[Recorded by Electronic Apparatus]

Thursday, March 21, 1996

.1533

[English]

The Chairman: I call the meeting to order. I would like to welcome our presenters today from the Centrale de l'enseignement du Québec, the Confédération des syndicats nationaux, and the Fédération des travailleurs et travailleuses du Québec.

Welcome. As you know, we are the committee in charge of making sure Bill C-12, an act respecting employment insurance in Canada, is improved. We have been fortunate to hear from Canadians from coast to coast to coast, from national groups, and they have provided us with very constructive ideas on how to improve this bill.

We have approximately one hour for this presentation. The members of the committee tell me they really enjoy the question and answer session, because they can pinpoint some of your better points and engage in a dialogue that is very important when you're trying to improve a bill. Therefore you may start, but we would prefer an overview of the major points so we can go on with the question and answer session.

[Translation]

Mr. Pierre Paquette (General Secretary, Confédération des syndicats nationaux): I would like to thank you for your invitation and introduce the people who are accompanying me: Mr. Daniel Lachance, Vice-President of the Centrale de l'enseignement du Québec (Quebec Teachers' Corporation); Mr. Henri Massé, General Secretary of the Fédération des travailleurs et travailleuses du Québec (Quebec Federation of Labour); and myself, Pierre Paquette; I am the General Secretary of the Confédération des syndicats nationaux (Confederation of National Trade Unions).

First of all, I would like to point out that our three organizations represent 900,000 workers in Quebec and that this is the second time that Quebec's three major central labour bodies have appeared together before the Standing Committee on Human Resources Development. The first time we appeared together to oppose the proposals outlined for consultation in the discussion paper entitled Improving Social Security in Canada, and today we are appearing once again to express our vehement opposition to Bill C-12.

First of all, the CEQ, the CSN and the FTQ strongly disagree with some of the basic premises of the government's proposed reform.

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First of all, the document states that income security programs are expensive and must increasingly be channelled to the most under-privileged groups in society.

The second premise of the proposed reform presumes that the unemployment insurance system constitutes a significant disincentive with respect to an individual's decision to work, and that, accordingly, it contributes to the increase in unemployment.

The third premise is that it is the rigidity of the labour market that has caused high unemployment rates.

Basing itself on this analysis, the federal government has, since the beginning of this decade, implemented many reforms that have weakened the unemployment insurance system. One has only to recall the previous government's legislation, namely C-21 in 1990, C-113 in 1993, as well as C-17, passed by this government in 1994, which made it harder for people to qualify, shortened the benefit period and reduced the level of entitlements. The reform now being sought goes even further. It proposes to decrease the maximum level of benefits, to reduce the number of weeks of benefits and to make it harder for people to qualify.

With Bill C-17, in 1994, and even more so with the proposed reform, the federal government is transferring some of its welfare responsibilities to the unemployment insurance system.

Indeed, one of the most worrisome aspects of the proposed reform is, without a doubt, the government's will to transform the unemployment insurance system into a welfare system. The reference to family income contained in the proposed reform jeopardizes the social insurance principle guarantying that people who pay into the system are entitled to its benefits. Establishing a benefit level based on family income is what characterizes, for the most part, a welfare approach. With this approach, the amount of the benefit is dependent upon the family income. This change constitutes an unacceptable regression, particularly for women who for decades have been demanding the right to financial independence and to equal job opportunities.

The second argument purporting that the unemployment insurance system has a significant impact on the behaviour of workers is extensively invoked to justify the numerous restrictions that are being proposed for the system.

Political rhetoric on the perverse effects that the rules of the system have on the behaviour of individuals is not at all supported by the studies commissioned by the government which show that such effects are, all in all, minimal. A more exhaustive review of the documentation also showed us that the system has very little impact on the way that individuals behave and on the unemployment rate in the regions.

Moreover, viewing work and individual motivation in this manner goes against many psychological and sociological studies and inquiries confirming that work, regardless of the level of its complexity or interest, constitutes, for individuals, much more than a source of income.

A job, more than anything else, enables people to participate in society, to have a sense of self-worth, to develop and to have contacts with fellow citizens.

It is troubling to note that at the dawn of the XXIst century, the Canadian government still holds such a simplistic view of work and worker motivation.

The reforms to the unemployment insurance system proposed by the federal government are also based on analyses that link the persistently high unemployment found in several countries to the rigidity of the labour market. According to this analysis, unemployment is largely the result of a lack of flexibility in the labour market, and is not due to a slowdown in economic activity or to a drop in overall demand.

The prescribed solution is therefore to lower the salaries and working conditions for certain categories of workers. Reducing income protection provided by the unemployment insurance system would have the advantage of forcing individuals to accept inferior working conditions.

It is interesting to note that the successive changes made to the unemployment insurance system have not stopped the labour market from deteriorating, since unemployment and job precariousness is the lot of an ever-growing number of workers. Moreover, the experience of the past 25 years tends to disprove the hypothesis that by restricting the unemployment insurance system we will improve the job situation. Since the mid-1970s, the Canadian unemployment insurance system has been subjected to many restrictions and the unemployment rate has nevertheless continued to rise.

The proposed changes to the unemployment insurance system, which are based on assumptions about the behaviour of individuals and about the impact of the system on unemployment rates, mask a whole series of factors that have transformed the labour market over the past 20 years and that have resulted in a growing unemployment rate and in job precariousness.

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Hence, if the number of repeat claimants increases, government refuses to admit that this is the result of both increased unemployment and the growth in the number of temporary jobs caused by a lagging economy and the numerous reorganizations underway, both in the public and private sectors.

The unemployment insurance system will not be truly reformed unless it serves to reduce the level of insecurity resulting from all this upheaval in the labour market. Obviously, the proposed reforms contained in this bill do not lend themselves to this.

Henri Massé will continue with the more technical aspects.

Mr. Henri Massé (General Secretary, Centrale de l'enseignement du Québec): As Pierre Paquette has just said, the government, by basing its reform on such premises, has made choices which we could say are consistent with its objectives, and particularly its objective of reducing the deficit. But for thousands of workers who, because they cannot find work, must resort to unemployment insurance, these choices do not make any sense whatsoever.

We are saying, and the government itself recognizes this, that the labour market is changing. Jobs are becoming increasingly more precarious. In addition to seasonal work, a reality we know well and which has been around for a long time, there is a growing number of part-time jobs and temporary casual jobs. With the new reforms, it is the working men and women - and let us not forget this - who are forced to accept this type of job who will be penalized even more.

In this brief presentation, I would like to discuss three features of this reform which will have a disastrous impact on individuals: the period used to calculate total earnings, the intensity rule and the qualification calculation based on hours worked, and the period used to calculate average earnings.

We are vehemently opposed to the measure which would enable the government to calculate average earnings based on the 20-week period prior to the layoff. This is an unfair measure which perverts the insurance principle and destroys our efforts to obtain better living and working conditions.

First of all, let's specify that if entitlement is defined by the number of insurable weeks or hours, then those insurable periods must necessarily be used to set the average levels of benefits.

Moreover, many workers will be penalized, such as those who go through more than one period of un employment in the same year, but this will also affect those who have rights pursuant to Acts, collective agreements or decrees. A work accident, an illness or vacations in the construction industry or the garment industry occurring in the 20 weeks preceding layoffs will cause a significant decline in the level of benefits.

Pregnant women who have to stop working as a precautionary measure would also be automatically penalized because their workplace isn't safe.

The rule of intensity: This is not the first time we oppose any measure trying to set benefit rates based on the past experience of beneficiaries. We reiterate our opposition today. If the government truly wants to recognize the changes in the labour market, it must also recognize that they are imposed on workers by private and public employers and, to a certain extent, by seasonal weather conditions and the type of natural resources we have in our country.

The government chose the easy route, which is to say penalize individuals and cause a significant drop in the standard of living of whole regions. In Quebec, according to the government's own data, scarcely 45 % of beneficiaries have received less than 20 weeks' worth of benefits during the five past years. More than half of Quebec unemployment beneficiaries are therefore potentially targeted by this aspect of the reform which, in actual fact, will not solve the economic development problems of industries or regions.

The true challenge is rather to support the development of precarious employment and to ensure sustainable economic development in regions where there is a lot of seasonal work.

Qualification requirements based on hours worked: Despite what the government would have us believe, one of the worst examples of unfairness in the reform before us is in the determination of entitlement based on hours worked.

We'd like to emphasize right away that we agree with the principle of premiums paid on all hours worked. We even asked for this measure when we testified at your first hearings. This measure has a dual effect: it increases the coverage of a number of precarious workers and it eliminates an incentive to work longer hours.

The government should have stopped there. It chose instead to integrate this concept into calculations of entitlement because the ``expression `workweek' may mean different things to different people".

If that's the case, why define an equivalent of 35 hours for a workweek? Why not 40 hours, which is the standard in the Canadian Labour Code? Why not 30 hours, the minimum set by Statistics Canada to define full-time employment?

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We believe that any standard defined in terms of hours worked is, by its very essence, arbitrary and that that choice has two significant injurious effects. The first effect means taking away with one hand what you've just given with the other. All part-time workers will pay premiums on all hours worked, but it's so difficult to qualify that it will take much more time and some will never do so, particularly new entrants. Hence, according to the government's own statistics, in Quebec, 31,000 people might no longer qualify, while 18,000 new people might be entitled to benefits.

The second effect is just as significant. The 35-hour standard would slow down claims having to do with reduction of work time. In Quebec, there were more and more such claims. It's unfortunate, because we think that the best way to reduce unemployment is to create jobs. It is also unacceptable.

We would have thought that within a department, the left hand would know what the right hand was doing. Wasn't it the minister responsible for Human Resources Development Canada who set up the advisory group on work sharing, which I personally took part in? The group's report has been shelved somewhere, and the present reform will further harm labour's efforts.

