Human Resources Committee on May 30th, 2012

[Joe Daniel, Conservative, Don Valley East, ON]

Thank you.

Minister, I would like to begin by saying how much I appreciate your appearance here today and giving you some feedback from the constituents in my riding.

There has been a tremendous amount of positive feedback on the government's budget, which is delivering on our commitment to jobs, growth, and long-term prosperity. I am pleased to note that in your budget there are several measures to improve the employment insurance system to help Canadians connect with local jobs in their local economy.

As part of the budget, it was announced that a new national “working while on claim” pilot project is being put in place that will help Canadians keep more of what they earn while collecting EI. I think this is a great initiative that will ensure that EI claimants take all available work while they are receiving benefits. Any time you encourage people to get back to the labour force and work, it is a good thing.

Would you be able to update this committee on what the working while on claim pilot project is, and how it will ensure that Canadians always get better off while accepting all available work?

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

Thanks. I particularly like the question because this announcement was made recently.

To put it in context, I met with a number of people who are on employment insurance and had been offered part-time work, and I met with the employers who had often offered it to them. These EI claimants said they couldn't afford to go to work for the employers. Yes, they would like to do it, but it cost them to work because the system is set up in such a way that someone who is on EI could earn, by taking part-time work, the greater of $75 or 40% of their claim. After that, they had to turn back from their EI, dollar for dollar, every dollar they earned working on a job. It just didn't pay. It didn't make sense to work beyond that $75 or 40% cap.

So people who wanted to work were basically told their work was worth nothing, and employers couldn't get the help they needed. So a few weeks ago we introduced this change, which takes effect in August, that says if they can find part-time work, we're going to let them benefit from that. They're still on EI but they'll now be allowed to keep 50 cents of every dollar they earned, and that's for part-time work. That's a good thing.

First, the worker and his or her family are better off, but second, we know that quite often somebody gets a part-time job and that leads to full-time work, and then that person is off EI, they are collecting full wages, and that's even better. So you go from EI to working part-time when you can keep your EI plus, to working full-time in many cases.

With the skills and labour shortages we're experiencing across the country, and that we're expecting to see grow significantly, this is a good way to make sure that work always pays, that people are always better off putting forth the effort they really want to.

[Joe Daniel, Conservative, Don Valley East, ON]

It's certainly an exciting project, and I'm sure the pilot will expand.

Many of the concerns the constituents raise with me about the EI system relate also to the so-called disincentives to work. I know it has been mentioned that as part of the budget implementation act you have made changes to the best variable weeks pilot project. These changes are so positive that Mr. Cuzner has praised them on national television.

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

[Inaudible--Editor]

[Some hon. members]

Oh, oh!

[Joe Daniel, Conservative, Don Valley East, ON]

Thank you very much for that.

Could you please explain how these changes will encourage workers, particularly seasonal workers, to accept all available work, as well as how it will bring fairness to the calculation of weekly benefits on a national level?

[The Chair, Conservative, Ed Komarnicki]

Thank you, Mr. Daniel. When the Minister responds, probably your time will be up.

Go ahead, Minister.

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

Thank you, Mr. Chair.

For many years, a program called the best 14 weeks pilot project has been run in 25 of the 58 EI regions across the country. As you say, it was a number of years ago, and what it said basically was that in areas of high unemployment where it's difficult to find a job, instead of taking their average wage, we were just going to take it from the best 14 weeks they worked. One of the problems was that if you worked extra, it started to bring you down a bit.

But the other thing that we found was that in those regions where the pilot project was running, when they started the pilot project they might have been at 13% or 14% unemployment, and they're now sitting at 5%. Yet other parts of the country where there was a 5% unemployment rate, people needed maybe 22 to 26 weeks. That's how they were evaluated, so they would be taking more work but at a lower rate. They ended up getting fewer benefits in dollars than the people in the pilot regions, and that wasn't fair.

So we said we were going to make it equal across the country and adjust it according to the unemployment rate in their region. Now if you have two parts of the country where the unemployment rate is the same, somebody has the same job experience, they're going to get the same benefits. But we're also going to make sure that it does vary according to our belief that when an unemployment rate in an area is low, it's easier for people to find work, so it makes it harder to qualify for EI. They have less need for it because there's more opportunity for them to be working.

