Bill C-56 (Historical)

Fairness for the Self-Employed Act

An Act to amend the Employment Insurance Act and to make consequential amendments to other Acts

This enactment amends the Employment Insurance Act and other Acts by establishing a scheme to provide for the payment of special benefits to self-employed persons who are not currently entitled to receive them.

Fairness for the Self-Employed Act

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

Mr. Speaker, I know how serious the hon. member is about that. I acknowledge the books and reports he referenced in the last century, but we are looking forward to things we are proposing, not just myself but the Liberal caucus, the Liberal women's caucus, and the human resources committee. We are trying to go forward.

The only advice I can give Canadians is that any book they see that has a shade of red in it beats any book they see with a shade blue that comes out of this place. It would be better for the social infrastructure of this country and better for Canadian workers.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Mr. Speaker, my friend and colleague from Dartmouth—Cole Harbour has a constituent, who is probably one of the greatest hockey players now playing in the NHL, Sidney Crosby.

I have to ask my colleague this. Has he ever seen an exhibition of skating like what was just put on by the Minister of Human Resources and Skills Development when asked the question about the expert panel and trying to gather information before coming forward with this, and how she skated around that entire issue, abandoned the issue, and gave no answer?

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

Mr. Speaker, first of all I have to take issue with the member's comment that one of the best hockey players lives in my riding. The best hockey player in the world comes from Dartmouth--Cole Harbour and that is Sidney Crosby.

However, I must defend the minister in terms of her skating around the question. It is not really her fault. Her material is very weak and she has to work with the material that she has. So far it has not been great. I hope though that we can take step forward.

As I close my comments, let us try to make this positive. I am certainly prepared to put aside what happened over the summer when I felt that the Conservatives did not take the EI working group seriously and we missed an opportunity there. However, let us see if we can get something done for self-employed Canadian workers and move forward.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Mr. Speaker, I would like to ask the member a quick question again about the working group that he spoke so eloquently about and has much disdain for. Could he provide for the House once again information about how the situation of self-employed benefits was handled by the particular working group and how the whole process was held in contempt by the current government?

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

Mr. Speaker, I believe the EI working group could work.

One of my great political heroes is Teddy Kennedy. Teddy Kennedy passed away this year. One of his legacies was that he made things work. He reached across the aisle with Orrin Hatch and other conservative Republicans, he was a liberal Democrat, to get things done. That is the model we should all follow.

I know it is the model my colleague from Bonavista—Gander—Grand Falls—Windsor follows and I think that we should all follow.

The House resumed consideration of the motion that Bill C-56, An Act to amend the Employment Insurance Act and to make consequential amendments to other Acts be read a second time and referred to a committee.

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

Mr. Speaker, with regard to Bill C-56, which will for the first time give a certain number of rights to self-employed workers, it is rather appalling that the major national parties are taking the credit for doing nothing to improve the living conditions of those who lose their jobs. It is quite surprising. They stated that they brought forward many proposals but at no time did they get together to finally take the next step of reforming the employment insurance program in order to restore its original purpose—to support and protect workers who have the misfortune of losing their jobs.

I am also surprised that two of my colleagues raised the fact that we could rejoice because of this bill and begin celebrating Christmas. I do not think there is anything to celebrate. There is no cause to celebrate, especially not for the unemployed because they will not be in a festive mood. In fact, I doubt that most of them have anything to be happy about, even at Christmas, because a large number—the majority of those who lost their jobs—will find themselves without income or with the small income provided by their provinces in the form of social assistance, the support of last resort.

Bill C-56 is not what is going to improve the situation. The only merit to be found in that bill is that for the first time it recognizes the rights of self-employed persons. Even though they do not have many rights, it is a first step, I would say, toward improving a social safety net that is perhaps, however, not identical to what other workers have. It needs to be improved, but it is a step in the right direction.

Members have been using the term “travailleurs autonomes” for self-employed persons. The term used in the bill is “travailleurs indépendants”. That is fine with me. We like it a lot, even though it also refers to workers who are federalists. But if we talk about workers who are “indépendants”, that is fine with me. The more there are, the better, not independent workers but people who are going to work for Quebec’s independence.

In recent years, the Bloc has never stopped calling for coverage for self-employed persons. In the last two economic recovery plans we presented, there were very specific measures for self-employed persons, particularly in the last one we presented in this House.

Bill C-56 refers to four kinds of special leave, but two of them will not apply in Quebec. Why? Because since March 1, 2005, there has been an agreement between Quebec and the federal government to transfer responsibility for maternity and parental leave to Quebec, along with part of the deduction for premiums that was to be allocated to support that program. Right now in Quebec, about 500,000 workers are considered to be self-employed.

