Human Resources Committee on Feb. 12th, 2009

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

Thank you, Chair.

I want to return to employment insurance. I want to read a couple of comments that have been made about the budget when it comes to EI.

Armine Yalnizyan of the Canadian Centre for Policy Alternatives says: “Six out of ten Canadians don't get EI. Everybody agrees that's a problem, but this government inexplicably decided to ignore the problem. That will lead to disaster for many.”

We have an editorial here from the Ottawa Citizen. Susan Riley, in fact, said “If the government was serious about helping the hardest hit, it would have opened access to employment insurance, along with extending benefits to those already covered.”

An editorial in the Montreal Gazette says “The biggest single failure of the budget is in employment insurance. The measures announced do nothing to address the fundamental problems in EI.”

We even have the C.D. Howe Institute, who you wouldn't normally think would be suggestive of opening the taps on EI--Finn Poschmann says "It's surprising, given how much money is being spent on initiatives of one kind or another, that the government couldn't find ways to ease access for laid-off workers....”

The focus of this budget was on stimulus, and this is why I asked the question about how you rank the different ways of doing stimulus. Ian Lee, an economist and director of the MBA program with the Sprott School of Business, spoke on CBC radio about a survey that was done that ranked the different kinds of stimulus, from corporate tax cuts to personal income tax cuts, temporary versus permanent, infrastructure, employment insurance, and so forth. And in terms of their multiplier effect, or bang for the buck, employment insurance came out on top, at 1.61, which means that for every dollar dispersed, it generates $1.61 in economic growth.

So it seems that everybody's in agreement that EI is probably the ideal way to both provide stimulus for the economy but also to provide help to those who need it the most. I'm a little concerned, and that's why I'm asking you for your opinion. I love your department; I love Service Canada. Some of the best people in the world work for Service Canada in Dartmouth, Cole Harbour, and I love them to death and I feel badly that they're having such a hard time dealing with the backlog of people, because they're very decent and hard-working people. But I'm concerned about how this decision was made on EI.

I'm wondering if perhaps the government is going to open its eyes and say they're going to do something at some point in time. I'm not asking you to be Kreskin on that either, and predict the future, but I am concerned when I hear that eliminating the two-week waiting period would not be convenient for the department. We're talking about what's the most efficient, convenient way to get help to people. This should be about what is the most efficient, convenient thing, not for the department, but the most efficient, convenient, and absolutely necessary thing for those who are on employment insurance.

Do you have information? Have you done research, looking at the stimulative impact of employment insurance in eliminating the two-week waiting period, broadening access across the country and across groups, as well as the five-week waiting period?

[The Chair, Conservative, Dean Allison]

Mr. Thompson.

[Paul Thompson]

On that question, I would say that there is indeed a fairly broad consensus about the stimulus nature of employment insurance investments. The recipients tend to have what economists would note is a high propensity to consume. The money actually does--

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

They have no choice, in other words.

[Paul Thompson]

Yes--the money flows into the economy. That's part of the rationale for including it in the stimulus package of the budget, in addition to dealing with the needs of the recipients.

Above and beyond the general point of EI contributing a stimulus, there was no comparative analysis of which type of measure gives more stimulus, but there was a policy decision taken by the government to focus on the duration of benefits in providing workers with additional benefits to find their next job, essentially.

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

Let me ask you this. The minister said the other day--I'm trying to get her words exactly correct--that 82% who contribute to EI can receive benefits when they need them. I realize this is an issue of interpretation, but I'm looking at a chart provided by the Caledon Institute entitled “Percentage of unemployed Canadians receiving regular EI benefits, 1976-2007”, which shows that in 1976, 84% of people could receive benefits, and today it's 44%. Can you just comment on that?

[Paul Thompson]

I don't have that particular study at hand, but I can indicate that access to EI is something that's monitored regularly by the department. Every year the Employment Insurance Commission issues their monitoring and assessment report, which deals with the impacts and effectiveness of EI overall--both the income benefits and the part II employment benefits--and there is an annual analysis of the access issue in there.

There are a number of different measures that commentators and researchers use to arrive at conclusions on access. One is indeed the measure that you referred to in one of your comments, essentially the beneficiaries-to-unemployed ratio, or how many EI beneficiaries there are relative to the total population of unemployed. That is a measure, but not necessarily the most appropriate measure in terms of the effectiveness of the program, because there are significant parts of the unemployed population that, by design, are not eligible.

