Bill C-56 (Historical)

Fairness for the Self-Employed Act

An Act to amend the Employment Insurance Act and to make consequential amendments to other Acts

This enactment amends the Employment Insurance Act and other Acts by establishing a scheme to provide for the payment of special benefits to self-employed persons who are not currently entitled to receive them.

Fairness for the Self-Employed Act

[The Acting Speaker, Barry Devolin]

Order. order. This is not a point of order.

It is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Madawaska—Restigouche, Employment Insurance; the hon. member for Etobicoke North, Health.

Questions and comments, the hon. member for Timmins—James Bay.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, I listened with interest to my--

[The Acting Speaker, Barry Devolin]

Order. My apologies.

Resuming debate, the hon. member for Saint-Lambert.

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

Mr. Speaker, I am very pleased to have this opportunity today to speak to Bill C-56, the Fairness for the Self-Employed Act.

I should say at the outset that the Bloc Québécois is opposed to this bill. I do not think that will surprise anyone, in light of the questions I have been asking the past few days. Although we were absolutely in favour of the principle originally behind this bill, we cannot support it, because it would be blatantly unfair for self-employed workers in Quebec. The Liberals and the New Democrats can see this unfairness, but have not bothered to speak out against it. On the contrary, they have endorsed it.

Let us have a look at some of the aspects of Bill C-56. This bill would allow self-employed workers to be eligible for special EI benefits: maternity benefits, to a maximum of 15 weeks; parental or adoption benefits, to a maximum of 35 weeks; sickness benefits, to a maximum of 15 weeks; and compassionate care benefits, to a maximum of 6 weeks.

Contrary to what the Bloc Québécois called for, this bill does not enable self-employed workers to have access to regular employment insurance benefits, but only special benefits. That is important. I believe that self-employed workers themselves understand what this bill means for them. This bill will be implemented on a voluntary basis. Self-employed workers will voluntarily enrol and contribute. They will have to earn a minimum of $6,000 in the calendar year preceding their claim to be entitled to 55% of their income. They will have to enrol when they file their income tax return for 2009 in order to have access to benefits the following year. Consequently, a self-employed worker will have to have contributed for a whole year before he or she can access these benefits.

We cannot support the bill because of the contribution rate that has been set for self-employed workers in Quebec: $1.36 per $100 of earnings. Allow me to explain. Bill C-56 proposes to allow self-employed workers to contribute voluntarily to the employment insurance system. However, unlike salaried workers, they would be entitled only to so-called special benefits, which, as I said earlier, include maternity and parental benefits, sickness benefits and compassionate care benefits.

Since Quebec already has a mandatory parental insurance plan for both salaried and self-employed workers, it goes without saying that Quebec must receive some sort of compensation to reflect the fact that self-employed workers there cannot receive the same benefits as Canadian workers. Moreover, salaried workers in Quebec already pay lower EI premiums because they also pay into Quebec's parental insurance plan.

To come up with the reduced contribution rate, the chief actuary of the employment insurance commission makes a relatively simple calculation that he publishes each year in his annual report on the break-even contribution rate and the maximum insurable earnings for EI. This calculation is as follows: the actuary calculates the portion of expenditures that pertains to parental insurance leave. This portion is then subtracted from the contributions Quebec workers are required to make.

The reduction is direct and based on a calculation, which means that the compensation accurately reflects the portion of expenditures that pertains to maternity and paternity benefits. This is a fair and equitable way to set the contribution rate for Quebec workers.

But in the case of Bill C-56, the government is completely ignoring this logic and proposing a totally excessive and abusive contribution rate for self-employed workers in Quebec.

For some reason, the government has decided to ask self-employed workers to pay exactly the same premium as salaried workers, even though they are not entitled to the same benefits. In other words—and I think all my colleagues here know it—salaried workers receive compassionate care and sick leave benefits, but also regular employment insurance benefits. However, self-employed workers, as I was just saying, will only get special benefits. They will not receive regular benefits, but they are being asked to pay the same premium.

