Human Resources Committee on May 15th, 2008

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

And that the premium rates continue to drop through the 1990s, but that's part of the outcome, why we had the notated surplus we have.

[Garth Whyte]

Right.

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

But they did support the action that was taken in 2005 with the--

[Garth Whyte]

Yes.

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

Okay.

Where it says it's not meeting the needs, could you just expand on that? If you could wrap up with that, that it's not meeting the needs of business....

[Garth Whyte]

As you can see on the graph, EI and qualified labour, on page 14, we have been saying for years that the shortage of labour is becoming an issue. It's an issue. Now everybody is recognizing it, but we've been saying it for years, and I've met with many of you saying that--and the unemployment rate was going down. The system has been tweaked a little, I agree, but it hasn't really helped to offset. So we still have people who are looking for jobs and we have employers who are trying to fill those jobs. This to me could be a win-win. How do we get there?

And no one has that discussion when it comes to EI. People are afraid to open it up, to talk about it. We're very protectionist when it comes to EI policy. From our point of view, we think there's an opportunity here to help with people who are unemployed, to help with aboriginal policy. There are a lot of opportunities. We put forward a presentation yesterday. Corinne presented on immigration policy and where we think there can be a win-win. Yet that discussion is not there. So I wanted to put it on the table today.

We're looking at the board, but I do think part of this issue that has to be dealt with is fixing the program and getting closer to issues that will help employers in terms of their training needs.

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

Thank you.

[The Vice-Chair, Liberal, Michael Savage]

Thank you, Mr. Cuzner.

Monsieur Lessard pour sept minutes.

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

Thank you, Mr. Chairman.

Thank you for being here this morning to inform us about how you understand the issues raised by the new board being put in place.

I want to get a clear understanding of the reasoning guiding you in adopting your position on the board. I'm afraid I don't really understand your reasoning on the use that should be made of the employment insurance fund with respect to the shortage of labour to fill available or future positions.

To illustrate my remarks, I'll cite the example of a restaurant owners' representative whom we heard in Saskatchewan during our employability study. She said that her restaurant owner colleagues and her were having trouble keeping their restaurants open all day because people's wages are low and they therefore have to occupy more than one position.

The best-paid jobs lure away the people who normally work in the restaurant business. I find it hard to understand how you can remedy that with employment insurance. These are people who want to work. The lady who came to testify didn't say that the employees were lazy. She said she didn't have any more staff because they went to work in Alberta or to occupy better-paid jobs.

You're saying that the big difficulty in filling positions is attributable to the mechanics of employment insurance. I don't understand your reasoning because it seems to me there's no connection.

[Garth Whyte]

Thank you for the question.

I was in Saskatchewan last week and I met with the premier. I met with a member who ships a pulse crop, which is lentils, to seven countries around the world, and he's having difficulty finding people. I talked to people.... Saskatchewan is booming. I guess we're going to have to compare notes because I was told an employer...Tim Hortons is paying $16 an hour in Saskatoon. I don't know where that was coming from, but I will answer it.

First off, Saskatchewan is booming; it's the next Alberta. They're going to have the same pressures as we see currently happening in Alberta. It's true, right? It's really great, there are great opportunities. But the second issue is, somehow--

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

Mr. Whyte, I know you met with the Prime Minister, but I want to understand the connection you're making between the employment insurance structure and the hiring structure. It isn't employment insurance that's going to correct the hiring structure which seems to be governed more by compensation or the working conditions of the employees you represent. You represent small and medium-sized enterprises, if I understand correctly.

[Garth Whyte]

I simply want to address your assumption that the reason you couldn't hold on to people was because of low wages, which from my most recent experience is not true. Secondly, having worked with EI over many years with the Canadian Labour Force Development Board, what we've found is that you want to get people into entry-level jobs. They may not be the highest paying jobs, but you move them into higher-paying jobs over time.

We feel there can be a really good opportunity with the programs. If you look at page 11 on the training programs, 11% of the budget--almost $2 billion--goes to training programs, and we're not sure of the effectiveness of those training programs. For example, we feel there are ways of dealing with EI to help move people into meaningful work. We strongly believe that.

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

I want to understand your remarks, because my opinion will be based on your testimony.

You said that your organization and the government at the time took part in an effort to consider the amendments made to employment insurance in 1996. You also said that 44% of the fund is currently being used by the employment insurance plan; the rest goes elsewhere. And yet you said that nothing has changed since 1996.

It seems to me that something major has changed: a surplus of $54 billion was generated as a result of the cuts made to the employment insurance plan, and the fund's contribution to support people who lose their jobs was lowered to 44%. Perhaps I misunderstood, but you said that nothing had changed since 1996. Something has changed, but for the worse.

[Garth Whyte]

Very good.

In terms of the makeup of the program, it hasn't changed, but in terms of the flowing of extra revenues, as we've said to you many times over many years, yes, we have been talking about the surplus since 1996, about how they've been building it up year after year, and now we say it's gone. We strongly disagreed with that approach, and that's why we're supporting the current board. We've agreed with shutting off the tap.

Also, don't forget that parental benefits were put into the program. We don't disagree with parental benefits, but should this really be in employment insurance? We don't think so, but it's there now.