Bill C-56 also provides for access to the program to be voluntary. We shall see whether making it voluntary, with the criteria being proposed at present, does not create problems in terms of genuine protection for those people.

We support the bill in principle for the reasons I stated at the outset. For the first time, it grants rights under the employment insurance scheme for self-employed persons, and in that respect we welcome this initiative.

We very much hope that the government, that is, the Conservative Party, will be open and work with us on making amendments to its own bill.

What also causes problems for us, and we will submit this for debate, is that we were hoping that when self-employed persons were given rights it would also mean granting employment insurance benefits from the point when they found themselves jobless.

An individual who owns a small business or is self-employed may sometimes in fact find themselves with no contract or no retainer so they can continue to work. As a result, they are left without an income. II think this is an aspect that should be debated. Certainly we are going to work to have this bill passed on second reading to make sure it can be debated in committee.

There is also another problem, however. In my view, it is a major problem. That is the entire question of how premium rates are set, which seems to us to be somewhat random. As well, the projected premiums for the benefits that will be made available to these people seems to be much too high.

Remember that the bill is intended to provide self-employed persons with benefits during special leave. There are four kinds of special leave. There are maternity benefits for up to 15 weeks and parental or adoption benefits for up to 35 weeks. We agree on that. The maternity and parental leave benefits are the parts that cost the most, 75% of the total estimated cost. This is a responsibility that Quebec already assumes.

That means the bill does not apply to self-employed persons in Quebec. Only some of its provisions apply. The two provisions that apply are sickness benefits, for up to 15 weeks, and compassionate care benefits for up to six weeks. However, these two benefits account for only 25% of the total cost of Bill C-56.

The members can probably see where I am coming from. Self-employed persons in the rest of Canada will pay their full contribution to be entitled to these four benefits, while in Quebec, they will pay their full contribution to be entitled to only two benefits, representing 25% of the total cost.

Self-employed persons in Quebec are going to contribute as if they were receiving all four of the special kinds of leave I listed, in addition to the benefits they get if they lose their job. There is something very questionable about this.

The answer we are given is that as self-employed persons, they are assumed to be employers as well and the employer’s share will offset their contributions.

Even if we follow this reasoning and add the employer’s share, the final amount is still much less. This even implies that the transfers currently provided to Quebec for maternity leave and parental leave are far too low. That is another debate, though, that we will take up in another forum.

For the time being, let us just say that the cost of this for self-employed persons in Quebec is clearly too high. Some very specific work needs to be done to give us the information we requested. I hope we will get it. We had a briefing two evenings ago with some senior officials. We asked for the actual cost of each of the measures in the bill: the actual cost of the maternity leave and parental leave, the actual cost of the compassionate care leave, and the actual cost of the illness leave. They are nowhere to be found here. We have to refer to the amounts that Quebec pays for parental leave and maternity leave. We conclude from this that the cost is clearly too high.

The coverage that is provided applies to self-employed persons earning at least $6,000 a year. I understand this is to facilitate the accounting rules in regard to taxation. The contributions that self-employed persons make will be determined when they fill out their income tax returns, that is to say, at the end of the financial year on the basis of their income during that year.

This brings me to another aspect of the bill that we need to take a closer look at. Self-employed workers who pay their premiums this year and then take six weeks of compassionate care leave, the purpose of which is to provide end-of-life care, would therefore be making a commitment to contribute for the rest of their working lives as self-employed persons. Yet, participation is said to be voluntary. I can understand that they cannot just make an opportunistic contribution and pull out after availing themselves of the plan. I understand that. We should, however, see if something could not be done differently, because this seems to be going too far.

Those who contribute for one year will be able to withdraw from the plan at any time, provided they have not availed themselves of it. If self-employed individuals join—and let us not forget that participation is voluntary—they will be able to withdraw, as long as they have not availed themselves of the plan. Otherwise, they will have to participate for the rest of their working lives. We should look for a way to come up with a more realistic measure with respect to the type of commitment self-employed workers have to make.

Before yielding the floor to a member from a different party, let me remind the House that, in Quebec, the self-employed will continue to benefit from maternity and parental leave administered by Quebec. Therefore, they will not benefit from this bill like the rest of Canada.

They will be charged the same amounts, which represent 75% of the costs, while Quebec will be assuming the largest part of the costs, given that maternity leave and parental leave make up 75% of special leave costs. The percentages for the self-employed will be reversed. While the federal government bears 25% of the costs, they will have to pay 100% in terms of premiums. The way the Conservatives look at it, this represents 75% of the total cost, and the federal government will be responsible for 25%. We estimate that the self-employed will be paying 50% too much.

