Bill C-50 (Historical)

An Act to amend the Employment Insurance Act and to increase benefits

This enactment amends the Employment Insurance Act until September 11, 2010 to increase the maximum number of weeks for which benefits may be paid to certain claimants. It also increases the maximum number of weeks for which benefits may be paid to certain claimants not in Canada.

[Louis Beauséjour, Director General, Employment Insurance Policy, Skills and Employment Branch, Department of Human Resources and Skills Development]

In Bill C-50, the excluded weeks are defined as regular benefits. Under the legislation, the term “regular benefits” excludes benefits payable under work sharing agreements. That also excludes benefits paid to those who are on training recommended by the commission or an authority designated by the Employment Insurance Commission.

Employment Insurance

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

Mr. Speaker, a representative from the International Union of Operating Engineers, who appeared before the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities, recommended that apprentices be put in the same category as workers who receive special benefits. In short, he was asking that the new legislation encourage apprentices to continue learning their trades and pursue training, instead of penalizing them by making them ineligible for EI benefits. Bill C-50 penalizes apprentices.

Is the government prepared to amend Bill C-50 to avoid penalizing apprentices?

[Armine Yalnizyan, Senior Economist, Canadian Centre for Policy Alternatives]

Thank you, Mr. Chair.

The CCPA is Canada's leading progressive think tank supported by 10,000 individual and institutional members across Canada, with offices in Ottawa, Vancouver, Winnipeg, Regina, and Halifax. Thank you for inviting our views today on how to prepare the next federal budget.

Today I'm putting forward three recommendations that are immediate, medium term, and long term for inclusion in budget 2010 that will meet the objectives stated by the chair of this committee, James Rajotte, in his invitation to advise this committee and the government on how to attain sustainable, economic, social, and environmental prosperity for all Canadians.

The first recommendation is to improve employment insurance so that it operates more effectively as an automatic stabilizer for the economy.

The second measure, medium term in nature, is to extend and reorient the home renovation tax credit so that it targets home renovations that advance the energy efficiency of all Canadian households across the income spectrum.

Recommendation three is to limit the tax-free savings account to redirect this taxpayer-supported initiative away from high-income individuals to low-income individuals, to give them the ability to build a modest financial cushion.

To address the immediate needs through EI improvements, we noted in April of 2009 in a report called Exposed that unemployed Canadians have not been this exposed to the economic risks of joblessness since the mid-1940s. The government should move immediately to improve access to jobless benefits by decreasing the variability of entrance requirements and introducing a lower hourly threshold. It should extend the duration of benefits uniformly, as it did in Bill C-10 but has not yet done in the proposed latest round of extensions to Bill C-50, and it should raise the income replacement rate, particularly for low-paid workers with dependants who have lost their jobs and cannot find alternative work.

It should be noted that all three ways of improving EI were agreed to in all-party approval at two readings but narrowly missed passage in Bill C-269 in November of 2007, when the present government refused royal recommendation at third reading. We have known for years that the EI system was not recession-ready. There is literally no more time to waste in fixing this automatic stabilizer so that the recession is not unnecessarily prolonged or deepened.

In the medium term, we ask the government to consider extending and reorienting the home renovation tax credit. The recession and widespread job insecurity has led many households that might have otherwise spent up to $10,000 on renovations to postpone taking advantage of the type of supports that the home renovation tax credit offers, which are largely in the category of decorative upgrades. With most household incomes stagnating during this period and many households experiencing significant income losses, Canadians are rightfully concerned with the possibility of rising energy prices. Cutting costs and improving energy efficiency is a welcome solution to both constrained household budgets and growing awareness that our individual energy use habits contribute to the pace of climate change.

The federal government could provide a second year of stimulus, this time targeting tax credits specifically to home renovation projects that improve energy efficiency of homes and apartments. We propose that the government apply any tax expenditure room not taken up in that window of January 27, 2009, to February 1, 2010, and add it to a further $2 billion in tax credits to be made available for work undertaken up to November 2011, and that these amounts be also matched with $2 billion in federal grants so that low-income homeowners and landlords can also participate in a program that improves energy efficiency across the country.

