Good day.
First of all, on behalf of our organization, the Conseil national des chômeurs et chômeuses, I would like to thank you, Mr. Chairman, as well as all the MPs from the various parties represented on the Standing Committee on Finance.
Our organization represents various groups of unemployed persons, some of whom have been working for about thirty years informing people and defending their rights. We have been on the front lines of many public opinion campaigns criticizing the misappropriation of the employment insurance fund and above all, demanding a better employment insurance system.
I am here today to share our views on the upcoming establishment of the Employment Insurance Financing Board, as set out in Part 7 of Bill C-50.
We have done our homework and examined this bill very thoroughly. We have also compared it with the current Employment Insurance Act.
In our opinion, most of the provisions in Part 7 of Bill C-50 respecting the Financing Board mean very little in the way of changes to the current employment insurance legislation. I will give you a few examples and I urge you to check for yourself in the bill over the next few days. Section 66(1) of the current act provides for the following:
[...] the premium rate should generate just enough premium revenue to cover the payments that will be made [...]
Balancing expenditures and revenues is the aim behind the establishment of the Financing Board.
According to section 66(2) of the current EI Act, the premium rate for a year may not be increased or decreased by more than 0.15%. The Financing Board will also abide by this provision.
Section 66.3 of the Act provides that:
the Governor in Council may substitute a premium rate if it considers it to be in the public interest [...]
Bill C-50 also contains a similar provision, even though this is covered in the existing legislation.
There is, however, one difference between the current situation and the planned establishment of the Employment Insurance Financing Board: the creation of an independent account would mean that workers' contributions remain in the fund and can no longer be used for other purposes. This is a significant difference.
As everyone here well knows, it was estimated that between 1995 and March 31, 2007, the government confiscated $54.1 billion from the fund and used it for other purposes. Appearing recently—I believe it was last week—before the human resources committee, the Minister of Human Resources and Social Development, Monte Solberg, acknowledged the surpluses and the fact that they had been confiscated and misappropriated. He stated that this must not happen again and we agree with him.
The establishment of the new Crown corporation for the sole purpose of managing the fund and setting premium rates is welcome news. However, as we stated before, very little has changed. Most of the provisions of the bill were already in effect and under the Commission's responsibility. Putting it another way, it would even be possible to envisage the establishment of an independent account under the control of the Employment Insurance Commission, which would carry out the mandate of the announced Employment Insurance Financing Board. Nothing then would change.
In either case, with or without the Financing Board, under the Commission's responsibility or not, the creation of this board does not mean that all problems would be resolved. Some problems are in fact not addressed at all by this initiative. In our opinion, creating the Employment Insurance Financing Board does not resolve the issue of the confiscation of the accumulated $54 billion surplus. Nor does it address the improvements needed to the employment insurance system in order to provide better financial protection for workers when they are between jobs.
On the first point, we propose that section 80 found on page 121 of Bill C-50 be amended so that basically, when the EI fund is in a deficit situation, the Governor in Council and the Consolidated Revenue Fund may authorize an advance to the account. However, the advance to the EI fund shall be repaid to the Consolidated Revenue Fund, with interest.
This is already covered in the current act and this is the intent behind the establishment of the Financing Board. We are proposing that these would not be reimbursable advances, but rather non-reimbursable payments drawn from the accumulated surplus.
As such, we are proposing that Bill C-50 be amended to provide for the keeping of records on this accumulated $54 billion surplus with interest until it is fully reimbursed, and that this surplus be regarded as a debt. It works both ways.
Our institutions, laws and people must never forget what can be described as one of the biggest financial scandals in Canada in the 20th century: the misappropriation of billions of dollars in employment insurance contributions that were intended to better protect Canadians.
Let me explain what I means Mr. Chairman. Global political events can sometimes be instructive.The great politician Nelson Mandela taught us that reconciliation has a price, namely truth, and that reconciliation can only take place once the truth has been established. In other words, we are not showing your our fist, but rather extending to you our hand, in the hope that the truth will emerge about the amounts stolen from the EI fund.
Moreover, the addition proposed with clause 70.1 on p. 119 of Bill C-50 provides for a $2 billion reserve fund. This reserve fund is insufficient. According to the Canadian Institute of Actuaries, it should be $15 billion. We propose, therefore, that this reserve be increased or that provision be made to add future annual surpluses to this reserve without affecting the balance of accounts.
Still with regard to Bill C-50, we propose that the appointment process for the Board of Directors and for the Chairperson of the Board—clauses 9 to 13 of the bill—be subject to the approval of the Standing Committee on Human Resources. This would make the process more transparent and more democratic.
Finally, the main message we wish to send to the members of this committee is that the creation of the Employment Insurance Financing Board does not address the real problem. It means that over 50% of unemployed workers are not eligible for employment insurance benefits, according to figures just released by the department. This is the most important issue to us, the key issue and the only one that we truly should be fighting for.
Whether or not the Employment Insurance Financing Board is created, the employment insurance system must be improved. Sometimes in the course of history, we must all work together, even if only for a very short time, to make progress on a social issue such as the employment insurance plan which is designed to protect workers in Canada. This is a highly political issue.
Mindful of our responsibilities, we are appealing to parliamentarians and to the various political parties represented in the Parliament of Canada.
Thank you, Mr. Chairman.