Human Resources Committee on March 1st, 2007

[The Chair, Conservative, Dean Allison]

Shall the committee order a reprint of the bill as amended for the use of the House at report stage?

[Some hon. members]

Agreed.

[The Chair, Conservative, Dean Allison]

We can now continue with our study, pursuant to the order of reference of Tuesday, December 5, 2006, of Bill C-278, An Act to amend the Employment Insurance Act (benefits for illness, injury or quarantine).

We will now go clause by clause.

Go ahead, Mr. Lake.

(On clause 1)

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

I want to take advantage of the presence of the departmental officials here and ask a couple of questions, if I could.

I'm curious right off the bat--and this is something that came up yesterday in our discussion--in terms of whether the department thinks the EI program is the right mechanism to deal with this. Is there any evidence? If there is, what does it show?

[Bill James, Director General, Employment Insurance Policy, Employment Programs Policy and Design Branch, Department of Human Resources and Social Development]

As proposed, the bill would increase sickness benefits under EI by 35 weeks, from 15 weeks to 50 weeks. At this point in time, based on the information we have, we wouldn't be able to conclude whether that full extension would be consistent with the intention of EI sickness benefits as they're structured in the Employment Insurance Act now. They're specifically designed for short-term absences from the workplace. In that regard, they're intended to complement a number of other different support mechanisms that are out there, both from the private sector and from provincial governments and other federal government programs.

As it stands right now, we know that about 30% of people who claim EI sickness benefits exhaust their benefits or use the maximum 15 weeks. But we don't know a lot about the situation of those people after that point in time, how long they're absent from the workforce. So it would be difficult to know, in the context of the current policy objective of EI sickness benefits, whether 50 weeks is appropriate or not.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Okay.

Further to that, I want to say from the outset, as we discussed yesterday, that this is an important issue for those of us on this side of the table. I don't want to necessarily speak for everyone here, but I think I can say very comfortably that we recognize that there's a gap here and something needs to be changed. We just want to make sure we're looking at the right tool to fix the problem that exists, and we are questioning maybe whether this is the right way to go about it.

I'm thinking about people who maybe don't pay into EI, for example, and get sick. What about those people? Obviously this wouldn't help them. Is that being considered?

[Bill James]

That's correct. This would provide additional benefits only to those presently covered under employment insurance. So those are employees, but it would not include people who are not covered under the Employment Insurance Act. An example would be self-employed persons, which is about 15% of the labour force, or people who are not presently employed at all.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Yesterday we talked a bit about a letter we received that suggested that possibly extending EI benefits might have some impact on private employer coverage. Mr. Eyking suggested that would not be the case. I just want you to speak to that a bit. Can you speak to the implications of this bill on private employer coverage?

[Bill James]

It might be helpful for committee members, as background, to elaborate that the EI program supports the delivery of sickness benefits to Canadians in two ways.

For about six million Canadians, the program supports the delivery of sickness benefits through private sector employers. The way it does that is it provides a premium reduction to companies in exchange for offering sickness benefits that are at least equivalent to those available through EI sickness benefits. The number of people covered under that premium reduction program right now is about 40% of employed persons, or about six million people. So that is one way the EI program supports these benefits.

It's notable that these types of benefits are at least equivalent to those available under EI, but in the vast majority of situations, they exceed those available under EI. For example, they pay higher benefit rates, they have rehabilitation, and they are generally longer in duration.

This is relevant to the bill I think because right now, in order to get a premium reduction, employers must fully replace the 15 weeks that are available under the current program. So if that were to change to 50 weeks, there would be a need to consider what implications that would have for employers, whether or not, for example, they would be required to fully replace 50 weeks of benefits.

With respect to the second issue, there are about 300,000 people who claim EI every year, not being covered under employer plans. I think I've already covered that.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

It sounds like you may be confirming concerns.... This is a problem. There is a gap here. You would acknowledge that there's a gap. This may not be the solution, though.

[Bill James]

There are two potential issues. One of the issues is, within the context of EI and the role it plays, is the duration currently appropriate? Is 15 weeks serving the needs within the policy objective? We know that about one-third of people use all their benefits, so there is a question as to whether EI is fulfilling its intended purpose in that regard, and we are actively looking into those questions. We have a number of studies under way in the department that are looking at the very issue of the 30% who run out.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Thank you.

[The Chair, Conservative, Dean Allison]

I have Mr. Chong, Ms. Yelich, Mr. Godin, and Mr. Lessard.

Mr. Chong.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Thank you, Mr. Chair.

The issue around people taking sickness benefits is going to become a bigger public policy issue as the demographic challenges in this country continue, with an aging population and an increasing number of Canadians who are taking care of their parents and their loved ones. In talking to the minister and my other colleagues, we acknowledge that the issue around sickness benefits is an important one. I think there is a willingness on the part of the minister and the government to find a solution, or to take a look at potential solutions that are economically sustainable and that work best for those who need it.