This bill also provides that a person who is absent from work because of a work-related injury will be covered. In Quebec, we have a program supervised by the Commission de la santé et de la sécurité du travail, the CSST, which covers costs and which pays benefits to a person who is absent from work because of an occupational injury or disease. Federal coverage will now be provided, but this will not benefit Quebec, because it has already provided such services since the late sixties. Quebec workers are paying good money for that protection. In fact, it is primarily employers who contribute to the fund, because of their responsibility as employers. Providing coverage in Quebec will not cost the federal government anything because coverage is already provided, but self-employed persons will have to pay premiums to the federal government. This is another point that we will have to examine very closely during our review in committee.

What we need is a comprehensive overhaul of the employment insurance system. As we mentioned, Bill C-308, which I sponsored for the Bloc Québécois, proposes some measures that should be part of this process, including working 360 hours to qualify for benefits, making the 50-week benefit period—instead of 45 weeks—permanent, and increasing the rate of weekly benefits to 60% of a claimant's earnings. Our bill also provides coverage for self-employed persons.

The government would have achieved two things by supporting Bill C-308, ensuring its passage through all the stages, and not seeking royal assent. This would have allowed us to do a really conscientious job and, more importantly, would have been socially responsible, because we would have taken into consideration a number of factors to avoid the aberrations that we mentioned earlier and that will have to be corrected along the way.

So we are going to support the principle of this legislation, as long as we can make the amendments that I suggested earlier. In the meantime, I urge the government and all parliamentarians to also support my Bill C-308, at third reading, in the near future.

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

Mr. Speaker, I am proud to rise in this House to speak to the bill and to express the opinion of the New Democratic Party on it. First, there have been discussions among the parties, and I would like to share my time with the member for Elmwood—Transcona.

[The Deputy Speaker, Conservative, Andrew Scheer]

Does the hon. member have unanimous consent to share his time?

[Some hon. members]

Agreed.

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

Mr. Speaker, this is a very important bill. I want to say right off that I agree with the Bloc member's remarks that the major parties here should work together to produce EI bills and EI and other reforms.

I could say—I do not know if the hon. member from the Bloc will agree with me—that when it comes to studying, we have been there and done that. Employment Insurance has been studied from top to bottom. Twenty-eight recommendations have been tabled in the House. Most of the political parties have introduced the 28 recommendations that should have led to the major reform of EI. I think we can agree that recommendations have been made and that a lot of work has been done.

When we invite witnesses to appear before the Standing Committee on Human Resources, Skills Development, Social Development and the Status of Persons with Disabilities to speak about EI, we know what people need.

Earlier, the member for Dartmouth—Cole Harbour tried to take some credit. It is not that I want to pick on this Liberal member. Let us consider their beloved pink book and the changes that should have occurred. Let us consider how much these people have been left out. I have to repeat what I have said on this. Although I produced a report in 1999, which the member more or less called an antique, the problem remains. If it is an antique, the Liberals were in office from 1999 to 2005 and did nothing for self employed workers, sometimes called independent workers.

This bill is a good start. I asked the minister why the government did not make self-employed workers eligible for EI when they were unemployed. She said that the formula was too complex, for example, if they were taking a vacation. I think that if they took a vacation—she seems to have said that these people work without a break—if there is no money coming in, it means they are not working. That is the test of Bill C-56. That is how it is calculated.

There will, however, be 2.6 billion Canadians who could access the self-employed workers program if they wish. The benefits of the bill are 15 weeks of maternity benefits, 35 weeks of parental and adoption leave and six weeks of compassionate care leave.

As I said in 1999—it is not in the red or pink or other book, but it is still true—there is the human side of EI. At the time, people were saying:

A plan ill suited to the new labour market. The EI program, as it exists, does not take market realities into account. More workers are described as "self-employed", which is not quite the case. A growing number of businesses are laying off people and then hiring them as self-employed workers in order to avoid having to contribute to EI or to a pension plan. Self-employed workers are not entitled to EI and are practically without social protection. We must take a closer look at what is really happening on the new labour market and explore ways to help so-called self-employed workers contribute to and benefit from the system.

What were people saying in 1999 and what are they saying today, 10 years later? Many self-employed workers used to work for an employer. When their services were no longer needed, they went home. And then the same employer would call them back. These workers were mainly women doing office work.

