Evidence of meeting #27 for Human Resources, Skills and Social Development and the Status of Persons with Disabilities in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was coverage.
A recording is available from Parliament.
Workplace Rights Coordinator, Conseil d'intervention pour l'accès des femmes au travail
So let me invite you to consult our notes.
As Ms. Rose-Lizée was saying in connection with the 50-week limit on benefits, one case challenging this discriminatory provision is currently before the courts.
The review of the employment insurance program must absolutely take into consideration the current needs of women.
Liberal
The Chair Liberal Sean Casey
Thank you very much, Ms. Brown.
We now move to questions from members.
We will start with the Conservatives.
Ms. Dancho, please go ahead for six minutes.
Conservative
Raquel Dancho Conservative Kildonan—St. Paul, MB
Thank you, Mr. Chair.
Thank you to the witnesses for being here and for being patient with all the interpretation issues. I appreciate that.
I have a few questions for Mr. Gray.
Mr. Gray, I've been reading quite a bit of your research and it's excellent. I'd love to hear some of your thoughts on EI reform. In one article, you called for a new, voluntary EI program to bring self-employed and gig workers into the EI system. You mentioned that they should be voluntary and not required. Could you expand on why that is?
Professor of Economics, University of Ottawa, As an Individual
You are quite right that I have changed my stance a little bit for today. The reason for our recommending in that article that it should probably be voluntary is that we think a lot of people will opt out of it.
The reason I said today that we might have to make it mandatory is to avoid an issue of what we economists call adverse selection, whereby those gig workers who face the highest risk of income insecurity in the future will opt into it, but those who are the most confident about their income security going forward will opt out. We will have only relatively higher-risk gig workers enrolling while those who are at relatively lower risk, at least as they perceive it or as they forecast it, will opt out of it.
We have mandatory coverage for EI to try to get around that adverse selection problem, which is very well known to insurance [Technical difficulty—Editor], for all types of insurance, so I see that as sort of an economic and political issue.
Professor of Economics, University of Ottawa, As an Individual
Thank you very much for the compliment. I really wasn't expecting that.
Conservative
Raquel Dancho Conservative Kildonan—St. Paul, MB
All MPs endeavour to research their witnesses, and we appreciate your being here and sharing your wisdom.
Thank you to all the witnesses for taking time to be here.
Mr. Gray, I want to ask you a few more things. You recently wrote, as well that the pandemic is a “unique event, and we caution the federal government to not dramatically redesign EI in response to this somewhat temporary situation.”
Can you elaborate on that further for committee members?
Professor of Economics, University of Ottawa, As an Individual
Just the outcome for the labour market is very different, so we have a big drop in demand. During the last session they were talking a lot about the big drop in demand, but we also have a drop in supply with businesses being totally closed or businesses being partially open but with workers, often for very good reasons, being fearful of showing up. We have supply-side constraints as well as demand-side constraints. That's not been the case before. Even with the Great Depression, that wasn't the case.
There are a number of reasons people are out of work right now. Going forward, I think the unemployment insurance system, yes, needs to be adjusted for the 21st century, both with the passive benefits like those we're talking about now and also with the training and retraining and skills development. Perhaps that's for another session. That's a challenge that I feel very strongly about as well.
Conservative
Raquel Dancho Conservative Kildonan—St. Paul, MB
Thank you.
The minister of this department, of EI—I believe it was last week, but the weeks are all blending together—alluded to the need to sequence upcoming EI reforms due to the age of the system.
From your perspective, and you might have touched on this as well, can you provide for the committee your thoughts on some of the areas that you think the government should prioritize in this sequencing?
Professor of Economics, University of Ottawa, As an Individual
I'm in favour of doing away with the one-size-fits-all administrative apparatus and creating a number of more specialized programs.
By the way, I really sympathize with what Ms. Brown was saying about part-time workers. Part-time workers are not treated nearly as well as part-year workers are, for example. Someone who works 50 weeks a year at 20 hours per week is not treated nearly as well as someone who works only a certain part of the year but full time.
