Bill C-265 (Historical)

An Act to amend the Employment Insurance Act (qualification for and entitlement to benefits)

The House proceeded to the consideration of Bill C-265, An Act to amend the Employment Insurance Act (qualification for and entitlement to benefits), as reported (with amendment) from the committee.

Opposition Motion--The Economy

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Mr. Speaker, the hon. member's party often talks about its commitment to working families. I would like to point out some of the things that the government has actually done for working families, important steps like cutting the GST, introducing the working income tax benefit, introducing the universal child care benefit, increasing the basic exemption, and lowering the lowest tax bracket. We have taken all of these important steps.

The NDP voted against these important steps but has introduced several private members' bills, one of which was Bill C-265 that was dealt with in the Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities. Bill C-265 would have basically cost the average worker in Canada a little more than $100 per year.

My question to the hon. member is this. How can she justify to working families her opposition to the important steps that we have taken to put more money in their pockets and, as well, how can she justify to those same working families the NDP's proposal to add a little more than $100 to the EI bill that they pay through their hard work that comes off of their cheques?

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Thank you, Chair.

This amendment we have put forward brings Mr. Godin's bill, Bill C-265, more in line, on the specific issue of regional rates of employment, with Bill C-269, the Bloc bill, which came about after a lot of discussion among opposition parties and some discussion with labour groups who feel we need to move forward on EI.

For a long time, the Bloc and the NDP have put forward bills on EI that haven't really gone anywhere. There's a recognition that we need to work together, and if there's going to be a change in government, it's going to be the Liberal Party that comes in and improves EI. And I believe we have to.

Throughout these hearings, the short hearings we've had, I've asked witnesses what their priorities are for EI, because there are so many. Every year we have a surplus. It wasn't always the case. There was a point in time, just over a decade ago, when we were spending $2 billion, I believe, more than was coming in. That's one of the reasons changes were made. Employment insurance has become a very important part of the social infrastructure of Canada. Some people don't like it. I suspect that there are many members on the government side who aren't keen on any changes to EI that would put money back into the families of workers who need it. But we have to prioritize what we're going to do.

There are a lot of ways we can improve EI. Some of the pilot projects have addressed this. We can look at the two-week waiting period and what they call the five-week black hole on the back side of employment insurance. We can reduce qualifying hours or increase benefits. What about Mark Eyking's bill, Bill C-278, which everybody who appeared before this committee said was entirely sensible and reflected the reality of health care at this point in time in Canadian history when people are living after having cancer interventions and after having strokes and heart attacks and need a longer period of time on EI? To me, that should be a priority for the employment insurance system. That's another cost of $600 million or $700 million. I can't remember exactly. I think it's a very valid cost.

How do we get to the part-time workers, largely women workers, who don't access EI as much as they should? What about self-employed people who don't have access to EI, and money for training under the program?

There are a lot of things we need to do with the employment insurance system. We believe it's time that some of the annual surplus be utilized to the benefit of workers.

We have a specific concern, though. As you can see, when you reduce to a flat rate of 360 hours, the cost is pretty significant. We propose, as a start, reducing by 70 hours across the board. But keep the regional rates. Mr. Godin and Mr. Lessard quite correctly have a concern about people in high unemployment areas. This is to protect those people. They are the people in the fish plant in Mr. Cuzner's riding or the people in the forestry industry who are out of work and simply don't have access to jobs without moving. And we don't want to force Canadians to move. Many of them will move to where the employment is better. But it's a real concern that if you get rid of the regional rates of unemployment, and cuts have to be made, it'll be those areas that are hurt disproportionately, and we need to be very concerned about that.

We've asked for priorities. We've identified ours. We want to make changes to EI that we think are reflective of the reality of the workplace today, including the fact that this country could be undergoing an economic recession, or certainly a slump in industries like forestry and manufacturing. We need to have that money.

Mr. Lessard mentioned that our leader didn't support Bill C-269. I think he was referring to the royal recommendation and appeal. That wouldn't have done anything, but I would remind him that every Liberal in the House of Commons voted for Bill C-269 at final reading. Every Liberal in the House of Commons voted to send Mr. Godin's bill to this committee so we could give it some prudent oversight.

