Human Resources Committee on Nov. 26th, 2009

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

Does keeping the premium low actually mean that the other employees already paying into the system are most likely picking up the slack? The employer part is being picked up by the EI fund, and the voluntary premiums are kept lower. That means others are picking up the slack for the self-employed. In other words, it's not self-sustaining, because there's not a collective risk.

[Luc Taillon]

It is to be self-sustainable.

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

But it is only that because the rest of the workers are picking up the difference, paying the employer's side.

[Luc Taillon]

If you're talking about cross-subsidization, that's not the intent of this new program. It is to be self-sufficient.

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

I'm sorry if I'm interrupting, but just to be clear, my understanding is that the self-employed individual would pay their premium, and the employer's part of the premium—it is normally the case that you have the employee and the employer—would be picked up by the EI fund, which is other employees. That's what we were told.

[Frank Vermaeten]

If I may interject, I don't think that's exactly what we said.

We have provided the estimates here. The person who joins pays only the employee portion at the current rate, which is for example presently at 1.73%. There is no employer portion.

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

No, but are you saying that the employee portion is high enough that it covers the cost of both of what normally would be, in another situation, the employer and the employee contributions?

[Frank Vermaeten]

We've provided you with the projections, and there are two aspects here. First of all, the individuals will only be able to receive special benefits. Are the premiums enough to cover the cost? We'll have to see whether exactly that is the case. If you look at our midpoint projections, we would say not quite. Our midpoint projections show that in steady state, we think there would be a shortfall of around $78 million. If that in fact turns out to be the case, it would be picked up by a general rate increase of a little less than a cent per year for all provinces except Quebec.

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

Would the rate increase be to the self-employed?

[Frank Vermaeten]

No, it would be a general rate increase across the board. The self-employed would also be impacted by that one cent.

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

Yes, I know, but then you are saying that the shortfall will be picked up by the rest of the fund.

That was my understanding, so that's fine.

[Frank Vermaeten]

Yes, the $78 million would be.

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

That's what I'm saying.

[The Chair, Conservative, Dean Allison]

That's all the time we have. Do you have one quick question?

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

I have a question. It may be hard to make it quick. It has to do with the $6,000.

Only one-third of the self-employed are women, and they're likely the ones who apply the $6,000 the most. Some of the male...or the ones who do better can earn $6,000 in a month or two or less, whereas somebody else will have to do $6,000 in a year, maybe.

Can you explain how this would work? I find it a little strange that rather than hours...especially when the majority of people working part-time are women. They can't access it because they don't have enough hours ever, yet they're paying into EI all the time.

[Louis Beauséjour, Director General, Employment Insurance Policy, Skills and Employment Branch, Department of Human Resources and Skills Development]

I just want to clarify something. People earning $6,000 will not be able to qualify right after earning $6,000. They will have to look at all the year completely, the year before.

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

Contribute for the year. Yes, I understand that.

[Louis Beauséjour]

This is all done over the year. The system now is quite different: when you work 600 hours, you can qualify just after your 600. Here, you always use a full-year qualification period.

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

It says here that the minimum for the year is $6,000. I could earn that in a month. It's still my year....

[Louis Beauséjour]

But it will be all the year there.

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

I guess I'm out of time.

[The Chair, Conservative, Dean Allison]

We're out of time.

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

I really want to get back to Mr. Taillon on this one, but there may be another chance.

[The Chair, Conservative, Dean Allison]

I want to thank Mr. Taillon and Mr. Martin for being here. I don't know whether you'll still be at the table for the clause-by-clause, but I would ask that we get ready to go to clause-by-clause.

I'll ask those who need to come to the table to come, and those who want to dismiss themselves can do that as well.

Thank you very much for taking the time to be here today.

[The Chair, Conservative, Dean Allison]

Let's get started with the amendments and the clauses and what we have to deal with here.

I want to make sure that everyone has the amendment package in front of them, as well as the agenda. I will make sure everyone has that information before we proceed.

I want to know where we are in terms of who doesn't have the information yet.