Evidence of meeting #48 for Human Resources, Skills and Social Development and the Status of Persons with Disabilities in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was workers.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Paul Thompson  Associate Assistant Deputy Minister, Skills and Employment Branch, Department of Human Resources and Skills Development
Louis Beauséjour  Director General, Skills and Employment Branch, Department of Human Resources and Skills Development
Philip Clarke  Director General, Benefits Processing, Service Canada

3:30 p.m.

Conservative

The Chair Conservative Dean Allison

Pursuant to the order of reference of Tuesday, September 29, 2009, Bill C-50, an Act to Amend the Employment Insurance Act and to increase benefits, we will start today.

I want to thank the witnesses, once again, for coming on probably short notice, although I'm sure that if you saw the bill passing through the House, you'd be coming to see us at some point.

I don't know who's going to be speaking on your behalf, Mr. Thompson, but we're going to turn the floor over to you. You guys know the routine. The microphones will come off and on for you as I acknowledge you, and then what we'll do is get through some rounds of questioning.

I'm probably going to suggest to the committee that we break at around 5, because we have some committee business to take care of. So we'll look at dealing with questions and answers over the next hour and a half.

Mr. Thompson, welcome again. It's good to see you. The floor is yours, sir.

3:30 p.m.

Paul Thompson Associate Assistant Deputy Minister, Skills and Employment Branch, Department of Human Resources and Skills Development

Good afternoon, Mr. Chairman and members of the committee.

I'm here today to speak to the committee about Bill C-50, an Act to Amend the Employment Insurance Act and to increase benefits. With me today I have Mr. Louis Beauséjour, the director general of employment insurance policy, and Mr. Philip Clarke, the director general of benefits processing with Service Canada.

The purpose of this bill is to temporarily provide additional weeks of employment insurance regular benefits to long-tenured workers. Let me explain to whom the legislation is referring when we use the term “long-tenured workers”. These are experienced workers who have paid EI premiums for years but have made limited use of EI regular benefits. Some of them, in fact, are unemployed for the first time in their lives. More specifically, they're workers who have paid at least 30% of the annual maximum EI premiums for a minimum of seven out of 10 years.

This allows claimants to remain eligible even though they have had temporary absences from the labour market.

Bill C-50 also allows for the use of up to 35 weeks of regular benefits in the past five years. This is in recognition of the fact that it is customary in some industries for employers to shut down for a few weeks every year for retooling or retrofitting. In these situations, industry sectors often have to make use of EI.

There are long-tenured workers all over the country and in every sector of the economy.

It's estimated that about half of Canadians who pay EI premiums qualify as long-tenured workers and that about one-third of those who have lost their jobs since the end of January 2009 and have made a claim would qualify as long-tenured workers. This proposed legislation would give these workers more weeks of EI income support while they look for jobs.

Let me take a few minutes to explain how the bill itself is laid out. First it deals with the benefit period. This is the period during which claimants must use their entitlement. This benefit period is normally 52 weeks, but it will be extended, through the legislation, where necessary, to accommodate the additional weeks of EI regular benefits being provided to eligible long-tenured claimants.

The second part then sets out how many additonal weeks of EI regular benefits will be provided to eligible long-tenured claimants. It also deals with the gradual transition out of the measure.

Specifically, Bill C-50 would provide from five to 20 weeks of additional benefits, depending on how long a person has been working and paying EI premiums. For example, to be eligible for five weeks of extended benefits, long-tenured workers must have paid at least 30% of the annual maximum EI premiums for a minimum of seven of the last 10 calendar years. This 30% threshold represents the most inclusive definition of full-time workers and is based on what a full-time worker at minimum wage would contribute throughout the course of a year. For every additional year of contributions, the number of weeks of benefits would increase by three weeks, up to a maximum of 20 weeks.

The third part of the bill sets out how many additional weeks of EI regular benefits are to be provided to eligible long-tenured claimants who live outside of Canada.

The last part of the bill addresses the coming into force of the legislation. It states that the measure takes effect two Sundays prior to royal assent.

The bill concludes by listing the sections that will be used once the measure is terminated after September 11, 2010.

Mr. Chairman, it is estimated that about 190,000 workers will be eligible for the assistance provided under Bill C-50. This number is based on information pertaining to three key factors. The first is the current population of long-tenured claimants. Second are the benefit exhaustion rates of long-tenured claimants in the past. And third are private sector forecasts of the national unemployment rate. Those are the three component parts that underpin that estimate of 190,000 workers.

