Human Resources Committee on May 26th, 2022

[Soraya Martinez Ferrada, Liberal, Hochelaga, QC]

Thank you, Ms. Nord.

I don't know whether Mr. Vachon would like to comment quickly before I ask my next question.

[Luc Vachon]

The Centrale des syndicats démocratiques represents seasonal workers. We have already lobbied for that, which may be why we have had less to say this time. The same goes for sick leave; it has already been done.

It is undeniable that the seasonal component is a source of concern, even though improvements have been made and pilot projects have been implemented, for some areas and some jobs—sometimes it's even more than regions—there will be seasonality that cannot necessarily be bypassed. We must always make sure to fix the black hole problem. We have to determine how to come back to a period of benefits that helps return to that.

I don't know whether this answers your question, but we have to accept that this system must meet the needs in some regions or in some areas of activity. Workers need to come back to work, and employers need people to come back to work. Otherwise, we have a cycle that starts over where we must constantly hire new workers. The expertise people have developed—

[Soraya Martinez Ferrada, Liberal, Hochelaga, QC]

Mr. Vachon, I would like to come back to what you just said. Is that why you think certain temporary measures implemented in budget 2021 should not be kept? I am referring back to what you just said.

[Luc Vachon]

I'm not saying it shouldn't be done. However, the pilot projects that have been implemented have had some success, and the pandemic may have prevented us from having a longer-term picture.

I think we can give ourselves an opportunity to implement other elements and other pilot projects. There is labour training integration, which is not not insignificant in helping develop skills in this area.

We could try to give ourselves an opportunity to do a few trials to draw the best possible conclusions.

[Soraya Martinez Ferrada, Liberal, Hochelaga, QC]

Thank you, Mr. Vachon.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Ms. Martinez Ferrada.

Ms. Chabot, go ahead for six minutes.

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

Thank you, Mr. Chair.

I thank the witnesses for joining us.

I will make a short introduction by saying how relevant I think it is for the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities to have taken the time to hear from witnesses and for them to have accepted our invitation to testify on important provisions concerning employment insurance. Those provisions don't affect the budget so much, which is the purpose of Bill C‑19. They are at the heart of an employment insurance reform, which concerns things like training and seasonal industry issues.

We are still waiting for the comprehensive modernization of the employment insurance act. Those key issues are now included in the budget—in other words, in Bill C‑19, which is an omnibus bill that must be passed as quickly as possible. Those don't seem like winning conditions to me.

Concerning division 32, the witnesses the committee heard from—Mr. Vachon, Mr. Beauregard and Ms. Nord—and the witnesses we heard from on Tuesday, are unanimous on the reform of the Social Security Tribunal of Canada. While consultations have been held, recommendations have been made and foundations have been built, everyone is wondering why we are unexpectedly finding this today in Bill C‑19.

Why is it important to remove this division from Bill C‑19? Why will that be important moving forward in the reform?

Let's go in order. Ms. Nord, Mr. Vachon and Mr. Beauregard, you can take turns answering.

[Leah Nord]

Thank you. I believe your comments are very astute. Where we're talking about the budget and certain divisions and implementation, they are in the bigger EI comprehensive review. On that point, I would say I think it is worth taking these pieces out and not nibbling at the edges anymore—looking at it as a whole.

Regarding division 32, I said in my opening remarks—and I think it's important—that you're hearing this over and over again, both from labour and the business communities. There is agreement across the board that this really does deserve a measured and deliberative and more in-depth response.

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

Thank you.

Mr. Vachon, you have the floor.

[Luc Vachon]

Good morning, Ms. Chabot. Thank you.

We had initially asked for clause 32 to be considered separately so that the issues it covers could be examined in greater depth. Frankly, since its reform, the Social Security Tribunal has done major damage for several years. It has neither been efficient nor cost‑effective.

