Human Resources Committee on April 22nd, 2021

[The Chair, Liberal, Sean Casey]

I call this meeting to order.

Welcome to meeting number 28 of the House of Commons Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities.

Colleagues, I understand that we are anticipating bells to ring to summon us to a vote at 5:15 eastern. When the bells start to ring, I will be asking for the unanimous consent of the committee to continue until our appointed hour, which is 5:30. I just wanted to give you a heads-up for that. Our hope is that we'll get in the full two hours—if needed. The second half of today's meeting is drafting instructions.

Today's meeting is taking place in a hybrid format, pursuant to the House order of January 25, 2021. The proceedings will be made available via the House of Commons website. The webcast will always show the person speaking, rather than the entirety of the committee.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Wednesday, October 28, 2020, the committee will resume its study of the review of the employment insurance program.

I'd like to welcome our witnesses to begin our discussion with five minutes of opening remarks followed by rounds of questions. We have with us today, from Canada's Building Trades Unions, Sean Strickland, executive director. From the Canadian Chamber of Commerce, we have Leah Nord, senior director, workforce strategies and inclusive growth. From the Workers' Action Centre, we have Pam Frache, organizer.

For the benefit of those witnesses, I'd like to make a few additional comments. Interpretation for this video conference will work very much like a regular committee meeting. You have the choice, at the bottom of your screen, of the floor, English or French. When speaking, please speak slowly and clearly, and when you're not speaking, your mike should be on mute.

With that, we're going to begin with Mr. Strickland for five minutes.

Welcome to the committee, Mr. Strickland. You have the floor.

[Sean Strickland, Executive Director, Canada's Building Trades Unions]

Thank you very much, Mr. Chairman. It's a pleasure to be here this afternoon.

Good afternoon. Thank you for the opportunity to address the committee on reforms to the employment insurance system that reflect the needs of Canadian workers.

Sean Strickland is my name. I'm the executive director of Canada's Building Trades Unions. We represent 14 international construction trade unions, and we have over half a million members across Canada.

Reforming employment insurance has long been a high priority for Canada's Building Trades Unions, and the pandemic has put a light on cracks in the system, as you're very much aware. I want to thank the committee for the work you are doing.

We appreciate the government's measures to support Canadians through the pandemic—unprecedented times for sure. The recent extensions of benefits through the budget—the Canada recovery benefit, the Canada emergency wage subsidy and extending sick leave—will help workers through this unprecedented time. We're also encouraged by the announcement we heard from the Province of Ontario today in terms of paid sick days, and we are looking forward to the successful rollout of that program as well, as it will help our members deal with the pandemic.

The construction industry accounts for 6% of Canada's GDP, and the industry has been a key player in keeping the economy going during the pandemic. However, industry employment is down from pre-pandemic levels, with unemployment nationally at 8% and much higher in certain regions of the country. The additional supports and the CERB have helped bridge the gap, and current reforms to EI are an opportunity to better support workers in the long term.

In our brief, we have included eight recommendations to update the EI system. I'd like to expand on a few of those in the time I have.

Let's talk about apprentices. Currently, apprentices enrolled and participating in the in-class portion of their apprenticeship, which often lasts only a few months over a period of years, often do not receive their entitlements from EI until after training is completed. This wait creates an economic barrier for apprentices to complete the in-class portion of the training and challenge the certification exam. To grow Canada's skilled trades workforce, we need to expedite the EI applications for apprentices to allow them to receive EI payments faster and complete their training.

As we look to rebuild our economy, we recognize the changing nature of work, and we've included recommendations to extend the EI training support benefit, address the limits in the Canada training benefit and support workers seeking retraining or skill upgrading.

There are a few key areas that we need to focus on. For example, Canada's energy sector is changing. As it changes, so does the nature of work, and a just transition, including skills retraining, needs to be included to make sure no worker gets left behind. We need to lessen the confusion of navigating the system to ensure more workers can utilize training programs and benefits.