Workers who have, for instance, limited their overtime or cut the normal length of their workweek will be penalized as far as their eligibility is concerned, and also as far as the number of weeks of benefits they will be entitled to; This is how they are treated for having helped to reduce unemployment and the use of the unemployment insurance fund. Others will think twice before doing the same thing.

For us at the CEQ, the CNTU and the QFL, this is, overall, moving in the wrong direction. We think that this isn't really a reform. It is purely an exercise in accounting which means that the present government will cut, in a mere two years, ten times more than the previous government.

In analyzing at least three characteristics of the reform, we can show that instead of attacking the true structural problems of the labour market it attacked individuals for purely financial reasons, at a time when the fund is hardly in the red, and when there are many other ways to ensure the funding of the unemployment insurance system, which Daniel Lachance of the CEQ will now tell you about.

Mr. Daniel Lachance (Vice-Chairman, Centrale de l'enseignement du Québec): By deciding, in 1990, to withdraw from unemployment insurance funding, the federal government finally acted on its intent to completely transfer the costs of the system to employers and employees.

For a long time, the government recognized its responsibility concerning underemployment and that led, concretely, to the rules for funding unemployment insurance. By taking on its fair share, it was basically asking for the contribution of all taxpayers to help remedy an economic and social problem which concerns the entire community.

By withdrawing in this way, the federal government confirmed, once again, that the fight against unemployment is not amongst its main objectives as far as economic policy is concerned. We believe that withdrawing from unemployment insurance funding is one of the worst initiatives taken by the federal government in the area of income security. To our great disappointment, this reform confirms that unfortunate tendency.

Not only does it withdraw from funding the system, but the federal government also continues to cut into benefits, claiming, among other things, that business payroll taxes are too high. But we must remember that even if contributions to social programs have increased in Canada, they are at a particularly low level compared to other OECD countries. We're talking here about an average of 11.3 % for OECD member-countries as a whole while countries such as France or Germany, for instance, are at 19.5 % and 15.2 %. The chart that you'll find at the end of this paper speaks volumes on this matter.

In this context, it seems at the very least astonishing that the government finds the business burden excessive, particularly given the many studies that show that in the long term, employers only bear a small part of social costs.

And this doesn't stop the government from making sweeping statements claiming that excessive payroll taxes increase unemployment. Even the OECD is careful on that level. In a recent study on employment the organization states that it would be unrealistic to count on a drop in payroll taxes to decrease unemployment to a significant degree in a sustainable manner. This vision is shared by a number of analysts.

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In fact, it's interesting to compare the data on unemployment and the payroll taxes in G-7 countries and see that at the macro-economic level there is no correlation between those two variables. You'll also see that in that area, the graph is very eloquent when comparing these countries' payroll taxes and unemployment levels. The level of payroll taxes in Canada as compared to its unemployment rate demonstrates that decreasing payroll taxes has no effect on unemployment, because with the lowest payroll taxes, we had the highest unemployment rates.

Moreover, nothing indicates that a decrease in premiums might stimulate employment. It could be a benefit for business, for funding or investment in those new technologies that kill jobs rather than creating them.

It must also be said that it's politically correct to denounce the so-called perverse effects of payroll taxes. But we too often forget the fundamental role they play in sustaining economic activity. A decrease in premiums occurring simultaneously with a decrease in benefits can only have a depressing effect on the economy, as we have already seen the first does not automatically have an effect on employment, whereas a decrease in benefits automatically depresses the economy.

We know that unemployment insurance premiums are a regressive tax because of their fixed rate and the existence of a ceiling on insurable earnings. This kind of tax penalizes labour-intensive industries and low wage earners. The reform will only accentuate its regressive characteristics by decreasing the MIE from $42,380 to $39,000. This will increase the proportion of employment earnings not subject to premiums in the upper range.

This lowering of the ceiling will be beneficial only to those employers paying salaries of over $39,000. Moreover, it might also have perverse effects in the area of overtime work. And because the salaried workers earning more than the MIE go on unemployment insurance less frequently, the anticipated savings flowing from the decrease in benefits will only reach $200 million whereas the shortfall in premiums will be of some $900 million.

We find it totally unacceptable for the federal government to decide, through its reform, to place the burden of funding unemployment insurance and fighting the deficit so unfairly on the shoulders of low- and medium-income wage earners.

On the contrary, we say that the upper limit of insurable earnings should be eliminated for employers. That would allow a broadening of the employers' levy to cover the whole payroll. At an unchanged premium rate, this would generate additional revenue for the fund.

As for employee premiums, increasing the MIE to a level equivalent to twice the average weekly wage seems interesting. Under that scenario, our calculations show that a parallel increase in benefits would still allow for funding the system because of a lower draw on the fund as revenue increases.

Finally, a word concerning the contingency reserve or the milk cow in fighting the deficit - I am referring here to the Unemployment Insurance Fund surplus of over $5 billion at this point. We raised this during public consultations on Minister Axworthy's Green Paper at the time.

For unemployment insurance to fully play its role as automatic stabilizer, we think it would be relevant to set the premium rate in such a way that the surplus could accumulate during periods of economic expansion to avoid increases in premiums during recessions. Our agreement to setting up a contingency fund comes with one essential condition: that the government not be allowed to play with the surplus, whether for investing elsewhere, in the Human Resources Investment Fund, for example, or to solve its financial problems as we see and perceive it to be doing at present. Separate management of the unemployment insurance fund could help lead them away from this temptation.

Now, the reform plan is going in the opposite direction. The government is actually proposing to do away with any ceiling on accumulated surplus. And, as I was pointing out before, everything leads us to believe that the estimated 1995 $5 billion surplus will only increase. It seems that Ottawa is getting ready to gleefully dip into the till to erase parts of its deficit. During the next recession, the temptation will be even greater to cut even more deeply into the system or slash other public expenditures.

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Mr. Paquette: In Quebec, considerable resources have been invested in the management of the labour market, but the absence of consistency in the initiatives taken by both levels of government as well as costly duplications have been prejudicial to these efforts. From that stems the Quebec consensus as to the advisability of repatriating all levers in the area of employment training and active measures in the labour market. This bill does not meet that objective. So an employment benefits program has been devised, but provincial governments won't be able to manage it unless they accept the standards dictated by Ottawa.

To develop an inclusive policy for the labour market addressing the whole working-age population whatever the kind of income support it may be offered, whether unemployment insurance or welfare, the Quebec government must repatriate all the management tools of the labour market including unemployment insurance with all its active and passive components.

In fact, a real employment policy must integrate and secure all income support measures, in other words benefits and active measures.

It is very clear to us, based on present areas of provincial jurisdiction, that it is up to Quebec to implement that policy.

I would also like to point out to the committee that within the context of the socioeconomic summit held in Quebec City earlier this week, the Quebec consensus was reaffirmed.

We, the unions, go even further than the consensus by asking for the repatriation of the whole unemployment insurance fund. But the consensus was reaffirmed at the request of the president of the Conseil du patronat, Mr. Ghislain Dufour. All the socioeconomic stakeholders were there, including some of the bigger players who are not renowned for their sympathy to the sovereignty cause, like Mr. Laurent Beaudoin and Mr. Bérard who singled themselves out during the referendum campaign, but who did join in the consensus.

In conclusion, the CNTU, the CEQ and the QFL are demanding the pure and simple withdrawal of this bill and repatriation by the Quebec government of employment training and job support and protection measures, including unemployment insurance.

Thank you for listening.

[English]

The Chairman: Thank you, Mr. Massé, Mr. Paquette, and Mr. Lachance, for your contribution to trying to improve this bill.

We'll move right to the first question from Madame Lalonde.

[Translation]

Mrs. Lalonde (Mercier): Thank you for coming. Welcome to Ottawa.

Your conclusion demanding the pure and simple withdrawal of this bill is based on an analysis that you explained here at length. Is it because you think amendments wouldn't be enough? Or could certain amendments lead to your agreeing to this bill?

Mr. Massé: We're asking for its withdrawal because there would just be too many amendments. That's clear, and we also mentioned the whole question of seasonal workers.

I'd like to tell you about a little tour I took of the Quebec building industry. I was in Val d'Or a few weeks ago. There were 400 construction workers at the meeting, mainly men, and they didn't take the government reform project that was presented very seriously because they thought it was neither possible nor doable.

A construction worker in the audience went to get the senior public official in charge of the unemployment insurance office in Val d'Or to get confirmation of what we were explaining concerning the bill. That person came and told them that we were telling the truth.

People responded with distress, anger and despair, because a lot of those workers are at work at the beginning of the period, and then for the last two or three weeks. Between times, they have a long stretch without work. To validate these periods of work, they get stamps. In a construction workers' meeting, you do not ask people where they work, but how many stamps they have.

So the issue is the whole question of seasonal workers. If you go on unemployment insurance repeatedly, your benefits will drop markedly. There is also the fact that it is to become more of an assistance program than an insurance program, because family income is supposed to be considered, and that will be extremely hard on the women.

In any case, when you look at it from one end to the other, you can see it needs major amendments. That is why we are asking for its withdrawal. We are asking the government to come back with a bill taking all those demands into account.

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M. Lachance: I'd like to add that we are suggesting withdrawal because the basic tenets of the bill itself have to be questioned. In our present economic situation, the government is sloughing off its responsibilities. The unemployment problem is a community problem, in other words it is the responsibility of the government and business, but the tenets of this bill make unemployment into an individual responsibility. They put the burden of responsibility for unemployment on the shoulders of the people who are without a job. These are fundamental questions and amendments cannot change this element of the bill.

At the same time, the bill reacts to the changes in the labour market by putting the burden of those changes on the shoulders of those who are the actual victims, while an unemployment insurance program exists - when it is an unemployment insurance program, not some sort of welfare - to help those who are momentarily affected by the changes in the areas of work or employment.

