Mr. Chair and members of the committee, good morning and thank you for inviting me.
The public health crisis we have been in since the spring of 2020 is coupled with an economic crisis, the likes of which we have not known in our lifetimes.
Last year alone, between mid-March and late September 2020—about seven months—nine million people lost their jobs. That is equivalent to 45% of the workforce. Those nine million people received the Canada emergency response benefit, or CERB, for an average of three months. The CERB was replaced by the Canada recovery benefit, or CRB. At the end of September, the government put the employment insurance, or EI, system back on track, introducing flexible measures that were practically akin to genuine program reforms. The measures are nevertheless temporary.
To gain a clear and unbiased understanding of the country's employment realities, we need only look to the EI numbers. From September 27, 2020 to May 9, 2021, a period of about seven months, 4.1 million EI claims were processed. Currently, 2.3 million people are receiving benefits. In terms of the CRB, if we take the three types of benefits into account, a total of 2.8 million people have received benefits since September 27 of last year.
In a recent study, the International Monetary Fund, or IMF, recommended that Canada “avoid a premature withdrawal of fiscal and monetary support” and highlighted that “the lessons from the crisis represent an excellent opportunity to review the EI system, including its role as an automatic stabilizer.” The IMF was right to say as much.
However, the objectives of the Budget Implementation Act, 2021, No. 1, are not entirely consistent with the IMF's position. Under division 35 of part 4, the measures to extend the CRB stipulate that, for the last eight weeks, or the new weeks after July 18, 2021, the amount of the benefit will be reduced to $300 a week, and at best, the September 25 cut-off date could be extended to November 20, 2021. Members of the Standing Committee on Finance, if it is within your power, I urge you to propose an amendment to the bill that would standardize the benefit amount at $500.
Division 36 of part 4 deals with EI and is clearly very complex. Some temporary measures will remain in place for a year, so 2021-22, but 2022 will mark a return to the status quo.
We welcome the temporary supports announced by the government, including measures to apply a single eligibility threshold of 420 hours to the entire country, to ensure penalties associated with separation from employment take into account only the most recent separation, to ensure that severance pay no longer has an impact on EI benefits, and to provide seasonal workers in 13 economic regions access to an additional five weeks of benefits.
However, the measures fail to address two areas. The first is the calculation of the benefit rate. The government is reverting to the status quo with a variable divisor determined by the unemployment rate. However, under the temporary measure currently in place, the divisor is 14 weeks. The second is the benefit period. Again, the government is reverting to the status quo with benefit periods that are too short. These gaps could have been avoided had the government renewed the temporary measures establishing the divisor at 14 and provided a universal benefit period of 50 weeks.
As a result of those gaps, the government is not helping regions in the same way. Some will actually be penalized, even though the entire country is feeling the effects of the pandemic.
Lastly, extending the duration of sickness benefits from 15 to 26 weeks is a historic and meaningful step, but why wait until next year? Why is it not being implemented until August 2022?
The government is delaying its plans to reform the EI system. So be it, but in the meantime, it should put temporary measures in place to provide the support people need. The government needs to act swiftly to close the gaps and remedy the shortcomings. Furthermore, it is imperative that the commission the government appoints to review the program and make recommendations, complete its work within a year, not two years.
Canada is the architect of great achievements on the world stage. The Universal Declaration of Human Rights is but one. Domestically, health insurance was a triumph for the country. The social safety net is critically important in responding to unemployment and crises, and the government must act accordingly.
On behalf of our organization, I urge the Standing Committee on Finance to bring forward solutions to the serious flaws in divisions 35 and 36 of part 4 of Bill C-30.