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

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

Madam Speaker, the fact of the matter is that in many cases they do not have the ability to plan their move to self-employment. It is basically thrust on them.

There are people who are able to set up and plan their affairs in such a way as to get into a self-employed situation through working for a company, learning how that company operates, and basically looking ahead six months to a year and then saying that their goal is to become self-employed by that time.

However, many others just simply find that they have no jobs and are forced into self-employment overnight. They are forced with the decision of trying to stay afloat and basically become a business person. We know that statistically businesses just do not last in a major fashion beyond five years.

I do not know what the figure is exactly but a very high number of businesses fail within the first five years and very few businesses survive past the five year mark.

By the way, that is why franchises have become such a popular item and a popular approach for people to take because the franchising concept, while it has a lot of negatives in some ways, has proven to be successful. If one signs in on a franchise, one can probably enhance one's chances by perhaps 100% in being successful for a much longer period.

In terms of the employment insurance route, my colleague talked about having full EI benefits available and that we should look to that in the future. This bill is a very good first step, but perhaps in the future, next year, the government might look at developing the system a little further, perhaps to allow self-employed people access to the full system under certain circumstances.

I think that would be the way to look at it long-term.

[Jean-Pierre Blackburn, Conservative, Minister of National Revenue and Minister of State (Agriculture)]

Madam Chair, I rise today in the House to speak in support of the measure we are putting forward to assist self-employed persons and to make it possible for them to balance work and family life.

As we know, self-employed persons are their own employers, and this means that the money does not always come in when they want it and that they have no guarantee of an income. As well, these people are to some extent vulnerable to special situations in their lives: they may have the bad luck to fall ill or a member of their family may be ill and they may want to help them during that difficult period in their life, or at the end of their life.

How does it work at present for all regularly employed workers in Canada who get a paycheque every week? They have access to employment insurance and special benefits such as parental leave, sick leave and compassionate leave. That is available to all employed workers in Canada.

In Quebec, certain aspects are different. In Quebec, all employed workers also receive the same kinds of benefits, except that they may get a little more than what is available to other Canadians. Because the service is a little different in Quebec, the costs associated with it are also different.

Today, our government is keeping its promise. We said that we would also offer certain special benefits to self-employed workers.

What are the special benefits we are going to make available to self-employed workers? First, let me explain the difference between Quebec and all the other provinces of Canada. In all provinces and territories, self-employed Canadians will be able to receive special benefits: maternity leave, parental leave, sick leave or sick benefits, and compassionate benefits. To receive those services, self-employed persons will have to pay $1.73 for every $100 in income earned.

In Quebec, there is a difference. Self-employed persons were already required to pay for maternity and parental benefits. Because Quebec managed the program, instead of paying $1.73 per $100 in earned income, employed people paid $1.36 per $100. But the Government of Quebec also required that self-employed persons pay an additional amount: 86¢ more than the $1.36 we already require, in order to get these benefits.

That may be a little complicated, but I want to make it clear that there is a difference between Quebec and the other provinces and territories, because Quebec offers more things. Now, what is being offered to self-employed workers?

Those who also want to avail themselves of sick leave and compassionate benefits will now be able to have access to them on a voluntary basis. No one will be compelled to contribute. Those who contribute will be billed $1.36 per $100 of income earned, while in the other provinces it will be $1.73.

I think it is important for people who want this protection to be able to have it, because they could have the bad luck to fall ill or to need compassionate leave to help a family member.

Sick leave would cover a period of 25 weeks. Someone could therefore fall ill and receive payment for 25 weeks, based on their average earnings in the last year. Compassionate leave covers a six-week period.

Now, how do we go about making all this available, and how will it work? For someone to actually be able to sign up for this insurance, to cover the possibility of illness or so they can take compassionate leave, they will have to have earned $6,000 in the last year.

