Human Resources Committee on April 1st, 2008

[The Chair, Conservative, Dean Allison]

I call the meeting to order. I'd like to welcome everyone back.

Pursuant to the order of reference of Tuesday, October 16, 2007, we are continuing with Bill C-265, An Act to amend the Employment Insurance Act.

A couple of weeks ago we started with the numbers and then we deferred. It's like Groundhog Day; we're starting all over again.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Can we discuss the schedule, since we're back? We had talked of possibly having a subcommittee meeting later as part of this. Do you have a sense of when that might happen? I see Tony is here; he's probably going to be leaving shortly.

[The Chair, Conservative, Dean Allison]

Nothing is planned for Thursday. My suggestion was that we meet Thursday to adopt a work plan for the poverty study. We have your motion to look at later on, Mike, if you still want to bring that forward. I was thinking that as a committee we come up with a work plan on Thursday. That was my thought for poverty, as we move forward. All we're going to do is have a subcommittee meeting, and we could do that. We could meet Wednesday and talk on Thursday. But as a group we all decide anyway. So I'm open to suggestions.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

My suggestion would be to have a subcommittee meeting, maybe on Wednesday--it wouldn't have to be very long--and then bring it back for discussion on Thursday. That would work for me. I don't know about other people.

[The Chair, Conservative, Dean Allison]

Is that okay? We'll get that figured out. Thanks.

I want to welcome back department officials, Ms. McLean and Mr. James. Thanks again for being back today.

Let's get right into it. I know people have had a chance to look at the numbers. Now we're going to start our clause-by-clause consideration.

Are there any other points of discussion before we get started?

Go ahead, Monsieur Godin.

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

Thank you.

When we say $320 million for the best 12 weeks compared to 14 weeks, we are not talking about the difference between the two, 12 weeks and 14 weeks, we are talking about the cost of the whole program, are we not?

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

Yes, that's correct. It's important to distinguish that the cost of the pilot project for the best 14 weeks that I've provided was the cost estimate when the pilot was introduced. We don't have the final numbers for that yet. But the cost estimate that has been provided for the best 12 weeks, because it involves different regions and a different number of weeks, has been costed separately. To clarify, those are separately costed; they're not added or subtracted.

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

Thank you.

[The Chair, Conservative, Dean Allison]

If there are no other points of clarification at this point, we'll continue with clause-by-clause consideration.

(Clauses 1 and 2 agreed to)

(On clause 3)

[The Chair, Conservative, Dean Allison]

We have an amendment to clause 3. I will read the amendment and then Mr. Savage can move it. It is moved that Bill C-265 in clause 3 be amended by replacing lines 1 to 8 on page 2 with the following:

3.(1) The table to subsection 7(2) of the Act is replaced by the following:

And it has the chart for the regional rate of unemployment as well as the required number of hours of insurable employment in the qualifying period.

Are there any comments on that?

Go ahead, Mr. Godin.

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

Mr. Chair, I am telling my colleagues that I will not be able to support this amendment. We must recall that, in the 1996 reform, major cuts were made to employment insurance. At that time, to be eligible for EI, you needed 150 hours at 15 hours per week. The real victim of the sweeping changes made in 1996 by the Liberal government of the time was seasonal industry. Not only were the workers in that industry ineligible, but the industry also lost many people who could no longer work in areas like fishing, forestry or tourism.

In tourism, for example, the situation in my province is not like in Toronto or Vancouver where there are tourists year-round. In New Brunswick, the tourist season starts when school is out in the middle of June and ends after National Acadian Day on August 15. According to Statistics Canada data, only 32% of women who contribute to employment insurance are eligible. One of the reasons is that women often work 20 hours per week. So they can never reach the 910 hours that are required, not even 840 hours.

On a cross-country tour, I remember the case of a woman in Vancouver who fell ill after three years in the workforce. She fell into a coma and was hospitalized for 10 days. Afterwards, she did not work for about three months. When she went to claim employment insurance, she had accumulated 698 hours. She needed two more hours to be eligible. Since that time, the government has reduced the requirements from 700 to 600 hours. Even so, even at 600 hours, there are still people who do not qualify.

