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.
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Director General, Employment Insurance Policy, Department of Human Resources and Skills Development
The intention of this change is to ensure that the EI premium rate-setting mechanism is cost-effective. That is why the financing board has been suspended until the account is balanced and it can be in a position to fulfill its legislative mandate. That is the purpose of this change.
NDP
Peggy Nash NDP Parkdale—High Park, ON
The account hasn't been able to be balanced, though, if governments have been using EI premiums for general revenue and not for the purposes for which they were intended. Tens of billions of dollars were taken out.
The issue is that when you're in a recession and then in a very weak recovery and unemployment remains persistently high, you have elevated demands on EI benefits. Of course, as we see in the report from Statistics Canada today, only 40% of unemployed workers are even able to get benefits, but if people were truly able to get the benefits that they were entitled to, the fund would be in even worse shape. Isn't that correct?
Director General, Employment Insurance Policy, Department of Human Resources and Skills Development
People for whom the program is designed and who are able to meet the eligibility criteria of the EI program have access to the program.
NDP
Peggy Nash NDP Parkdale—High Park, ON
That's right. The people who are eligible for it, the 40% who are the lucky ones, are able to get benefits.
Does it make sense that during a period of low unemployment the EI fund would be increased and have a surplus so that during periods of high unemployment the fund will be built up so that unemployed workers can get access to benefits?
Director General, Employment Insurance Policy, Department of Human Resources and Skills Development
That is why we changed: to ensure that we have stable premium rates over the business cycle. That is why the government is introducing the new rate-setting mechanism, the seven-year break-even rate that will be introduced once the account is in balance, in order to have a longer span in which we project and have greater stability.
NDP
Peggy Nash NDP Parkdale—High Park, ON
The fact that money was taken out before, when there was a surplus, and was not given to unemployed workers is part of the problem. Is that the problem you're trying to address, that these funds were used for other purposes? Are they going to be protected now so that the money cannot be siphoned off into general revenue?
Chief, Labour Markets, Employment and Learning, Department of Finance
I should point out that the EI account is actually part of the consolidated revenue fund, so the funds actually do go into the government's general revenue. It is all part of the same calculation.
NDP
Peggy Nash NDP Parkdale—High Park, ON
Then this isn't going to fix the problem of moneys being used for purposes other than providing benefits for unemployed workers.
Chief, Labour Markets, Employment and Learning, Department of Finance
I can't speak to that, but I can speak to your concern that the money is consolidated. It is consolidated on the advice of the Auditor General, and it's a requirement. That is what I can speak to. I'm afraid I can't speak to your other question.
November 5th, 2012 / 4:15 p.m.
Conservative
The Chair Conservative James Rajotte
I didn't mean to indicate there were two funds. I was attempting to show that the changes are actually there to address a lot of the concerns that have been raised with respect to that issue in the past, which I think they effectively do. Others may disagree.
Ms. Glover is next.
Conservative
Shelly Glover Conservative Saint Boniface, MB
Thank you, Chair.
I was actually trying to sit back and enjoy the conversation. However, it has gone quite off track, so I think I might step in and try to help, since I took part in a fairly extensive consultation across the country.
First and foremost, Ms. Nash is absolutely incorrect and misleading in the statements that she makes about governments using this account. There is no evidence that any other government, aside from the Liberals, entered into any kind of agreements or contracts to use this money from the EI account for general revenues, so I'd appreciate it if she'd clarify that she had no idea of what she was talking about, because it's in fact absolutely not true.
NDP
Peggy Nash NDP Parkdale—High Park, ON
I don't appreciate the tone. I didn't specify which government. I specified that tens of billions of dollars had been taken out of the EI fund—
NDP
Peggy Nash NDP Parkdale—High Park, ON
—and I certainly don't appreciate my comments being taken out of context or my comments being taken in a misleading fashion. I'd appreciate a little better decorum at the committee.
Conservative
The Chair Conservative James Rajotte
Yes.
I think some of these are points of debate, but there is a point of order with respect to decorum. I'd just ask members to deal with the arguments of the other side and not to use terms like “misleading” when referring to another member. We can counter other arguments, but when we speak of other colleagues, we should always speak respectfully.
Conservative
Shelly Glover Conservative Saint Boniface, MB
I'm attempting to do that by saying “misleading”, because I don't know another word to describe that, Chair. I apologize, but it is misleading. There were no other governments, save one, and it was a Liberal government.
With regard to the project at hand, there was a necessity to try to find a way to prevent that same situation from occurring, and under this government we provided for an account, an EI account, and an account that now requires some attention because of the several withdrawals from it by a previous government.
This project was put in place so that we could see predictability for many of our businesses. Under the board there was a suggestion that there be a 15¢ increase, which our government during a time of recovery from a global recession decided to step in and limit to 5¢, simply because businesses at that time were very much in jeopardy of having job losses.
We tried to do what we can to create and maintain jobs, particularly when it's a fragile economy. The predictability factor was taken under consideration across the country, and businesses, labour groups, and individuals who took part were very much in agreement that this is the direction they would like to see the government go.
However, I do want to ask a question. My understanding--and it may not be these officials--is that eight out of ten Canadians qualify for EI, that many of the measures that have been put in place actually are helping to make sure we move towards a balanced account, and that this measure is being suspended so that this board can act when the account is in surplus.
Do the officials agree that all of those things that have been in place appear to be measures that will lead to a balance being obtained, and then the board can be put back into place and continue the work that they would have done if they had had a surplus when they began?
Chief, Labour Markets, Employment and Learning, Department of Finance
We can say that the costs of the suspension of the board will not be borne by premium payers and that it does, as a result, make for a more efficient rate-setting process.
Conservative
Shelly Glover Conservative Saint Boniface, MB
Thank you.
As well, I apologize, Chair, through you. I don't know how else to express it when someone is misleading, but there have been no other governments. There have been no other governments, so I wanted that to be perfectly clear to Canadians who are listening.
Conservative
The Chair Conservative James Rajotte
My advice as a chair, though, is to say that the member opposite is incorrect, and then state your view in terms of what is correct. Obviously you have a very detailed knowledge of the consultations that happened, so I would just ask members to state what their view is or disagree with the argument. As you know, the word “misleading” is.... Speakers in the House have said that this word ought not to be used.
The responsibility of the chair is to try to ensure that there is a good healthy debate here, but also one that is respectful. That's what I'm trying to do, and I'm encouraging members on both sides to argue with a point rather than to say something about a member opposite.
Conservative
Shelly Glover Conservative Saint Boniface, MB
I appreciate the clarification. Perhaps I would ask then that the member submit the proof rather than to comment on it the next time. I'll do that and continue from there.
I appreciate the officials answering the question with regard to the attempts by this government to close the loophole on other governments being able to access the account and on the fact that it was a consultation done across the board to try to get back to a situation that will benefit both employers and employees for many years to come.
Thank you.
Conservative
NDP
Wayne Marston NDP Hamilton East—Stoney Creek, ON
Okay, I won't argue with that.
To my friend from Parkdale—High Park, I'd just make one comment. Every time there's a government elected, they are referred to as “governments”. If you have a Liberal government successively three times, they're governments. If you have Conservative ones successively, they're governments, too.
To go back to the point, originally my understanding of the concept of unemployment insurance was that it was an insurance program for workers when they lost their employment, underwritten by the Government of Canada, and using premiums to do that. Would that be an effective way of describing the intent originally?
