Mr. Speaker, I am pleased to share with you our conclusions regarding Bill C-265, following its review by the Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities.
The first version of Bill C-265 proposes substantial amendments to the Employment Insurance Act, resulting in less stringent eligibility criteria and increases benefit rates. These proposals would have quite an impact on the fund. Before further discussing the repercussions identified by the standing committee, I believe it is important to analyze the situation in the more general context of today's labour market.
We acknowledge that there has been an economic slowdown in some sectors and certain regions in the country recently. However, in general, Canada's labour market indicators remain robust.
According to Statistics Canada, the unemployment rate in Canada continues to be one of the lowest in decades and the proportion of the population that is working has reached almost record levels. The participation rate of working age Canadians is 77.9%, one of the highest in the world. In addition, a review of long-term unemployment indicates that the rate declined from 13.5% in 1996 to only 4.4% in 2006 and 2007, under our government.
In short, more Canadians are working and the labour demand is high. Employment opportunities are abundant because a number of sectors are facing labour shortages and the aging of the active population in the next few years will only increase labour demand. In this context, one of the important objectives, now and in future, is to encourage the full participation of Canadians in the labour market.
Of course we realize that even in periods of high employment, some individuals need the support of employment insurance. The facts indicate that the plan is meeting their needs. Statistics Canada's 2006 Employment Insurance Coverage Survey reports that almost 83% of individuals who pay into the plan and who lose their job or quit for allowable reasons are entitled to benefits. In regions where the unemployment rate is high, the proportion of eligible individuals has increased significantly.
Of course, the higher the unemployment rate in a given region, the harder it is to find a job there. That is why, in the employment insurance system, when the unemployment rate goes up, the number of hours required to be eligible for benefits goes down. Setting a fixed number of hours—360 hours in the first version of Bill C-265—works against the goal of achieving equal access to benefits across the country. In fact, the regions that would benefit the most are those that already have low unemployment rates. In such regions, eligibility requirements would be reduced by 50%, but regions with high unemployment would see only slight reductions.
When the standing committee reviewed Bill C-265, its members made it clear that a fixed rate, 360 hours, could have negative repercussions on the labour market and would be very expensive. By opposing that suggestion, the standing committee upheld the variable eligibility requirements and the provisions for people who are new entrants or re-entrants to the labour force, because it recognized that those requirements stimulate labour market activity.
With respect to benefit rates, following the standing committee's study, the bill still proposes increasing benefit rates by introducing a formula based on the 12 best weeks.
We believe that we need to find a happy medium between raising benefit rates and the possible factors associated with the notion of “best week” that could discourage people from working. It is important for members to keep in mind that we are currently conducting a pilot project in regions with high unemployment that calculates employment insurance benefits based on the 14 best weeks of income over the 52-week period preceding the claim.
This pilot project is designed to address the same issues as the best 12 weeks approach. It examines whether this way of calculating the benefit rates will encourage workers to accept jobs which, otherwise, would have lowered their weekly benefits.
Our government's approach is based on the certainty that Canada has to rely on the forces of the labour market and the economy. That is how we look at employment insurance. Based on the annual EI monitoring and assessment report, there is every reason to believe that Canadians are well served by the EI program.
At the same time, we have always sought to improve the program and bring in specific changes to address specific problems. For example, we have: relaxed the eligibility criteria for compassionate care benefits; launched a pilot project to examine the effects of providing additional weeks of benefits to those in high unemployment regions; extended transitional measures for two regions, in New Brunswick and Quebec, until the conclusion of the national review of EI boundaries; introduced just recently, in budget 2008, improvements to the management and governance of the EI account, against which the Bloc and the NDP voted.
As I said, our government believes it is important that the EI program strike a balance between providing temporary income support for Canadians while they find new employment and keeping individuals active in the workforce.
Given that it cannot be established that the fundamental changes put forward in Bill C-265 are absolutely necessary, two important factors have to be considered: the cost to Canadian workers and employers, and the potential negative impact on the labour market.
Bill C-265 is not the right approach in light of the current labour market conditions. The Government of Canada is committed to ensuring that all Canadians can participate and prosper in the Canadian economy. We believe that we can make the most progress and deliver the most results by investing in a variety of mechanisms, including the EI program.