We think it's time for employment insurance to reflect the fact that workers have not benefited. Employees have had a reduction in benefits over the last ten years, I think by almost half the premium rate. That's good. We want to be fair to both ends, but we haven't done very much for the workers who have been hurt and continue to be hurt as the economy of Canada continues to concern people more and more all the time.

So we support Mr. Godin's bill. But we think this is a prudent and sensible way to go about making changes in EI, keeping in mind that there are many other things we would want to do as a government to make EI more accessible and more reasonable and to enhance the productivity of Canadians, not to detract from it.

These recommendations, in our view, reflect that.

[The Chair, Conservative, Dean Allison]

Thank you, Mr. Godin.

We're taking a list here. I have Mr. Lessard, Mr. Savage, and Mr. Lake.

I just want to read this into the record so that people are aware.

As all members are aware, the Speaker was called upon to render a decision as to whether certain provisions of Bill C-265 would infringe on the financial initiative of the crown and consequently require a royal recommendation.

In his ruling on March 23, 2007, Speaker Milliken stated:

I have examined the bill carefully and find that the changes to the employment insurance program envisioned by this bill include lowering the threshold for becoming a major attachment claimant to 360 hours, setting benefits payable to 55% of the average weekly insurable earnings during the highest paid 12 weeks of the 12 month period preceding the interruption of earnings, and removing the distinctions made to the qualifying period on the basis of the regional unemployment rate.

It is abundantly clear to the Chair that such changes to the employment insurance program, notwithstanding the fact that workers and employers contribute to it, would have the effect of authorizing increased expenditures from the consolidated revenue fund in a manner and for purposes not currently authorized.

We have a proposed amendment before us that does not remove the requirement for the royal recommendation. The final decision, however, will rest with the Speaker of the House, so for the purposes of our meeting today, the amendment is admissible and will be put to the decision of the committee after debate.

I just wanted to get on the record again that we are talking about the amendment. It does not remove the royal recommendation, but we are going to discuss it and we will continue to move forward on that process today.

I will continue with the list. I have Mr. Lessard, Mr. Savage, and Mr. Lake.

Mr. Lessard, sir.

[The Chair, Conservative, Dean Allison]

I call the meeting to order. I'd like to welcome everyone back.

Pursuant to the order of reference of Tuesday, October 16, 2007, we are continuing with Bill C-265, An Act to amend the Employment Insurance Act.

A couple of weeks ago we started with the numbers and then we deferred. It's like Groundhog Day; we're starting all over again.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Chairman, if that's the case, then I suggest we suspend the meeting until we have the information we need. A bill is too important. Perhaps someone will say that we should have done this earlier, but we are here to work for the welfare of Canadians and it would be a shame not to have the right information. Moreover, Mr. James has information about both scenarios that he can convey to us, about the amendments that have been drafted and about the first bill. It would be important to have copies of this material in order to review it properly. Perhaps we should postpone the meeting until the House returns from its break. As soon as Mr. James has the information, he can forward it to our clerk, who can then pass it along to us. I suggest we adjourn this meeting on Bill C-265.

[Bill James]

It's $200 million per year, 25,000 claimants.

That part of Bill C-265 would be left standing.

[Bill James]

Sure. All I can mention is that the costs associated with the change to the program are very dependent on the specificity with which we're provided in terms of the change. So it's not to say the costs provided in 2004 were incorrect; they were the baseline preliminary estimates we could do in two days, based on the question we had from the committee. There's a lot more detail in the proposed changes in the context of Bill C-265. We've tried to cost it based on the way it's described in the bill.

If we go back to 2004, the question was quite a general one posed by the committee, and we did the best we could, I think, as Mr. Brown mentioned at the time, in the time we had. The cost estimate at that time, again, was a minimum cost and a preliminary estimate, and I believe it was indicated that with additional detail and more time we could improve on those estimates.

