Human Resources Committee on April 22nd, 2021

[Pam Frache]

Yes, it's absolutely devastating to those workers, and it's devastating to the economy.

When we talk about 30% of unemployed people in an urban centre receiving EI, 70% of unemployed workers are not getting it. That isn't just bad for workers. That is also terrible for the economy. We have to ask ourselves: What is the cost of not doing it?

Our economy would not have survived if there weren't urgent measures to reduce the hours to 120 so that people could get access to the supports they needed, so yes, it is is absolutely urgent.

I wanted to talk more about temp agencies. For temp agency workers, it is absolutely ballooning in terms of workers in short-term jobs moving from workplace to workplace. What we're seeing, as we saw in long-term care, is the deliberate creation of part-time jobs, which makes it more difficult for workers to access EI. People have to string together jobs with all the additional paperwork associated with that. All of those things are terrible for the economy.

We need an EI program that is modern, that reflects those challenges and that protects workers and the businesses that those workers support. It's very important to never forget that EI isn't just another social program. It is a fundamental economic stabilizer that every employer depends on as well as workers.

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

Thank you for that.

I know a few of us have been commenting on how so much of what you're talking about that needs to be done has been fought for for years. The question of urgency is so important, the question of political will.

I'm wondering perhaps if you could touch on what you're hearing from workers in areas.... You mentioned migrant workers and workers in warehouses. What is the reality that they're facing right now?

[The Chair, Liberal, Sean Casey]

Answer very quickly, please. We're past time.

[Pam Frache]

Yes, very quickly I'll say that people are being forced into very unsafe working conditions. Those are people who still have their jobs. People without jobs are having difficulty getting the income supports they need.

I wanted to touch on how many workers come through the centre who have been fired for no legitimate reason and are, therefore, not able to get access to EI. Punitive things are taking place where people are marked down as fired and so forth. They don't get their record of employment, and they are denied their access to EI.

All of these things could be made so much easier if we reduced the hours of requirement, if we extended the duration, if we got rid of the punitive rules like quits and fires, and if we had a minimum amount of EI supports. Sixty per cent to 70% of [Technical difficulty—Editor] say that the 55% income replacement is the lowest replacement rate in the 80-year history of employment insurance. I will also mention that the premium rates are quite modest right now. They've been higher at different times. In the 1980s, they were much higher.

The truth is that it's not out of control. We can do this. We can do this collectively. We can protect workers. We can protect the economy, and we can do it responsibly. We can especially do it if the federal government gets back into the business of funding EI so that it's there when all of us need it.

[The Chair, Liberal, Sean Casey]

We have Ms. Dancho, please, for five minutes.

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

Thank you, Mr. Chair.

Ms. Nord, I have a few more questions for you.

You mentioned in your opening remarks that not everything should be included in EI reform. We know that EI has many pieces. It has a skills development piece. It has maternity-paternity leave, sick leave and caregiver benefits now. All these are critical programs.

I just want to know what you really meant. What did you mean by that? What do you feel the EI program should look like with reform? How do you manage all of these moving pieces?

[Leah Nord]

That's to the point that it is complex. You have part I and part II. Part II, again, is a whole kettle of wax with funding that goes through. We would argue again for simplification, and an additional principle we would have is transparency around where that funding goes, how its spent and who gets to decide what.

On part I, different organizations and different people around this table have different opinions, whether they are education and training or special benefits. They're not sickness benefits. That's not to say that sickness benefits aren't important, but at what point and how much do we do it so we don't strain the system?

Special benefits as well.... I've heard discussions here of sort of an account that you can draw down on, which is also interesting as well, but different people have to draw down for different things, including for example, maternity leave. There's a gender aspect to that. There's also, you know, how much you pay into it. In an insurance scheme, the point is to help you through temporary periods of unemployment. I think we really have to get back to that core mandate. That's not to say that other things aren't important, but this is it.

