Human Resources Committee on May 2nd, 2016

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

Well, I'm having a hard time understanding how you do not receive the benefit that you're alleging the unions receive. You're receiving the same tax benefit, but you want different reporting requirements to be targeted towards the unions.

My next question is for Mr. Wudrick.

Have you undertaken any public awareness campaigns or lobbied government concerning public disclosure for the types of organizations we are talking about, so that they would similarly be required to comply with the provisions of bills such as Bill C-377?

[Aaron Wudrick]

No, in fact, we haven't even undertaken it for unions. We were simply asked to appear at committee on several occasions.

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

You spoke at the Senate Standing Committee on Legal and Constitutional Affairs about a year ago, claiming that your organization, the Canadian Taxpayers Federation, supports the principle of privacy.

How can you justify the distortion of enforcing Bill C-377, which itself violates privacy? We've heard that from previous panels in previous weeks. How do you reconcile the violation of privacy requirements by Bill C-377?

[Aaron Wudrick]

In our view there's a spectrum between privacy and accountability. When one receives the benefit of public funds, I think that tilts the demand, the threshold, more towards transparency than towards privacy.

If privacy is a paramount concern, you should be willing to forgo special tax treatment, which is exactly what our organization does.

[The Chair, Liberal, Bryan May]

Thank you very much, gentlemen. I think I can say about this discussion that definitely you guys get the most passionate panel award. Thank you for that. I really appreciate your both coming here today and speaking to this group on this issue.

We have one final hour today, committee. We'll break for a very quick health break and go from there.

Thank you.

[The Chair, Liberal, Bryan May]

Could we come back together, please?

We have a brand new, fantastic panel to speak to us. We have a little committee business that we're going to have to squeeze in at the end. I know I'm being a taskmaster today, but I want to get through everything.

I would like to welcome from Canada's Building Trades Unions, Robert Blakey, Canadian operating officer, and Neil Cohen, executive director; and Sandra Guevara-Holguin, an advocate from the Community Unemployed Help Centre; and Hans Marotte and Laurell Ritchie from the Inter-Provincial EI Working Group.

Thank you all very much for coming here today.

We're going to keep the opening remarks to under seven minutes, please. We've got such a big group, we want to make sure we get to everybody.

We'll start with Mr. Blakely.

[Robert Blakely, Canadian Operating Officer, Canada's Building Trades Unions]

Thank you very much.

As a result of the short notice, I haven't been able to get you any written material, but I undertake to do so in a timely fashion.

Thank you for having a look at this topic. I think the entire EI system needs to be looked at, but this is a great place to start.

I come from the construction, fabrication, and maintenance industry. We represent about 500,000 Canadians, 8% of all direct employment in Canada, and 14% of Canada's GDP. It's an industry that is transitory for both employers and workers. Every construction job ends. It is not unusual to have several employers over the course of a year, and it is extremely and highly unusual to ever have a career with one employer. The industry conforms to this characteristic of worker mobility both in its training structure and in the hiring halls we use. Our work patterns aren't very well understood: we have long hours, few days off, with periods of unemployment in-between.

At the outset, let me say that it supposed to be employment “insurance”. When I went to law school, insurance was a contract of indemnity against a foreseeable event. If you are unemployed, that is the foreseeable event, and you ought to get something. It doesn't work that way in our business now.

Your request talks about the issue of denials and the issue of access. Sometimes—and I've laboured through this a lot—people say that it's easy: let's just go back to the past. I'm likely the only person here who has spent a bunch of time in my hometown at the board of referees for unemployment insurance, as it then was, and then employment insurance. The truth is that the board of referees has been replaced by a tribunal of people who can sit in their PJs at home, having a look at everything, having coffee, and looking at a pile of papers, most of which are supplied by the commission. It is a poor way to deal with the issue of appeals for EI.

You know, you need to be able to get.... Sometimes, inarticulate people need a chance to be able talk to a human being to find out what the story actually is. Having the board of referees allowed those people to develop some local expertise in things like urban and rural, seasonal, and distance.... It gave them an opportunity to have a couple of people there who knew something about hiring halls. It gave those people an opportunity to understand the local labour market and to have some knowledge.