When such fundamental problems have to be addressed in a bill, amendments are not an option. One can only request its withdrawal pure and simple and tell the government to get back to work and bring in a new bill which will allow Quebeckers and Canadians to deal with the economic and social situation we're in.

The Chairman: Mr. McClelland.

Mr. McClelland (Edmonton Southwest): I will have to put my question in English because I cannot do it in French.

[English]

I'd like to ask two very brief questions, because there are so many members present today. I'll pose both and then you can answer them together.

I was heartened to hear you say that you felt the fund should be managed separately and not be considered part of general revenues. If the fund were managed independently in Quebec, similar to the Quebec Pension Plan, do you have any idea what the premium rate would be?

The second question is more of a general question that has to do with the nature of work. In your opinion, is it proper that someone who works year round and without interruption for many years but may only make minimum wage, or around $18,000 a year, should subsidize, through their unemployment payments, a seasonal worker earning $50,000 in six months of the year, every year, year in and year out?

Those are my questions, and I anticipate your response. Thank you.

[Translation]

Mr. Paquette: Concerning your first question, here is why we suggest that the unemployment insurance fund be separate from the rest of the federal government's books. As the federal government does not contribute to the fund anymore, even though, in view of certain economic circumstances, it might put some money in, but pay itself back later, we think that the employers, the workers and their organizations should be the ones to manage the unemployment insurance fund themselves. So the government should not be the only one making decisions in this area. Actually, we agreed that the fund should build up a surplus to ensure stability of premiums over time.

In the Martin budget, what we saw on the revenue side were premiums kicking in and benefits on the expenditure side, with a difference between the two of $5 billion that disappeared at the end of the year.

So if we have to build up this reserve every year in case there is to be a recession or an economic slowdown, in our opinion, it is a red herring. As for Quebec, you have to look at it globally.

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The different reforms that were made to unemployment insurance over the last few years transferred a whole lot of unemployed people who were the responsibility of unemployment insurance to the welfare rolls, for which more and more responsibility is being shifted onto the Quebec government.

So, globally speaking, as far as unemployment insurance as such is concerned, let's say that from one year to the next it can change. Quebec puts as much money into the unemployment insurance fund as it takes out. With the changes in the labour market, we expect the responsibilities of the Quebec government, within the present tax structure, to increase.

So we propose that the measures offered to the jobless be the same, whether they are unemployed or on welfare. During the first year, their income would come from the unemployment insurance fund into which they would have contributed and if, unfortunately, after their benefits ran out, they had still not joined the ranks of the employed, they would then depend on welfare.

As for the premiums, we have to look at the total tax burden shouldered by the workers and the business side for those who are not working. In brief, we think that we would not be the losers in this operation. However, the position of the unions - and my colleagues will confirm this - concerning the repatriation of the fund and active measures is not linked to any financial question.

It's not because we're paying more into the fund than we're withdrawing now. It's because to have an efficient, active labour force policy, there can be only one prime mover. Regardless of whether you're getting a welfare cheque or an unemployment insurance cheque, you should have a right to the same kind of back-to-work measures.

Mr. Massé: As for seasonal work, when times are bad, you use the unemployment insurance fund and when times are good, you don't need it. The premium is a lot lower for a worker paid the minimum wage. The seasonal worker earning a higher salary while he's working pays bigger premiums.

That's one of the things we point out. Unless I'm mistaken, I think we're going from insurable earnings of $42,000 a year to a level of $39,000 which creates injustice because at some point the higher wage earners will be paying less. We should do the opposite and remove the ceiling. The seasonal worker earning higher wages over a short period of time would pay more than what the bill provides for.

Mr. Paquette: The answer to your problem will be found more on the tax side than with unemployment insurance. We have a progressive taxation system and revenue redistribution that mean, overall, that workers earning $18,000 can have a reasonable level of income.

[English]

Mr. McClelland: Like a guaranteed annual income - something of that nature.

[Translation]

Mr. Paquette: Yes, something like that, even though that debate is ongoing in Quebec.

[English]

The Chairman: Now we'll move to the Liberal side. Mr. Lavigne.

[Translation]

Mr. Lavigne (Verdun - Saint-Paul): Gentlemen, thank you for your presentation.

Mr. Massé, you say you toured Quebec recently. You did notice that the construction workers want to work. The construction workers need work and you know exactly why. Those people work six months and earn $60,000, $70,000 or $100,000 during that time. For the other six months, they get unemployment.

Of course they pay premiums, but you know very well that lower-income people or those who have jobs that don't pay as well need unemployment insurance, or employment insurance, more than those who earn $60,000 or $100,000 a year.

Some lobstermen earn $150,000 and $200,000 and go on unemployment insurance for six to eight months a year. That's a point I wanted to clarify.

Secondly, even though there are people in Quebec who need unemployment insurance, the objective isn't to allow them to collect benefits for years and years. A lot of them will get their 12 or 24 stamps and then they'll collect their unemployment insurance and spend their summer on the beach. You know that there are those who do that.

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As participants in the economic summit that just come to a close, you must be aware of the fact that in order to stem unemployment in Quebec, the business community is asking that the sovereignty issue be put aside for the next ten years, thus allowing them to invest more in their businesses.

You know full well that if the Premier of Quebec were to make such a commitment, there would be more business investment. You know that there would be more jobs and an improvement in the Quebec economy. I'd like your comments on that.

We can see what's happening in education in Quebec. I have children at school. When my seven-year-old comes back from school and says to me: ``finger, Dad", I think it shows we have a big problem on our hands, namely education.

Secondly, before we transfer employment training to Quebec, we have to make sure that education is functioning properly in this province. Only then can we envisage transferring other areas of jurisdiction to Quebec.

You are lumping together many different things.

First of all, concerning your last statement about sovereignty, I'd like to remind you that from 1985 to 1994, even though a federalist government was in charge of the province of Quebec, employment continued to decline. I've never had any difficulty understanding that instability could have some effect on employment.

We don't intend to bury our head in the sand, we're all adults, but that doesn't mean you can put all the blame on that... You have to make some qualifications. Once again, during the years of Liberal government in Quebec, a federalist government, the unemployment rate started skyrocketing.

In the case of the construction sector, someone said a while ago that these people seem to work six months a year and for the remainder they work on their suntan. Anyone who can say that doesn't know much about the construction sector.

When the construction industry was thriving in Quebec, the economy was prospering and between 75% and 80% of these workers were working almost non-stop throughout the year. There were others who didn't manage so many hours. At the present time, a third of the construction workers are receiving welfare, a third are unemployed and a third are working. So it isn't a situation that enables people to work for a while and then live on unemployment insurance benefits.

I worked in construction for a long time. I can tell you that that is a sector where people are proud of the work they accomplish with their two hands.

I'm not saying that there aren't any exceptions to the rule but at any level of society, you'll always find a few exceptions.

The situation is presented as if people were happy not to work, or happy to work only six months and then live on welfare or unemployment insurance. I don't think that this actually reflects how people feel.

I sat on a committee looking into the reduction of hours of work and it was quite clear, and this is also shown by surveys from Statistics Canada, that two-thirds of seasonal, part-time or unsteady workers would like to work full-time.

There may be a third of these people who are satisfied with their situation, but the other two-thirds are not.

[English]

The Chairman: We're going to stay on the government side. Mr. Lachance, did you have some comments?

[Translation]

Mr. Lachance: Yes, I have two comments to make on what I would describe as prejudices relating to the state of education in Quebec.

I want to emphasize that Quebeckers are taking control of education. There was the educational forum, a large scale consultation of Quebec society through various corporate, union, and parent organizations attempting to assess the present situation and to take whatever measures are required in the way of adjustments.

The same kind of problems are to be found throughout Canada. In some sectors they may be more pressing than in others.

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The measures proposed by government are not contributing to the improvement of education. From what we saw in last week's budget, the Canadian Health and Social Transfer, particularly with respect to higher education, will not improve access to education. It will have a direct impact on access to higher education because of higher tuition fees.

The many instances of overlap with the federal government in the field of education make it impossible for us to tackle the real problems being faced by Quebec in education at the primary, secondary, college and university levels.

Quebec is taking on the responsibility, and we hope that the federal government will put an end to this overlap which instead of improving education only serves to aggravate the present situation.

Let me conclude by saying that as far as employment is concerned, the social and economic conference held this week in Quebec City brought together representatives of unions, the government and employers.

Decision-makers representing big business in Quebec were present at the table and agreed to take part in the employment forum which is to table its report next September, not on matters of principle but with a concrete action plan calling for specific job measures and results.

This has been a joint effort on the part of big business, unions and the government. Mr. Jean Coutu, an outstanding Quebec entrepreneur, will be presiding this commission. A number of things will be set aside. This does not prevent business leaders from having their own views on Quebec sovereignty but they've decided it's time to get to work.

I think that this could serve as an inspiration for the Liberal Party of Canada which has started talking about employment insurance. The Red Book claimed that this was a government priority but we haven't seen any practical results. On the contrary, the situation has worsened with a bill which will have the effect of aggravating this situation for people who are the victims of unemployment in Quebec and in the rest of Canada.

[English]

The Chairman: Mr. Paradis.

[Translation]

Mr. Paradis (Brome - Missisquoi): Just over a year ago I was elected member of the House of Commons and I get the impression that there are two different worlds. First of all there is the world of federal-provincial relations between Quebec and Ottawa, both in this field and in others, and then there is the ordinary world.

I try to see as many people as I can. This was my approach during the election campaign as well as during the Referendum period. I get the feeling that I'm living on two different planets. In federal-provincial relations everything seems to be based on confrontation. That isn't what ordinary people want, and we realize when we go to see actual people in real life that things work there.

Let me give you some examples. You say that Quebec wants to take over such and such a jurisdiction, you say you want the whole lot, all of unemployment insurance. As you were saying this to me, out there in the Eastern Townships and Montérégie, throughout the regions, the director of the Quebec Manpower Development Corporation was working hand in hand with the director of Human Resources Development Canada on manpower requirement plans for the next five years.

