Evidence of meeting #27 for Human Resources, Skills and Social Development and the Status of Persons with Disabilities in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was surplus.
A recording is available from Parliament.
Conservative
Jacques Gourde Conservative Lotbinière—Chutes-de-la-Chaudière, QC
Subsequently, the rates stood at 3% and 4.7%, which means almost 8%, for several years. Did it take four or five years before the rates began to go down again?
Director, Social Policy, Federal-Provincial Relations and Social Policy Branch, Department of Finance
I think that the rates began to go down fairly quickly. We could provide you with detailed information about this in a few hours or in a few days.
Conservative
Jacques Gourde Conservative Lotbinière—Chutes-de-la-Chaudière, QC
Very well.
There was a period of liability followed by a period of assets, and then there was a surplus in the fund. Was the amount of $54 billion higher than the amount of the previous liability, or was there some exaggeration?
Director, Social Policy, Federal-Provincial Relations and Social Policy Branch, Department of Finance
Once again, these are very specific questions that reach far back into time. I should do some research before answering you. I am afraid that I might mislead you, but I believe that, based on the Auditor General's recommendation, the government did, indeed, consolidate the figures. They show the balance accumulated from the time when the amounts were consolidated almost up to now.
Conservative
Jacques Gourde Conservative Lotbinière—Chutes-de-la-Chaudière, QC
Consequently, our initiative to create a board will allow us to put an end to this accounting game so that the money will be entirely available to the employees and employers, and so that the funds that were used and that are being used for employment insurance will come back to the contributors.
A minimum rate of 15% was mentioned. Could the rate go down to only 10% during any year? The rates will most likely be changed in 10% increments.
Director, Social Policy, Federal-Provincial Relations and Social Policy Branch, Department of Finance
Fifteen does not stand for a percentage, but for the amount of 15¢. It is a maximum. Therefore, it would go down as far as 1¢.
Conservative
Jacques Gourde Conservative Lotbinière—Chutes-de-la-Chaudière, QC
It could go from 1¢ to 2¢, but the maximum would be 15¢. In other words, with the previous surpluses, we could have had amounts below $1, if the money had not been returned to the Treasury.
Director, Social Policy, Federal-Provincial Relations and Social Policy Branch, Department of Finance
With an exceptional improvement in the economic climate, it would be theoretically possible.
Conservative
Jacques Gourde Conservative Lotbinière—Chutes-de-la-Chaudière, QC
If things get much worse in an exceptional way, it will take several years before the board runs into deficits, because we have a 15¢ maximum.
Director, Social Policy, Federal-Provincial Relations and Social Policy Branch, Department of Finance
This is possible, however, as we heard earlier, the government guarantees the payment of benefits. As this program has already been legislated, a person is eligible regardless of the amount held in the reserve or the amount that is no longer in the reserve. The government, the federal Treasury, guarantees the payment of all the benefits to eligible persons.
Conservative
Jacques Gourde Conservative Lotbinière—Chutes-de-la-Chaudière, QC
Someone mentioned a $2 billion reserve indexed at a rate of 2 or 3% per year.
Director, Social Policy, Federal-Provincial Relations and Social Policy Branch, Department of Finance
I gather that this is so, because of the consumer price index or some other index determined by Statistics Canada. Currently, it stands at about 2% per year.
Conservative
Jacques Gourde Conservative Lotbinière—Chutes-de-la-Chaudière, QC
Mr. Chairman, I find it hard to hear the witness. Everyone is speaking at the same time. I rise on a point of order. I listen to the others when they speak. Could you rule on this?
Conservative
The Chair Conservative Dean Allison
If we could all keep it down, that would be great.
Okay, go ahead, Jacques. You're almost out of time. You've got another 10 seconds, sir.
Conservative
Jacques Gourde Conservative Lotbinière—Chutes-de-la-Chaudière, QC
The indexation percentage will come straight from the Treasury, and not from the surplus in the fund.
Director, Social Policy, Federal-Provincial Relations and Social Policy Branch, Department of Finance
I think that it will come from the fund, so as to maintain the reserve at an appropriate level.
Conservative
Jacques Gourde Conservative Lotbinière—Chutes-de-la-Chaudière, QC
We are talking about $2 billion maximum. The amount could be raised to $2.1 billion, and the money would come from the premiums.
Director, Social Policy, Federal-Provincial Relations and Social Policy Branch, Department of Finance
This is the way I understand it.
Conservative
Conservative
The Chair Conservative Dean Allison
Thank you, Mr. Gourde.
We're going to move to Mr. Martin.
Mr. Martin, since you missed your first round, I'll give you a few extra minutes here, just as long as there are not too many complaints from the rest of the committee.
Go ahead, Tony.
NDP
Tony Martin NDP Sault Ste. Marie, ON
I'll try not to be too controversial, then.
The reason I was late coming this morning.... This is a very important topic and I did want to be here. I appreciated Mr. Savage moving a motion that we would study this new initiative by the government on EI. I have a number of questions.
I just came from a press conference, where we were looking at the results of a study released this morning by Statistics Canada that indicates that the top 5% of Canadians have gotten much richer over the last few years and yet the bottom 20% have lost ground. Their salaries have gone down; their purchasing power has gone down. What we're seeing in some parts—particularly in Ontario now with the big hit to the manufacturing sector—is that many, many people who paid into EI over the years don't qualify anymore for this insurance they thought would be there for them when they got themselves into some difficulty.
Many are falling off of the EI wagon a lot sooner than they expected or anticipated, and the economy isn't recovering sufficiently that they can get another job, particularly a job that reflects their skill, their experience, their knowledge, and their background. It seems there are lots of jobs beginning to evolve in the service sector, in call centres and that kind of thing, that pay anywhere from $10 to $15 an hour. But the $20 to $30 an hour jobs seem to be disappearing, and people are struggling.
I was just wondering, when this decision was made, if there was any analysis. Mr. Giroux said earlier—I was a little surprised that he would make such a loaded statement—that this is going to be good for Canadians. This move to this new system of managing the EI program and fund is going to be good for Canadians. I suggest that what we're doing is buying in ever more and more to a notion that if we simply allow the market...and use labour strategy initiatives to deal with unemployment, poverty, and social inequity, things will actually get better. The statistics are now showing that things are in fact not getting better, but that they're getting worse for a large group of people. The gap between the rich and the poor is growing.
In making this decision, was there any analysis done as to the social impact overall of this change that we're hearing about here this morning?
Director General, Employment Insurance Policy, Department of Human Resources and Social Development Canada
In fact, the change we're proposing is not linked to the benefit. We didn't look at what the impact on benefit could have been, because the change was about how we'd be setting the rate going forward, to ensure that the money collected would be used only for EI purposes.
NDP
Tony Martin NDP Sault Ste. Marie, ON
And money in the past was used for various programs across the country to help different groups. Sometimes there was a special pilot program put in place where there was a particularly difficult economic time. How will this affect that kind of programming and those kinds of decisions with this one?
Director General, Employment Insurance Policy, Department of Human Resources and Social Development Canada
The new legislation will not affect the way the decision will be taken for whether we need to do a new pilot or.... That would rest within the EI Commission and the government.