Human Resources Committee on Nov. 19th, 2009

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

Thank you, Madam Chair. I'll be splitting my time with Mr. Anderson.

Thank you, Minister, for coming today. Your riding of Haldimand—Norfolk is very similar to my riding of Huron—Bruce. I believe that each year our two ridings are neck and neck for the largest gross receipts for agriculture.

Obviously the agriculture community has faced some hard times, and for many years, really, starting in 2003 with BSE all the way through to the struggles we've had in the pork industry. Also, an issue in the agriculture industry is the age of our farmers.

I wonder if you could comment on two particular items within this bill. One is young farm families—we know that we need more of them all the time—and some of their options or benefits through this bill. As well, we know that the average age of many of our farmers is approaching 60 and their parents, in turn, are facing an age when they need some care. I think the bill will address some of these issues. I wonder if you could comment on this for the committee.

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

I'd be pleased to do that. Farm families have long had to face challenges in terms of everybody participating, but there wasn't always time on the farm for the farmer to take care of an ailing parent, for example, or to take time out for the children, because there was an economic impact if the wife wasn't working.

Now obviously farms have many different corporate and financial structures, but in many cases now, the employees of the farm are eligible for these benefits and receive these benefits, but the farmers themselves haven't been because of their financial and corporate structure. We don't think that's fair.

We believe that young couples starting out on the farm should have the opportunity to have a family. We need to keep the farm family tradition going, and this is one way that will help that. Equally, as you point out, some of the older farmers need time away from working on the farm to take care of family or maybe themselves if they become ill. This is a safety net for them, if they choose to participate.

I know a lot of people, too, who are in that sandwich generation, where they have young families to look after, but also older parents who aren't that well. Sometimes they need that flexibility, and this is what we're offering them. Their employees have it and we think they should have the opportunity to have these benefits as well.

[The Vice-Chair, Liberal, Raymonde Folco]

Mr. Anderson.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Thank you. It's good to be here today.

I want to follow up a little on the idea of farmers.... I'm from a rural riding as well. Farmers need to respond to the markets, obviously, and they have inventory on hand. That puts them in a situation that is a little different from that of some of the other self-employed folks like, say, the professionals, the scientific folks, or health care providers and those kinds of things.

Are they going to be treated the same? They won't be treated differently because they're in a bit of a different financial situation where they need to respond to markets and bring their product to market...? Will they still be able to apply for these benefits in the same way?

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

The criteria will be the same for farmers. The benefits will be the same as long as they make $6,000 a year as an individual, as long as they've opted in and registered for the program 12 months in advance, and as long they've paid the premiums and are deemed to be self-employed according to the Canada Revenue Agency.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

In our 2008 campaign, we were committed to providing maternity and paternity benefits. The opposition has asked why we haven't gone all the way in providing the regular benefits.

I'd actually like to ask the other question. What were the factors that went into extending this beyond what we made as a campaign promise and what we told Canadians we were going to do? Why did you extend it to the other sickness and compassionate benefits?

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

We listened to Canadians. We listened to the self-employed. We spoke with a number of agencies and associations that represent them. There is no one organization that speaks for all of the self-employed, but we listened to them. They said they wanted more. They were particularly interested in compassionate care and sickness benefits.

Let's face it, with regard to sickness, in some places the only sort of insurance the self-employed can get against sickness is through workers' compensation, but that only covers them if they're injured on the job or become ill because of the job. Those premiums can go as high as 20%. That's very unaffordable to the self-employed.

So we thought, wait a minute, let's take a look. This is what they want, actuarially it made sense, and it provides an affordable option to the self-employed, one that's already available to regular employees. It was really a question of fairness.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Can we talk a little about the history? I'm interested in what groups of self-employed people have had these benefits in the past. Have they been asking for them in the past? What's the history behind this?

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

The only self-employed in Canada who have had any of these benefits, ever, are in Quebec, where there is a mandatory participation required of the self-employed in what's known as QPIP, the Quebec parental insurance program. They pay in premiums and can draw one of two forms of maternity and parental benefits. That's the only place where any of these have been available in Canada.

That's why I say that this is probably the most significant enhancement to the employment insurance program in a decade. It's really about giving employers, the self-employed, the same privileges and opportunities to look after their families and to balance work and family that many of their employees have. It's the right thing to do. It encourages entrepreneurialism, but it also encourages the mainstay of Canadian society: strong family relationships.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

You talked a little earlier about the labour survey that was done and the demand for these benefits in the past. I'm just wondering if you can talk a little about the reaction of Canadians to us moving ahead with this.

What has been the reaction? Do you have some anecdotes or reactions of people who either favour or oppose this?

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

I actually have several pages of positive comments that have been made by a very wide range of groups.

I mentioned the Grain Growers of Canada, the Canadian Federation of Independent Business, the president of the Independent Contractors and Businesses Association, the Institute of Marriage and Family Canada, ACTRA, and the real estate association. I met with the Direct Sellers Association, which encompasses a lot of people, and they're all for it.

They really see this as just what we've said: fairness and giving their members the opportunity to pursue both their family dreams and their professional dreams without sacrificing one for the other. The response has been overwhelmingly positive.

The only really negative thing we've heard is that some people misunderstood and thought we were offering the regular benefits. Interestingly enough, it was the self-employed themselves who were most opposed to us offering regular EI benefits to the self-employed. I found that fascinating, I really did.

[The Vice-Chair, Liberal, Raymonde Folco]

We'll now go into the second round.

For this second round, everyone will have five minutes.

Ms. Minna.

[Maria Minna, Liberal, Beaches—East York, ON]

Thank you, Madam Chair.

