Human Resources Committee on March 6th, 2008

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

The fact is that the premiums have gone down and the benefits have gone down. It would seem to me that there should be, at this point in time, a restructuring to say that we have this notional surplus, an actual surplus each year. It's not accumulated; it goes in and out of the consolidated revenue fund. But it has been mainly at the expense of people on the benefit side, much more so than on the premium side.

[Charles Cirtwill]

I think you have to recognize the positive benefits of that. If you take a look, for example, at the unemployment rate, the employment rate, and the participation rate in Atlantic Canada in 1997, 1998, and 1999—before the changes in 1996 were undone—those raw numbers are pretty impressive. We actually put people to work. People actually started taking training that they hadn't been taking before.

I would suggest to you that the changes we saw in the early 1990s did exactly what we wanted them to do, which was put people to work, encourage them to train themselves, and make better lives for themselves so that they did not have to depend on long-term switching into and out of EI. I think that would be a better long-term goal than maximizing the benefits.

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

I will pass your commendations on to the government for the work they did in terms of improving the economy in Atlantic Canada.

I would like to ask questions of my colleagues from the labour movement. Mr. Céré, you have given us a few numbers, and I wrote them down. I wanted to see if I understood them in terms of the cost of certain improvements to EI, and $220 million is your estimate of what it would cost to go to the best 12 weeks. Is that the number you've given me?

[Pierre Céré]

No. Once again, according to our economist's calculations, for the best 12 weeks, the cost would be $320 million and if the eligibility criteria were relaxed, it would be $400 million. We are talking about relaxing the criteria, and not about a single eligibility criterion. Our calculations were not based on that assumption.

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

Okay. I'll come back to this when I get a chance. Perhaps I won't.

The issue is that I believe we need to do something on the benefit side of EI. The question I asked Monsieur Godin in sincerity related to a number of things that we need to do. Bill C-269 was one that eliminated the two-week waiting period, the five-week black hole on the other end, and did a number of things. It increased the rate from 55% to 60%.

You can look at the benefit period. We had Bill C-278, which was a Mark Eyking bill, to extend sickness benefits from 15 weeks to 50 weeks. It was supported by both the Cancer Society and the Heart and Stroke Foundation, realizing people are living longer now and recovering from illness.

We have the arm's-length provision, the best 12 weeks, and hours worked. There are a number of things that we need to do on EI. I'm trying to come to terms with whether this bill, as it is, is entirely the best one.

Monsieur Céré mentioned some of the discussions that have happened. We are trying to figure that out; I don't think I have time to ask for a comment.

Thank you.

[The Chair, Conservative, Dean Allison]

Thanks, Mr.Savage.

We will move to Mr. Lessard for seven minutes, please.

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

Thank you, Mr. Chairman.

Allow me to thank and congratulate this morning's witnesses for the work that they have done. I am referring to the CLC, the Comité Chômage de Montréal, and the Canadian Auto Workers Union. You continue to do very good work.

Mr. Cirtwill, it is unfortunate that your opinion is so offensive to workers. I have worked with employees for 40 years. I am not going to knock what you said. You are entitled to your opinion, even though it illustrates an absolute misunderstanding about the context within which these workers find themselves when they lose their job. It's like saying that it is the pain medication that caused the illness. I am saying this so that you will give it some thought. I don't want to discuss it with you, I simply want you to know how I feel. It was hurtful.

I would also like to say that Mr. Céré is absolutely correct when it comes to assessing the costs. When he appeared before the committee on December 7, 2004, Mr. Malcolm Brown, assistant deputy minister with the Department of Human Resources and Skills Development stated that a calculation based around the best 12 weeks would represent $320 million and would benefit approximately 470,000 claimants; the cost of changing the entrance requirement to a flat 360 hours would be $390 million. I think that your calculations are in keeping with what the department has determined to be the cost.

My questions are for Ms. Byers and Mr. Jackson. I believe that you did a study that was published in 2003 on the number of people who paid employment insurance premiums and who had the misfortune of losing their job. The study indicated that only 38% of them could ever hope to draw employment insurance benefits. According to the figures that you gave us this morning on the percentage of unemployed women, it appears that the situation continues to be very serious. Am I mistaken? Your conclusions always seem to be the same.

