Evidence of meeting #57 for Human Resources, Skills and Social Development and the Status of Persons with Disabilities in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was program.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Ian Shugart  Deputy Minister, Department of Employment and Social Development
Louise Levonian  Senior Associate Deputy Minister, Chief Operating Officer Service Canada, Department of Employment and Social Development
Paul Thompson  Senior Assistant Deputy Minister, Skills and Employment, Department of Employment and Social Development
Gail Johnson  Assistant Deputy Minister, Learning Branch, Department of Employment and Social Development
Benoît Long  Senior Assistant Deputy Minister, Processing and Payment Services Branch, Service Canada, Department of Employment and Social Development
Alain P. Séguin  Chief Financial Officer, Department of Employment and Social Development
Evan Siddall  President & Chief Executive Officer, Canada Mortgage and Housing Corporation

3:35 p.m.

Conservative

The Chair Conservative Phil McColeman

Good afternoon, ladies and gentlemen, and welcome. This is meeting number 57 of the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities.

Today we're here to review the main estimates for 2015-16, and we're pleased to have with us, appearing for the first time as the minister to the committee, the Honourable Pierre Poilievre, Minister of Employment and Social Development.

Welcome, Minister, to your first official committee meeting.

We also welcome, along with the minister, people who have been here before. From the Department of Employment and Social Development, we have deputy minister Mr. Ian Shugart; senior associate deputy minister and chief operating officer at Service Canada, Ms. Louise Levonian; and Mr. Alain Séguin, the chief financial officer.

Also, joining us from Canada Mortgage and Housing Corporation, we have Mr. Evan Siddall, president and chief executive officer.

Minister, because you're just a touch late, I guaranteed to the members that you would perhaps tag that extra five minutes onto your stay so we would have you for a full hour. I took the liberty of doing that.

We'll begin the meeting by proceeding with your comments and then move into members' questions. Please proceed.

May 28th, 2015 / 3:35 p.m.

Nepean—Carleton Ontario

Conservative

Pierre Poilievre ConservativeMinister of Employment and Social Development

Thank you very much, Mr. Chairman.

I'd like to thank the officials from my department and Mr. Siddall from the corporation for being here as well to provide parliamentarians with answers about the estimates.

Of course this is a vast job for us to do. This department is the largest in dollar terms, about $112 billion. It touches on everything from old age security, guaranteed income security, Canada pension plan, to employment insurance, job training, and of course hundreds of billions of dollars in mortgage insurance. We have a vast array of matters that will come before the House in the estimates for authorization.

I always like to simplify, though, the purpose of this department. It really does come down to jobs, families, and communities, the three pillars of good social policy. I've always believed that the best anti-poverty plan is a good job. The best social safety net is a strong family. For those who, through no fault of their own, do not have a job or whose family struggles, we have a third pillar called community.

Let's start with jobs. Our jobs plan is based on the three Ts: trade, training, and tax cuts. Trade is self-evident and it's not directly under the purview of this department, so while I support the Canada-EU trade agreement, the trade agreement with South Korea, and the trade agreements we've signed with roughly 40 countries in total, I won't spend a lot of time talking about them.

Training is definitely a big part of what we do. Our approach at Employment and Social Development over the last several years, especially under the leadership of my predecessor, Jason Kenney, has been to reorient our training programs towards matching Canadians with jobs that actually exist. For too long we told our young people that there was only one way for them to succeed and that was to get a job after going to university, wearing dress shoes in a white collar position. We now know that those jobs are great, but there are a million skilled positions that are needed, many of them in blue collar trades where we don't need dress shoes, where we need hard hats and workboots.

That is why we have reoriented our program to renew respect and value for the skilled trades. We believe that trades deserve the same respect as professions, colleges and polytechnics the same respect as universities, and blue collars the same respect as white collars. So we have created the Canada apprenticeship grant to help with the cost of initiating and then concluding an apprenticeship. We supplemented that recently, in fact just this year, with the Canada apprentice loan, a $4,000 loan that helps students with the in-classroom costs of being an apprentice. Already, I think we have over 10,000 young people who have taken advantage of this interest-free loan.