Salaried employees and self-employed workers will pay into the same fund. That seems illogical for the reasons I just mentioned.

That means that Canadian self-employed workers will pay $1.73 in premiums, which would allow them to receive the three so-called special benefits. Self-employed workers in Quebec will have to pay $1.36, but those premiums will allow them to receive just two of the three special benefits. It just so happens that those two benefits are by far the least expensive. If I am not mistaken, the compassionate care and sick leave special benefits represent roughly 25% of the cost, whereas parental leave benefits represent 75%.

It took the working group some time to get answers to its questions on Bill C-56. Nonetheless, according to the estimates that were finally forwarded to us by the Department of Human Resources and Skills Development, maternity leave benefits will probably represent 70% of the cost of this new plan for the employment insurance system. You do not need a math degree to know that by paying $1.36, or 79% of what Canadian self-employed workers will pay, Quebeckers are being had.

In other words, Quebeckers are being asked to provide 19% of the funding for the plan, but, according to the department's numbers, they will collect only 6% of the benefits. That is scandalous.

We all agree that it makes sense for insurance plans to spread the risk. That is a basic principle of insurance. Insurance of all kinds is a risk-sharing endeavour that requires all beneficiaries to assume a portion of the risk because they cannot predict what events might cause them to lose their income for one reason or another. What we take issue with, however, is the disparity between how self-employed Canadian workers are treated and how self-employed Quebec workers are treated. The Canadian portion of the plan will result in a huge deficit at a contribution rate of $1.73, while the Quebec portion will produce a huge surplus at a contribution rate of $1.36.

It is expected that the Quebec portion of the sickness and compassionate care benefits, the only benefits to which self-employed Quebec workers will be entitled, will cost some $22 million in 2014, whereas premiums collected from Quebec will amount to $45 million. In contrast, in Canada, also in 2014, benefit payouts will be on the order of $280 million and premiums, $178 million. In other words, the government is asking self-employed Quebec workers to absorb the deficit for self-employed Canadian workers.

Of course we believe that is unfair. And we are not the only ones. We asked Michel Bédard, who was the departmental chief actuary for over 12 years, to provide an estimate of what he considered to be a fair contribution rate for self-employed Quebec workers. As it turned out, Mr. Bédard confirmed our initial suspicions. The contribution rate to be imposed on Quebeckers will be outrageously high, and the return they get will be ridiculously low.

That is why the Bloc Québécois cannot support this bill.

We know that, generally speaking, this government's employment insurance measures in no way meet the needs of Quebeckers. I said so yesterday and I will say it again: the program for long-tenured workers does not apply to Quebec forestry workers. The additional five weeks are a temporary measure. Self-employed workers in Quebec already had access to parental leave, and the contribution rate for compassionate care and sickness benefits is three times what the rest of Canada will pay. So there is a serious problem regarding employment insurance.

We now realize that it is Quebeckers who are always paying for others, although improving the employment insurance system, as the Bloc Québécois as been proposing for several years now, would be a good way to help all workers. We therefore cannot support this bill for the reasons I have just given.

I encourage our NDP and Liberal colleagues, especially those from Quebec, to ask themselves some serious questions and examine this issue closely, because it is very clear that self-employed workers in Quebec will be the ones to foot the bill for everyone else when it comes to this employment insurance fund.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Mr. Speaker, the fact of the matter is that the number of self-employed people has mushroomed over the years. In fact, people in many cases are being forced into self-employment. They are having to go back to work for their previous employers in a self-employed capacity. Computer companies replace their repair people. The real estate industry has gone largely to a self-employed system over the last 15 years. Companies contract their own cleaning services.

There is a huge number of people who need this type of program, and the number is increasing. While we can argue that the government has not given us the information that we have asked for in terms of the uptake and the studies on how many people will be taking part in this, it is important to get the program started.

Even though the government says it is going to be self-financing, we think that it probably will not be in the first couple of years because it will be selected against. It will be a couple of years before the system becomes mandatory and the premium rates that the Bloc member is talking about will be adjusted so that there will not be the imbalance that she sees.

