Finance Committee on May 2nd, 2023

[The Chair, Liberal, Peter Fonseca]

Just a second, please, MP Ste-Marie. We're going to pause. We can't hear you very well.

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

Are you saying my audio quality is poor, Mr. Chair?

[The Chair, Liberal, Peter Fonseca]

It's a volume issue, MP Ste-Marie. Can you speak a little more?

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

Yes, I will keep talking while you do the checks.

Is that better?

[The Chair, Liberal, Peter Fonseca]

Okay. We're good. The members are good.

MP Ste-Marie, you're coming through clearly. Thank you.

You can start now. We did pause your time. Go ahead.

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

Thank you. That's very generous.

My question is for the Privy Council officials. Division 31 pertains to the Royal Style and Titles Act. Frankly, I was very surprised to come across the following in section 2 of the proposed act, at clause 510 of the bill, near the end of a hundred-plus-page document:

Charles the Third, by the Grace of God King of Canada and His other Realms and Territories, Head of the Commonwealth.

It's the royal proclamation under the Great Seal.

What is that doing hidden at the end of a budget implementation bill? Is it a way to conceal a huge change in the system?

I've often asked my fellow committee members whether this was hidden at the end of a budget implementation bill last time.

[Joël Girouard, Senior Privy Council Officer, Machinery of Government, Privy Council Office]

Thank you, Mr. Chair.

My name is Joël Girouard, and I am a senior Privy Council officer.

I'm not sure how it was laid out in the 1953 bill, but this is an administrative provision. Ideally, it would be passed close to the date of the King's coronation, May 6. That's partially why the choice was made. It was the right time to introduce the legislation, and this is an administrative measure, in our view.

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

Thank you for your answer.

In our two previous meetings, I asked senior finance officials to provide a written response to this next question, and I'm going to ask you the same one. The last time, was this part of a budget implementation bill or another bill?

I can't see why it's not part of another bill, so it can be voted on separately, if not for political reasons. Do you have any other information you can share with us about that?

[Joël Girouard]

As you know, the department doesn't bring forward bills. That said, we felt it was acceptable to include this measure in the budget implementation bill because it was administrative.

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

As I see it, this is much more than an administrative measure because it makes Charles III the King of Canada.

Obviously, then, I look forward to your written response as to how this was done the last time.

My next questions are about employment insurance, or EI, so they're for the senior officials from the Department of Employment and Social Development.

[The Chair, Liberal, Peter Fonseca]

MP Ste-Marie, we have paused the time again as the witnesses come to the table.

Mr. Leblanc, who was with us virtually, will no longer be able to participate due to the quality of the sound and the effect on the interpreters.

You may commence.

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

Thank you, Mr. Chair.

The Bloc Québécois has been asking the government to absorb the EI account deficit accumulated during the pandemic, as it did for all the sectors of the economy. The government doesn't seem to be doing that, however.

The bill doesn't include any changes to bring balance to the EI account, despite the rule that the account be balanced over seven years. That means workers' and employers' premiums will have to cover the $17‑billion deficit. Do I have that right?

[Benoit Cadieux, Director, Policy Analysis and Initiatives, Skills and Employment Branch, Department of Employment and Social Development]

Yes, you are correct.

Crediting the EI operating account to absorb the pandemic-related expenditures would require legislation.

I also want to mention that the premium rate is $1.63. The EI chief actuary's latest forecast puts the seven-year break-even rate at $1.73. That forecast will be repeated this summer, and a new report will be released in September. That will give us a better estimate of the premium rate for 2024 and the rate required to balance the operating account.

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

That's very clear.

I want to stay on the topic of EI, but I'm not sure whether my next question is directly tied to the changes proposed in Bill C‑47.

Last Wednesday, the spokesperson for the Conseil national des chômeurs et chômeuses met with senior Service Canada officials, including senior assistant deputy minister Tammy Bélanger. The department confirmed that, for privacy reasons, it would no longer provide information on the files of claimants represented by organizations assisting unemployed workers. That is an assault on the primary mission groups like these have taken on, which is to support and represent workers. What's more, it severely limits people's access to justice.

Does Bill C‑47 change things? The Privacy Act is not new legislation, so what is the reason behind the decision? On top of it, these claimants duly sign a form appointing their representative. Do you no longer recognize those consent forms? How do you explain the change?

[The Chair, Liberal, Peter Fonseca]

We're well over time, but perhaps you could give us a very short answer, please.

[Benoit Cadieux]

I think we'll have to take note of your question and get back to you with an answer, because that doesn't fall under our purview.

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

Yes, you can get back to the committee with a written answer. We would appreciate that. Thank you.

Thank you again.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Ste-Marie.

Now we're going to the NDP and MP Blaikie for six minutes.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much, Mr. Chair.

I'm curious with respect to division 22(d), which has to do with rail interswitching. Why is the government considering a pilot for interswitching at this time to increase the interswitching distance?

[Tamara Rudge, Director General, Surface Transportation Policy, Department of Transport]

I'm Tamara Rudge. I'm the director general for surface transportation policy at Transport Canada.

Currently, regulated interswitching is at 30 kilometres. That provides shippers with a radius from the interchange point with guaranteed access to another carrier at a rate regulated by the Canadian Transportation Agency without an application. This means it's easy to use and they have cost certainty. Also, shippers indicate that it provides meaningful leverage when they're negotiating contracts with the railways.

We have another piece called long-haul interswitching. That was introduced in 2018 as a competitive option for shippers outside of that 30 kilometres. This measure hasn't been used. There have been concerns from shippers about the measure, because you have to apply to the agency, so you have uncertainty as you apply and they will determine the cost. Then you have to take that once you've applied. It doesn't give them the same type of leverage as the normal interswitching does.

During the work of the supply chain task force, they put forward a recommendation on interswitching to extend the distance. Therefore, in the budget implementation act we are mimicking an approach that was taken from 2014 to 2017 to increase the limit to 160 kilometres for a pilot of 18 months to gather more data.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

When that longer interswitching distance was in place, as you said, for about three years, from 2014 to 2017, there was another task force, under David Emerson, that looked at that and recommended that the practice be terminated. What has changed between 2017 and now such that the government, which was prepared to and did in fact put an end to that practice, thinks it would be advisable to do the same thing again? What results do you think you'll get that you didn't get between 2014 and 2017?

[Tamara Rudge]

The Emerson report was completed at the end of 2015. The previous measure had not been in place that long, so when the Emerson task force made their recommendations, they didn't have the full information. In fact, for that previous measure, there was an uptake over the three years of those using the extended interswitching measure. This time—

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

If I could just intervene, my understanding is that uptake largely meant a lot more freight was being moved by the BNSF in the United States along the southern edge of the Canada-U.S. border, and it resulted in a loss of work for folks at railways like CN and CP. Has the department conducted any kind of analysis in terms of what they think the employment impact will be for Canadian rail workers?

[Tamara Rudge]

From 2014 to 2017, less than 1% of traffic in the Prairies actually used extended interswitching. At the time—and we're going to collect more data under this pilot—I don't think we had evidence of that. This time we will be getting information from the railways and from shippers during the pilot so the government can do a full assessment of the impacts, such as whether there is an impact on employment.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

You should be aware that I've heard from railways and I've heard from railway unions. Their impression is that it did cause a loss of work for folks who worked at Canada's major railways and that the organization that benefited most was an American railway. You can take that as feedback into the department, and I would encourage the department to ask those questions and to get that information during the course of this pilot.