As the economy changes, we also need to crack down on employer misclassification of workers, who are often labelled as independent contractors or self-employed, allowing employers to evade EI and other payroll deductions. A recent study in Ontario by the Ontario Construction Secretariat indicates loss of revenue to governments in the magnitude of $1.8 billion to $3.1 billion annually. Addressing the misclassification of workers will help broaden EI's base and prevent free-riding and undercutting competition.

Canada's Building Trades Unions is also requesting that the dedicated EI program liaison officers be restored. Think of an apprentice who doesn't know the system. They submit a report to an EI office that redirects them to apply for other similar jobs, not understanding the cyclical nature of construction and how a union hiring hall works. This not only confuses the apprentice but leads to deferring apprenticeship completion. CBT recommends that each of Canada's four regions have its own liaison officer who can understand the specific issues pertaining to the region and the building trades.

I'd like to also talk about getting Canadians back to work in the construction sector. There's a private member's bill in the House, Bill C-275, which will help get workers back to work across Canada. Unlike many careers, construction is temporary, in that you build a project, complete it and then move on to the next. This can require workers to travel and to temporarily relocate for work. Costs could be too much for a worker and could disincentivize them to travel. This can create labour shortages in different regions, with high unemployment in others—something that a skilled trades mobility tax deduction would address.

Currently, the temporary foreign worker program is a tool used to support labour shortages. However, it is not being implemented accurately with labour market information data. This has become a bigger issue in certain trades and regions, particularly in B.C. We need to better address how temporary foreign worker applications are reviewed, make it easier for skilled trades workers to travel to where the work is, and rely less on temporary foreign workers and government programs like EI.

I thank you for this opportunity and I look forward to answering questions later during the deliberations.

[The Chair, Liberal, Sean Casey]

Thank you, Mr. Strickland.

Next, we're going to hear from the Canadian Chamber of Commerce.

Ms. Nord, welcome back. I'm glad we've overcome our technical challenges. You have the floor for five minutes. Thank you.

[Leah Nord, Senior Director, Workforce Strategies and Inclusive Growth, Canadian Chamber of Commerce]

Good afternoon, Mr. Chair, vice-chair and committee members.

I'm speaking on behalf of the Canadian Chamber of Commerce. We represent 200,000 businesses across the country, across sectors and across sizes with our network that includes 450 chambers of commerce and boards of trade from coast to coast to coast. I am delighted to be here successfully this afternoon, and I thank the committee for the opportunity to speak about the importance of employment insurance program reform.

For a number of years, the Canadian Chamber of Commerce has been calling for a comprehensive review of the EI program, and the pandemic has further demonstrated the acute need for EI modernization. I appeared before the previous iteration of this committee just about a year ago, in May 2020, and in speaking to the need for EI reform I stated that in moving forward we needed to identify the reform needed to build a system that can respond to current and future workforce needs, ensure Canadians remain connected to the labour force, and ensure that somewhere there is a strong component of upskilling and re-skilling for displaced workers.

I say the same thing today. Our recommendation is as follows.

The Canadian chamber recommends that the federal government immediately start a tripartite-led comprehensive review of the EI insurance program through discussion and data-driven decision-making to ensure that the EI's governance, programs, policies and operations are viable and sustainable, responsive and adaptive, non-partisan, inclusive and relevant for current and future generations of Canadian employers and employees.

In the time I have remaining, I will make a few brief comments on aspects contained in this recommendation to provide further contextualization. I'm actually going to start with my last one and work my way back. Hopefully I'll have time.

My fourth and likely most important comment is that the EI system must be viable and sustainable. Under the current iteration of EI support, you have heard from ESDC officials that there is an additional $10 billion in EI benefits that are being paid under the expanded EI eligibility, admittedly mostly by government, as premiums are frozen, along with over $10 billion in expenditures for three additional benefit programs: the CRB, CRCB and CRSB. Further, over the past weeks in this review, you have heard recommendations that have included permanently expanding EI eligibility, changing zones, expanding sick leave and adding additional income supports, raising the payment floors and including other active measures.

Quite simply, how much does this cost and how can it reasonably be funded? I will return to my first comment and close with that in a moment.