Among those 190,000 are many workers who have been in the same job or the same industry all their lives and now face the prospect of having to start all over again.

Bill C-50 is a temporary measure designed to provide additional support to long-tenured workers while they look for jobs in a recovering economy.

As I said, eligibility for the extended benefits for long-tenured workers will continue until September 11, 2010. This means that the payments of those extended benefits would continue to the fall of 2011, approximately one year later.

This measure to extend the benefit applies not only to new claimants, but also to existing claimants. In fact, eligibility extends back nine months from the coming into force of the legislation. This will reach back as early as January 4, 2009.

In order to ensure a smooth and gradual transition out of the measure, the additional weeks of benefits would be reduced in five-week increments, beginning in June of 2010.

Mr. Chairman, this temporary measure for long-tenured workers builds on other measures introduced under the Government's Economic Action Plan.

There is one program in particular that is closely linked to this proposed measure that I would like to draw attention to. This is the career transition assistance initiative, which helps this same population of long-tenured workers.

Under the career transition assistance initiative, long-tenured workers who have opted to undertake training are already eligible for extended benefits of up to two years to help them make a transition to a new field or a new occupation. We have already sent out more than 370,000 letters since January to individuals who qualify as long-tenured workers. In addition, these workers can also get earlier access to EI if they pay for part of their training using their severance package.

The economic action plan also provides other measures to help all unemployed Canadians, measures such as providing nationally the extra five weeks of regular EI benefits and increasing the number of weeks in regions of high unemployment from 45 to 50.

Mr. Chairman, many of the Economic Action Plan measures as well as the legislation before us are temporary.

Bill C-50 is intended to help workers faced with the difficult challenge of finding a new job. The goal is to help them bridge to new employment.

Mr. Chairman and members of the committee, I would be happy to answer your questions about this bill with the help of my colleagues, Louis Beauséjour and Philip Clarke.

3:35 p.m.

Conservative

The Chair Conservative Dean Allison

Thank you very much, Mr. Thompson. We appreciate having you back here again.

We're going to start, as we always do, with the Liberals, followed by the Bloc, the NDP, and the Conservatives. The first round will be seven minutes and then we'll move to rounds of five minutes.

I'm going to start with Mr. Savage from the Liberal Party for seven minutes.

The floor is yours, sir.

3:35 p.m.

Liberal

Michael Savage Liberal Dartmouth—Cole Harbour, NS

Thank you, Mr. Chair.

Thank you to the witnesses for coming. I always enjoy it when you come here and provide your wisdom for our benefit.

I got to experience that wisdom more often this summer than I normally would, Mr. Thompson. I appreciate the work you did for the EI working group, and I certainly respect your understanding of the employment insurance system.

On this particular bill, I have a couple of questions.

First of all, I want you to take me through the math that gets to 190,000 workers. You indicate on page 4 that it's based on three factors, and you outline those factors. Can you put numbers on those factors for me, those factors that take us to 190,000 workers?

3:35 p.m.

Associate Assistant Deputy Minister, Skills and Employment Branch, Department of Human Resources and Skills Development

Paul Thompson

Sure. I think I will turn to my colleague Louis Beauséjour, who's a little closer to the actual analysis. He's in a better position to explain the calculation of that 190,000. I did outline the three factors, but Louis can provide more specifics.

3:35 p.m.

Louis Beauséjour Director General, Skills and Employment Branch, Department of Human Resources and Skills Development

In fact, the values were estimated based on 2006 data. Our 2006 data base contains different kinds of information on claimants. We have updated these values by changing the umemployment rate which was used. In 2006, the unemployment rate was about 6%, and our hypothesis was that the unemployment rate, based on private sector predictions, would stand at about 8.8% in 2009 and 2010. We therefore increased the number of claimants based on that ratio.

We also noted, using the same database, that approximately 30% of claimants qualified as long-tenured workers. So that is the ratio we used. Further, nearly 21% of long-tenured workers had run out of benefits. Again, we used that information.

Consequently, on an annual basis, there would potentially be 120,000 claimants availing themselves of this measure, in one year. The measure will be in effect for more than one year. We used January 4 as the start date for collecting benefits. The measure starts to end in June and ends completely in September, which represents a total period of 19 months. In fact, it is a period of 21 months, namely one year and nine months, from January to September. Based on these values, we increased the total number because we reached the figure of 190,000 long-tenured workers who would qualify.

3:40 p.m.

Liberal

Michael Savage Liberal Dartmouth—Cole Harbour, NS

That's 120,000 for 12 months, which extrapolated is—

3:40 p.m.

