Human Resources Committee on Nov. 29th, 2018

[Bobby Morrissey, Liberal, Egmont, PE]

It was a progressive change I agree with, which leads to my next question.

What is, for lack of a better term, the flexibility within the EI fund? We've done several studies since I've been on the HUMA committee, and they all point to expanding the EI system as a better social safety net for people with a host of issues and disability. We constantly hear in the House of Commons from the opposition that EI premiums are a job-killing tax on business, which I disagree with. We have social security nets in this country to protect people with minimum attachment to the workforce.

What is the flexibility if we put more demands on the EI system?

[Andrew Brown]

The rates are set according to a formula that essentially takes a look at the expected benefits that would be paid out over the coming seven years and what rate would need to be set to equal that.

[Bobby Morrissey, Liberal, Egmont, PE]

We would simply manage what the demand would be and set the rates.

[Andrew Brown]

That's what it is.

[Bobby Morrissey, Liberal, Egmont, PE]

If you made a recommendation to increase the demand on the EI system to fund, then the rates would have to go up.

[Andrew Brown]

What I was just going to add to that is that this figure gets updated each year by the senior actuary for the EI program. An increase in benefits paid of about $170 million equates to a one-cent increase in the EI premium rate.

That's where we are at the moment with current economic conditions.

[Bobby Morrissey, Liberal, Egmont, PE]

If, as a committee, we want to recommend that the system should be used to expand benefits as a social safety net, then in fairness, we would have to at the same time recommend that there be a consequential increase in the EI premium.

[Andrew Brown]

That's what the impact would be because then any changes that are made to the EI Act get taken into account in the rate-setting process. The committee would not make that particular recommendation. It would be through the annual rate-setting mechanism.

[Bobby Morrissey, Liberal, Egmont, PE]

Earlier this morning, you were not here but witnesses appeared before the committee. This relates to the questioning about the flexibility of sick benefits of 15 weeks. I thought it was a very creative option put before the committee. Currently, as you reference as well, it's structured in week allotments, so you have 15 weeks. Fifteen weeks equates to 75 days. This system would be better tuned to people with episodic illness if they could take that on a daily basis, if they could use the option of having 75 days of benefits over a period of time.

I thought this was a great recommendation put before the committee, because there would be no increase in cost to the EI system. If there were, it would be marginal at best. Could you comment? Would the system be able to accommodate that kind of flexibility?

[Andrew Brown]

I think about two main considerations. One is really with respect to employers. An important thing when we think about the EI program is not just the worker but the employers, and the two are funding this program. If we are creating a benefit that could be paid on a weekly basis, there would have to be thought about whether there are equivalent leave provisions of some kind that would be made on a daily basis, and whether we would be creating some kind of a burden on employers who would be required to allow someone to be off.

[Bobby Morrissey, Liberal, Egmont, PE]

This is occurring anyhow. If this person, because of a medical condition, simply cannot go into work for a day, they're not going to work.

If they are out for the week, the same or even greater impact would be on the employer. Is there anything from an administrative perspective that would prevent the system from accommodating a 75-day sick payment versus a 15-week one? Fifteen weeks can be allocated week by week over a period. I don't see why you could not accommodate that.

[The Chair, Liberal, Bryan May]

Give a very brief answer, please.

[Andrew Brown]

A tremendous change would be required to manage taking benefits on a daily basis as opposed to a weekly basis. That would be so for a lot of reasons. From an internal perspective, internal to more the Service Canada side of things, we would see an increase in the individual number of claims, because somebody who was perhaps making a claim for one week might claim two—

[Bobby Morrissey, Liberal, Egmont, PE]

Then we would have to up the rates.

[Andrew Brown]

It would create a lot more administration. The other thing to think about is that people don't have standard patterns of work, the way people thought about it in the past. If someone cannot work one day, is that one-fifth of a week or one-fourth of a week?

[Bobby Morrissey, Liberal, Egmont, PE]

No, it's one day.

[Andrew Brown]

For us, it's a week. There are seven days in the week not five, and if they only work for some of them, it's very complicated to go below the unit of one week.