Why $6,000 and not 600 hours, like employment insurance for other workers? That is because we do not know how many hours a self-employed person works per week, because it is not recorded and also because there is no obvious way to do it.

Our calculation is based on a person working 600 hours, as in regular EI. If we calculate that at $10 an hour, it comes to $6,000. At that income level, an individual can contribute in order to be eligible for the special benefits for sick leave, compassionate care leave, maternity leave and parental leave, which will be made available to all Canadians.

This is not the first measure we have put forward to help Canadians and workers who are losing their jobs right now. I will say a few brief words about these workers who are losing their jobs. We know we are in a recession. Even though things seem to be going better at the moment, it is still a global recession and during this difficult time it is important for us to support workers who lose their jobs. Among the new benefits we are offering, we decided, first, to extend EI by five weeks for people who will lose their jobs or for those who have already lost them. We thought it important to give them an extra five weeks. By way of example, if someone received $400 weekly in EI and got an additional five weeks that would mean $2,000. That is a lot more than the two weeks the Bloc was after with the elimination of the waiting period.

We also wanted to protect businesses and employees, if they were prepared to share work in order not to lose their jobs, so that everyone could stay on with the company. This is often called a four day week. We put measures in place to support these businesses and the workers who want to go that route. We are giving them an additional 14 weeks. In the past, it was 38 weeks, now it will be 52 weeks. Over 5,000 businesses have benefited from this for 5,000 workers, which is to their advantage as well.

Among the other measures, we wanted those who lose their jobs to get training in order to acquire new skills. We can pay for up to two years while they train. Of course, during that time, they receive benefits as they acquire new skills so they can go into another sector of activities if they are unable to return to their former workplace.

Another measure that we proposed recently—and once again the Bloc wanted to vote against this measure—is to arrange for an additional 5 to 20 weeks of EI for long-tenured employees, people who have worked in a company for 7, 8, 10, 15 or 20 years and never drawn EI benefits. They come up against hard times, and of course it might well take longer for them to return to the same job. Some will not even be able to go back because the business closes for good. There will be an additional 5 to 20 weeks available to them. For someone contributing at the maximum, that 20 weeks amounts to $8,940 more. This is what EI claimants could get if they lose their jobs. I do not know whether anyone can explain to me why the Bloc voted against the unemployed in order to deprive them—if we speak of the maximum—of $8,940. That is money when you lose your job and have no idea when you will find another one. Well, the Bloc members voted against this measure.

I want to come back to the importance of what we are doing today. First, we are delivering the goods. Second, we are doing even more than what we originally talked about. We are now allowing self-employed workers to be eligible for special benefits. That means that now, self-employed workers will be able to receive maternity leave, parental leave, sickness and compassionate care benefits. Those are the measures we will offer.

Of course, Quebec already had parental and maternity benefits that were mandatory. In Quebec, workers paid less than what we were asking. For them it was $1.36, while for the other provinces and territories, it was $1.73. Quebec charged an additional 86¢ for self-employed workers. So, for the two new measures, everyone would be on an equal footing. They would pay $1.36 for every $100 of earnings in order to be able to receive benefits.

We know that life is unpredictable. We determined that 86% of people wanted this for self-employed workers for sickness benefits, among other things. That means 86% of people wanted these benefits to be available. They now are. At least they will be once the bill is passed. Some 84% wanted compassionate care benefits, and a little over 60% wanted parental and maternity leave benefits. We see that this is what people wanted, and now self-employed workers will have access to that protection.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Madam Speaker, I heard the member for Jonquière—Alma talk about various measures on which the Bloc has taken a stand.

Let us take, for example, the two week waiting period. The Bloc believes that the two week waiting period is unfair to a worker who loses his job. If we abolished the waiting period, that worker would receive money a lot sooner to buy food and other necessities. People who lose their jobs and go on EI are subjected to the two week waiting period, and it takes another four weeks to process the claim. That means that it takes six weeks for the cheque to arrive. This is very unfair, but the member for Jonquière—Alma and his party do not understand that.