The employer would ask them to do some work for him, to write a letter, for example. They had their own computer at home. They would write the letter and send it to the employer, who would use it. He would make these people work as self-employed workers and they were totally excluded from any program that could have helped them, like health insurance or employment insurance. They could not contribute.

How many people with complaints about that have I met in my riding? For example, a hairdresser who had her own salon told me that she would like to start a family and have children, but she could not afford to because if she stopped working, she would have no income.

Bill C-56 would give that hairdresser the chance to benefit from maternity leave, parental leave and sick leave. And she is not the only one because, with this bill, even farmers will enjoy those benefits. Any person holding more than 40% of the shares in a company will be recognized as self-employed. That is why I am proud to see that this bill is going in the right direction. However, there are still improvements to be made.

The minister says that she wants equal treatment for workers. What is troublesome is that, according to the numbers, 2.6 million Canadian men and women are self-employed and have no protection whatsoever. How can the minister say that she wants equal treatment for workers when the self-employed cannot avail themselves of employment insurance, for example?

I have talked to other people who are self-employed, massage therapists, for example, and as I said, farmers. They get up in the morning and do their work. They wonder why they are not protected for when they do not have work, especially those who work in offices, most of whom are women.

When I made my trip across the country in 1999, the self-employed said it very, very clearly. I presented a document to the House of Commons, to the government. On page 12 of the document is the heading, “Lack of response to the new labour market”. In the new labour market, many people have become self-employed. Many people who had worked for a company or a business but had been laid off started their own business.

This morning the minister herself said that this is a new lifestyle that we will see more and more. There are 2.6 million self-employed people in our country. If there are 2.6 million self-employed people in our country, we have to give them more than the sick leave, paternal leave, maternity leave and care leave. We have to go further than that. What if they lose their job or do not have any work? The minister this morning asked how we would know whether a person was working or not working. If people do not report any earnings, that means they are not working. If a hairdresser does not have earnings for two months, then that person is not working. I think there are ways to do it.

I will vote for the bill to go to committee. I would be very interested to work with other members to make it a better bill. That is what this is all about. The bill is presented in the House and when it goes to committee, we have the opportunity to make amendments to it. I hope that we will work together so that self-employed people will have be treated equally with respect to employment insurance.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Mr. Speaker, the member for Acadie—Bathurst made a very good presentation. I want to acknowledge the amount of work he has done over the years. He has been a driving force in the House in bringing forward the reforms that need to be made to the employment insurance system. I know the member is very familiar with the cuts to the program that were made back in the mid-1990s under the Liberal regime.

The member pointed out that in the cross-country tour he undertook a number of years ago, the very issue around women and self-employment was raised at that time. He mentioned the new economy. I wonder if he could talk about the kinds of cuts that he has seen over the last 10 or 12 years to the employment insurance program that have meant that women truly have been left behind when it comes to the employment insurance program.

I believe at this point in time only about a third of the women who pay into the system actually gain any benefits. I wonder if he could specifically talk about the impact this program has had on women and their families.

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

Absolutely, Mr. Speaker.

When I went across the country I happened to go to Nanaimo, which is in the member's riding. I remember very well a story I was told about a woman who had worked for about four or five years and because of the cuts made by the Liberal Party at that time, people needed 700 hours in order to claim EI if they were sick. This woman fell into a coma and had to go to hospital. She recovered and applied for employment insurance. Believe me, I saw the tears in that woman's eyes when she told me she had 698 hours. She was missing two hours to qualify for employment insurance. She could not make the payment on her house. It was a real shame. The cuts that the Liberal Party made at that time were totally unacceptable.

Women are the ones who have suffered the most from all the cuts. Only 32% of women qualify for employment insurance. They are the ones who have been hit the most with all the cuts and changes that have been made over many years.

The government said that workers depend on employment insurance. It is not that. The government depends on the employment insurance fund. It has made a big profit from it. There was an overflow of $57 billion that it put into the general revenue fund and said, “Never mind the working men and women of our country. We are going to steal that money, put it into the general revenue fund and say that we are good administrators with the money of our country”. The deficit was paid on the backs of the working people of our country.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Madam Speaker, I am very pleased to follow my colleague, a colleague who understands and knows the EI system better than most people in this House. He is a true expert in the area. He has done a lot for unemployed people over the last number of years.

At the outset, I want to compliment the government for bringing in a bill that appears to have all-party support in the House. That is a welcome change from the government we were seeing six months to a year ago. The Conservatives perhaps are learning their lesson rather slowly, but nevertheless they are learning that if they bring in legislation that benefits workers in this case, or benefits Canadians, they can continue to achieve at least a majority support of the House, or perhaps even both houses in this case. They may find themselves successful in a minority government situation for a lot longer than most people think. That is certainly a good sign and we expect to see more positive initiatives from the government over the next few months and maybe even years.