For the purposes of Bill C-265, we've taken the much more specific information provided in the proposed bill and we've costed those individual elements, and that's how we've arrived at a more accurate estimate.

[The Chair, Conservative, Dean Allison]

I call the meeting to order, pursuant to the order of reference of Tuesday, October 16, 2007, on Bill C-265, an act to amend the Employment Insurance Act.

We'll commence our hearings today on Bill C-265. We're going to go clause by clause. I believe you should have everything in front of you.

I do want to welcome Mr. James and Ms. McLean. Thank you very much for being here.

They will be here to answer any questions that you have. Mr. James is the director general of the EI policy, skills, and employment branch. Ms. McLean is the acting senior counsel of legal services.

As usual, we have our legislative clerk here, who will help us navigate through any and all clauses. I believe there are only two amendments. So as far as amendments go, there won't be a lot to deal with there.

Why don't we just get started with clause 1?

Go ahead, Mr. Savage.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Ms. Byers, in your introductory remarks, you explained how the plan could be improved, and you spoke of increasing the benefits. Currently, this would represent 55% of the claimant's income, and you suggested 60%. Generally speaking, people with the higher incomes are not the ones who draw the benefits. So that is a small income. I tabled before the committee an amendment to Bill C-265 in order to improve the plan and raise the benefit level to 60%. I believe that you would agree with me on that.

[Charles Cirtwill, Acting President, Atlantic Institute for Market Studies]

Well, I'll waste a few of my 10 minutes to point out to Yvon that since we both come from Atlantic Canada, if he's buying the beer, I'm his friend.

I appreciate the invitation to come today to comment on Bill C-265. As you say, I did just arrive from the airport. As proof of the wonders of the modern transportation age, it took just as much time to get here from the airport as it did to fly from Halifax to Ottawa.

For those of you who are unfamiliar with AIMS, we are an independent economic and social policy think tank. We are based in Halifax, Nova Scotia. Our chief objectives include initiating and conducting research, thus acting as a catalyst for informed debate on public policy matters, and communicating the conclusions of that research and the resultant policy prescriptions in a clear, non-partisan way via publications, conferences, seminars, and sessions like this one.

AIMS is a Canadian federally incorporated non-profit non-partisan organization with charitable status from the Canada Revenue Agency. We are financed by contributions from individuals, corporations, foundations, and other organizations, as well as by the sales of our publications. AIMS does not, to put a point on it, take any money from government.

I'd like to start my comments today with a couple of fairly straightforward points. Since the sponsor of this bill, as I understand it, is from New Brunswick, I thought I'd put those comments in the context of New Brunswick, but I want to emphasize that they do in fact apply nationwide.

If someone had asked me yesterday to come up with a list of the three or four things the federal government could do to put the biggest possible wrench in New Brunswick's plan to become self-sufficient, this suggestion, this bill, would have been in the list of the top three. Basically the reason is quite simple: if you pay people not to work, they will not work, and of course Bill C-265 does suggest that we get back to that very model.

AIMS has commented frequently on the problems with Canada's employment insurance system, and our key criticisms follow.

While the basic intention of EI should be to provide short-term assistance to those who find themselves temporarily unemployed due to the vicissitudes of life or a dynamic economy, the EI program has become instead a system that creates unemployment and provides disincentives to work. The Atlantic region is an example. Employers in large centres such as Halifax, Saint John, and Moncton are experiencing tremendous difficulties finding workers, while double-digit unemployment remains constant in other areas, such has northern New Brunswick and Cape Breton. For example, StatsCan just in January reported an unemployment rate for Halifax of 4.3%, while in Cape Breton that number is 13.8%. An overly lax and generous EI system deters unemployed people from moving from where the work is unavailable to where jobs are going unfilled. This problem is only going to get worse as our society ages and labour shortages become more severe.

The EI system also distorts wages upwards as firms are forced to compete not only with other employers, but with a system that allows workers to work for only a small portion of the year and then collect EI for the remainder. This distortion negatively affects firms' competitiveness and makes business investment less attractive in those regions where the effect is most prevalent, and that includes Atlantic Canada.

