Evidence of meeting #88 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was rate.
A video is available from Parliament.
4:05 p.m.
NDP
Hoang Mai NDP Brossard—La Prairie, QC
Thank you, Mr. Chair.
I would like some clarification. For this interim period, will the decision on establishing the contribution rate be made by the Minister of Finance or the Minister of Human Resources and Skills Development?
4:05 p.m.
Director General, Employment Insurance Policy, Department of Human Resources and Skills Development
The decision will be made by the Governor in Council, namely, the cabinet.
It will be done based on a recommendation from the Minister of Human Resources and Skills Development and the Minister of Finance.
4:05 p.m.
NDP
Hoang Mai NDP Brossard—La Prairie, QC
Can you give us a bit of an explanation of the minister's decision-making process with respect to the contribution rate? Are there any consultations, any checks or a report?
Unless I'm mistaken, the board had an obligation to be transparent. In this case, it is a decision of the minister that is given to the Governor in Council.
Is there the same verification and transparency mechanism as for the board?
4:05 p.m.
Director General, Employment Insurance Policy, Department of Human Resources and Skills Development
The process is similar. An actuary hired by the board currently makes actuarial calculations and submits a report. In the interim period, an actuary will do the same kind of calculations, but the employer will submit the document to the Employment Insurance Commission, which will then draft another report. Both reports will be submitted and taken into consideration when the decision is made on establishing the rate.
Once the decision is made, the two reports will be tabled in Parliament by the Minister of Human Resources and Skills Development, and she will then have 10 days—and by 10 days, I mean 10 days when Parliament is sitting—to do so following the decision.
4:05 p.m.
NDP
Hoang Mai NDP Brossard—La Prairie, QC
Could the minister's recommendation differ from recommendations that she would have received? Does she legally have the authority needed to make a decision that would not reflect what was recommended?
4:05 p.m.
Director General, Employment Insurance Policy, Department of Human Resources and Skills Development
As is the case currently, the documents will be considered as suggestions. So it will be up to the minister and the committee to make the decision, based on the information that has been presented to them.
4:05 p.m.
NDP
Hoang Mai NDP Brossard—La Prairie, QC
In other words, the minister is not obliged to follow these recommendations, and she has the power to determine the rate that will be applied.
4:05 p.m.
Director General, Employment Insurance Policy, Department of Human Resources and Skills Development
Given that the account is in deficit, we expect the rate to increase by 5¢ until the account is balanced.
4:05 p.m.
Conservative
The Chair Conservative James Rajotte
Are there any questions?
I want to clarify for my own understanding here. I'm reading from the budget documents:
Economic Action Plan 2012 ensures stable, predictable EI premium rates by limiting premium rate increases to 5 cents each year until the EI Operating Account is in balance, and then moving to a seven-year break-even rate.
Madam LaRoche, Ms. Miller, can you explain why the government made these changes?
4:10 p.m.
Director General, Employment Insurance Policy, Department of Human Resources and Skills Development
Do you mean the five cents?
4:10 p.m.
Director General, Employment Insurance Policy, Department of Human Resources and Skills Development
A series of consultations were held and championed by Ms. Glover and Ms. Leitch throughout the fall of 2011. The government heard that they wanted to ensure predictability and stability of the EI premium rates. Those changes were made as a result of these consultations, so the 5¢ was seen as a way to stabilize and to ensure that rates are going up or down in a marginal way so that employers and employees can adjust accordingly.
Similarly, there was a decision in budget 2012 to advance the date at which the rate was set by two months to give employees and employers more time, from September to next year, to adjust whatever systems they needed to and to be able to plan accordingly.
4:10 p.m.
Conservative
The Chair Conservative James Rajotte
This is mentioned in the budget. Ms. Glover and Ms. Leitch had broad cross-country consultations, including in my own community of Leduc, with small businesses from across that region, asking for advice on how to set these rates going forward.
4:10 p.m.
Director General, Employment Insurance Policy, Department of Human Resources and Skills Development
Yes.
4:10 p.m.
Conservative
The Chair Conservative James Rajotte
They did this because concerns were expressed in the past that funds paid in through EI premiums by both employees and employers were then used by the government for general revenues to reduce the deficit. They basically took funds that were there for the purposes of employees and employers and used them for general revenues. That was the concern that started this initially. Am I correct?
4:10 p.m.
Director General, Employment Insurance Policy, Department of Human Resources and Skills Development
I think first and foremost—and Ms. Glover's here—the goal of the consultation was how we—
4:10 p.m.
Conservative
4:10 p.m.
Director General, Employment Insurance Policy, Department of Human Resources and Skills Development
Before the consultation? You mean before the consultation, in terms of what you referred to, that led to the creation of—
4:10 p.m.
Conservative
The Chair Conservative James Rajotte
Of this board, which was designed then to ensure that the funds coming in were the same as the funds going out—
4:10 p.m.
Director General, Employment Insurance Policy, Department of Human Resources and Skills Development
Yes—
4:10 p.m.
Conservative
The Chair Conservative James Rajotte
—and the concern still expressed by people was—and they used the figure of about $50-plus billion from employees and employers—that it had actually been used for general revenues. Therefore, they wanted that concern addressed. That very large-scale concern, it seems to me, is exactly what budget 2012 and these actions are attempting to address in doing the cross-country consultations and coming out with specific recommendations to do so. Am I correct in that?
4:10 p.m.
Director General, Employment Insurance Policy, Department of Human Resources and Skills Development
Yes.
4:10 p.m.
Conservative
The Chair Conservative James Rajotte
Thank you for that.
Is there anything further?
Ms. Nash, go ahead, please.
4:10 p.m.
NDP
Peggy Nash NDP Parkdale—High Park, ON
Just so I understand the motivation for this change, governments have routinely put EI funds into general revenue and have used them for other purposes, including paying down debt, which the funds were never intended for, because premiums had been paid by unemployed workers and employers. Is that correct?