Human Resources Committee on March 6th, 2008

[Andrew Jackson]

Perhaps I could just put one--

[The Chair, Conservative, Dean Allison]

Please give a quick response. We're almost out of time here.

[Andrew Jackson]

Two-thirds of working-age families who are poor in Canada have at least one person in the family who is working full-time all year. A lot of those people are in employment on a regular basis, but they're moving from one low-wage, precarious job to another, so if people had a bit more EI income support in the short periods between jobs, it would be increasing the incomes of a lot of working-poor families.

It's not as though we're talking about people who are unemployed for dramatically long periods of time. We have a very low duration of unemployment now. But the fact of the matter is that an awful lot of Canadians do transition through a period of unemployment at some point in the year, even with a 6% unemployment rate. Probably about 15% of them still experience a spell of unemployment in the year.

To draw this disjunction between people who are unemployed and people who are employed just totally abstracts from the real experience of people, which is that huge numbers of people are moving between those states all the time.

[The Chair, Conservative, Dean Allison]

We are going to have to wind this up. That's all the time we have.

Ms. Dhalla, we are starting the second round, five minutes please.

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

Thank you very much to all of you for coming.

I think Charles had started off saying that Mr. Godin was going to buy him a beer after his presentation. Probably not. But Charles, I wanted to ask you this.

You come from the Atlantic Institute for Market Studies, and you had spoken about your feelings, which I was quite shocked about, that employment insurance actually creates a dependency and perhaps is an incentive in some sort of way to people not wanting to work. From the number of constituents in my constituency of Brampton—Springdale who actually utilize EI, I know that's certainly not the case.

Do you have any statistics, figures, or facts to back up what you have mentioned?

[Charles Cirtwill]

Actually, thank you for the question, because I'm getting a little tired of being accused of having a bias and just stating feelings.

I supplied to the committee before I arrived a copy of a study we did following the 1996 changes, which demonstrated the positive impacts of reducing the EI, basically matching the econometric models that had come before them. So they're actually hard numbers on the ground, demonstrating the benefits around tightening the rules, discouraging people from repeat use, getting back to the word that we used here earlier, about the fact that EI is supposed to be temporary, so talking about limiting the repeat use of employment insurance.

The other interesting thing is that we did supply to the committee—and I hope the members get a chance to look at it later on—a copy of a 2007 study that took a look at Maine and New Brunswick, because it is a natural social experiment in that you have two jurisdictions sitting side by side, with very similar populations, very similar demographics, geographics, and everything, the only really significant difference being their EI.

This research was actually funded by the Canadian government, the Canadian embassy in Washington. I think the committee will find those findings very fascinating, because what they show is that, with a high level of EI premiums regularly available to people on a systemic basis year over year, you see a larger percentage of your population actually taking EI and staying out of the workforce.

So it's not that Atlantic Canadians are lazy; it's that they're not stupid. If you're going to pay them more than they would get working, why in God's good name would they work?

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

We'll look forward to receiving your studies, to see exactly what everyone has come up with.

Thank you very much, Charles.

In lieu of time, as well, since it's International Women's Week I wanted to ask both Barbara and Laurell for some information with regard to the impact the EI program has on gender inequality that exists and the impact it has on women.

I know Barbara spoke in her presentation about some of those facts, of only 32% of the unemployed women actually being qualified for regular EI. What type of changes do we need to see within the system, either that are mentioned in the bill presently or that you would suggest to the committee, that would perhaps reduce all the inequality that women experience across this country when it comes to accessing EI?

[Barbara Byers]

I think the fact is that, first of all, the 360 hours is very important so all women all across this country have the access, because again we go back to how long it takes women to accumulate that time in temporary, part-time, and casual types of jobs. So the 360 hours in terms of access is critical to every woman, no matter whether she lives in a high-unemployment or a low-unemployment area. That is number one.

The question of the best 12 weeks is very important because, again, if it is the most recent 12 weeks, those can sometimes be your worst 12 weeks.

If you look at the paper we presented and the information we're going to have up on our website on EI around women's economic equality, we're looking at the difference in how benefits are paid out: $291 to $351 per week is the difference between women and men. That's absolutely critical.

I guess the whole thing is that we know the EI system has to be modernized. It has to take a look at the kinds of jobs we're in. We need to be able to do that, but we need the access first.

There is no point in improving all the other stuff if people can't get in the door.