Further labour market distortions occur in that the value of work experience, training, and education—all of which lead to better long-term employment prospects—is diminished when the ability to live a state-subsidized life in exchange for only a few weeks of work each year remains available.

For these reasons, the general thrust of Bill C-265 to make access to EI easier is of clear concern, especially the question around the removal of the new entrant condition—the one that's meant to actually engage young Canadians' attachment to the workforce early on—and the dramatic change in eligibility requirements that would occur in areas of lower unemployment. Again, if we return to the Halifax example for a minute, which Mr. Savage might be relatively familiar with, and take a look at Halifax's vibrant labour marketplace, right now under this bill we would end up with the amount of work required to qualify for EI dropping from 17.5 weeks at 40 hours a week to only nine weeks. Now, is a nine-week qualification for employment insurance really necessary in a labour market with 4.3% unemployment?

The proposal to enrich EI benefits generally by basing the benefit on the calculation of the worker's best 12 weeks is also a disincentive, because it will again result in paying people more money not to work. Even worse, it increases the incentives to gain the system.

Now, with regard to the expansion of accessibility to special benefits, I don't think anyone should be opposed to the intention of this measure. Given the demographic challenges that we have and that the country faces in the years to come, measures of this type make it very much easier for parents to have children, for individuals to contribute to the care of family members. These kinds of proposals and services are absolutely critical in the future years in Canada, but I want to point out a couple of things around how we're funding it.

First, we have really done no significant research into the impact of these kinds of benefits on the employer side of the question, and certainly we haven't had a conversation yet about whether or not EI is truly the appropriate place to pay for these services. The benefits for these programs accrue to society as a whole, so we really need to question whether or not the burden for these services should be placed only on employers and employees by paying for them exclusively through EI.

Now, there is one point where the Atlantic Institute for Market Studies and this bill come to agreement on, and that is that Bill C-265does effectively remove regionally extended EI benefits, but it does it by basically giving extended benefits to everybody. We think the conversion should run in the opposite direction, that the objective should be to tighten the requirements in the areas where they're loose, not loosen them where they're currently tight.

Full-time jobs are going unfilled in Atlantic Canada because, among other reasons, the wages offered for them cannot compete with seasonal work and subsidized EI benefits. The balance needs to be changed decisively in favour of work, so that people see that they would be better off, not worse off, to accept the work that is available and to acquire the training and education needed to secure even greater opportunities.

Before I close by quoting a couple of other organizations, let me just say that AIMS does not think the EI system currently in place is perfect. Certainly it requires lots of tinkering around the edges, if not fundamental change.

We have just three quick suggestions for changes that you might want to consider, either attending to this bill or doing something else in its place.

First, the requirement for new entrants to access EI needs to be higher, not lower. We want people to engage in the employment field and stay there for a while, get used to the benefits of working, know what they are, and be able to appreciate them.

We need to take a serious look at experience rating. If in fact you spend a lot of time using unemployment insurance, perhaps your rates should be higher or your benefits should be lower, or both. That applies both to employers and to employees. We cannot afford a government system that encourages employers to set up a structure where they only employ people for 10 or 12 weeks, knowing that those people are going be taken care of until they need them again 12 months later.

The other thing we need to be thinking seriously about is, if we are carrying forward surplus after surplus in the EI account and we change the EI benefits to the point where we secure some savings, what do we do with those savings? Our suggestion is that the majority of those savings should be targeted at education and training of the workers, so that they in turn are better able to take advantage of opportunities as they come their way.

[Laurell Ritchie]

Lesson learned.

We're here to support Bill C-265, including the proposal for best 12 weeks, and at the same time acknowledge that a majority of members of Parliament have in fact supported other bills that have tried to address some of the difficulties with our current EI system.

Some of us live and breathe unemployment insurance. Earlier today I had to file an appeal for claims that had been presented out of a closure in Bracebridge. Certainly our industry and many others are reeling from closures and large-scale layoffs.

