Human Resources Committee on April 22nd, 2021

[Wayne Long, Liberal, Saint John—Rothesay, NB]

She is indeed.

[Sean Strickland]

I know Arlene's been active on the small modular reactor file as well. That's something we're really encouraged about.

It is related to my remarks in terms of transitioning workers from the traditional oil and gas energy sector into the new energy projects of the future. Projects like small modular reactors, hydrogen and carbon sequestering are going to take large capital investments. It is also going to take investments into training programs—through our union training centres and also more broadly through the community college system—to help train workers for the new greener economy. I'm not even talking about retrofits for commercial and residential buildings and industrial buildings.

That's a really important file. The creation of these new, cleaner technologies and the training that's required is really important to our members.

Permanently abolishing the clawback of separation moneys is a huge benefit to our membership. We're really quite thankful to the government and to Minister Qualtrough for including that in the budget. We have had conversations with the minister and various other MPs around the importance of this to our members.

It's really just a question of what's fair. For our union members, separation moneys are actually money they earned while they were working. It's basically a holdback from the employer. Under the previous regime, they were actually being penalized by delaying their EI claim on earnings that have already happened. This is a really good, positive step forward. It's well received by our members who have to access employment insurance.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Thank you for that.

Can you expand on how EI payment delays impact apprentices?

[Sean Strickland]

Apprentices have to go through an in-school portion for training. Depending on your trade, it dictates how much in-school training you have.

In various jurisdictions in Canada we have what are called compulsory trades. Examples are tower crane operators, mobile crane operators, electricians, plumbers, steamfitters and sheet metal, just to name a few. Those compulsory trades have a higher requirement of in-class learning than other trades that are voluntary.

The voluntary trades still have in-class learning, but the challenge is—and this is where it really hits the road—if they're a younger worker and they have to go into a community college, for example, or an IBEW training centre to complete their in-class portion of training, they apply for EI. They can be there for three to six weeks. Oftentimes the delays are such that the apprentice has not received their EI dollars until their training's done. They're waiting six weeks without a paycheque.

Apprentices talk to each other. What do they do? They can't afford to go four to six weeks without a paycheque, so maybe they'll defer their in-class learning. When they defer their in-class learning, it stretches the length that it takes to get their certification. It delays their training and it delays their ability to perform as a certified tradesperson in Canada.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Thanks for that.

In one of your brochures that I pulled up here today, there was some talk about the misclassification of workers. I just want you to talk about why workers in the construction industry are misclassified. How does that happen and why?

[Sean Strickland]

This is a huge issue, and you heard the stats that I reported from the Ontario Construction Secretariat just for Ontario alone: $1 billion to $3 billion a year.

What happens is this: I'm a contractor. I have to hire 10 people to perform my work. Rather than bringing them onto my payroll, I describe them as independent operators. They're independent contractors. Let's say that, being an independent contractor, they make $2,000 a week. I give them $2,000. It's up to them to pay EI. It's up to them to pay CPP. It's up to them to pay taxes on that. How many of those workers actually do that? That creates the problem. There's a lot of missed revenue there for governments.

The other thing is that these workers are often exploited. Then in terms of the competitiveness factor, I'm that contractor who has these workers styled as independent contractors. I have 10 employees. I'm going to bid on a project against a union contractor, for example, who has 10 employees but is paying them all the requisite dollars and wages and making the necessary remittances. The contractor who is misclassifying these workers as independent contractors has a competitive advantage against the legitimate contractor. However, I'm still not breaking the law by styling the workers as independent contractors. This is a real problem for the construction industry.

You may recall years ago—I think it was 10 years ago—that there was a terrible swing-stage accident in Etobicoke in Toronto, where three workers fell to their deaths. One survived but tragically was impaired for life afterwards. Each one of those workers was an independent contractor. This is a real challenge for our industry.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Thank you, Mr. Strickland. I appreciate it.

Thanks, Mr. Chair.

[The Chair, Liberal, Sean Casey]

Thank you, Strickland.

Thank you, Mr. Long.

Ms. Chabot, you have the floor for six minutes.

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

Thank you, Mr. Chair.

Good afternoon. My thanks to all our witnesses for joining us.

My first questions will be for Ms. Frache.

You mentioned this in your remarks, but what interests me is that the government should once again contribute to the EI fund. We know that this is supported by the Inter-provincial EI Working Group.

Why do you think it's important for the government to fund part of the EI program, as it did in the beginning?

[Pam Frache]

Yes, that's a very important question. The federal government plays an important role in providing the funds and resources so that the EI system can actually include all the workers it needs to include. As a reminder, as my colleagues have also said, funding EI is an investment in the economy, not just in workers. Investing in EI, making sure that EI is there when we need it, helps to stabilize the economy. It's good for business, so that there is not a catastrophic drop in consumer demand as workers are without income supports and so forth.