[Corinne Pohlmann]

Can I also mention that in 1996 our labour market was in a very different place. Our unemployment rate was much higher. We didn't have the shortages we see today. The programs and the benefits that were set up at the time reflected the needs at that time. We need to now rethink where we are today and where we're going in the future, knowing the aging demographics that are facing us. We need to build an EI system that better reflects what is going on today than what was going on in 1996.

[The Vice-Chair, Liberal, Michael Savage]

Thank you, Mr. Lessard.

We're going to move to Ms. Priddy of the NDP.

[Penny Priddy, NDP, Surrey North, BC]

Thank you, Mr. Chair.

There are several questions I would like to ask.

On the survey you did, concluding that people were stepping back from employment in favour of being on EI, it seems to me a very qualitative kind of study to be doing. I would be very interested in receiving that, because I'm not sure you can assess. You can count numbers, but I don't know how you do that in a qualitative kind of way.

I'd be interested to know what that is based on. What did you look at when you looked at that? Did you look at age? Did you look at skill level? Did you look at gender, geography, etc.? That's the first part of my question.

Because it was an aside to know where parental benefits ought to be, if they're not under EI, I'd be curious to know what your suggestion would be as to where parental benefits should be.

The question about training.... You have this in your action alert. I'm not sure how you would decide what percentage of training dollars individual employers would get because they are training for very different kinds of things.

I would also be interested to add my last part of that. You have a statement here that says “Review cost-effectiveness of existing EI programs”, and I'm curious as to how you would go about that.

[Garth Whyte]

Thank you.

I have opened a can of worms, haven't I?

First off, it is qualitative. What we did was we asked our members their opinions of their business and what they've tried to do. As we said, we want to drill down deeper and ask. Those are very good suggestions that we are already looking at--gender, age. We're going to ask them why. I don't know how many pages of comments we have to go through to look at this, and we have presented it to the officials. We want to drill in to see why.

We should say, at the front end, that it wasn't in a malicious manner that they were saying this, and they were also supportive of the program. They really feel there should be an EI program to protect those workers who do lose their jobs.

Parental benefits.... I think, by and large, it is now in EI, and I think our members would support it staying in EI for now.

As far as training dollars are concerned, and how you measure the effectiveness of it, we have made some suggestions. If you look at parental leave.... For example, when parental leave policy was done, by the way, it was a political announcement. We were with the industry. The very moment this policy was announced out of the Prime Minister's Office, Minister Manley was unaware of it.

There was no discussion on the parental leave, it was just done, and they didn't look at the implications of a five-person business losing four employees. At that time you rehire an additional four employees, but you can't ask them to stay because they may have to leave when the people come back from parental leave, and they lose those employees.

We feel there should be some dollars allocated to help with the training of the new employees coming in...of those employees who are leaving. That's one issue. We want to look at the whole training issue.

On measuring the effectiveness of the training, we have a lot of concern, and we do have deeper research here. Even the department will admit the measurement of training right now is based on take-up, how many people applied for the program, not the effectiveness of the training in terms of whether it resulted in jobs, whether it resulted in getting people employed, which is the ultimate goal.

We find that very disconcerting, especially when there is money being transferred to provinces. Let's say I'm in P.E.I. and I want to go to the federal government and say, “Which program works?” I don't want to rewrite the policy; I want to know which one works. They can't really say. They can basically say, “Well, on the take-up on the self-employment assistance program, we think that program is successful because we had a pretty good take-up of it.” They don't monitor whether those people are actually self-employed today. That's where we really have a major concern. We want to work with the government to look at this and measure the effectiveness of these programs.

[Penny Priddy, NDP, Surrey North, BC]

Does anybody else want to comment?

[Corinne Pohlmann]

The other thing we were referring to on the training side was a program that we modelled after something called the “new hire program”. It was introduced in the late 1990s, and it gave employers an EI holiday when they hired young people. It encouraged employers to hire youth. It was very successful. It gave employers a holiday from paying EI for, say, a year, which gave them options for putting money towards training new employees. The employees still paid their portion, so they could still access employment insurance benefits if they needed to. Employers could use the extra funding to help train their employees.

Right now, many of our members are dealing with the shortage of labour by hiring people who are under-qualified and training them into positions. That's how they're dealing with the issue. So more dollars or more ways to invest money in training would be welcome.

[Penny Priddy, NDP, Surrey North, BC]

Thank you.

[The Vice-Chair, Liberal, Michael Savage]

Ms. Yelich.

[Lynne Yelich, Conservative, Blackstrap, SK]

Thank you for being here.

I would like to ask the CFIB how many members you represent. Can you also give the committee an idea of what kinds of members you have? This way, when we look at the statistics we can put a face on who they are.

I will ask the same of Mr. Patterson.

So how many do you represent, and what types of businesses and people do you have?

[Garth Whyte]

We represent the non-stock-market economy. You have to own your own business to be a member. We have 105,000 business owners in every sector in every region across the country. We work on the principle of one member, one vote. We visit every member, all 105,000, at least once a year, which is about 4,000 to 4,500 small business visits a week.

[Lynne Yelich, Conservative, Blackstrap, SK]

Coast to coast?