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.

[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 is what we're discussing today.

I want to thank all our witnesses, who on short notice have taken time out of their busy schedules to be here. We really appreciate that because we're sure you had to move some things around.

We're going to start with your testimony, and I'm going to start with Mr. Schumann and continue down the list, for seven minutes each. I'll give you a one-minute warning by waving my hand to give you an idea of the time left. For the information of those of you who haven't been here before, we'll then have two rounds of questions, a seven-minute round and then a five-minute round, and there may even be a few statements during those times as well.

We'll get started with Steve Schumann from the International Union of Operating Engineers.

Sir, the floor is yours for seven minutes.

[Rick Dykstra, Conservative, St. Catharines, ON]

Thank you, Mr. Chair.

It was an interesting presentation. I'm intrigued by the level of detail you're speaking to in terms of what all three of you think the federal government needs to do. If I take a look back over the last, I guess, close to four years.... Just recently we announced $50 million over the next two years for the provinces and territories to work and address these barriers in terms of a pan-Canadian framework, including a recognition of foreign qualifications.

Amy, you mentioned the Canadian Experience program, which is very helpful to students.

From a temporary worker perspective, I also think about the opportunities that they are engaged with, to stay in the country and work here. We've gone from 120,000 to 200,000 on a yearly basis, to the point of literally setting records in terms of those numbers. Also, with respect to how many folks have had the opportunity to come to this country as landed immigrants or to be educated here, the numbers we're seeing now year after year are higher than we've seen in decades.

I think a little bit about the detail that you spoke to, Elizabeth. I think of C-50, section 6, which we passed in 2007. That really does change our immigration policy with respect to landed immigrants and the opportunities folks have from a very early stage to understand, if they're going to apply to come to this country, what we need in terms of the 38 categories that we announced last November for this year. That has actually allowed us to expedite the opportunities for individuals who want to come to this country who are having to wait six, seven, or eight years to get into Canada. The way it's set up now will expedite that to 12 to 18 months. The minister was just here a couple of weeks ago saying that we've actually been able to get our numbers down and we're moving in the right direction.

Ms. Chow reminded me of The Employee's Roadmap.

All of these are a step in the right direction, and I think the investments we've made in English as a second language and in English language training.... I guess what made me think of all of these programs that we've worked on since 2006 is--as I started this point, and I do have a couple of questions--the fact that you're really into significant detail in terms of where we need to be. So it suggests to me that from an overall perspective.... Part of the reason why we wanted to do this study was to ask where are the areas that we need to emphasize, where are the areas that we need to focus on. I come away from it, just from our first panel, with an understanding that we have made some significant steps in the right direction, and that really where we need to go is, perhaps as you suggest, in some of the levels of detail.

I did want to ask you, Elizabeth.... We have gathered the provinces together to work towards the recognition of foreign credentials, and I wondered if you could comment a little bit .ore on the whole aspect of a national approach to this issue versus an individual provincial and individual territorial approach to it?

[Andrew Casey]

Certainly the work-share program has been an enormous benefit to the industry. We know of a number of mills that would have probably closed permanently if it had not been for the work-share program.

Companies were taking advantage of the program before the changes were implemented in the budget. A number of companies, as I said earlier, came on after the budget, and that's where the problem lies for us. We'd like to see those companies not be penalized for having been in good operating order before the budget. We'd like to see some changes there.

To some of the earlier questions, there's not a silver bullet in Bill C-50 that's going to cure the industry's problems. But certainly overall, the package as you put it together is of great benefit to the industry and it has certainly kept a number of mills running and kept employees in the communities where they belong.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

Thank you, Mr. Chair.

Mr. Céré has said that he disagreed with Bill C-50. And I heard the member from Dartmouth—Cole Harbour speak about why you might disagree with the bill. But what do you tell those workers who would benefit from this bill, the 190,000 or so who would be receiving $900 million over three years? How do you stand up and vote against a bill like that, as the members of the Liberal Party and the Bloc proposed to do? What do you tell those workers?

Craig Riddell, a UBC professor and member of the expert panel on older workers, found that long-tenured workers are hardest hit by unemployment and take up to 35% longer to find new employment than other workers.

It is a question of taking the dollars and targeting them to those who need them most, those who have paid most into the system, worked the longest, and need that support. How do you oppose them by saying that we don't want them to have those benefits?

I heard Mr. Casey speak about how you need to take this measure in the context of everything else that's happening. We've added five weeks of benefits across the board. About 300,000 workers are estimated to benefit. We added $500 million for approximately 40,000 long-tenured workers. There is $1.5 billion on top of $2.5 billion for training—something I'm sure the Federation of Independent Business would support. And we had a targeted initiative for older workers—$60 million, and five to twenty extra weeks of benefits in this proposed legislation. If you take it as a group, a suite of programs, you'd have to say that a significant amount of benefits will be flowing out. Significant steps have been taken.

With respect to the work-sharing program, there have been a number of responses. I have one from the Michelin Tire company, which has 500 employees benefiting from the work-sharing program. The company spokesman remarked that the work-share program had allowed Michelin to avoid layoffs and maintain their workforce. He characterized the program as a win-win-win for the company, its employees, and the government, and said that it would help Michelin to rebound quickly when market demand returns.