This is how things work in the field. There's a very good understanding between these two people. There is co-operation and collaboration between the federal and provincial organizations in the field but when we get up to higher levels, this is no longer the case.

I was in Coaticook in the Eastern Townships last week and I had the pleasure of attending the launching of a human resources fund set up with $250,000 from Human Resources Development Canada and $100,000 from the Quebec Manpower Development Corporation, $50,000 from the Quebec Labour Ministry and $100,000 from the community. It added up to the tidy sum of $500,000 for job creation and business opportunities in the Coaticook region. There wasn't any fighting over power. So instead of basing things on disagreements between the federal and provincial governments, between Ottawa and Quebec, why don't we start thinking about the citizens and their needs? I think that that is the approach we'll have to take.

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After having travelled, I can say to you that people do not want duplication. Yes, people want more decentralization, you are right about that. Co-operation and joint action, it doesn't necessarily work at your level but on the level of average people, it works.

[English]

The Chairman: I think you were just about to get to your question.

[Translation]

Mr. Paradis: I don't think that unemployment insurance should be a way of life, but rather assistance that is provided to people. In this sense, rather than provoking confrontation, wouldn't it be better to multiply the number of projects that generate federal-provincial-municipal agreements?

Mr. Massé: Contributions to the unemployment insurance fund are made by employees and employers. A fund is not an assistance plan. I will let Pierre speak more on the matter. With regards to what you have just brought up, we did not come here today to debate sovereignty. We did not come here to put federalism on trial either. We were simply responding to a question put by Mr. McClelland who asked us if it had been repatriated to Quebec. But this is not what we came here to preach about today. That is another debate, for another time.

Today we came here to say to you that the unemployment insurance bill is inconceivable for us. It must be withdrawn or seriously changed. So long as it comes under federal jurisdiction, we will have to live with it. We came to speak about that issue.

Mr. Paquette: I completely agree with the preceding commentary. We don't want to squabble. We want cohesion. You have given us the example of co-operation between the two services. Why have two services drawn up manpower plans the labour force in a region? One service would be enough. In Quebec, there is a consensus. Convince your minister to resolve this as soon as possible based on the consensus. If you want, we could even strike a small negotiating committee with Mr. Dufour, Mr. Laurent Beaudoin and others.

Thirdly, how is it that in the Martin budget, you attack labour funds, that are roughly the only initiative in Quebec that have shown results? The Fonds de solidarité, that is the largest labour fund in Canada, is penalized. We have begun our own fund. We have collected, with difficulty, 8 million dollars over three weeks and, during the first year, our wings are clipped. These are measures to help employment and not to improve the federal government's rating in Quebec.

We hoped for the demonstrations against Bill C-111 and there will be some against Bill C-12. They have even surpassed our expectations. In Gaspé, in the Lower St. Lawrence, and roughly everywhere in Quebec there has not been a day where there have been no demonstrations. You know this quite well.

There will be a large demonstration on March 31st in your Prime Minister's riding of Shawinigan. There will be another one in Matane in a few weeks, as well as in Chicoutimi. When you see thousands of people take to the streets in these regions, I hope that it will make you think and you will see who will be held responsible for the effects of this law on the living conditions of people. Let me say to you that it will not be the government of Quebec. Rather it will be the federal government, in the same manner that Paul Martin is being held responsible for the cuts to our labour funds.

[English]

The Chairman: Thank you very much, Mr. Paquette. I appreciate your outlining the schedule of the protests for all members so they'll be aware of them, but I would like to move on to Mr. Dubé.

[Translation]

Mr. Dubé (Lévis): I would like to make a comment, and I will let Ms Lalonde add to my comments afterwards. I listened to my colleague Mr. Lavigne, and I think he did not understand that he appeared on television. He said incredible things. He expressed certain prejudices against the unemployed, saying that they were voluntarily unemployed, they wanted to tan their stomachs... If he thinks that he has scored points by saying those things on television today, I'm sorry, but he is wrong.

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Mr. Massé, I have a short question to ask you. Construction workers, as you have explained, sometimes make quite good salaries. However, the decrease in the maximum amount of benefits and insurable earnings will have incredible consequences. Let me remind you of the figures. The maximum benefit rate was at $448 and was decreased to $413. But if the person becomes a repeat user, after five times, the rate decreases to $375 per week. And if, furthermore, for these people, the four dead weeks rule is applied, the rate decreases again. So one must ask if, at a certain point, there will be any unemployment insurance benefits left.

I would like you to comment on premiums. From now on, a fair number of people will no longer be able to benefit from unemployment insurance, but will still have to pay premiums. I want to know if Canadian labour would be open to an increase in the maximum amount to deal with... Would the labour bodies accept that this maximum amount be increased rather than decreased as the federal government has done?

Mr. Massé: For years now we have asked for the removal of that ceiling. By the way, this is one of the issues that we discussed at the federal committee responsible for examining the reduced work week, in order to encourage the reduction of overtime and to ensure that premiums are paid for total hours worked and based on total salary. Thus employers might be able to hire more.

Should the maximum amount be at $100,000, $110,000, $96,000, or $85,000? We have not done this work, but we do hope for an increase in the maximum amount.

Mr. Paquette: We would like to highlight one of the most iniquitous aspects of the law - there's no other word for it - and that is that one pays premiums as of the first hour, but that one only has rights to benefits if one qualifies, and a refund will be given only if the person earns less than $2,000.

This means that some thousands of people who will pay premiums will not have the right to benefits or to the repayment. So, this bill does not at all fill the needs of employees with the lowest incomes in our society.

And there, I realize that we're even witnessing sabotage.

[English]

The Chairman: Let me make it very clear that around the Parliament Buildings there are no safe seats.

[Translation]

Mr. Paquette: There might be education problems, but there might also be infrastructure problems.

Mrs. Lalonde: The representatives of these three big labour groups went to great effort to prepare a quality brief and to come here after the socioeconomic summit that ended late last night. I'm sad to note that they were received in this manner by my colleagues across the table, who could at least have been concerned about the reasons why they made their recommendations.

After the political speeches that each of you has made for us, I can present my excuses on your behalf to our guests. We have never had such an attitude towards anyone else, and in the committee this is not done either. In general, we respect each other.

[English]

The Chairman: Was that a comment or a question? That's the important part.

[Translation]

Mrs. Lalonde: Before asking you to answer my question, I would like to remind you and remind my colleagues across the table that Minister Bourbeau, who is by the way extremely Liberal and a federalist, reiterated, in January 1993 and a number of other times during that year, how having two networks carrying out active measures was costly, even when the coordination between the two levels of government was at its best. And he added that the administration was costly, that it slowed things down. So, as quickly as possible, we must resolve this issue.

.1630

The Quebec consensus, that was quite obvious yesterday, needs means. I would like you to provide further explanations to my colleagues across the table - they could have asked you these questions - so that they understand better, about why the Quebec consensus requires the repatriation of all these active measures.

Mr. Paquette: First of all it would be worth mentioning, as Mr. Bouchard did at the conference when he lamented that very overlap and duplication, that in Quebec, there are 13,000 federal and provincial public servants who manage 110 different programs. So, it is clear that these programs overlap, are duplicated sometimes and are not well known by the people who need them to improve their training in order to re-enter the labour force.

The biggest problem is that a person who receives unemployment insurance benefits has access to certain programs which are paid out of the UI account or by the federal government, whereas a person receiving welfare has access to other programs, despite the fact that both people may have exactly the same needs. So, it would make sense to have several programs of the same kind targeted to people who are out of the job market.

Another element is the ability to link training policies with income support and labour market integration policies. This is especially important for people living on welfare who need the same kind of help.

Lastly, income support and training policies must be consistent with job creation policies. In Quebec, we think we can achieve this. It was proven at the beginning of the week. Job creation policies will only work if all socioeconomic partners gather around the same table to develop them. The same thing can be done coast to coast. Also, regional disparities must be taken into account.

In a way, if Quebec received the tools it needed, it could in turn transfer them to the regions. But that is impossible given the federal system. These issues are currently being discussed within the Société québécoise de développement de la main d'oeuvre, which represents the socioeconomic partners.

[English]

The Chairman: As chair, I'd like to thank you for your presentation. Of course you've made it quite clear what your position on this bill is. I was hoping, though, that perhaps you would have used this opportunity to enlighten the members of the committee on ways you could actually improve the bill.

I was struck by your presentation because you addressed some very important issues, such as the issue of the gap, the so-called ``dead weeks'', and I know what that means, and I know how you feel, particularly when you refer to the challenges the construction industry faces, because as a student I worked on construction sites for many summers. I understand the impact of the weather. I understand the gaps and shortages that sometimes exist when you're moving from one project site to the next. I'm quite sensitive to that. But I don't think I or any member of this committee will help those particular construction workers by scrapping a piece of legislation.

I would like to hear from you if you have any thoughts or any ideas on how you deal with some major issues; issues such as the gap, the seasonal workers, and how you address that within the parameters of this particular bill, and the intensity rule. How do you deal with the issue of the fact that...?

.1635

I know all three of you have a clear understanding of what is happening in today's economy. I am convinced of that. We will also have to appreciate the fact that if we keep going at the rate we're going with the maximum insurable earnings, we will be at 146% of the average industrial wage.

As individuals representing unions who I am sure are also quite cooperative with employer groups and all the other stakeholders in our economy, do you think that creates a distortion in the marketplace? What do you have to say about a system that has grown from $8 billion to $16 billion and $20 billion in less than a decade? Do you think this can go on? In other words, in a simple question, do you really think we can maintain the status quo? I'd like those points addressed, because as chair I am here to listen to ways to improve the bill.