In our view, the employment insurance hours system was the main villain in the 1996 changes. Nothing of any real substance has been amended since what is now fully a decade ago except for two changes—not without importance to the people they affected but still in some ways tinkering on the edge of the system.

I'm referring first to the reduction of the 700 hours that were originally required for so-called special benefits—parental, sick benefits, those types of benefits. I think many of us can still remember the photograph on the front page of the The Globe and Mail of the woman with child in hand, just short of the 700 hours to qualify. It was amazing how quickly the political will was found to address that and to reduce it to 600. I never heard a very good, rational explanation for 600; it was simply that there were too many people who weren't being covered at 700, so it was reduced to 600.

The other change, though not to the legislation, was the introduction of pilot projects that extended, for 21 truly high-unemployment regions, an additional five weeks, still with the maximum of 45.

Those have been the only real changes. The fundamental structure of the EI grid has not been amended.

When you do get the document, I'd ask you to spend some time on the second page. I know it looks like you cannot fathom it, but what I had hoped to do—and perhaps someone can take the time to walk through that—is go through an example of what happens for people in sectors, in industries, and in regions where they do not have full-time, full-year work. This is not just a rural issue; this is an urban issue.

The example I want to give is of service workers; in particular, I use the example of a grocery store worker. Service workers are critical now in our economy. About 70% of all jobs are in the public or private service sector.

Under the old UI system...and we're not proposing to go back to that, but it's important to understand where some of the billions in the surplus have come from. I've provided Statistics Canada information that shows that the average service worker works 29 hours a week. On that basis, they would need, under the old system, 19 weeks of work prior to layoff in order to qualify in a 6% to 7% unemployment region; currently that would be like Toronto or Montreal. But under the EI system, the way the hours have been rejigged, the same service worker now needs 23 weeks of work prior to layoff to meet what is now a 665-hour minimum.

It is worse still for a grocery store worker, and I've picked that as one of the occupations where it's even lower than the average service sector worker. They average 24 hours weekly, and in their case, instead of needing 19 weeks of work prior to layoff to qualify, they now need 28 weeks of work.

There's a chart there that shows how the requirements have increased. This chart, which shows the old system alongside the new system—we've grafted them together—allows you to study and understand, in your own regions, how this system is functioning to the detriment of workers.

We have a changing job market out there. Many of us would argue that the architects of the 1996 changes had at least some sense that this was coming. Now, without a doubt, we know how many jobs are contract, temporary, and part time, and this applies mainly to women. It also applies to men.

One of the things we're finding with layoffs in auto and other manufacturing workplaces is that men and women are now having to look to a future with fewer options, and many of those options are those temporary, part-time jobs, certainly not full-year, full-time jobs. There are also serious economic impacts for the economy as a whole, serious negative impacts for EI's key role as an economic stabilizer.

The federal government last fall, in the economic and fiscal update that they provided, looked right through to year 2011-12 for risks to their fiscal projections, and they mentioned volatile commodity prices, weaker U.S. consumer spending—they didn't know the half of it—global current account imbalances, and a further appreciation of the Canadian dollar. This is not the end of history. We may well yet have another recession in this country. Certainly we have a downturn, and that, by all accounts, goes to explain the Bank of Canada rate drop, unusual as it was, this week. There is in some of the papers today the suggestion that the job numbers coming out tomorrow will have some grim information for all of us. We cannot sit easy.

Again, as part of the documents, we've compared the hours that were needed to qualify for employment insurance or unemployment insurance during economic downturns. We used a regional rate of 8% to 9% unemployment, which would not be unusual in a downturn. We've gone from a formula that would allow somebody at 165 hours to at least get a minimum entitlement; then, in the early 1990s, a formula that meant 255 hours; and now a formula in this same region that would require a minimum of 595, and that's just to get a bare minimum entitlement.

There is a very important study that was commissioned by Human Resources Development Canada—I can never remember its name in its various changes. This was a study of the UI system as an automatic stabilizer, identified as the single most important stabilizer, and to prevent downturns going much deeper.