I think the member is projecting too far ahead. I think she should give the program a chance and then work out the problems as we go along.

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

Mr. Speaker, I thank my colleague for his question. The department's former chief actuary has confirmed that the cost to Quebec is much too high. In fact, self-employed Quebeckers should pay 41¢ for every $100 earned in order for it to be fair.

Calculations are based on 2014, because the government will be re-evaluating this bill in five years. I believe that we should use specific years to evaluate all the ramifications.

We cannot have Quebeckers assume the cost of a program that is designed for all of Canada's self-employed.

The House resumed consideration of the motion that Bill C-56, An Act to amend the Employment Insurance Act and to make consequential amendments to other Acts, be read the third time and passed.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Mr. Speaker, I would like to read a quote from the hon. member for Saint-Lambert. She said in March, “I think offering self-employed workers the opportunity to contribute to employment insurance on a voluntary basis is long overdue”. That is what this government did.

I wonder how the hon. member reconciles with her constituents, the people she represents, that that party has voted against all the measures that we have brought in on employment insurance? How is she able to go back to her constituents and say that she is trying to help those who are unemployed?

The member voted against the five extra weeks. She is voting against this bill. She is voting against up to 20 weeks for long-tenured workers who need the support the most and freezing EI rates at $1.73 for this year and next. All these measures the member has voted against but at the same time she is saying she is working for the interests of those who have lost their jobs. She voted against the infrastructure stimulus funds and all the community adjustment funding. Yet the member stands in the House and says that she is working for those who are unemployed.

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

Mr. Speaker, I thank my committee colleague for his question.

In fact, the Bloc Québécois has always voted in the interests of Quebeckers. I repeat, the government's employment insurance measures do not meet the needs of Quebeckers. The program for long-tenured workers does not apply to Quebec forestry workers but is designed primarily for workers in the automotive sector.

The five additional weeks are only temporary and are not a permanent measure. Self-employed workers in Quebec already have access to parental leave. They now have access to compassionate care and sickness benefits. They will be paying three times too much. I do not believe that these self-employed workers, even if the program is voluntary, are interested in covering the entire cost of this project across Canada. It will take a much lower amount, a fairer amount, say 41¢, for them to be interested in signing up for employment insurance benefits for the self-employed. In fact, I am not sure that our Quebec workers are interested in paying for all other workers.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, earlier I had asked a question of the parliamentary secretary with regard to the Quebec rates. The parliamentary secretary's response concerned me a little bit. He indicated that it was set at a rate that was lower than private rates available in Quebec.

Considering the range of benefits that are being provided under this bill, I would think it would be extremely difficult to do a very accurate assessment of what a group rate might be. I also understand there were questions about the rate at committee, yet I notice there have been no changes to the legislation to speak of.

If this matter is serious enough, should there not be an undertaking by the government to do an immediate review of the proposed rates to determine whether or not there is a necessity to bring forward an amendment, either in the Senate or subsequently given review of other aspects of the bill?

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

Mr. Speaker, I thank my colleague for his interesting question.

At the last committee meeting, we indicated that we wanted to meet with the former chief actuary, and the Conservatives refused this request. We wanted to hear what figures the former chief actuary could give us to justify and explain why Quebeckers will be paying far too much. I do believe that we will be meeting with him next week.

We also proposed an amendment before voting on this bill, an amendment that did not receive a majority vote, that would have also called for the government to review the amount paid by Quebec compared to the rest of Canada. When the bill is sent to the Senate, we will have to propose an amendment to look at the calculations of these costs to ensure they are fair.

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

Mr. Speaker, I have a question for the member for Saint-Lambert.

I understand the position that the Bloc Québécois is taking. The Bloc Québécois is saying that the way the premiums will be paid is not right. A member talked about what would happen, but I will not repeat what was said.

