Human Resources Committee on Nov. 19th, 2009

[Tony Martin, NDP, Sault Ste. Marie, ON]

Are there other jurisdictions out there? The minister spoke of other jurisdictions where this is....

[Frank Vermaeten]

Within Canada, no. These types of benefits are not provided in other provinces--only in Quebec.

[Tony Martin, NDP, Sault Ste. Marie, ON]

No. I mean in other parts of the world.

[Frank Vermaeten]

Are you talking about special benefits or all benefits?

[Tony Martin, NDP, Sault Ste. Marie, ON]

It's any unemployment type of insurance for self-employed people.

[Frank Vermaeten]

There are some examples in the world where they have this type of system, but they are very few and far between. Generally the self-employed are not able to access many benefits, if we look at our international studies.

Would you like to add anything, Louis?

[Louis Beauséjour]

Yes, there are not a lot of cases. There are a couple of examples in Europe where there are different tests used--bankruptcy--that provide for some of the regular benefits. In terms of special benefits in the U.S., California has a model whereby a subgroup can access some sickness benefits, but there aren't a lot of models.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Okay. Did you do any analysis or crunch any numbers around making it the full program as opposed to simply the special benefits and what that would cost?

[Frank Vermaeten]

The focus was on providing the special benefits on a voluntary basis. The focus was initially on maternity and parental and then was broadened to also look at sickness and compassionate benefits. The work really did focus on that.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Of course, when you look at what's happening out there, the world of work is changing. My colleague Mr. Godin, from Bathurst, recognized this in his 1999 report, The human face: unemployment insurance. He very clearly recommended that the UI system, as it was called at the time, be extended to cover the self-employed. His anticipation was that it would be for all benefits.

I guess I'm surprised that there wasn't any analysis done to try to determine whether.... You know, if you're going to do this, you might as well try to cover as many people as possible, and in a way that recognizes the changing world of work.

I know, and I'm sure you know, many people who are now given jobs where the nature of the job is such that they have to become self-employed. There's no choice in many workplaces. You go in there as a self-employed. It's a way that particularly big industries now are finding to get out of paying a whole lot of money for benefits and different things. Workers are finding themselves with little or no choice in that.

So I don't know why you wouldn't have done that analysis.

[Frank Vermaeten]

If I may, we did considerable work in looking at the international experience with this type of system. I think what we see is that it's very rare to find a system like that just because of all the logistics challenges. As the minister said, it's very difficult to know when somebody has laid themselves off, for example. It is extremely difficult to try to ring-fence something to have a system with integrity where there isn't a lot of abuse, etc.

That's why, if you look at the international experience, you really don't find many EI systems that provide it. What you do find is providing support to self-employed who experience business failure. It's part of their social safety net. It's more akin to social assistance rather than being run through an employment insurance system, simply because of the design challenges.

[Tony Martin, NDP, Sault Ste. Marie, ON]

But to me it doesn't seem to be that difficult. You just set the parameters--i.e., you make so much money in a year, which you're able to determine by way of income tax that's filed. If somebody pays in and they reach the threshold, then they can collect.

[Frank Vermaeten]

I think there are a lot of complexities there in terms of how to determine the reason that the income went down. Is it because of reduced effort? Is it because of creative accounting? Is it because of an exogenous factor, such as an economic downturn?

I think that's what the international experience shows, that it's very difficult to design a system like this. I think that's why you will have a very hard time finding a country that provides employment insurance in situations of business downturn.

[The Vice-Chair, Liberal, Raymonde Folco]

We'll now go to Mr. Dykstra.

I understand, Mr. Dykstra, you are sharing your time with Mr. Lobb.

[Rick Dykstra, Conservative, St. Catharines, ON]

Yes. He'll probably take a couple of minutes.

I have a couple of questions.

First, I find it intriguing; I served with Mr. Savage on the finance committee during the 39th Parliament, and he certainly wasn't.... We got along pretty well there, I think, but I'm a little surprised to see how concerned he is about dollars today versus back then.