We've been talking about expanding access so that it can be a genuine economic stabilizer, but I think that may seem daunting if we don't actually put all the funding streams back on the table. The federal government has always been a third partner. It should be stepping up. It has a role in determining how the economy unfolds as well. We all have a stake in it. Employers have a stake. Workers have a stake. The government has a stake. We should be funding the system so that it's there when all of us need it.

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

Thank you for your answer. We have known for a long time that the government no longer funds the employment insurance program.

In 2019, the annual Employment Insurance Monitoring and Assessment Report indicated that some workers were paying premiums but not getting benefits, either because they had not accumulated enough hours to qualify or because their employer, as one of our witnesses said, was giving the wrong information on why they had left their job.

In your opinion, is it important to address these issues?

[Pam Frache]

Thank you for those very important questions.

Around the hours question, even though technically EI eligibility is determined by the number of hours, think about even the 420 hours to qualify. That translates into a worker having to work a full 35 hours a week, uninterrupted, for three full months. To be honest, and this is especially true in urban centres for temp agency workers, there are, as the saying goes, more temp agencies in the GTA than there are Tim Hortons. This gives a sense of what's possible and what's not possible. Imagine retail; the average workweek is 28 hours. You can see how long it would take for consistent employment for workers to access the program they need when they have an interruption in earnings.

Reducing the hours is extremely important. We can see what would have happened in the COVID crisis had we not reduced hours to 120. Our committee is recommending that we reduce the hours to 360 hours or 12 weeks, whichever is best, in order to be in keeping with the realities of today's labour market. People might work for six weeks and then have an interruption. They might work for another month and then have an interruption. They might not get 28 hours a week. This is the reality of today's labour market. It helps explain why so many people aren't accessing EI when they need it.

Again, on the question of quits and fires, it's absolutely true that we need just-cause protection to prevent arbitrary decisions by employers. Let's also talk about the conditions that exist that cause workers to feel like they need to leave their job and find another job. As I said, there's racism in the workplace. Sometimes an employer will change the schedule and it's just incompatible with that worker's child care responsibilities. Sometimes there are health and safety issues. For people who work at Amazon warehouses, their bodies wear out. There are legitimate reasons people quit their jobs, and sometimes they have to do it very quickly.

Therefore, yes, we should get rid of these arbitrary rules and make sure EI is there for workers when they need it.

Thank you so much for the important questions.

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

Mr. Chair, how much time do I have left?

[The Chair, Liberal, Sean Casey]

You have 20 seconds.

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

So, I will direct my 20-second question to Ms. Nord, from the Canadian Chamber of Commerce.

I hear your concerns that EI needs to be reformed, but that it's going to take time, if I understand you correctly. Other groups say that the time has come to act, that there have already been many studies, that there are many indicators and that with what we know, we could change things.

Do you think we could act more quickly?

[The Chair, Liberal, Sean Casey]

Ms. Nord, you haven't been left any time to answer, but we'll give you a bit. Please give as brief an answer as possible. Thank you.

[Leah Nord]

Thank you.

Just very quickly, we need to act but we need to act prudently. We need to act on decisions that are data-driven. Everything gets thrown at the wall and we have to sort it all out. What belongs where? Does government belong paying within the system? We can't comment because we don't know how much it costs. Maybe it's a better system to take a lot of what's currently in there out of there and have it focused. It does need to happen, but it needs to happen with tripartite discussions. It needs to be costed and data-driven before we can make any final decisions moving forward. It's really important to do that.

Thank you.

[The Chair, Liberal, Sean Casey]

Thank you.

Next is Ms. Ashton on behalf of the NDP.

Welcome to the committee, Ms. Ashton. You have the floor for six minutes.

[Niki Ashton, NDP, Churchill—Keewatinook Aski, MB]

Thank you, Chair.

My first question will be for Sean Strickland.

Before I begin, I also want to express my solidarity with IBEW members here in Manitoba who are fighting for a fair contract from Manitoba Hydro. I really appreciate the work they do day in and day out.

Mr. Strickland, I know you talked a bit about this earlier in this meeting, but I'm wondering if you could elaborate more on how employers' misclassification of workers allows them to evade paying into EI and how this business practice undermines competition by placing EI-paying employers at a disadvantage. Why is this a problem in the industry? Is it getting worse? What needs to be done right now to put a stop to this?

[Sean Strickland]

Thank you very much for the question. It's a very important issue for the construction industry. The only really substantive data provincially on this is from Ontario. As I indicated earlier, it's $1 billion to $3 billion a year, but you can take that on a percentage basis and roll it right across the country. It's happening in every province.