I would like to raise another point. He also talked about the program to add an extra 5 to 25 weeks of benefits provided that the worker has not received benefits in the last five years. This is another measure that does nothing for Quebec, for seasonal workers and for forestry workers. Every union and every workers' representative in Quebec is against this measure because it is tailored to the needs of auto workers. Those are the two points I wanted to make regarding the comments by the member for Jonquière—Alma.

[Jean-Pierre Blackburn, Conservative, Jonquière—Alma, QC]

Madam Speaker, once again, I would like to add to what the member for Chicoutimi—Le Fjord just said.

Suppose a worker loses his job and is entitled to 30 weeks of employment insurance benefits under the EI rules. If I eliminate the waiting period, that worker will get his benefits earlier, but he will still collect just 30 weeks of benefits.

We are in a recession, so the measure we are proposing is doubly important. Often, when a recession happens, the economy does not recover as quickly as employers might have expected. Economic activity often slows down. Employers get fewer orders and are not in a position to call staff back. In such circumstances, it is important for those who worked for these companies to have the opportunity to collect five extra weeks of employment insurance benefits. As we all know, the maximum weekly benefit is $447 per week. Multiply that by five, and it adds up to over $2,000. That is not peanuts.

Then, consider the 5 to 20 weeks that we want to give long-tenured workers. How can any member of the House say no to that if they want to help people going through hard times because they have lost their jobs and might never be hired back by their former employer? Our government is taking action. We want to help unemployed workers. We are standing up for unemployed workers by bringing in a measure to offer 20 extra weeks, times $447 per week, which means that we are giving $8,940 to people who are going through tough times. They, on the other hand, are standing up to vote not for this bill, but against it. What is going on?

Why are they here? Are they here to help people who are having a hard time or are they just here to ask partisan questions that are not in the best interest of those people? Rich people will not benefit from this measure. Workers who lose their jobs, who are going through hard times and who want to support their families, are the ones who will benefit. We are offering 20 extra weeks and they are voting against it.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Madam Speaker, my colleague from Jonquière—Alma will probably admit that he made an error in his presentation earlier. The number of weeks of sickness benefits is 15, not 25. I do not believe that the bill says that it will increase. He said 25, but I think that that is a mistake, because the bill provides for 15 weeks of sickness benefits. That said, I do not believe he deliberately misstated the number.

I would like to talk about my colleague's presentation, in which he defended Bill C-50 instead of Bill C-56. I understand that he is embarrassed at having supported that bill and that he felt obliged to defend it because it is indefensible.

My colleague from Chicoutimi—Le Fjord pointed out that in Quebec, both the major unions and the groups that represent the unemployed are unanimously opposed to the bill. I would add that even in the auto sector, the Canadian Auto Workers have acknowledged that it would help them so little for the price that they would prefer not to have it.

[Jean-Pierre Blackburn, Conservative, Jonquière—Alma, QC]

Mr. Speaker, I appreciate the correction the hon. member made. It was an error. There are 15 weeks of sickness benefits and 6 weeks of compassionate care benefits. Parental benefits vary by province or territory.

In Quebec, for example, maternity leave runs for 15 to 18 weeks under the plan there. In the other provinces, it runs for 15 weeks. We can see that there are differences, just as there are for parental leave.

That said, I would like to tell the hon. member once again that the Conservative government is standing up in the House to introduce measures to help workers who lose their jobs, especially long-tenured workers who have paid into the employment insurance plan for maybe 20 years and have never received a cent. We are offering to give them from 5 to 20 additional weeks of benefits if something disastrous should happen and they should lose their jobs. If they are entitled to a year, for example, we will give them 5 to 20 weeks more. You are voting against this.

How can you explain why you are voting against a measure like this that helps—

[The Acting Speaker, NDP, Denise Savoie]

I would ask the hon. minister to address his comments to the Chair.