As to the bill, I appreciate that the department has finally provided the costs for us to study. Even so, there is a surplus of $57 billion in the employment insurance account. The government now wants to create a Crown corporation in order to legalize the theft of $57 billion dollars from the employment insurance account. That money belongs to workers, to employers and to businesses. Employment insurance exists in order to help people who run into difficulties when they lose their jobs.

For all those reasons, I will not be able to support the Liberals' amendment. A bill dealing with this issue has already been adopted, a Bloc bill where this understanding was already presented. This bill goes to the heart of employment insurance, that is, whether people qualify or not. We can make all the changes we like to employment insurance, but if people do not qualify, they do not qualify. I often hear western Canadians say that people just have to go out west to work.

Another experience we have involving the workers going to the west to work is that, for example, if a person leaves home to work in Alberta—and there are real examples of this—and has an accident on the job, he cannot stay there, because he was working and staying in the camp. He will go back to New Brunswick, for example, and after that, compensation will say, “I'm not going to pay you”, or “I'm going to stop your payment”. It's pretty hard for him to go back to Alberta to fight this case, because we don't have ways of dealing with these situations across all the provinces. It's pretty hard for people, and it doesn't fit all situations with justice.

It's not the answer, that all should go and work in Alberta. We want to save our area. We want people to stay in our region and be able to create economic development. If you don't want reliance on employment insurance, you must work on economic development. Put people to work, and automatically they will be off employment insurance. I say nobody's lazy in our country. We have very good Canadians all across the country.

I grabbed the flight on Monday morning, for example. I think there were probably only six of us on the plane flying on business. The other 30 people on the plane were all going to Alberta to work, and that's every day. They go for twenty days in, eight days out. People are going to work in Alberta, but we can't force everybody to go there. We don't want to move the Atlantic to Alberta.

At the same time, as a country we have to support each other to be able to create this atmosphere of job creation, of economic development and good jobs—not just minimum-wage jobs—where people feel good: they can go to work in the morning and feel very proud of what they have done and can feed their families and be happy. That's what Canada is all about.

This has hurt working people, and that's why I say I cannot support this. I think if we don't go this way, it's a deportation of the Atlantic to other places in the country, and it is just not acceptable.

And it's not only the Atlantic. If you go to northern Ontario.... I went to Hearst, I went to Kapuskasing, I went to Timmins. They have the same problems there too when they lose their jobs, with some of the seasonal work when the mills close down and those types of jobs, or in tourism.

Thank you.

[The Chair, Conservative, Dean Allison]

Thank you, Mr. Godin.

We're taking a list here. I have Mr. Lessard, Mr. Savage, and Mr. Lake.

I just want to read this into the record so that people are aware.

As all members are aware, the Speaker was called upon to render a decision as to whether certain provisions of Bill C-265 would infringe on the financial initiative of the crown and consequently require a royal recommendation.

In his ruling on March 23, 2007, Speaker Milliken stated:

I have examined the bill carefully and find that the changes to the employment insurance program envisioned by this bill include lowering the threshold for becoming a major attachment claimant to 360 hours, setting benefits payable to 55% of the average weekly insurable earnings during the highest paid 12 weeks of the 12 month period preceding the interruption of earnings, and removing the distinctions made to the qualifying period on the basis of the regional unemployment rate.

It is abundantly clear to the Chair that such changes to the employment insurance program, notwithstanding the fact that workers and employers contribute to it, would have the effect of authorizing increased expenditures from the consolidated revenue fund in a manner and for purposes not currently authorized.

We have a proposed amendment before us that does not remove the requirement for the royal recommendation. The final decision, however, will rest with the Speaker of the House, so for the purposes of our meeting today, the amendment is admissible and will be put to the decision of the committee after debate.

I just wanted to get on the record again that we are talking about the amendment. It does not remove the royal recommendation, but we are going to discuss it and we will continue to move forward on that process today.

I will continue with the list. I have Mr. Lessard, Mr. Savage, and Mr. Lake.

Mr. Lessard, sir.

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

Thank you, Mr. Chair.

