Human Resources Committee on April 15th, 2021

[Corinne Pohlmann]

The fact is that small businesses represent almost of half of Canada's GDP. If it goes to the highest level that we are predicting—we're trying to be a bit more conservative in our estimates—and if those 220,000 that right now are worrying about closing actually close, that could be as much as 15% to 20% of businesses that are out there. They are big employers. They are big contributors to our GDP. That could have a significant impact on our economy.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

When I was putting myself through university, I worked at numerous small businesses. All the soft skills I learned were critical to my success getting through university. I'm concerned very much about what it will mean for the future if small businesses go down to a greater degree than they already have.

[Corinne Pohlmann]

Yes, and we all should be. They're not only important to our economic outlook; they are very important to job creation and really important for our landscape in every community across this country. They are what makes every community in this country unique.

[Raquel Dancho, Conservative, Kildonan—St. Paul, MB]

That's well said. Thank you.

Thank you, Mr. Chair.

[The Chair, Liberal, Sean Casey]

Thank you, Ms. Dancho.

Next we have Mr. Dong, for six minutes.

Go ahead, please.

[Han Dong, Liberal, Don Valley North, ON]

Thank you, Chair.

Ms. Pohlmann, thank you very much for joining the committee today. Your perspective is obviously very important to the study that's in front of us.

My father used to own a small business, and I used to work there during my high school days. I understand how resilient small businesses are and how important they are to the neighbourhood, so, through you to your membership, I want to thank them for doing what they do.

Small businesses are also very crucial to the economic recovery post pandemic. That's why the government has introduced a series of financial assistance programs, including CEBA, the rent subsidy and the wage subsidy, until June of this year. What kind of feedback have you been hearing from your membership regarding these financial support programs?

[Corinne Pohlmann]

They have been absolutely critical to the survival of thousands, if not hundreds of thousands of small businesses, for sure. In responding to a recent survey we did, over 70% told us they continue to be critical to their survival in 2021 as we move into year two of the COVID pandemic, so they have been absolutely important. In fact, we hope to see those measures extended beyond June, because I don't think we're going to be out of it by June. So many small businesses are shut down or severely restricted as to what they can do, and those programs continue to be a lifeline for many of them.

[Han Dong, Liberal, Don Valley North, ON]

Like you, I look forward to seeing what will be in the budget on April 19 to support small businesses further.

Last March, Canadians realized that the EI system just wasn't designed to handle the unprecedented pandemic we were facing. That is why the CERB was created, to support what I think was eventually eight million Canadians who had lost their jobs.

In September of last year, we transitioned back to a simplified EI program and created the Canada recovery benefit for those who did not qualify under the previous EI qualifications.

Based on the input from your membership, how would you say the flexibility within the Canada recovery benefit will create more incentive to work? Have you heard anything back from them on that?

[Corinne Pohlmann]

As I mentioned, the one thing our members found difficult was that you could get a maximum of $500 per week through the CRB or the simplified EI system, and for some of them that has presented a real challenge as they have tried to attract people back to work, especially businesses that often rely on part-time workers, for example. That has been the one measure within the CRB and the temporary EI system that has been a real challenge for smaller companies, because some people were able to earn more not going back to work than going to work, since they might work only part time. I think those are some of the things we really have to think about before we move forward with making any permanent changes that may reflect some of those things.

[Han Dong, Liberal, Don Valley North, ON]

That's very interesting.

In your opinion, what are the benefits of having Canadians receive EI regular benefits as opposed to the CERB?

[Corinne Pohlmann]

Employment insurance is an insurance program, so it's based on whoever pays into it being able to benefit from it. We understand the need for CRB being set up during the pandemic, because obviously there are not just individuals who may not have paid enough into the EI system—though it also reduced the qualifying amounts by quite a bit—but also a lot of self-employed, including our members, who have used the CERB and the CRB systems to help themselves through the pandemic. About 34%-35% of our members had no income coming in, and when you're self-employed, you don't have access to the EI system, as you know. It became an important lifeline for some of them as well.

[Han Dong, Liberal, Don Valley North, ON]

There is flexibility designed into the CRB system that allows workers to maintain employment, especially for regions that are experiencing lockdowns. Can you speak to that a bit?

[Corinne Pohlmann]

That was certainly, I think, an improvement over the CERB. People could earn a certain amount of money and still get the CRB at the same time. That was definitely something we applauded at the time. I think that flexibility was an improvement in the transition to a CRB system.

[Han Dong, Liberal, Don Valley North, ON]

Let's talk about EI premiums. We heard that some employers are quite concerned about EI premiums, and we also know that many were relieved when the government announced a two-year freeze on the premiums so that employees don't have to shoulder the cost of these emergency programs that we introduced. Could you share with the committee some of the concerns that you have heard from your membership in regard to that EI premium, in particular in the context of the modernized EI system?

[Corinne Pohlmann]

As I mentioned, smaller businesses in particular are much more labour-intensive than larger businesses, so they're much more sensitive to changes in payroll taxes like EI and CPP. There is a lot of concern about what will happen to EI once the freeze is removed.

Again, people are happy there is a freeze in place right now, because increasing the cost of hiring at this point in time is the last thing we should be doing, but I think there is a lot of concern about how the EI system is going to pay for all the temporary measures that were put in place starting last September. We've certainly suggested that that potentially also be taken out of the EI system and not paid for by employers and employees, given that these temporary structures were put in place to deal with the pandemic. It wasn't the employer who forced these folks to leave their jobs.

