Status of Women Committee on Feb. 26th, 2009

[Richard Shillington]

I don't know whether it's a proposal or a suggestion that we think about it. I'd be happy to talk about that. I've actually spent a fair bit of time in the research I mentioned before, for the Canadian Bar Association, thinking about that and looking at what Quebec has done.

I think it was pretty clear in my comments that this is better than the status quo, but it would still be encumbered by being administered within EI.

I get phone calls and e-mails regularly from people who have found me, wondering, “Why are my maternity benefits only this many weeks?” Well, that's because you were unemployed part of last year. “But what has that to do with my need for maternity benefits? In fact, my need is greater.” Well, no, that's the way the program works: you can't get benefits for more than x weeks.

When you put maternity benefits within that program, that limit still exists.

[Patricia Davidson, Conservative, Sarnia—Lambton, ON]

But if part of the benefit of a maternity-paternity program—

[The Chair, Liberal, Hedy Fry]

Ms. Davidson, you are one minute over.

[Patricia Davidson, Conservative, Sarnia—Lambton, ON]

Okay, sorry.

[The Chair, Liberal, Hedy Fry]

Ms. Mathyssen.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Thank you, Madam Chair.

Thank you, Mr. Shillington. It's very good to see you here again and very good to benefit from your number crunching.

We're here talking about numbers and percentages and how many people access a program and who is excluded, but we haven't talked about the social impact. Ultimately—and you referred to this—the employment insurance, or in the old days the unemployment insurance, program was intended to meet a societal need. I'd like to discuss that societal need, in terms of that program being there for a purpose.

In connection, first of all, with older women—I don't think there has been much discussion today about older women—many of them will lose their jobs in this economic downturn and they will struggle financially. Will the current employment insurance program accommodate the needs of these older women workers? What do we need to do to prevent these women from falling into despair and destitution?

[Richard Shillington]

I'm a research associate at Informetrica. Informetrica is an economic research firm that does forecasting. They have some data on the likely impact of the recession by gender.

I'm not qualified at all. I'm a statistician, but I'm not an economist. So I don't even want to share the results with you. You can ask them for it.

You do notice that the stimulative package and the money going into infrastructure is likely going to benefit people working in construction. At first blush, you would think most of that benefit is going to go to males, but that's not what the data suggests. As I said, the social experiment we're going into, a major recession, having substantially...“dismantled” is too strong a term, but hobbled EI and social assistance, should be very interesting.

If we find significant numbers of people ending up on social assistance in this country, we are going to be in such a bad state. In order to be eligible for social assistance, for example, in Ontario, you have to have less than $1,000 of assets. You imagine the hypothetical family—two people, one works for Nortel, one works for...pick another company—and their income goes to zero. Most of us are going to go through whatever assets we have very quickly, and then you start selling things.

You may be eligible for EI, but even with EI, if you're in an area with a low unemployment rate, the duration is not going to be 46 weeks. If you're eligible for EI, your benefits are not going to last a year. At our maximum of $450 per week, for many people, that won't pay their mortgage. We shall see. But we've certainly saved a lot of money over the last 20 years by cutting back on these programs.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

So it's money that went into general revenues and didn't benefit the people who it was supposed to benefit.

In talking about what could happen, what is a possibility down the road in terms of lack of income and having to sell things and loss of purchasing power.... We know it impacts negatively on the individual, be it a young mother, a self-employed woman, or just the self-employed, period. Have you given much thought or consideration to the impact on the broader community? This is something that I think we really need to give consideration to.

For example, we keep hearing that tax cuts have a certain stimulation on the economy. EI has a much better, more significant stimulation, and you actually mentioned that in your remarks. But have we considered the impact on the larger community? What on earth happens to us in the scenario you just described?

[Richard Shillington]

The economic circumstance we're in, broadly speaking, I suspect, isn't our doing, but in having good times, particularly good times for comfortable Canadians, we did cut back substantially on our social programs, and now we're at a state where my generation hasn't experienced a depression like this, so we won't have learned the lessons our parents learned. So we shall see what happens.

I have no idea how bad this could get. We shall see. But I do very much worry about those vulnerable Canadians, young people working part time, the lone parents juggling—I don't know how—parenting and trying to earn an income, seniors without a pension, seniors without benefits, employees without the employer health benefits that most of us take for granted and are subsidized by the tax system.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

With many of my constituents--and there's been an increase of traffic just in the city of London alone--the number of people seeking employment insurance benefits has increased by 75%. They come to my office, and they're in despair. They don't know what to do.

Some of them have asked that severance, vacation pay, and pensions be excluded from earnings under the EI Act. Do you have any idea how many people are excluded from accessing EI after the two-week waiting period because of these other considerations? Do we need to exclude severance, vacation, and pensions in order to circle the square?

I don't mean to cause you pain.

[Richard Shillington]

It's okay. I'm just trying to think.