It also allowed people to explain a reason: “I didn't take the one-week job because I was at the top of the out-of-work list, and if I waited another three days, I would get a job that lasted eight months”. People don't know how to express those things, and when they're sent into the current set of tribunals, it doesn't work. The system is supposed to function in the interests of the people who are actually the claimants who fund employment insurance.

We have a series of hiring halls. We have roughly 300 hiring halls across the country that dispatch people to go to work in various places. We're not the only unions that run hiring halls. Other groups of unions do as well. Theoretically, in the last review of EI, hiring-hall agreements were deemed to be acceptable and were preserved in place. It simply depends on where in Canada your hiring hall is located as to whether Service Canada thinks you have a valid hiring hall agreement or not.

The premise of the hiring hall is a pool of skilled people. Employers invest in those people, paying somewhere in the vicinity of 25¢ to $2.50 an hour to get the workers trained. We maintain an infrastructure of $750 million across the country and spend $300 million a year training people at 175 training centres. There's an enormous investment there.

Threshold training may come from the community college, but the union training centre does all the graduate-level training, specialist training, refresher training, upgrading, and supervisory leadership training. They do that to maintain a pool of skilled workers whom they can call on when they need them.

We do the job search for the workers. We share work through the hiring hall. This is of enormous value to our employers, who actually agree with us that this is something that needs to be preserved.

The second point is on denials. People who take training are supposed to be in receipt of special benefits under sections 12 and 25 of the act. That isn't always the case. What ends up happening frequently is that people who go through their apprenticeship have to use regular benefits in order to go through training. Those are four or five periods of apprenticeship training. They have to use their regular benefits, not special benefits. When they get a journeyman certificate and enter the industry as full-fledged participants, they're already frequent users of EI. This doesn't work.

At the end of the day, we are still going to lose 25% of the construction industry in the next seven years. The baby boom generation is going to retire. We need to get access for people. The regional system of EI doesn't work very well. If you live in southern New Brunswick, you need 600-plus hours to qualify for 17 weeks' benefit. If you're a half a mile north, in northern New Brunswick, it's 300 hours over 52 weeks. This doesn't make sense.

We'll send you some material. I'll answer any questions you have.

Thank you very much for undertaking this. It looks to me like it's the start of a major review of EI, which is something that needs to happen. EI should not be an ideological football. It should be a principle-based system.

[The Chair, Liberal, Bryan May]

Thank you, Mr. Blakely.

Now, we have Mr. Cohen for seven minutes, please.

[Neil Cohen, Executive Director, Community Unemployed Help Centre]

First, I want to thank the committee for undertaking this important work, and I want to thank you all for the opportunity to be here today. As with Robert and, I suspect, many other witnesses, given the short notice, I haven't had time to prepare a written submission in advance, but I certainly intend to follow up after today with more detailed comments. This is going to be a very quick overview of the kind of work that we do.

I'm joined today by Sandra Guevara-Holguin, an advocate with the Community Unemployed Help Centre. She's been with us for eight years now. I wanted Sandra to be here, in particular, because if I were here on my own and had sufficient time, I would probably do a high level policy analysis of the history of EI going back to 1940, and how the current system is failing workers. I would talk about the program structure and the way things should be, and things of that nature, but I think what Sandra brings is of real value, because she can talk about what she sees on a daily basis, acting on behalf of unemployed workers over the last eight years.

I want to begin by talking very briefly about the Community Unemployed Help Centre. We've been operating since 1980. We're a non-profit community-based organization located in Winnipeg. Although we provide direct services to unemployed Manitoba workers on issues pertaining to EI, we also do a lot of social policy work at the national level with some of our partners, particularly, the Canadian Labour Congress, and similar organizations throughout the country.

We were created to provide information, advice, and representation for unemployed workers. We have had a history of appearing before umpires and boards of referees. We also have extensive experience making requests for reconsideration and appearing before the Social Security Tribunal.

We're a small organization. We're a unique organization. There are not many similar organizations in this country. We certainly share a lot in common with Mouvement Action-Chômage, where my colleague, Hans Marotte, is employed. We provide essential and important services to unemployed workers in need.