Finally, this week is also the anniversary of the first death from the SARS epidemic. There was a great deal of puzzlement amongst the honchos within EI about why so few people were applying and getting EI. Those of us who know what has happened in the hospitality sector and in the health care sector and homes for seniors and the aged, what is happening in hotels and restaurants, understand very well why people could not apply or qualify.

Our system has been problematic since the beginning; it has gotten worse with recent developments in the labour market, and we urge you to fix it.

[Pierre Céré, Spokesperson, Comité Chômage de Montréal]

Thank you for having invited us, Mr. Chair, members of Parliament.

I represent Comité Chômage de Montréal, but more broadly, the Conseil national des chômeurs et chômeuses, the CNC, for which I am a spokesperson. The CNC is an umbrella organization comprised of groups from different regions throughout Quebec.

To begin with, I'd like to see if we can agree on three simple matters.

The first point is that the unemployed are not marginal. An unemployed person is not defined in society based on his or her social status. You're not defined as an unemployed person, you are defined first and foremost by your work, your profession, your roots, the places where you have ties, and your family. Unemployed people are workers. An unemployed person is someone who used to work and who will work again, but between jobs, such individuals are temporarily unemployed. And let me be clear: “are temporarily unemployed”.

In 1940, when you needed replacement income between jobs, it was called unemployment insurance. Since 1996, it has been called employment insurance. And it is also for a limited period of time. That's the first thing I'd like us to agree on.

The second thing—and it would seem more and more that this is true, according to the prognosis of a number of economists—is that we are heading into a period of labour shortage. So that raises the question: why do you need employment insurance and unemployment insurance if you are about to face a period of labour shortage?

We believe that even during a period of labour shortage, you never actually eliminate unemployment or the need for employment insurance. Now, why is this? Well, it is because of what has characterized the new jobs created in Canada over a good many years and the way in which work has been reorganized over the past 20 years. This has been documented by Statistics Canada, for example. Most jobs created in Canada for many years have been described by academics as atypical: part-time work, temporary or seasonal work. That's what jobs look like nowadays. Between two temporary jobs, obviously, people need a replacement income. And that's what employment insurance does.

Let's see if we can agree on a third point. We all know that the employment insurance system has been pruned over the past 20 years. This has been documented and publicized. It's now time to stop documenting these cutbacks because we are aware of them and have fought against them. We will continue to fight against them. But the time has come to find solutions.

We believe that Bill C-265 is part of this groundswell movement to find solutions to the problems which exist.

On behalf of our organization, I'd like to take this opportunity to commend the sponsor of this bill on his devotion and tireless hard work. He has fought hard for many years to find solutions to the problems faced by thousands of people throughout Canada who don't qualify for employment insurance benefits.

We believe that there is a political solution to these problems. There will not be a political solution without a political and social majority. The one and only eligibility criterion which features in Bill C-265 is the 360-hour minimum, and in our opinion, it is the way of the future. The CNC has been fighting for this for over 10 years.

The dialogue and exchange between a number of organizations and political parties over the past several years has not led to a majority of people being willing to find solutions to the problems which exist.

Last year, we brought together the three opposition parties: the Bloc Québécois, the NDP, and the Liberal Party of Canada. We got them to all sit around a table just like this one with representatives from Québécois and Canadian labour associations and groups of unemployed persons. We had a discussion and an exchange of points of view. Sometimes we agreed, sometimes we managed to find solutions, and to reach compromises. We agreed to a five-pronged agreement in order to improve the employment insurance system in the way that it needs to be improved.

Included in this five-pronged approach is the 12 best weeks benefit-setting formula. However, the single eligibility criteria was not included because we didn't manage to reach a consensus on this issue. We agreed on relaxing the eligibility criteria by 70 hours. There are two categories of beneficiaries: ordinary beneficiaries and new beneficiaries. The ordinary beneficiaries qualify based on a variable standard ranging between 420 and 700 hours; we would suggest that this range be lowered to 350 to 630 hours.