[Translation]

Mr. Paquette: All these suggestions are contained in the brief we submitted during the first consultations on the Axworthy reform. We agree with the hours-based premiums, on the condition that benefits are prorated to the number of hours worked. But the government introduced a hook: in addition to the hours-based system, it tightened the benefit eligibility criteria.

If a person works 15 hours and pays premiums on those 15 hours, they should receive the equivalent of 15 hours in benefits, prorated at 55 or 60 p. 100 of their income. This takes into account the new reality of the job market. It is acknowledged in some provisions of the bill, but not in a big way. A person may pay premiums if they work for two employers, but chances are slim the person will lose both jobs at the same time. That person would really have to be unlucky.

Some people suggested that the surplus should be used to maintain premiums at their current level, but, once again, we recommend that the government not use those funds. Once there is a surplus, it accumulates with interest, and it is then possible to stabilize premiums.

We agree that funding should be studied, but we also want businesses to contribute, because they also benefit from the unemployment insurance system. It lets them retain a qualified labour force and stabilizes the economy, as opposed to the way it was before unemployment insurance was introduced in the 1940s. And who can forget the dirty 30s?

We don't have a problem with a capital tax or a value-added tax. Our brief makes all kinds of suggestions. But business has to pay its fair share. Studies show that employers take the entire system into account when they negotiate salaries, and that does not simply include UI premiums.

It's all included in the direct and indirect pay of workers. We refer to this situation in our brief. We are very open to new forms of taxation. Indeed, at the socioeconomic summit, we said we were open to other forms of payroll taxes which exist in Quebec. We have no problem with that.

Generally speaking, it's obvious that our unemployment insurance system is under pressure because no new jobs are being created. Apart from the infrastructure program, which we welcomed at the start of the federal government's mandate, there have not been many initiatives to solve this problem. But that's what we have to concentrate our energies on.

Trying to reform the unemployment insurance system to reduce costs, but without an employment policy, means that people will receive less benefits or that it will be harder for them to be eligible. We've suggested all kinds of solutions. We can send you copies of this brief, which, incidentally, was jointly produced by the CSN (CNTU), the CEQ and the FTQ (QFL).

[English]

The Chairman: Do you believe in reduction of premiums?

[Translation]

Mr. Paquette: As for premiums, we are just like any other taxpayer. No one wants to pay more than is necessary. But people are not interested in paying lower premiums if it means they receive fewer benefits.

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Premiums to the fund have to be high enough to meet the basic needs of a person who is temporarily unemployed. It is obvious that we cannot ask for an increase in premiums. But if lowering premiums means lower benefits, we will oppose that, as we did when there was a surplus due mainly to previous cuts which led to a reduction in employers' premiums.

Mr. Massé: Regarding the previous question, you only speak of the bill in terms of how it will affect unemployment, but you don't address the source of the problem. It's true that, in Quebec, some regions only have seasonal employment. But no government has tried to diversify local economies by bringing in different industries.

I'm not saying that it's simple or that it's easy, but governments have not shown the political will to change anything. Take construction, for instance. Nothing is happening today. Even when times were good, when we thought that the economy was changing, nothing was really done. Construction unions have often put forward proposals asking the organizations that employed them, namely governments - the federal, provincial and municipal governments, as well as large private sector corporations - to try to get together and plan their projects so that work is not all done at the same time.

There were good times in construction, when there was practically no unemployment. But building costs have increased to the point where they have killed the industry. The situation changed and it wasn't long before there were many unemployed construction workers. But if the work had been spread out, people would have had work over a longer period of time.

But it seems this is not a priority in our economy. No one is controlling - or wants to control - the situation, but when the result is unemployment, the unemployed are penalized by receiving lower benefits.

As for lower premiums, you won't change the situation unless people decide not to work in construction anymore. The building industry will soon pick up, however, and then we will need skilled and qualified workers.

These issues all concern us. You are reacting to the effects of unemployment rather than addressing its source. We're not saying that Quebec's unemployment rate could go from 13% to 6 or 7% within a few months. There are ways to drastically reduce the costs of unemployment insurance, but no one is looking at them.

Mr. Paquette: I would like to add a few words on that subject. The bill holds individuals responsible for a situation which was caused by the economic sector they worked in or by business. It is true that some companies plan their work schedules according to the employment insurance system. We must point out that business is held completely unaccountable in Bill C-12. It's as if individuals chose to become unemployed.

There are even public institutions which hire people in winter and put them on unemployment insurance in summer. This, of course, was not the main purpose of the UI system. So, even government uses unemployment insurance to pay workers instead of reorganizing work. Ultimately, individuals will be penalized. And as for the banks, that are making profits and announcing huge layoffs, are the laid- off employees responsible?

No, in my opinion, the North American strategy of downsizing will lead us to a dead end. Workers will be penalized, but not the Royal Bank. To my mind, the committee should think about how business might be held more accountable for the way it treats its employees and uses the unemployment insurance system.

[English]

The Chairman: Your presentation is quite interesting. I have just two final issues. What are your thoughts about the $300-million transitional job fund and the family income supplement for low-income Canadians with dependants who are unemployed?

[Translation]

Mr. Paquette: Regarding the income supplement, we don't see how it is relevant. Bill C-17, which has already been passed, contained a 60 % provision for unemployed people with dependents. In our opinion, that is much fairer. In this case, a family income test will be introduced and will affect women the most, because they earn less than their spouses and are more likely to be unemployed. They will lose the right to the supplement which they previously received. So it is certainly better to maintain the 60 % criteria which is the lesser of two evils.

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As for the 300 million, it should be included in the common fund so Quebec can give itself a coherent job creation policy. But that will certainly not compensate for the negative effects the overall reforms will have.

[English]

The Chairman: Thank you very much, Mr. Massé, Mr. Paquette, and Mr. Lachance.

As chair, I will also instruct the Department of Human Resources Development perhaps to provide you with the 26 independent studies that have been produced by the department, because one thing that is occurring in these hearings is that we're using different sets of figures to analyse the same issue. These discrepancies have to be resolved, because I feel, frankly, quite uncomfortable with them. So I'll make sure that you will get all the information required so that we can speak the same language. Thank you very much.

Mr. Nault (Kenora - Rainy River): May I ask the clerk to get this brief put in English so maybe the rest of us could read it, because of course it's in French.

This morning the Bloc were complaining about the fact that most of the briefs are in English. Well, it goes both ways. I'd like to read this brief at my leisure sometime. Could you get the clerk to have it translated into English? I would certainly like to know what the unions were saying today, based on the fact that I never got to read it in advance.

The Chairman: Since you bring this point up, I'd like to deal with a matter that was raised, quite properly, this morning by Madame Lalonde in reference to the issue of translation.

At our organization meeting, when we had the election of the chair and the vice-chair, we approved routine motions. One of the motions we approved - and there were Bloc representatives there, if I remember correctly - was that the clerk of the committee would be authorized to distribute documents to the members of the committee in the language in which they were received and would ensure that such documents are translated and distributed as promptly as possible.

I would like to bring to the attention of the hon. member from Mercier that I have asked the clerk if in fact this was being honoured. He has given me a 100% assurance that he is following this particular motion, which was approved by the entire committee, to the letter.

So we should be receiving the briefs that we receive in English translated into French versions, and of course the ones we receive only in French translated into English.

[Translation]

Mrs. Lalonde: After the meetings?

[English]

The Chairman: No. Before, yes - within a reasonable time period. I think that would be before the end of the hearings.

[Translation]

Mrs. Lalonde: I'm sorry, it has to be before the meeting.

[English]

The Chairman: Yes.

[Translation]

Mrs. Lalonde: All right.

[English]

The Chairman: Before the person appears?

[Translation]

Mrs. Lalonde: Yes.

[English]

The Chairman: No, we can't. If that was the case, then we wouldn't be able to hear the CSN today.

[Translation]

Mrs. Lalonde: Yes, but that means we will have to find another way. We have a list of the briefs which have been submitted and only a few were in French. If the translation is not available, it's probably because there was not enough time, but we have the right to have the French version in time for a meeting.

[English]

The Chairman: Absolutely. So we'll honour this routine motion that we passed at the organization meeting.

Mr. McClelland: This isn't the first time this has occurred, and this isn't the only committee in which it has occurred.

We, as a committee and as parliamentarians, should show courtesy to our guests and to our witnesses. If, for whatever reason, they bring briefs to the committee and they are not translated, then that's our problem, not theirs. We should keep that within the family. If it takes a couple of days to get it, then it takes a couple of days to get it. That's not the end of the earth.

The Chairman: Mr. McClelland, I think we're all in agreement.

We've passed this routine motion. I'm going to stick to it, because that's the only order I have from the members of the committee.

.1650

There is also a housekeeping matter. Last Thursday I asked the department to provide this committee with a note outlining with clarity the eligibility rules for obtaining special benefits under UI and the changes provided for in C-12. Today I'm tabling a briefing note on this matter from the department. It conforms to my request. Members will see that it lays out the qualification period for the regular and special benefits under both the existing unemployment insurance system and the proposed employment insurance regime. The information in this note will be helpful to us as we hear further witnesses and as we deliberate about any changes members here might wish to suggest in coming weeks.

However, for the record I would like to draw this committee's attention to a clause in the bill dealing with special benefits. I'm sure we will want to see it changed. As currently written, Bill C-12 appears to state that new entrants and re-entrants into the workforce will need 910 hours of work before they may claim not only regular EI benefits but special benefits too, such as maternity, parental, and sickness. It is my understanding, however, that the government intended that the new entrant, re-entrant entrance requirement was not to apply in the case of special benefits. In other words, the 700-hour eligibility threshold was to apply for all special benefits claimants whether they are new entrants or long-standing members of the workforce or not. Therefore, I think at a minimum we will want to have the wording clarified so this extra burden, imposed apparently unintentionally on people, new entrants, who wish to claim maternity benefits, is lifted.

