Thank you very much, Mr. Chair
I am very honoured to be here as a witness. I feel a little off kilter because I am used to being seated on the parliamentarians' side. I ask your indulgence, my dear colleagues.
I am pleased because, during this session, I also had the privilege of sponsoring Bill C-269. This bill is the result of a great deal of hard work by the committee and my colleague Yves Lessard. I am very honoured to have had the opportunity to present this bill in the 39th Parliament.
The purpose of Bill C-269 is to improve the present employment insurance system, which the Conservative and Liberal governments have distorted over the years into an unfair program that bears increasingly little resemblance to an insurance plan. More than 50% of unemployed workers are not covered by this insurance, even though they pay premiums and the plan continues, year after year, to accumulate surpluses in its coffers.
It seems that the contributions of workers and employers have turned into a disguised tax and that the amounts amassed in this fund are used for purposes other than those of employment insurance.
The House of Commons Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities studied this issue in 2004 and, on February 15, 2005, issued 28 recommendations for improving the program.
You will recall that the Conservatives supported certain recommendations of the House of Commons Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities whereby the plan would be reserved for the benefit of workers.
The Bloc Québécois worked on this committee and was primarily responsible for adoption of the report. Thus, on May 8, 2006, I tabled a bill on behalf of the Bloc Québécois, which, if adopted, will make sweeping changes to the program.
Enacting Bill C-269 will provide a lifeline for workers and that is why the government must have the political will to change the system before any more damage is done.
We should recall that, until 1990, the Canadian government contributed to the unemployment insurance fund. In 1990, however, Brian Mulroney's Conservative government destroyed that equilibrium by terminating the federal government's contribution to the fund, leaving the entire funding of it to employers and workers. The withdrawal of federal funding created a major deficit in the fund at that time. The government then tried to solve the problem by slashing the coverage that the system provided, cutting the benefits paid to unemployed workers and tightening the eligibility rules for workers. The effect of this was to reduce the number of people covered by the system by half between 1989 and 1997 and to create enormous surpluses in the fund.
For more than 15 years, workers and employers have been the only contributors to the fund, and every year, the fund surpluses are swallowed up by a federal machine whose appetite knows no bounds. The EI account cumulative balance has ballooned since 1994, reaching about $50 billion to date.
There is no doubt that this cumulative balance is the result, among other things, of many changes that have restricted coverage of employment insurance since the early 1990s. The reform of employment insurance, in 1996, gave rise to a more restrictive system by tightening the eligibility criteria.
The EI account cumulative balance belongs to the employment insurance system and the government has the moral obligation to restore it in full. The EI account surplus must be applied to the employment insurance system.
In her November 2005 report, the Auditor General of Canada, Sheila Fraser, said there was an accumulated surplus of more that $48 billion. She also declared that the federal government had the obligation to respect the Employment Insurance Act and added that:
For the past six years, we have drawn Parliament's attention to our concerns about the government's compliance with the intent of the Employment Insurance Act, with respect to the setting of employment insurance premium rates and its impact on the size and growth of the accumulated surplus in the Employment Insurance Account. The accumulated surplus in the Account increased by an additional $2 billion in 2004-05 to reach $48 billion by the end of March 2005.
Today, about 40% of people who lose their jobs manage to qualify for employment insurance benefits. That is 4 workers out of 10. The people the most affected by the federal government's reforms are women, young people and seasonal workers. Of course, they are the same persons who are the most dependent on the program because they occupy precarious and unstable jobs.
With the changes to the system, the number of women covered by employment insurance decreased from 73% to 33%. They often have seasonal and unstable jobs.
In some parts of the country, it is impossible for people to accumulate more than 360 hours of work because of the large number of seasonal jobs in agriculture, forestry and tourism. The regions are suffering economically from plant shutdowns and, more recently, job losses in the forestry sector. In my riding, for example, in the regional municipality of Antoine-Labelle, 80% of the local economy is dependent upon the forestry sector; 80% of this industry's activities are at a standstill because of the current crisis.
Workers are victims of massive layoffs and often they do not qualify for employment benefits. Yet, they contributed to the fund for many years. Not only do workers become poorer because they are deprived of the right to EI benefits, but their families and their regions are also impoverished. Statistics show that the number of claimants has gone down since 1996; however, contrary to what we might thing, it is the number of eligible claimants that has gone down. The eligibility requirements are so strict that fewer and fewer workers qualify.
The time has come to give contributors what is owed to them and to stop looting the fund. The system we had in the 1990s is no longer suited to today's realities. That is why reforms are needed to help workers. Bill C-269 aims to restore some fairness for workers in the way employment insurance benefits are delivered. The employment insurance system must be updated to make it more accessible for vulnerable workers.
First of all, this bill aims to reduce the qualifying period to a 360 hours regardless of the regional unemployment rate.
This measure will eliminate the inequities between regions on the basis of their unemployment rates. This rule would also cover seasonal workers and those with unstable jobs. The required 360 hours correspond to 12 weeks of 30 hours. The benefit period varies according to the region and the regional unemployment rate. For regions with a high unemployment rate, this would eliminate the infamous “seasonal gap”, which leads us to the following recommendation: increase the maximum benefit period from 45 to 50 weeks.
