Finance Committee on April 9th, 2024

[Sean Strickland]

Thank you for that question, MP Baker.

I think this is a real game-changer in terms of levelling the playing field so that all construction workers....

To me, if the people of Canada are going to forgo, according to the Parliamentary Budget Officer, up to $22 billion in lost revenue to fund these credits, the quid pro quo for that has to be requiring these large companies, many of them very capitalized, affluent companies, to pay workers the best wages they possibly can. That will be a win. I think there's an expectation from the Canadian public that, if we're going to forgo the $22 billion, there had better be some good-paying jobs for Canadians. This legislation provides for that ability, and it will lift all construction workers up to the union wages that have been successfully negotiated with thousands of contractors across the country.

The other thing it will provide, of course, is work opportunities. There are tens of billions of dollars in work opportunities. I listed some of those in my opening comments. That's important for a construction worker too, because construction workers go to work on the first day to put ourselves out of a job. We know that eventually the job is going to be completed. Where will we go next? Well, this will help with a long-term pipeline of large industrial projects across Canada, which will provide more certainty to construction workers and attract young people to the industry.

On all levels, then, this is a game-changer for the construction worker in Canada.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Baker.

Now I have MP Ste-Marie.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

I would like to welcome the three witnesses, whose presentations gave us much to think about.

Mr. Céré, I too wish you a happy 65th birthday. I want to congratulate you on the fullness, in every sense, of your 45 years in the struggle to protect the rights of unemployed men and women. I have the feeling that the historical perspective is too often lost when policy is made, because short-term action is what is wanted.

I certainly understood that you had expectations of the last budget. Bill C‑59 is about implementing that budget. Commitments were made and consultations were held. I recall that when you came to testify before the committee you were enthusiastic about that commitment, but there is nothing about that in the last budget. The last economic statement talks about temporary measures, which, as you said, are to end on September 7, and the pilot project, which will be ending in a few weeks.

You gave a quick listing of the requests that need to be filled if we are to have a good scheme, a scheme that functions. As you said, the economy is a cyclical thing and the crises will return.

Can you repeat what has to be done if we are to be sure this is a good reform?

[Pierre Céré]

Thank you for your question, Mr. Ste‑Marie.

The employment insurance scheme was essentially torn down in the 1990s and we are still living with that; we are stuck with it. The scheme was locked down.

One of the first things that must be fixed is eligibility. This is about the number of hours that must be accumulated in order to be eligible for employment insurance. Whether it is 420 or 700 or 900 or 1,200 hours, it is not a problem for someone who works full-time and has a permanent job. However, it is a problem for the third of the working population, the 7 million working men and women, who have part-time, contract, on-call, seasonal or split-shift jobs. They include professors and nurses who work on call, who are not yet permanent and are having trouble accumulating the time worked that they need in order to be eligible for employment insurance when periods of unemployment occur. The eligibility question must be resolved.

When we talk about eligibility, we are also talking about the penalties provided that relate to the reasons for termination of employment. Since 1993–1996, a succession of governments have imposed the extreme penalty: that for the reference period, the year preceding an employment insurance claim, there will be an analysis, an investigation, of all records of employment. In that period, if there is a voluntary departure that is defined as unjustified or a dismissal defined as attributable to misconduct, that record of employment—and everything that went before it—goes into the trash can.

I will give you an example. We recently defended an actuary who was working full-time and lost his employment as a result of a reorganization. In addition to that work, he had a little part-time job on Saturdays from which he had been dismissed two months earlier. He was found to have been dismissed for misconduct and so, from that date forward, everything was thrown out. All he was left with was two months of work, so he was not eligible for employment insurance. There is something messed up about the employment insurance scheme, something that is not working and is extremely punitive.