Let's look at the future of work. Let's look at what's needed and then start mapping out what's needed where and how. Yes, there is an urgency, but this has to be done properly as well or it will break. The system rates were higher in the 1980s, but what would they look like if there weren't a freeze? We don't even know that.

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

My understanding is that there were significant cuts to EI in the 1990s, and those cuts were a result of the debt crisis that was, in part, generated by many years of deficits at the federal level in the seventies.

I have concerns, employers have concerns, and I know you have concerns about the debt we're taking on today. Are we going to be facing a debt crisis in a few years, in five years or in 10 or 20 years whereby we're going to have to make significant cuts to critical social programs that, as has been outlined this year, Canadians are relying on?

You represent 200,000 Canadian businesses. Are there any concerns regarding future cuts to EI and what that may mean, maybe the burden they may bear as a result? You said in your opening remarks, in particular, that there should be no permanent changes at this time, because we're not quite sure how we're going to pay for it yet, given the fluctuations we've seen in the last year. Could you comment on that generally?

[Leah Nord]

Absolutely.

First, to answer the question, we can look back. We are in a current crisis, but again, we need to look forward. We need to look at what the future of work looks like, and then respond to it, as well. You've heard any number of examples here: lessen the hours, raise the floor, put in more income supports. We need to map that all out and see what it looks like.

You saw from CFIB most recently—their data is a little more recent than ours—how the business community is really split. My members would argue that we don't have a position on whether government should come in as third party tripartite funding. We can't make an informed decision on that because we don't have the costing. We don't know what this looks like.

This is the opportunity. We have been talking. We know what's needed, but this is the comprehensive review, rather than these little pieces of patchwork that keep layering the burdens onto the system until it breaks. It needs to be sustainable.

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

Thank you.

Sustainability is so key. We know that if the federal government does come in as a third funder.... We know that, ultimately, government doesn't create its own money. It's from the taxpayer, as well, and from business taxes and the like, so it's just another way that people and businesses contribute to EI, through the federal government. It's not necessarily solving the issue of the cost to workers and employers, in that regard.

I believe that's all my time. Thank you, Ms. Nord. I appreciate your comments.

[The Chair, Liberal, Sean Casey]

Thank you, Ms. Dancho.

We'll go to Mr. Vaughan, please, for five minutes.

[Adam Vaughan, Liberal, Spadina—Fort York, ON]

Thanks very much.

I really liked the three parties talking to each other. It was actually informative to hear you bounce ideas back and forth. In particular, you talked about a tripartite with government, but it's the evolving workplace, it's the traditional workplaces and it's the businesses that are caught in between those two moving dynamics that are what we're trying to wrestle to the ground here.

I have a quick question, though, for Ms. Nord.

We have had a parade of boutique applications of EI: paternity, maternity, sickness pay, seasonal workers, temporary foreign workers, bereavement and training. For every issue of income support that needs a solution, EI seems to be the answer. Can we accommodate all of these, one by one, without breaking the system?

[Leah Nord]

That's the million-dollar question: How much pressure can be put on this system?

I can say that education and training are important. I can say that we have to look at zoning. Someone could say it's reducing hours or raising the ceiling, but you can't look at them singularly. I would agree. You have to look at the totality of where—

[Adam Vaughan, Liberal, Spadina—Fort York, ON]

One of them will be, literally, the straw that breaks the camel's back, even though they're all compelling.

[Leah Nord]

Yes, exactly. That's it.

It is very difficult.... When you talk about sickness benefits, it's not to say they're not important, but how much are they...? Let's have a data-driven discussion on what is needed, where it sits.

[Adam Vaughan, Liberal, Spadina—Fort York, ON]

Fair enough.

Madam Frache, the issue of mandatory EI contributions has come up, in particular, around contract, gig, temporary, you name it. There are 100 different ways to describe precarious work, some by choice, some by force. Would you support mandatory EI contributions?

[Pam Frache]

I think the bigger problem here is the misclassification of workers who are constituted as independent contractors, who should be constituted as workers. That should end.