I can't emphasize enough how this misclassification of workers really curtails the amount of revenue that's available to provincial and federal governments to fund programs like EI, and how it puts workers in a vulnerable position, where they're easily exploited by their employer because they don't have any real protection. The other thing it does, which is often not spoken about—and I mentioned earlier, Ms. Ashton—is the competitive nature of it. You can have contractors who are bidding for municipal contracts, for example, who don't have to make those payroll payments on behalf of their employees because they've styled them as independent contractors or independent operators. They're able to bid for a project and save that money and undercut the legitimate contractor who is making those appropriate payroll remittances to Revenue Canada, CPP, etc.

It puts workers in vulnerable positions. It does not afford them the kinds of protections that normal workers would have in an employee-employer relationship, and it also negatively impacts more legitimate contractors who are bidding for this work and making the right payments. The challenge is that the contractor who styles his or her workers as independent contractors is not breaking any law, so you can't say that they are operating illegally. However, through styling their workers in such a way, they're able to get a competitive advantage over contractors who pay their workers as they should pay them, as employees. It's a problem on multiple levels.

The other thing I didn't talk about was workers' compensation claims. In terms of solving the problem, I know years ago in Ontario, they tried to solve it by making it mandatory to pay WSIB. I don't think that has solved the problem. I think there just needs to be a government regulation or legislation that severely curtails the ability to style a worker as an independent contractor. That's the only way you're going to solve this.

[Niki Ashton, NDP, Churchill—Keewatinook Aski, MB]

I appreciate that.

I want to now turn to Ms. Frache from the Workers' Action Centre. I want to truly acknowledge the incredible work that the Workers' Action Centre does on behalf of workers, and particularly non-unionized, precarious workers, which is of course a growing working class in our country and a very much struggling working class, particularly during this pandemic.

I'm wondering if you can tell us what we need to do. I know you've touched on it a bit already. What do we need to see this government do to make EI accessible to precarious workers in Canada?

[Pam Frache]

Thank you for the question.

I think it's reducing the hours threshold and making it permanent. As I said, the step toward 420 hours is a good step forward, but it really needs to go down further. That is a very important aspect of it, because as I said, basically, the EI thresholds are still based on weekly hours of 35 hours, and as I was explaining, for most workers, 35 or 40 hours a week is just unheard of and steady employment is also unheard of. I think that's a very important point.

We also need to make sure that we raise the actual amount of income supports for workers, because honestly, when you're in a low-wage job, not even just a minimum wage job, 55% of income is just not sustainable. We need to think about raising the floor of EI income benefits—potentially 60% to 70% would be good. We saw what we did during COVID. We had a floor of $500.

Those are the kinds of things we have to do to make sure that EI is not only there for workers and precarious employment, but that it sustains them. The other aspect of this is also extending the duration of benefits so that it's 50 weeks across the country. That's because you may get EI at the front door, but then you lose at the back door because you haven't been able to get another job in time before your benefits run out. As you know, if you have low qualifying hours, then you have low access to duration. Those things are related. We need a much longer duration.

I will do a shout-out for raising the sickness benefits from 15 weeks to 26 weeks. That's very important. Again, it should be extended to 35 weeks, and I think with COVID—the long-haulers—we're getting all of this evidence to say these are essential changes.

I have one last thing to say about migrant workers as well. They pay into this system like all of us pay into this system, and they are absolutely essential for our economy. We need to make sure that those workers are protected and that EI is there for them as well, because they're contributing to it just like we all are.

[The Chair, Liberal, Sean Casey]

Thank you, Ms. Frache.

Ms. Ashton, you will get a two and a half minute turn in the second round.

We're going to proceed to that second round now, beginning with Ms. Falk, please, for five minutes.

[Rosemarie Falk, Conservative, Battlefords—Lloydminster, SK]

Thank you, Chair.

Thank you to all our witnesses for taking time out of their busy schedules to contribute to our study and our committee today. Thank you for being here.

Ms. Nord, I'm grateful that you made yourself available to us again today because I think it's so critical that we hear from the job creators who will be directly impacted by any changes to the EI program.

This committee has now heard from a few witnesses who have recommended that the government not implement any permanent changes to the EI system until our economy has fully recovered from this pandemic. I'm just wondering if the Chamber of Commerce would also share that viewpoint. If so, what impact would significant program changes, in advance of an economic recovery, have on your membership?

[Leah Nord]

I know a number of our business association partners have come out very clearly with the position that any temporary changes that have been implemented to various degrees of understanding through this pandemic, not be made permanent until we are through the pandemic. I think we would concur with this.

Having said that, the time to start discussing this is now. Again, September looms large, and so does the EI premium freeze. The impact that could have could be crushing. I spoke about the struggle that is real for large portions of our membership, the big, the small and otherwise. You look at this as one piece, but there are the other pieces as well and they're already starting behind the eight ball with the amount of debt they are incurring.

The other concern we have is how these burdens, as they increase, will affect hiring practices and getting Canadians back to work.