There are other specific subjects that are in need of intervention. For seasonal workers, the problem exists both upstream and downstream. Upstream, the problem lies in the difficulty of accumulating enough hours of work to be eligible. In some regions of Quebec and the rest of Canada, and in certain areas and administrative regions, the dominant type of employment is seasonal employment. It can be hard to manage to accumulate the working time needed in order to obtain benefit periods, which are much too short. Do you know how many weeks of benefits someone who has accumulated 900 hours of work is given? They are given 16 weeks, which is not even four months.

Downstream, the problem is how to get through the winter. Seasonal workers often work in the spring, summer and fall, and they have to be able to get through the winter. When February comes, they no longer receive employment insurance. This is what we call the black hole.

There are parents, especially women, who lose their jobs during maternity or parental leave, and this accounts for several thousand people across Canada. They find themselves with nothing, because they have exhausted their benefits bank. They may not exceed their bank of special leave, sick leave, and so on.

This scheme includes a host of measures where a bit more justice needs to be restored; I would simply say a bit more balance. In so doing, we will get a scheme that provides working men and women with more protection. We understand that a period of unemployment may be shorter or longer, depending on the job market. Right now, there are jobs, and so benefit periods are shorter. They go together. Unemployment and jobs are two sides of the same coin, and that is one of the facts of life in the labour market.

I would conclude with this image: that an unemployed person is first and foremost a worker, someone who was working and will start working again. That is how it has to be understood. That is why we need structuring measures in the employment insurance scheme to help people when they find themselves between jobs.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Merci, MP Ste-Marie.

Now we'll go to MP Davies, please.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you.

I was lucky enough to serve in Parliament when late Conservative finance minister Flaherty brought in the RDSP. I want to second my colleague Mr. Morantz's comments about it being an excellent and groundbreaking program that helps members of Canada's special needs community who can't work to accumulate CPP benefits like other people can. This provides a really important way to accumulate savings. I want to add my kudos to that.

Ms. Knox, it sounds like you deal with this program a lot. What advice would you give this committee on how we could improve access to the RDSP, or make it easier to administer to the people you help?

[Natasha Knox]

I think I would just go back to my original point, which is that with Bill C-59, the measure that allows siblings to become successor holders is temporary. It would be great if that were a permanent provision, because that just makes the administration simpler, more flexible and more streamlined for families. Access to the RDSP is contingent on the disability tax credit. Expanding access to the disability tax credit is something that I think could potentially happen over time and that I would like to see.

Disabilities that are episodic in nature are particularly tricky. The impacts on people are devastating. I will give one example to help illustrate my point. I have a client who has a severe migraine disorder. She has maybe five good days a month, but she doesn't know when those good days are going to be.

Thanks to the expanded access for mental health issues, which was very recent, she was able to get access to the disability tax credit, which has enabled her to open up an RDSP. That has been fantastic. If she gets even a little better, she may lose access to that disability tax credit, so she is caught in a loophole. If she gets even a little better, she may no longer meet the threshold even though this is an absolutely devastating disability in which she spends most of her days feeling like her head is in a vise. She needs help.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you, Ms. Knox.

Mr. Strickland, can you outline why the inclusion of the apprenticeship requirements is important for the new investment tax credits in carbon capture utilization and storage, as you have itemized?

[Sean Strickland]

Absolutely. We need to provide opportunities to young people and to Canadians.

I say “young people”, but the average age of apprentices across Canada is approximately 27, which would surprise people. Younger people tend to come to the construction trades after a journey of post-secondary and service sector jobs and they realize there is some decent money to be made in the construction industry. We'd like to get at them younger. We'd like to have them come into our industry at a younger age.

I also think that the mandatory minimums in the investment tax credits are going to drive industry proponents to make sure that contractors, unions and labour providers maximize the apprenticeship opportunities within their own organizations.

[Don Davies, NDP, Vancouver Kingsway, BC]

I think you have anticipated where I'm going next, because under the requirements in Bill C-59, the incentive claimants must make “reasonable efforts to ensure that apprentices registered in a Red Seal trade work at least 10% of the total hours worked during” an installation tax year at the “designated work site”.

I'm curious as to how that compares with the current situation. Currently, do most work sites have 10% of the hours worked being performed by apprentices or not?