I don't know. The officials know. If they know how many people had their beneficiary period delayed because of income, you can ask them.

Very quickly, is that a reason? I don't really have much of a problem with saying that because you have severance we're going to delay your EI benefits. A pension makes me more nervous. You try to think about that; it's more your money, not your earnings.

I had a conversation with an official and asked whether we could find a way that people could have earnings while on maternity benefits. There was a discussion, and I said, “But how can you have a top-up of your maternity benefits to 93% of your earnings without having that clawed back?” The answer was, “Oh, well that's not earnings.”

So some cashflow is not clawed back--employer top-ups--but severance will delay you. As far as pensions go, I'm not sure.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Technically, pensions are deferred earnings. It comes back to you putting into the EI program, but you can't collect out. You put into your pension; you can't benefit from it.

[Richard Shillington]

Well, your EI benefits are delayed.

If we wanted to have a full discussion on that, I'd actually want to think about what types of sources you have that would be reasonable to delay. I don't think I have a problem with severance because it's money to re-establish yourself because you've lost this job. Therefore, you don't need the EI, right? Whereas pensions to my mind are a different thing. It's your money.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Except if you were paying off a mortgage with the severance in order to manage on 55%--

[The Chair, Liberal, Hedy Fry]

Ms. Mathyssen, we've run out of time.

We're moving into the second round. Remember this is five minutes only.

Anita Neville.

[Anita Neville, Liberal, Winnipeg South Centre, MB]

Thanks very much, Madam Chair.

Again, Mr. Shillington, thank you for coming. You're always overwhelmed with information.

You talked about the economic dislocation we are in. We've heard, both in this room and in other forums, and you acknowledged it too, that it's unprecedented and many of us don't know our way through this.

We're focusing on EI benefits for women. We know that women are disadvantaged. We've seen the statistics that you and others have provided.

What would be your recommendation for the most urgent response to the reform of EI that would benefit women in the upcoming months--again not knowing with certainty what the time ahead is going to bring?

[Richard Shillington]

If you look at this chart with the measure that I could most easily get access to without spending more than $100, you see this decline. It's the same measurement when it was 80% or 90%, so there was a time, even with that measure, when the vast majority of unemployed were getting EI. The major drop is the “voluntary quit” rule. It wasn't the case before 1993 that people who quit their jobs got EI on the same basis. They didn't. They had a penalty on their waiting time, so it's not as if they weren't covered. To my mind it's as if you have car insurance, and if you are at fault right now what happens is normally you pay the deductible. That's your penalty for being at fault. If we wanted to run car insurance the way we run EI--you are not covered--you would not be insured if you were at fault. You would get no coverage whatsoever, and half the people involved in car accidents would have no insurance because they were at fault. Most of us would find that unhelpful.

I would address the “voluntary quit” rule. I'd go back to the rule that said if you quit your job, you will have a longer waiting period, rather than not being eligible whatsoever. We know that right now the current rules create the incentive for lots of little agreements between employers and employees about who gets laid off and who is fired and who quits. We know that's happening.

Also the move from weeks to hours disadvantages part-timers, who are obviously disproportionately women, in three different ways. If two people were hired on the same day, one worked half time and the other worked full time, then five weeks later they were both laid off, the person who worked part time had half the earnings, but they paid half in. They are less likely to get EI, and if they are eligible for EI, they could get a lower weekly benefit and they would collect benefits for a shorter period of time. They are penalized three different ways for working part time.

[Anita Neville, Liberal, Winnipeg South Centre, MB]

Say that again.

[Richard Shillington]

If you had two people who were hired, one full time, one part time, at the same hourly rate and five weeks later they were both laid off, one will have half the hours of the other, so depending on the local unemployment rate, may be ineligible. Let's assume they are both eligible. The average weekly benefit is calculated based on a divisor and the divisor varies, so you could get fewer benefits and the duration of benefits varies both by the number of hours you worked and your local unemployment rate. You could actually receive benefits for a shorter duration. There are penalties at each stage. I talked about hurdles.

[Anita Neville, Liberal, Winnipeg South Centre, MB]

What do we do about it? What do we recommend?

[Richard Shillington]

Go back to weeks. I was involved in...Kelly Lesiuk. I don't know how many of you will know the name.

[Anita Neville, Liberal, Winnipeg South Centre, MB]

I do.

[Richard Shillington]

It was a court case in Winnipeg. She was a woman who challenged the EI changes in 1996 because she claimed they had a disproportionate impact on women. I was an expert witness and I spent five days in a courtroom with the data.

How could you possibly believe that going from weeks to hours would not have a disproportionate impact on people who work part time, and how could you not believe that women disproportionately work part time?

[Anita Neville, Liberal, Winnipeg South Centre, MB]

Thank you.

Do I have any more time?

[The Chair, Liberal, Hedy Fry]

You have 10 seconds.