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

Laurell.

[Laurell Ritchie]

That is absolutely the issue: getting in the door. The government's latest monitoring and assessment report on EI, looking at the year 2005, under II, says—and again it's part of the document that was provided, and hopefully it's translated--that lower access to EI among women reflects their different work patterns, as women are more likely than men to work part-time. Of unemployed people who had worked full-time, 87.6% were eligible for EI, compared to 42.8% of those who had worked part-time before becoming unemployed.

In this document there are some studies that look at employment in the last couple of decades, and in particular some numbers from Stats Canada that were put together by Professor Leah Vosko from York University.

It is quite startling to step back and see how large the drop has been in full-time permanent positions, and for that matter, part-time permanent positions. What is replacing them very quickly, and in fact has more than doubled since the beginning of the 1990s, is full-time temporary and part-time temporary jobs.

I can only assume that some of the people who have asked questions today don't have a real-life experience of what it's like in certain sectors and the kind of employment available in them.

[The Chair, Conservative, Dean Allison]

We're out of time. We're way over time.

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

Could I request that the committee get that report that she's speaking from?

[The Chair, Conservative, Dean Allison]

The report is part of her documentation.

[Barbara Byers]

Can I remind people, too, that there is a really good study by Monica Townson and Kevin Hayes, which was done for Status of Women Canada, about the question of women and EI. It's an excellent study, and it gives you a lot of the background.

[The Chair, Conservative, Dean Allison]

Thank you very much.

Okay, we're now going to move to Mr. Brown.

You have five minutes, sir.

[Gord Brown, Conservative, Leeds—Grenville, ON]

Thank you very much, Mr. Chairman.

I thank our witnesses for coming today.

The main point of this bill is to introduce the flat 360-hour entrance requirement. I heard Mr. Jackson say that he was not opposed to a variable program, which is what we have now.

Did I hear you correctly?

[Andrew Jackson]

We think there should be a common entrance requirement so people can get onto the program, but we haven't said that everybody should get the same length of benefits irrespective of the local unemployment rate--the argument being that everybody is at risk of unemployment regardless of the unemployment rate where they live, but it is easier for people to find jobs where unemployment is low.

[Gord Brown, Conservative, Leeds—Grenville, ON]

So you are supporting the main push of this bill, which is the 360, but you don't have a problem with there being variable entrance requirements for the duration. Thank you. I wanted a clarification on that.

I was very interested in some of the points that were made. I come from a business background, in the lodging and food service industry, as Mr. Godin knows--I explained that before when he was in front of the committee--so I understand many of the challenges. Also, from an investment side, I was very interested in some of the points that Mr. Cirtwill had.

Maybe you could expand a bit, Mr. Cirtwill, on this concept of a disincentive to work, and also how it is causing less likelihood of business investment.These are pretty important things. I come from the viewpoint that if the jobs are there on a year-round basis, people would rather work.

I was quite offended when I heard you talking about people from certain parts of the country being lazy, because my experience from the people who have worked in my business is that they want to work. I know when money is available that business owners invest in their companies and put people to work, and then they don't need to access these services.

I have one more point. In my area, there have been some layoffs in the manufacturing sector. I am very interested in hearing a bit more about how those who have been working for a long time could quite possibly get the better benefits, because those are the people who are having a tougher time transitioning back into the workforce.

Those are a few questions that I've thrown in. If others want to get in on some of those questions as well, I'd be happy to hear from them.

[Charles Cirtwill]

That's certainly a pile of concepts to address, so why don't I get at a couple of things without trying to highlight my bias or give you opinions.

First, on the side of the disincentive to work, it's not, again, as I said earlier, a question of people being lazy. It's a question of people doing what people have done since the dawn of time, which is to make logical assessments about what is in their best interest to do or not to do.

So if you take a look at the 50-year study that I referenced, looking at Maine and New Brunswick, what you find is a long-term trend of higher rates of the use of the employment insurance system, a higher take-up, a higher dependence on it, and that is for both the young working-age males and, disturbingly, women. Unfortunately that seems to be the case throughout all of these numbers, that women and other marginalized groups tend to take the brunt of these kinds of things.

