Evidence of meeting #62 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was work.
A video is available from Parliament.
6 p.m.
NDP
Peggy Nash NDP Parkdale—High Park, ON
If employers were going to do this voluntarily, there never would have been the human rights decision that Judge Abella created, which demonstrated that, in fact, there was systemic discrimination in employment. What we've found is voluntary compliance usually is not great, and that's why governments create laws, which is to say these are the rules people are going to live by.
It's a sad statement that we're walking backwards on equality because that's going to be the outcome here.
6 p.m.
Conservative
6 p.m.
Conservative
The Chair Conservative James Rajotte
Okay. Thank you very much, Mr. Child, for being with us today.
We'll move on to division 43.
Welcome to our committee. Thank you so much for being with us here today. We look forward to hearing your opening remarks on the amendments that relate to division 43.
6 p.m.
Mireille Laroche Director General, Employment Insurance Policy, Department of Human Resources and Skills Development
Good afternoon.
My name is Mireille Laroche. I'm the director general of employment insurance policy at HRSDC. This is my colleague, Mark Hodgson, from the Department of Finance.
In the budget implementation bill there are six proposed changes to the Employment Insurance Act. I will go through them in sequence.
The first change proposes to align the calculation of EI benefit amounts with local labour market conditions. This proposes a new approach to calculating EI benefits that would come into force on April 7, 2013.
Under the new approach the required number of best weeks, which would range between 14 and 22 weeks of employment earnings, that would be considered for the purposes of calculating benefits would be determined in accordance with the local unemployment rate in the region where the client resides.
The second change pertains to the refund of premiums to a self-employed person. It would ensure that insurable earnings as well as self-employed earnings were taken into account when determining whether a self-employed person who has opted into the program to receive special benefits can be eligible for a premium refund.
The third measure regards the administration of overpayment of benefits. This amendment would provide discretion in pursuing potential overpayment arising from employer bankruptcy or wrongful dismissal. It would provide this discretion under two conditions: first, if more than 36 months have elapsed since the layoff or separation from employment; and second, if the administrative costs of determining the overpayment would likely exceed the amount of the repayment.
The fourth change pertains to the assignment of benefits program within the EI program. It would remove the requirement that claimants have to consent in writing to have deductions made from EI benefits to reimburse any provincial government for social assistance or welfare payments that they would typically receive prior to receiving their special benefits or regular benefits.
The fifth change pertains to premium rate setting and is in response to the public consultations that were held on this matter in the fall. It has three broad elements. The first one provides for an earlier announcement or notice of the new EI premium rate for the coming year by advancing the date by two months, that is, from November to September. The second change proposes to amend the EI Act to change the premium rate setting per se. Under this proposed change, the premium rate would be set annually at a seven-year break-even rate to ensure that the EI operating account is in cumulative balance at the end of that period. This rate-setting mechanism would come into force once the EI operating account has returned to a cumulative balance. The third change within the premium setting proposal is to affix the legislative limit on year-to-year changes to the premium rate to 5¢ per $100 of insured earnings.
The last proposed change is with regard to connecting Canadians to an available job. It proposes to amend the Employment Insurance Act to provide the Canada Employment Insurance Commission with the authority to develop regulations pertaining to the definition of suitable employment for various types of claimants and also to define what would constitute a reasonable job search.
6:05 p.m.
Conservative
The Chair Conservative James Rajotte
Thank you very much for your presentation.
I'll start members' questions with Mr. Marston, please.
6:05 p.m.
NDP
Wayne Marston NDP Hamilton East—Stoney Creek, ON
Thank you, Mr. Chair.
In your presentation I heard the terms “premium rate” and “insured earnings”. Very clearly some kind of misunderstanding has been happening for awhile, in that unemployment insurance is not a government program in the sense of being funded out of government moneys. It has been funded for years out of premiums.
My understanding is that at one point, probably in the 1990s, it actually had built a surplus to about $55 billion, which was directed into general revenues. Is that correct?
6:05 p.m.
Mark Hodgson Senior Policy Analyst, Labour Markets, Employment and Learning, Department of Finance
The EI program is in fact funded from general consolidated revenue.
6:05 p.m.
Senior Policy Analyst, Labour Markets, Employment and Learning, Department of Finance
It always has been. Premium revenues are deposited into the consolidated revenue fund and benefits are paid from it. As the Auditor General has noted in the past, the preceding EI account and the current EI operating account are tracking accounts that keep track of premiums and benefits.
6:05 p.m.
NDP
Wayne Marston NDP Hamilton East—Stoney Creek, ON
I don't disagree with you on that point, but at one point in time, there was an understanding that the premiums had accumulated to roughly that figure. But I'll move on from that. I made the point I wanted to make anyway.
Ms. Laroche, it is my understanding that currently there are about 800,000 Canadians who are not on employment insurance who have given up looking for work. Is that a figure you're aware of?
6:05 p.m.
Director General, Employment Insurance Policy, Department of Human Resources and Skills Development
I can't confirm that number.
6:05 p.m.
NDP
Wayne Marston NDP Hamilton East—Stoney Creek, ON
Okay. The reason I was going to ask that is that we have an unemployment rate, which we're told publicly, and that is based on those people who are looking for work. Is that correct?
6:05 p.m.
Director General, Employment Insurance Policy, Department of Human Resources and Skills Development
Yes.
6:05 p.m.
NDP
Wayne Marston NDP Hamilton East—Stoney Creek, ON
So the actual number of Canadians who are out of work is much more substantial than the percentage that we see at any given point of time. We're really talking about those who are on employment insurance—that's one figure and that's the figure that's published. Then we have close to 800,000 other Canadians who are out of work, or a significant number of Canadians without trying to put a figure on it. Is that correct?
6:05 p.m.
Director General, Employment Insurance Policy, Department of Human Resources and Skills Development
I'm sorry, I'm not sure I understand the question.
6:05 p.m.
NDP
Wayne Marston NDP Hamilton East—Stoney Creek, ON
When we're tracking unemployment insurance—we're tracking all of this—the number of Canadians who are searching for work and who are on employment insurance is the figure that's given. I think it's is roughly 7% at this point in time. Beyond that figure though, there's another substantial number of Canadians who have given up. That's the term that's usually used.
6:05 p.m.
Senior Policy Analyst, Labour Markets, Employment and Learning, Department of Finance
I think you may actually be talking about three separate things. There's the unemployment rate, which reports on the number of people who are unemployed and actively searching for employment as a proportion of the total labour force. That would be your 7% or 8% number. The people who are receiving employment insurance benefits are a separate population who have paid EI premiums, who have lost their job through no fault of their own, and who are currently receiving EI benefits. There can be, at times, another group of people who are the so-called discouraged workers—
6:05 p.m.
Senior Policy Analyst, Labour Markets, Employment and Learning, Department of Finance
—who have given up searching for work. They're no longer counted as unemployed, because if they were surveyed they would say they're not looking for work.
6:10 p.m.
Senior Policy Analyst, Labour Markets, Employment and Learning, Department of Finance
So in that sense, they've withdrawn from the labour force.
6:10 p.m.
NDP
Wayne Marston NDP Hamilton East—Stoney Creek, ON
—that they may have withdrawn, but the point is that they don't have a job.
