Human Resources Committee on Sept. 29th, 2011

[David McGovern]

I can give you a breakdown of where the department's contribution to the strategic review exercise came from. As I noted before, Budget 2011 announced that--

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Excuse me, I just get one shot at this.

Is it possible that the 4% expenditure review money, the cuts that are coming, would also include the 95%?

Is that a yes or no, or am I being too complicated?

[David McGovern]

There's no decision on the strategic operating review.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Okay. When it comes to the student jobs program, would you be able to comment on that? Would you consider that program to be in that 95%?

[David McGovern]

Again, if you're referencing the strategic operating review, or SOR, that process is still under way and there have been no decisions taken on it. We can comment about the strategic review, where the details have been announced in Budget 2011.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

I understand. I'm just worried about the future.

Since my time is limited, let me move on to the EI rate issue again. What did the board recommend the EI rate should be to bring it into line, to make it balanced, I guess is the term?

[Louis Beauséjour]

Unfortunately, I don't have that information with me. I didn't bring that. It's higher than the current rate. The EI operating account, as you know, was in a deficit because of the economic downturn; but I don't remember the level that was indicated. It was part of the Chief Actuary's report that was published last fall. It indicated the level that would bring the account to balance in a given year, but I don't remember the numbers.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Does the board have a cap on a cash reserve to deal with any deficits in the EI fund?

[Louis Beauséjour]

As it exists right now, I think the legislation provides that if they were to have a surplus, the CEIFB should maintain a $2 billion reserve.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

They should maintain a $2 billion reserve.

Was it not recommended awhile ago, maybe by the Chief Actuary or the Auditor General at the time, that about $15 million would be needed to sustain a program such as this?

[Louis Beauséjour]

Yes, I think I remember that was one recommendation made at the time.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Okay, so the government just decided it was going to be--

[Louis Beauséjour]

At the time when they took the decision, it was decided that $2 billion would be enough to face the kind of fluctuation in the economy we were having at the time.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

You obviously don't have the rate number, but the number is fairly substantial to bring this program into balance.

[Louis Beauséjour]

If you were to do it in a given year, yes.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Fine, okay.

The rest of my questions are for Service Canada.

[The Chair, Conservative, Ed Komarnicki]

Okay, thank you very much.

We'll move to a Conservative member, Mr. Daniel.

[Joe Daniel, Conservative, Don Valley East, ON]

Obviously, a concern for most Canadians is the poverty level among seniors.

Could you comment on the measures to decrease seniors' poverty, particularly bearing in mind the recent increase in the guaranteed income supplement?

[Jacques Paquette]

Yes, sure.

What I would say is that the efforts focusing on seniors in the last few decades have been quite successful when one looks at the poverty rate among seniors. In a few decades, that rate went down to only 5.2%, which is in fact lower than the average for the rest of the Canadian population. This is due to a combination of many factors, including the fact there has been greater labour market participation by women over the last decades, which is also having an impact.

The OAS increases that were announced in 2006-07 and, more recently, what we call the GIS top-up, have contributed to the increased level of benefits seniors are receiving. This is for old age security, but specifically the guaranteed income supplement that is for the lowest income seniors. The top-up that was announced in the last budget focused on the lowest of these. In fact, the amount announced was provided in a way that had the greatest impact on or benefit for lowest income seniors.

Of course, you have to add to this the other measures that have been announced in the last few years, including some tax measures to increase the seniors tax credit, and so on. It's because of the combination of all of these elements that we can now state that compared to other OECD countries, the level of poverty among our seniors is among the lowest. There is still some work to be done, but we can say with assurance that we're certainly going in the right direction.

[Joe Daniel, Conservative, Don Valley East, ON]

Okay.

Kellie, would you like to supplement that?

[Kellie Leitch, Conservative, Simcoe—Grey, ON]

Yes.

I just have one further question for Monsieur Beauséjour. Is it not true that the transparency and the creation of the new accounts for EI were created in the 2008 budget by the Conservative government?

[Louis Beauséjour]

Yes, it was both the creation of the new Canada Employment Insurance Financing Board in 2008 and its ability to set the rate on a going forward basis. Moreover, there was an instruction to this new organization to look at the balance starting in January 2009, going forward.

[Kellie Leitch, Conservative, Simcoe—Grey, ON]

Is it not also correct that this rate was set so that there would be protection for employers and employees from substantive increases?

[Louis Beauséjour]

Yes, at the time the maximum increase was set at 15¢ per year. The government, as I remember last fall, as part of the budget, decided to have the maximum increased up to 5¢ for the coming year.

[Kellie Leitch, Conservative, Simcoe—Grey, ON]

Thank you very much.