You’d want to avoid making the same mistakes again when overhauling the tribunal and the way it operates. We’d like for things to be set straight, as they should’ve been from the start. There seems to be consensus on a tripartite model, which is excellent news. There were consultations, but will the outcomes of those consultations be taken into consideration?

We had asked for consultations because Bill C‑19 is colossal, just huge. Our concern and the reason why we wanted to have clause 32 considered separately is that potential corrections have been discussed for years. Opportunities like these don’t arise very often, so it’s important not to fumble. Any misstep could be felt for years.

We called for a separate review of clause 32 out of a desire to achieve the best possible outcome. We would be concerned if that did not happen.

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

Thank you.

Mr. Beauregard, it's your turn.

[Luc Beauregard]

Thank you, Ms. Chabot.

Why consider clause 32 of Bill C‑19 separately? It has been said, the bill is huge. It covers a lot of ground. We believe this section, which deals with employment insurance, should be dealt with on its own because of its importance to Canadians.

We saw quick action being taken during the pandemic. As a result, Canada was able to move forward and continue to operate despite the pandemic, which affected other countries' economies and workforces much more severely.

In our view, there are significant aspects of Bill C‑19 that do not reflect the interests of workers.

We're referring to a tripartite approach, that is a departure from what existed before.

You shouldn't make the 2012 mistake of not holding consultations again. We need to get back on track, and the EI file needs to be worked on separately.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Beauregard and Ms. Chabot.

Madam Zarrillo, you have six minutes.

[Bonita Zarrillo, NDP, Port Moody—Coquitlam, BC]

Thank you, Mr. Chair.

I thank the witnesses for coming today. I, too, am going to ask about division 32.

Perhaps, I'll start with Ms. Nord, then Mr. Vachon and Mr. Beauregard. I have the same two questions for each. What do you feel will be the negative impacts to EI clients if division 32 remains? What do you feel will be the impacts to EI clients if division 32 is removed?

[Leah Nord]

I just want to make a comment that the first four questions have come from four female MPs and I think that's wonderful.

As far as the impact of its remaining versus of the impact of its being pulled is concerned, I'll leave it to my labour members because it's their members who are directly impacted. I would say that by removing it, though, in the end we'll have a better product for all Canadians, a truly tripartite product would be the hope. I do appreciate that this has been a long time coming. Discussions have been ongoing since 2018, and there have been issues that have predated that, even since the revised system.

I would then argue that we've waited this long. It's really worth it, because of the complexity, because of what you've heard over the past two meetings of testimony, to take this out and really get it done correctly. I think there's a real opportunity. I actually don't think it's a lot of work. We don't have to go into another few years of consultation. It's the parties sitting around a table, I would argue, and agreeing to the way forward.

[Bonita Zarrillo, NDP, Port Moody—Coquitlam, BC]

Mr. Vachon, I'm listening.

[Luc Vachon]

I'm not sure I fully understood your question.

I'm not clear on what you mean by “eliminate”. Dealing with it separately is one thing. The reason we’d like to deal with it separately is to make sure it includes the right provisions.

When you say “eliminate”, do you mean keeping the status quo? If so, I can say that experience over the last few years has demonstrated that the current Social Security Tribunal of Canada is a failure. It has caused problems for workers and led to catastrophic results for them.

We need to get back to a tripartite model, which has proven itself in the past.

Although there is likely room for improvement, we need to get back to a system that ensures accountability and is more people‑centred, of course. Individuals who appear before the tribunal often face problems and are in precarious situations. The Social Security Tribunal of Canada is a very different type of tribunal.

[Luc Beauregard]

Thank you for your question.

What would happen if Bill C‑19 did not pass? In the short term, we'd be left with the same system. That would be a problem, but it would be an even greater problem to make the wrong changes to the bill. This is what Mr. Vachon just said. We need to be careful about that.