Finally, the Prime Minister recently announced that the Canada student grant, which had been available only to programs of a duration of 60 weeks or more, will now be available for more vocational-style training of a duration of as little as 34 weeks. That, of course, opens up that grant for a vastly broader array of training opportunities for young people.

Finally, we had something called the labour market agreement, with which all of you are familiar. That gave half a billion dollars a year in training dollars to our provinces. But we found, unfortunately, that it wasn't matching people with jobs that actually existed, so we've transformed that into the Canada job grant whereby an employer pays one-third of the cost and the Government of Canada pays the other two-thirds of the cost of training an employee for either a promotion or a new job within the work setting. That means that the employer gets a tailor-made employee, and the employee gets the guarantee that their training will actually lead to a job. We've had many successes with this already.

That is a small sample of the changes we're making to our training program.

Finally, with regard to tax cuts, in my department we are strongly supportive of measures to reduce the costs on employers. That's why I'm pleased to confirm that in 2017 we will reduce employment insurance payroll taxes by 21%. That will make it much less expensive for employers to hire. When they do, their employees will pay less payroll tax as a result of this change. That means more money in the hands of people who work and more money in the hands of those who would hire them.

We also announced in our recent budget plans to cut small business taxes from 11% to 9%. This is the largest small business tax cut in 25 years. The CFIB confirms that this will help small enterprises hire more people, build their payroll, and strengthen our economy.

Mr. Speaker, that brings me to our next point, which is families. We believe the child care resources that the government has should go directly to the child care experts, and those are the eight million people we call moms and dads. I see that Mr. Cuzner already knew what that line was, so I'm very impressed that he's coming around to our point of view. We hope he will convince his leader to do the same one day. We have cancelled bureaucracies that were erected by previous governments on the child care front, and replaced them with direct cash payments to parents that they can spend on anything they believe is appropriate.

I've asked my department to look into the impact this has had on child poverty, and we have some good news in this area. Colleagues, the universal care benefit—it's the original $1,200 payment—has already lifted 41,000 children out of poverty and into the middle class.

The methodology of this calculation is simple. We looked at families who would be below the low-income cut-off line if that benefit did not exist but are above it because of its existence, and there are 41,000 kids, based on the original program. That does not include the recent increases to the universal child care benefit announced in the previous fall economic update. That increase will mean $2,000 for every child under six and $720 for kids six through seventeen. It augments the family tax cut or income splitting, and a whole variety of other pro-family, low-tax measures instituted by our government. The overall approach is to put money directly in the pockets of parents so they can lift their kids up and strengthen their families. It's working.

UNICEF looked at child poverty in this country. They looked at child poverty all around the world. What they found was that during the great global recession, while you would have expected that children would suffer the most, in Canada, the opposite happened. We had 108,000 kids lifted out of poverty between 2009 and 2011. UNICEF specifically said that was the result of government policies to put money directly in the hands of moms and dads.

Finally, with respect to community, probably all of us can think of great philanthropic community leaders, people who have gone out into the world and done great things and want to give back. Often when they make these impressive donations to build hospital wings or university libraries or expand food bank operations, they don't have that money sitting under their bed; they have it invested in a small business, in real estate, or in shares. You all know what happens when they sell those assets. They pay taxes. That never hurt the philanthropist; they were planning to give that money away regardless, but it hurt the charity. It was a tax on charities. I'm pleased to share with this committee a recent announcement by our government that any sale of assets for the express purpose of donating to a non-profit will be exempt from all capital gains tax going forward. That means those donations will go 100% to the charities to which they were destined rather than to the government and the taxman.

Another inspiring area where communities have stepped up is in helping our new Canadians achieve their full potential. We have a problem and an opportunity in this country. Here's the problem. Despite the fact that we have 24,000 skilled tradespeople and professionals who immigrate to Canada every year, only about 26% of immigrants work in the field for which they were trained.