You will understand—and I think we all share in this—we're dealing with a highly complex program which is not easily understood by the public at large and, dare I say, even by politicians. It's often been said that the Unemployment Insurance Act is the most complex act in government. We're dealing with a lot of adjudicatory issues that are very hard to decipher in terms of entitlement to benefit.

I want to focus on three areas very briefly. First, the program design really has to be reconsidered. I want to remind members that workers pay five-twelfths of the cost of the program, and the program is failing workers. I remember a recent EI commissioner for workers forum. I said to the minister at the time that if the EI program went to the private market, no one would buy it. I want to share that with you because we know, for example, that only 40% of workers who are currently unemployed receive EI benefits.

We look at the financing of the EI program, and you hear calls repeatedly from business that they want lower premiums and that premiums are a job killer. I want to tell members that in 1990, when the government withdrew from financing the EI program, the EI premiums for employers were $3.07 per $100 of earnings, and today they're $1.88. There has been a constant pressure to lower premiums, and that's done by reducing entitlement to benefits.

Historically, over a period of time, the trend since 1990 has been to require workers to work longer in order to receive benefits, to shorten benefit duration periods, to increase penalties for workers who quit their jobs or are fired. The service that they're getting certainly fails to meet standards of reasonableness. We're certainly aware of the issues.

I hope all members of the committee have had an opportunity to read at least the executive summary, the monitoring assessment report, which addresses some of these issues and the fact that 30% of workers who contact the Service Canada office receive a blocked call. That means they don't even go into the queue.

These are the kinds of things that Sandra sees on an ongoing basis. The program structure really needs to be reformed so that workers have a reasonable chance of entitlement to benefits for a reasonable period of time at a reasonable rate.

The second issue, certainly, is one of appeals. We do not support the change to the Social Security Tribunal. Most appeals end. The EI Monitoring and Assessment Report, for example, again indicates that 45% of decisions are overturned. That's an appalling rate, and it shouldn't be the case. Decisions properly adjudicated with the assistance of staff at Service Canada should be reasonably approved and should not be overturned at a rate of 45%.

Governments have told us that the system is working because few people appeal to the SST, for example. I would submit to you that few people appeal to the SST because dealing with Service Canada means encountering a succession of speed bumps, starting from the time one tries to call Service Canada and is unable to get through. Then, one encounters claim processing delays, which create another deterrent. Then one goes through the request for reconsideration stage—another deterrent. By that time, one is sufficiently discouraged from even pursuing their appeal rights to the social security tribunal.

That's the other area that we think really requires additional examination. We would certainly call upon the government to look at a major review, with meaningful consultation with stakeholders, particularly organizations like ours, which has a unique perspective and unique experience. In any given year, we do about 300 appeals, and our success rate on appeals has historically been, since 1980, over 80%. We have a good track record and we have a good body of cases upon which we can draw.

What's my time like? I would like to turn it over to Sandra now.

[The Chair, Liberal, Bryan May]

You left her a minute.

[Sandra Guevara-Holguin, Advocate, Community Unemployed Help Centre]

At any given time we have 300 cases, and four months is the average wait for a request for reconsideration to be processed. People are waiting four months to know what's going on. Most of the time we have to go to the social security tribunal.

As an example, I have a case of a person who was denied benefits on June 23, 2015. He finally has a hearing with the social security tribunal on July 12 of this year. During this whole time, he hasn't had access to EI at all.

In terms of my personal experience, I tried to call the general inquiry line last April 27. I went there. I called. I had the SIN number of my client, and the access code. The first message that showed up was that if you've provided all the records of employment and documents requested, it is not necessary to call. Mind you, there are eight weeks between the time you submit something to employment insurance until you hear from them.

After I went through that, I was lucky enough to get into the queue. The message I got was that my waiting time was an estimated 45 minutes. Who is expected to sit down for 45 minutes to get an answer as to what's going on?

My second try was to create a “My Service Canada Account” for my client. This particular client is an elderly client, so he cannot do that on his own. He does not have a computer. I tried to do it for him, and it took me an hour to create the account. When I finally got there, and I went to the most updated messages, it just said that his claim was in process. It has now been four months, and this person hasn't seen any benefits.

This is just to let you know what my front-line experience is with clients. I have at least 70 active files right now, and all of them are delayed: four months—to hear from them, to seek a decision—for all of them.