That's the unknown right now—what's going to happen with the extra costs that have been accumulated since last September? If that's going to be put onto the new EI system, it's going to be a lot of new costs that are imposed on small businesses.

[Han Dong, Liberal, Don Valley North, ON]

I was going to ask another question, but—

[The Chair, Liberal, Sean Casey]

You have no time. Thank you.

Ms. Chabot, you have six minutes.

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

Good afternoon. Thank you very much for being with us.

I salute the Canadian Federation of Independent Business, or CFIB. Before I became a member of Parliament, I had the opportunity to work with the CFIB, particularly in Quebec, with Martine Hébert, on the Commission des partenaires du marché du travail, a forum for social dialogue where labour issues and labour conditions were very important.

I've read your brief and your recommendations. The reason a committee was asked to reform the EI program is because we found that the current program didn't meet the needs. Because your businesses are important, the government had to put in place other measures as a result of the crisis. It's true that this crisis is exceptional, but without these measures, it would have been difficult, and you recognize that.

The goal of making EI more inclusive for workers is to ensure a better social safety net. In that sense, what measures could be taken to improve the program, in your experience?

[Corinne Pohlmann]

There is a lot to look at when it comes to modernizing the employment insurance system, which is something I think our members are not opposed to doing. The issue right now is that for many of these changes that may be looked at or are being proposed, it's unclear exactly what the implications would be. There's a lot of openness, as I mentioned, where our members are very split on things such as expanding sickness benefits. They're very much split on increasing that 55%.... I can't remember what it's called right now, but that amount you get in terms of EI benefits.

Our membership would be open to looking at a number of things in terms of modernizing the system, but a lot more information needs to be provided in terms of the costs and benefits of those systems, so that the employers who pay 60% of the EI program have an opportunity to really understand what these changes mean for the benefits both to society and to their employees. For many of them, if they have to let their employees go, it's often a very difficult thing for them to do, and they want to make sure their employees are going to be well served. At the same time, what are those costs going to be? Ultimately, they're going to have to pay 60% of that, and they want to make sure there's a proper balance and an opportunity to provide input. Those are some of the things we need to look at first.

There are, of course, a few things we would like to see for employers themselves. They would like to see a bit more equity around who pays the premiums. For a small business owner it's a big hit for them to take, so they would like to see a more even split or even some way to allow smaller business owners to maybe pay only 1.2 times more and, up to a certain threshold, 1.4 times more. We have a lot of ideas there to look at how we can make the EI system more palatable and easier for owners of smaller businesses to understand or to use, especially if we start to make other adjustments to the EI system that may end up increasing the cost of it.

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

Let's not forget that, when the EI program was introduced, the government also paid a share at the time. Now, the fund is financed by contributions from employees and employers, and everyone wants to find a balance.

Have you ever considered having the plan funded on a tripartite basis?

[Corinne Pohlmann]

It is certainly something we have looked at and that we've even asked our members about. Again, they're sort of split on that, partly because if the government takes 20% back, like it once did, that's still going to come out of your taxes or in some other form. It's just a sort of shifting of responsibilities.

I think that if the EI system is going to be one that goes beyond just a job insurance program—it already is to some degree, in terms of providing parental and caregiver benefits—and if we're going to keep adding more to that, there is a good argument to be made that perhaps governments should be supporting some portion of the EI system if it continues to go beyond its original mandate of just being a job insurance program.

[Louise Chabot, Bloc, Thérèse-De Blainville, QC]

I know you represent a lot of seasonal workers. The seasonal industry is a sector of activity, like tourism and accommodation, that is important in our regions.

Many deplore the fact that there is a black hole for workers in this industry.

Do you think the EI program should also be strengthened so that workers no longer experience such periods, which are also difficult for employers?

[Corinne Pohlmann]

It's an interesting question, because we often look at that from a seasonal employer perspective. We've heard often from seasonal employers that they really want to hold on to those people and not have them get other in-between jobs, because they've been trained and they're well known to the company. They want to make sure of that, but they can't keep them year-round because the business is only really functioning for, say, six months of the year. It's a challenging one for sure.

We've spoken to seasonal employers in the past. Many have told us that in order for them to be able to retain those employees throughout the year, they would be willing to pay a bit more for EI, for example. Make it more of an experience-rated type of program, like most other insurance programs are, so that the more you use it, the more you'd be able to pay. That's from the employer perspective.

There may be other solutions we can look at in those particular areas where seasonal workers are an important component of that community and for that employer. If we can do that, maybe there are ways in which we can be more creative about making sure those employees are there when they're needed. Obviously, you know, we want to make sure it's fair to everybody, including the EI system.

[The Chair, Liberal, Sean Casey]

Thank you, Ms. Pohlmann.

Thank you, Ms. Chabot.

Our last set of questions will be from Ms. Gazan.

Go ahead, please, for six minutes.

[Leah Gazan, NDP, Winnipeg Centre, MB]

Thank you so much, Chair.

The heart and soul of my riding of Winnipeg Centre is small businesses. I'm a huge supporter of local small businesses. They are what really makes Winnipeg Centre vibrant. We actually even have some of the best restaurants and award-winning chefs in the country: Check out Deer + Almond on the Food Network. I'm very proud of our businesses.

One of the frustrations I've had is watching this current government give billions and billions of dollars to corporations, while small businesses in my riding are struggling to stay afloat. They are saying that if there's another lockdown they literally don't think they're going to make it. This will destroy our community, and we know that small businesses are the largest employer in the world—not just in Canada, but in the world.

Do you feel that the help that has been given to small businesses during the pandemic so far is sufficient?