Finance Committee on May 8th, 2018

[The Chair, Liberal, Wayne Easter]

We are at division 12.

Mr. Albas and I were at a meeting this morning at 6:45, but if you folks are willing, we're willing. It's been a long day. We'll go another half an hour at least.

Mr. Dusseault.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

If I were at the back of the room since 6:30, I would prefer getting it done tonight.

[The Chair, Liberal, Wayne Easter]

Thank you, Mr. Parker, for your presentation.

We'll turn to division 13, “Department of Employment and Social Development Act”. From ESDC, we have Pirthipal Singh, director, tier 1 partnerships and services offerings for federal partners; and Julie Lalonde-Goldenberg, director general, partnerships development and management directorate.

Ms. Lalonde-Goldenberg, the floor is yours.

[Julie Lalonde-Goldenberg, Director General, Partnerships Development and Management Directorate, Department of Employment and Social Development]

Good evening Mr. Chair and members of the committee.

We're here today to talk about some proposed amendments to the Department of Employment and Social Development Act to promote better service delivery to Canadians.

As you know, the Department of Employment and Social Development is responsible for delivery of many social programs to Canadians, including the Canada pension plan, old age security, employment insurance, to name a few.

The department has an extensive network of service delivery, including online, on the phone, and in person presence of up to 150 points of service across the country.

Like other departments, this department has the mandate to deliver its own services, but not deliver services for partners. Over the years, the department has been granted authorities to assist other partners, including other federal departments, in the delivery of their programs. It's achieved those authorities on a case-by-case basis. A machinery of decisions culminating in orders in council has, for instance, provided the department with the authority for the 1 800 O-Canada, the Canada.ca, and the delivery of domestic passport services.

The case-by-case approach can be time consuming. Once a mandate for a service delivery partnership authority is in place, then the department needs to go and get cost recovery authorities from Treasury Board. This case-by-case approach can be time consuming, and prevent nimble response to partnerships, service delivery, that can assist Canadians.

The proposed amendments today to the departmental statute are to broaden the minister's mandate to provide authorities for service delivery partnerships. The partners that we're envisioning in this legislation are other federal partners, provincial, municipal, for instance, and also some indigenous communities.

The provisions will allow the department to provide services using the service delivery infrastructure. They'll also clarify the responsibility for personal information collected in the service delivery partnership.

Finally, they'll also permit the department to cost recover for the services that it provides to its partners.

Another amendment proposed is to allow the department to use CRA's business number under the Income Tax Act when it works with businesses to identify the validity of the businesses.

This is really a proposal that is machinery in nature. It does not seek funding. It is permissive. It's not a mandatory mandate. Partners who would like to avail themselves of ESDC's service delivery network and expertise could come to the table and negotiate a partnership.

The service delivery authorities are not directly related to any budget initiative. However, they could facilitate some initiatives, such as responsibility to improve access in indigenous communities on reserves and in the north.

I'll stop with that.

[The Chair, Liberal, Wayne Easter]

Thank you. I have one question.

Does this have any privacy implications with exchange of information between departments?

[Julie Lalonde-Goldenberg]

The Department of Employment and Social Development Act has provisions that provide the management of personal information collected by the department for its programs. The provisions here will amend those particular personal information management provisions to make it clear that the department will collect personal information for the partner for the service delivery. It will use it for the purpose for which it was collected, which is to provide that service, and do nothing else with it but give it back to the partner who will protect the personal information under their regime.

It does not amend the Privacy Act, but only the provisions within the departmental statute.

[The Chair, Liberal, Wayne Easter]

Are there any questions?

Mr. Dusseault.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

What is the cost recovery mechanism associated with this? If another territory or department asks you to provide a service on its behalf, you assume the related cost. Consequently, what mechanism ensures that they actually pay for this service?

[Julie Lalonde-Goldenberg]

You are quite right. There will be negotiations and an agreement concerning the cost of this service, which will be recovered in the usual manner as the right to cost recovery is legislated.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Okay.

[The Chair, Liberal, Wayne Easter]

Thank you for the information, and thank you, Julie.

We'll turn to division 14.

On division 14, “Employment Insurance Act”, also with the ESDC, we have Mr. Brown, acting director general employment insurance policy; and Ms. Scales, director policy analysis and initiatives.

Mr. Brown.

[Andrew Brown, Acting Director General, Employment Insurance Policy, Skills and Employment Branch, Department of Employment and Social Development]

Good evening.