There should be a provision whereby those bona fide individual self-employed people have an option to opt in to the EI program. I do think that—

[Adam Vaughan, Liberal, Spadina—Fort York, ON]

But optional.... I'm hearing the word “option”. It's not mandatory but an option.

Fix the classification, but if you're a freelance journalist, for example, who chooses to submit articles here, there and everywhere, you should have the option of signing in, as opposed to somebody who is a freelancer for one particular company endlessly.

[Pam Frache]

Yes, I think there's a way of doing it that would accommodate those people. I think there is a model in Quebec around the child care program that we could draw from.

[Adam Vaughan, Liberal, Spadina—Fort York, ON]

Okay.

The other issue we are hearing more and more about, from all different corners of the House of Commons, is basic income. Whether it's universal, guaranteed.... There are as many versions of basic income as there are democratic reforms sometimes—maybe more.

Almost everybody pays for the concept by amalgamating all income support into one pool, because it's an extraordinarily expensive proposition the more that it's universalized.

With regard to basic income versus EI, is one better than the other in your perspective? In other words, if we're going to support income support, should we move away from EI and just go to basic income, or do we need to sustain EI as a plug-and-play management of the ups and downs and the fluctuations in the workplace?

[Pam Frache]

I think that we need to maintain EI, because it has served its purpose historically. Because it's funded by employers and by workers, and hopefully, in addition, the federal government, I think it represents additional revenue streams.

I am skeptical about basic income in terms of its ability to ensure that workers have everything they need. We don't want to inadvertently create an incentive for employers to adopt subpoverty-level business models and create precarious employment, because we have a publicly funded revenue stream that's going to top that up.

My concern is maintaining EI. I think it has a proven record. We just have to look back even a couple of decades to see how effective EI can be in terms of addressing workers' needs. The recommendations we're making are very important to that goal.

[Adam Vaughan, Liberal, Spadina—Fort York, ON]

Mr. Strickland, the issue of training comes up a lot with EI.

There is the clumsiness of the old system, largely because of the clumsiness of the old computer system, which is older—and I think I'm the oldest member here today—even than me. I thought it was “cobalt” not COBOL; that's how old it is. I didn't even know the program language that uses the computer dynamic.

However, the issue is this: Do we we modernize and make EI more nimble so it can go day by day as opposed to week by week? Do we invest in upgrading the IT system to make it more nimble, or do we split training into a separate category and leave EI for unemployment, effectively, as opposed to the in and out of training and the skills upgrades that we are so invested in? What's your perspective?

[Sean Strickland]

Those are great questions.

I can't answer the question with respect to system designs and computers and so on.

I did say earlier that I think training should be separated from employment insurance. We should be able to provide the right kind of focus on the income support program, which employment insurance is, and put a singular focus on training. You talk a lot on this committee...and part of your mandate is about the future of work and whether the EI system is responsive to the new and modern economy. If we're really serious about that, we need to give training the attention and resources that it needs.

With regard to the training system we have right now, I saw some stats. I don't have them at my fingertips—just look at the number of workers who are eligible for training and how many of those workers access that training. You see a huge gap. Part of it is the ability to navigate the system.

That kind of comes full circle to your question. I think maybe the system does need to be updated. It needs to be more nimble. Moreover, I think training needs to be separated from the employment insurance system to have its due attention, and a separate ministry, in my view.

[The Chair, Liberal, Sean Casey]

Thank you, Mr. Vaughan. Thank you, Mr. Strickland.

Thank you to all of the witnesses. This was a very comprehensive and fascinating panel, and an excellent one for us to wrap up our input from experts across the country.

I want to thank you so much for being with us. Thank you for the articulate and comprehensive way that you presented information and handled all of the questions.

We're going to move now to drafting instructions. You are welcome to stay but absolutely free to leave.

Thanks again. It will be extremely valuable to us.

[Leah Nord]

Thank you very much.