The hon. member for Charlesbourg—Haute-Saint-Charles.

[Daniel Petit, Conservative, Parliamentary Secretary to the Minister of Justice]

Madam Speaker, through you, I have a question for the Minister of National Revenue, who, like me, is a citizen of Quebec.

I have been watching the Bloc in this House for the past 20 years. First of all, it has never brought forward any measures to protect the interests of Quebec's unemployed workers. Second, it has never wanted power, and accordingly, never wanted to resolve any issues.

I would like to ask my colleague who will pay for this new system. In Quebec, I already pay, in part, for unionized employees who have certain rights, but those employees do not necessarily pay for me.

Since I am a self-employed worker who decided to run for election, I would like to know who is going to pay for this new bill, which benefits self-employed workers in Quebec.

[Jean-Pierre Blackburn, Conservative, Jonquière—Alma, QC]

Madam Speaker, I thank the hon. member for Charlesbourg—Haute-Saint-Charles. It is an excellent question.

Since we are talking about self-employed workers, those who wish to take advantage of this insurance in order to have benefits, including sick leave and compassionate leave—so the self-employed workers themselves—will pay a premium of $1.36 for every $100 of earnings.

To be entitled to employment insurance, the employee and employer both pay. For instance, the employee pays $1.73 in all other provinces and territories, and the employer pays the same amount multiplied by 1.4. In the case of self-employed workers, the employer does not pay. Only the individual who wishes to receive special benefits will have to pay premiums. The money accumulated should allow this to remain revenue neutral.

Furthermore, beginning in 2011, the Canada Employment Insurance Financing Board will ensure that premium rates correspond to the actual costs associated with the benefits provided by the employment insurance system.

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

Madam Speaker, I rise today to speak to Bill C-56, An Act to amend the Employment Insurance Act and to make consequential amendments to other Acts.

These amendments will mainly affect self-employed Canadians who have been lobbying for changes to employment insurance legislation for a number of years.

In principle, Liberals will support this legislation because the intent is good. We would like to see the bill sent to committee for an in-depth study.

What my colleagues and I on this side of the House find surprising is the fact that the government has drafted such an important bill without even defining the expression “self-employed worker”.

As a legislative body, it is our responsibility as parliamentarians, when laws are written and codified, to provide advice to whose who will apply the law in the legislative framework.

At the outset of any piece of legislation, it is important to say what we mean by the terms. Who are these independent workers? When we talk about the self-employed, who are we speaking about? Are we speaking about people who work as individual consultants, or those who work within a consulting firm where there are several independent consultants but only share office space, phone lines, a receptionist and other administrative services? Are we speaking about contractors, small and medium-sized entrepreneurs who work in teams yet have no financial responsibility towards each other?

Surely the definitions of the people affected by any legislation, and particularly such a major piece as we are discussing today, should be included and clarified in the actual legislation and not left to regulations. These regulations, which come after the legislation has passed this House and the other House, can be amended by order in council, at the government's will, without any debate in Parliament. It is therefore imperative that there be substantial amendments to the bill as it stands today, and the very first one that I would suggest to this House would be a definition of who are the people who will be affected by this bill.

Who are these self-employed workers? What we do know, based on socio-demographic characteristics, is that the number of self-employed workers has increased.

Throughout Canada, one worker in six is now self-employed.

According to the surveys, self-employment has grown more quickly than employment in general in the past 25 years.

According to Statistics Canada, between August 2008 and August 2009, self-employment rose by 3.5% on average. That is in one year. That is over 92,000 more people.

Concurrently, the paid work force has decreased by 2.7%.

There are now more than 2.7 million self-employed people in Canada, as compared to 2.5 million in 2005. This is despite the downturn in the economy. It is obvious that this bill comes at a very important time for these 2.7 million self-employed people in Canada, but we have to know, within this 2.7 million, who is going to be affected by the bill.