As you may know, the employment insurance system provides workers who have lost their jobs with temporary income support, known as regular benefits. It also provides special benefits in specific circumstances that can arise during an individual's career.

I am here to talk about the proposed amendments to the Employment Insurance Act, which determine how benefits are adapted when a worker earns income while receiving employment insurance benefits. These are known as working while on claim provisions.

The intent of the provisions is to encourage claimants to accept work while receiving EI benefits.

Each year, about 800,000 EI claimants do some work while receiving EI benefits, with women more likely than men to work at least one week while on claim.

The current legislative provisions have been in place since 1971, and a series of pilot projects over the last 12 years have tested various approaches to adjusting EI benefits when a claimant earns income while receiving EI benefits. Budget 2018 proposed to make one of these approaches permanent.

I'll go through the amendments first. The amendments proposed in the budget would make the default rule of the current pilot project permanent. Under these rules, workers retain all of their employment earnings, and EI benefits are reduced 50 cents for each dollar earned, up to 90% of their pre-claim earnings.

Second, for a limited time three-year period, EI claimants who opted for the alternative treatment of earnings could continue to do so. This three-year period would provide time for this small group of claimants to adapt to the permanent “50 cents on the dollar working while on claim” rule.

Third, working while on claim provisions would be extended to sickness and maternity claimants for the first time. Extending these rules to maternity and sickness claimants is not intended to encourage work, rather this change would allow workers to benefit from the same treatment as other claimants if they choose to stage their return to work, and they would be allowed to retain some additional income.

Finally, there are some technical amendments included to ensure that the changes to the working while on claim rules do not result in unintended consequences on other aspects of the EI program, such as the waiting period and the EI premium reduction program.

As indicated in the budget, these measures should cost $351.9 million over five years and $80.1 million per year after that. According to the Employment Insurance Act, these costs will be charged to the Employment Insurance Operating Account and recovered through employment insurance premiums.

The measures would come into force August 12, 2018, if approved, to ensure there is no interruption between the pilot provisions and the proposed new legislative provisions.

Thank you.

[The Chair, Liberal, Wayne Easter]

Mr. Sorbara.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

How many people are employment insurance recipients on an annual basis? Will this assist on a yearly basis?

[Andrew Brown]

Currently we see about 1.8 million to 1.9 million recipients of EI benefits annually. Roughly 1.3 million to 1.4 million receive regular benefits, and about 500,000 receive EI special benefits, so about 800,000 are working while on claim.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Approximately 800,000 could possibly be eligible for this top-up, I'll call it, this incremental benefit, while they are working.

[Andrew Brown]

That's right. These provisions are administered essentially automatically through reporting by claimants, so every two weeks when they report on any earnings they have had while receiving EI benefits, we make adjustments. Service Canada, which delivers the service, makes adjustments to the EI benefits they receive.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Okay, one of the two current pilot projects is de facto being made permanent.

[Andrew Brown]

That's correct. The default rule of the current pilot project is being made permanent and the alternate rule of the current pilot project is being allowed to remain in place for a three-year period so if people have opted for the alternative treatment over the current pilot, which is of a two-year duration, they will be allowed to opt in to that for this three-year period.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Okay.

I have one last question. When you hit 90% of earnings has the clawback rate been changed, or is it existing?

[Andrew Brown]

Once they have hit that 90% then it is dollar for dollar beyond that until their EI benefits are reduced to zero. At the point where their benefits are reduced to zero, they simply do not receive an EI payment that week, and a claimant could still access that particular week of benefits later in their benefit period if needed.

[The Chair, Liberal, Wayne Easter]

Mr. Dusseault.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

I would like you to confirm one thing for me. If I have understood correctly, the problem we are attempting to address is that when there is a small number of hours per week an EI claimant is better off staying at home than going to work.

[Andrew Brown]

That's correct. The object of the pilot projects has been to determine which measures have had a greater impact on the incentive to work. Absent special rules in the program, when somebody earns a dollar, we would reduce their benefits by a dollar. These different measures have tested different ways to encourage work because now their benefits are only reduced by a portion of those earnings, and the person is then receiving a greater total income in employment earnings and their EI benefit than if they did not work during that week.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Was this measure included in Bill C-74 because of specific cases? Without going into details, there has been a case in Sherbrooke that you may be familiar with. Are they specific cases? If yes, how many cases led you to propose such an amendment?