So I'll table this and we'll get it distributed.

Now we move on to our next presentation, from the Institut canadien d'éducation des adultes, president Pierre Paquet and project manager Gaétan Beaudet.

As you know, we are trying to improve Bill C-12. As a committee we have identified certain areas we are certainly working very hard at improving. We have had the benefit of hearing many witnesses who have given us greater insight into Bill C-12, an act respecting employment insurance in Canada.

We have approximately one hour. We would like to have you start with an overview of the major points and highlights of what you think the key areas of concern are. Then we will move to a question and answer session.

Thank you very much. You may begin.

[Translation]

Mr. Pierre Paquet (President, Canadian Institute of Adult Education): Thank you, mr. Chairman. On behalf of the Canadian Institute of Adult Education, I would like to thank you for inviting us today.

I will take a few moments to introduce the Canadian Institute of Adult Education. The Institute is an important meeting point for networks of public, labour and community teaching organizations, and it has been monitoring and supporting the development of adult education in Canada and Quebec for the last 50 years. This year marks our fiftieth anniversary.

The Institute has a global vision of what continuing education should be, and is involved in every aspect of this area. The purpose of the Institute is to relentlessly promote the point of view of adults and to help them access services which meet their needs, as well as the development of those services.

Our mission is to promote adult and continuing education. Our mission is based on the three focuses of our work: first, co-operation between adult education partners; second, critical analysis of public policies; and third, research and the development of expertise to support our various public representations.

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Bill C-12 represents the most important unemployment insurance reform since 1989, which was marked by the labour force development strategy and the withdrawal of government from the funding of the unemployment insurance fund.

The CIAE made various representations when those reforms were introduced. We spoke out in 1989, when we appeared before the House of Commons parliamentary committee and the Senate special committee. We also made representations in 1994 when the Green Paper on social security reform was introduced.

Today's brief analyzes the reforms in view of the strategic importance which education, employment training and, generally speaking, the development of the labour force hold for individuals and organizations.

From the outset, we want to share our deep concern regarding the fact that people will be excluded and marginalized if the bill is adopted.

Since the reform is part of the social program review process, we would like to highlight the fundamental principles underlying our analysis. In our opinion, social security reform must, first, propose a global vision and an integrated approach to social and economic development; second, include a reform of the tax system; third, recognize that the government plays an essential role in the distribution of wealth across the country; fourth, help people get real jobs skills; fifth, be based on a real policy of job creation which excludes no one.

We will begin by briefly explaining our perception of how Bill C-12 came to be, especially as it relates to income supplements. We will also briefly describe the job market situation in Canada. But our presentation will mainly focus on the bill's provisions dealing with employment benefits and the way the federal government wants to work with the provinces.

In our view, the bill is basically based on the OECD strategy contained in its 1994 study on employment. The study concluded that unemployment was not due to technological progress nor to competition between developing countries, but was basically caused by the fact that industrialized countries could not adapt and increase the flexibility of their economies.

Unemployment was basically due to the rigidity of social protection systems, minimum wage and employment standards. The solution lay in slashing social programs and reducing public spending, but not in reviewing fiscal policy, which is necessary, nor the disastrous repercussions the monetary approach has had on unemployment rates.

This is what the federal government is doing. Bill C-12 is based on two arguments which reinforce the model of management by unemployment. We believe this argument puts too much emphasis on budget cuts and the federal deficit. Consequently, the social security net is weakened, which causes salaries to fall.

The bill calls for a 10% reduction in program expenditures, which amounts to 1.6 billion dollars, as demanded by the Minister of Finance, Mr. Paul Martin.

More and more cuts have been made to unemployment insurance benefits since the early 1990s. According to studies by the Société québécoise de développement de la main d'oeuvre, cuts to the social system, which were carried out in turn by ministers McDougall, Valcourt, Martin and Axworthy, will total approximately $44 billion between 1991 and 1999. Since the end of 1990, the federal government has also withdrawn funding from the unemployment insurance system. For the same period, from 1991 to 1999, it will have withdrawn some 25 billion dollars.

.1700

So, since the end of 1990, the federal government has withdrawn funding from the system, but it continues to use the surplus in the UI account to pay down its deficit. With a $5 billion surplus, the account does appear to be the goose that lays the golden eggs to reduce the deficit.

The federal government will go to the unemployment insurance account to find money for the Human Resources Investment Fund, the HRIF ($400 million this year and $800 million at the end of the fiscal year). At the same time, the government is continuing to reduce the proportion coming from general funds intended to support the implementation of active measures to assist the unemployed.

In our view, by focusing on adapting the labour market to changes in the global economy, government policies, such as the series of reforms made to the Unemployment Insurance Program, have made it harder for certain segments of the workforce, who are often not very highly skilled, to remain in the labour market. These people have been further marginalized.

Even during a period of economic growth, the number of jobs created is still not adequate to significantly bring down the unemployment rate. Furthermore, the frequency and duration of unemployment have risen to such a degree that in the case of certain groups, such as women, visible minorities, aboriginals, disabled people and the young, the term chronic unemployment has to be used. It should also be noted that at the present time practically four out of ten jobs are described as ``non-typical". Therefore, it is no surprise to see that in 1993, approximately 40% of claimants had received unemployment insurance three times over the past five years.

The Green Paper on reforming the social safety system referred at length to structural changes in the Canadian economy, and the CIAE hoped that the present bill would propose ways of combatting the polarization of the labour market as described in the Green Book.

The CIAE believes that reducing the deficit and combatting unemployment are compatible objectives. As the SQDM (Quebec Manpower Development Corporation) stated in its document ``Corvée nationale de l'emploi", there is no contradiction between putting our fiscal house in order and combatting unemployment. On the contrary.

Putting people who currently receive state benefits back to work in productive jobs would do more than any other measure to improve the government's fiscal position.

Figures compiled by the SQDM show how much the public debt would be reduced if the unemployment rate dropped by 1% over the next few years. It makes for quite a significant reduction just for one single year. For one year alone, they are talking about a reduction of $1.5 billion. Therefore, over five years, there would be a reduction of $7.7 billion as a result of a 1% drop in unemployment. These are the figures just for Quebec.

The federal government would be the major winner here: $5.8 billion of the total amount of $7.7 billion would go to reducing the federal deficit, and the remaining 1.2 billion would reduce the Quebec deficit.

By proposing a two-tier system based on the difference between occasional and frequent users, the bill further polarizes the labour market. Access to benefits is further limited as a result of the introduction of these two categories of unemployed people. Access will be made even more difficult for people coming onto or returning onto the labour market, such as women, young people and immigrants.

From now on these people will have to accumulate a considerable number of hours of work before becoming eligible for their first benefit. In our view, there is every reason to believe that a good number of these people will pay premiums without ever being entitled to benefits.

.1705

From our reading and analysis of the bill, it appears to us that the proposed reform will be conducted primarily on the backs of the unemployed, and that as a result they will be marginalized or even excluded from the labour market. Therefore, the CIAE proposes that this aspect of the unemployment insurance reform be reviewed.

I am referring here to the document of the SQDM which clearly recognized that corrections have to be made to our fiscal situation. The real question is how this should be done. As there is almost no possibility of a general increase in taxes, there are basically two ways of attaining this goal, either by further cutting program spending and transfer payments, or by stimulating economic growth and tax revenue resulting therefrom.

While further spending cuts can be considered inevitable and even desirable in some cases, the fact is that achieving a fiscal balance through strong economic growth would provide benefits in two areas. Not only would it be easier to reduce the public deficit, but the government would also be addressing one of the major causes of the deficit, namely unemployment, while retaining the ability to provide funding to public programs which need them.

The final part of our presentation deals with positive measures and provincial responsibilities.

The CIAE believes that the government's decision to reform the social safety program is a very good opportunity to thoroughly review the very basis of our social policies and to gear job training and development towards the creation of an active labour market policy and a policy of renewed partnership between the worlds of education and labour.

That is why we consider that as a result of the unemployment insurance reform, the federal government should recognize the jurisdiction of the provinces in the area of manpower development and encourage the type of reforms currently being carried out in Canada.

In Quebec for example the government is trying to develop the necessary means of adapting its active labour market policy to reforms in its systems of education and welfare.

It should be remembered that in 1990, during the debates on Bill C-21, the CIAE expressed its interest in the federal initiative to create a special fund for training, returning to work and entrepreneurship.

The Institute supported an idea of broadening assistance for training by providing income support to recipients during the training period. But the CIAE objected to the federal government using the unemployment insurance account to fund measures for non-claimants or to directly fund training activities which had previously been covered through the government's general funds. We still maintain this position.

The CIAE supports the effort at streamlining made in the bill, which reduces 39 programs to 5 types of benefits. However, the CIAE continues to object to the use of the unemployment insurance account to fund measures intended for non-claimants or to fund measures other than income support for claimants.

We feel it is important to indicate that the introduction of new types of employment benefits will have no real value if they are not accompanied by a genuine job creation policy.

Despite the statements regarding the HRIF, the Human Resources Investment Fund, the CIAE considers that the various types of benefits proposed will not offset the lack of active labour market policies. In themselves, the guidelines in the bill will not be able to create the necessary conditions of proximity, flexibility and partnership needed to make a consistent and effective contribution at the provincial, regional and local levels. The direct funding of local projects which are not part of an overall approach might well prove to be another example of piecemeal decision-making.

We believe that the federal government would be better advised to respond positively to the demands of the Quebec government and the consensus reached by all parties in the National Assembly with respect to manpower training, and also to the consensus of all socioeconomic partners sitting on the board of the SQDM, that is management, unions, community-based workers and education establishments.

.1710

In this bill, the federal government reiterates its intention to respect provincial jurisdiction and even announces that it intends to withdraw from these areas of responsibility.

