Human Resources Committee on May 1st, 2008

[The Chair, Conservative, Dean Allison]

That's all the time we have.

Ms. Harrison, you can answer the question.

[Sherry Harrison]

The legislation does not specify whether they are full- or part-time, but with the very focused mandate of the organization, I expect there will be part-time appointees.

[The Chair, Conservative, Dean Allison]

Thank you very much. That's all the time we have.

We're now going to move to Mr. Cuzner. Five minutes, sir.

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

First, when you're seeking this first commissioner for this new corporation, where could we drop off resumés? I'd like to put my friend and colleague Mr. Lessard's name forward, should he decide on a career change, and I'm sure I'd get support right around the table.

[France Bonsant, Bloc, Compton—Stanstead, QC]

He wants you to chair the commission.

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

I am not aspiring to that, but I appreciate your trust. You know that this commission will be in charge of the in and out.

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

We should bring this into context. We want the history lesson because we take some things for granted here now. We take balanced budgets and surplus budgets for granted.

To think back when the Auditor General made the recommendation and the recommendation was followed to put the EI account into general revenues, we have to remember that the unemployment rate was at 12.5%, that interest rates were at 12.5%, that CPP was on the rocks, so things had to be done. We can certainly go back as deep as we want and put whatever view we want on it, but that's the reality.

You indicated in one of your previous answers that the board could decide to increase rates. Could they also decide to cut benefits, should we run into a protracted period of...? The board cannot do that? Where would that have to come from, if that was ever to evolve? Would that have to come to Parliament?

[Louis Beauséjour]

That would be a government decision.

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

It would be a government decision, or it would have to come to Parliament, or what? We want to find out.

[Louis Beauséjour]

It depends if a change to the legislation is required or not.

[Yves Giroux]

If it's a change in the benefits that is done through regulations, for example, it's the Governor in Council. If a more fundamental change is required, and it's an amendment to the Employment Insurance Act, then you'd all be consulted because that would have to be discussed in Parliament.

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

So this change would not necessarily preclude entering into new programs within EI. For example, there've been a fair number of private member's bills on employment insurance. The extension of benefits to those who are receiving health benefits under EI for traumatic cases, cancer, lung transplant, whatever it might be, that would not be under the responsibility of this board; it would still be a function of, or a responsibility of, the House.

[Louis Beauséjour]

Correct.

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

Great.

We're talking about additional transparency and the importance of additional transparency. The changes that were made in 2005 when we looked at changing the method of the rate-setting to match it more closely to benefits, where do those changes fall short?

[Yves Giroux]

I would say the main difference between the 2005 rate-setting mechanism and the one that is likely with the changes that are before you today is the surpluses. The proposed board will have the management of a reserve, and then if there's a surplus the board would have to take that into account in setting the rate going forward. I think that's the main change, but I can be corrected by my colleagues if they want to add something.

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

That would be the main point?

[Louis Beauséjour]

Yes.

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

Okay, because what we felt in 2005 was that the inputs necessary were identified in 2005 and responded to in 2005. It's just that.

I'm fine with that.

[The Chair, Conservative, Dean Allison]

Okay, that's your time. Thank you very much.

Monsieur Gourde, you have five minutes, sir.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Thank you very much, Mr. Chairman.

I think that the highest rates that the employment insurance fund ever asked of employees and employers were 3.2% and 4.7%. Roughly, in what year did this happen?

[Yves Giroux]

I had prepared for a discussion of Bill C-50, but I have not memorized all the figures that go back to the 1990s. If I remember correctly, it was in 1993, or at least in the early 90s.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

I think that you mentioned earlier that there were a deficit in the fund during certain years, and that money had been injected by Treasury Board or that the rates had been balanced out during those years.

[Yves Giroux]

If I remember correctly, and as one of your colleagues mentioned earlier, the Auditor General in the 1980s, Mr. Desautels, made a recommendation. When large non-consolidated deficits crop up, he had strongly suggested that the government consolidate the employment insurance account so as to fully reflect the liabilities incurred by the deficit in the employment insurance fund. At the time, this was perceived as a way to reduce the deficit of the government in power. The Auditor General therefore strongly suggested that the deficit should be consolidated within the accounting parameters of the federal government, so as to fully reflect all financial transactions at the federal level.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

This would mean that, despite the high rates, there was still a shortage of funds at that time.

[Yves Giroux]

Once again, if I remember correctly, the sums amounted to billions of dollars rather than hundreds of millions. These were fairly large deficits for a program of that size.