[Sean Strickland]

That's a really good question. We quite frankly would like to see that number a bit higher.

In the U.S., in the Inflation Reduction Act, it's 15%. We had advocated originally when the bill was in its infancy for a higher percentage. We want to make sure that we find the right number so that it's not an impediment to collect the tax and it's an incentive to hire apprentices. Ten per cent is good number. Fifteen per cent would be better.

[Don Davies, NDP, Vancouver Kingsway, BC]

We'll keep an eye on that number and monitor it.

Mr. Céré, in your view, should the federal government increase the 55% income replacement rate and raise the ceiling on insurable earnings?

[Pierre Céré]

Certainly, but that is not the priority.

The priority really is eligibility. Too many people do not have access to employment insurance. However, the aspect that can be worked on to raise the benefits received is the maximum insurable, whether it is the maximum wage—

[The Chair, Liberal, Peter Fonseca]

I'm sorry for the interruption. We're not getting translation, or I'm not getting translation.

We'll try again.

It's okay now.

Mr. Céré, you have the floor.

[Pierre Céré]

Okay, I will start over.

I was asked a question about the replacement rate, which is 55%. I would note that the rate was revised downward during the reforms in the 1990s we are all familiar with. That percentage definitely has to be increased.

To my mind, the priority is the maximum insurable earnings, which has not seen a very pronounced upward curve.

I will give you an example. When the reform was brought in, in 1996, or the counter-reform that was called the Axworthy reform, the insurable earnings maximum was reduced from $42,000 to $39,000, and frozen for ten years. The curve has never gone back up. Today, the maximum insurable earnings should be around $90,000. That would benefit the middle class and working men and women. At present, the insurable maximum is stuck at $63,000, and the government is losing revenue. We have to consider the replacement rate, but we also have to look at eligibility.

The real problem is that people are not able to meet the eligibility requirements or are not eligible because of penalties associated with the reasons for termination of their employment. One claimant out of four is ejected from the system because of those penalties. It does not matter how it was done, but that is what was wanted in the 1990s. We have been stuck with this problem for 30 years.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Céré.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Chair, I forgot to mention one thing.

Happy birthday.

[Pierre Céré]

Wow. Merci.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Davies.

Listen, members. We have excellent witnesses here. This is our third panel. We got backed up a bit here today, so we're going to do just a very rapid round here. Each party is going to have about one minute to ask a question or two, and then we'll conclude this panel.

We're starting with MP Chambers.

[Adam Chambers, Conservative, Simcoe North, ON]

Thanks very much, Chair.

I'd love to ask about the auditing of the investment tax credits, but CRA officials haven't been here yet. I'm hoping they're on the docket soon, because I understand they will be doing the auditing of the investment tax credits for the labour requirements.

I'd like to ask a quick question of Ms. Knox.

My understanding is that the government's actually working on the Henson trust issue. I thought it was already resolved. If not, I'm happy to take this off-line and send you some information I received.

My question is on the RDSP account opening process. I understand it's very difficult to open.

Would you be in favour of finding a way to streamline that process, but also having a holder ask the government to pay a portion of the DTC or the child care benefit directly into an RDSP, so that it happens at the source? We'd make it easier for families to direct funds into those accounts.

[Natasha Knox]

Thank you for that question.

Number one, yes, I would be very interested in getting any information on the Henson trust issue. My understanding is there was some draft legislation, but it didn't go further than that. I would be very happy to be corrected on that.

With respect to the difficulty of opening the plans, yes, it is very difficult.

To your question on whether it would be helpful to have the child tax benefit paid directly into those plans, I'll be honest and say I haven't considered that particular mechanism. Would it be helpful to you if I thought it through a little more and got back to you, so I that I could think about the implications? I think it would depend on the case, though I could see any option to be able to do that—as long as it's optional—being tremendously beneficial in streamlining that process.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you.

Thanks, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Chambers.

Now we'll go to MP Baker.