However, the CIAE considers that this is in fact a form of disinvestment by the government in the area of training. The government is offloading the burden to individuals, with the conditional agreement demanded of each of the provinces.

The provinces would be compelled to respect the federal government guidelines if they want responsibility for managing manpower development.

The CIAE can only deplore, once again, the federal government's decision regardless of its rhetoric to remain in areas of provincial jurisdiction, through guidelines.

The federal government is continuing its foray in areas of provincial jurisdiction, especially through its national placement service and employment benefits which can be managed either by a government organization, a sectoral committee, or any other designated body.

In reality, in an effort to put provincial governments on an equal footing with any other body, the bill trivializes provincial jurisdiction over manpower training and development. In fact, in Quebec for example, it overshadows the rule played by the Société québécoise de développement de la main-d'oeuvre as a collective tool for manpower development. It even goes as far as to weaken this organization.

In this sense, the proposal for a single window, reduced to bringing a number of services under one roof, does not provide a real solution to the much criticized administrative muddle. On the contrary, establishing local human resources centres will increase the waste and the overlap of services and programs at a time when resources are scarce; to us this is unacceptable.

The proposal clearly illustrates the federal government's refusal to recognize Quebec's traditional demands for responsibility for training and manpower development, and the consensus reached by all of the socio economic partners in this area.

The main recommendations we have for the committee today are as follows: firstly, the federal government must take direct responsibility for active measures reserved for people not receiving UI benefits and reach an agreement with the provinces in this area; secondly, the employment insurance plan must be maintained as an insurance plan designed essentially as income support. The unemployment insurance fund must not be used to fund employment benefits other than income support for claimants. Funding for other expenditures linked to employment benefits must come from the government's general accounts. Finally, we recommend that provincial jurisdiction over manpower training and employment development be clearly reaffirmed and recognized; that provinces receive full control over managing budgets relating to services, manpower training and employment development measures and programs, especially the budgets for active measures funded through the unemployment insurance fund. Thank you.

[English]

The Chairman: That concludes your presentation, I gather. Thank you very much.

Mr. Dubé.

[Translation]

Mr. Dubé: You pointed out that this is the fiftieth anniversary of your organization, which I know very well because I've often used your publications. On several occasions, I have subsequently recognized your social involvement in the main debates in Quebec society.

As you undoubtedly know, we are hearing from a number of witnesses, and some aspects are repetitive. But today, you have brought about two new points of view: firstly, your reference to the OECD, and secondly, an additional 1 % decrease in unemployment.

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You have access to a lot of documentation and you have shown that you have good background knowledge. I followed that and I am somewhat aware of the role that the federal Department of Human Resources Development played in that area. The member countries of the OECD divide up the issues to research and study, and we know that Canada played a leading role, if not the leading role, in the strategy you mentioned. So when you say that Canada followed the OECD strategy, in my view, that means - I don't know if you agree - that the OECD followed Canada strategy.

I would like you to expand on the debt, because it is an issue that concerns everyone at present. Tell me a little about the basis of your theory regarding the 1 % decrease in unemployment. What studies have been conducted and could we obtain them?

Mr. Paquet: Regarding the 1 % reduction in the unemployment rate in Quebec, the calculations have been done. I can leave you a copy of ``La corvée nationale de l'emploi". It is a document the Société québécoise de développement de la main-d'oeuvre prepared in conjunction with the Socio-economic Summit. It has not been the subject of a debate as such, but it was prepared with a view to dealing with both the deficit and job creation. It is a working document that was prepared and debated by the partners who are members of the Société québécoise de développement de la main-d'oeuvre, which was also represented at the Socio-economic Summit.

Mr. Dubé: May I suggest to the Chair that you tabled this document for all members of the committee?

Mr. Paquet: With pleasure. Moreover, it is a document that Mrs. Harel released at the meeting in Toronto.

Mr. Dubé: It would be useful.

Mr. Paquet: According to the charts we have, the method used for the calculations is similar to the one used by the organization called ``Forum de l'emploi". It includes detailed calculations for the years from 1996 to the year 2000. It provides details on the cumulative impact of a 1 % per year reduction in the unemployment rate in Quebec on the deficits of the federal and provincial governments.

It covers the possible increases in direct taxes for all governments, the net increases in indirect taxes, the reductions in social assistance, and in total, the reduction in their deficits. Then it details that information for the federal and provincial levels of government. It is what enables you to see that the federal level is the one that benefits the most, by far.

So, a strategy centred on not only budget cuts but also job creation would have a positive impact. It is in that sense that one could say the objectives are not contradictory. On the contrary, if, while making certain cuts that are undoubtedly necessary, we can have another means for dealing with the problem of job creation, we're working towards the same objective in the end.

Mr. Dubé: As for the first aspect?

Mr. Paquet: Regarding the first aspect, I will ask Mr. Beaudet to provide you with more information.

Mr. Gaétan Beaudet (Project Manager, Canadian Institute of Adult Education): On that issue, a OECD document published in 1994 stated that to understand the sluggish labour market, a close look had to be taken at the real reasons preventing job creation. The document stated that technological progress and competition in developing countries, where salaries are lower, are not the main reason.

Each of the OECD member countries commissions studies, provides input, projects, and research perspectives which supplement the work of the organization, and we know that Canada was actively involved in this research.

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There is nevertheless a consensus. It seems to illustrate the strong points among the OECD countries. The main reasons are problems of adapting the economy and a flexibility that various countries should have to stimulate job creation. Often, with respect to these issues, instead of emphasizing policies for job creation, we focus instead on a lack of flexibility or we attack the social safety net, the minimum wage and working standards under the pretext that that will make job creation easier for businesses.

We know that all of the steps taken for only the past three years in Canada and elsewhere in order to make the labour market more competitive and more flexible to deregulation have not led to the creation of enough jobs to stimulate the economy.

We do not think that cuts and making the labour market more flexible through measures which attack the unemployed and low income earners will stimulate job creation. Other possibilities must be envisaged to do that.

[English]

The Chairman: Thank you.

Mr. McClelland.

[Translation]

Mr. McLelland: I have to ask my question in English.

[English]

I have two questions. I'll pose them at the same time, and if you would answer them both that will make it go more quickly.

In your opinion, should the primary focus of the UI fund be income redistribution or strictly unemployment insurance funded by employees and employers? If that's the case, should funding for training be kept totally out of UI?

My second question concerns the fact that earlier witnesses suggested that the unemployment insurance be handled in Quebec discretely by Quebec, exclusive of federal participation. In your opinion, would that be wise? If so, would that lead to higher premiums in Quebec in keeping with the higher levels of unemployment?

[Translation]

Mr. Paquet: Regarding your first question, we do not believe that the UI fund should become an employment assistance plan, nor should it be a means for income redistribution. There are other ways to redistribute income. For example, a family income supplement could be guaranteed or other similar measures could be adopted.

Unemployment insurance should be used exclusively for income support. Having said that, we are in favour of active measures. We have given several examples of how unemployment insurance in Canada is a passive system as opposed to other countries where there is a lot invested in active measures.

We are clearly in favour of active measures. We believe that it is an essential element that must be focused on. However, active measures must not fully fund manpower training and development activities through the UI fund.

We believe that income support should be taken from the UI fund and that all other expenditures must be funded out the government's general accounts, which is not obviously the tendency in the bill nor the tendency of previous governments. The tendency has been to decrease contributions from the government's general accounts and to increase the portion of the UI fund used for active measures.

Yes, active measures should be focused upon and developed, but the fund should be used exclusively for income support and should be limited exclusively to UI claimants. For other people, assistance should be provided from funds other than the UI fund.

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Regarding your second question, in 1990, we refused to comment on that issue and we will not comment on it today either. It is a complex issue. In Quebec, there is a firm an strong consensus among partners on repatriating active measures for manpower training and development, but there is just as much as a division on repatriating the UI fund to Quebec.

The Canadian Institute of Adult Education has not taken a stand on that issue. It did not do so in 1990 and will not do so today. Moreover, we are part of the Quebec consensus reached by all of the parties in the National Assembly and all of the partners within the Société québécoise de développement de la main-d'oeuvre. In as much as we recognize that businesses, management, unions, the community sector and educational institutions support this consensus, it is not a choice of policy thrust, but a practical choice out of necessity at a time when resources are scarce.

At present, there is a lot of duplication. Socio-economic partners have been in agreement on the current consensus for five years now; the successive governments in Quebec have been calling for a repatriation of manpower training and employment development measures for a lot longer.

[English]

The Chairman: Thank you, Mr. McClelland.

Mr. Nault.

Mr. Nault: Thank you, Mr. Chairman.

An interesting debate seems to evolve when we get witnesses from the province of Quebec.

One of the things I want to deal with is this whole issue of constitutional argument, but first I want to deal with the finances of the UI account.

My understanding is that since 1985 Quebec has received $46.9 billion in total benefits and has paid $37.2 billion in contributions, which means that Quebec has received about $10 billion more through contributions of the federal government than it's put into the system.

The question I have is a very simple one. Based on that particular analysis, which means that in essence Quebec's getting $1.32 for every dollar it puts in, do you not think that the Government of Canada should have some sort of accountability to the taxpayers outside of Quebec for the kinds of programs that are run, versus the more simplistic view I keep hearing that we should just send Quebec a cheque and let them do their own thing? I'd like to hear an Ontarian's perspective of why I would want to put money into a particular province - not just Quebec but any province, whether it be Newfoundland, Alberta or anywhere else.

Of course, Ontario is a net contributor to this program versus what they get out of it, and of course the smaller provinces like Alberta are the same. The large amount of dollars really comes from the Province of Ontario.

We're having the same debate in Ontario as you are, as to whether we would want to continue to have a national program if in fact there are no national standards and if we would have some$2 billion extra a year if we kept our money. I'm very interested in knowing about the accountability the federal government should have or would have if you were in our shoes.

