Oh, so it gets cheaper?
Evidence of meeting #58 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was authority.
A video is available from Parliament.
Evidence of meeting #58 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was authority.
A video is available from Parliament.
9:50 a.m.
NDP
November 18th, 2014 / 9:50 a.m.
Senior Economist, Canadian Centre for Policy Alternatives
That's right.
9:50 a.m.
NDP
9:50 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
I had a number of my constituents write me asking me where they could apply for one of these half-a-million-dollar jobs. I wasn't able to point them anywhere.
I want to challenge you on something and maybe it was you or Mr. Askari who said this. I think it was you that said it. It was about how the incentive is quite low for people to apply to this program. I asked the government officials about this and they said the incentive is low to fire somebody, to get below that $15,000 hard cut-off, which is, I would argue, poorly designed. Is the incentive also not low the other way?
How can it be true one way and not the other for small businesses deciding whether or not to hire somebody?
9:50 a.m.
Senior Economist, Canadian Centre for Policy Alternatives
The incentive is low. For every $100 spent on an employee, you would get 39¢ back for increases, although in fairness no employer has to apply for this. They just get the cheque in the mail.
9:50 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
But in terms of a small business making those decisions, 39¢ on a $100 expenditure for a new employee isn't going to tip the balance.
9:50 a.m.
Senior Economist, Canadian Centre for Policy Alternatives
I wouldn't expect that it would tip the balance very much, which is why the number of jobs created for the amount of money spent is very low.
9:50 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Right.
Mr. Askari, this is a challenge I want to put to you. I'm trying to understand this process of the government. EI has been this perpetual money grab for governments over the years, and many of us have decried this. EI has been restricted. How many people working now and paying into EI can gain access to employment insurance if they lose their jobs? What percentage?
9:50 a.m.
Assistant Parliamentary Budget Officer, Economic and Fiscal Analysis, Library of Parliament
Right now, about 38% of the unemployed have access to EI.
9:50 a.m.
NDP
9:50 a.m.
Assistant Parliamentary Budget Officer, Economic and Fiscal Analysis, Library of Parliament
That has trended down.
9:50 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
So fewer and fewer Canadians gain access to what they pay into. I believe it was Mr. Adler who said a few weeks ago that employment insurance doesn't belong to the government, that it belongs to the employers and the employees who pay into it. That's the foundation of the program, correct?
9:50 a.m.
Assistant Parliamentary Budget Officer, Economic and Fiscal Analysis, Library of Parliament
That's correct.
9:50 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
So fewer Canadians can actually gain access, yet by keeping rates at the same level, the government is overcharging those employers and employees to create this surplus, which it is now using for this program. Is my line of logic correct so far?
9:55 a.m.
Assistant Parliamentary Budget Officer, Economic and Fiscal Analysis, Library of Parliament
Well, there is a temporary surplus in the account, but for the surplus, as I mentioned earlier, the way that the account is structured—
9:55 a.m.
Assistant Parliamentary Budget Officer, Economic and Fiscal Analysis, Library of Parliament
By the current law, any surplus in that account will have to be offset in the future.
9:55 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
This is my challenge to you. I asked government officials about this and they said that the clock doesn't start for another two years, so it doesn't have to keep that seven-year balance because we're not starting the seven-year clock until two years from now, after the account has already been raided for the half-billion dollars.
9:55 a.m.
Assistant Parliamentary Budget Officer, Economic and Fiscal Analysis, Library of Parliament
Well, the clock effectively started in 2009, when they created the new operating account for EI. At that point, obviously, there was a deficit in the account, so the rates had to be kept higher. But right now, based on our estimate and the estimate of the Department of Finance, in 2015-16 there will be a surplus in the account, so—
9:55 a.m.
Assistant Parliamentary Budget Officer, Economic and Fiscal Analysis, Library of Parliament
Eventually, yes. Exactly.
9:55 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
EI rates will have to go up eventually to pay for this program that costs as much as half a million dollars a job today—