Finance Committee on May 7th, 2008

[The Chair, Conservative, Rob Merrifield]

Mr. Wong.

[Victor Wong]

I have a quick point.

The government has introduced the Canadian experience class to target students and high-skilled workers, but it excludes the lower-skilled workers. It makes them more vulnerable to exploitation. That's why our recommendation in our comprehensive immigration plan is that we offer a clear path to legal status and citizenship for all workers.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Does Mr. Pierre Céré want to answer the EI question?

[The Chair, Conservative, Rob Merrifield]

I think Mr. Stewart-Patterson had an answer there as well.

[David Stewart-Patterson]

I have just a quick point, if I may, on this issue of temporary workers.

I think some of the criticism of the bill is that this will lead to more temporary workers. In my view, one of the reasons we've had such a surge in temporary workers is that we can't get permanent migrants through the system. I heard of a major project in the resource sector that's in the planning stages right now where the human resource planning assumption is that they're going to have to bring in half the workers on a temporary basis because they can't get them in on time through the permanent system. This is a tragic lost opportunity for our country. We should be getting these people here on a permanent basis.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Yes, but is the answer, really, that there should be more training, taking the funds from the EI to do the training, so that the unemployed manufacturing workers who are now on the street, or the forestry workers, can be retrained? That is number one.

Number two, should we not change the point system and actually allow some of those people to come into Canada? Right now the skilled workers, unless they have degrees and speak fluent English, are not the types of workers you necessarily are looking for. We need carpenters, for example. Carpenters don't have enough points to come into Canada.

So yes, we are all for changing the point system, but this is not what Bill C-50 is doing. Bill C-50 is basically allowing the minister to bring people and move categories of people up and down; it's not changing the point system. I don't see how that would necessarily make the system any better.

[David Stewart-Patterson]

If I may, I think it provides some discretion to enable us to react to labour market conditions, but I agree with my colleagues here that Canada should be trying to attract more people. On the other hand, I also agree with you that as we bring people into the country, we do need to make sure we are enabling them to integrate as quickly as possible and move into our economic mainstream. I think that's been a flaw—

[Olivia Chow, NDP, Trinity—Spadina, ON]

And make sure they're landed immigrants.

[David Stewart-Patterson]

—of public policy over the past years, that we're not doing a good enough job. If you look at the income results for immigrants and what's happened over the past 10 or 20 years, we're seeing those results deteriorate rather than improve.

So yes, there are issues that need to be dealt with, but the first thing we've got to deal with is to make it possible for more of the skilled people that Canada does need, right now, to move into this country on a permanent basis and not on a temporary basis.

[The Chair, Conservative, Rob Merrifield]

Okay, thank you very much.

We'll now move to Mr. McKay for five minutes. Now we're into five-minute rounds.

[John McKay, Liberal, Scarborough—Guildwood, ON]

My precious few seconds.

I wanted to carry on the conversation that Mr. McCallum was having with Mr. Stewart-Patterson and Mr. Jackson.

This EI proposal strikes me as, if you will, a half-pregnant solution. It doesn't put a sufficient amount of money, notional or real, into the fund in order to be able to do the counter-cyclical things Mr. McCallum and you were talking about. So having $2 billion there is almost a waste, because it really is the national treasury that stands behind the whole thing in any event.

I'd be interested in your views as to whether, if this is in fact to operate as a true arm's-length entity, it would be in both business interests and labour interests to be serious about this and actually put $15 billion into it, much like the actuaries want to happen, and do the counter-cyclical thing. That way, when things are going badly under Conservative times you don't have to raise the premiums, and when they're going well under Liberal times you don't have to lower the premiums.

[An hon. member]

Tory times are tough times.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Look, we're going into the toilet with the Conservative government.

Mr. Jackson, I'd be interested in your view.