Another recommendation within this is that the reform system must be inclusive. We believe that with one important caveat, which is the fact that the gig economy does not wholly equate to precarious work. Again, I spoke in front of a previous iteration of this committee at length in April 2019 about this and can further elaborate in the Q and A period, but the bottom line is that, until we determine where the challenges and issues lie with the gig economy, we should not be jumping to program solutions and any solutions should be optional, responding to the needs and desires of the gig workers and self-employed themselves.

Our third recommendation here is that this review must involve discussions—not consultations—that are tripartite-led, a true social dialogue. As a reminder, the EI system is supported seven-twelfths or 58% by employers, and five-twelfths or 42% by employees. Business and labour must be at the table in a meaningful way, and the EI Commission must continue to play a central governance role.

Our final recommendation is to first note that the EI program is complex. This review must be comprehensive, examining both parts I and II, with all the moving pieces therein. A necessary approach is to take a step back and look at modernization through a lens that focuses on the future of work and what is needed to have an adaptable system.

This includes some of the following points: (a) teleworking and working from home, suburbanization and ruralization, and labour mobility, both within and outside Canada; (b) professional pivots, upskilling, lifelong learning, education and training; (c) digitization, automation, industry 4.0 and artificial intelligence; (d) all sorts of workers: foreign workers, seasonal workers, older workers staying longer in the workforce, self-employed workers and gig workers; and (e), the foundation for all of this, economic competitiveness.

In conclusion, we must take a look at the big picture and look forward to what is needed and where it belongs, because not everything can or should fit into the EI program. We must look at how it could be afforded. In this regard, decisions need to be data-driven and costed. We can look at other examples, either internationally—at Australia, Denmark and Germany—or here in Canada, for example, the Canada pension plan, workers' compensation plan or the QPIP.

Thank you. I look forward to answering any questions.

[The Chair, Liberal, Sean Casey]

Thank you, Ms. Nord.

Finally, we have the Workers' Action Centre.

Ms. Frache, welcome to the committee. You have the floor for five minutes.

[Pam Frache, Organizer, Workers' Action Centre]

Thank you very much. I'm glad to be here.

Yes, I'm an organizer with the Workers' Action Centre, but I'm also speaking today as a signatory to the submission by the interprovincial employment insurance working group. This submission is signed by over 80 labour and frontline advocacy organizations. It contains recommendations that are grounded in workers' lived experience, with recommendations that could transform access to EI for millions.

I'm sure you are all well aware of the fact that today, only about 40% of unemployed people are receiving EI income supports when they're out of work. I'm sure you all also know that in urban centres the situation is even worse, with only about 30% of unemployed workers receiving income support.

I want to use my time today to help us understand why this is happening. First of all, I think we need to disabuse ourselves of the notion that seasonal work is pertinent only to particular industries or provinces. If we replaced the term “seasonal work” in our minds with the term “non-full-year employment”, it's very easy to see that the issue of non-full-year employment is an issue everywhere, in urban centres as well as rural areas, and from the education sector to the retail sector. We know that fluctuating demand for services results in non-standard, non-full-year employment.

Let's remind ourselves that the services sector now comprises 80% of all jobs in Canada. That's a remarkable transformation. In retail, the average workweek is only about 28 hours, so the notion of a 40-hour workweek or even a 35-hour workweek is of a bygone era.

I do agree with my previous colleague. We also must end the rampant misclassification of workers. Too many so-called gig workers are ordinary workers who are, in fact, misclassified and are entitled to all the protections and entitlements under the law.

Why is it that workers are not getting EI when they need it? I want to run through three broad areas.

One is that workers are simply not getting enough hours to fulfill the hours requirement. While we welcome the recent announcement of a single universal standard of 420 hours to qualify for EI, we believe it should be reduced further to 360 hours or 12 weeks of work, whichever is best for the worker. We believe this should be the standard for both regular and special benefits. Of course, this change must be made permanent. If I get a chance, I'd love to elaborate on this further.

Two, workers are disqualified from EI when they have “quit” or “fired” on their record of employment. This rule is punitive, unnecessary and fails to recognize the reality of the labour market today. Until there is strong, just-cause protection legislation in every province for every worker, there's no denying the arbitrary nature of firings in the workplace. In Ontario, the employer doesn't even have to provide a reason for firing a worker. At the same time, workers also quit their jobs for a variety of very legitimate reasons, including racism on the job, scheduling changes or even health and safety reasons.

