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.
4:50 p.m.
Conservative
The Chair Conservative Dean Allison
Thank you.
We're now going to move to Madam Beaudin for five minutes.
December 10th, 2009 / 4:50 p.m.
Bloc
Josée Beaudin Bloc Saint-Lambert, QC
Thank you very much, Mr. Chairman.
I wish to thank you, Mr. Bédard, for being with us.
I am happy to hear my colleague opposite speak about fairness, given that we are talking precisely of fairness, or rather of unfairness.
You are in agreement with the principle, as we are as well. From what I understand, you recognize that this bill establishes a certain inequality between the self-employed outside of Quebec and those of Quebec. I would like to underscore, for my colleague's benefit, that we are talking here of compassion and sick benefits for workers in Quebec, but of all of the benefits, including parental benefits, for those workers living outside Quebec.
In your document, you make the following recommendation: “Rather, we should select a funding mode that is proportional to the cost of the new benefits, and relatively stable.“
Must we take that as meaning that you are recommending the same benefit rate for all self-employed workers?
4:55 p.m.
Bloc
Josée Beaudin Bloc Saint-Lambert, QC
Yes, indeed, for example, 41% for compassionate and sick benefits, and 88% for parental benefits.
4:55 p.m.
Consultant, As an Individual
That would be my preference, but there is a political choice to be made here. I am however not involved in the political domain. If we wanted to spread the cost over the entire group, then a rate of 0,41% would be my personal choice. However, I cannot tell you that this would be the choice of an expert: it is a political choice. In order to fund these benefits, the rate would have to be 0.90%. To my mind, both these choices are defensible. In any event, there is no need to allow these premiums to increase indefinitely, over time. I see no logic in that. If we were to come to that, it would no longer be a matter of political choice. We would be talking about a rather abusive system.
4:55 p.m.
Bloc
Josée Beaudin Bloc Saint-Lambert, QC
Therefore, it is in essence a political choice and we, as parliamentarians, are about to vote on a bill that, we now know, provides for inequalities amongst self-employed workers.
4:55 p.m.
Consultant, As an Individual
Yes, to the extent that it would impose a rate of 0.36% and would provide, in the following years, for an increase unrelated to the cost of the benefits in question. There is no logic in that.
4:55 p.m.
Bloc
Josée Beaudin Bloc Saint-Lambert, QC
Perfect. I thank you, Mr. Bédard.
Mr. Lessard, do you have any further questions?
Thank you.
4:55 p.m.
Conservative
4:55 p.m.
Conservative
Maurice Vellacott Conservative Saskatoon—Wanuskewin, SK
Thank you, Mr. Chair, and thank you again, Mr. Bédard, for being here today.
Did you have any involvement, direct or indirect, in the calculations of the QPIP?
4:55 p.m.
Conservative
Maurice Vellacott Conservative Saskatoon—Wanuskewin, SK
Not at all, okay. My understanding was that those costs were significantly underestimated. I don't know if you would bear that out, but it resulted in some significant imbalances there and some rate increases.
4:55 p.m.
Conservative
Maurice Vellacott Conservative Saskatoon—Wanuskewin, SK
It's my understanding, also, that the claim rate of sickness and compassionate care benefits in the mandatory system for employees is somewhere around one in fifty. You can tell me whether you agree with that or challenge that. It means that in that typical year, one out of every fifty contributors makes a sickness or compassionate claim. According to HRSDC, on this one, the costs and premiums associated with the bill here are assuming a one-in-ten claim rate for sickness and compassionate care benefits. Is that your assumption so far?
4:55 p.m.
Consultant, As an Individual
The one in ten, yes. The department says that it's one in fifty, but actually it isn't once you consider that about 40% of workers are covered by private wage loss replacement plans. If you remove these people from the equation, if you just consider EI claims to the exclusion of those covered by private plans, it would be more like 4%.
4:55 p.m.
Conservative
Maurice Vellacott Conservative Saskatoon—Wanuskewin, SK
Okay, some say one in thirty. In any event, though, you would agree they've made the assumption of a one-in-ten claim rate for sickness here.
4:55 p.m.
Conservative
Maurice Vellacott Conservative Saskatoon—Wanuskewin, SK
I guess my second question, then, is this. If 41¢ is the right rate, because it would cover the cost of a claim rate of, as you say, one in twenty-five or one in thirty, if we take into account potential claims that are currently covered by the EI plans, as you did, would that still be the right rate if the claim rate is closer to one in ten?
4:55 p.m.
Consultant, As an Individual
If the claim rate is closer to one in ten, and if you want to achieve self-financing for this particular scheme, then you want a rate of 0.9%. If you want to charge the same premium as everyone else is paying, it's 0.41%.
4:55 p.m.
Conservative
Maurice Vellacott Conservative Saskatoon—Wanuskewin, SK
Right. So if they're saying it's about one-third coverage only, then I guess maybe your 90 is not even quite.... Two and a half times is one in ten, kind of thing.
My third question then is, if HRDC is right and the claim rate is around one in ten for self-employed, what would be the impact on the EI count if charging only 41¢?
4:55 p.m.
Consultant, As an Individual
It would produce a deficit, of course. It would require cross-subsidy as it occurs under the rest of the plan. Then this program would move a bit further away from self-financing.
4:55 p.m.
Conservative
Maurice Vellacott Conservative Saskatoon—Wanuskewin, SK
I'm not a mathematician, but I guess as we bring it to a close today, if a 41¢ premium rate covered 100% of the costs--based on a one-in-thirty or one-in-twenty-five claim rate as you say--then very clearly, as you said, my math tells me that only one-third of the cost would be covered with that 41¢ premium rate. If the claim rate was three times higher, then one in ten.
I guess my question is basically getting into a policy area, but you've answered a few of those thus far today, so how would that be good public policy if the premium rate is only covering roughly one-third of the cost? How is that good public policy?
5 p.m.
Consultant, As an Individual
There again, you fall into the domain of policy decisions. There are two policy decisions that can be reached on this file. Either you want it self-financing, and then it's 0.9%, or you want these people to pay the same premium as everyone else under the EI system is now paying, and then it's 0.41%.
It's up to the parliamentarians to decide which policy direction they want to go in.