On the investment side, again, to point to a concrete study, the analysis that was done by our institute following the changes that were made in the mid-nineties demonstrated that what you saw as a result of people having lower disincentives to work--in other words, that we didn't pay them quite as much and we didn't encourage them quite as much not to take those opportunities or not to look elsewhere for opportunities--is a raw increase in the number of employment. So you saw more jobs being created, more investment happening. Again, those changes were only in place for a very brief period, so the ability to extrapolate those preliminary findings to something larger is very difficult. But at least the preliminary trends were there.

So on the data side, I think that responds to both your question around investment and the question on the disincentives to work.

On the issue around the additional payments or the concept of rewarding people for long periods of time in employment, I unfortunately do not have any numbers on that. We haven't done an analysis on that exercise, but I think that with many of the comments we've heard here around the fact that EI has to be changed, it has to reflect the new reality of the economy, that it's not simply an exercise where everybody has a 30-year job and we need to have a program that helps them transition from one 30-year job to another. That's where we get into the exercise of whether the incentives are right in the structure.

I don't think this bill or its other two complementary bills, which are tinkering around with little pieces of it, are going to solve the EI problem. I think we need to take a serious look at the issues these folks are raising around women and aboriginal and visible minority groups, but we also have to take a serious listen to the concerns around the business groups, and ask, do we need to start from scratch with this legislation?

[The Chair, Conservative, Dean Allison]

That's all the time we have. We're going to move on. We're going to have Mr. Lessard, from the Bloc, for five minutes, sir.

Mr. Lessard.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Thank you, Mr. Chair.

This isn't getting any better. Mr. Cirtwill is saying it's not that they are lazy, but those who are the least well-off take advantage of the system. That is the take-home message. And that message is getting worse. Someone said that statistics are weak by nature and that, if need be, they can be twisted to say anything you want them to say. And that is kind of what our colleague Mr. Lake did earlier. The premise of what he said was that the employment situation had improved because of steps to tighten employment insurance eligibility criteria and that, by extension, this had also had a positive impact in terms of poverty levels. Did I understand you correctly?

The United Nations' social measures committee observed the situation in different countries and indicated that when you compare statistics on poverty in Canada from 1990 and today, clearly the situation hasn't improved. There are not more poor people, but those who are poor are poorer than they used to be. It has been observed recently that there are an increasing number of poor people who have a job. Even though they work, they use food banks. The highest use of food banks among workers is in Alberta. It is 17% in Alberta, whereas the national average is 14%, with 13% in Quebec. So when you make those kinds of comparisons, you always have to work from the same points of reference.

Mr. Lake asked a question. It's always very interesting to listen to what others have to say because it helps us understand what might motivate their decisions, especially when those people are in power. And these people aren't listening. They're asking the unions and groups representing the unemployed what studies they're doing and what recommendations they have to improve the employment situation. 150,000 people have lost their jobs over the past five years in the manufacturing sector in Quebec alone. From what I understand, the unions and groups representing the unemployed have solutions. These solutions have even been brought before the House of Commons, but you have refused to entertain them. Why aren't you listening? You criticize them for not bringing forward solutions or recommendations. But clearly, you're not listening if you're playing with your BlackBerry.

It's the same situation in the forestry industry. There are 25,000 people who lost their jobs in the forestry sector. And what was the Conservatives' answer to this? They didn't listen. There was nothing for this industry in the budget. And that's also what we are trying to get at. When you talk about the unemployed, you're talking about people who have not got the help they logically needed from their government, which has meant they have lost their jobs. It is not just a coincidence that they lost their jobs. The 25,000 forestry workers want to work. They have demonstrated, and last week, about a hundred of them went to Mr. Blackburn's office. These people want to work. But they're not being given any work, and all they're being told to do is go and work in Alberta, uproot themselves, and live in poverty in Alberta and have to use food banks.

I want to hear what our friends have to say on this matter. Am I mistaken when I say that you have made recommendations despite the fact that they say you've done nothing in this regard?

[The Chair, Conservative, Dean Allison]

Okay, who wants to answer that? You have about 45 seconds.

Ms. Byers, did you want to take a crack at that?

[Barbara Byers]

The question, as I understand it, is what do we do about...? Well, I mean....

[France Bonsant, Bloc, Compton—Stanstead, QC]

What's your recommendation?

[Barbara Byers]

What's our recommendation?

Our recommendations are these. First of all, you have to include access. We have to extend the duration of benefits and the level of benefits. We have to get back to a system that works for the unemployed during their times of unemployment, whether it's regular benefits or special benefits. And we have to increase the active measures as well.