I'm hearing almost the same thing from Mr. Casey of the Forest Products Association of Canada.

So there's a divergence of opinions and there are different things that need to be done. But taken in context, it's something that is beneficial. With respect to work-sharing, how have your employees and workers responded to the work-sharing and Bill C-50 that we're proposing?

[Pierre Laliberté]

As we stated earlier, and everyone who comments on Bill C-50 seems to be in agreement about this, accessibility is the number one priority. As Pierre Céré said, everyone agrees on this first point, except Parliament.

The second issue is the extension of the benefit period. We are in the throes of a recession. These are temporary, albeit much needed, measures. However, the initiative should more closely resemble the approach taken when the five-week period was extended. The situation will need to be monitored closely. According to the banks and to the OECD, the recession will drag on. There is every reason to believe that this will in fact be the case.

Mr. Casey mentioned another measure, namely work sharing. He said there had been a problem given the large number of work-sharing programs. Approximately 22,000 Quebeckers have entered into work-sharing agreements. That is a very high number. Across Canada, 50,000 people have entered into such agreements. This program is slated to end in a few months. This is a good initiative that, as Mr. Casey said, keeps everyone employed. If there is some way to develop a program based on this model, we would be happy to co-operate.

The government claims to want to help long-standing members of the labour force. We would rather see a program designed to help workers who will have problems finding a new job. Mention was made of job training. That is all well and good, but we must not try to function with a byzantine EI system that, in our view, is off the mark and creates obvious inequities.

Ms. Folco spoke earlier of the inequities experienced by women. At this particular point in time, young workers are the ones being treated unfairly. The unemployment rate among young people is double that of other groups and young people do not meet the stated EI eligibility criteria because they have not worked long enough. From a demographics standpoint, nothing is being done to help the people hardest hit by the economic downturn. I'm not talking here about the burden of a family and other such things. I believe these factors should be taken into consideration.

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

Thank you, Mr. Chair. Thank you all for coming here.

Two weeks ago, we welcomed the minister and a number of officials. I asked the minister why she had not adopted the same approach as the one taken in the case of the employment transition program, namely introducing a pilot project, instead of a new measure via Bill C-50. I did not receive a direct answer to my question. It has quickly become apparent that the government is playing politics at the expense of unemployed workers. Had a pilot project been initiated, there would not have been an amendment or any decision to make.

In our estimation, the bill creates two categories of unemployed workers, the good ones and the bad ones. The decision to separate workers into two groups is unfair and does nothing for social justice, in my opinion. It is like deciding to save people with glasses and feed them when everyone else is starving. One group is told to wait patiently until their turn eventually comes. Where is the social justice in that?

Faced with an economic crisis, the government brought in a temporary measure in the form of Bill C-50. These are harsh economic times. People already have access to employment transition assistance. What areas would you have prioritized?

When the minister testified before this committee, she stated that she had consulted a number of experts. Were you consulted, yes or no?

[Armine Yalnizyan]

Thank you very much, Madame Folco, for the question.

We know this recession has been dubbed, in both the United States and Canada, as a “he-cession”. We know that 71% of the people who have lost their jobs in this country thus far have been men, and women are part of the “she-covery”, particularly women over 55, because they're the ones who are picking up whatever jobs are out there to support and sustain family incomes. We know already that those who are able to access employment insurance are primarily men, generally speaking, even in good times—and in this recession, it's been even more so. It has been a male-dominated process to make use of the employment insurance system. And as well it might, because it's been the goods-producing industries that have been hardest hit in the recession.

That does leave us with two issues: there are always people in the service industries who are going to get hit, and hit very badly; and Canada has a very poor track record of low-wage employment for women, as well as insecure and precarious hours.

I did have a recommendation, which I didn't make in my opening pitch, that I would like to raise now. I will also be doing so in front of the finance committee in pre-budget consultations next week. One other consideration that this committee could undertake, should you wish to make things a little more secure for people who are really struggling—and it is outside the purview of Bill C-50—is related to the fact that a lot of women cannot survive on 55% of their insured earnings from whatever they were working at. It just isn't enough to pay the bills. There was one clause introduced in the EI Act in 1996 that permitted some relief for low-income families in receipt of the Canada child tax benefit. For families with net incomes—including the CCTB—of not more than $25,921, there was a clause in the EI Act that would permit up to 80% of income replacement, meaning that women who were laid off could at least come close to paying the rent and feeding their kids. They are the people who primarily use this provision.

In 1999, about 11.5% of EI recipients made use of this clause. By last year, only 7% did. By raising that threshold in a different amendment to the legislation—which I would highly urge this committee to look at doing—you could actually relieve an awful lot of vulnerability.

I do want to make one other comment, if you will, Madame Folco. I wonder if this committee realizes that in the recession of the 1980s, if you convert the weeks required then to the hours required now, it took only 165 hours to trigger EI eligibility in an area of 8% to 9% unemployment. In the recession of the 1990s, it took 255 hours. Today it takes 595 hours. For people who are worried that if you reduce the hours of work eligibility, there will be malingerers in the system, I would remind you that the economy exploded in 1989, and after the recession of the 1990s, we had ten of the most sustained years of economic expansion. It wasn't because of the eligibility requirements for EI. We have an enormous economic storm unfolding, and we can do better.

