Human Resources Committee on Oct. 20th, 2009

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

Thanks to the presenters here today.

We are working on Bill C-50, an act to increase benefits for long-tenured workers, which is part of the comprehensive suite of our economic action plan. This is the broadest consultation ever taken for a budget, and it's the earliest budget implemented in Canadian history.

The fact that we have extended our EI program by five weeks has been alluded to--the work-share program. About half of Canadian workers who pay into the EI program are long-tenured workers. Roughly one-third of those who have lost their jobs since the end of January of this year and made EI claims are long-tenured workers. Department officials, who were witnesses previously at the committee, indicated that we're addressing this bill to about 190,000 unemployed people who have worked over the years and are now in a most vulnerable state. We'll continue to monitor the situation as we move forward.

I appreciate the CFIB's position. I used to have my own business, and I support small businesses. SMEs are the economic engine that drives the economy of our country, and we'll continue to work together--the risk takers, leaders, and entrepreneurs of our communities.

I understand your concern about the $57 billion. As Mr. Godin said, it's gone. It has disappeared. And we're dealing with the fact that regardless of who spent it--we can point fingers until the cows come home--we don't have it, so we have to deal with the present situation and build a stronger Canada as we move forward.

Mr. Reid, I was also a member CEPU at one time. I have the honour of representing Kelowna—Lake Country in the Okanagan, part of beautiful British Columbia. Our wood is good, and forestry is a big economic driver for our province. As Mr. Casey alluded to—the element of where we're going with this bill—a lot of the workers are in the forestry industry.

My question is for Mr. Casey. We've heard from the Bloc that they feel this bill will not help the forest industry. Could you elaborate a little more on how you feel, from your members' perspective, Bill C-50 will help the forest workers?

[Andrew Casey]

Thank you for the question.

A starting point would be to reiterate that the industry continues to employ 273,000 Canadians directly. We've been at the leading edge of this economic downturn. When the U.S. housing market went down we were the first ones to feel that pain, so we've been at this for a while. Yet we still employ those people.

It's safe to say that a significant number of long-term tenured employees are still part of the industry and would fall within the qualifications of this legislation. We expect there will be some continued economic turmoil. We don't think markets are going to come back for probably another year in our industry, so we expect there will be more mill closures--temporary shutdowns of some sort or another.

The provisions of this bill will benefit a number of those long-tenured employees in some of the areas where we are going to see some temporary closures. It will greatly help keep them in their communities so we don't lose them. When we come back we want to be able to get up and running as quickly as possible. We're going to need those highly trained, highly skilled employees to be back in our mills as soon as possible, and this will help.

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

Thank you, Mr. Casey.

I will pass the floor.

[The Chair, Conservative, Dean Allison]

You have three minutes.

[Maurice Vellacott, Conservative, Saskatoon—Wanuskewin, SK]

I want to address my question to Ms. Pohlmann or Mr. Kelly, because we got into the issue of the 45-day work year--or at least implied. Everyone seems to agree we're in a difficult time now. We need to help those who have been hard hit by the global recession. Our government is focused on making some smart changes to the EI bill, such as in this bill before us that provides additional weeks to long-term workers.

Mr. Kelly and Ms. Pohlmann, I think I have an answer from what you've said already, and from your graphs and so on, but I have three questions.

Does your organization support the Liberals, Bloc, and NDP on a 360-hour, 45-day work year? Second, how would a 45-day work year affect your members? Finally, how would a 45-day work year affect the labour dynamic across the country?

[Dan Kelly]

No. In fact when we made a similar presentation to the Senate committee on the same bill we said that while we're not excited about the changes in this bill, they are less harmful than some of the other proposals for changes to employment insurance that have been proposed.

We are very worried and have publicly stated that a 360-hour period for employment insurance across the country would potentially be devastating to many small firms that struggle to find workers, even in these economic times. We have to remember that there are still many businesses in many sectors of the economy that are hungry for workers but unable to find them. So we don't support that.

The idea would be extremely harmful to small firms across the country. When we come out of this recession it would seriously set us back, even if it were a temporary measure. Temporary measures have been found to be very difficult to get rid of, and our major concern with employment insurance is that these measures would stick around and further exacerbate the shortage of labour when we do come out of the recession.

[The Chair, Conservative, Dean Allison]

Thank you very much.

We're now move to our second round of questions.

We'll start with Madam Folco for five minutes.

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

Thank you, Mr. Chair.

I have here a table showing that between January and July of 2009, 70.8% of the claims filed in Quebec were approved, which means that 30% of the claims were rejected.

With respect to Atlantic Canada, the percentage of the claims approved varies between 59% and 69%. Those are the lowest percentages in all of Canada. In my view, the figures are low for Atlantic Canada because the provinces are suffering, and have been for years, from chronic job shortages and those who are out of work have a very hard time finding employment, whether part-time, seasonal or other.