But this is a voluntary program. So she is saying that the Bloc Québécois is making this decision for the people of Quebec, but they are not required to contribute. They say that they already have a program. Why prevent other Canadians from having access? Why prevent Quebeckers from making a decision for themselves? Why prevent a hairdresser or an artist from making a decision regarding sickness or compassionate care benefits? Why make that decision here, and not let the people of Quebec decide for themselves?

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

Mr. Speaker, in fact, we already have the Quebec parental insurance plan.

We agreed with the principle of this bill. I do not see why workers in Quebec should not have access to special benefits. But can we hope to have a plan that is fair to Quebec as well? Why should we accept a bill that asks Quebeckers to pay three times what they should?

We can review these costs, especially since the former chief actuary has stated the costs and confirms what we are saying: Quebeckers will be paying three times what they should.

As a government, we must review the calculation so that it is fair to Quebec as well.

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

Mr. Speaker, it is my pleasure to speak to Bill C-56, An Act to amend the Employment Insurance Act and to make consequential amendments to other Acts, concerning self-employed workers.

I would like to begin by saying, as I have said during other speeches on the subject, that I toured the country to meet with workers across Canada. I went to Gaspé, to Montreal, and to Rivière-aux-Renards. I should mention to the member for Saint-Lambert that her riding is a very beautiful place. I visited all of the provinces—Newfoundland and Labrador, New Brunswick, Nova Scotia and so on—and I went all the way to Vancouver.

That was back in 1999. The Liberals were elected in 1997. I want to emphasize that because earlier, the Liberal member said that the Liberals were the ones who worked on the self-employed workers file. In 1999, I made a proposal to the House of Commons. I would like to read from the record:

The EI program, as it exists, does not take market realities into account. More workers are described as “self-employed”, which is not quite the case. A growing number of businesses are laying off people and then hiring them as self-employed workers in order to avoid having to contribute to EI or to a pension plan. Self-employed workers are not entitled to EI and are practically without social protection. We must take a closer look at what is really happening on the new labour market and explore ways to help so-called self-employed workers contribute to and benefit from the system.

I gave that speech quite a while ago. The NDP will support the bill currently before the House of Commons. In my opinion, it is time to support our self-employed workers, such as artists in Canada and Quebec, hairdressers in Canada and Quebec, and massage therapists, to name but a few. There are countless other categories of self-employed workers who need our help too.

Consider for example parental leave or sick leave. A hairdresser from my riding came to my office and asked how she could take advantage of the employment insurance system. She is a young woman who would like to start a family, but since she is self employed, she will not receive anything. She does not have the financial resources to start a family.

Finally, a bill has been introduced here in the House of Commons today. This bill aims to support people who need maternity leave or parental leave.

I applaud Quebec, which has had a program like this for several years now. It is time for the rest of Canada to have the same thing, through the employment insurance program. This is what people want. Some of the witnesses we heard from in committee even suggested having a separate fund, apart from employment insurance. We heard various proposals in committee.

The unfortunate thing is that the Conservative government introduced a bill for long-tenured workers without allowing us to make any amendments. It is all or nothing, which is unfortunate. Why bother having a Parliament and parliamentary committees and examining bills if the government refuses to be open to amendments and refuses to listen to the people?

This is how Parliament normally works. The government introduces a bill, which is studied in a parliamentary committee. For example, the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities would study the bill. The parliamentary committees' raison d'être is to allow Canadians and Quebeckers the opportunity to testify before the committee and share ideas that could inspire changes in order to create a better bill.

But the Conservative government arrived with an all or nothing proposal. Can we call that democracy? The government will say yes to avoid saying no. If we say no, we are saying no to all those workers who would have had a chance to have a program to help them.

I find that a bit sad. That is their business. The Bloc Québécois wants to vote against this bill. The Bloc members will do what they want, but I am sad for the workers in Quebec, the hairdressers and massage therapists and all those people.

Artists, whom we defended so ardently in the last election, will not be able to decide themselves whether they want to contribute. This is a voluntary program. We have to give other Canadians the opportunity to have it. We can do this together. People should exert pressure. I am sure that the Government of Quebec would know how to tell the Government of Canada that its premiums are too high and should be reduced, as they have been in the case of parental and maternity benefits. It is true that they pay lower premiums than others because part of the program already exists in Quebec.