While it's true that we've been making these requests for some time now, a few more months won't make or break things. In my opinion, the goal is to do the work, take the time to consider everything, ensure there's a real tripartite appeal board, with regional representation and people who have a good understanding of the area. Over the medium and long term, we'd have devised a system with a more effective structure that is more representative of the three groups within it.

Let's put in the work to find the right answer, so we don't have to start again from scratch in two years time.

[Bonita Zarrillo, NDP, Port Moody—Coquitlam, BC]

Thank you.

Mr. Beauregard, I would just like to ask about the appeal board and the appointment process. Can you share any positives or negatives that you're seeing with this new way of appointing members to the board or this new appeal board in general?

[Luc Beauregard]

We believe the appeals process needs to revert back to the way it was before 2013. At the time, actual labour representatives were the ones making the appointments. Each of the groups had real representatives. This meant that everything was in line, decisions stood unchallenged and were acceptable to all.

Thank you.

[The Chair, Liberal, Bobby Morrissey]

Thank you, Mr. Beauregard and Ms. Zarrillo.

Now we'll move to Mr. Liepert.

You have the floor for five minutes.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Thank you very much, Chair.

Thank you to the witnesses for being here today.

Not much of what we've heard today is dissimilar to what we heard from the two sets of witnesses who appeared at our previous meeting.

However, I would like to make this comment. I do recall the 2015 election. A particular Liberal leader campaigning against the Conservative prime minister, Stephen Harper, was very critical of omnibus legislation. I don't think we have seen a bill in this House in the last six or seven years that has more stuffed into it than this particular budget implementation act. I think this is just another example of broken promises by the Liberal government.

I think we will find out later today whether the members of this committee—the new Liberal-NDP coalition—will listen to what the witnesses have said relative to division 32 and having it removed. Obviously, we are only making a recommendation to the finance committee. It will be interesting to see whether the finance committee will be listening to this committee and then ultimately whether the finance minister and Prime Minister will be listening.

Thank you, everybody, for making your presentations, but my suggestion would be not to get your hopes too high.

I want to actually focus on the comments of Ms. Nord on division 26 because we haven't heard very much about the other divisions in our testimony.

I just wanted to ask...more for clarification than anything. It's my understanding, and correct me if I'm wrong, that EI does not operate independently, like the Canada pension plan. It's out of general revenue. When you're talking about a $25-billion or $29-billion debt, that's part of the federal debt, if I'm correct.

Can you elaborate on that at all, Ms. Nord?

[Leah Nord]

I can. I'm not sure it's my place to, but the EI program is funded separately. It's funded by employers and employees. Employers pay seven-twelfths into the system. The employee community pays five-twelfths. It is a separately funded program.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

I do understand the separate contribution side. I think the problem with EI right now is that it all goes into general revenue and then it may operate as an individual program within the Department of Finance, but I do not believe it operates independently like the Canada pension plan.

If, in fact, we have this huge debt in EI and if the program does in some fashion operate somewhat independently with five-twelfths of the amount coming from workers and seven-twelfths from employers, if we're going to try to clear off that debt, we're likely to see what I would call another tax. If EI premiums go up for both employers and employees to try to pay off this debt, that's going to be a significant hit to both workers and businesses.

Would you agree?

[Leah Nord]

Yes. It is also my understanding that within the current debt structure those rates were frozen for all contributors during the pandemic. We are grateful for this, but that is set to lapse this September 2022. The concern is that you can actually legislatively only increase the rates over a seven-year period by a certain amount. To cover the current debt alone, those rates would have to rise at a rate higher than the legislated amount. Again, this is before we do anything else about expanding eligibility with the expansions that are discussed in sections 26 and 27.

We have strongly urged, as we move forward, not to look at all of these little compartments, but to look at the EI system as a whole in that process of modernizing it.

There's a whole piece as well—an important piece—around modernizing the software and the platform that form the basis of this. There are a lot of costs going on and on, and we're not seeing how that's going to be covered or what's coming off the books.