Human Resources Committee on Oct. 6th, 2009

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

Thank you, Mr. Chairman. I would also like to thank our witnesses for being here and for the information they are sharing with us.

I would like a clarification, Mr. Chairman. I think there is a typo on page 4 of your brief. Indeed, in the fourth paragraph it says, and I quote: « Afin d'assurer un retrait graduel et en douceur de cette mesure, le niveau de prestations supplémentaires serait réduit progressivement par tranche de cinq semaines, à compter de juin 2011. »

You mean 2010, don't you?

[Paul Thompson]

You're right. That's a typo.

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

You calculated that 190,000 people would benefit from this program and that it would cost $935 million. We have already talked about this, but to work out the numbers you have to target people who are covered and those who are not. You based your calculations on 2006 figures. Can you break down for us, by region and activity sector, how many unemployed workers will benefit from these measures? In other words, do you know how many unemployed workers would be covered by these measures, by province and by activity sector?

[Paul Thompson]

First, it is difficult, even impossible, to segment, by province and sector, the number of claimants who would be covered by these measures. Indeed, as my colleague just explained, the numbers are based on a forecast of the national unemployment rate and not regional or industry unemployment rates. Therefore, the number of 190,000 claimants for the length of the program is a national projection.

When we developed the criteria for the program, some parameters were based on past experience, including a 35-hour work week. I indicated that certain sectors rely on employment insurance from time to time. The EI system allows for this.

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

You cannot work out specific figures, but you are presenting specific results concerning the number of unemployed workers who would be eligible and how much the program would cost. Could you submit to us in writing the method used for your calculations and the results by period, beginning in 2006, and for 2009 and 2010, as you had indicated? As for the number of so-called long-tenured workers, about 30%, 21% of them have run out of benefits.

Based on your method of calculation, which yielded a result of 190,000 workers and $935 million, 85% of unemployed workers would have to run out of benefits. So please understand that we are skeptical with regard to your numbers. It is extremely important that you send us in writing your method and results. We want to know how you reached these results. I don't know if you have those details with you this morning. If not, we would appreciate your sending them to us within the next few hours.

Further, is it fair to say that these measures, in fact, discriminate against women? We have to take into account women who take parental or maternity leave and who, as a consequence, don't pay EI premiums for long periods of time. As a result, these women face an additional hurdle if they want to qualify for the program. Please correct me if I'm wrong.

I would also like to know why you did not think of creating a measure which pays out more under the system — we all know that there is a lot of money in the EI fund — and which would benefit all unemployed workers. Why have you penalized some groups of unemployed workers?

[Paul Thompson]

As far as measures concerning women are concerned, there are two important provisions in the bill. The first provision contains criteria which allows a person who has paid premiums seven years out of ten to have been out of the job market for three years. Those years could include time spent on parental or maternity leave, or time spent away for other reasons. The second provision provides that special benefits are not included in the criteria relating to the 35 weeks. It does not include maternity, parental or other kinds of special benefits.

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

I also wanted to know why exclusion was chosen rather than accessibility.

[The Chair, Conservative, Dean Allison]

Mr. Thompson, you have about 20 seconds. Finish your answer.

[Paul Thompson]

Discussing politics is not my role. The government decided to adopt a measure targeting workers affected by the economic downturn. As I said, other measures in the Economic Action Plan are more general in scope, such as the five weeks of extra benefits.

[The Chair, Conservative, Dean Allison]

Thank you, Mr. Lessard and Mr. Thompson.

Mr. Godin, welcome to the committee. I know you've spent some time here in the past, so it's good to have you back. The floor is yours.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Thank you.

Thank you for coming. In the briefing, we were told about a nine-month extension. If the measure is adopted before October 15, the extension goes back to January 4. Why nine months? You might say that it was the minister's decision, but technically, what is the impact of this?

The economic crisis did not begin in January. This bill seeks to help workers during an economic crisis. If we really want to help everyone, why does the extension only go back to January, when we know that mills and other industries closed down in October or November 2008?

[Paul Thompson]

There are two aspects to your question. The first has to do with implementing the measures. Usually, new measures are meant for new clients, but in this case, the measure applies to existing clients.