In the case of women who are self-employed, 35.9% have their spouses as business partners compared to 28% for men. That means that both workers in the family are self-employed.

We also know that around 88% of the self-employed work full time.

We know that people have chosen self-employment either after retirement, or in many cases, when they have grown frustrated with their inability to find full-time work that suits their qualifications and skills.

We also know that stress in the workplace, especially within the public service sector, has forced people to choose the uncertainties of self-employment, and I could talk about the uncertainties of self-employment, because for 10 years I was self-employed. It was really an up-and-down ladder. There were months when nothing would come in and I would do no work, and there were months when I would be trying to do two or three things at the same time. One could never tell a few months ahead whether there was going to be any money coming into the house.

We know that among the self-employed, 17% are newcomers to Canada. We know one of the reasons is that they have degrees they have earned outside Canada and they are not able to have a comparable degree here in Canada. These people have no choice but to become self-employed, because barriers to employment are more prevalent.

The opposition has been waiting a long time to discuss changes to employment insurance. We spent the summer trying to work with the Conservative government.

In the end, we have a bill that has no flexibility within the employment insurance program, does not take into consideration the variety of legislation in the provinces and territories, and does not provide a clear definition of self-employment. If there is one, it is not good enough.

This is as a result of a summer of discontent, of a lack of goodwill on the part of the government to be open and willing to discuss public policies that matter to Canadians.

While we are pleased that many of those self-employed women, and I am only speaking of women here, will now be able to access maternity benefits and parental, sick and even compassionate benefits, what calculations did the government use to assure Canadians that the EI fund will be able to withstand the added cost? If it has done calculations, these calculations are still unknown to Canadians and are definitely unknown to parliamentarians.

What models did the government look at before coming up with this framework? Obviously not very many.

For instance, had the government made an effort to look at what the provinces and territories had in terms of programs, it would have realized that the Quebec model is a very good one, and it would be important that it be used as a basis for developing a fairer and more equitable system for the self-employed. I would like to take a moment to outline this Quebec model.

The Government of Quebec currently provides parental and maternity benefits to the self-employed, but it uses a different model. All Quebeckers who are in business for themselves have to pay, out of their income, premiums to Quebec's parental insurance plan, QPIP. Self-employed workers with at least $2,000 in insurable income may qualify for benefits under this plan and receive up to 70% of their income in QPIP benefits. That is a more generous plan than the one proposed in the bill before us today.

As long as the QPIP is in place, the new federal maternity and parental benefits plan will not apply to Quebec, but the self-employed in Quebec will be able to contribute to the plan for the caregiver and sick leave benefits that are not currently provided under QPIP. Consequently, in Quebec, the self-employed will pay premiums corresponding to 37% less of their income. It goes without saying that this sounds like a more equitable arrangement than the one proposed in this federal bill, which corresponds to 55% of an individual's average income.

Another questionable aspect of what is being presented in this legislation is the threshold of $6,000 in pre-tax earnings before the self-employed can qualify.

Again, what calculations did the government use to come up with this figure?

This is one aspect that we, on this side, would like to see discussed in detail at committee in the interest of those who will be affected by the proposed regulations.

At committee, we would also like the hear the Government of Quebec on the best practices and lessons learned in providing services to the self-employed in that province.

While we are pleased that many of those self-employed women will now be able to access maternity benefits, we still ask, again, what calculations has the Conservative government made? How has it come to these calculations? Will it make them public to members of Parliament, as well as to the Canadian public?

The labour force must become flexible. Working full time for a single employer is no longer the norm. We must therefore have a system that meets and responds to the needs of this new labour force, one that is flexible, mobile and even seasonal.

This is what fairness and equity is all about in the 21st century.

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

Madam Speaker, it is a pleasure to rise in the House to speak to this very important piece of legislation, which is being brought forth as part of our Conservative government's campaign commitment last year, not only fulfilling but exceeding expectations of our constituents with regard to this platform initiative. I would like to thank the hon. member for her dissertation. We work together on the human resources standing committee and will be discussing this piece of legislation.