I feel that one fact has radically changed things since the Speaker's decision on Bill C-269 specifically. At the time when the Speaker made that decision, the account was recognized as part of the CRF. Given the budget proposal and the creation of a separate account administered by a board, it seems to me that it is no longer the Speaker's place to decide whether it is admissible under the government's budget prerogatives. He can make a decision about the rules of procedure, but not about the administration of the CRF, since these amounts will no longer be administered from the CRF. My objective here is to tell you that as soon as the debate on this matter has taken place, that decision will have to be looked at quite differently.

Furthermore, we will not be able to support the amendment put forward by our colleague Mr. Savage. The merit of the amendment is to try to come to some common position before the House. We went through that exercise when we were studying Bill C-269. At that time, we agreed to request a reduction of 70 hours, in a real effort to come to a compromise. We realized that, really, the exercise was not about getting the figures to balance or anything like that, it was about deciding whether we had the will to improve employment insurance and whether, as a system, it required major changes. That is the question, Mr. Chair.

We also ask ourselves if it would not be worthwhile to use this opportunity to do away with regional disparities and inequities, using not a percentage unemployment rate, but rather the specific reality of people who lose their jobs. That reality is the same for mothers or fathers who have lost their jobs whether their region has an unemployment rate of 12% or 7%. They no longer have an income, but they still have the same family obligations every day. That is the situation that I urge our Liberal colleagues to consider. Has the time not finally come to take corrective action? Maybe the action is not major, but it may at least be right.

To date, the arguments that have been made to us have dealt with contributions to the account. The Conservatives have the right, given that it is the ideology they hold dear, to believe that taxes must be cut and fewer support services must be provided to the least fortunate in our society. The same principle applies to the employment insurance account. They want to target the premiums but not the benefits because they are not important; that is the law of the free market. If someone loses his job, it is no one's fault. The person has to deal with it and find another job. I am not going to get into a debate on that, but, as I am sure you know, there is no escaping the facts. The facts are that these people no longer have an income and they cannot go and work somewhere else because there is no work for them. Those are the facts and there is no changing them. What can be changed, however, is the way we support these people.

With all due respect to our Liberal Party colleagues, I remind them that when the time came to ask the Prime Minister to arrange for royal assent for Bill C-269, they stalled, they did not proceed. That was their right. They have changed their minds, I suppose. I do not know. Whatever the reason, we could not get to that stage. However, I remind them how we really tried to join forces in order to make the Conservatives change their position.

In all sincerity, I understand the Liberals' concern. They tell themselves that if they get back into power one day—and the way the Conservatives are carrying on at the moment days, it could happen—they do not want to be stuck with something that they cannot manage. But they can manage it, Mr. Chair. When people started slashing premiums, they were at $3.10 or $3.20, I believe. When we held hearings with our friend Mr. Cuzner, everyone said that a premium of around $2.20 was manageable. The only sour note on the other side was that employers said that they wanted to contribute the same as employees. That debate is always the same.

At the moment the premium drops below $1.80, it is not about premiums any more, it is about supporting people who have lost their jobs. We are now discussing one of the ways that will allow us to do away with regional discrimination. That mainly affects women and young people. We know what effect the percentage has from one region to another. Let us do something, Mr. Chair; after all, we are not talking about a large amount of money. We are talking about 320 hours, which means $200 million. In the worst case, according to the 2004 figures, it would be $390 million and that would affect 90,000 unemployed people. The money is in the account.

I am going to stop there, Mr. Chair. I am asking our Liberal friends to keep this measure specifically. With it, we can really begin to revive employment insurance.

[The Chair, Conservative, Dean Allison]

Thank you, Mr. Lessard.

Now we're going to move to Mr. Savage. I still have Mr. Lake on the list as well.

Mr. Savage, sir.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Thank you, Chair.

This amendment we have put forward brings Mr. Godin's bill, Bill C-265, more in line, on the specific issue of regional rates of employment, with Bill C-269, the Bloc bill, which came about after a lot of discussion among opposition parties and some discussion with labour groups who feel we need to move forward on EI.

For a long time, the Bloc and the NDP have put forward bills on EI that haven't really gone anywhere. There's a recognition that we need to work together, and if there's going to be a change in government, it's going to be the Liberal Party that comes in and improves EI. And I believe we have to.