Finally, we recommend that for the longer-term sustainability of our public finances, this government limit the tax-free savings account. At a time when most governments around the world were trying to devise ways of increasing aggregate demand and private sector spending, this government chose to use scarce public revenues to encourage people to save. It did not wait until the recovery was under way to introduce what the Certified General Accountants Association of Canada has called a “revolutionary” new savings instrument. This undercuts the government's argument that the revenue hole caused by the recession is a serious public finance concern.

Budget 2008 showed an anticipated cost of $920 million to the public purse over the first five years of introduction, and went on to state that in 20 years, it was estimated, this measure would leak a minimum of $3 billion annually from the Treasury. Current tax expenditures of about $20 billion a year are provided through the RRSP and RPP tax shelters, which primarily advantage those with high incomes.

The tax-free savings account continues this bias. Given concerns about emerging financial pressures caused by an aging demographic, such revenue losses will add to the difficulties faced by all future governments. The Government of Canada should limit lifetime TFSA contributions to $50,000, or 10 years' worth of contributions, and cap the growth in such accounts to a lifetime limit of $150,000.

The full submission that I have made to this committee, available in English and French, outlines how that could be done. This would amply provide for low-income individuals to create a small financial cushion in case of unforeseen exigencies should they be able to save from their income stream or find themselves in receipt of an inheritance or lottery winnings. Those who find themselves at the top of the income spectrum need no further tax-supported assistance to increase their holdings beyond the tax shelters that currently exist.

Thank you.

Forestry Industry

[Josée Beaudin, Bloc, Saint-Lambert, QC]

Mr. Speaker, the AbitibiBowater plant in Beaupré shut down indefinitely yesterday. Nearly 360 workers lost their jobs. Bill C-50on employment insurance is designed to help Ontario's auto workers. It does nothing to meet the needs of Quebec's forestry workers. A complete overhaul of the EI system is needed to enhance accessibility and improve benefits.

What is the minister waiting for to help forestry workers?

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Colleagues from Quebec, as far as the proposed Bill C-50 goes, as I said, it's not the panacea, not the silver bullet--these are all incremental programs to help the workers--but would some of your members benefit from this legislation that's being proposed?

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you, Mr. Chair.

Thank you to our witnesses. I appreciate the discussion around the table. As previous colleagues have mentioned, several witnesses have been at the various meetings, and Minister Finley as well as the staff, and we've alluded to the approximately 190,000 employees who will benefit from the amendment to the EI act, as well as to the work share programs. There are about 8,500 work share agreements in place helping about 165,000 employees. So it is a suite of programs that we have implemented, with the additional five weeks and with the economic action plan, and trying to put them all together to build on that and monitor it and be responsible. We'd love to be able to help everybody, and that is our effort as we move forward. But we also have to be responsible for taxpayers' dollars.

As an association, Mr. Blakely, you mentioned that this specific bill, C-50, would materially assist your members. How many members would benefit from this particular legislation amendment that is being proposed?

[Josée Beaudin, Bloc, Saint-Lambert, QC]

So you would like them to have access to the measures contained in Bill C-50.

[Josée Beaudin, Bloc, Saint-Lambert, QC]

Thank you very much, Mr. Chair. Thank you, guests, for being here today.

I have a dozen questions that I would like to ask you, but I have very little time. I have heard what you said and I have heard a number of other witnesses before you. The problem with this bill is not only that it is not perfect, but that it is fundamentally unfair. It is discriminatory because it creates two categories of unemployed people. This breaks down the solidarity among the unemployed, at times, even within the same company. This week, we heard from witnesses who told us that. In the same company, you can have workers who will be eligible and others who will not. That is where the problem lies.