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

Thanks to the presenters here today.

We are working on Bill C-50, an act to increase benefits for long-tenured workers, which is part of the comprehensive suite of our economic action plan. This is the broadest consultation ever taken for a budget, and it's the earliest budget implemented in Canadian history.

The fact that we have extended our EI program by five weeks has been alluded to--the work-share program. About half of Canadian workers who pay into the EI program are long-tenured workers. Roughly one-third of those who have lost their jobs since the end of January of this year and made EI claims are long-tenured workers. Department officials, who were witnesses previously at the committee, indicated that we're addressing this bill to about 190,000 unemployed people who have worked over the years and are now in a most vulnerable state. We'll continue to monitor the situation as we move forward.

I appreciate the CFIB's position. I used to have my own business, and I support small businesses. SMEs are the economic engine that drives the economy of our country, and we'll continue to work together--the risk takers, leaders, and entrepreneurs of our communities.

I understand your concern about the $57 billion. As Mr. Godin said, it's gone. It has disappeared. And we're dealing with the fact that regardless of who spent it--we can point fingers until the cows come home--we don't have it, so we have to deal with the present situation and build a stronger Canada as we move forward.

Mr. Reid, I was also a member CEPU at one time. I have the honour of representing Kelowna—Lake Country in the Okanagan, part of beautiful British Columbia. Our wood is good, and forestry is a big economic driver for our province. As Mr. Casey alluded to—the element of where we're going with this bill—a lot of the workers are in the forestry industry.

My question is for Mr. Casey. We've heard from the Bloc that they feel this bill will not help the forest industry. Could you elaborate a little more on how you feel, from your members' perspective, Bill C-50 will help the forest workers?

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

Thank you, Mr. Chair.

The Canadian Centre for Policy Alternatives is Canada's leading progressive think tank, supported by more than 10,000 individual and institutional members across the country, with offices in Ottawa, Vancouver, Winnipeg, Regina, and Halifax.

Thank you very much for inviting our views on Bill C-50.

No recession since the Second World War has destroyed as many jobs in the opening months of a downturn. The government was very quick to react with supports for the financial sector, but improvements to EI have been long overdue and woefully inadequate. This despite a clear action plan for EI reform tabled by this very committee on February 15, 2005, and later, in 2007, all-party agreement on two readings of Bill C-269, before the government of the day, this government, then decided to deny royal recommendation in November of 2007. So, long before the meltdown of global financial capital began last fall, we knew our system of unemployment insurance was not recession-ready.

Between October 2008 and last month, the labour market shed 483,000 full-time job opportunities. More than 1.5 million Canadians today are actively looking for paid work. More than half of them do not receive EI. That means three-quarters of a million Canadians are left twisting in the wind. Canadians have not been this exposed to the economic risks of joblessness since the 1940s, when we first put unemployment insurance into place.

Now, I’m not telling you anything new that you don’t know. I’m not telling you anything radical. For years, your very own committee has noted the need to improve access to the system by reducing and making more uniform the eligibility criteria based on hours; to improve the duration of benefits, which were precipitously cut back in the reforms of the early 1990s; and to improve the rate of income replacement, which is particularly disastrous for low-income workers.

Bill C-50 was this government’s response to these concerns. It limits itself solely to the issue of duration, and further limits the extension of benefits to a small subgroup of the unemployed. HRSDC gave testimony to the Senate Standing Committee on National Finance just a couple of weeks ago and stated that a third of those displaced since January 2009 could benefit from this legislation. That means two-thirds of those who have been displaced since January 2009 and who have exhausted their benefits—the majority of Canadians who are in that position—will not receive any help. Bill C-50 also ignores all of those who lost their jobs, who were the shock troops of the opening months of the recession.

So how many people are we talking about? Monthly unemployment figures by Statistics Canada showed that unemployment swelled by at least 200,000 people last fall and a further 300,000 people since January. Improvements to EI, need I say, are critical. Canada cannot have a full recovery if workers face rollbacks in wages, benefits, and pension provisions and the unemployed also cannot find new jobs at roughly comparable wages. Aggregate demand will just continue to fall.

The United States are 22 long months into recession, with no clear end in sight. We will have to wait an awfully long time to ride on their coattails. So diminishing purchasing power of Canadians is an issue this government, this committee, needs to deal with, because this is a very fragile recovery and this issue can no longer be ignored.

I will limit myself to comments about Bill C-50, though we understand that it only deals with one aspect of the improvements we are all seeking to the unemployment insurance system. Bill C-50 can be made more effective with three simple modifications that address three questions. When should the clock start ticking? Who should get help? How much help should they get?

First, the effective date for Bill C-50 should be changed to start at January 4, 2008, rather than January 4, 2009. Some may ask why reach so far back. It's simply because January 4, 2008, is exactly what the government's thinking was in Bill C-10, passed not very long ago, which included measures to extend benefits by five weeks for all those who had exhausted their benefits. Moving the trigger date to January 4, 2008, would extend the benefits provided in Bill C-50 to the same group as Bill C-10: everyone affected by the recession.

