Evidence of meeting #184 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was proposed.
A recording is available from Parliament.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
You said that the United Kingdom did so in 2010. Would you be able to provide the committee with the wording specifically used by that parliament?
Senior Director, Social Development Policy, Strategic and Service Policy Branch, Department of Employment and Social Development
Of course.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
I just wanted to make clear that our government did introduce a national poverty reduction strategy a few months ago, and this obviously dovetails with that.
Mr. James, there is something currently in use, which I think is called LICO, by Statistics Canada that, for the time being, defines the poverty rate in Canada or the low-income threshold. Is that correct?
Senior Director, Social Development Policy, Strategic and Service Policy Branch, Department of Employment and Social Development
Yes. There is something called the low income cut-off.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
Yes, the low income cut-off.
We do have an existing basis point at which poverty within Canada can be measured. Is that correct?
Senior Director, Social Development Policy, Strategic and Service Policy Branch, Department of Employment and Social Development
Yes, but I have a point of clarification. Statistics Canada actually produces three different measures of low income. They have the low income cut-off. They have the low-income measure, which is a relative measure. They also have the market basket measure, on which Canada's official poverty line is based.
The strategy you mentioned actually ends the debate on which one the government will use to report on poverty. It has selected the market basket measure, which will be referred to as Canada's official poverty line.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
Thank you very much for that clarification, Mr. James.
London North Centre, Lib.
Could you, Mr. James, go into that last point you made a bit more, on the market basket measure and how it differs from the other approaches and what it offers?
When we talk about this policy being truly historic, for me at least, it's the market basket measure that holds that potential because of how well rounded it is as a measure for poverty.
Senior Director, Social Development Policy, Strategic and Service Policy Branch, Department of Employment and Social Development
Unlike the low-income measure, the market basket measure is an absolute measure of poverty. It doesn't change necessarily over time in the way the low-income measure does, based on how everyone else is doing in the country. The low-income measure is a better measure of income inequality, for example, than whether or not someone has the absolute necessary goods to be above the poverty line.
The market basket measure is based on the amount of income required to purchase a basket of goods and services that includes food, clothing, shelter and transportation and that would allow Canadians to have a modest standard of living and participate in their communities. The benefit of the market basket measure is that it's available regionally. It's actually available in 50 different regions, including 19 specific communities. It allows Canadians to say where they stand relative to the poverty line in their community. It's being expanded to the territories as well.
London North Centre, Lib.
What I like here is that I can look at, for example, poverty levels in the southwest of Ontario where I'm from—I represent London, Ontario; that's the region I also advocate for—and compare that with poverty levels in British Columbia or Alberta and so on and so forth.
When I say it's well rounded, you have put your finger right on it. Thank you very much for that.
I have one last question. I'm not sure how long you have been in your position, but have there been previous governments that have advocated for the market basket measure to be used as a measure of poverty in Canada?
Senior Director, Social Development Policy, Strategic and Service Policy Branch, Department of Employment and Social Development
I'm not aware of what previous governments have advocated for.
London North Centre, Lib.
I'm sure that, if they had, we would know.
Thank you very much.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
I have one last question. When they are stand-alone or as part of the BIA, usually these acts include a provision that has a report to Parliament.
Is there a reason why this particular one doesn't have it?
Senior Director, Social Development Policy, Strategic and Service Policy Branch, Department of Employment and Social Development
As part of the poverty reduction strategy, the government committed to establish a national advisory council on poverty that would produce an annual report. As part of that obligation, that annual report would be tabled in Parliament.
Conservative
Senior Director, Social Development Policy, Strategic and Service Policy Branch, Department of Employment and Social Development
Not in this particular part of the legislation.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
The future government might renege on that promise or change its mind...?
Senior Director, Social Development Policy, Strategic and Service Policy Branch, Department of Employment and Social Development
I can't tell you what a future government might do.
Liberal
The Chair Liberal Wayne Easter
Thank you very much, Mr. James.
We will go to division 8, on parental benefits and related leave, with ESDC.