We also talk about a scarcity of resources. Many witnesses have told us to accept this bill and hope to get something else later on, such as eligibility once you have worked 360 hours, the extension of weeks per year, and so on. We have doubts about that, first of all because there is very little money, and secondly, we doubt that anything else will happen. We would like to have seen a much more comprehensive and complete reform. This reform is unfair, because more than 50% of workers will not be eligible.

Mr. Blakely, you said a little earlier that you were hoping to amend this bill so that trade apprentices would be eligible. We would also like to amend it to include all seasonal workers and workers in unstable job situations.

Would you vote in favour of Bill C-50 if it were not amended to include your requirements?

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

I can see that my time is going by quickly, Ms. Kozhaya. Pardon me, but I am going to have to interrupt you.

Since you did not know that we were going to be asking you these questions, I wonder if you could provide the chair and the clerk with figures pertaining to youth and women in Canada who have applied for employment insurance benefits, but who would not be affected by the new measures put forward by the government in Bill C-50.

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

So should we vote for Bill C-50?

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

Mr. Blakely, you brought up the question about the training program. I think this is very interesting, and I hope the government is taking note of this here. I think that's what they should check, because on the training program you said they were supposed to be available to work. I don't think so. I think they are on phase two of EI, because when they are in trade school or community college, they don't have to look for a job because it's already accepted through the program.

They are going to be there for six or eight weeks, doing their program and not looking someplace else, and they are allowed to finish their program and go back to their job—it could be in a mine or anywhere—that belongs to them. That could be considered as a special.... We would like to see clarification from the government, and if you're right, then I think they have the power to make amendments to this Bill C-50 to look after the apprentices.

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

Thank you very much, Chair.

Thank you for coming. This is the last meeting we're going to have hearing witnesses on Bill C-50. It has been an interesting set of hearings that we've had. Normally when a bill comes forward you have people who come and say they support it, it makes sense, it's what's needed. You have others who come and say they don't support it and that it doesn't make sense. What we have on this bill is really two schools of thought: one, those who say it's a bad bill and it can't be supported; and others who say they don't like it, it doesn't do enough, but we'll take it and then move on to try to get other reforms. I don't think we've heard anybody, except perhaps the minister, suggest that this is the ideal solution to what EI needs right now. We have a bill here that is discriminatory, that is inadequate, that doesn't cover enough people, and that doesn't go back enough months to deal with the circumstances we have.

Armine Yalnizyan was here earlier this week. I was looking at her testimony to the Senate committee. The Senate did a pre-hearing on this bill. When she appeared before the Senate she put it as well as I've heard it so far. She said these are unprecedented economic times and it is an economic tsunami; therefore, it is incumbent on the government to address everyone who has been swept by this wave of economic dislocation, not only those who have been cherry-picked to be the most deserving of help.

Those others who have not been long tenured and who have not used EI for the period specified also had no control over whether they would have a job. Those in the fishing industry, forestry, tourism, hospitality, agriculture, and large parts of the construction industry, through no fault of their own, have periods of unemployment when they need to go on the EI system. Nobody who I have seen in the last six months while EI has dominated the national political landscape has suggested that this is the best solution for what we need. We've heard all kinds of other things, but we haven't heard this. Yet we're in a position now where this is the solution before us. As I've said before, I don't think it's realistic to say, “You take what you can get and move on,” because I don't think there is anything else.

At a suggested cost of $935 million, this is almost the cost of what it would be to have a 360-hour national standard, which the Parliamentary Budget Officer pegged at less than $1.2 billion, as an example.

So we're in a difficult position. This bill doesn't seem to make it. The chair said we sometimes have statements. I only have questions, but sometimes they're long. I want to ask you the question because a lot of people really aren't sure about the numbers either. We hear $935 million we hear $190,000. I'm not suggesting you should have the resources, but have any of you actually been able to look at those numbers and see if they make sense? We have to vote on this bill very soon.

I open that to anybody, if anybody has had a chance to do that.

[Yves-Thomas Dorval, President, Quebec Employers' Council]

Thank you, Mr. Chair, ladies and gentlemen.