Second, Bill C-50 should drop the rule that excludes workers who may have been drawing up to 35 weeks of benefits in the last five years. As you have heard, it is nonsense to say that, in these types of economic times, some unemployed are more deserving of help than others.

The majority of people first affected by the downturn were in goods-producing industries. Such industries commonly retool, adjust inventory, experience slowdowns in demand or supply, which all can lead to temporary layoffs and shutdowns periodically. Workers in such industries have zero control over their hours of work. People who have been laid off on a regular basis in the previous five years may find themselves not being recalled at all. These people should not be excluded from what Bill C-50 offers. No such limitation was placed on Bill C-10.

Finally, how much help does Bill C-50 provide? Unlike Bill C-10, which provided an additional five weeks of benefits to all unemployed Canadians who had exhausted their benefits, Bill C-50 proposes this baroque set of eligibility criteria that are extraordinarily difficult to read through. Within the small group of unemployed who are the target of Bill C-50 , the bill further creates six different categories of winners, where the amount of help they'll get is based on how much they have contributed to the system in the past 15 years, up to a maximum of 20 weeks for a select few.

Extension of benefits should be uniform, as in Bill C-10, and Bill C-50 should offer a significant extension for all who need it. Does 20 additional weeks sound overly generous to you? Well, let's compare this to what happened just two weeks ago in the United States. The Associated Press reported: “Congress has added up to 53 extra weeks of benefits on top of the 26 typically provided by the states.“ And the House this week approved legislation that would add a further 13 weeks for high-unemployment states.

Let's be very clear. Without significant extension of benefits, you can be sure that a huge proportion of the cost is going to fall on provincial shoulders. Last summer, British Columbia's Premier Campbell suggested extending benefits to two years, and Saskatchewan's Premier Wall also stressed the need for extended benefits. These are not socialist politicians, but these premiers know very well that they are going to end up picking up the tab for the federal government's unwillingness to act.

Without significant changes to Bill C-50 this government risks being a spectator to what may be the most significant period of asset-stripping of the middle class in generations, exactly what unemployment insurance was designed to prevent.

Recovery or not, Canadians are coping with unbelievable economic stress. Your predecessors from decades ago created a system that improved life for Canadians in good times and bad. I urge you to consider today how you can take on that mantle.

Thank you.

[Andrew Casey, Vice-President, Public Relations and International Trade, Forest Products Association of Canada]

Thank you, Mr. Chairman.

Thank you, committee, for this invitation today to appear before your committee to contribute to your discussions on Bill C-50.

By way of brief introduction, I am here on behalf of the members of the Forest Products Association of Canada. We're the national trade association that represents the majority of production of Canada's forest products, including lumber, pulp, and paper.

The industry, more broadly, represents about 11% of Canada's manufacturing GDP. We employ 273,000 workers directly across this country and another 500,000 or so indirectly. That comes to about 700,000 people.

We are the mainstay of about 300 communities from coast to coast, in every region of this country.

I am certain that the members of the committee know that the Canadian forest industry is currently undergoing a major crisis. I am sure that the members have had the opportunity to note that when we talk about job losses, we are not only talking about people who lose their jobs, but also about the destruction of communities. The topic of interest to us is not only the loss of jobs but the social integrity of rural Canada.

Even though the devastation, heartbreak, and social disintegration we're experiencing is cause for deep concern—and I think yesterday's debate in the House of Commons serves as a good example of the level of passion on all sides of the House about this issue—I would like to at least put on record today that we foresee strong markets coming back for the industry in the not-so-distant future.

We have traditional markets that are going to come back and also new and emerging markets for the industry, and we're prepared to take advantage of those markets when they do come back into play. Until that time, we obviously have a number of challenges ahead of us. First, we have to survive until those markets come back. Secondly, we have to be as competitive as possible, so that when the markets do come back, we are going to be able to compete. When those markets come back, we're going to be looking at competition that's fiercer and stronger than it ever was before.

The good news is that Canadian industry hasn't been alone in being hit by this recession. Our competitors have been hit too. Whether it's Brazil, Russia, or Europe, each and every one of them has been facing their own set of challenges that has put them at the same playing level as Canadian industry is at right now.

I am certain that you are wondering what the government can do. We know what we in the industry must do and we do it. But what can the government do?

We know what we have to do as an industry and we're doing it, but what can government do? One thing is for certain: government cannot bring markets back up to the levels where they need to be for us. That's the first thing that has to happen for this industry: People have to start buying lumber and people have to start buying paper again. The government cannot do that for the industry. That's the biggest thing that's facing the industry right now. As I said earlier, those markets will come back.

However, there is a fundamental role that government can play right now—that is, establishing the policy conditions here domestically that will enhance our competitiveness, not only now but also when those markets come back. There are certainly a number of things at the government's disposal, such as tax policy, providing for a competitive rail system, and investing in the green energy and bioeconomy right now, that it should be pursuing immediately, and that will set us up, not only this industry but the country more broadly.