Thirty-six per cent of immigrants report difficulty getting their credentials recognized in Canada. Despite the fact that immigrants are more likely, vastly more likely, to have Ph.D.s and master's degrees, they have more difficulty putting those credentials to work in the Canadian economy. Now one of the reasons is that, in the licensed professions and trades, it can often be difficult to get a licence to practise and to get credentials recognized. It's very costly. Many newcomers have no credit history or collateral, so they can't get a loan in order to go and take the training, testing, and time off work necessary to get their credential recognized.

A group of business leaders in Calgary came up with a really innovative idea. They said that if they can't get a traditional bank loan, they will sign loan guarantees for them so the banks can be sure the money will be repaid. A group called the Immigrant Access Fund administered the initiative and helped these newcomers with charting a course to obtaining credentials, planning their studies, and preparing for a job find after the credentialization was finalized. They took small loans of about $7,000 a year. Our department, under the leadership of Jason Kenney, funded the administration at the outset of this. Then we provided a little bit of extra loan capital and loan guarantees to support it as well.

We're starting to get the results of this pilot project. Roughly 1,800 immigrants took these loans. On average, they were about $7,000. So far, the default rate is well under 3%. Employment is up by 47%. At one of the sites where these loans were delivered, incomes have doubled from before they took the loan until after they paid it back, and there's been a very large increase in licensing in the original field. We are still waiting for additional information and data to come, but I am almost certain and very confident in saying that the very small amount of money that we put into this will be paid back many, many times over through the increased taxes that will result from the growing incomes of participants in the program.

We announced in the recent budget that we would transform this pilot project into a full-blown program. The terms of that program have not yet been established. We are not yet prepared to announce how many loans will be available or how exactly they will be delivered, but I can tell you that we are going to keep the budget commitment to institute a micro-loan program to help newcomers get fully credentialed in their fields and working in high-paying jobs so that they can fulfill the outstanding potential that they bring to Canada.

3:45 p.m.

Conservative

The Chair Conservative Phil McColeman

Minister, could you just quickly wrap up. Thanks.

3:45 p.m.

Conservative

Pierre Poilievre Conservative Nepean—Carleton, ON

I will wrap up. Thank you, Chair.

Our agenda is jobs, families, and communities. That's what we do, and we will keep doing it with the help of extraordinary public servants and the support, hopefully, of Canadians.

Thank you.

3:45 p.m.

Conservative

The Chair Conservative Phil McColeman

Thank you very much for your comments.

We'll move into five-minute rounds of questioning, starting with Mr. Davies.

3:45 p.m.

NDP

Don Davies NDP Vancouver Kingsway, BC

Welcome, Minister, to the committee. Congratulations on your inaugural appearance.

Minister, I'm looking at the youth employment strategy in the 2013-14 departmental performance report. I want to ask about youth unemployment in this country, which you touched on. As you know, it's approximately twice the national average, about 14%. Some think it's higher than that, because that's just the reported number. We know that young people are hurting, and parents are worried, yet there was lapsed spending. Forty million dollars that were targeted to go towards alleviating youth unemployment did not go towards helping Canada's young people find jobs last year. On top of that, there are now cuts planned to the youth employment strategy, nearly $20 million, by 2018. Further, we note that dozens of organizations waited months to hear about skills link funding the government either did not dole out or doled out very late.

Minister, in the face of a 14% youth unemployment rate, why did you leave $40 million unspent to address this issue, and why will there be future cuts?

3:50 p.m.

Conservative

Pierre Poilievre Conservative Nepean—Carleton, ON

Thank you very much for your question.

I think we need to put the issue of lapsed funding into its proper context. It is the regular practice of governments to spend underneath the budget that Parliament authorizes for them, and there's a good 800-year-old reason for that, which is that departments are not meant to spend what Parliament has not approved, and it's unwise to spend right up to the limit for fear of going over it. It is good, prudent financial management to come in under budget and to leave a buffer between that which you have approved and that which we spend.