I sympathize with what members are saying today, but I believe that the bill should be passed.

The government has also truly closed its mind to any change. The reality is that this program is going to cost money. According to the figures we have, there will be a $48 million surplus in 2010. I do not know whether it is million or billion, but it makes no difference, it is still money. We are talking about $57 billion. There will be a $48 million surplus with this program, because in the first year, 2010, people will pay into the system, but will not get any money in return, because they will not be entitled to receive benefits until 2011.

In 2011, a $24 million deficit is anticipated. In 2012, the deficit will be $39 million. In 2013, it will be $56 million, and in 2014, $78 million. These are the figures we have been given.

That is why we proposed that within six months of the coming into force of this part, the minister appoint a group of experts to study the effect and application of this part, or this act. Every year for a period of five years, the group of experts would consult the Canadian public and present to the House of Commons and the Senate a report of its findings and recommendations.

We are not asking for the world. We are just saying there is a new program, we are willing to vote in favour of it, but we just want to be sure there is follow-up to see if we are on the right track. This was supported by the Canadian Labour Congress. It was refused by the government. The Conservatives completely rejected this proposal. They said we needed royal assent. The answer therefore was no.

We asked for something else. I think this should be addressed. They say they want to help self-employed workers. That is what the government was saying earlier. I was listening carefully to the parliamentary secretary, who was saying that her government wanted to help self-employed workers. If that is the case, we had another proposal for being fair to those workers and supporting them.

I was saying earlier that the labour market has changed and that today there are more self-employed workers than ever. There are even more today than there were in 1999.

We made another proposal. Self-employed workers are not entitled to regular benefits. They are not entitled to receive regular employment insurance benefits. That is what it says in the act. Let us say that for more than a year, the worker earned 95% of his income from just one client.

An employee who is fired because his employer wants to avoid paying him benefits, and who is subsequently retained as a self-employed worker, should be recognized as a regular worker for the purposes of employment insurance, and be entitled to benefits, if he has worked 95% of the time for that employer. In this case, the commission would consider it to be equivalent to an employer-employee relationship.

Once again, the Conservatives said no. And yet they claim they want to help the self-employed.

There are two things that would have truly helped the self-employed. The latter are asking that a task force, in the next five years, report to both Houses given that the cost will increase. Even self-employed workers stated that they were not aware it would be so costly. It will cost them $78 million in the next five years. They would like to be given the facts and hear what we have to recommend.

We wanted to amend the bill in order to allow a self-employed worker who worked 95% of the time for a single client to be considered a regular worker. We are not talking about 50% or 25% of the time. If he were to lose his job, he should be entitled to employment insurance benefits.

Once again the Conservatives said no. I find that unfortunate. We have to adapt to the new labour market.

That is clear in the government report. It states that, in 2008, 2.6 million Canadians declared they were self-employed. For a vast majority, it is their sole source of income. That is a large number of people. It means that 2.6 million Canadians and Quebeckers do not have a safety net if they lose their employment, even during an economic crisis such as the current one.

The Conservative government would like Canadians and also Quebeckers to believe that the program they are presenting is the best in the world. It has overlooked a fair number of things. We must do more.

Earlier the Liberals were bragging about the fact that they were trying to help self-employed workers. They were in power for 13 years. From 1999 to 2005, they had enough time to implement a program, but they did not.

When a bill was introduced in the House of Commons to consider the best 12 weeks for workers, the Liberals, while they were in power, voted against that measure. Now that they form the opposition, they are saying that the 80% of women in the workforce benefit the least from employment insurance when they are the ones who need it the most.

Only 32% of women are eligible for employment insurance because the Liberals made major cuts to the program in 1996, when they were in power. That is when they decided that to be eligible for employment insurance, a person needed to have 910 hours of employment. They are the ones who have prevented a great number of women from being eligible for employment insurance.