Moreover, the minister of the day said more or less the same thing in 2004. It angers me to hear that, but I repeat that Mr. Cirtwill is entitled to his opinion. Mr. Volpe, the Liberal minister, in response to a question that I asked him in the House of Commons, told me that employment insurance—we no longer call it unemployment insurance and I understand why—is for people who want to work. He implied that the government philosophy was to give as little help as possible to workers so that they would go out and find another job, and we know where that type of philosophy leads.

I would like to hear what you have to say about those two points. If we have time, I will raise another one.

[Barbara Byers]

I'd love to say to you that in the studies we've done over the last number of years, things have gotten better for workers. They haven't. The percentages are still shamefully low in terms of who can access benefits, and obviously for women and for workers of colour, aboriginal workers, workers with disabilities, any of those people who might have any hope to qualify, it's even worse. In some locations, you can see the percentages for women being able to access as low as about 16%.

I just think, again, when we're looking at this bill, we're talking about the question of access, which should be the right of everybody, to have fair and equal access, and some question of the level of benefits.

I have to comment as well, very briefly, that I spent 17 years as a social worker in the province of Saskatchewan, and I too am very offended by the notion that the unemployed and the poor just want to be that way. People don't choose poverty. They don't choose to be unemployed. I think it's quite ironic that we have this system that says that to make the poor work harder, you pay them less, and to make the rich work harder, you pay them more.

[Andrew Jackson, National Director, Social and Economic Policy, Canadian Labour Congress]

Could I speak very briefly to the incentives to work issue?

I guess at the time of EI reform there were a number of background studies done for the department. One key result of those studies was that one reason the employment rate in Canada was higher than the rate in the U.S. traditionally through the eighties and nineties is that in fact people are more likely to work in Canada, under a relatively generous EI system, for the obvious reason that you don't qualify for benefits if you don't work. So the employment rate in rural New Brunswick is higher than in parts of rural Maine—or was—where the system didn't exist.

The other point I would make, and I think this is an important one, is that the labour movement has never said that the duration of benefits should not vary with the local unemployment rate. It's reasonable that people in high unemployment regions should get a longer duration of benefits simply because it's harder to find another job.

I mean, what's important about the 360 hours is to put everybody in the country on the same basis. You can very easily live in a low unemployment city and experience a bout of unemployment through no fault of your own--the SARS epidemic, for example. So we think it's absolutely critical that the 360 hours, that entrance to the system, should not depend on local labour market circumstances, but it is reasonable to condition duration of benefits.

[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.

[The Chair, Conservative, Dean Allison]

Just a quick response, and then we're going to move on.

[Barbara Byers]

We think there are three things that need to happen with the EI system: the question of access, which we're dealing with there; the question of the duration of benefits, which Andrew has talked about; and the question of level of benefits, so the percentage of what people get. And even at 60%, by the way, we're not where we used to be before all the cuts came.

[The Chair, Conservative, Dean Allison]

Thank you, Ms. Byers, for keeping that short.

We're going to now to move Mr. Godin, for seven minutes.

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

Thank you, Mr. Chairman.

Last Tuesday, we discussed the possible costs. As you know, I have been a member here for a number of years, and I have a keen interest in the employment insurance program. I truly believe that it is unfair to workers. Mr. Charles Cirtwill thinks that there should be a different program. From what I understand, the witness believes that these people should go on social assistance and stay there until the end of their days rather than try to maintain their ties with the workplace so as to be available for work when the employer calls them back. I don't want to spend too much time on this, but I am ready to challenge him to a one-hour debate—it could be on Radio-Canada or the CBC—so that he can explain his position and we can put forward our own and we can hear what Canadians have to say.