Our markets will rebound. We know that the U.S. is going to start building houses again. We know that the markets in China and India are going to come back. We're already the leading exporter into the Chinese market. We're the third-largest Canadian exporter into the Indian market. We're well positioned and we look forward to taking advantage of those marketplaces again, once they come back.

In the short term, there are certainly some key challenges. I think one of the main things we're certainly worried about right now, in this current economic recession, is the loss of employees. Forestry jobs are highly skilled jobs. We cannot simply replace those employees with anybody just off the street. Our big concern right now is that, in a time like this, people go and look for jobs elsewhere. The changes that are incorporated in Bill C-50 and other changes to the EI program that came out of the budget of 2009 go a long way towards helping the industry retain its employees. This particular bill is one measure, but also the work-sharing program changes that were brought in through the budget are enormously helpful.

With the committee's indulgence, I would like to draw the committee's attention to one tiny change, or at least an area of interest, that we hope the committee will find the opportunity to look into a bit further, going down the road, on the work-sharing side of things.

Prior to the work-sharing program announcements, a number of companies were already taking advantage of the program. Those members received the top-up to their existing agreement and immediately qualified for a new 52-week agreement at the conclusion of their existing agreements, without a cooling-off period. Other companies that were relatively healthy at the turn of 2008 and were not in the program started their clock when the program began. Their benefits will conclude at the end of their 52 weeks. They will be subject to a 26-week cooling-off period. Right now, we don't see the markets returning for another year or so. A lot of those companies are going to be facing a 26-week waiting period to get back into the work-sharing program. We'd like to see the government take a long, hard look at that to see if there's a way that we can eliminate the 26-week waiting period. Ultimately, we think this will be of benefit to the government as it will be less costly at the end of the day.

Ultimately, as grateful as the industry is for these programs, like most insurance policies, we would prefer that our employees not have to avail themselves of the program. We would much rather keep the mills running and keep the employees gainfully employed in the towns in which they were raised or those communities that they have grown to be members of over time. Focusing on providing the industry with a competitive domestic policy framework should continue to be a strong objective for governments at all levels.

Again, on behalf of the Forest Products Association of Canada and our members, I thank the committee for its time and I look forward to answering any questions you may have.

[Corinne Pohlmann, Vice-President, National Affairs, Canadian Federation of Independent Business]

Thank you, and thank you for the opportunity to present the perspective of small business on EI and Bill C-50.

First, I'll tell you a little bit about CFIB. We represent more than 105,000 independently owned and operated businesses across Canada, all of which are small and medium-sized companies. They collectively employ 1.25 million Canadians, and they account for $75 billion in GDP. Our members come from every region of the country, and every sector of the economy.

Most people do not realize how big small business has become in Canada. In this country, 98% of all businesses have fewer than 50 employees. They employ about 55% of Canadians and represent 45% of Canada's GDP. They have also been responsible for the bulk of net new jobs in our economy, and this is especially true during more difficult economic periods.

Speaking of more difficult economic periods, the last year has not been easy for many, and small businesses are no exception. CFIB produces a monthly business barometer that tracks our members' business expectations along with a number of other economic factors. Our most recent index, which was released on October 7, shows that our SMEs' outlook dipped quite dramatically during the latter part of last year and earlier this year, but it has been picking up since April. This upward trend has continued into September, leading us to suggest that the economy is making its first tentative steps towards recovery.

The good news is that the level of optimism is up right across the country. For the first time in many years, it's our members in Ontario who are leading the country on this measure. The manufacturing sector is also one of the most optimistic sectors, leading us to believe that those manufacturers that have been able to adjust and survive the downturn of the last few years are starting to come out the other end with renewed hope and optimism.

While optimism is growing, however, hiring plans remain on hold: 16% plan to increase full-time employment, and 13% plan to decrease it. These results are not unusual during times of economic recovery, as employment plans tend to lag behind economic growth. As employment growth is essential to the recovery of the real economy, we must be very cautious of decisions that may end up deterring job creation. We are concerned that some of the decisions being made with respect to EI may end up doing just that.

I'd like to give you a quick glimpse of a report on small business perspectives on EI. You have a copy of that report; it's called “Ensuring Prosperity”. It goes into quite a bit of detail about a variety of issues related to EI. I'm just going to focus on a couple that are relevant to this discussion.

First, CFIB research found that the smaller the firm the less likely it is to lay people off. So while small business employers may not yet be starting to hire in great numbers coming out of a recession, they are more likely to have held onto their people longer. This is the reason that throughout this recession we've not seen a large increase in the percentage of small firms planning to decrease employment. Other research has shown that employment at larger companies has dropped by 10% in the first half of this year but was virtually unchanged among smaller firms. In fact, we know of employers who have forgone their own income to ensure that their employees continue to get paid during these more difficult economic times. What small business provides to employees is stability and personal relationships, which is often not the case at larger firms.