Thank you.

[The Chair, Liberal, Bryan May]

Thank you very much.

Now over to Ms. Ritchie, please. Thank you.

[Laurell Ritchie, Co-chair, Inter-Provincial EI Working Group]

Thank you very much.

I'm speaking on behalf of the Inter-Provincial EI Working Group, which was formed in 2013, inspired by some of the EI coalition work in places like P.E.I. and New Brunswick, and of course groups in Quebec. As well, the Toronto-based Good Jobs for All Coalition has an EI working group, which I co-chair.

We most recently—this won't surprise you—have been joined by representatives from Alberta and Saskatchewan.

We developed a joint statement at that time, and in May 2014 issued it with signatures from well over 100 organizations from coast to coast endorsing the position. As you will appreciate, it is not easy to reach consensus across the country no matter what the issue, but that has been done, and we did also issue a statement this year to the government representatives and opposition parties with respect to the budget, EI reforms, and, in particular, stimulus spending.

There are four areas that we would like to see the HUMA committee direct its attention to, and I can't help it, but somebody said earlier that with these short presentations we have to keep our “sense of HUMA”.

[Some hon. members]

Oh, oh!

[Laurell Ritchie]

Sorry about that.

There are four areas that we want to cover.

First of all, we're obviously pleased to finally see some changes to EI in the budget. We want to see some of those moved up, though, from the times that have been set, whether we're talking about the 910-hour rule for new entrants and re-entrants or others.

We think some of them have gotten lost in the shuffle of the changes that did happen in 2012 and into 2013. We lost the hiring hall provisions. We lost parental and sick benefits for workers employed under the temporary foreign worker program. We had additions—many would say politically motivated additions—of new EI regions in Prince Edward Island and Canada's north, to the detriment of workers. In all, though, those who have suffered most are the low-income workers and the precariously employed workers.

We'd like to see that moved up.

Secondly, there are the rampant problems with EI service delivery and the appeal system. Others have spoken on this, so I won't dwell on it except to say that we're very much in agreement, and it is a shared experience across the country.

Thirdly, there is a need to ensure an independent EI account and to ensure that EI contributions are used exclusively to fund EI programs.

The piece I want to focus on is the fourth one. I'll make just a few comments. It is about the need to fast-track a significant review of the EI system. I'm going to quote from a certain party's political statement at the time of the election, because we couldn't have said it better:

...to assess how successfully the Employment Insurance system is delivering its core mandate to provide income security to workers in a changing labour market. This will result in changes to the program that ensure more Canadians workers, particularly those in more insecure work, can get access to the benefits they need.

We think that review needs to happen and needs to be expedited. It needs to involve a lot of organizations on the ground, whether they be legal clinics or unions and the many others that are doing that kind of work.

Again, the business of there being an average 40% of unemployed receiving benefits is really the result of a couple of things. One is that those who don't qualify for benefits can't under the current rules; in particular, for problems with the hours system, that needs a complete rethink. Secondly, there are those who fall off benefits before they are able to find any work.

As a result of all of this and the need to make these kinds of changes, we do think that the government should be holding off on the premium cuts. If you can rethink definitions for who gets the 5 extra weeks and the 20 extra weeks, we think you should reconsider the premium cuts, because we need to know first what improvements need to be made in this system before we go reducing benefits even further.

We find it disheartening to see the debates focusing on the extra five weeks and on who, in addition to the existing 12, will get it. It used to be that there were five more weeks than we have now, right across the country. When you have both Calgary and Montreal currently with the same rates of unemployment, and now potentially up to 67 for those in Calgary and 42 max in Montreal, no wonder there are resentments building up.

We really think the hours system, which dictates entrance as well as duration, needs a complete rethink. It's based on the 35-hour week. The chart, the grid, is in 35-hour increments. We're long past the day of an average 35-hour work week; 80% of workers, according to the labour force survey most recently, are in the service sector, and the service sector average for paid employees is less than 30 hours.

Thank you.

[The Chair, Liberal, Bryan May]

You have about 30 seconds.

[Hans Marotte, Inter-Provincial EI Working Group]

Good afternoon. My name is Hans Marotte, and I am from the Mouvement Action-Chômage de Montréal.

