Human Resources Committee on May 8th, 2008

[Judy Sgro, Liberal, York West, ON]

I'd really like it if we could move that forward, because otherwise the report may have a lot of things in it that aren't necessary. If we can get some answers, we can be reassured as a committee by also being able to pass on the information to the witnesses so that some of their concerns may be allayed.

All current and past governments have spent a huge amount of money on training programs, pilot projects, and so on to help people who find themselves unemployed. The concern I have is the training and so on. We keep hearing about all this money, but frankly it's money that was paid in premiums that has been reinvested in Canadians, providing them job opportunities, training, and so on. Do you think the contributions collected from employment insurance contributors should be used exclusively to go back into paying benefits or should they be used to help in the training programs that are required by many Canadians?

[Robert Blakely]

I support using the money for benefits and for training. If you look at the promises held out in part II of the act and you look at the use of money for training--for apprentices, other forms of training programs, and industrial adjustment--the five vehicles that were set out in that act are essential to growing a replacement for the baby boom generation here in Canada. We're not going to have people to design buildings and build them if we don't replace them now.

[Judy Sgro, Liberal, York West, ON]

Does anyone else have a comment on that?

[The Chair, Conservative, Dean Allison]

Mr. Jackson.

[Andrew Jackson]

I absolutely agree with what was said. The concern here is that if we enter an economic downturn and the premium revenues are not generating enough revenue to pay for benefits and the approved training, what is going to happen?

If you go to proposed subsection 80(1) of this bill, the way I read it, it says that if expenditures under the EI program--that would be for regular benefits, parental benefits, and training, part II expenditures--exceed the revenues, the minister “may authorize” an advance to the new board to pay for the program. I think that is a dilution of the current understanding, which is that the EI statute provides eligibility for benefits. It provides for active measures. And that “may” should read “shall”, especially with a $54 billion surplus.

[Robert Blakely]

One of those active measures is the fact that every apprentice or trainee in an approved program gets paid EI to go to school, because these learners are doing it in short sharp periods, usually in the middle of their work season.

[Judy Sgro, Liberal, York West, ON]

You indicated your concern with whether it was necessary to set up a separate crown corporation. We've been hearing this argument about EI for a very long time. The government has chosen to go this route, establishing a crown corporation.

How would you like to have seen it? If you're concerned about a crown corporation and the administration costs that we'll suddenly be dealing with, having to pay the payroll for seven more people who are going to have to be paid and all that is involved with a crown corporation, what would you like to have seen done in order to be able to deal with this whole continued discussion about a $54 billion surplus? How would you like the government to handle that?

[The Chair, Conservative, Dean Allison]

Mr. Campeau.

[Georges Campeau]

I suggest, for the reasons that have been stated, that it be clearly stated in the Act, maybe in a preamble, that the Parliament of Canada has a constitutional obligation to the jobless and to workers. As we said earlier, this is a social insurance scheme. The premiums collected under the employment insurance program have to be used exclusively for the purposes set out in the Act.

This case has taken 15 or 16 years; the Supreme Court is going to decide the issue next week. The government's jurisdiction in relation to employment insurance comes from a constitutional amendment that goes back to 1940. At that time, the provinces agreed to give the federal government jurisdiction over the unemployment insurance scheme.

Does using premiums for other purposes, at the expense of the protection that the scheme is supposed to provide for the people who pay into it, meet Parliament's constitutional obligation in relation to employment insurance?

For the reasons I stated earlier, in particular the perverse effect, this has to be clearly included in the preamble to the Act, and the wording has to be based on that first principle.

[The Chair, Conservative, Dean Allison]

Thanks.

[Judy Sgro, Liberal, York West, ON]

Thank you.

[The Chair, Conservative, Dean Allison]

That's all the time we have.

I know Mr. Valois wanted to make a quick comment and I saw Mr. Céré's hand, so maybe a couple of quick comments. We'll start with Mr. Valois and then wrap it up and move on to the next presenter.

[Roger Valois]

The discussion we are having at present would not have taken place if the employment insurance scheme had done its job. The primary purpose was to pay unemployed people properly when they are unemployed. If the employment insurance fund had done its job, the discussions we are having about the surplus and what it should be used for might not have taken place. We have to improve the scheme and ensure that the unemployed... That is what we will be starting to argue on the 13th. I will not argue to the contrary this morning.