So it's going to vary directly with that, which I think is fair. In areas where it's tough to find another job and the unemployment rate is high, then the number of weeks required to determine the benefit rate will be lower in recognition of those differences that exist between different regions.

[The Chair, Conservative, Ed Komarnicki]

Thank you, Minister.

Mr. Cuzner, you might want to start with the comment attributed to you, or not.

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

No, I'm okay with it. I'm going to make a deal with the minister. I'm going to say three nice things about her, then she can keep her answers short and I can get all my questions in. How about that? That's a good deal.

As Joe said, certainly the two actions, the best 14 weeks—although it's politics. I understand that. You would sort of lead us to believe that you invented this program a couple of weeks ago. The fact is that they were Liberal pilot projects, the best 14 weeks or working while on claim, and you guys have enhanced the programs. I want to tell the truth on this stuff and recognize that you've enhanced them. They're important programs and I want to recognize that.

That's two goodies, Joe.

The third one is the principle of what you're doing with the EI alerts. The principle is sound, and I think it's targeted at, probably, a large portion of EI recipients. But where it sort of falls short is in households that make under $30,000 a year. In 2010, 40% of those households had no access to the Internet.

There was a figure that HRDC used to make available that they no longer make available, and that's the annual household income for the unemployed. We couldn't get that figure, but that would be a worthwhile figure. You don't know that figure, do you?

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

No, I'm sorry.

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

No, and I wouldn't expect you to know that. Anyway, that's an important figure, and if we could get that from your officials, that would be a worthwhile figure to know.

Then you look at the next bracket: $30,000 to $50,000 a year in household income. There's 25% that doesn't have access to the Internet.

In looking at this, the $21 million will address, probably, 60% to 70% of EI clients. There's a big gap there. There are probably 400,000 EI recipients that wouldn't have access to the Internet. My question is, with cutting CAP sites that were really accessed by those who would need those services, how are we going to reach those people?

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

First of all, I do acknowledge that the Liberals did bring in those programs. Despite the opposition that we faced from the Liberals during the recession about sticking with the variable entry requirements, we believe it is a responsible program. What we're trying to do is modernize these pilot projects and make them the same across the country, and fair to everyone.

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

Okay, but the 40%, how are we going to get at those 40% that don't have—

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

One thing that often gets ignored in the discussion about the changes to the EI reforms is that in everything we do we want to be fair and reasonable, and base it on individual circumstances and the local labour market conditions. That includes access to Internet, as an example.

We're aware that not everybody has it, although we do—

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

Okay, so at least if this—

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

Although 80% sign up for their EI—

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

With great respect, Minister, I have about three minutes left.

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

—via the Internet.

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

Know it as a concern.

The EI processing hub in Kingston had been identified as a hub between 2005 and 2011. After the 2011 election, all of a sudden, North Bay has become a hub. There are 30 people employed in Kingston. They're going to be relocated or have the opportunity to be relocated to North Bay.

You have a hub in Sudbury. Does the department have a rationalization for why this change was made?

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

Karen, would you like to address that?

Karen Jackson is the head of Service Canada.

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

Is it a formal presentation that you have as to rationalization?

[Karen Jackson, Senior Associate Deputy Minister, and Chief Operating Officer for Service Canada, Department of Human Resources and Skills Development]

When we considered the sites as hubs for the long term, we looked at a range of factors, including where our labour force was currently located and what kinds of skills we would need to be able to draw on from the local population. We considered bilingual capacity. We considered our leases in the real estate market. It was a range of factors that led to the choice of location where we are intending—

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

So would Kingston be low in bilingualism? And the fact that you're breaking a lease that has five years left on it in Kingston.... In my minute and a half left, I would ask you to write down what the rationalization is, because every way I've looked at it, it makes no sense.

[The Chair, Conservative, Ed Komarnicki]

If you want to respond to that you can and your time will be up. So if you wish to respond, go ahead.