[Andrew Jackson]

I basically agree with what you say. That's my interpretation. I think with the $2 billion, it's intended that it would set up enough to allow, over time, the new board to not necessarily increase a premium immediately, because they would belt up the reserve. But we don't really know, because we don't know what the size of the reserve fund is going to be, and that's going to continue to be set by the government.

I think the important thing is not so much the arm's-length aspect of the fund as having a fund that's genuinely separated from the public accounts. We do know the funds that are collected through the EI premium are being spent for EI purposes, and I think there's been a lot of consensus over the years on the employer and labour side over—

[John McKay, Liberal, Scarborough—Guildwood, ON]

In some respects it's half-pregnant on half-pregnant, because they can only go up and down 15¢. You make them arm's-length, but then you take it all back, so what's the point of having the thing in the first place?

Mr. Stewart-Patterson.

[David Stewart-Patterson]

You're right. First of all, the fact that you can only go up and down by a certain amount provides some welcome certainty and limits any kind of pro-cyclical damage. At the same time, as Andrew Jackson mentioned earlier, as we were going through a period of extended economic growth, the estimates of what was needed to break even tended to lead to another surplus every year. You'd made a conservative analysis. The result was that if we had been at arm's-length a decade ago, we'd have a pretty healthy surplus by now. I think my expectation would be that an arm's-length rate-setting body is going to make that sort of conservative calculation, and over time, you would build up what the board considered to be an adequate surplus to deal with the cyclical issue.

I think there is a legitimate discussion here in terms of what the necessary seed capital is, if I can put it that way, in order to ensure that we don't immediately have to get into making decisions about raising premiums right away just to kind of—

[John McKay, Liberal, Scarborough—Guildwood, ON]

It just strikes me that it has the appearance of a solution, but it's not a real solution.

[David Stewart-Patterson]

One of the things we agree on here is that this is one step in the right direction. Lots more could be done, and there's a whole other policy debate about the purpose of the employment insurance fund. I think some of the other witnesses have spoken to that. There's a whole variety of different changes. We might want different changes to the purpose of the fund than others. But that's a separate policy debate that needs to take place in this country.

[The Chair, Conservative, Rob Merrifield]

Mr. Céré.

[Pierre Céré]

If I may, I would just like to clarify one thing. It's very important to understand, Mr. McKay, that the current method for setting the premium rate will also apply with the new Board, that the goal of balancing the account has been stated in the act since 2005. There is no difference in this respect. Fundamentally, the only major difference is the creation of an independent account. That's all.

As far as everything else goes, if you look closely at the act and compare sections 66, 80 and so on with the proposed provisions in Part 7 of Bill C-50, you will find the same things. The provisions are identical. This process is already used to set the current premium rate and the money is there to meet the needs of the EI system. The premium rate currently generates surpluses which would be substantial enough to make improvements to the system.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

We'll now move on to Monsieur Laforest.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Thank you, Mr. Chairman.

I have a question for Mr. Céré, but it could also be put to Mr. Stewart-Patterson. Following the creation of this new, independent board, do you expect to be consulted on a regular basis or, at the very least, to take part in annual general meetings? Do you have some idea of what the nature of your involvement will be, if the bill is adopted?

[Pierre Céré]

We hope that process will be as open and as democratic as possible. In terms of appointing the board of directors and the chairperson of the board, the process needs to be more transparent and more democratic. Right now, appointments are decided by a small committee working behind closed doors. More than likely the 2-2-2 three-party approach will apply. However, consultations will need to take place and witnesses will need to be heard.

Your committees must consider these issues and endorse the minister's decision on these and other matters, including the setting of the premium rate. This is an unavoidable fact that the various associations...In a society like ours, employers, unions and social and community groups must be consulted.

[David Stewart-Patterson]

I agree. It's important for everyone that the process be transparent. In spite of what Mr. Jackson said, I think it would be important for the board to have the capability to conduct its own analyses in a transparent manner. We all hope to be consulted. Transparency is very important.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Do you have an opinion on the subject, Mr. Jackson?