Yes, so how would that roll out in a program? You indicate that should be determined by changes in the provincial employment rate, so how would the federal government support that concept?

5:25 p.m.

Professor of Economics, University of Ottawa, As an Individual

Dr. David Gray

Administratively it would be a pretty easy change for them to make. It's easier to calculate the employment rate than it is to calculate the unemployment rate for each of these administrative areas.

Our point was that we want the system to be able to adjust more quickly when there's a major drop, a downturn in the labour market. We were inspired by what happened in Alberta in 2014. Even though it was Canada's richest province, it got hit really hard with a big drop in the price of crude oil. The system was really slow to adjust because it was based on the unemployment rate, which was rising much more slowly than the employment rate was dropping. That's an illustration that we used to support our case.

5:25 p.m.

Liberal

The Chair Liberal Sean Casey

Thank you, Mr. Gray and Ms. Gazan.

Next we're going to Ms. Falk, please, for five minutes.

5:25 p.m.

Conservative

Rosemarie Falk Conservative Battlefords—Lloydminster, SK

Thank you, Mr. Chair.

I would like to thank all the witnesses for contributing to our study and also making the time, out of their schedules and their lives, to be here.

As we navigate through this pandemic and work towards recovery, we know it's important that the government be focused on jobs, job creation and connecting Canadians with available jobs, while also ensuring that benefits are there for those who are going to need them. Part of ensuring that those benefits continue to exist is ensuring the sustainability of the program.

Last week at our committee we heard from the Canadian Federation of Independent Business, which suggested that no permanent changes be made to the EI program until our economy has recovered. It also raised concerns about the impact that higher payroll taxes would have on our economic recovery.

Mr. Gray, I noted that in your open letter to Minister Qualtrough last fall you suggested that the EI program should not necessarily be redesigned to meet the stress test for a shock of the magnitude of this pandemic. Are there specific program structures in the temporary COVID support programs that you would suggest not be incorporated permanently into our EI program?

April 20th, 2021 / 5:30 p.m.

Professor of Economics, University of Ottawa, As an Individual

Dr. David Gray

Yes, that's exactly what I think. As for the Canada emergency response benefit and its replacement, it's really my hope that come later this year, we'll have maybe not full employment, but adequate job openings. Right now we're about 300,000 positions short of where we were in the good old days of February 2020. I'm hoping that the need for all these extraordinary measures will be obviated and we can go back to a reformed employment insurance system, part one and part two, for the 21st century.

It is unsustainable. A deficit of $350 billion is like World War II. I wasn't around back then, but we cannot go on with expenditures, with outlays anywhere near that magnitude, for more than another four or five months or so, even though fiscality is not my primary area of expertise.

5:30 p.m.

Conservative

Rosemarie Falk Conservative Battlefords—Lloydminster, SK

Mr. Gray, I note as well that when we had the Canadian Federation of Independent Business here, they had the recommendation that no new permanent changes be introduced until our economy recovers.

I noted that similarity in your opening remarks. I'm wondering if you could explain further as to why.

5:30 p.m.

Professor of Economics, University of Ottawa, As an Individual

Dr. David Gray

I suppose it's because the labour market situation will be very, very different. Hopefully, we'll be back to normal before we make any changes. I am in favour of expansion in certain areas—no overlap, no transition.

When the war against the pandemic ends, we will move on to the recovery phase with different imperatives and different policy objectives.

Get people vaccinated so that everyone can go back to work safely. We're going to have a certain number of workers who will be permanently laid off. Get them into training as soon as possible. I don't want to—

5:30 p.m.

Conservative

Rosemarie Falk Conservative Battlefords—Lloydminster, SK

I guess on that point, what would you say the priorities in reform would be once we come to recovery?

5:30 p.m.

Professor of Economics, University of Ottawa, As an Individual

Dr. David Gray

At a very broad level, it's a recognition that the unemployed are very heterogeneous. Someone mentioned a little while ago—and I agree totally—the system designed for full-time, mostly Caucasian, white-collar workers in the 1940s and 1950s. We have these different types of unemployed workers with different attributes in different situations. I'm hoping for a system that can be compartmentalized a bit more to address more specific and particular needs of different unemployed workers.

5:30 p.m.

Liberal

The Chair Liberal Sean Casey

Thank you, Ms. Falk and Mr. Gray.

That is all the time we have for questions today.

I want to sincerely thank our witnesses for being with us.

Ms. Rose-Lizée, I am terribly sorry that we had technical problems. Unfortunately, it happens from time to time when we are working by videoconference on Zoom.

Your colleague represented your organization very well and we are very grateful for the work that you and your organization are doing.

Madam Brown, thank you so much for so ably managing the situation.

Thanks again to our witnesses. You're welcome to go.

There are a couple of things I need to raise with the members before we adjourn.

Colleagues, we have one more panel of witnesses on the EI study coming up this Thursday. The second hour of the meeting will be dedicated to drafting instructions. I believe it would be helpful to the committee if the analysts provided us with a draft outline. That would help inform our discussions around drafting instructions. If you're okay with that, we can so direct them.

Is there any issue with having the analysts provide us with a draft outline for our drafting instructions on Thursday?