For example, only 70% of the unemployed in 2007 actually paid EI premiums. Almost by definition, those people are not eligible to receive benefits. Only 54% of the unemployed actually had a job separation that met the requirements of EI in that they were laid off or they quit with just cause. So there's a significant portion of the unemployed who, unless there were major design changes to those fundamental parameters, would not be eligible for benefits. The number the minister quoted refers to 82% of those for whom the program was designed to serve being eligible to receive benefits.

[The Chair, Conservative, Dean Allison]

Thank you, Mr. Thompson.

We'll move to Mr. Cannan for five minutes.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you, Mr. Chair.

I thank our witnesses. I appreciate your coming today to enlighten us on the budget.

Mr. Thompson, in your opening comments you talked about the very ambitious agenda that's been put forth for you and your staff. I thank you for your work in advance, and as well for all the employees across the country who will be inundated, as we've heard, with more to come in the application process.

Many of my colleagues around the table and I have had meetings with constituents in our offices, coffee shops, and economic round tables with the chambers. The number one issue in my riding was the work-sharing program. I appreciate that 14-week extension.

In your presentation, Mr. Thompson, on page 6 you made reference to the older workers program. You talk about the more vulnerable cities. I'm wondering if there's a definition. Is it based on an EI rate? How do you define vulnerable cities?

[Paul Thompson]

The definition of eligibility for the program previously excluded those cities that were part of census metropolitan areas. The new definition essentially allows more cities to qualify, even if they are part of a broader census metropolitan area. The program, by design, is intended to focus on those communities that are vulnerable. Part of the targeting of this program is towards the communities that are particularly dependent on one industry or one employer. Even if they are in proximity to a larger census metropolitan area, they would now be eligible for the program, whereas previously they would have been excluded. That's essentially the eligibility change that was made through this measure.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

I appreciate that clarification. I represent Kelowna—Lake Country, which was the largest census metropolitan area of seniors in the 2006 census. It's good to hear in that respect.

I have one issue with regard to accessibility. There was an enabling accessibility fund. I was wondering if that was extended within the budget.

[Paul Thompson]

That was not part of the 2009 budget. I'm not in the best position to speak to that program. If you have specific questions, we could follow up.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Could you clarify, for example, whether, if you have a van and you need a conversion, there is a component to allow people with disabilities to get compensation reimbursement to help pay some of the cost? There would be both a provincial and a federal contribution.

[Paul Thompson]

It's not a program that I'm responsible for, but my colleagues in the room may know.

Karen, do you want to speak to that?

[Karen Jackson, Acting Senior Assistant Deputy Minister, Skills and Employment Branch, Department of Human Resources and Social Development Canada]

If you can quickly précis the question for me, perhaps I can answer it for you.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

There was some funding--the enabling accessibility fund--in previous budgets for people with disabilities. So, for example, if they wanted to purchase a van and adapt it for wheelchair accessibility, they could. I wonder if that is going to be extended.

[Karen Jackson]

Yes, there is three-year funding for the enabling accessibility fund. There were no additional funds put aside in this budget, however, for that program. The program is in place, and we will soon be having another call for proposals for projects to be funded.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

That's good to hear. Thank you.

[Paul Thompson]

I should have introduced my colleague Karen Jackson. She is senior assistant deputy minister for the income security and social development branch.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you, Mr. Thompson.

Ms. Kinsley, with regard to CMHC, I thank you for your great work across the country.

In British Columbia we have the Canada-B.C. social housing agreement, which was signed by Minister Finley in 2006. It's a 30-year agreement. You mentioned that the provinces are going to be involved. Is this how the money will be transferred and administered, then, as it is with B.C. Housing and CMHC--in partnership?

[Karen Kinsley]

Some spending that's contemplated in Canada's economic action plan will actually be cost-shared 50-50, as was pointed out, between us and the provinces and territories. We intend to use existing delivery mechanisms to try to get this money on the ground and housing up and running quickly.

In the case of the bulk of the funding that relates to provinces, it will be through an existing program, the affordable housing initiative. The Province of British Columbia has signed that agreement, and is in fact a cost-share partner. The funding that's contemplated here for new construction with the provinces would go through that program.

[The Chair, Conservative, Dean Allison]

That's all the time we have, Mr. Cannan. We're going to have to come back to you.

I just want to clarify, is the disability access program $30 million a year? I know there's no new funding, but you said it was a three-year program. Do you remember how much it is?

[Karen Jackson]

If memory serves me right, it's $45 million over three years. But I'll certainly confirm that and provide that confirmation in writing to the committee.

[The Chair, Conservative, Dean Allison]

Plus, can you provide how much was spent in the first year and how much is left?

[Karen Jackson]

Yes.