Human Resources Committee on Nov. 19th, 2009

[The Vice-Chair, Liberal, Raymonde Folco]

We've not received anything, so you will send them on to us?

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

I apologize, Madam Chair. I had expected that they would be here for the members.

[The Vice-Chair, Liberal, Raymonde Folco]

So they'll be distributed tomorrow, possibly, or as soon as possible? Are they on their way, Madam Minister?

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

They will be on their way before the meeting's over.

[The Vice-Chair, Liberal, Raymonde Folco]

Thank you so much.

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

I believe you're continuing for another hour.

[The Vice-Chair, Liberal, Raymonde Folco]

Yes, we are. That's what I was just about to say. I'd like to thank you personally, as well as Mr. Vermaeten, Mr. Beauséjour, and Madame Binette.

Thank you very much.

This is the end of the first part of the meeting. In a few seconds, we will go on with the second part.

Thank you so much.

[The Vice-Chair, Liberal, Raymonde Folco]

I now call to order the second part of our 57th hearing, today, Thursday, November 19. We welcome on behalf of the Department of Human Resources and Skills Development, Mr. Frank Vermaeten, Senior Assistant Deputy Minister, Skills and Employment Branch, and Mr. Louis Beauséjour, Director General, Employment Insurance Policy, Skills and Employment Branch, and on behalf of Service Canada, Ms. Liliane Binette, Assistant Deputy Minister, Operations Branch.

Since this is the second part of our meeting and since you were present for the first part, and we are continuing what was begun by the minister and her presentation a few minutes ago, we will go directly to question period. Consequently, this round of questions will be the same as the previous one. We have one hour before the end of our regular meeting.

I'd like to start with Mr. Savage. You have seven minutes.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Thank you, Madam Chair.

Again, welcome. I know what fine work you folks do for the people of Canada.

Frank, you and I got to spend some time together this summer that for me was sort of bonus time with the bureaucrats, along with Minister Finley and others.

I want to go back to this issue I raised, which is causing me trouble. We support the bill and we don't want to hold up the bill. This committee has agreed that we would try to finalize our study on this by next week, so we're not trying to be difficult, but I am increasingly perplexed at the economics and the analysis that have gone behind this.

On the one hand, the minister insists that there were surveys done and there was some rigorous examination of the uptake of people who are self-employed and who want to take advantage of these benefits, enough that a rate has been set, with some confidence. Also, you have these surveys that allege to have a great deal of accurate information as to who is going to take it up, yet you can't give us a cost on it because it's optional.

There are many things that are optional, but that's what actuaries and accountants and analysts do. They plug numbers in and say “this is our model”. It could be right, it could be wrong, but this is the model. Can you explain what's missing there for me? Because I don't get that.

[The Vice-Chair, Liberal, Raymonde Folco]

Is your question directed to Mr. Vermaeten, Mr. Savage?

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

It's for whoever would like to answer.

[The Vice-Chair, Liberal, Raymonde Folco]

Mr. Vermaeten.

[Frank Vermaeten]

Thank you very much for the question.

I think we have an extremely good handle on what we think the costs and the revenues will be on this. We've gone through it in a fairly rigorous way.

Why don't I provide you just a very brief explanation of what's involved in how we get these calculations? You'll see that it does kind of narrow the band of what types of revenue figures we're talking about.

I think that when we undertake the calculations, we basically divide this up into two groups. What is the primary interest of one group, that is, to get maternity and parental benefits? What is the primary interest of the second group to get sickness and compassionate benefits? As I said earlier, while a person is able to get the full suite of benefits, there is a primary interest.

So we start with that and we ask ourselves: how many people will want to sign up to get maternity and parental benefits? We have a very firm idea of that by looking at the QPIP experience, which is a mandatory system. When we look at the mandatory system, we look at how many claims were made. We go back to recent data for 2008 and we see that we have 7,300 people who made a claim.

Because it's a mandatory system, we know basically that all those who can claim will claim, because they have no incentive not to make the claim. They've already paid into the premiums.

From that, you can extrapolate fairly clearly what is the maximum amount of claims that could occur in the rest of Canada. So you take--

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Excuse me for interrupting, Mr. Vermaeten, but I don't have a lot of time.

When I was in school my teacher always used to say that I never showed my work. Sometimes I got the answers right and sometimes I got them wrong, but I didn't show my work. I'm partly interested in that, but you do, then, have a cost of this program. What is the cost of this program going to be?

Be brief, please, because I have other questions.

[Frank Vermaeten]

What we have is a range of--

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Okay. What is the range?

[Frank Vermaeten]

We have the range of costs and we have a mid-point projection.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

What's that?

[Frank Vermaeten]

Well, we have that initially in the first year we'll actually make money, and then in the later years, if our projections are right on, it will not fully cover the costs and--

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

So we would not self-sustain?

[Frank Vermaeten]

We think that in a steady state it will possibly be not fully self-financing, in the range of about $70 million a year.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

So $70 million a year will be the mid-range estimated--

[Frank Vermaeten]

A mid-range estimate--

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

--cost to the EI fund every year.

[Frank Vermaeten]

Yes.