Secondly, it was clear from the survey results that small business owners support the fundamental principle of EI—to provide short-term financial assistance to workers between jobs. For the most part, they were relatively satisfied with the regular benefit side of the program. For example, when asked how the system could be modified to meet the needs of their business, the largest group would rather see no changes to the current benefit levels or current qualifying periods. In fact, the majority want no change or less generous benefit levels or qualifying periods. Instead of making changes to the benefit side of the system, CFIB strongly believes that the most effective way to assist long-tenured workers is to help them get trained and back to work as soon as possible.

Another report we did last May, which was entitled “Canada's Training Ground: SMEs' $18-Billion Investment in the Nation's Work Force”, found that when you calculate the costs associated with formal and informal training, smaller companies actually invest more in training per employee than larger companies. Moreover, oganizations such as the OECD have found that the most effective means of helping people get back to work is to provide on-the-job training incentives. We believe that providing an EI training credit to small employers would be a much better investment of EI training dollars and would likely help to create job and training opportunities for many long-tenured workers.

Our biggest concern with this bill, and with the EI system overall, is the additional costs that are being added to the EI program, which will result in sky-rocketing EI premium rates just as we're coming out of recession.

First, small businesses themselves have identified payroll taxes as having the biggest effect on the growth of their businesses. When you increase the cost of payroll taxes, such as EI, you discourage hiring, and fewer jobs are created.

What kinds of increases are we talking about? The current EI rate freeze, which is in effect until the end of 2010, has been a very welcome policy, as it has allowed many business owners to hold on to their people. Most analysts, CFIB included, do not expect the unemployment rate to fall to 6.5% by 2011, which is the rate at which the EI premium rate freeze was set. So the rate will have to go up in 2011 to compensate for whatever the difference in unemployment rates will be at that time.

However, it has become clear that the government also plans to charge back the two-year EI rate freeze to the EI account, which would require the new Canada Employment Insurance Financing Board, the CEIFB, to pay the government back an additional $10 billion to $13 billion, with interest. The only way it can do that is by increasing EI premiums. As they are limited to an annual increase of 15¢ for employees and 21¢ for employers, we foresee maximum premium rate increases for both employers and employees for many years to come. By passing Bill C-50, yet another $935 million will be added to the total amount the CEIFB will be expected to pay back through premium increases for several years to come.

Turning to the next slide, you'll see what this might mean for an employer or an employee. Taking the most pessimistic scenario, which is also the most likely scenario, given what we currently know, we expect that between 2011 and 2015, EI premiums will increase by 65%. This will ultimately discourage job creation at the worst time, as the economy will be just starting to emerge from its employment slump. Ironically, the $935 million to help long-tenured workers get additional benefits may end up contributing to making their job prospects worse as employers watch the costs of hiring go up and the take-home pay of their employees go down.

What makes this whole scenario even more frustrating is that there was a $57 billion surplus accumulated in the EI account from 1994-2008, as shown on the next slide. We would have no objection to government requiring the CEIFB to pay for the additional EI costs as a result of the current recession if they would repay the $57 billion surplus first. Instead, the new CEIFB was provided $2 billion as an initial reserve, which, given the scenario I have just described, will be easily wiped out in the first year. We strongly believe that the federal government has a moral obligation to pay back the surplus accumulated from employers and employees by absorbing additional costs and by maintaining a premium rate freeze until the $57 billion has been paid back.

In conclusion, we believe that no real discussion about Bill C-50 can take place without your understanding and dealing with the much broader fiscal issues related to EI. We suggest that the EI premium rate freeze be maintained beyond 2010 to ensure that future job creation is not harmed by payroll tax increases. We also suggest that the CEIFB be properly funded to withstand recessions and additional costs by having the $57 billion surplus repaid over time.

With its target of assisting long-tenured workers, Bill C-50 is more acceptable than other measures that have been suggested to enhance EI benefits. However, we remain very concerned that these kinds of selective measures are unlikely to result in the successful restructuring of the program. They will likely just harm the overall financial balance of the system.

Finally, we encourage the government to think about creating an EI training credit that encourages hiring and workplace training as an alternative means of assisting long-tenured workers and others on EI so that they can get effective training and have better access to the new jobs that are being created.

Thank you.

[Brent Reid, Rank and File Board Member, Communications, Energy and Paperworkers Union of Canada]

So then there is a bad side, concerns around the many workers that this bill misses--for one, 500 Canwest workers laid off in November, and the others before them.

Bill C-50 in its current form.... There are some situations that arise. At Catalyst Paper in Campbell River, there's a three-phase closure: the sawmill in the spring, the pulp mill in November, and the paper mill probably this February. These people all work together. This bill will cover fewer than half of them. That's a concern for the people I represent and the community I live in.

The other concern is that the people who are best protected, with the most severance, with those kinds of contractual obligations behind them, will get the most benefit. The people with the least amount have the least protection; they'll run out of time and won't be able to push past. If you're shut down in November and you don't have enough severance to take you through until January 4, you'll be excluded. All of the people in the sawmill in the spring will be excluded.

The conditions set out to claim the extended benefit are way too numerous, again pushing employees that are at the most risk of production curtailments outside the scope.

Thank you.