That's a reach-back of nine months. The typical way would be to look forward to new clients; this actually looks back. It's a rather unusual way, in our experience with EI, to implement a change. In fact, the five-week measure introduced in the economic action plan was the first time we'd actually applied it to existing clients. So there's an aspect that's operational. The farther you look back, the more challenging it becomes from an implementational perspective. We have more clients who have long since stopped becoming clients. They have to be contacted to come into our office. They may be participating in other programs offered at the provincial level, including training measures, so the interactions with other programs becomes more complicated. With longer periods—as my colleague from Service Canada could explain—you begin to get people who are into a second claim in the same period. That introduces additional complexities. So there are various operational requirements that make it increasingly complex the farther back you go from the coming into force of the legislation.

The second aspect has to do with the labour market. The unemployment rate went up considerably between December and January; it is the highest rate in recent years. From December to January, it went from 6.3% to 7.8%.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Thank you.

You decided to apply a retroactive measure to existing beneficiaries whereas it would normally apply only to new beneficiaries. Let us not forget that some people applied for benefits in January. Normally, they are still collecting benefits. This is why you can go back nine months. These people have not exhausted their benefits yet, and you intend to extend them. I find it hard to accept this argument on this basis. Could you give me an explanation?

Even if we go back, people are already benefiting from the five extra weeks. Besides, in the last budget, the department was very proud of having added five weeks. We are dealing with long-term beneficiaries and not with regular seasonal workers. These people normally would have received 45 weeks of benefits, or 50 maximum, which could have taken them at least to November or December, given that this measure would be in force on October 15.

You identified these people, but the bill could also have included people who are still collecting benefits and not those who have left and are working elsewhere. For someone making their second claim... I would like to hear Mr. Clarke, because I think that if the claimant is making a second claim, he has probably received 35 weeks of benefits and he would not be eligible in any case.

[Paul Thompson]

Louis, did you want to comment?

[Louis Beauséjour]

Usually, when new measures are adopted, they are applied to new claimants, because the old claimants go by the old rules. In fact, over the past years, when we implemented pilot projects, the new claimants were dealt with under the new provisions, and the old claimants were dealt with under the old provisions.

Regarding the five weeks, as is now the case, we decided to also offer them to existing claimants, and this is quite exceptional.

A certain number of people who used the weeks of the preceding year will not necessarily have access to 40, 45 or 50 weeks. It will depend on the region they are living in. When these people were unemployed, the maximum they could receive varied according to the region where they lived. Not everyone has access to the full 50 weeks, because everyone was not necessarily working full-time when they got laid off. Thus, many claimants will exhaust or have already exhausted their benefits. There will be more and more claimants as time goes on. Things will get more complicated for the people who have exhausted their benefits.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Do you think that between January and October 15, some people will have stopped receiving benefits and you will go to see what is happening to them?

[Louis Beauséjour]

Yes, a certain number of claimants will have finished receiving benefits at that time.

[The Chair, Conservative, Dean Allison]

That's all the time.

Mr. Clarke, did you want to add to that?

Okay. Thank you very much.

We're now going to move to the first round with the Conservatives.

Mr. Komarnicki.

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

Thank you, Mr. Chair. I will be sharing my time with Mr. Cannan, so at about three and a half minutes I'd like to be notified.

Thank you very much for appearing before the committee. I get the sense that this particular bill is very targeted and specific and has to do with those who have worked for a significant period of time, a substantial period of time, but for varying years, and who have not used the system to any great degree over those years. So there are two factors working there. When you're talking about someone in those varying years who has not used the system for more than 35 weeks, they would be entitled. In those 35 weeks you talked about a business potentially retooling and retrofitting. I take it then that those 35 weeks are a cumulative total that could be any number of periods of time, or episodes if you want to call it that, of unemployment during those particular years. Is that correct?

[Paul Thompson]

That is correct. It could be one period of 35 weeks or it could be claims spread over five years. So it's a cumulative total.

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

So it would indicate over at least five years that there would have to be substantial connection to the workforce over a long period of time and someone finding themselves in a position of not being employed through no fault of their own after having been in the workforce for a long time.

[Paul Thompson]

That's correct.

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

In the 35 weeks you mentioned there were certain special benefits that did not count to the 35 weeks. You recounted some of them--parental maternity benefits perhaps. What other benefits might there be? Sickness, for example?

[Paul Thompson]

Yes, all that's taken into account is the use of regular benefits, so that would not include use of all the special benefits. Included in special benefits are maternity, parental, sickness, and compassionate care benefits. In addition, I would add that our work-sharing program is not included in the calculation of use of EI benefits.

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

So anyone finding themselves in that category would not be affected.