First of all, thanks to the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons of Persons with Disabilities for inviting us to deliver our remarks about the bill.

Because we represent employers and companies from the province of Quebec, I will deliver my remarks in French.

The Quebec Employers Council operates in regular partnership with other organizations throughout the country, and, in particular, with the Canadian Employers Council. As it is not a provincial branch of a Canada-wide organization, the Quebec Employers Council has a keen independent interest in federal matters that affect Quebec employers, specifically issues of labour, development, human resources and taxation.

Employment insurance and all other payroll-based employer-funded plans are closely followed by the Employers Council. That is especially the case for employment insurance as employers fund the majority of the cost of the plan: their contribution is 40% higher than that of the workers.

We spoke publicly on the matter last September when the proposed amendment to the bill was announced. We come here today in person to reiterate the concerns that we raised then and that still remain.

The Employers Council first and foremost prefers that all enhancements made as a result of the current economic situation remain temporary. In this regard, we are pleased that the government has heard us.

Costs close to $1 billion, $935 million to be precise, amount to a major change in the plan. It is expected that, under the current rules, in other words without the changes in Bill C-50, the expected increase in plan costs could vary from 35% to 70% by 2015, according to our estimates. It would be wise to seriously consider the terms of the enhanced funding schemes being studied by your committee.

First, because it is a cyclical enhancement, we believe that it should not be funded by the Insurance Fund, but rather by the government's general revenue. That was the case for the enhancements announced in the last federal budget, and the same rule should apply to these changes.

Second, social responsibility also involves fiscal responsibility. This is not an economic context where taxpayers can dig into their own pockets any deeper to fund new public expenditures. The government should therefore ensure that any amendments have a neutral effect on the cost borne by the public purse. In other words, employers say yes to improvements to the employment insurance plan on condition that these improvements are accompanied by savings or cost reductions elsewhere in the plan.

Third, and still on the issue of funding, the Quebec Employers Council reiterates that it is important for the government to restore fairness through a 50/50 employer-worker split to fund the costs of the plan.

This brings me to a final remark. The QEC is concerned about the government taking a piecemeal approach to changes to the employment insurance plan. As I mentioned in my introduction, Bill C-50 calls for changes in addition to those already announced in the most recent budget, changes amounting to close to $4 billion. We are not against changing the plan. However, we believe that, in the future, every effort should be made to avoid making piecemeal changes and instead should make changes that take into account the concerns of all partners, and specifically those that I have just raised.

Thank you very much.

[Robert Blakely, Director, Canadian Affairs, Building and Construction Trades Department, AFL-CIO, Canadian Office]

Thank you, Mr. Chairman and members of the committee. I'd like to thank you very much for taking the extra day to hear witnesses.

My name is Bob Blakely. I'm the Canadian director of the building trades. The building trades are the unions that represent construction workers in this country, everyone from the operating engineers Mr. Schumann represents, to refrigeration workers, pipefitters, electricians, and millwrights. We represent 50-odd trades and nearly 500,000 people.

With me today is Mr. Christopher Smillie, who is the policy analyst in our office. I'm introducing him because his dad said that if his name got in Hansard he would buy him dinner.

There is an issue that I believe has a very serious impact, and it is very important to a significant number of our members.

Mr. Schumann talked about a number of things we might want to see in EI. We're disappointed that there isn't a rationalization of the eligibility zones and anything to deal with the qualification period, but the long and the short of it is that we are prepared to support the broad strokes of Bill C-50. We're prepared to support it because it will materially assist a number of our members who are currently unemployed.

A number of people are now unemployed simply because of the meltdown of the markets, and construction workers are the first people off the bus on the downside of the business cycle and the last to get on it. The extended benefits are something that....

There are a number of people who will be disadvantaged. We believe there is a strong possibility of an unintended consequence in respect of the application of extended benefits allowed under Bill C-50 for apprentices and those who are qualified within their trade but in the wording of the Employment Insurance Act are directed to programs to requalify either on new equipment or procedures.