[The Chair, Liberal, Bryan May]

I'm afraid I'm going to have to jump in here.

Madame Sansoucy, please.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

Thank you very much, Mr. Chair.

In the same vein as the comments I have heard since the beginning of this study this morning, I must first remind you that the federal government stopped contributing to the employment insurance fund in the early 1990s. I'm happy to hear people say that employment insurance must be reformed, but it is clear that the reform must require the federal government to start contributing to the employment insurance fund again as it used to in the early days. In fact, when the government stopped contributing, the 1996 Liberal reform made the rate of eligibility to benefits and the benefit amount drop. The Conservative reform in the mid-2000s made the situation worse. So the government must assume its responsibilities through a desired reform of employment insurance. Either it needs to contribute to the employment insurance fund or it needs to dissociate from it all the programs for special benefits, sickness, caregivers and episodic disabilities it created in its “generosity” by dipping into a fund to which it no longer contributes.

I think it is also important to remind people of this because it has been pointed out that health was a provincial responsibility. Yet federal health transfers have dropped from 50% to 19% in the latest agreement. Over the years, the federal government has been increasingly withdrawing from that sector, and the provinces are left with the burden. So we cannot make recommendations that would give the provinces new responsibilities without first thinking about increasing transfers. I absolutely want to bring this up from the outset.

Here is my first question for the witnesses. In September 2015, the Institute for Research on Public Policy asked Ottawa to create employment support services to facilitate return to work and create a centre of expertise providing employers with resources and information for situations when a worker falls ill. Has your department started working on those issues and finding solutions?

[Kris Johnson, Director General, Canada Pension Plan Disability Directorate, Department of Employment and Social Development]

I have read the report. It raises a number of important considerations, some of which I think we've already heard about this morning.

We have looked at a broad range. My colleague went over a full range of available supports within the federal sphere. Some of the changes for EI that my colleague Mr. Brown has highlighted have introduced new flexibility. We have looked at the CPP as well. That is a little more difficult to change, for reasons I can get it into if people are interested, but we continue to study it. If there are particular questions, or changes—

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

I do have a specific question.

According to the report by the Institute for Research on Public Policy, the definition of “disability” in some public programs, such as the Canada Pension Plan Disability Program, is too rigid, and that makes support for individuals with a chronic or episodic disability difficult. How does your department plan to remedy that situation?

[Kris Johnson]

That one, I can be a little more specific about. It is important when we're talking about the definition used by the CPP for the disability benefit to understand that it doesn't operate on any particular illness, injury or condition itself. The test is set out in the legislation and has remained the same since the inception back in the sixties.

Every individual case is looked at on its own as to how it presents in that individual. It is interesting to know that for people with conditions that are most often thought of as episodic in nature—because it's not always obvious which conditions are episodic and which are not—for those that are commonly considered, people applying with those conditions can and do get approved for benefits. It really depends on how severe it is and how likely it is that the person is going to regain the ability to work. When we look at the definition, we keep that in mind first and foremost.

The other thing we keep in mind is the fact that the CPP is not a federal program. It's actually jointly governed by the federal, provincial and territorial governments. Any changes we would make to that definition would have to be approved by the jurisdictions. The formula is two-thirds of the jurisdictions with two-thirds of the population, which is a high bar. As Parliamentary Secretary Vaughan raised earlier, there is a need to look at the funding source, and we've had some questions on the EI account on that.

If we were to change the definition in such a way as to be more inclusive or to make it easier for people to qualify for benefits, that might put at risk the monies available to pay out retirement pensions, because of course they're not separate plans. The disability benefits are paid out of the overall Canada pension plan. We would need to engage, with the help of the chief actuary of Canada, in a study of what the impacts of that might be, what that might mean for the contribution rates and whether or not there were any offsetting reductions in other parts of the plan to help.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

That does raise the issue of responsibility.

May I ask one last question very quickly, Mr. Chair?

[The Chair, Liberal, Bryan May]

A superfast one, please....

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

How is the Liberal government showing leadership in the hiring and retention of workers with episodic disabilities?