I'm in favour of more specially designed unemployment insurance regimes.
Conservative
Raquel Dancho Conservative Kildonan—St. Paul, MB
Thank you. That's excellent.
We just have a few seconds left, so could you provide for the committee what you believe the core responsibilities are for EI in 2021 and beyond?
Professor of Economics, University of Ottawa, As an Individual
I'll talk just about the passive benefits rather than the active benefits.
With the passive benefits, we want to cover the idiosyncratic risk of job loss and certainly the job loss caused by recessions and cyclical unemployment. It's a system that is not too costly because we don't have trillions of dollars to fund it, but it is consistent with a flexible and dynamic, yet equitable, labour market.
Liberal
The Chair Liberal Sean Casey
Thank you, Mr. Gray.
Thank you, Ms. Dancho.
Next we have Mr. Long, please, for six minutes.
Liberal
Wayne Long Liberal Saint John—Rothesay, NB
Thank you, Mr. Chair.
Good afternoon and thank you to our witnesses. They were very interesting presentations.
Bloc
Louise Chabot Bloc Thérèse-De Blainville, QC
Mr. Chair, we are being told that the member's equipment does not allow the interpreters to do their job.
Liberal
The Chair Liberal Sean Casey
Mr. Long, the interpreters are having some problems. Are you using the House of Commons-issued headset?
Liberal
Wayne Long Liberal Saint John—Rothesay, NB
Mr. Gray, my questions will be for you.
I want to thank you for your advocacy and your calling for reform. I, too, have read your articles and am quite interested with what you have to say.
My experience, certainly as an MP in Saint John—Rothesay, was that the EI system was there and it covered everybody that needed it. Save for a few problems, it was very adequate. Then came COVID-19. We were getting calls into our office—I won't name names—from people who were performers.
Professor of Economics, University of Ottawa, As an Individual
Was it my daughter?
Liberal
Wayne Long Liberal Saint John—Rothesay, NB
It wasn't your daughter, but there were some wonderful performers here who performed at some local pubs. We have a wonderful Imperial Theatre, etc. They were telling their stories to us. It became abundantly clear that there were so many who weren't covered. They deserve to be covered. They had good careers and performed and what have you. They made livings.
When COVID-19 came and the feet were taken from underneath them, they didn't have coverage. I think it showed the shortcomings in EI, which was that not every worker was covered nor can everyone who is covered get benefits when they need them.
It's clear that reform is needed. Certainly in your articles you're quoted as saying that the system needs reform and—correct me; I'm not putting words in your mouth—don't just do it because of COVID-19; take a longer view and do the right reforms.
I want to initially talk to you about EI access. I'm hoping you can provide some insight to the committee regarding the average worker's ability to access EI benefits and some of the more common issues that currently exist.
As you may be aware, budget 2021 proposes to make EI more accessible and simple for Canadians through a 420-hour common entrance requirement for regular and special benefits, with a 14-week minimum entitlement for regular benefits, and a new common earnings threshold for fishing benefits.
When it comes to access, what type of impact do you feel these changes that were announced in budget 2021 will have?
Professor of Economics, University of Ottawa, As an Individual
It would be somewhat minor, because the figure that is always thrown around regarding EI coverage is that 80% of the unemployed workers were covered circa 1990 and now only 40% of them are covered. Most of those people have entered the labour force, but haven't contributed to the regime in the prior 12 months.
I certainly have no problem with reducing the entry requirements. They really should be uniform throughout the land. The preceding witness mentioned that we're the only country that has these geographically variegated program parameters. She was right about that. Just for the sake of simplicity, I'm okay with lowest common denominator, but that's not going to make a major difference with the access.
As far as those splendid performers from your neck of the woods are concerned, do you think they would be willing to...? They are obviously attached to the labour force, right? These are not people who work for two months a year and then take the next 10 months off. These are people who are career performers.
Do you think they would be willing to contribute readily? That's what we would need. We would need people to be able and willing to contribute readily into such a regime for the sake of solvency and efficiency.