Thank you, sir.
First, let me thank you for the report your committee put out in April, and particularly for recommendations 1.6 and 1.7, which deal with relocation and the ability for our industry, which is 12% of Canada's GDP, to be able to meet its manning needs by helping people get from place to place in the country. Thank you very much for that; we're obliged.
In principle we're not opposed to the idea of a crown corporation holding assets. In the past we've urged that as an industry, construction could run its own EI program; leave it to us and we'll run it. We are, however, opposed to the creation of the Canada Employment Insurance Financing Board. If you look at the proposed legislation, what is that board constrained to do? It sets the premium rate, invests the money, manages the money, and maintains the reserve--and it does this on a break-even basis. It isn't even clear that the $2 billion seed money is going to be part of a reserve.
The board of directors that is to be appointed as senior executives, the seven wise men from the financial and insurance sectors, have no power over EI. They are obliged to manage the EI premium rate within fifteen one-hundredths of a percent from year to year. Why bother giving them even that power? If it's fifteen one-hundredths of a percent, it is going to take seven years for them to change the premium by 1%.
If you look at a 15-year history of what has taken place with the EI premium rate, in 1994 the EI worker premium rate was $3.08. Today it's $1.74. This board has no ability to change anything. They could simply have something marked out in the fifteen one-hundredths of a percent and have Vanna spin the wheel and that would be close enough.
The character of the board concerns us. We participate nationally in a number of programs with government as a management and labour consultium. Someone needs to be on the board to represent the people who are paying for this money. The seven wise men, these men of property and wealth to whom God in his infinite wisdom has confided the direction of the wealth sector, are not likely ever to be on EI. The representative nature of a board like this with a constituency is important. The seven wise men with the ability to move fifteen one-hundredths of one percent are seven wise rubber stamps.
The board is to work on a break-even basis. The Auditor General, the chief actuary, and a number of other people have told us that the amount of cash in there needs to be $10 billion to $15 billion as a starting point. Will any significant downturn in the economy break the bank? With the ability to ratchet the rate up at a very responsive fifteen one-hundredths of one percent, how will the EI fund ever recover?
What is left is program restraint: there isn't enough money, so we'll just pay people less. It's why, in the past, we've seen up to 70% of EI claimants being unable to access benefits.
Nowhere in this implementation bill does it suggest that the Government of Canada will guarantee payments. A number of people would like to see an ironclad guarantee, because we've already paid it. We do not see this crown corporation as a flexible, responsive policy vehicle.
Insurance is a contract of indemnity against the happening of a specific specified event. I pay money into EI so that if I'm unemployed I can get a benefit. Without the ability of this board to be flexible and look at where the economy is at any given moment, it cannot deliver on that contract of indemnity.
What is going to happen with part II EI funding? We're the construction industry; we train over half of Canada's apprentices. We need to know that the money that is going into training will stay there. We need to know that the industry adjustment programs that are being funded will stay there.
Will training suffer at the expense of benefits? Will training simply not take place if the seven wise men can't determine how much money there needs to be to actually make the program work?
The EI fund grew from contributions from workers and employers. They deserve to understand that the Government of Canada will guarantee their benefits and will guarantee the part II training that is going on. People paid the money into EI not as a deficit reduction tax, not as a discretionary spending pots for a series of successive governments of Canada. People have paid money for value, and they deserve to receive value in benefits and in training. Training is the way of the future.
If you look at the neo-conservative agenda in the United States, there is a school of thought that says that if you cut off or curtail money to a program, the program withers. When the program withers, you then say, “It's not doing what it should do anyway. Why don't we just do away with this?” I don't like to think this is something that could happen here in Canada, because it's not the Canadian way, but this looks like and smells like and feels like a curtailment of the EI system that Canadians have paid for and enjoyed. We would urge you not to implement these provisions of the budget implementation process.
Those are my comments. I hopefully kept within my time.
Thank you.