[Jean-Claude Rocheleau, Rank and File Board Member, Communications, Energy and Paperworkers Union of Canada]

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

My name is Jean-Claude Rocheleau and I am President of Union Local 121 of the Communications, Energy and Paperworkers Union of Canada at the Shell refinery in Montreal. For reasons of transparency, I also wish to mention that I am currently the New Democrat candidate in the Hochelaga by-election. I am accompanied by Brent Reid, Vice-President of Local 630 of the Communications, Energy and Paperworkers Union at the Catalyst Paper pulp and paper mill in Campbell River, British Columbia. I would like to thank the committee for inviting us.

First let me state that our organization supports Bill C-50 as a measure that will provide help to tens of thousands of Canadians who have been hit with full force by the current economic crisis. To give you a sense of this urgency, the current terms of the bill would likely exclude 1,100 workers at the AbitibiBowater mill in Grand Falls-Windsor, if not implemented by the end of November.

We have been informed that an amendment will be presented to maintain a January 4 starting date and we encourage you to adopt it. Despite our support for adopting this bill as quickly as possible, let us be clear and state that Bill C-50 must not be confused with the real reform that employment insurance needs at this point. It is merely a stop gap that is simply better than the status quo.

There are three points that should be mentioned in connection with this bill. About 190,000 workers will be eligible and will qualify for extended EI benefits in the next two years. This extension which varies from 5 to 20 weeks of benefits will allow workers to extend their benefit period. That is the only reason why CEP is supporting this bill. Some workers will be helped more than others, but it is still better than the status quo and it is a step in the right direction toward necessary change.

As a negotiator, in my everyday life, I believe in the step-by-step approach. I believe in taking what is on the table and continuing to work in order to improve the system. Moreover, the workers I represent at the Montreal refinery may, in the near future, be affected by the closing of the refinery, because the government is allowing the oil to go south to the United States, which is causing our refineries to close and could lead to the layoff of a lot of our members. This situation is also affecting several employees in the Montreal region who are currently laid off because of the economic context. This measure will thus come to the assistance of certain workers who need this help and need to hope that other changes will occur.

I will now yield the floor to my brother.

[Pierre Laliberté, Political Advisor, Manufacturing Sector, Fédération des travailleurs et travailleuses du Québec]

Good afternoon and thank you.

It is my pleasure to testify today on behalf of the FTQ. For those who are unaware, the FTQ represents 500,000 workers in Quebec, of whom two thirds come from the private sector. In Quebec, the private sector has been in recession since 2003. The official recession began in 2008, but we have been experiencing its effects for several years. As you will see, that has repercussions on us and on our opinion of Bill C-50.

As to the content of the bill, two main impressions arise. I echo the remarks of my colleague, Mr. Pierre Céré. Two things strike us: first, the inadequacy of the measures proposed to solve the problems we are facing, and second, the arbitrary, even discriminatory and certainly bureaucratic nature of what is proposed. Allow me to give you more details.

For several years, we have stressed the fact that the employment insurance program is no longer fulfilling its role as a safety net. In the 1990s, there were reforms that amounted to overkill, if I may use the expression. They went too far. That left, and continues to leave, whole sectors of our workforce, men and women alike, without life jackets.

The most vulnerable on the labour market, in fact, are precisely those without life jackets. As the recession began, our employment insurance system was one of the least generous in the OECD. As the recession loomed, we even said that we were in favour of temporary, but generous, measures intended to curb it. What we have are temporary, but not at all convincing, measures that are going to leave a lot of people in difficulty.

I will not use the word “scandal”, but, to be polite, let us just say that it seems to us like an anomaly. Extending the period of employment in insurance benefits is the macroeconomic measure that will have the most impact. No other measure comes close. Every economist studying multiplier effects will tell you that. So we thought we had a right to expect a program with some muscle. We are still waiting.

The OECD has given us its most recent forecasts. As in every recession, the unemployment rate is expected to remain quite high for one, two, perhaps even three years after the recession is officially over—as happened through the 1990s. For us, this is a source of concern.

In our view, any reform should have had, and still should have, a single eligibility level of 360 hours. We know what impact that would have; it has been measured. You have heard the testimony. It would cost about $1.2 billion for 165,000 unemployed. In the circumstances, we think that this is what should be done.

Now let us talk about these measures. I will not go into detail because I feel that Mr. Céré has described our problem well. One of the provisions that causes us a great deal of difficulty is the one that will put people into either the deserving or the undeserving camp. Being laid off is not some sin that requires penance. It is the result of an economic condition. In our view, the government is on the wrong track and is going to cause a lot of frustration as a result. Be warned: people who feel that they have a right to benefits and do not get them are going to be telephoning you. We guarantee it. I work in the union movement and I can tell you that when our members expect something that they do not get, they let us know about it. I am telling you to look out.

For several years, manufacturing job losses in Quebec have been substantial. The figure 125,000 is mentioned, not counting temporary layoffs. Naturally, the temporary layoffs affect eligibility for the program that you are now cooking up. That worries us. We would like better figures. Everyone would. But we do not have them. We are puzzled, especially when we hear the figure of potentially 190,000 people receiving benefits.