While we're getting rid of arbitrary rules, COVID has reminded us how important migrant workers are to the economy. We must get rid of the punitive and arbitrary rules that exclude migrant workers from accessing regular and special benefits.

Lastly, a big reason workers aren't getting EI when they need it is that they've exhausted their benefits because they don't last long enough.

Now I want to turn my attention to the improvements in EI income supports. Not only do we need to make sure EI is there when workers need it and when the economy needs it as well. We also want to make sure it's enough for workers to live on, and let me just say that 55% of income is not an adequate replacement. Especially when you think of the poverty-level minimum wage rates across the country, 55% of a subpoverty minimum wage is simply unsustainable. We need income replacement of up to 60% to 70%, and the earnings should be based on the worker's best 12 weeks of income.

In addition, we should be raising the ceiling on insurable earnings. This would have the effect of increasing revenues for the EI fund, as well as increasing weekly income supports.

Finally, on the question of revenue, EI is currently funded solely through employer and employee contributions, as was noted. We urge the federal government to come back to the table, put its pillar of funding on the table and restore the three pillars of funding that used to sustain EI in its heyday.

We know that this system can do what it needs to do for workers and for the economy. We just need to now implement the changes that are going to make it happen.

We should have a comprehensive review. Any of the temporary best changes that have just been announced should be made permanent. Let's find the political will to make it happen. We know from COVID this is the time to do it. We can't wait a minute longer.

Thanks very much for your time.

[The Chair, Liberal, Sean Casey]

Thank you, Ms. Frache. We're going to begin now with rounds of questions, starting with the Conservatives.

We'll go to Ms. Dancho, please, for six minutes.

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

Thank you, Mr. Chair.

Thank you to the witnesses for your excellent opening remarks. I took a lot of notes. It's just wonderful to have so many experts here today, so thank you for being with us.

Ms. Nord, I have a number of questions for you. Thank you for your remarks. Again, you mentioned you represent over 200,000 businesses in Canada, so I'm really looking forward to hearing some of the feedback you've heard from those businesses on their experience with EI and how it can be improved for everyone.

You outlined a number of these things in your opening remarks, but before I get into that, I just wanted to ask you about the EI employer commissioner. As we know, there has not been an EI employer commissioner since January, I believe, when the former commissioner was not renewed, and there has not been a replacement. I just wanted to get your perspective about why an EI employer commissioner is important and why we need someone at the table as soon as possible, given we're talking about reform.

[Leah Nord]

Good afternoon and thank you for the question.

It is a critically important position because the EI Commission is tripartite. That's the basis and is the foundation of the governance of the EI Commission. We have stated that should remain as the centrality of the governance system, so in the absence of an EI commissioner for employers, there are consultations, there are discussions and there are decisions being made without the voice of business at the table.

We have expressed our concerns. We have written.... Most recently, 15 business associations wrote a letter at the end of March to the minister to express our continued concern about the absence at this critical time. Even as somebody is on board, we understand it is an issue of importance. We're told it's imminent, but there's still going to be a period of onboarding, and we're all aware of this looming September deadline. It is of great concern to us.

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

I appreciate that, Ms. Nord. We had Minister Qualtrough in and she had an opportunity to answer a lot of questions from committee members. When I asked her about this, she did sort of defer to how she's met with CFIB, and she....

I don't want to put words in her mouth, but my take-away was that she was relying on CFIB, which is an excellent organization. It does that similar work in research to yourself through the chamber, but do you feel that relying on CFIB rather than an EI employer commissioner is adequate, given the September deadline you mentioned?

[Leah Nord]

Again, CFIB is one of our close business partners. We do have a group of six, and even under the EI commissioner—under the previous one—there was a group that was called the business liaison group, and she convened a group of about 30 businesses. You get the full voice and breadth across not only sizes but also sectors across the country, and it is important because you'll see that there are different concerns and different priorities within the EI system. It's the full voice being heard.

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

It's great to hear that you've been consulted on that as well.