BillC-265 impacts on two areas: the eligibility criteria and the 12 best weeks benefit-setting calculation. Both here and in other areas, we find ourselves at a crossroads: either we get boxed in by the rationale for our demands—the fact is that we do not have a majority—or we look for a more appealing solution so that we can get a majority that will actually be able to impose a solution. This formula must be the result of a compromise and it will enable us to enhance the current level of protection provided to workers in Canada.

When Parliament debates this issue, it always says that it is going to cost the government money, and that it doesn't have this money. We asked an economist to calculate how much these two measures would cost, i.e. the 12 best weeks formula and relaxing eligibility criteria by 70 hours. A very serious individual who worked for a political party's research service and then at a union produced a document stating that relaxing the criteria by 70 hours would cost $400 million and that the 12 best weeks formula would cost $320 million, for a grand total of $720 million. Now you can play around for a long time with these figures, but that's the assessment that we made.

We know that the employment insurance fund is posting surpluses. On March 31, 2007, there was still an additional surplus of $3 billion, totalling $54 billion. We know that on March 31, 2008, or in a couple of weeks—the figures will be announced in a couple of months—there will once again be a surplus. So the money is there.

The creation of a crown corporation on unemployment insurance funding should help to strike a balance. A document submitted to the committee by the Conseil du patronat du Québec in 2003, in reference to comments made by the employment insurance chief actuary, stated that: “each 10 cent variation in the premium rate would affect revenue to the tune of [...] $840 million”.

In other words, we believe that the premium rate won't even need to be changed because the money is already there. But if necessary, there would be an increase in the premium of less than 10 cents which would enable more Canadians, in fact tens of thousands of people, to qualify for employment insurance. That's not a lot, considering that the premium rate was much higher in the past: it's previously been over $3.

I'd like to quote a line from the Conseil du patronat: “[...] the employment insurance system must rediscover its original mission which is to provide replacement income.”

It is our belief that we need a compromise formula that will help us garner this majority. It's time for solutions, and we need a majority so that we can impose these solutions. The debate has to take place above the partisan fray and it needs to focus on the welfare and betterment of our society. We need to find better ways of protecting our workers.

[Barbara Byers, Executive Vice-President, Canadian Labour Congress]

Thanks very much for the opportunity to be here. We won't be taking 10 minutes, because we want to get into the discussion as well.

The key reforms to the EI program that have been advocated by labour and anti-poverty groups are a reduction in the number of qualifying hours to 360 in all regions; a longer duration of up to 50 weeks of regular benefits; and an increase to at least 60% in the percentage of insured earnings replaced by EI benefits, based on the best 12 weeks of earnings.

We support Bill C-265, which would reduce the number of qualifying hours to 360 and base benefits on the best 12 weeks.

We are now sitting just two days before International Women's Day, so I want to speak today in particular about the importance of the EI program to working women and the need to make fundamental changes of the kind proposed in this bill.

The Canadian Labour Congress is going to be organizing, commencing Saturday, teach-ins all across this country on the question of women's economic equality, and these teach-ins will continue throughout the course of the year. The need for EI reform is very much on our agenda. I would refer you, beginning tomorrow, to our website, www.onceandforall.ca or www.unefoispourtoutes.ca, because you will see interesting fact sheets on the question of women's economic equality, and in particular on EI.

EI income support during periods of unemployment, maternity or parental leave, and periods of sickness is obviously important in terms of stabilizing and supporting family incomes. EI also supports the economic independence of women, since benefits are not based on family income, with the exception of a small supplement for low-income families. Rather, the benefits are based on insured individual earnings. However, key EI program rules exclude or unfairly penalize women workers, because they fail to take into proper account the different working patterns of women compared to men. While the great majority of adult women now engage in paid work, the hours they work exclude many from EI benefits, as do periods of time spent away from work caring for children or others.

We shouldn't just say that this is a particular kind of worker, because recently, at a meeting with some officials from Service Canada, it was pointed out by the representative of the Canadian Teachers Federation that there are a lot of young teachers who don't have full-time positions who are doing a lot of fill-in work, and a lot them don't quality for their EI. So we can't compartmentalize this and say it's one group of workers. In fact, it cuts across all groups, and in particular, again, it hits women in those groups particularly hard.