If you were going to take away only one thing today, it would be this. The legislation currently deters those who know and penalizes those who try.

Last week, I defended an individual by the name of Maria. She worked at a company for 15 years before losing her job. She qualified for and began receiving employment insurance benefits. She then spent two weeks working at a job that was absolutely unacceptable, so she quit and is now no longer eligible for benefits. That means that a person receiving employment insurance benefits who then accepts employment cannot quit that job unless they show that they had no reasonable alternative to leaving, under section 28 of the Employment Insurance Act.

When someone on EI comes to me for advice, asking whether they should accept a given job, as a lawyer, I tell them that, once they do, they will have to stay in that job. So what do you think they decide? They decide not to take the job. Those who don't know their rights will take the job, try it out, and potentially be disqualified from receiving further benefits.

We all want people to have access to the best jobs possible. As part of their most recent EI reforms, the Conservatives claimed they wanted to help connect Canadians with available jobs. But, as things stand, the legislation does not allow for that, and it needs fixing.

Thank you.

[The Chair, Liberal, Bryan May]

Thank you, Mr. Marotte.

The first one up is Mr. Deltell, please.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Thank you, Mr. Chair.

Welcome to the committee, ladies and gentlemen.

Mr. Marotte, my question is for you.

It's a pleasure to meet you, and likewise, I'm sure. This is the first time we've met. I follow your activities, though, as many do.

You talked about those who know how the legislation works. I know exactly what you mean. I've talked with those who represent labour organizations and groups like yours. According to them, this new measure represented a pretty major change in attitude, one that required adapting to. But they also said that, on a practical level, few people had suffered as a result.

I'd like to hear your take on that.

[Hans Marotte]

With respect to the Conservatives' 2012 reforms, that is true. I gave a number of information sessions to employee unions active in the area of employment insurance. They said it was akin to being given a bazooka without the power to fire it. I don't have evidence of that. I am simply repeating what they told me. It's hearsay.

Although I had concerns about the impact, it is true that I didn't handle a great many cases stemming from the Conservative reform. Public servants had the legislative tool but rarely used it.

But what I'm going to tell you about now is much more serious. In 1993, the legislation was amended to disqualify an individual from receiving EI benefits if they had left their employment without just cause. Then, in 1995, the Federal Court of Appeal made a very smart ruling. The case was Jenkins, and I encourage you to read it. Under the act, an individual who had voluntarily left their employment—emphasis on the word “their”—was not entitled to receive benefits. The Jenkins decision established that claimants who were making an effort to find employment should not be deterred. That meant, then, that someone who was receiving benefits and trying to obtain employment was not penalized.

The Jenkins case gave rise to that very smart decision in 1995, but the Liberals amended the legislation the following year. In response to Jenkins, they changed the wording to refer to a person who had left “any” employment.

Trust me, for 20 or so years, I watched people struggle because of that sort of thing. Consider, for example, a machinist who comes to me and says he was making $20 an hour in a job with good working conditions but, after losing his job, has been unemployed for a month. He tells me he can get a job at Home Depot earning $12, $13, or $14 an hour. He wants to take the job on a short-term basis because his employer is going to recall him in three or four months' time and he doesn't want to be out of work. What I say to him is that, if he takes the job and has to quit later because he is having problems with the employer, he will no longer qualify to receive benefits. That means people are being deterred from taking jobs.

You are all creative thinkers. A myriad of options are available. For instance, if unemployed workers find a job while they are receiving benefits, they could be allowed to do the job on a trial basis for a certain period of time, without hindering their eligibility to receive benefits. It is akin to a probationary period on the employer's end, where the employer has the option to try someone out and let them go if it isn't working out in a month, say. Likewise, the employee could have that option.

The committee needs to give these issues serious consideration. Political stripes aside, we all want Canadians to have access to good jobs. But I don't think the current legislation allows for that.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

That's quite informative, Mr. Marotte. Let's stay on this topic.

No one, by the way, is immune to losing their job. It's happened to a few of my friends who were in the midst of wonderful careers. Provoked or not, problems can happen at work and people can find themselves out of a job at the age of 35, 40, or 45. Despite having a good university education, they can stay unemployed for 7 or 8 months. All of us here today know that no one is immune to that possibility and we all want people to be working.