[Leah Nord]

We made ourselves consulted, yes.

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

Great. I'm glad to hear that she's consulting you, consulting CFIB.

Do you believe that's a replacement? Do we not need the employer EI commissioner, then?

[Leah Nord]

Yes, absolutely.

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

We do need it?

[Leah Nord]

Yes.

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

Okay. I understand. I think we were saying the same thing, but I'm miscommunicating. Thank you.

I also wanted to get your perspective on the last year. Can you just sum up in a few minutes what the weight and the pressure on business in Canada is and how critical is it that we...?

I would say I have heard concerns from businesses in my riding that I've met with. They're concerned about EI long term. We know there's a premium freeze, but they're concerned that it's going to skyrocket with a legislative change or something, and that could be the last straw for them.

Can you elaborate on some of the concerns you're hearing and any sort of forewarning we need to be aware of, should EI premiums go up substantially when the moratorium is done?

[Leah Nord]

What I would say, first of all, is that we are grateful that, in light of the expanded EI eligibility, the premiums were frozen. We don't have an indication of what that will look like outside of that, and it is very concerning. You heard from colleagues at CFIB last week. Their figure is that our members are $170,000 in debt right now.

The Canadian chamber partners with Stats Canada on something called the Canadian survey for business conditions. The most recent survey data came out in March. I would note that was before the third wave that has hit many jurisdictions across the country. Survey data from that indicated that 50% did not know how much longer they could operate without going into bankruptcy and that 40% of those who had under 20 employees could take on no more debt, 29% of those in the size range of 20 to 100 couldn't take on more debt and, of those with over 100 employees—so we're getting into our medium and bigger sizes—almost one in four cannot afford to take on any more debt.

As we look at this, I know this is only one piece, but it's a bigger puzzle of any number of things. I would note that already our businesses did take a hit with the recent rise in the CPP premium rates within the program as well.

Thank you.

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

How many employees do you think could be impacted by this—you mentioned a number of statistics—if we don't get these programs right? It sounds like the government, in its budget, to its credit, has extended them. If these programs are at risk, or whatever may happen after September, how many Canadian employees could be impacted, by your estimate?

[Leah Nord]

I mean, first of all, give credit where credit is due. We are thankful that those wage subsidies and those new programs have been put in place for business.

It would be difficult to put a figure on it. What I will say is that small and medium-sized businesses constitute 98% of this country's business community. They are the majority: 90% of business drivers, of economic growth and of employment. Statistics between 2013 and 2017 are that about 90% of employment comes from them, so that's important.

It's also important to start looking at our bigger companies, as well, that are on that K-shaped crisis and on that downward curve as well. The impact will be significant.

Thank you.

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

Thank you, Ms. Nord.

[The Chair, Liberal, Sean Casey]

Thank you, Ms. Dancho and Ms. Nord.

Next is Mr. Long, please, for six minutes.

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

Thank you, Mr. Chair.

Good afternoon to our witnesses. It's been very interesting testimony. I thank you for that.

My questions will be for you, Mr. Strickland, from the Building Trades Unions. I certainly want to acknowledge first the great working relationship I have with Steve Schumann and Matt Whelan. We've worked on different initiatives together.

I'd certainly be remiss without saying that the MLA in my riding here is Arlene Dunn, who was a former director of the Building Trades Unions. I talk to Arlene almost on a weekly basis here.

We've been very excited—speaking about projects for trades unions—about the recent federal announcement of $57 million here in Saint John—Rothesay for the small modular reactor project. We think that holds great hope for the future, certainly not only for southern New Brunswick but all of Atlantic Canada.

My questions for you, sir, would be as follows. I'm wondering if I can get your thoughts on the recent additions and changes to EI outlined in budget 2021, ensuring that severance and other separation monies do not delay unemployment insurance benefits.

[Sean Strickland]

Thank you very much for the question, Mr. Long. I really appreciate it.

Thanks for remarking on the relationship with Matt from IBEW and Steve from the operating engineers. I'm sure they're watching.

I'm sure Arlene, whom I've known for a number of years, is not watching. She's busy working on issues in the New Brunswick legislature.