As for youth unemployment, the historical reality is that there has always been a gap between rates of youth unemployment and unemployment among the general population. That said, there are some very positive developments as it relates to the financial well-being of our young people.

For one, student loan debt has declined by 10% in real terms. As well, we have ended the Liberal tax on scholarships and provided tax credits for textbooks. We've also created, as I mentioned in my opening remarks, the apprenticeship grants and loans. We've put out 500,000 of these grants. They're worth about $4,000 apiece. They will help us help young people fill, for example, the more than 300,000 construction jobs that will go wanting over the next seven years.

So we do have a low-tax plan to help young people get employed and earning good incomes in high-demand jobs.

3:50 p.m.

NDP

Don Davies NDP Vancouver Kingsway, BC

Thank you.

I'm going to turn from young people to seniors and income security for seniors. As you know, Minister, demographically Canada is aging, and we're all more concerned about this as we go forward.

Now, there's no magic to pensions. If folks want stable, sufficient income in retirement, it requires people to put away money in a disciplined way in a stable, secure fund for a long period of time.

The Canada pension plan is Canada's largest pension fund. It is the most stable pension fund. It is the most diversified pension fund. It is completely portable across the country. It is jointly funded between employers and employees. It is the cheapest pension fund in the country for employers, because they have no administrative costs for actuaries, lawyers, or otherwise. Also, it has guaranteed benefits.

We know that it was designed specifically to provide 25% of income replacement in retirement. We also know that well over 50% of working Canadians no longer have workplace pensions. That's a change from how it was 20 or 30 years ago when the 25% was figured out.

Mr. Minister, why not implement the NDP's plan to gradually and prudently phase in small increases to the Canada pension plan contribution rate to gradually result in a doubling of pension benefits, to recognize the fact that more seniors will need to rely on the Canada pension plan 10, 20, or 30 years out? What's wrong with that idea?

3:50 p.m.

Conservative

Pierre Poilievre Conservative Nepean—Carleton, ON

It's a tax increase.

3:50 p.m.

NDP

Don Davies NDP Vancouver Kingsway, BC

It's retirement funding.

3:50 p.m.

Conservative

Pierre Poilievre Conservative Nepean—Carleton, ON

I was speaking to a businessman just before I came into this room. His small business offers matching RRSP contributions to his employees. He says that he would have to cancel that if.... He proactively brought up the provincial Liberal proposal to increase payroll taxes on his company. He said that he would have to cancel matching RRSP contributions for his employees if they brought in this payroll tax increase on his company. Other businesses have told the CFIB that they would have to lay people off in order to mitigate the costs that such a payroll tax would impose upon them.

I know that yesterday the Liberal leader said that he supports “a mandatory expansion of the CPP of the type that Kathleen Wynne put forward in Ontario”. That plan would lead to a $1,000 tax increase for an individual earning only $60,000 a year and another $1,000 for the small business that employs that worker.

Higher taxes are not the solution. We prefer low-tax options, and that is exactly what we have provided.

3:50 p.m.

NDP

Don Davies NDP Vancouver Kingsway, BC

Minister, can I ask—

3:50 p.m.

Conservative

The Chair Conservative Phil McColeman

Thank you. That's—

3:50 p.m.

NDP

Don Davies NDP Vancouver Kingsway, BC

—are you opposed to employers contributing to their employees' retirement—

3:50 p.m.

Conservative

The Chair Conservative Phil McColeman

Mr. Davies, your time is finished.

3:50 p.m.

NDP

Don Davies NDP Vancouver Kingsway, BC

Thank you.

3:50 p.m.

Conservative

The Chair Conservative Phil McColeman

I'm going to allow some latitude with going over the five minutes, but we were well over the five minutes in that case.

Mr. Butt, you have five minutes, sir.

3:55 p.m.

Conservative

Brad Butt Conservative Mississauga—Streetsville, ON

Welcome, Minister, and officials. Thank you all for joining us today to discuss the main estimates.