We have Mr. Brown, Ms. Astravas, Ms. Moran and Ms. Winter. Welcome.
Who's taking the lead?
Mr. Brown, the floor is yours.
Andrew Brown Director General, Employment Insurance Policy Directorate, Skills and Employment Branch, Department of Employment and Social Development
Thank you, Chair, for the introductions.
Good evening, committee members.
We are here to discuss the proposed changes to the Employment Insurance Act that will increase the number of weeks of parental benefits when they are shared, and related amendments to the Canada Labour Code.
I will begin by sharing with the committee some information on the employment insurance program and the support it offers for Canadians.
Employment insurance is Canada's largest labour market program playing a key role in Canada's economic and social union. When workers lose their jobs through no fault of their own, the program provides temporary income support, known as regular benefits, and in specific life circumstances that may occur over the course of one's working career, known as EI special benefits.
Special benefits play an important role in helping individuals balance work and life responsibilities and include maternity, parental, sickness and caregiving benefits.
Workers need to have accumulated at least 600 hours of insurable employment during the last year, or 52 weeks, before the start date of their claim or since their last EI claim, whichever is shorter, to qualify for special benefits including maternity and parental benefits. It's important to note that the proposed legislative changes do not change the eligibility requirements.
Currently, there are 35 weeks of EI parental benefits available that can be shared among parents. In 2016-17, over 196,000 parents received EI parental benefits representing a total of $2.7 billion in that year. Eighty-five per cent of those parental claims were made by new mothers.
The bill would amend the Employment Insurance Act to introduce a parental sharing benefit. The objective of the measure is to promote gender equality and would provide parents with additional weeks of parental benefits, for parents who share these benefits when welcoming a newborn or newly adopted child.
With the parental sharing benefit parents would be able to receive five additional weeks of standard parental benefits for a total of 40 weeks. They would continue to be paid at 55% of average weekly insurable earnings, over a period of 12 months. No parent would be able to access more than 35 weeks of standard parental benefits, so if one parent took 35 weeks, there would be five weeks left for another parent.
Since December of last year, an extended parental benefits option has also been available that offers 61 weeks of EI extended parental benefits paid at a lower replacement rate. For the extended parental benefits option, the parental sharing benefit would offer eight additional weeks of benefits for a total of 69 weeks. These are paid at 33% of average weekly insurable earnings, over a period of 18 months. Again, no parent would be able to access more than the 61 weeks of extended benefits that are currently available, thus ensuring that there would be eight weeks available for another parent.
The shared parental benefit will be inclusive and will be offered to eligible parents, including biological and adoptive parents, and parents of the opposite sex or of the same sex. It will be offered to parents whose children were born or placed for adoption once the amendments come into effect, which is scheduled for March 17, 2019, and who agree to share parental benefits.
The employment insurance shared parental benefit includes aspects of the Quebec model, which has shown that incentives are key in deciding who stays home to care for the children. Before Quebec's parental insurance system was implemented, in 2006, 20% of fathers in that province claimed parental benefits. In 2015, 80% of fathers in Quebec claimed paternity benefits under Quebec's system.
These proposed changes to employment insurance will not have any direct impact on Quebec residents, since Quebec currently offers benefits under its own system.
It's estimated that up to 97,000 Canadian parents may claim the EI parental sharing benefit per year. The bill ensures that the same changes that apply to insured workers will also apply to self-employed workers who voluntarily participate in the EI program by paying premiums.
This proposed amendment for EI parental benefits represents an incremental cost of $344.7 million per year, with the cost of $1.3 billion over five years.
In accordance with the Employment Insurance Act, these costs will be charged to the EI operating account and recovered through EI premiums. This measure is expected to result in an upward pressure on the EI premium rate by approximately two cents for $100 of insurable earnings.
Employers and labour organizations will need to determine whether this change would have impacts on any employment contracts and benefits plans and to assess any implications for their organization and members.
I will now give the floor to my colleague, Ms. Moran, who will talk about the related amendments to the Canada Labour Code.