We also have other questions. We were always told that it would be difficult to get Revenue Canada and Human Resources and Skills Development Canada together but now it seems to have become doable. That system already poses administration problems and you are going to increase them tenfold. You must not underestimate what this could mean.

There are other problems. If you really resort to legislative means and if this process is of some use, we would like you to consider our proposals as amendments and to duly process them. If that is not the case, we wonder why you did not choose to use pilot projects which would be much less awkward and would allow you to help people tomorrow morning.

I will conclude with that. If you have questions, I would be happy to answer them. Thank you.

[Pierre Céré, Spokeperson, Conseil national des chômeurs et chômeuses]

Thank you, Mr. Chair. I thought I had 10 minutes. That is what they told us in the documents, but fine.

First of all, on behalf of our organization, the Conseil national des chômeurs et chômeuses, I would like to thank you and the members of the Standing Committee on Human Resources for this invitation to discuss Bill C-50, which would extend the duration of employment insurance benefits.

But, regrettably, we must disagree with this bill, strongly disagree.

First, we disagree with the approach. The government has in fact chosen to use legislation to play a political trick on the opposition when, on September 14, it could have simply announced a pilot project. The government obviously opted for a game of political chess, using the victims of the recession as pawns.

We oppose this bill because it creates two categories of unemployed persons: the good ones who have hardly drawn any benefits in recent years and the bad ones who have drawn on employment insurance in the last five years.

We disagree with and are very skeptical of the department's figures: $1 billion and 190,000 unemployed persons to be helped by the bill.

And finally, Mr. Chair, we disagree because this bill further complicates an already complicated piece of legislation by creating all kinds of exceptions and applications.

For 20 years or so, successive governments in Ottawa have worked to make employment insurance a many-headed beast, a complex act with multiple exceptions and special measures. With Bill C-50, the current government is adding further complications. It is replacing subsection 12(2) of the act, which is about six or eight lines long, with over three pages of all kinds of exceptions. So subsection 12(2) becomes 12(2.1), 12(2.2), 12(2.3) and 12(2.4), creating a distinction as to when employment insurance benefits are claimed—four different periods—and setting out up to six possible types of extensions depending on the number of years of premiums paid. The 20-week extension would be granted only to those who applied before June 5, 2010, and who paid, and I quote from the bill, “at least 30% of the maximum annual employee's premium in at least 12 of the 15 years before the beginning of the claimant's benefit period.” All other claimants, Mr. Chair, would receive less, often only five weeks. Most importantly, workers who have received more than 35 weeks of benefits in the last five years would be excluded. That, of course, means all workers in unstable situations, all seasonal, part-time and casual workers, all workers affected by economic slowdowns and those laid off, even for short periods, in recent years. Therefore, whole areas of our economy are excluded: the lumber industry, the construction industry and a large part of the manufacturing industry, to name only a few. The measure also excludes all workers with less labour market seniority.

As a result, some unemployed persons will receive a few additional weeks of benefits while others will not be entitled to receive them, even if they are from the same workplace, the same factory, and live in the same town, if not the same neighbourhood.

It is all too clear to us as well that the department's figures do not stand up, if only because the $1 billion announced is necessarily based on a calculation of the average benefits, of $348 per week, for 190,000 unemployed persons. That simple calculation, taking $1 billion and dividing it by 190,000, translates to an average extension of 15 weeks. Let me ask the following question, Mr. Chair: is the bill designed to grant that average extension? Of course not. And if there truly was the political will to grant a 15-week extension, why did the government not proceed accordingly, with a simple, clear and direct bill that is much less complicated than the one before us now?

Similarly, will there really be 190,000 long-term unemployed persons who can benefit from this measure? We seriously doubt it, Mr. Chair, based on two facts: first, just 27.9% of employment insurance recipients exhaust their benefits.

I still have two minutes, right?

Second, the bill excludes all those who have drawn benefits for more than 35 weeks in the last five years. That excludes a whole bunch of people. We think it is wrong to claim that Bill C-50 will provide $1 billion to 190,000 persons. We believe that older workers deserve more than these few weeks of additional discriminatory benefits and that they deserve a real assistance program for older workers, such as POWA.

In our opinion, the problems with the employment insurance system have not been addressed at all, including the pressing problem of eligibility. At the end of July this past summer, the 10 premiers of the 10 provinces called on the Prime Minister to resolve this problem. Most Quebec municipalities signed a declaration demanding that the eligibility question be solved at the federal level. The Federation of Canadian Municipalities, as well as many economists and observers, associations and unions, even the church, have all called on the government to resolve the eligibility problem.

In the present case, it is not up to us to vote on this bill, to defeat it or to pass it. However, we respectfully maintain that, in its current form, Bill C-50 is unacceptable. It is discriminatory. It does not represent the type of constructive and structural solutions that are expected to repair the employment insurance program. We believe, perhaps naïvely, that policy must provide solutions to problems and our highest legislative officials must be able to work together.

Can the Standing Committee on Human Resources make use of its voice and legislative powers to raise the issues pertaining to employment insurance and put them forth to the Canadian Parliament and before the Canadian people? We believe so. That is why we are here today, and that is our continued hope.

Thank you, Mr. Chair.