Minister, one of the most significant programs your department is responsible for, of course, is the employment insurance system. As a member of Parliament obviously I'm helping my constituents out from time to time with these issues. There is absolutely universal agreement that, thank God, Canada has such a program that helps people who have lost their jobs due to no fault of their own and in fact helps parents and mothers, because we have maternity benefits and parental benefits.

I was just reading an article last week. There is a big debate now in the United States because they don't have maternal and parental benefits in their employment insurance or social security system. We have those great things in Canada.

I want to ask you a few things about our EI system. Obviously, Canadians pay into the EI system through payroll taxes and these premiums fund the administration of EI. Obviously their employers make a contribution to the EI system as well. It's a great social safety net program that we have and I think all political parties cherish the EI system and the important role it plays.

I understand that Service Canada recently brought on additional staff to assist in the processing of EI claims. As a result, can you confirm that Canadians can expect to have their EI claims processed within the 28-day service window? Service Canada's standard, I understand, is 80% of claims processed within 28 days. Are we currently meeting that standard? I can certainly tell you that in my office I'm getting very few constituents coming in indicating that they are having issues with the processing of their EI claims, which tells me that it must be working, because otherwise, they'd be in my office.

Can you give us an update on that? Where are we on the service standards, and where are we generally on the strength of this very important program for Canadians?

3:55 p.m.

Conservative

Pierre Poilievre Conservative Nepean—Carleton, ON

The anecdotal evidence you observed in your riding is a microcosm of what has happened across the country. Because of the very good management of public servants and the very wise decisions they have made to allocate the right resources towards this service standard, I can confirm that over 80% of eligible applicants are receiving payment in under 28 days. That is the 80 in 28 commitment with which you are all familiar, and I can confirm that it is now being met.

3:55 p.m.

Conservative

Brad Butt Conservative Mississauga—Streetsville, ON

One of the things I do want to do, and I think all members will agree, is that I certainly want to compliment the excellent work that the Service Canada office in Mississauga which my staff and I deal with are doing. They are being extremely helpful, I find, on some of these cases. Some of them are complicated in terms of how we get to insurable earnings, insurable hours, and those kinds of things. Sometimes those issues are a little bit complicated, but I've certainly found, in my experience anyway, that the ability to work with the individuals in the Mississauga Service Canada office has been outstanding. Please take that comment back to your staff, from my office and me, that I have found it to be quite good.

Minister, when we are processing EI claims, people are obviously concerned that things will be dealt with more efficiently. I'm assuming that more and more of these are being done electronically and that they're able to be processed fairly quickly in that manner. Is that the case, or if people are still doing the walk-in traffic thing, what is happening in these Service Canada offices across the country that will give us, as members of Parliament, a better feeling that there is someone there, a live body there who is actually providing a level of service to an individual who is simply dropping by to drop off that EI claim?

3:55 p.m.

Conservative

Pierre Poilievre Conservative Nepean—Carleton, ON

Other than to say I know that at least two-thirds of claims are now fully or partially automated, I don't have anything to add to it.

I think my officials could offer you more technical information on how we're processing these.

3:55 p.m.

Ian Shugart Deputy Minister, Department of Employment and Social Development

I would just say that the digital age has two main impacts. Louise may want to elaborate on this in more detailed questions if you wish.

The first is to turn increasingly to automated processing of the claims rather than having it done manually by individuals. The second of course is to encourage people to make the contact through digital means. Both of those things have been trending for some time, and continue.

That said, Service Canada is committed to being available through the mechanism, whether it's call centres, digital approaches, or direct person-to-person contact. It is the citizen who makes that decision, typically based on their need and their circumstances.

4 p.m.

Conservative

The Chair Conservative Phil McColeman

Thank you for that answer.

Now we move to Mr. Cuzner. You have five minutes, sir.

4 p.m.

Liberal

Rodger Cuzner Liberal Cape Breton—Canso, NS

Thanks very much, Minister, for being here with your officials.

Minister, are you quite confident that in 80% of the cases people are receiving EI benefits within 28 days?

4 p.m.

Conservative

Pierre Poilievre Conservative Nepean—Carleton, ON

Eligible claimants, yes.