Human Resources Committee on Feb. 12th, 2009

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

Did they consult workers before reaching this decision?

[Paul Thompson]

I wasn't there.

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

I see. I don't want to bother you about things that you were not involved in. I wanted to know whether you were involved, and you are telling me that you were not.

[The Chair, Conservative, Dean Allison]

Thank you, Mr. Lessard.

We are now going to move to Mr. Martin. You have seven minutes, sir.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Thank you very much, Mr. Chair.

I'm becoming very concerned as to how this is all playing out on the street, particularly in my own community.

We just had a call to our office on February 11 from a woman who had applied for EI on January 12. She was told she would have her cheque within 28 days. She called back yesterday and was told that the assessment would take another 10 days because of the backlog of applications.

We were told by the minister on Tuesday that the ministry is hiring more people to deal with that. We've been hearing since before Christmas that there's a backlog, that people are waiting 40 or 45 days. Whenever you talk to the minister she says that's not true. Well, we have an actual case in fact here, and there are more cases of people who are now in serious need of money to pay the rent and put food on the table for their children. This is a sole-income earner, so it's tough. We're now looking at at least 38 days, but there's no guarantee that the cheque will be in her hand in 38 days.

Could you maybe talk to us about how this mass hiring is going? Yesterday the minister suggested that there's overtime being worked. How is that actually playing out in terms of the commitment that was made that in fact these cheques would be out within two weeks?

[Paul Thompson]

I'm going to turn to my colleague Liliane Binette for that question.

[Liliane Binette, Assistant Deputy Minister, Quebec Region, Service Canada]

Thank you.

Our priority, of course, remains to pay the clients as quickly as possible and on a timely basis. At the end of December we were meeting our key performance indicator of paying our clients 80% of the time within 28 days. There are occasions when, for a number of reasons--incomplete applications, missing documentation, and so on--it takes longer than 28 days. In a specific case like that, I would suggest that we have a line for parliamentarians to be able to provide specific information, and I would suggest we could answer the specific question.

Again, at the end of December we were meeting the 80% rate of payment within 28 days. We have undertaken a large number of measures to be able to cope with the important additional workload. We have realigned internally all staff that were able to process EI applications, so if they had moved to another position within the organization, we brought them back to process EI applications. We also hired a large number of people who had retired on a voluntary basis, who agreed to come back and work to be able to process the applications. We are having staff do a lot of overtime, and we are monitoring the situation on a very diligent basis across the country.

[Tony Martin, NDP, Sault Ste. Marie, ON]

I understand that. The problem, of course, is that it isn't happening fast enough and we have now people starting to call our office.

Now, when people call our office that means that there's a significant number of people out there who aren't calling your office because they don't know that they can do that, nor do they really know what to do. They go into an office, they see a big bureaucracy, often in this instance will see a big lineup of people, and they get dispirited and discouraged about this.

I'm afraid that we'll have a whole whack of people out there who will have worked, got up every morning and worked, have now legitimately lost their job because the economy has gone bad, and they've gone to make the application, only to find out that it's just going to take forever. They would like to see an end date here. They don't know when, in fact, they're going to get that cheque.

I appreciate the suggestion that there be a desk set up for MPs to more readily access. That's helpful for us and for the people who come to our office. It's not helpful for the others who don't.

I would suggest that you have a major problem on your hands, that it's been red-flagged from well before Christmas as a problem and that in fact we're not getting at it quick enough. And as this floodgate opens now.... I just had a call this morning from another of the big employers in my community, and they're laying off another 130 people on Monday. They will be into your office as well, once the two-week waiting period is up. Hopefully, they will qualify, but they will add to this very large number of people wanting cheques ASAP.

I just wanted to share that with you. I'm not satisfied that I've gotten an answer that indicates that we will actually get to the bottom of this and make it happen.

The second question is on the two-week waiting period and why that wasn't one of the reforms the government chose to move on. Are you aware of any studies that were done regarding cost-benefit, how that affects workers, how many it affects, and the positive or negative impact that might have, first of all on the workers themselves, and then what the cost of that would be to the government to actually implement?

[Paul Thompson]

I can respond to that question.

I can't speak to any comparative analysis per se, but I would say that there was some work done, clearly, on the two-week waiting period, and one of the concerns was the operational impact that has on the organization. You mentioned the volume of claims that we're currently experiencing, and there are significant numbers of workers who obtain employment within that two-week period, and they would be adding to the volumes of the employment insurance system and further increasing the service pressures. That was one operational consideration that was taken.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Was there any consideration given—

[The Chair, Conservative, Dean Allison]

That's all the time we have, Tony. We'll try to get back to you again.

We're going to move over to Mr. Komarnicki. I got it right, finally. After five years, I finally got it.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

That's good. Thank you, Chair. I appreciate that.

