Thank you, Mr. Chair.
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Thank you very much for inviting our views on Bill C-50.
No recession since the Second World War has destroyed as many jobs in the opening months of a downturn. The government was very quick to react with supports for the financial sector, but improvements to EI have been long overdue and woefully inadequate. This despite a clear action plan for EI reform tabled by this very committee on February 15, 2005, and later, in 2007, all-party agreement on two readings of Bill C-269, before the government of the day, this government, then decided to deny royal recommendation in November of 2007. So, long before the meltdown of global financial capital began last fall, we knew our system of unemployment insurance was not recession-ready.
Between October 2008 and last month, the labour market shed 483,000 full-time job opportunities. More than 1.5 million Canadians today are actively looking for paid work. More than half of them do not receive EI. That means three-quarters of a million Canadians are left twisting in the wind. Canadians have not been this exposed to the economic risks of joblessness since the 1940s, when we first put unemployment insurance into place.
Now, I’m not telling you anything new that you don’t know. I’m not telling you anything radical. For years, your very own committee has noted the need to improve access to the system by reducing and making more uniform the eligibility criteria based on hours; to improve the duration of benefits, which were precipitously cut back in the reforms of the early 1990s; and to improve the rate of income replacement, which is particularly disastrous for low-income workers.
Bill C-50 was this government’s response to these concerns. It limits itself solely to the issue of duration, and further limits the extension of benefits to a small subgroup of the unemployed. HRSDC gave testimony to the Senate Standing Committee on National Finance just a couple of weeks ago and stated that a third of those displaced since January 2009 could benefit from this legislation. That means two-thirds of those who have been displaced since January 2009 and who have exhausted their benefits—the majority of Canadians who are in that position—will not receive any help. Bill C-50 also ignores all of those who lost their jobs, who were the shock troops of the opening months of the recession.
So how many people are we talking about? Monthly unemployment figures by Statistics Canada showed that unemployment swelled by at least 200,000 people last fall and a further 300,000 people since January. Improvements to EI, need I say, are critical. Canada cannot have a full recovery if workers face rollbacks in wages, benefits, and pension provisions and the unemployed also cannot find new jobs at roughly comparable wages. Aggregate demand will just continue to fall.
The United States are 22 long months into recession, with no clear end in sight. We will have to wait an awfully long time to ride on their coattails. So diminishing purchasing power of Canadians is an issue this government, this committee, needs to deal with, because this is a very fragile recovery and this issue can no longer be ignored.
I will limit myself to comments about Bill C-50, though we understand that it only deals with one aspect of the improvements we are all seeking to the unemployment insurance system. Bill C-50 can be made more effective with three simple modifications that address three questions. When should the clock start ticking? Who should get help? How much help should they get?
First, the effective date for Bill C-50 should be changed to start at January 4, 2008, rather than January 4, 2009. Some may ask why reach so far back. It's simply because January 4, 2008, is exactly what the government's thinking was in Bill C-10, passed not very long ago, which included measures to extend benefits by five weeks for all those who had exhausted their benefits. Moving the trigger date to January 4, 2008, would extend the benefits provided in Bill C-50 to the same group as Bill C-10: everyone affected by the recession.
Second, Bill C-50 should drop the rule that excludes workers who may have been drawing up to 35 weeks of benefits in the last five years. As you have heard, it is nonsense to say that, in these types of economic times, some unemployed are more deserving of help than others.
The majority of people first affected by the downturn were in goods-producing industries. Such industries commonly retool, adjust inventory, experience slowdowns in demand or supply, which all can lead to temporary layoffs and shutdowns periodically. Workers in such industries have zero control over their hours of work. People who have been laid off on a regular basis in the previous five years may find themselves not being recalled at all. These people should not be excluded from what Bill C-50 offers. No such limitation was placed on Bill C-10.
Finally, how much help does Bill C-50 provide? Unlike Bill C-10, which provided an additional five weeks of benefits to all unemployed Canadians who had exhausted their benefits, Bill C-50 proposes this baroque set of eligibility criteria that are extraordinarily difficult to read through. Within the small group of unemployed who are the target of Bill C-50 , the bill further creates six different categories of winners, where the amount of help they'll get is based on how much they have contributed to the system in the past 15 years, up to a maximum of 20 weeks for a select few.
Extension of benefits should be uniform, as in Bill C-10, and Bill C-50 should offer a significant extension for all who need it. Does 20 additional weeks sound overly generous to you? Well, let's compare this to what happened just two weeks ago in the United States. The Associated Press reported: “Congress has added up to 53 extra weeks of benefits on top of the 26 typically provided by the states.“ And the House this week approved legislation that would add a further 13 weeks for high-unemployment states.
Let's be very clear. Without significant extension of benefits, you can be sure that a huge proportion of the cost is going to fall on provincial shoulders. Last summer, British Columbia's Premier Campbell suggested extending benefits to two years, and Saskatchewan's Premier Wall also stressed the need for extended benefits. These are not socialist politicians, but these premiers know very well that they are going to end up picking up the tab for the federal government's unwillingness to act.
Without significant changes to Bill C-50 this government risks being a spectator to what may be the most significant period of asset-stripping of the middle class in generations, exactly what unemployment insurance was designed to prevent.
Recovery or not, Canadians are coping with unbelievable economic stress. Your predecessors from decades ago created a system that improved life for Canadians in good times and bad. I urge you to consider today how you can take on that mantle.