Simply put, apprentices go to trade school. It is part of their work. In Ontario, a number of trades have a five-year apprenticeship: five periods of apprenticeship over five years, each of which extends for eight weeks. That's 40 weeks that they are in school. We expect them to go to school. They must go to school in order to qualify.

In Alberta, in the electrical, the instrumentation, or the refrigeration trades, it's three years at eight weeks and one year at 12 weeks. That's 40 weeks of training. These people are deemed by section 25 of the act to be unemployed and available for work, and there is no assistance in the definition of special benefits for them. It is entirely possible that apprentices who worked every hour they could for the last five years will be disentitled from the extended benefits because they got EI when they went to trade school.

It may seem that all you have to do is fish through the act to find a fix for this. Well, we tried very hard to talk to a significant number of people, in government, in opposition, and in the bureaucracy, and we ended up getting a number of people saying don't worry, be happy, and other people saying that maybe we are right and there is a possibility that something bad could happen.

I don't have a fix on the number of journeymen this could affect, but there are 400,000 apprentices in Canada, and 60% of them are in construction. They ought not to be disentitled because they went to trade school.

I am asking that with respect to the in-school portion of the training that people access EI to get--those are programs they are directed to by EI or that are approved by EI in accordance with the act--you not disentitle them either by a minor amendment in subsection 12(3) or by regulation. The negative impact of taking training and then finding out it disentitles you from getting EI for a significant period of years will work against what we're trying to do.

If you look at the demographics, construction, like many other industries, is a baby boom industry, with 70% of people being grey-hairs or no-hairs. They are going to retire shortly, and we need to replace them. This is the wrong time to discourage people from taking training.

We ask that you not lose sight of what could be an unintended consequence and make it clear that people who access training will not be disentitled from extended benefits in the event they become unemployed. After all, employment insurance is a contract of indemnity against a foreseeable event, that being losing your job.

I look forward to your questions.

Thank you very much for your patience in listening.

[Steven Schumann, Director, Canadian Government Affairs, International Union of Operating Engineers, Local 793]

Thank you.

Good afternoon, and thank you for the opportunity to appear before the committee today to discuss and share some concerns around the bill.

My name is Steven Schumann. I am the government affairs director for the International Union of Operating Engineers, or IUOE, for short. We are a progressive and diversified trade union. We represent workers in a wide variety of occupational categories. Our members help to build Canada's infrastructure, and they are involved in the production of Canada's resources and the delivery of critical health care and community services. We have been in existence since 1896.

Currently in Canada we have over 45,000 members, with representation in every province and territory through our 20 locals. We also have eight state-of-the-art training centres that develop and deliver heavy equipment operator training and a wide range of construction safety courses catering to the present and future needs of the construction industry. Many of our training centres deliver the provincial training programs for our trades.

Construction workers represent the largest share of our membership, around 30,000 members. They operate tower and mobile cranes. They operate heavy machinery, like bulldozers, graders, and backhoes. They are the mechanics and surveyors who work on the construction sites. They are the first to a job site and the last to leave. They work for commercial construction companies and civil and industrial contractors. They build roads, bridges, schools, hospitals, pipelines, and oil refineries, just to name a few. Our members shape the infrastructure and the skylines of Canada.

We strongly believe it is important to work with our employers, other building trade unions, and all levels of government to ensure Canadians are provided with the best opportunities to work and provide for their families.

Since this legislation will provide additional benefits to many Canadians, including some of our members, we support Bill C-50 even though we have questions around the fairness of this legislation. More importantly, we believe there has been a missed opportunity to make real changes. The time spent on this legislation could have been spent overhauling and modernizing the system in a more global context rather than a singular approach.

Unfortunately, we believe this legislation shows there is a continued lack of understanding towards the construction sector. This government, like previous governments, believes that all sectors of our economy can be dealt with in a one-size-fits-all approach. This has been seen with other initiatives, like the agreement on internal trade that overlooked the construction sector in many ways. This singular approach does not work and it must stop, to ensure that Canada's construction sector can survive with the skilled people we require to get the jobs down.