Having said that, if the government proceeds to bring in omnibus bills with poison pills and wedge issues in them, then it will end up seeing itself defeated and we will be into an election which, once again, nobody wants. If that were to happen, I think members of the public are aware enough that they would know that it was a set-up on the part of the government.

I would also like to compliment the Liberals for climbing down from their ledge. It has taken them a month to do it. They did oppose Bill C-50, which would provide $1 billion to 190,000 long-tenured workers in this country. They did vote against that. I thought that was something they probably should not have done, but I see that on this particular provision, extending benefits to self-employed people, the Liberals themselves are on board. Therefore, I anticipate that perhaps by the end of today, this bill will receive all-party support to get it to committee where I am sure through the committee process, there may be some adjustments and changes.

As I had indicated, we are providing under this bill employment insurance special benefits to the self-employed. In the 2008 Speech from the Throne, the government committed to take measures to increase access to maternity and parental benefits under employment insurance. The commitment is being met by providing the self-employed access to all EI special benefits on a voluntary basis. These include maternity, parental, adoption, sickness and compassionate care benefits.

Not only were these promises made in the Conservative Party's election program, but this promise was also made as part of the NDP election promises last year.

We also note that in 2008, 2.6 million Canadians reported some income from self-employment, and for a large majority, it is their sole source of income. The share of self-employed in the labour force has been relatively stable over the past decade at 15%. I have to take that figure at face value because I personally do not believe that that is true.

I see an explosion, in fact, of self-employed people in the labour force, probably starting back in the early 1980s. It may even be earlier than that, but companies have changed their methods of doing business. For example, computer companies that repair computers would turn around and lay off their repair staff, and then hire them back as self-employed individuals. In some cases that was a win-win situation because the employees were perhaps happy to be working for themselves. They could take on customers other than simply working for their previous employer. They would get to deduct their expenses and perhaps even deduct office expenses because many would be working out of their houses. We have certainly seen a lot of activity in that area.

As long as 25 years ago, pretty much all of the real estate business was made up of employer-employee relationships and deductions were taken. During the old Block Brothers days, deductions were taken from the agents who were considered employees in terms of benefits.

In the early to mid-1980s companies like RE/MAX and others that members would be familiar with simply went to an option of self-employment. I say that as an option because a lot of those companies retained a hybrid system. Some companies did go totally to a self-employed model and thereby moved away from worrying about deductions and so on, and in turn transferred the responsibility over to the agents themselves so they became self-employed and could deduct their expenses. This probably worked out for some employees, but in a lot of cases the employees were actually worse off than they were before.

I have had other experiences over the years. I have heard of people giving up good paying jobs to open a Pizza Hut or a restaurant thinking of themselves overnight as entrepreneurs. They worked many more hours than they were before and getting less benefits. They were taking a different look on life. The reality is that they would have been better off staying as salaried employees.

Many self-employed people may have gone there by choice. They may in fact have been doing better than they were before, but there are a number out there who went in that direction not on a voluntary basis but were forced into self-employment. They are doing worse than they were before.

This measure has been a long time coming. People who are self-employed will benefit under this system. Perhaps a measure like this might actually encourage more self-employed individuals in the marketplace when they find that they can be covered for benefits under the employment insurance system.

Self-employed people face a very difficult time trying to find insurance coverage for themselves and their families because they do not belong to a group so they do not qualify for group benefits. No insurance company wants to insure one or two people, so it is very difficult for them. They are basically out there on their own and they do not have a lot of support or protection. Anything that we could do to help them through the EI system is a positive thing.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Madam Speaker, when we are looking at the self-employed, and I would agree with the member's analysis, I think that 2.6 million workers who are self-employed is probably an underestimation.

We know of many communities that are going through transition, my own community is going through a transition due to the changes in the forestry sector, and many workers are ending up being self-employed.

In fact, in my office in Nanaimo—Cowichan we had a worker come in a couple of weeks back. He had been employed for a number of years and decided to set up his own business. He wanted to do it on his own hook. He did all the work in setting up the business and then found out, as many self-employed discover, that it would be a while before he actually saw a positive cashflow. He went to the local office to find out whether he could collect employment insurance benefits while he was setting up his business. Because he already was into setting up his business, he was not eligible. He was already deemed to be self-employed.

This bill is a positive first step, but could the member talk about what other changes he would like to see in terms of supporting workers who are self-employed?