I have just given our clerk a letter outlining the costs that have already been determined by the Department of Human Resources. With respect, Mr. Céré, this did not involve a simple reduction of 70 hours for each category, but a drop to 360 hours, which could possibly be done by amending schedule 1 of the act. The cost for 360 hours would be a total of $390 million. I would like to ask our clerk to have the letter translated and distributed to all committee members. This work was done by our research assistant. We made the request, and received the answer on November 21, 2006.

I join with my colleague Mr. Lessard in saying that I am truly offended, on behalf of all workers, by the opinion that people who draw employment insurance benefits are well paid. Their benefits only represent 55% of what they were earning. I can tell you that most of the calls to my office come from people who want to work. If small Atlantic companies in Halifax and elsewhere cannot find enough people to fill their jobs, it is because the workers have taken the train or a plane and have gone to work in Alberta. That is why in Atlantic Canada today, welding shops and manufacturing plants are running short of workers. People have moved west to find work. Out west, they may not be able to draw EI benefits, but it is still not possible to find someone to work at McDonald's for $18 an hour. There is a manpower shortage there. That has nothing to do with employment insurance.

People who represent workers and those who represent some employer groups have shown you both sides of the issue. Nevertheless, when the Prince Edward Island Chamber of Commerce appeared before the committee, they said that the reductions to employment insurance were too steep. We went to Forestville, in Quebec, where there was a demonstration. Manufacturers as well as merchants demonstrated in the street to protest against these measures and the effects that they will have.

In 1986, the number of hours required was 150, or 15 hours per week. Is it really unreasonable to set the number at 360 hours? Do you really think that Canadian workers are lazy? That is what my predecessor Doug Young said about the workers in the Atlantic provinces. His statement was published in The Globe and Mail. They said that was why changes had been made to employment insurance.

[Pierre Céré]

Let me begin by offering amends for what I said.

I said that unemployment insurance cuts had been broadly documented for the past 20 years, but it seems that this was not so in every case. I did not come here today on behalf of an organization to debate prejudices. It is rather unimportant, but there are prejudiced opinions in society. There are prejudices regarding different matters. We see all kinds of them. All this prejudice is irrational. Would the mere fact that there is more unemployment in Acadia, in Gaspé, in Abitibi, on the North Shore or in Newfoundland indicate that there is a higher degree of laziness in those regions? Is the employment insurance system contributing to unemployment? This is not serious.

The ratio between beneficiaries and unemployed persons, ladies and gentlemen, was established in 1940. The department, which changed names several times since then, established it at that time. It has not changed. This ratio helps to estimate the coverage of Canada's employment insurance system. In the 1980s, it was 85%. In other words, if they lost their jobs for any reason, 85% of the people who were working and contributing to employment insurance were able to rely on it for replacement income while looking for another job.

The ratio of beneficiaries to unemployed persons, which is the coverage, went down after the cuts that the Conservatives made in 1993 with regard to the reasons for job termination. The ratio went down from 85% to 65%. More cuts were made in the wake of the Axworthy reform in 1996, and the ratio currently stands at 46.8%. These figures are not ours, nor do they come from the unions or from just anyone at all. These are the department's figures. Less than one out of two workers has contributed. Thus, a large segment of the working population cannot access employment insurance when the need arises. That is how I define the problem. The employment insurance system's coverage should be brought back to a level more acceptable to workers.

Unemployment is a temporary situation, and so is reliance on employment insurance. The money is available, and therefore we ask that it be distributed in a way that will provide better protection for workers. This is the real purpose of an insurance system. Moreover, the Conseil du patronat made this point right in this place, three years ago, in the context of the commission. Therefore, let us come back down to earth, and let us look for a solution.

A union leader told me a few days ago that generating smokescreens was not getting us anywhere. It is time to find solutions. Let us go beyond partisan interests, and let us work together to find solutions that will be supported by a majority and that will make this social institution that is fundamental for many people work better. This is my appeal to you.

[The Chair, Conservative, Dean Allison]

Thank you, Mr. Céré.

We're now going to move on to our last questioner.

Mr. Lake, you have seven minutes of this first round.

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

I'm going to start by doing something I don't normally do, and that is to commend my colleagues across the table for some important changes in 1996 to the EI system.