Throughout these hearings, the short hearings we've had, I've asked witnesses what their priorities are for EI, because there are so many. Every year we have a surplus. It wasn't always the case. There was a point in time, just over a decade ago, when we were spending $2 billion, I believe, more than was coming in. That's one of the reasons changes were made. Employment insurance has become a very important part of the social infrastructure of Canada. Some people don't like it. I suspect that there are many members on the government side who aren't keen on any changes to EI that would put money back into the families of workers who need it. But we have to prioritize what we're going to do.

There are a lot of ways we can improve EI. Some of the pilot projects have addressed this. We can look at the two-week waiting period and what they call the five-week black hole on the back side of employment insurance. We can reduce qualifying hours or increase benefits. What about Mark Eyking's bill, Bill C-278, which everybody who appeared before this committee said was entirely sensible and reflected the reality of health care at this point in time in Canadian history when people are living after having cancer interventions and after having strokes and heart attacks and need a longer period of time on EI? To me, that should be a priority for the employment insurance system. That's another cost of $600 million or $700 million. I can't remember exactly. I think it's a very valid cost.

How do we get to the part-time workers, largely women workers, who don't access EI as much as they should? What about self-employed people who don't have access to EI, and money for training under the program?

There are a lot of things we need to do with the employment insurance system. We believe it's time that some of the annual surplus be utilized to the benefit of workers.

We have a specific concern, though. As you can see, when you reduce to a flat rate of 360 hours, the cost is pretty significant. We propose, as a start, reducing by 70 hours across the board. But keep the regional rates. Mr. Godin and Mr. Lessard quite correctly have a concern about people in high unemployment areas. This is to protect those people. They are the people in the fish plant in Mr. Cuzner's riding or the people in the forestry industry who are out of work and simply don't have access to jobs without moving. And we don't want to force Canadians to move. Many of them will move to where the employment is better. But it's a real concern that if you get rid of the regional rates of unemployment, and cuts have to be made, it'll be those areas that are hurt disproportionately, and we need to be very concerned about that.

We've asked for priorities. We've identified ours. We want to make changes to EI that we think are reflective of the reality of the workplace today, including the fact that this country could be undergoing an economic recession, or certainly a slump in industries like forestry and manufacturing. We need to have that money.

Mr. Lessard mentioned that our leader didn't support Bill C-269. I think he was referring to the royal recommendation and appeal. That wouldn't have done anything, but I would remind him that every Liberal in the House of Commons voted for Bill C-269 at final reading. Every Liberal in the House of Commons voted to send Mr. Godin's bill to this committee so we could give it some prudent oversight.

We think it's time for employment insurance to reflect the fact that workers have not benefited. Employees have had a reduction in benefits over the last ten years, I think by almost half the premium rate. That's good. We want to be fair to both ends, but we haven't done very much for the workers who have been hurt and continue to be hurt as the economy of Canada continues to concern people more and more all the time.

So we support Mr. Godin's bill. But we think this is a prudent and sensible way to go about making changes in EI, keeping in mind that there are many other things we would want to do as a government to make EI more accessible and more reasonable and to enhance the productivity of Canadians, not to detract from it.

These recommendations, in our view, reflect that.

[The Chair, Conservative, Dean Allison]

Thank you, Mr. Savage.

We'll go to Mr. Lake.

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

Thanks, Mr. Chair.

One of the things I want to point out, of course, is that the changes that have been made over the last 12 years to this legislation, to the EI legislation, by the previous Liberal government were some of the few good moves they actually made in their 13 years. Before Paul Martin became a shopaholic and went on a spending spree, these were good moves that they were making. Of course, the EI program was used, as Mr. Godin mentioned, as a slush fund, and there was a significant surplus year after year that was used to fund Liberals' special interests and their pet projects and things like that. Of course, we made some important changes to the legislation to make sure that doesn't happen again, to bring things into balance.

I think the key word, of course, is “balance” here, and thankfully right now we have a government that understands that and takes a look at a big picture instead of individual silos. The system as it stands right now with the changes we've made is a workable system.

