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.

9:05 a.m.

Liberal

Michael Savage Liberal Dartmouth—Cole Harbour, NS

The witnesses aren't going to make a presentation on the bill?

9:05 a.m.

Conservative

The Chair Conservative Dean Allison

No.

9:05 a.m.

Liberal

Michael Savage Liberal Dartmouth—Cole Harbour, NS

We had talked before about the fact that the government had indicated at some point in time that they had costed this bill at $1.5 billion. Do we have any information on that?

9:05 a.m.

Conservative

The Chair Conservative Dean Allison

Mr. James, do you have any information on that?

9:05 a.m.

Bill James Director General, Employment Insurance Policy, Skills and Employment Branch, Department of Human Resources and Social Development

Sure. Perhaps there's a point of clarification on this. I could speak today to our estimates with regard to the bill as it stands or with regard to the proposed amendments to the bill. It's the committee's preference which we move to on that.

9:05 a.m.

Liberal

Michael Savage Liberal Dartmouth—Cole Harbour, NS

Before we do clause-by-clause I'd like to get a sense of where the $1.5 billion comes from. Perhaps you could itemize that for us.

9:05 a.m.

Director General, Employment Insurance Policy, Skills and Employment Branch, Department of Human Resources and Social Development

Bill James

The $1.5 billion is an estimate basically of the individual elements of this bill as it's described here. We have had to make some assumptions. For example, around the benefit entitlement table associated with the lower entrance requirements, the actual entitlement for those lower entrance requirements isn't specified in the bill. Basically what we've done is we've costed the individual elements and estimated those costs. So the total cost of $1.5 billion is the sum of those individual elements. But it's likely a minimum sum, because we cost each element individually, as opposed to costing the entire package, which would be a much more complex process.

I should also mention in terms of the costs we're speaking to today that those costs are done with a certain degree of uncertainty around those getting access to the program who didn't previously have access—so the lowered entrance requirements—because these people aren't currently clients of the program being served by the program.

9:05 a.m.

Liberal

Michael Savage Liberal Dartmouth—Cole Harbour, NS

Are you talking about first-time entrants, Mr. James?

9:05 a.m.

Director General, Employment Insurance Policy, Skills and Employment Branch, Department of Human Resources and Social Development

Bill James

Yes, people who would be allowed into the program through the lower entrance requirements. Part of that is related to first-time entrants and part of it is related to just the elimination of the variable entrance requirement.

So the specific costs that sum to $1.5 billion....

There are the best 12 weeks over a 52-week period that we estimate as $320 million per year and affecting 480,000 clients. The other two costs we've broken out.

This is a different approach from our approach in the past around lowered entrance requirements. We have a cost for the fixed entrance requirement for special and regular benefits. There are two aspects there. One aspect is lowering the special requirements from 600 to 360 hours, and the second one is lowering the variable entrance requirements, which are 420 to 700 hours, down to a flat 360 hours. For that, we come up with $665 million per year and 150,000 claimants affected.

Now I'll turn to the final aspect of the bill as proposed, which is the new re-entrance requirements.

We've actually costed that separately as well. That's associated with looking at a population of people who wouldn't have 910 hours when filing their claim right now and who, at the present time, wouldn't have 490 hours in their prior year of work. That's the way the new entrance requirement works, if you don't have a certain level at the time you file your claim, and you have to have a certain amount of work in the previous year. This is an additional element of work that we've undertaken. It's very complex to estimate, so we've broken that out from the work that we've done prior and estimated that as well. That comes to $535 million per year and our estimate is it would affect 100,000 claimants.

That's how we come to $1.5 billion for the bill unamended.

On the proposed amendments that have been circulated, we do have costing for those as well, and they would significantly change the various costs in the bill.

9:10 a.m.

Conservative

The Chair Conservative Dean Allison

Does the committee want Mr. James to go with that now?

9:10 a.m.

Liberal

Michael Savage Liberal Dartmouth—Cole Harbour, NS

I would, but I 'd like to ask one question on what we've heard so far.

9:10 a.m.

Conservative

The Chair Conservative Dean Allison

Sure, go ahead. Then I have a list consisting of Mr. Lake and Mr. Godin as well.

Go ahead, Mike.

9:10 a.m.

Liberal

Michael Savage Liberal Dartmouth—Cole Harbour, NS

I want to understand the $665 million better, Mr. James. Are we talking about the elimination of the regional rates in this $665 million?

9:10 a.m.

Director General, Employment Insurance Policy, Skills and Employment Branch, Department of Human Resources and Social Development

Bill James

That's right. It would basically take the variable entrance requirement system we have right now and move it to an entrance requirement system that would begin at 360 hours and move up from there.

We've made the assumption that there would still be additional entitlement for additional hours worked; that, for example, it wouldn't just be one level of entitlement.

9:10 a.m.

Liberal

Michael Savage Liberal Dartmouth—Cole Harbour, NS

When we looked at Bill C-269, we looked at the regional rates. A document that was put together a year ago indicates that the cost of establishing a uniform qualification requirement of 360 hours of insurable employment was about.... Oh, I'm sorry, this was based on a 2004 report, but the cost then would have been $390 million.

Is the difference between the $390 million and $665 million a little bit of inflation and perhaps also the special things?

9:10 a.m.

Director General, Employment Insurance Policy, Skills and Employment Branch, Department of Human Resources and Social Development

Bill James

Yes. To clarify, I don't believe that for Bill C-269 in particular officials were asked to provide costs. But we were here in 2004, and at that point in time there were five or six questions that the committee posed, and one of them related to the 360-hour entrance requirement.

It's important to recognize that basically the numbers we have for you today are a much more comprehensive and detailed costing than we had in 2004. In 2004, unfortunately we only had about two days to prepare before answering the committee's questions, and the approach we had to take at that point.... There was also a lot less detail than we have in the currently proposed bill, in terms of what those parameters would be.

The numbers we brought forward for the 360 hours at that point, as I believe was mentioned by officials at the time, were minimum estimates and were preliminary estimates. I think we said that if we were given more time, we would be able to address those more comprehensively.

So the higher numbers I have for you today reflect the fact that, as I mentioned, we've broken out the costing for each one of those changes; that's with the benefit of time we've had over the last three years.

9:10 a.m.

Liberal

Michael Savage Liberal Dartmouth—Cole Harbour, NS

Thank you.

9:10 a.m.

Conservative

The Chair Conservative Dean Allison

I have Mr. Lake, and then Mr. Godin.

9:10 a.m.

Conservative

Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB

I think Mr. Savage was referring to the same number I'm looking at in a letter that was sent to Mr. Godin from Mr. Kerr, actually in November of 2006. But it refers to an appearance before the subcommittee on employment insurance funds on December 7, 2005.

First of all, is that even possible? We were in an election campaign at that point. Was it 2004?

9:10 a.m.

Director General, Employment Insurance Policy, Skills and Employment Branch, Department of Human Resources and Social Development

Bill James

It was 2004, I believe.

9:10 a.m.

Conservative

Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB

It was at the 2004 meeting. Okay.

9:10 a.m.

Director General, Employment Insurance Policy, Skills and Employment Branch, Department of Human Resources and Social Development

Bill James

I believe it was in November.

9:10 a.m.

Conservative

Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB

That makes sense, then.

Actually, I think you've answered the question I had.

9:10 a.m.

Conservative

The Chair Conservative Dean Allison

Mr. Godin.