What I have a problem with, though, is diminishing the value of low-paying jobs. You talked about a job at Home Depot that paid $12 an hour. I'm not saying you are diminishing the value of those types of jobs, on the contrary. That's not what you're doing. I have, however, had colleagues, in the past and in other places, who did look down on such jobs. It always made me angry, but that's another story. I won't get into the details of my personal life here.

What I want to make clear is that there is no shame in working a job that pays $12 an hour when you are trying to get back on your feet. There is absolutely no shame in getting up in the morning, going to work, putting in 35 or 40 hours a week, coming back home, looking your children in the eye, and being able to tell them that you are earning your keep.

You said the situation needed fixing, but what would you recommend in tangible terms?

[Hans Marotte]

The idea is precisely to encourage people.

Most of the people I see don't want to receive EI benefits; they want a job. The skilled worker, the machinist who makes $20 an hour, is probably going to be recalled in four months' time by their employer, who had to lay them off because there wasn't enough work. In the meantime, that person would prefer to work at Home Depot and do just about any job. But the problem arises when the person takes the job and it doesn't work out. Say the worker was promised 40 hours a week but only gets 20; say they were promised benefits and don't get them. In that case, the employer is not respecting the employment agreement. Unfortunately, the legislation does not authorize someone to quit the job because they are getting only 25 hours a week when the employer promised them 40. Someone isn't allowed to do that.

To rectify this, three options are worth considering. First of all, the wording in section 28 of the Employment Insurance Act could be revisited, specifically as it relates to a person who voluntarily leaves their employment. The provision refers to an individual who leaves “any employment”. The wording used in the 1993 legislation could be restored. Second, the idea of a trial employment period could be introduced into the legislation. For instance, the government could decide that, when an individual receiving EI benefits finds a job, they should have a month-long trial period and incorporate that into the act. After all, the idea is to encourage people to work, rather than collect benefits. With that in mind, the government could build into the legislation a reasonable period of time to try out the job. How long would be up to you.

The government needs to encourage people. It especially needs to ensure that those who, for 10, 15, 20, or 25 years, worked and paid their premiums, and who are receiving employment insurance benefits do not lose access to those benefits when they accept a job. Let's not forget we are talking about insurance. I have been paying car insurance premiums for 10 or 15 years and if I have an accident next week, the repairs will be covered.

We also talked about timeframes. Work is also needed on that front.

[The Chair, Liberal, Bryan May]

I am sorry to cut you off. We are running long there.

It's over to Mr. Sangha, please.

[Ramesh Sangha, Liberal, Brampton Centre, ON]

Mr. Blakely, you said in your submission that you want some improvements to be made. We are all sitting here to see that some improvements are being done in employment insurance. You are really enthusiastic about that. In your press report you also said that “Canada's Building Trades Unions are pleased with the support demonstrated for the skilled trades in this Government's first tabled budget.”

What type of improvements can you suggest today that would be good for the system?

[Robert Blakely]

Reinstate something like the board of referees. Look at the various zones across the country. I think they have to be rethought. Look at principles such as, if someone has left a job, is there a reasonable cause for doing that? Not infrequently, we have people who have been living in Cape Breton and working in Fort McMurray who actually get a job at home. They quit the job in Fort McMurray, where they have been for a year, and they go to work on the job in Cape Breton. Things are going along really well until the third week, when there is no material, so they lay everybody off. This person files for EI, after quitting a job and losing a year's worth of whatever. You are on your own. That does not make sense.

On the question of access to EI, I am not prepared to say, give every slug who doesn't want to work some money because the government is a nice way to get money. It should be based on your actions. If you have done something that puts you out of a job without a reasonable explanation, then we don't need that. The hiring hall agreements need to be reinstated across the country. They make sense for our industry. Parental and sick benefits need a good look. The real issue around parental and sick benefits, special benefits, and training benefits needs a fix. Where does part 2 fit? I'll write you something on all of those things, which will be a lot more elaborate than my just thinking off the top of my head and boring my umbrella to the point it fell on the floor. I'll send you something.