I'm sure the Liberal Party would have benefited from your efforts when there was $50 billion in the EI fund and it ended up not remaining there. I think, based on your efforts today, they would have listened to your sage advice on keeping the money there.

[The Vice-Chair, Liberal, Raymonde Folco]

Excuse me, Mr. Dykstra. I think personal remarks are out of order here.

[Rick Dykstra, Conservative, St. Catharines, ON]

I'm complimenting Mr. Savage on the work he's doing.

[The Vice-Chair, Liberal, Raymonde Folco]

Well, I think personal remarks are out of order here, Mr. Dykstra.

[Rick Dykstra, Conservative, St. Catharines, ON]

I do have a couple of questions with respect to implementation.

A number of the folks in my riding...and the Prime Minister was down, actually, prior to the 2008 election to talk to folks, to listen to what they had to say about this. A small business owner was asking the Prime Minister if this was something that he was going to be considering. She was running a small business--still does--and she was certainly excited to hear that this was actually going to be implemented.

One of the concerns at that round table, and one of the concerns that I have, is less to do with dollars and more to do with communications and understanding and promoting. One of the issues that we always face when we start a brand new program is folks' lack of understanding or lack of knowledge of the program.

I wonder if one of you could communicate to the committee how in fact this will be broadcast and how we will make sure that all of those who could benefit from the program, who could use the program, will be notified, or at least will have the understanding that the program exists and when it will start.

[Liliane Binette, Assistant Deputy Minister, Operations Branch, Service Canada]

Thank you for your question.

First of all, we will have developed a package of frequently asked questions, a set of questions and responses, that will be posted on the Web. Self-employed workers will be able to access that information.

We will also create a client fact sheet and brochure on paper and electronically, in which we are going to provide a high-level description of eligibility criteria for those EI special benefits. We will also include information to provide in different types of publicity so that people have access to the information. We also want to work with the Canada Revenue Agency to be able to send mailings to the self-employed workers so that they have access to the information.

As you know, from an implementation standpoint, we will be registering the self-employed workers that voluntarily want to opt in. We will then collect the premiums through the Canada Revenue Agency. Because they have the information about the self-employed workers, we can provide the information via specific mailings.

We will also provide self-employed workers with access to My Service Canada accounts so that they can have access to their own account when they have registered and have access to their own information in terms of receiving something or paying premiums. We are looking at a comprehensive package.

[Rick Dykstra, Conservative, St. Catharines, ON]

So you've obviously had a number of meetings with CRA to determine the best means and methods of implementation.

[Liliane Binette]

Absolutely. We've done that with CRA and we are continuing the discussions, because self-employed workers will be able to register as of January 30, 2010. We'll give them until the end of March to register, with a date when it would start in January. That also gives us time to finalize all of the discussions with CRA in terms of when they are going to collect the premiums, as well as when they would be sending out the mailings to the self-employed workers.

[Rick Dykstra, Conservative, St. Catharines, ON]

I have one final question and then I'll turn it over to Mr. Lobb.

One of the things with starting a new program is that there's always a concern about its implementation and getting it started up very quickly. Perhaps you could give us a very quick understanding of the seamless transition that will happen in terms of implementation.

[Liliane Binette]

For anyone who would like to register, we will provide information so that they know they can apply as of the end of January 2010. For the transition period, we will give them until the end of March to apply, to register retroactively to the end of January 2010.

We are developing an Internet-based registration process because we believe that self-employed workers do want to use electronic services. They already deal with the Canada Revenue Agency via the Internet, so we want to give them that opportunity. Of course, for those who are not using the Web, there will be the possibility of a paper application as well. We will also have the network of call centres that will be able to answer questions for the self-employed workers.

[Rick Dykstra, Conservative, St. Catharines, ON]

That's dynamite. Thank you.