I want to refer to a couple of quotes that I've heard so far. Mr. Céré, at one point you said, forget about partisan interests, think about the best interest of society. At one point Ms. Ritchie said that this is not the end of history.

It's good to hear you refer to the big picture. The big picture right now is that we have an employment rate that is the highest since 1975, and that's just a fact. There are studies out there that have shown time and time again—and it's interesting, because I've never heard of AIMS before today, so I'm not referring to what he had to say—that the rise in employment is directly correlated with a decrease in poverty rates.

My first question is for Ms. Ritchie. Why in the world would you want to advocate for an ad hoc policy change that will, with absolute certainty, lead to a decrease in employment and an increase in poverty?

[Laurell Ritchie]

Well, I obviously disagree with both of those conclusions. I think it would be helpful to have a look at the government's website, the HRSDC website, and take a look at unemployment rates and entitlements by region. While you will see some areas that are at or about the average, I would not want to be you walking into the Niagara Peninsula or Hamilton or the Kitchener—Cambridge region or Windsor, Ontario, and trying to tell people that they have a better employment situation than they had a few years ago.

It's true, on average, across the country, but we have two solitudes in employment numbers right now. We have a red hot economy in Alberta and to some extent in Saskatchewan, and we have a very different problem in other parts of the country, and I think you know this very well. I think you'll have this registered again tomorrow when you see the new unemployment numbers, at least as it has been suggested.

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

Ms. Byers, you refer to aboriginal, disabled, and people of colour—I think that was the terminology you used—in talking about access to unemployment insurance.

Coming from Alberta, I know that among the huge opportunities that have been created due to the labour shortages we have is that employers are looking at workers from these exact groups you mentioned in ways they have never looked at before, which is creating tremendous opportunities.

Why is there so much focus on supporting the unemployment of these folks? Why not take steps to reinforce policy changes that create opportunities for employment?

[Barbara Byers]

Well, obviously we do support all sorts of measures for employment, in particular for people from disenfranchised groups, but what we're talking about here are people who have jobs. Sometimes when you look at aboriginal people, women, workers of colour, and workers with disabilities, they are also the people who are more likely to be employed in part-time, temporary, casual-type jobs that don't have security. What we're saying essentially is that those people should have the right to access EI for those periods of unemployment.

Take a look at the stats. People aren't getting rich on unemployment. They don't choose to be there.

We certainly would expand all sorts of things. We've been promoting an insurance system under employment insurance that would currently give those workers the opportunity to access their EI while they upgrade their skills—all sorts of things—but what we're talking about in this committee is that when they have periods of unemployment, whether short-term or long-term, they should have the right to access the EI benefits they've paid into.

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

But the very high employment situation we have in Canada in part is due to the changes that have been made to the EI system--the very changes that you would reverse. Employment rates would go down if this policy change is implemented. It would hurt those workers.

[Barbara Byers]

I don't think you can back that up for one moment.

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

Oh, I absolutely--

[Barb Byers]

Just a moment; just a moment.

You know there's no evidence that says that if you allow people access to their EI benefits, they will then refuse to go to work for a crummy $291 a week. I mean, really, just take a look at it: if you have somebody who is offered a job that has reasonable wages and reasonable benefits, are they going to choose EI over that? They still have to go out and look for work, sir.

Maybe you've never dealt with people who are unemployed. I don't know, but the reality is that you're saying this would create unemployment. It will not create unemployment. It will allow people to access the benefits they've paid into, and a lot of those people are the disenfranchised groups.

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

I have a lot of experience with those disenfranchised groups you talk about. I've mentioned in this committee before that I have seven foster brothers who are aboriginal and come from aboriginal backgrounds. I have a 12-year-old son with autism. I believe more in the abilities of these people than what any of you are talking about.

What is coming across is a total lack of faith in their ability to get a job and keep a job—a high-paying job—and I do not believe the steps you're talking about actually help these people. I've heard no evidence from you. All the outcomes you refer to are entirely based on unemployment. Why does none of your research actually focus on the key outcome of increasing employment, of higher employment rates?