I'd like to suggest to the committee, if you haven't already reviewed it, that you look at a report done by Monica Townson and Kevin Hayes for Status of Women Canada. It's a recent report. They document that only 32% of unemployed women qualify for regular EI benefits compared to 40% of men who are unemployed. Over 70% of women and 80% of men qualified for benefits before there were major cuts imposed more than a decade ago. The key reason for the gender gap is that in order to qualify, a person must have worked in the previous year and must have put in between 420 and 700 hours of work, depending on the local unemployment rate. Workers in most large urban areas now have to put in 700 hours, roughly the equivalent of 20 weeks of full-time work.

Fewer unemployed women qualify than do men because many women take extended leaves from work to care for children and for others in their families. After a two-year absence from paid work, the entrance requirement jumps to 910 hours, or more than six months of full-time work. And when they work, women are much more likely than men to be employed in part-time and/or temporary jobs as opposed to full-time, permanent jobs providing steady hours. Because they lack enough qualifying hours, only about half of part-time workers who lose their jobs actually qualify for unemployment benefits.

Even when they finally do qualify, the lower pay of women, combined with more unstable work patterns, means that they usually qualify for lower benefits, an average of $291 per week compared to $351 for men in 2005-06. Only about one-third of the total dollar amount of regular EI unemployment benefits is paid to women, even though women now participate in the paid workforce at almost the same rate as men.

The EI program now provides for up to 15 weeks of maternity benefits and 35 weeks of parental benefits, 90% of which are taken by women. Expansion of maternity parental leave stands as a major gain for working women in recent years, especially the 2001 increase in parental benefits from 10 to 35 weeks.

To qualify, a woman must have worked 600 hours in the previous year. About three-quarters of all women giving birth to a child do qualify, and about 60% claim a benefit, but a full year leave of absence is much more likely to be taken by women who qualify for a reasonable benefit or whose employer supplements the EI benefit. Bill C-265 would increase the proportion of women eligible to take maternity or parental leaves and the proportion who could afford to do so.

In conclusion, the reduction of qualifying hours to 360 for regular and special benefits would result in a major gain for working women, who are unfairly treated by the current EI rules.

I would like to add here that when the change was proposed to move from a weeks calculation to an hours calculation and that everybody would be included, we actually embraced that in the labour movement. We thought that was good, that there would be people who could pay in and who could benefit from it. What we didn't know was that there was this vicious undertow that said, yes, you can pay in, but you're not going to qualify because the number of hours is too high.

I'll look forward to answering questions later on, and we've also provided to the committee an updated version of our policy paper, “Towards a Better Employment Insurance System for Workers in Today's Job Market”.

Thank you.

[The Chair, Conservative, Dean Allison]

Pursuant to the orders of reference on Tuesday, October 16, we're now going to look at Bill C-265, An Act to amend the Employment Insurance Act (qualification for and entitlement to benefits).

I want to welcome everyone here today, and certainly our witnesses. I realize that you've probably all come on fairly quick notice, so thank you very much for making your schedule available.

We're still waiting for one more witness, who was given about 24 hours' notice, just slightly less time than you guys were given. What we will do, though, is start the rounds anyway, and when the witness shows up we'll insert him into the lineup.

We have with us today three different groups that are here right now and one more that we're waiting on.

Why don't we start with Mr. Jackson and Ms. Byers from the Canadian Labour Congress. Welcome, again. I know you guys have been here before for various things.

I'm going to give each presenter 10 minutes, or less if they need that. I'll just give you a one-minute warning. Certainly if you're at less time than that, that's fine as well. Then what we'll do is start with a seven-minute round of questions and answers, and then we'll go with five minutes after that. I'll identify you, and the microphones will automatically turn on and off. I think most of you have been here before, but for those who haven't, that's the way it works.

We'll start with a round of Liberal, Bloc, NDP, and Conservative, and we'll proceed in that order.

Welcome, Mr. Jackson and Ms. Byers. We'll give you 10 minutes to get started.