I want to just take a look at the numbers. I'm looking at the numbers Mr. James prepared for us here, and the one that jumps out at me is the one where you take the combined Liberal–Bloc–NDP approach to the bill--table 4--that would cost an addition $2 billion per year if it were implemented. That's per year. That's not a $1 billion or $2 billion hit; that's $2 billion per year more than it would cost otherwise, and of course that's money that is paid into the fund by workers and by employers.

Mr. James, I have a quick question for you. Could you tell me how many workers actually pay into EI across the country?

[Bill James]

I don't have the exact figures in front of me, but it's approximately 15 million to 16 million workers who pay in every year.

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

So by doing some quick math on that, to fund just these changes alone, we'd be looking at probably $133 per worker per year more than what they would have to pay otherwise. That's pretty significant, and of course Mr. Savage did mention a few other initiatives that the Liberal Party has proposed to add costs to the EI program. So we're looking at basically increasing the contribution by workers significantly. I don't know how many hundreds they would have us increase the numbers by.

The spirit behind some of the changes that have been proposed is good. I would just note that for us as parliamentarians it's important to have priorities and to actually be able to focus on those priorities. If we try to do everything, we're not going to accomplish anything. I think that sums up the Liberal approach. It is trying to do everything at whatever cost and making whatever promises—we've seen this over the last year with their leader—with no real regard for the costs of any of the changes that are being proposed.

Here we see just an ad hoc bill that, with the amendments that have been proposed, is potentially going to cost workers $133 extra per year, if you average it out over the number of workers. And let's make no mistake that even though the employers pay a significant portion into it, it's the workers who ultimately pay for it. I think that's the approach we have to take when we're looking at this.

So it's $2 billion if we're looking at the Liberal–Bloc–NDP version of the bill--if they come together on that--and I think that's not sustainable.

[The Chair, Conservative, Dean Allison]

Thank you, Mr. Lake.

I have Mr. Cuzner, Ms. Yelich, and then Mr. Godin.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Having been back in the riding for two weeks, specifically seeking input on two different occasions from workers' groups, the people in my area continue to support regional rates. Certainly, with no disrespect to Monsieur Lessard and Monsieur Godin, whose opinions on the EI file I value greatly, a caring government tries to help those who need help.

I guess the ultimate goal is to have everybody engaged in the workforce and everybody contributing to the economy of the nation. That's the ultimate goal. I think the country has come quite a way in the last number of years in that regard.

But there still exists the reality that some Canadians do need help at times. There is also the understanding that most Canadians who are doing all right are willing to help contribute to the greater good, to the greater benefit of other Canadians. We see it in our bracketed income tax system, where those who are making more money or are doing better contribute more, to the benefit and greater good of the people.

We can apply the same principle here with the regional rates, so that in rural areas, whether they are coastal or northern or remote, wherever they might be, where it's more difficult to seize those job opportunities, for the benefit of the overall program and the sustainability of the overall program, the regional rates are still essential.

We had a change, with the unemployment rate continuing to go down—which is a good thing—but when you're on that line and drop below 12.5%, as one area in my constituency did, and the number of hours went up by 40 hours, or something like that, I can tell you that it put an unbelievable amount of stress on an entire community, and I don't just mean a geographical community. A lot of people from this area didn't know where they were going to get the 40 hours in order to make that happen. People would have been forced to leave the community, to leave their kids behind, whatever, to try to make those additional arrangements.

I fully support this amendment, and I would hope the committee would reconsider this, because this will have an impact on those communities that most need it.

[The Chair, Conservative, Dean Allison]

Thanks, Roger.

Ms. Yelich, then Mr. Godin.

[Lynne Yelich, Conservative, Blackstrap, SK]

I just want to ask Mr. James something, although I'd better have a correction first.

Mr. Savage, did you say it would disproportionately affect low-income or poor people if we didn't pass this amendment of yours? I didn't quite hear that.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

I was referring to the regional rates. It's my view that if you get rid of the regional rates and there are changes forced on the EI system because of the economic circumstances, those in the regions will be hurt disproportionately.

[Lynne Yelich, Conservative, Blackstrap, SK]

I'd just like a comment from Mr. James. In your experience, are they—the group Mr. Savage cited—exactly those who would be affected the worst?