My concern, which is shared by my colleagues on the committee, is that we have a bill in front of us for which we have no detailed analysis, for which we have no detailed supporting evidence. I'm new to this committee, but my understanding is that we've had no witnesses appear with respect to this particular piece of legislation. My understanding is that it was put in front of the committee. We should have had witnesses here to testify and the committee decided not to have witnesses. Now we have this peculiar situation where we have this bill in front of us for clause-by-clause decisions and we have nothing to base our decisions on. I don't think that's a very good approach on the part of the people who opposed having witnesses give evidence.

The other thing I wondered if officials would comment on is how does this bill address the hundreds of thousands of Canadians, new Canadians, in Canada's largest cities, often immigrants who are disproportionately left out of the employment insurance system? Studies show that immigrants in the GTA don't have as high an uptake of the employment insurance system because they often are in job categories or professions where they don't pay into employment insurance, so they are left out of that whole approach. Bills like this don't help them either, in the sense that they aren't a part of the system. So enhancement of sickness benefits is not going to benefit this rapidly growing portion of the population, which is increasingly going to be part of the Canada of tomorrow.

Maybe the officials could comment on that.

[Bill James]

Maybe I could answer in two parts, Mr. Chair.

The first question is on persons who are not currently covered by the employment insurance program; they would not benefit from a change in this case. That's based on being in insurable employment, so if someone is self-employed or has never worked or is new to the Canadian workforce, unless they had some labour market attachment that met the qualifying requirements, they would not be able to access that. You are correct.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Does the department have evidence to show that new Canadians are not eligible for employment insurance benefits to the same extent that Canadians who have been here for many years? Is there evidence to show that the uptake for employment insurance and eligibility for employment insurance in cities like Toronto is far less than in other regions of the country because new immigrants tend to work in professions that are not paying into the EI system?

These are some concerns that have been raised with me by various stakeholders in the GTA.

[Bill James]

To that specific issue, with respect to EI coverage as a proportion of the unemployed population, that does vary depending on the specific labour market, and it varies depending on the employment patterns.

So in an area like Toronto, you are correct that a larger proportion of the unemployed tend not to be accessing EI as compared to, say, Prince Edward Island, where the proportion of the unemployed that is collecting EI is higher. That can be for a number of different reasons. It could be that they're self-employed; it could be that they don't have labour market experience. So it's not particularly related to being an immigrant.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

I understand that.

Mr. Chair, I want to put on the record that I think if we're going to enhance and extend sickness benefits, it should be done for all Canadians and not just certain groups of Canadians.

If that's the case, then one of my problems with this bill is that it's using a particular mechanism that is not going to equally and consistently ensure that Canadians across the country can take advantage of those benefits. In other words, the mechanism itself is flawed, and I think that's another reason why we don't support this particular legislation.

[The Chair, Conservative, Dean Allison]

Thank you, Mr. Chong.

We have Ms. Yelich, Mr. Godin, Mr. Lessard, and Mr. Savage.

Ms. Yelich.

[Lynne Yelich, Conservative, Blackstrap, SK]

Do you think, then, that we should maybe look elsewhere to prolong the benefits? We're studying CPP this fall, disability. Perhaps we should look there. Unemployment certainly is not the place.

The 15-week requirement came from somewhere. Why was it determined that 15 weeks was the amount that was needed, and what would you suggest then for those who have a longer disability? Perhaps it should go to another area like the CPP disability, would you suggest? Do you have any suggestions?

[Bill James]

I guess the first point I should mention is that for the six million who are covered through a premium reduction program that EI incites employers to offer, many of those have access to a longer coverage right now as one of the benefits of being covered under that program.

With respect to the 15 weeks, it was established several decades ago based on consultations with doctors and the medical community and employers at the time. What we know about the access to the 15 weeks is that on average about nine and a half weeks are used, so the average amount used is about nine and a half weeks. Only about 30% right now use the maximum 15.

There was a recent Stats Can study that looked at the duration of illness and absence from the workforce, and it confirmed that this average absence is about 10 weeks. So the evidence, in the monitoring that we've been doing, suggests that there hasn't been a significant change in terms of the needs, at least that we're observing within the context of the EI program.

EI is designed on the concept of a short-term absence from one's job, supporting employment income during that period, presuming that the person will return to one's job. So there is a question of a 50-week duration. That's about three times the current duration, and at that point it does raise a policy question as to the number of individuals who would be returning specifically to that employment relationship. Because the program is funded by both employers and employees, those are the types of things that would need to be clarified.

[Lynne Yelich, Conservative, Blackstrap, SK]

Thank you.

[The Chair, Conservative, Dean Allison]

Thank you very much.

We have Mr. Godin.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Thank you, Mr. Chairman.

It is possible for you to undertake studies, obtain statistics, and so on. I believe that the Department of Human Resources and Social Development has that capacity, am I correct?

[Bill James]

Yes, that's correct.