[Translation]

Mr. Paquet: There are several aspects to your question.

At present, a number war is being waged. In the past, there is no doubt that Quebec came out on top. Over the past few years, the numbers have become somewhat less clear and we're facing a number war which I will not get into today.

Having said that, in our view, one of the reform's tenets is recognizing the determinant role for government in redistributing wealth throughout the country. Traditionally, the federal government has played this role. Quebec, by this very fact, has benefited from transfers.

As I explained, we will not comment on the UI fund as a whole.

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Moreover, as far as active measures and repatriation go, we are currently dealing with more than a war on words. Only yesterday, we saw participants at the Quebec socio-economic summit say that they were prepared to accompany Mrs. Harel if necessary, and Mr. Ghislain Dufour, president of the Conseil du patronat. Basically, there were people there who were clearly federalists and others who were clearly sovereignists. However, everyone agreed on that.

Of course, these are public funds and one might think that people who are for example part of the Société québécoise du développement de la main-d'oeuvre, who represent all of those sectors, are also people who are accountable. They are not elected, of course, but they are accountable and they are in contact with a lot of people from the regions, with businesses, workers, community organizations and educational institutions.

One can consider that dialogue or management through mechanisms like those also provide guarantees that public funds will be managed soundly. The Quebec government has confidence in that organization. That does not commit the federal government, but the Quebec government, which delegated some of its authority to that organization, is also made up of elected representatives who are accountable to their taxpayers. So it has similar problems.

Moreover, I would also like to point out that in light of the sense of urgency felt by all of the partners in Quebec, some are losing patience with the fact that we seem to be lapsing into federal-provincial squabbles at a time when we had hoped to move on.

At the end of 1995, when Mr. Axworthy who was the Minister at the time, and the Minister of Employment, Mrs. Harel, were in contact, things seemed to start moving again. In the past, there were also times when we thought progress was possible, and it seems increasingly questionable that claims continue to be made that it will take years to reach an agreement and that we are forced to continue to live with duplication.

Just think about the employment centres, the local human resources centres, the Travail Québec centres, the Société québécoise de développement de la main-d'oeuvre centres! In each of these cases, there are overlapping services; not all services, but it is clear that if we were to set up a single window not only to lodge...

[English]

Mr. Nault: That's the question I wanted to ask you about next. But before you get too far down the road on that explanation, let me ask you this question. My understanding - correct me if I'm wrong - is that you have some 85 different programs in Quebec that deal with education and training, or what you classify as ``active measures''. In those 85 programs, which are developed by some 4 departments in the Quebec government and employ some 13,000 people, could you tell me whether in your estimation, based on your organization, those 85 programs that are active measures for unemployment and for labour adjustment are effective in helping the unemployed in Quebec?

[Translation]

Mr. Paquet: I can even say that at last count there were 110 programs. It has exceeded 85. There are a host of programs going in different directions and at present, there is a process attempting to harmonize and organize these programs.

As a result of the debates that we have had with the Société québécoise de développement de la main-d'oeuvre, we are making an attempt, not for each of the 110 programs, but for those over which the Société québécoise de développement de la main-d'oeuvre has control, to open three different envelopes in order to eliminate the standards and constraints which result in people who need training being left out of the program, and people who do not have the right colour cheque or who do not have a cheque, are refused access to training.

[English]

Mr. Nault: Last question, Mr. Chairman, and it's based on the witness's very obvious belief that active measures are very important for labour adjustment for people looking for work.

Based on that argument, my question is very obvious. On the one hand you're very much a big supporter of active measures. On the other hand you're not a very big supporter of the federal government having active measures for the workforce in Quebec. So what I assume by that statement is the only objection you have is a political and ideological objection. It has nothing to do with the fact that this is good or bad for workers. In fact it's your politics getting in the way of the fact that the federal government is supplying some sort of active programming to help the working men and women of Quebec, versus their not being any good or anything of that nature.

Would that be a fair statement to make?

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[Translation]

Mr. Paquet: It has got to be one thing or the other: Either I did not express myself clearly, or you did not understand me correctly. I thought that I clearly said in response to Mr. McClelland that we were in favour of active measures. We believe that it is important for federal policies to be centred on developing an active labour market policy. We are in favour of increasing active measures.

Having said that, the problem is not one of ideological focus. I told you that the consensus in Quebec has brought together as many federalists as it has sovereignists. The CIAE has never taken a position in favour of one side or the other. It is an organization which has remained neutral on that level, which has not always been easy.

We used to be financed by the federal government. Our subsidy was cut 100%. The situation is becoming more and more difficult, but that was not your question. We are not concerned with ideology, but rather with a way of maximizing our use of resources that are becoming more and more scarce, given the increasing needs.

[English]

Mr. Nault: Based on that, Mr. Chairman, I have just one question.

You're not the first group of a social policy nature to come before us that has said you don't think the EI fund should be spent on training. Based on the fact that we're not in a perfect world and the federal government is not any different from any other government that really does not have the flexibility to raise taxes under general revenue.... Based on that assumption....

Take my word for it that we have debates not only in our party but I'm sure in other parties about the fact the taxpayer is taxed out and won't accept any further taxes. Based on that fact, would you rather see a major reduction in the amount of moneys allocated for training under the EI system, which of course removes the active programming that's under part II of this reform, and take your chances that maybe government would have the courage to raise taxes and general revenue for the things you would like to do, or would you prefer just to leave it the way it is, based on the fact that at least we do have some dollars available for active training measures that are available to us now?

The Chairman: That was the final question and answer.

[Translation]

Mr. Paquet: On the contrary, we support the development of active measures. In any case, it is clear that there is no question of increasing taxes. Now, less money is being taken out of the government's general accounts for labour training, especially for people other than unemployment insurance recipients.

There is a problem with that. Spending has to be reduced, and yet job training has to be provided. It is important to point out that sufficient resources still exist, but there is a lot of duplication. We could maximize the use of existing resources.

The idea behind the Quebec consensus is this: Can we, in terms of the multiplicity of network and jurisdictional programs, make much better use of the same resources? That is a problem and that is one of the messages that was sent last night again.

We hope that there will not be a "political" block that will bring about debates and flag wars again, but rather that a shining example be found that shows that federalism is flexible or instead that we are unable to find a quick solution to an issue for which there is such a broad consensus in Quebec.

[English]

The Chairman: Thank you. Mr. Beaudet.

[Translation]

M. Beaudet: I would like to finish my comments on the issue of active measures in Bill C-12 under employment benefits. What bothers us is not that it comes from the federal government, but rather that the projects listed will be directly financed at the local level and that these projects do not, in the framework of Bill C-12, appear to be sufficiently coordinated, consistent and efficient to clearly stimulate employment.

When one is establishing active measures, these measures first of all have to be controlled by the socio-economic partners so that they can coordinate their employment policies and work together so that there truly is consistency between the various actions taken. In this bill's framework, financing seems to be going directly to the local level without any possibility of cohesion.

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Quebec's active job market policy would be the spearhead for boosting employment and savings could be made in the 110 existing programs by avoiding duplication between the five main levels of Quebec's active job market policy, that is preparation for employment, integration, employment maintenance, employment stabilization, and job creation. If we were to focus these measures on one level where we could have a consistent and efficient framework, then we could boost employment and save money.

There could be coordination between the other provinces and the federal government without necessarily involving all of the policies.

[English]

The Chairman: Mr. Beaudet, Mr. Paquet, thank you very much for your presentation. We have duly noted all your points and of course we will take them into consideration as we try to improve this bill. On behalf of the committee members, I thank you.

I'd like the members to stay here for a few minutes. As I said, at the end of every week I'll be doing a summing up of the events that occur during the week and some of the objectives I have for the following weeks. So I would like to sum up as we complete our work for the week.

The clerk has informed me we have received over a hundred briefs. There are several ideas we have heard suggested a number of times already during our hearings. There are ideas that try to address the concerns brought to this committee in January by Minister Young, concerns I reviewed with you when we began our hearings of witnesses two weeks ago. These are the problem with calculating people's benefits based on a fixed period when there are gaps in earnings during that period; the magnitude of the divisor - that is, the length of the fixed period used in calculating people's benefits - and the intensity rule and its impact on low-income unemployed Canadians with dependants.

I've heard some suggestions and have made it quite clear to the members that I would like to see those suggestions and ideas developed. I'm talking about the suggestions that have been raised by Andy Scott, Geoff Regan, and Jean Augustine. We may have heard suggestions that can in fact preserve incentives to work, retain key structural elements of this reform, yet recognize the need to reinforce the social safety net in the realities of today's labour market and the variations across the country in opportunities for employment.

Mr. Scott has suggested that we look back over 26 weeks from the day someone is laid off to find the most recent number of weeks to use in calculating their benefit. Mr. Regan has suggested that rather than a divisor that varies across the country from zero to four weeks above the minimum entrance requirement expressed in weeks, we look at a divisor that is two weeks more than the minimum entrance requirement in all cases. Mrs. Augustine has suggested that low-income unemployed Canadians with dependants who are entitled to the family income supplement be exempted from the intensity rule. I've noted all of these along the way as ideas worth pursuing and have asked each of the members to return to the committee with a precise proposal by next week.

I believe it would be appropriate at this point to ask officials of the Department of Human Resources Development to make themselves available to members to answer any questions they may have. I would also ask that they begin work on an assessment of the impacts of these changes. We have had officials listening to our proceedings. I'm certain they can go away and do further analysis on what they've heard.

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On Monday, although this committee will not be sitting as per the schedule agreement approved by all members of this committee, I will be in a position to announce the date on which the Minister of Human Resources Development will be appearing. Members will of course be notified by the clerk.

We will return on Tuesday, in room 237-C, and we will begin our tele-videoconferencing and hearing from various groups.

I thank the members of the committee for their cooperation in this week's proceedings.

This meeting stands adjourned to the call of the chair.

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