Good afternoon, Mr. Chairman and members of the committee.
I'm here today to speak to the committee about Bill C-50, an Act to Amend the Employment Insurance Act and to increase benefits. With me today I have Mr. Louis Beauséjour, the director general of employment insurance policy, and Mr. Philip Clarke, the director general of benefits processing with Service Canada.
The purpose of this bill is to temporarily provide additional weeks of employment insurance regular benefits to long-tenured workers. Let me explain to whom the legislation is referring when we use the term “long-tenured workers”. These are experienced workers who have paid EI premiums for years but have made limited use of EI regular benefits. Some of them, in fact, are unemployed for the first time in their lives. More specifically, they're workers who have paid at least 30% of the annual maximum EI premiums for a minimum of seven out of 10 years.
This allows claimants to remain eligible even though they have had temporary absences from the labour market.
Bill C-50 also allows for the use of up to 35 weeks of regular benefits in the past five years. This is in recognition of the fact that it is customary in some industries for employers to shut down for a few weeks every year for retooling or retrofitting. In these situations, industry sectors often have to make use of EI.
There are long-tenured workers all over the country and in every sector of the economy.
It's estimated that about half of Canadians who pay EI premiums qualify as long-tenured workers and that about one-third of those who have lost their jobs since the end of January 2009 and have made a claim would qualify as long-tenured workers. This proposed legislation would give these workers more weeks of EI income support while they look for jobs.
Let me take a few minutes to explain how the bill itself is laid out. First it deals with the benefit period. This is the period during which claimants must use their entitlement. This benefit period is normally 52 weeks, but it will be extended, through the legislation, where necessary, to accommodate the additional weeks of EI regular benefits being provided to eligible long-tenured claimants.
The second part then sets out how many additonal weeks of EI regular benefits will be provided to eligible long-tenured claimants. It also deals with the gradual transition out of the measure.
Specifically, Bill C-50 would provide from five to 20 weeks of additional benefits, depending on how long a person has been working and paying EI premiums. For example, to be eligible for five weeks of extended benefits, long-tenured workers must have paid at least 30% of the annual maximum EI premiums for a minimum of seven of the last 10 calendar years. This 30% threshold represents the most inclusive definition of full-time workers and is based on what a full-time worker at minimum wage would contribute throughout the course of a year. For every additional year of contributions, the number of weeks of benefits would increase by three weeks, up to a maximum of 20 weeks.
The third part of the bill sets out how many additional weeks of EI regular benefits are to be provided to eligible long-tenured claimants who live outside of Canada.
The last part of the bill addresses the coming into force of the legislation. It states that the measure takes effect two Sundays prior to royal assent.
The bill concludes by listing the sections that will be used once the measure is terminated after September 11, 2010.
Mr. Chairman, it is estimated that about 190,000 workers will be eligible for the assistance provided under Bill C-50. This number is based on information pertaining to three key factors. The first is the current population of long-tenured claimants. Second are the benefit exhaustion rates of long-tenured claimants in the past. And third are private sector forecasts of the national unemployment rate. Those are the three component parts that underpin that estimate of 190,000 workers.
Among those 190,000 are many workers who have been in the same job or the same industry all their lives and now face the prospect of having to start all over again.
Bill C-50 is a temporary measure designed to provide additional support to long-tenured workers while they look for jobs in a recovering economy.
As I said, eligibility for the extended benefits for long-tenured workers will continue until September 11, 2010. This means that the payments of those extended benefits would continue to the fall of 2011, approximately one year later.
This measure to extend the benefit applies not only to new claimants, but also to existing claimants. In fact, eligibility extends back nine months from the coming into force of the legislation. This will reach back as early as January 4, 2009.
In order to ensure a smooth and gradual transition out of the measure, the additional weeks of benefits would be reduced in five-week increments, beginning in June of 2010.
Mr. Chairman, this temporary measure for long-tenured workers builds on other measures introduced under the Government's Economic Action Plan.
There is one program in particular that is closely linked to this proposed measure that I would like to draw attention to. This is the career transition assistance initiative, which helps this same population of long-tenured workers.
Under the career transition assistance initiative, long-tenured workers who have opted to undertake training are already eligible for extended benefits of up to two years to help them make a transition to a new field or a new occupation. We have already sent out more than 370,000 letters since January to individuals who qualify as long-tenured workers. In addition, these workers can also get earlier access to EI if they pay for part of their training using their severance package.
The economic action plan also provides other measures to help all unemployed Canadians, measures such as providing nationally the extra five weeks of regular EI benefits and increasing the number of weeks in regions of high unemployment from 45 to 50.
Mr. Chairman, many of the Economic Action Plan measures as well as the legislation before us are temporary.
Bill C-50 is intended to help workers faced with the difficult challenge of finding a new job. The goal is to help them bridge to new employment.
Mr. Chairman and members of the committee, I would be happy to answer your questions about this bill with the help of my colleagues, Louis Beauséjour and Philip Clarke.
