Evidence of meeting #69 for Human Resources, Skills and Social Development and the Status of Persons with Disabilities in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was amendment.
A recording is available from Parliament.
4:45 p.m.
Liberal
Michael Savage Liberal Dartmouth—Cole Harbour, NS
Could you explain to me again this table that shows a potential deficit of $131 million, based on 2010 contribution rates, table 3?
4:45 p.m.
Consultant, As an Individual
It's simply that if the current premium rates were implemented for this program, in 2014, if the current premium rates were charged at that point, in Quebec there would be a slight surplus, and in the balance of the country there would be a deficit in the order of $137 million, for a $131 million net deficit.
4:45 p.m.
Liberal
Michael Savage Liberal Dartmouth—Cole Harbour, NS
Explain to me how we know what the rates are going to be in 2014.
4:45 p.m.
Consultant, As an Individual
Are you asking how the premium rates are going to be in 2014?
4:45 p.m.
Consultant, As an Individual
Under the legislation that was adopted in the last budget and in the previous budget, the Canada Employment Insurance Financing Board is to set premium rates, and those premium rates cannot increase by more than 0.15%, although the government can remove that cap. But assuming that the premium rates do increase in the next four years by 0.15% a year, then the premium rates in 2014 would be 196% in Quebec and 233% outside Quebec.
4:45 p.m.
Liberal
Michael Savage Liberal Dartmouth—Cole Harbour, NS
To have a deficit of $68 million instead of $130 million assumes the maximum 15¢ per year increase.
4:45 p.m.
Consultant, As an Individual
No, excuse me, all I wanted to demonstrate with the $131 million was that the current premium rate applied in Quebec is already sufficient, so there's no reason to raise that premium rate any further. However, those current premium rates would produce an even larger deficit outside Quebec.
4:45 p.m.
Liberal
Michael Savage Liberal Dartmouth—Cole Harbour, NS
We assume that the premium rates are going to go up anyway in the EI fund. They have to. Payroll taxes are going up.
4:45 p.m.
Liberal
4:45 p.m.
Conservative
Ben Lobb Conservative Huron—Bruce, ON
Thank you, Mr. Chair; and thank you, Mr. Bédard.
I echo Mr. Lessard's comments in that I give you credit as a retired individual for coming before the committee. Maybe at times you question why you're doing it, but I appreciate the effort that you are bringing here today.
With the employment insurance and your experience in it, the idea is obviously fairness in rates for all who pay it. For the benefit of committee, could you go back to one of your initial comments, that a particular sector is not self-financing? I think you mentioned the lumber industry or the forest industry. Maybe you could expand a little on that for the benefit of the committee.
4:50 p.m.
Consultant, As an Individual
The employment insurance system, as everyone knows, as a social insurance program, charges the same premiums to everyone no matter what their age, gender, risk of unemployment, province, industry, or occupation. Thus, in this scheme, one option would have been to apply the same principle and charge the same premium to these people as everyone else, the alternative being to make the program self-financing. I've given the numbers on the two options.
4:50 p.m.
Conservative
Ben Lobb Conservative Huron—Bruce, ON
The number you came up with here was $68 million in 2014. Those were your numbers based on the information you had. I believe the department has many projections—high, mid, and low, and they may even have some others that they keep tucked away somewhere else. Did you do high, mid, and low projections as well?
4:50 p.m.
Conservative
Ben Lobb Conservative Huron—Bruce, ON
In terms of your calculations, in your deficit of $68 million in 2014, we've talked about one in 10, or one in 50, but what rates did you use to calculate your deficit?
4:50 p.m.
Consultant, As an Individual
I used the same rates as the department is using. It's the one in 10 claim rate, 10% claim rate, for sickness. For maternity and parental benefits, it's essentially everyone who joins, and the department assumes 20,000 people joining per year and 20,000 claiming. Essentially they're saying whoever joins will draw benefits, which seems reasonable under this particular scheme for maternity and parental benefits.
4:50 p.m.
Conservative
Ben Lobb Conservative Huron—Bruce, ON
Do you agree with the department's calculation on what a 1% increase to the EI rate for employees would do to raise the level? Do you agree with those numbers?
4:50 p.m.
Consultant, As an Individual
Is that in terms of the financing that this would produce?
4:50 p.m.
Consultant, As an Individual
Yes, the $110 million, which was quoted on the overall EI financing base.
4:50 p.m.
Conservative
Ben Lobb Conservative Huron—Bruce, ON
When we go back to fairness, I can't help but think about my own family, what I know the best. I go back to my father, who has been self-employed for more than 40 years and is kind of from the old school. A question he might ask is, in the spirit of fairness, is it fair that someone in southwestern Ontario, with a sickness claim, and so forth, would pay $1.73—because obviously I don't think he's having any more kids—for a sickness or injury claim or a compassionate care claim? Would it be fair for someone in a different province, where it may be 41¢ or 91¢? Does that seem fair at all that one would pay that difference? Shouldn't it be close to the same for all?
4:50 p.m.
Consultant, As an Individual
The way this program is structured, you cannot join just one component if you're outside Quebec. In Quebec, you would be joining only for the sickness component. However, outside Quebec, if there were an option to join only the sickness part, then that could be corrected in that fashion. However, the program being what it is, the result is what it is.
4:50 p.m.
Conservative
Ben Lobb Conservative Huron—Bruce, ON
In the spirit of fairness, it does seem a little unreasonable that someone in a province might pay 41¢, when someone in another province would be paying $1.73. It would seem a little unbalanced and unfair, in my opinion.
Thank you.