The second element that comes into play, and that ties in with this, is discrimination, an issue that we have discussed at some length here this afternoon. We have also talked about the fact that this is a bill that treats unemployed workers in an arbitrary manner. Let's be specific here. A significant proportion of the people who are not touched by this bill and who are not among the 190,000 affected are women. Already, these women hold down part-time or seasonal jobs—I'm referring to the percentages I quoted for Atlantic Canada. They are not on the same footing as full-time workers, the people who work 12 months of the year, and by virtue of the very nature of their jobs, they already experience discrimination.

I do not think the government's intention was to discriminate against women, but the bill will lead to obvious discrimination against a certain category of workers, namely women.

I would like to hear from at least two witnesses on this matter. Obviously, I would like to hear from Ms. Yalnizyan, but also from Mr. Céré and from Mr. Laliberté.

[Armine Yalnizyan]

Thank you very much, Madame Folco, for the question.

We know this recession has been dubbed, in both the United States and Canada, as a “he-cession”. We know that 71% of the people who have lost their jobs in this country thus far have been men, and women are part of the “she-covery”, particularly women over 55, because they're the ones who are picking up whatever jobs are out there to support and sustain family incomes. We know already that those who are able to access employment insurance are primarily men, generally speaking, even in good times—and in this recession, it's been even more so. It has been a male-dominated process to make use of the employment insurance system. And as well it might, because it's been the goods-producing industries that have been hardest hit in the recession.

That does leave us with two issues: there are always people in the service industries who are going to get hit, and hit very badly; and Canada has a very poor track record of low-wage employment for women, as well as insecure and precarious hours.

I did have a recommendation, which I didn't make in my opening pitch, that I would like to raise now. I will also be doing so in front of the finance committee in pre-budget consultations next week. One other consideration that this committee could undertake, should you wish to make things a little more secure for people who are really struggling—and it is outside the purview of Bill C-50—is related to the fact that a lot of women cannot survive on 55% of their insured earnings from whatever they were working at. It just isn't enough to pay the bills. There was one clause introduced in the EI Act in 1996 that permitted some relief for low-income families in receipt of the Canada child tax benefit. For families with net incomes—including the CCTB—of not more than $25,921, there was a clause in the EI Act that would permit up to 80% of income replacement, meaning that women who were laid off could at least come close to paying the rent and feeding their kids. They are the people who primarily use this provision.

In 1999, about 11.5% of EI recipients made use of this clause. By last year, only 7% did. By raising that threshold in a different amendment to the legislation—which I would highly urge this committee to look at doing—you could actually relieve an awful lot of vulnerability.

I do want to make one other comment, if you will, Madame Folco. I wonder if this committee realizes that in the recession of the 1980s, if you convert the weeks required then to the hours required now, it took only 165 hours to trigger EI eligibility in an area of 8% to 9% unemployment. In the recession of the 1990s, it took 255 hours. Today it takes 595 hours. For people who are worried that if you reduce the hours of work eligibility, there will be malingerers in the system, I would remind you that the economy exploded in 1989, and after the recession of the 1990s, we had ten of the most sustained years of economic expansion. It wasn't because of the eligibility requirements for EI. We have an enormous economic storm unfolding, and we can do better.

[The Chair, Conservative, Dean Allison]

Thank you. That's all the time we have. We're actually over time.

We're going to move now to Mr. Lobb, sir, for five minutes.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Thank you very much to the people here today who are representing organized labour. My heart goes out to you for those jobs that have been lost.

In the early part of my career I worked in the CAW union, so I know that it's very difficult for union leadership and representatives to have to go through these losses. It's stressful for your workers and also for you.

I have just one observation regarding a point made by Mr. Lessard towards Mr. Rocheleau on whether or not he had a collective agreement within his union shop. I would suggest he likely wouldn't be the president very long if he didn't have a collective agreement. That was an interesting comment.

When we talk about helping people, I can think of hundreds of currently laid-off employees in my riding that this bill would directly benefit. That's why I will be voting for this benefit.

The number of 190,000 workers has been used. By voting against this bill, Mr. Savage and Mr. Lessard are going to provide them zero help. That's unfortunate to see, for sure.

I have just one other point. I've heard the word “reform” used many times about this bill. This is a bill to amend the act. I just want that to be clear on the record.

My direct question is for the CFIB. It's a forward-looking question. Be it as it may be, the past is the past. But looking forward to the future, would you agree with and support the initiatives undertaken to balance the premiums, to invest those premiums back into employment insurance? Do you think this is a good move?

[Dan Kelly]

It depends on which aspect you're speaking of. The budget measures that were put in place in January that paid for the additional benefits during the recession out of general revenues we absolutely do support. It was a contribution back from the $57 billion surplus that was taken out of the account. This measure, though--

[Ben Lobb, Conservative, Huron—Bruce, ON]

Specifically--could you comment specifically around the employment insurance board, the act of balancing revenues and expenses?

[Dan Kelly]

Yes, the creation of the CEIFB was a terrific measure, one we had pushed for for years and years. Had it been done a decade ago we would be in much better shape, because the surplus dollars would have been invested in a fund that we could then draw on in this difficult economic time. Instead, that money was pulled into general revenues and is now not available for us in weaker economic times. But the challenge with this is the timing. The creation of the board was excellent. It was the right public policy move, and all MPs who supported it I think are to be congratulated. The challenge of it, though, is that the creation of it at this particular point in time means that all of the surplus dollars that had been taken out of the fund in the past are gone, and now the fund is going to be stuck with the deficits. So we feel that this is incredibly unfair.