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

Louis Beauséjour

There are 190,000 workers. Over 12 months, the number was 120,000, but the measure covers a longer period.

3:40 p.m.

Liberal

Michael Savage Liberal Dartmouth—Cole Harbour, NS

So it's 190,000 because it's one year plus another nine months. And 30% of people would qualify as long-tenured workers?

3:40 p.m.

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

Louis Beauséjour

That's right. It is very difficult to get the real number for the coming months, but based on historic data of 2006, 30% of claimants would qualify.

3:40 p.m.

Liberal

Michael Savage Liberal Dartmouth—Cole Harbour, NS

The exhaustion rate is 21%. So that's the percentage of the long-term workers who exhaust their benefits.

3:40 p.m.

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

Louis Beauséjour

Exactly. We noted that 21% of long-tenured workers had run out of benefits.

3:40 p.m.

Liberal

Michael Savage Liberal Dartmouth—Cole Harbour, NS

Is this something that had to be done in this type of legislation? Could this not have been done as a pilot project, as other changes to EI have been done?

3:40 p.m.

Associate Assistant Deputy Minister, Skills and Employment Branch, Department of Human Resources and Skills Development

Paul Thompson

Maybe I'll take that question. The approach that was taken with the previous economic action plan measures, such as the five weeks, was to introduce the measure as part of the response to the economic downturn. So a similar approach was taken with these measures: to introduce it as a temporary measure that would run its course and then revert back to the regular benefits regime.

The purpose of pilot projects, as you know, is really to test a measure for future application in the EI programs.

3:40 p.m.

Liberal

Michael Savage Liberal Dartmouth—Cole Harbour, NS

But it could have been done as a pilot project without having to go through legislation and all of the stuff with this. Is that correct?

3:40 p.m.

Associate Assistant Deputy Minister, Skills and Employment Branch, Department of Human Resources and Skills Development

Paul Thompson

The purpose of a pilot project, as I said, is to test a measure for application for future implementation in EI. So the preferred method here—the more relevant method and the one that was used with other similar measures in the economic plan—is to do it on a legislative basis because it's been set out as a temporary measure with a hard end date in September 2010.

3:40 p.m.

Liberal

Michael Savage Liberal Dartmouth—Cole Harbour, NS

I understand that. But it could have been done as a pilot project.

3:40 p.m.

Associate Assistant Deputy Minister, Skills and Employment Branch, Department of Human Resources and Skills Development

Paul Thompson

If there had been a different objective, to test something for future application, yes. It could have done as a pilot project if it were positioned differently from the way it is in this legislation.

3:40 p.m.

Liberal

Michael Savage Liberal Dartmouth—Cole Harbour, NS

We want to hear from a number of witnesses on this bill, and some have expressed their points of view through the media and in other ways already. The head of the CAW, Ken Lewenza, said that what Canadians need is a full loaf of bread and suggested that this was crumbs. We heard from the CAW, indicating that only handfuls would meet that long-tenured definition. Andrew Jackson of the CLC has indicated that there's a problem with it because it only goes back to the beginning of this year; it doesn't go back to the beginning of the recession but to the beginning of this year.

This bill comes into effect for people who would qualify as of January 2009, correct?

3:45 p.m.

Associate Assistant Deputy Minister, Skills and Employment Branch, Department of Human Resources and Skills Development

Paul Thompson

That's correct. It would be nine months prior to royal assent, and as far back as January 4.

3:45 p.m.

Liberal

Michael Savage Liberal Dartmouth—Cole Harbour, NS

What would you say to people who would argue that this divides people who are unemployed into what the government considers to be the worthy unemployed and the unworthy unemployed?

3:45 p.m.

Associate Assistant Deputy Minister, Skills and Employment Branch, Department of Human Resources and Skills Development

Paul Thompson

Do you mean around the date in January versus some other date?

3:45 p.m.

Liberal

Michael Savage Liberal Dartmouth—Cole Harbour, NS

No, I mean around the qualification of long-tenured workers.

3:45 p.m.

Associate Assistant Deputy Minister, Skills and Employment Branch, Department of Human Resources and Skills Development

Paul Thompson

This is intended as a targeted measure to deal with those who have worked for a considerable length of time and made little use of EI. There are other measures in the economic action plan that have broader application, including the five weeks and the investment in training. So this measure is intended to serve a targeted client base.

3:45 p.m.

Conservative

The Chair Conservative Dean Allison

Thank you, Mr. Thompson.

Thank you, Mr. Savage.

We'll move to the Bloc now and Monsieur Lessard for seven minutes.