We are going to file all the letters and discussions that took place among Mr. Duplessis, Mr. Mackenzie King and Mr. Bennett with the Supreme Court. Today, we have surpluses because the fund did not do its job. If there had been no surplus, we would not be talking about what is being done with it. They are stealing from the unemployed, they are putting money in the fund and they don't want to give them any. Then they wonder what to do with the surpluses. This is a question of philosophy. The fund has to be used for the unemployed. That is the purpose for which it was created. It isn't complicated. If we had no surplus, we would not be talking about it. The surpluses have had a perverse effect because the unemployed did not get what was coming to them when they needed it. That is the problem.

[The Chair, Conservative, Dean Allison]

Mr. Céré, a quick comment.

We're moving very quickly around here, I understand that.

[Pierre Céré]

I am going to start from a little farther.

There are some political experiences in the world that sometimes teach us things. When we were writing our submission, one of the things we had in mind was a great politician, Nelson Mandela, who taught us that reconciliation has a price. The price is truth. Only when the truth has been determined can there be reconciliation.

What we think is that our institutions, our laws and our peoples, in Canada, must never forget what can be called one of the great Canadian financial scandals of the 20th century. Billions of dollars in premiums paid into the employment insurance scheme have been siphoned off. The Consolidated Revenue Fund has a debt of $54.1 billion that it owes to the Employment Insurance Account. That has to be included in the Act. We have to continue to carry that figure on the books for as long as it has not been paid back.

[The Chair, Conservative, Dean Allison]

Thank you, Mr. Céré.

Mr. Lessard.

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

Thank you, Mr. Chair.

I would also like to thank the organizations who have testified and assure them that their testimony will be very useful as we continue our work.

For the information of our guests, this committee unanimously recommended, in December 2004, that the amounts that had been siphoned out of the fund be returned — and it was indeed unanimous — at the rate of $1.5 billion per year, and that that amount be considered to be a loan on the same basis as money borrowed by the Canadian government on the financial market, that is, at the appropriate interest rates.

I am still persuaded that this is the approach to take in order to do justice to the people to whom that money belongs. Since we started looking at this question, there has been a discordant note in the testimony. Overall, the witnesses have been relatively reserved and critical of the Canada Employment Insurance Financing Board. You have stated a number of opinions, but there is one that is quite pointed.

MASSE said that the bill must not be passed. Apart from the philosophical question, in practical terms, I would like to know why your comment is so pointed. We understand that the other organizations are in favour of the bill, because in their minds it represents a step forward. A separate account is being created that will be used, from now on, only for the purposes of employment insurance, with the exception, of course, of the famous reserve, which will continue to be part of the Consolidated Revenue Fund, and will have to be used strictly for reducing premiums. We agree with you on that and we will come back to it.

Apart from the philosophical question, why do you not consider creating an independent account that will be used only for employment insurance to be a good thing?

[Georges Campeau]

We completely agree on the need to improve the scheme, while taking the surplus into account.

What is the government proposing? These two items are being kept completely separate. It says there will be a board. I know that this is a very technical subject, but there seems to be a lot of confusion between the board's bank account and the employment insurance account. It has to be very clear that the employment insurance account will continue to receive premiums and manage benefits. What will the board's role be? It is completely separate from coverage. In fact, that is the criticism that most people have voiced. There is no desire to improve the scheme; the board is being kept completely separate, as part of a self-financing scheme.

Financing and coverage are achieved out of premiums and benefits. But the mechanism freezes it, that is, there will be no new inputs. What is going to be done with the $54.1 billion surplus? As far as I can understand, the government doesn't want to talk about that now.

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

Everyone agrees, with the exception of one discordant voice, that the $54 billion has to be put back. No one has said that this was an end of the $54 billion; on the contrary, they are saying they are going to continue to fight for it.

The Commission is going to ensure that benefits are in compliance with the department's decisions, and the board will manage premiums. We are in agreement there. This is clear, and the Minister came here to say it again. He also said clearly that he wanted to use the surpluses to reduce premiums.

Would your position be the same if responsibility for the independent account were given to the Commission?

[Georges Campeau]

I am having some difficulty understanding what difference there would be. In fact, Mr. Céré talked about the legislation that has been in place since 2005. That could be achieved under the current legislation, as long as the government made a firm commitment regarding the Employment Insurance Account.

There is some sort of confusion between the board's account and the Employment Insurance Account. It isn't the same thing.

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

But...

[Georges Campeau]

Creating this board, with no commitment to refinance the scheme, is going to lock the scheme in at its present level. I read in the papers that at the committee's last meeting, the Conseil du patronat called for a premium reduction. What will the consequences of that be?

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

I am going to restate my question. Apart from the mechanics, do you agree with the idea of an independent account?

[Georges Campeau]

On the actual fundamentals, I don't think it is necessary within the framework of the employment insurance scheme.

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

You prefer for the scheme to be administered by the Consolidated Revenue Fund.