It's fine, as my colleague Corinne Pohlmann noted, for the EI fund to be called on to pay for these additional benefits at this particular point in time if it were also given some of the surplus dollars. If you're not going to refund the entire $57 billion surplus, we do feel that the government has a moral obligation to at least ensure that the new fund has enough money to ride out recessionary times. I think $10 billion to $15 billion would be a good start.

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

Following up on that question, I take it from you then that ensuring that you have a rate-setting mechanism that ensures the premiums do not go into general revenues is something you accept as a good policy step, and certainly using the surplus for general revenues, as happened in the previous Liberal government, is not something you'd like to see happening, and that's fair.

When I look at your chart and some of your diagrams there, the various parties, the NDP, the Bloc, and the Liberals, have suggested that there be more generous levels of benefits than we now propose and that the qualifying periods would be more generous. We've heard witnesses today suggest that. But given what we now have, in regard to doing either of those, either increase the deficit or tack on more money to premiums, which would be, as you say, harmful to employers and employees alike, do I take it your group is opposed?

[Dan Kelly]

Yes, in fact--

[The Chair, Conservative, Dean Allison]

Just give a quick response, because we're out of time, Mr. Kelly.

[Dan Kelly]

Yes, we do. When we did our survey--and you've got copies of this report--the majority of our members were either in favour of the current system of benefits or perhaps less generous benefits. There was a small sliver that was in favour of increasing EI benefits but by a very small margin. So the hours of eligibility and the benefit levels we urge you not to touch. The measures that are in this bill, while not our favourites, are less worrisome than some of the other measures that have been proposed.

[The Chair, Conservative, Dean Allison]

Thank you very much.

We're going to now move over to Madame Beaudin. You've got five minutes.

[Josée Beaudin, Bloc, Saint-Lambert, QC]

Thank you, Mr. Chair. Thank you all for coming here.

Two weeks ago, we welcomed the minister and a number of officials. I asked the minister why she had not adopted the same approach as the one taken in the case of the employment transition program, namely introducing a pilot project, instead of a new measure via Bill C-50. I did not receive a direct answer to my question. It has quickly become apparent that the government is playing politics at the expense of unemployed workers. Had a pilot project been initiated, there would not have been an amendment or any decision to make.

In our estimation, the bill creates two categories of unemployed workers, the good ones and the bad ones. The decision to separate workers into two groups is unfair and does nothing for social justice, in my opinion. It is like deciding to save people with glasses and feed them when everyone else is starving. One group is told to wait patiently until their turn eventually comes. Where is the social justice in that?

Faced with an economic crisis, the government brought in a temporary measure in the form of Bill C-50. These are harsh economic times. People already have access to employment transition assistance. What areas would you have prioritized?

When the minister testified before this committee, she stated that she had consulted a number of experts. Were you consulted, yes or no?

[Pierre Laliberté]

No.

[Josée Beaudin, Bloc, Saint-Lambert, QC]

I think you should have been consulted. What areas would you have prioritized to help workers and make EI as accessible to them as possible? Go ahead, Mr. Laliberté.

[Pierre Laliberté]

As we stated earlier, and everyone who comments on Bill C-50 seems to be in agreement about this, accessibility is the number one priority. As Pierre Céré said, everyone agrees on this first point, except Parliament.

The second issue is the extension of the benefit period. We are in the throes of a recession. These are temporary, albeit much needed, measures. However, the initiative should more closely resemble the approach taken when the five-week period was extended. The situation will need to be monitored closely. According to the banks and to the OECD, the recession will drag on. There is every reason to believe that this will in fact be the case.

Mr. Casey mentioned another measure, namely work sharing. He said there had been a problem given the large number of work-sharing programs. Approximately 22,000 Quebeckers have entered into work-sharing agreements. That is a very high number. Across Canada, 50,000 people have entered into such agreements. This program is slated to end in a few months. This is a good initiative that, as Mr. Casey said, keeps everyone employed. If there is some way to develop a program based on this model, we would be happy to co-operate.

The government claims to want to help long-standing members of the labour force. We would rather see a program designed to help workers who will have problems finding a new job. Mention was made of job training. That is all well and good, but we must not try to function with a byzantine EI system that, in our view, is off the mark and creates obvious inequities.

Ms. Folco spoke earlier of the inequities experienced by women. At this particular point in time, young workers are the ones being treated unfairly. The unemployment rate among young people is double that of other groups and young people do not meet the stated EI eligibility criteria because they have not worked long enough. From a demographics standpoint, nothing is being done to help the people hardest hit by the economic downturn. I'm not talking here about the burden of a family and other such things. I believe these factors should be taken into consideration.

[Josée Beaudin, Bloc, Saint-Lambert, QC]

Thank you very much.

[The Chair, Conservative, Dean Allison]

Mr. Komarnicki.