Every year, seasonal workers face the seasonal gap, leaving them without benefits for as long as 10 weeks. Statistics show that 35% of recipients use their full benefits. In a regional municipality in my riding, that figure rises to 43%. According to an excerpt from the report, witnesses stated that the benefit period should be increased to 50 weeks, as is the case for special benefits. This measure would solve the longstanding problem of the seasonal gap, which mainly affects seasonal workers who have no benefits before the start of the next season. Although the government has taken measures to address this problem, further action is required. Resource regions are particularly affected. Bill C-269puts an end to the seasonal gap by increasing the benefit period from 45 to 50 weeks.
Next, the bill aims to increase the rate of weekly benefits to 60% of insurable earnings rather than 55% as is currently the case.
Unstable jobs are generally the least well paid and these changes would provide claimants with a bare minimum. The Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities made this recommendation in 2005. This measure would help women in particular, since the 55% rate primarily affects low-wage earners, two-thirds of them women.
The Bill also eliminates the waiting period between the time when people lose their jobs and apply for benefits and the time when they receive their first cheques.
Workers should not be penalized for losing their jobs. Their financial obligations continue even if the money is late arriving. The waiting period penalizes workers who have lost their jobs without being fired or resigning. These workers often have a low income and it is further reduced by the period of unemployment they are entering, and which is not justified because the waiting period does not affect the maximum benefit period.
The Bill eliminates the distinction between a new entrant and a re-entrant to the labour force.
This practice is completely discriminatory, especially with respect to young people and women whose work situation is more precarious. The fact that a worker has received benefits is a determining factor in whether or not he or she is considered a new entrant or a re-entrant to the labour force. The eligibility conditions have become incoherent and fragmented. A person not considered a new entrant or a re-entrant must accumulate fewer insurable hours to be entitled to regular benefits, whereas a new entrant or re-entrant must accumulate 910 hours, which is becoming increasingly difficult in many regions. This becomes a major deterrent for individuals who wish to work in agriculture, forestry and several other sectors providing seasonal employment. It is virtually impossible for these individuals to accumulate 910 hours in these sectors.
The Bill will eliminate the presumption that persons related to each other do not deal with each other at arm's length.
The burden of proof with regard to dealing at arm's length is always shouldered by the employees of family businesses, who are deemed guilty until proven otherwise. We understand that it is important to discourage fraudulent relations between employers and employees. However, it should not be up to workers to prove their good faith when they lose their jobs; it should be up to the system to investigate when there are doubts.
The Bill increases the maximum yearly insurable earnings, which stood at $39,000 when the Bill was tabled.
The maximum has now been set at $40,000. We were asking that it be raised from $39,000 to $41,500 and that an indexing formula be introduced. The current contribution formula is actually a regressive tax that affects low-income earners the most. Once the maximum insurable earnings have been reached, higher income-earners pay no further premiums, whereas lower income-earners contribute for the entire year.
The Bloc Québécois is recommending that there be greater fairness. The maximum was once $43,000. Furthermore, higher income-earners are only covered for 55% of $39,000, the maximum yearly insurable earnings when the Bill was tabled. It is difficult to pay one's bills with so little, even if it is only for a few weeks.
Benefits must be calculated based on the 12 best weeks so as not to penalize seasonal workers who sometimes work short weeks.
Only the weeks with the highest earnings in the new benefit calculation period would be considered and the average earnings would be calculated using the 12 best weeks of insurable earnings. The NDP member, Yvon Godin, tabled Bill C-265 in May 2006 in this regard. We believe it is vital that this new formula be implemented.
Finally, we must extend program coverage to self-employed workers, given that they currently represent 16% of the labour force. These workers have no coverage should they become unemployed. Premiums would be paid on a voluntary basis and the rate would be established by the chief actuary on the basis of need. Complete coverage should be provided.
In closing, I would like to remind the committee that workers, employers, the Auditor General of Canada, the Bloc Québécois and now even the UN have criticized the federal government and its employment insurance program. In an article that appeared in La Press on May 23, it was reported that the UN Committee on Economic, Social and Cultural Rights, and I quote:
—recommends that the State party reassess the Employment Insurance scheme with a view to providing greater access and improved benefit levels to all unemployed workers.
Furthermore, during the last election campaign, the Conservatives made a commitment to put in place an independent employment insurance program and to create an autonomous fund administered by employees and employers. They also supported the recommendations of the Standing Committee on Human Resources whereby the plan would be reserved for the sole benefit of workers. They deemed the practice of accumulating a surplus intellectually dishonest, and a deliberate attempt to overtax workers and their employers for the purpose of diverting funds to finance other government priorities.
Obviously, there are serious shortcomings in the management of the employment insurance fund. The priority is to end the injustices that harm workers, their families and businesses. We must quickly enact the necessary measures allowing workers to benefit from the insurance program to which they contribute.
Thank you.