Madam Minister, there's no question that this is a direction that most Canadians appreciate and that we do as well. However, I just wanted to clarify some things with respect to this particular legislation.

The fact that the program is optional rather than mandatory means that the self-employed persons who are most likely to benefit from it--for example, self-employed persons who are planning to have children or have poor health--will most likely self-select to contribute to the scheme, as opposed to others who might be healthy and don't have family. In the case of employed persons, the program is mandatory for everyone and the costs of the program are spread among everyone whether they are likely to receive benefits or not. It's a wider spread. In this case, it's not, because it's self-identifying only if they need it.

Why is the program optional rather than mandatory? Do you not expect that there could be a disparate situation, with more people who need to receive actually applying while the rest don't, thus putting a heavier weight on the system? What proportion of the 2.6 million self-employed persons do you think would actually self-identify? This goes back to the actuarial...because since it's not mandatory, people who think they need it will probably be the ones most likely to apply, as opposed to those who don't think they do.

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

It's been interesting to talk to the self-employed and to hear from them. Many of them are very entrepreneurial. They like a bit of risk. They also want to have some level of security for their families to compensate for the risks they take in running their own businesses. Many of them are very interested in things like the compassionate care benefits and the illness or injury benefits, even more so than the maternity and parental benefits.

So while there may be some level of self-selection, it's true, anyone who does claim benefits will have to continue paying after they've claimed that benefit, as long as they're self-employed. If they go back into paid work, they will be contributing to the EI fund that way. So there really is some mitigation there in terms of self-selection.

[Maria Minna, Liberal, Beaches—East York, ON]

I understand that. I guess my concern is that you may end up with a lot more people applying for it who actually intend to use it, as opposed to those who don't expect to, and this could cause problems. That's why I think an actuarial or some modelling of the program would have been helpful to see in this case.

My next question goes to another area of the program. For the self-employed, the minimum income for them to receive benefits is $6,000, whereas for the employed it's 600 hours. What has eligibility for benefits been...? Why was eligibility converted from 600 hours to $6,000 for the self-employed?

My concern here is that somebody who earns $10 would probably have to work the 600 hours, but someone who has a much higher income could get to $6,000 very quickly and therefore collect without having spent 50 or 100 hours, if they're earning good money. I don't quite understand why there's that disparity and that departure from the hourly rates.

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

This was a fundamental challenge for us in designing this system, because the self-employed do not have an objective record of the hours they work, which regular employees do. Regular employees contribute based on the hours they have worked, the hours for which they are paid, as you're aware, which are verified by their employer. Whether it's a work week of thirty-seven and a half hours or they get paid on an hourly basis, all of those hours are recorded.

The self-employed don't have records like that, not that we can objectively verify. So what we would try to do is say, okay, what's the closet approximation so that we're not excluding people? We've said that since 600 hours can't be used, which is the standard we've used for regular employees, how do we approximate that? We wanted to make sure that we didn't set the standard too high or too low--

[Maria Minna, Liberal, Beaches—East York, ON]

So someone who's earned $6,000 in a matter of one contract in a month could actually collect EI?

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

If they paid it in a previous year? If that has been declared income, yes.

[Maria Minna, Liberal, Beaches—East York, ON]

It's a bit of an interesting conundrum.

[The Vice-Chair, Liberal, Raymonde Folco]

Mr. Vellacott--

[Maria Minna, Liberal, Beaches—East York, ON]

Oh dear, because I have another piece--

[The Vice-Chair, Liberal, Raymonde Folco]

--it's your turn now.

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

Thank you very much.

Thank you, Minister, for being here.

Earlier you mentioned some examples of organizations across the country that represent self-employed people who support this bill. I've been hearing from a lot of people well before this, and in fact, going back to the previous election and before that. There were different ones who were advocating--or agitating, if you will--for us to have a program like this. As a party, we indicated then that we would be supportive of such a move. That was part of the platform and all. So I've received some fairly good comments in my interactions here.

You're a very busy minister, I know, but you do get out of Ottawa. You get back into your riding and you get across the country a great deal more than I do, so could you expand a little on the reaction you've received from Canadians who are affected by the changes?

The second part of my question is about how we have made the program optional rather than mandatory. I assume there to be some good reasons for that, at least at this juncture. You may want to comment in respect of that as well.

But just the general reaction, I guess, that you've monitored and maybe got directly from your own constituency.... I know that's where you want to serve well, not only as a minister for the nation, but in regard to your own constituency. What has been the reaction? Does it reflect what others among us have been hearing with respect to a positive response in the country?

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

As Mr. Lobb mentioned, mine is a very rural riding, with a lot of farmers. In fact, over half of our economy comes from agriculture and agrifood. We have a lot of small businesses and people who are self-employed, and they are very pleased to see this coming.

I've been hearing from people right across the country. They're saying that this has been a long time coming and they've echoed the word that's in the title of this bill: it's about “fairness”. Many of them have been in a situation where they've been deemed to be self-employed, and they have a lot of employees who go off on maternity leave or who get paid time through EI while they are on an extended illness or due to injury. The owners, who are the ones creating the jobs, don't have that opportunity, so they've been very, very pleased.

The response has been overwhelmingly positive. I've been really quite pleasantly surprised by how well people are taking to this. I hope that's reflected in the take-up rates.

But it is voluntary. That was part of the commitment the Prime Minister made. He wasn't going to force people into it. It is voluntary and it's an opportunity.

Let's remember, too, that we really want to support the self-employed. Most of those people are classed as small businesses, and small and medium-sized businesses in this country create three out of every four new jobs. We want to make sure that the people who have that entrepreneurial spirit and who are willing to take some risks to grow their company and grow our economy get the supports they need, not just entrepreneurially, but on the family side as well.

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

Do I have a bit of time left?