From a British Columbia perspective, and you yourself, Madam Speaker, being from B.C., I know that John Winter, the chair of the Coalition of B.C. Businesses has said that the legislation would ease some of the risk associated with self-employment and provide greater financial security to Canadian entrepreneurs. He said:

This is welcome news to B.C.'s 216,300 owner/operators. No longer will an economic downturn or the decision to care for children leave them in the lurch without employment insurance or parental leave. It's only fair that...British Columbians who hang their own shingle should not have to choose between raising a family and raising a business.

One of the fastest-growing sectors of the self-employed is women entrepreneurs. The women's enterprise centre is located in my riding of Kelowna—Lake Country and I see how the women's resource centre is expanding. A Globe and Mail editorial made reference to the fact that:

Broader supports for this group of 2.7 million Canadians, men and women who work long hours with little certainty, would make the country more equitable and make the path to entrepreneurship more viable.

This is substantiated by Stats Canada, which says that, from 1976 to 2008, the number of self-employed men in Canada roughly doubled, from 873,400 to 1,719,700, and the number of self-employed women nearly tripled over the same period, going from 311,600 to 909,900.

Understanding the importance of this type of insurance for men and women, specifically the entrepreneurial women sector, does the member support expediting the bill through the House so we can ensure the legislation is effective in January 2010?

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

Madam Speaker, I am very happy to hear the member for Kelowna—Lake Country. I totally agree with him that there is a great need. I said so myself in the brief remarks I just made in the House.

However, it is clear that some basic elements are missing from the bill before us. The bill must go to committee. The member for Kelowna—Lake Country sits on that committee, as I do. It depends on us, as members of the committee, and on how fast we want to work.

I suggest that we work as fast as possible to correct the flaws in this bill so that it can come back to the House as quickly as possible and so that all these people, these women and men, can benefit from it as soon as possible.

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

Madam Speaker, I thank the hon. member for her work on the human resources committee. She works very hard on behalf of her constituents on issues like this.

There was a briefing on the bill itself. I understand the member attended the briefing and it was quite clear how the calculation came to be about the $6,000 threshold, related to the number of dollars per hour earnings, as well as the threshold for special benefits. I wonder if the member had missed that in the briefing.

Perhaps the member would like to make a rebuttal to this comment. In 2003, the parental benefits for the self-employed was the principal recommendation of the Liberal women on the Prime Minister's task force on women entrepreneurs. Just recently, the member for Notre-Dame-de-Grâce—Lachine was asked about the success or failure of that on behalf of the previous Liberal government and she admitted on Power Play that the previous Liberal government completely ignored it.

I wonder if the member would be prepared to comment on either of those issues.

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

Madam Speaker, I was a member of the committee of women entrepreneurs which came to my riding at the time and we met a large number of women entrepreneurs in Laval—Les Îles. Along with the other groups, we made those recommendations. I was for that recommendation then. I discussed it with my party. We discussed it in the Liberal women's caucus. This was important for us because, as everyone agrees, women in the workforce form a large part of the independent, autonomous workers.

I am sorry to say that when we in the Liberal Party were in government, we did not push this sufficiently. What is past is past. What is now before us is a bill which I think means well but is definitely incomplete and must be ameliorated.

[Judy Sgro, Liberal, York West, ON]

Madam Speaker, I want to recognize the contribution that my colleague has made in working on that whole issue of the self-employed and women in particular. She mentioned the needs of women in her comments and that self-employment is attractive to women. They can arrange their own schedules and so on, so it is a real benefit.

Some of the things that go against women are: not being able to contribute to their pensions and insufficient support. I would like to ask the hon. member, what other suggestions does she have for the committee in order to make this bill that much stronger and really help the women of Canada that we are talking about with this motion.