I gather that there will be a significant addition of $20 million a year, over three years, for the targeted initiative for older workers, as well as an expansion of the qualifying cities or communities that are most vulnerable. I would expect and encourage Monsieur Lessard to get behind the budget and support it, if no other reason than that, because I know he's been a champion of that area.

It's good to see that you've approached the issues relating to job losses and layoffs in a three-pronged attack that deals not only with the issue of layoff or losing a job, but also retraining and skills upgrading. I gather the total funding, including what's in the budget, is over $8 billion, a significant amount of injection.

I know there's also been a concern about the two-week waiting period. There have been broad consultations with various stakeholders across the country, and the choice has been made to add five additional weeks of benefits, at a fairly significant cost, which seems to be what Canadians wanted. But with respect to the two-week period, I have a quote here from someone who said there's a lot of churn in the labour market in that two-week period, and almost 2% of jobs change every month just in the normal course of events.

So the two weeks is there for a very good reason, and if you're going to extend benefits, it may be, as Canadians have said, better placed elsewhere. Do you agree with that statement or assessment, or do you want to amplify it, if you could, Mr. Thompson?

[Paul Thompson]

Thank you.

Yes, there is indeed the type of churn in the labour market you're referring to. That's a factor here.

As well, the operational implications of taking a large additional volume of claims for a potentially very short period of time is a consideration around the two-week waiting period. The decision of the government was indeed to extend the duration of benefits at the back end of the claim rather than in the two-week waiting period at the front.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

Obviously, those concerns would not apply with equal force and validity to payments at the back end.

[Paul Thompson]

The back-end payments pertain to people who are already on claim, so it's a longer duration for the same claimants, who would otherwise run out of their benefits.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

I was also interested to see your indication that on the wage earner protection program, initially passed through legislation and dealing with a number of important issues in the event of a bankruptcy, this augments that. The statement here indicates that it's to cover unpaid severance and termination pay for up to a maximum of four weeks under employment insurance.

How does that impact on the two-week waiting period? Is that in addition to benefits that might be payable under EI? Is it supplemented? How does it work or figure into the big picture scheme of things?

[Paul Thompson]

I'll let my colleague Scott respond to that, but the reference to employment insurance is just a reference per se for the calculations of the wage earner protection program. Scott can speak to that.

[Scott Streiner]

Yes, that's right. There is in fact no interaction effect, if you like, between the two. Payments that are made under the wage earner protection program are made for wages that are owed to the individual because of time worked or vacation pay that is owed or, as proposed in the budget, unpaid severance or termination pay. That sort of looks back retrospectively to money owed to the individual by the bankrupt employer.

There is no impact of receiving a payment under the wage earner protection program on an individual's eligibility for EI, either in terms of the level of payment or in terms of the timing of qualifying.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

Would the payment for termination or severance expire and then the waiting period would start?

[Scott Streiner]

No. The waiting period for EI is unaffected by receiving a payment under the wage earner protection program.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

So you'd have the two-week waiting period and start receiving benefits under EI, plus, at the point of termination, you would start receiving the termination benefits as well.

[Scott Streiner]

The way the wage earner protection program works, the individual who makes an application will receive compensation for the unpaid wages, unpaid vacation pay, and, potentially as proposed, unpaid termination and severance pay when a claim is fully processed. That typically wouldn't actually happen within two weeks of somebody being terminated, for example, by a bankrupt employer. It takes time for trustees to assess the assets of the organization.

The first effort is always made to ensure that the individual is paid directly from the assets of the bankrupt company. If that proves impossible and the individual wants to file a claim under the wage earner protection program, then the claim will come forward and the Government of Canada will look at the validity of the claim and make payment. It wouldn't normally happen that somebody would be receiving compensation under the wage earner protection program during the two-week waiting period. It would come some time later.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

I also have a question to Ms. Kinsley with respect to the budget allocation for social housing. Of course, there are repairs and maintenance and so on, but the $600 million is with respect to building new social housing, and then there's a provision for another $2 billion in a sort of community loan fund, whereby communities can access loans at a very low cost rate to deal with things related to infrastructure and social housing, like the water, the sewers, and that kind of thing.

How is that going to apply? When developers or communities want to build social housing, can they combine seniors' housing with other types of housing? Are they going to be able to augment what they're doing by accessing a loan for utilities and infrastructure or will the municipality be doing that? Can you explain how the two might interrelate and how the public might expect them to work in the future?

[Karen Kinsley]

Yes. Thank you.

As for the money for construction of new social housing targeted to seniors, persons with disabilities, first nations on reserve, or housing in the north, all of that is new construction. To the extent that any of the new construction requires housing infrastructure associated with it--think of a subdivision that may require sewage lines or roads, those types of things--it would be the municipality that would come forward and say they would like to access capital moneys to be able to provide that infrastructure in order to support the new construction, be that social housing or market housing.

[The Chair, Conservative, Dean Allison]

Thank you very much.

We're now going to move to our next round, which will be five-minute rounds. We're going to start with Mr. Savage, from the Liberal Party.