The Liberal member said that, at the time, the economy was doing well and that only about 6% of the workforce was receiving employment insurance benefits. If the economy was doing well, then why did they make cuts to the employment insurance program?

When they made those cuts, the economy may have been doing well in Toronto, but it was not doing well in Atlantic Canada. Fish plants were closing and there were other closures in the forestry industry. There were closures everywhere. That is when the loggers had to leave the forest.

Back in the days of Liberal spending cuts, the unemployment rate out east was around 20%. They could not have cared less about people in the Atlantic provinces.

Better yet, a former Liberal minister—my predecessor, as it happens—told the Globe and Mail that the government would tame Atlantic Canadians. He called them shiftless and lazy. The Conservative member from Nova Scotia said something similar a few weeks ago—or was it last week—when he said that lazy, no-good bastards in Halifax do not want to work. That was almost the same thing. The Conservatives and the Liberals have the same attitude toward workers.

Today, the government said that it would freeze employment insurance contributions until 2011. But look out, because in 2011, rates will go up. In 2011, there will still be a $57 billion surplus in the employment insurance fund, a surplus that was stolen by the Liberals and the Conservatives. There is money in the employment insurance fund. It is not as though it is empty.

Why will premiums have to go up in 2011 despite the surplus in the employment insurance fund? It is funny to hear them talk. The Liberals dipped into the fund and spent the money over a series of budgets. The government paid off $92 billion of the national debt, but $57 billion of that was taken from workers who lost their jobs.

The Conservatives say that the Liberals were the ones who did it. But they cannot lay all of the blame at the Liberals' feet, because they have been in power since 2006. Who passed the bill in the House of Commons? There is a new commission, but it is only getting $2 billion. The Conservatives passed the bill, but the Liberals were the ones who supported it.

In the end, both parties stole the $57 billion because they legalized the theft. That is what happened. In last year's budget, $2 billion was deposited in the employment insurance fund. Now they say that it will not be enough come 2011. They say that they will have to raise contribution rates and make workers pay yet again for the debt acquired by the two parties that were in power.

They could do something else to help workers in Quebec and Canada. For example, the employment insurance calculation could be changed to be based on the 12 best weeks. Better yet, it should not even have a divisor, because under the EI regulations individuals already receive only 55% of their income in benefits. Even if an individual earned $1,000 a week, the 55% calculation would not be based on the $1,000, but on an amount of approximately $750. So the individual would only receive 55% of that amount.

A motion was moved in the House of Commons regarding the 12 best weeks, but once again, the Liberals and Conservatives voted against this motion, just as they voted against a bill for a 360 hour threshold when it was introduced.

Maybe one day workers—if there are any watching us at home—will realize that the Liberals and Conservatives are not their friends. Maybe one day they will realize. They will say that they are not receiving EI benefits because the Liberals and Conservatives made cuts.

They would have us believe that someone who goes to the employment insurance office to receive EI benefits does not want to work. I think that is shameful and unacceptable in our society.

In France, employment insurance recipients receive 75% of their income. The Government of France says that it pays that percentage because it is the workers' employment insurance program, and it injects money into the economy and the community. It does not label those people as lazy slackers, as the Conservatives and Liberals do. It does not do that.

The NDP will support this bill, but we believe it does not go far enough. Other changes need to be made to EI, and the $57 billion must be handed back over to the workers who have lost their jobs. It should not go to paying down the government's deficit.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the member is quite right with regard to the surplus that was accumulated under the EI system. Indeed, it still is owed to workers and to employers. In fact, under the rules guiding it, it has to be disposed of by either lowering premiums or by expanding benefits, and the member is well aware of that.

Does the member realize that under the last budget, the government will set up a separate commission where it will get $2 billion as seed money and then subsequent to that, all premiums will go into the separate commission and all benefits will come out, but the balance of the $50 billion will never be accounted for ever again. This is where the stealing is happening.

Why did the auditor general tell the Government of Canada, Brian Mulroney of the day, to put the EI operations in the government as an indication of its operations, but the current government has not done that and has put it outside again so it can seize the surplus moneys?