While many workers in various sectors of our economy will be able to apply for these benefits, only a limited number of our members will meet the criteria of collecting less than 36 weeks of benefits in the past five years. The construction sector is a very unique industry; it is cyclical in nature, and activity often differs substantially from region to region. The industry ebbs and flows in cycles corresponding to the level of investment and the strength of the economy. These investments come from both the private sector and through public investment at all three levels of government.

The construction industry also often stays active at the beginning of a downturn in the economy as ongoing work continues to completion. In turn it lags behind recovery, as planning and preparation do not take place until investment is in place. This can be seen right now. There are many areas of the country that have stayed fairly busy through the early parts of 2009, but we forecast in 2010 and beyond that there may be a serious shortage of work in many of the same regions that are busy now. Construction jobs themselves are very unique. Every one of these jobs has an end date. It may be a week, a month, a year, but that job will end when the project ends.

These are not typical nine-to-five jobs. Our members work tirelessly. They work lots of overtime to ensure a job gets done and that it gets done on time. They also face many shortages of work. When the jobs end, our members go off to find new jobs. On a regular basis they will travel to a different part of the city or province they live in, or in some cases a different part of the country. This can create challenges for our workers. They are forced to relocate at their own cost, usually for short-term opportunities. This can leave them with a heavy financial burden, to say nothing of the impacts on their families.

Sometimes our members may find work right away, or it may take a few days, a week, or even six months or more; it all depends on the various factors that are well beyond their control. As a result, many of our members are forced to make several claims a year for EI benefits. This is the nature of the construction industry; this is what makes us so very different from other sectors of the economy.

Simply put, Bill C-50 does not take into account these variations of our work hours and work schedules; thus, many of our members are excluded from applying for these benefits. We estimate that several thousand of our members will be unable to apply. For example, in Quebec we believe that 80% of our local's membership, around 1,000 members, will not be able to access it; in B.C. it is around 20%, which is about 2,000 members; and in Ontario we are expecting the same numbers, if not higher.

These are members who have been working for 10, 15, 20 years and have been contributing fully to the employment insurance plan. They are now going to be treated differently from other Canadians because they don't have an opportunity to access these benefits.

Another concern we have, which Mr. Blakely will focus more on in his presentation, is the need for clarification around the impact this legislation will have on apprentices. Apprentices are essential, and they're the lifeline and future for our industry in particular. We need legislation that promotes and encourages apprentices to continue their schooling and training. If they are forced to leave their program and find another job, they're not coming back to construction to be an apprentice; we'll lose them forever.

We are already facing a significant skills shortage, and we need legislation to positively address this problem, not make it worse. We believe that Bill C-50 could have the unintended consequences of making this situation much worse by forcing people out of apprenticeship programs because they can't seek these benefits and they need to look for more work. As I said, Mr. Blakely will focus a bit more on that.

We also believe that more has to be done, sooner rather than later. We cannot just pass this legislation and forget about doing more reforms. We believe there are several small but significant measures that need to be done, not only to make employment insurance fair for everyone, but also to encourage people to seek other employment rather than collect EI and to address the skills shortage issue.

Some of these measures would include creating one national EI standard that makes sense and that is fair for all regions; enhancing the work share program, because many of our members on the stationary side really do support that; more support for training and re-training to address some of the impending skills shortage; providing a tax credit or income deductibility to employees in the construction sector who want to travel across the country to work; and monetary incentives for employers to maintain and hire more apprentices.

We believe that by taking these measures you will ensure Canada can better respond to the needs of a post-recession economy and we will have the skills and workers available to fill the jobs that become available.

We are more than willing to participate in broader consultations with the government and all parties to develop viable solutions that benefit not only the construction sector but all sectors of the economy.

Thank you for your time, and I look forward to your questions.