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Pursuant to the order of reference of Tuesday, September 29, 2009, Bill , an Act to Amend the Employment Insurance Act and to increase benefits, we will start today.
I want to thank the witnesses, once again, for coming on probably short notice, although I'm sure that if you saw the bill passing through the House, you'd be coming to see us at some point.
I don't know who's going to be speaking on your behalf, Mr. Thompson, but we're going to turn the floor over to you. You guys know the routine. The microphones will come off and on for you as I acknowledge you, and then what we'll do is get through some rounds of questioning.
I'm probably going to suggest to the committee that we break at around 5, because we have some committee business to take care of. So we'll look at dealing with questions and answers over the next hour and a half.
Mr. Thompson, welcome again. It's good to see you. The floor is yours, sir.
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Good afternoon, Mr. Chairman and members of the committee.
[English]
I'm here today to speak to the committee about Bill , an Act to Amend the Employment Insurance Act and to increase benefits. With me today I have Mr. Louis Beauséjour, the director general of employment insurance policy, and Mr. Philip Clarke, the director general of benefits processing with Service Canada.
The purpose of this bill is to temporarily provide additional weeks of employment insurance regular benefits to long-tenured workers. Let me explain to whom the legislation is referring when we use the term “long-tenured workers”. These are experienced workers who have paid EI premiums for years but have made limited use of EI regular benefits. Some of them, in fact, are unemployed for the first time in their lives. More specifically, they're workers who have paid at least 30% of the annual maximum EI premiums for a minimum of seven out of 10 years.
[Translation]
This allows claimants to remain eligible even though they have had temporary absences from the labour market.
[English]
Bill also allows for the use of up to 35 weeks of regular benefits in the past five years. This is in recognition of the fact that it is customary in some industries for employers to shut down for a few weeks every year for retooling or retrofitting. In these situations, industry sectors often have to make use of EI.
[Translation]
There are long-tenured workers all over the country and in every sector of the economy.
[English]
It's estimated that about half of Canadians who pay EI premiums qualify as long-tenured workers and that about one-third of those who have lost their jobs since the end of January 2009 and have made a claim would qualify as long-tenured workers. This proposed legislation would give these workers more weeks of EI income support while they look for jobs.
Let me take a few minutes to explain how the bill itself is laid out. First it deals with the benefit period. This is the period during which claimants must use their entitlement. This benefit period is normally 52 weeks, but it will be extended, through the legislation, where necessary, to accommodate the additional weeks of EI regular benefits being provided to eligible long-tenured claimants.
[Translation]
The second part then sets out how many additonal weeks of EI regular benefits will be provided to eligible long-tenured claimants. It also deals with the gradual transition out of the measure.
[English]
Specifically, Bill would provide from five to 20 weeks of additional benefits, depending on how long a person has been working and paying EI premiums. For example, to be eligible for five weeks of extended benefits, long-tenured workers must have paid at least 30% of the annual maximum EI premiums for a minimum of seven of the last 10 calendar years. This 30% threshold represents the most inclusive definition of full-time workers and is based on what a full-time worker at minimum wage would contribute throughout the course of a year. For every additional year of contributions, the number of weeks of benefits would increase by three weeks, up to a maximum of 20 weeks.
[Translation]
The third part of the bill sets out how many additional weeks of EI regular benefits are to be provided to eligible long-tenured claimants who live outside of Canada.
[English]
The last part of the bill addresses the coming into force of the legislation. It states that the measure takes effect two Sundays prior to royal assent.
The bill concludes by listing the sections that will be used once the measure is terminated after September 11, 2010.
Mr. Chairman, it is estimated that about 190,000 workers will be eligible for the assistance provided under Bill . This number is based on information pertaining to three key factors. The first is the current population of long-tenured claimants. Second are the benefit exhaustion rates of long-tenured claimants in the past. And third are private sector forecasts of the national unemployment rate. Those are the three component parts that underpin that estimate of 190,000 workers.
[Translation]
Among those 190,000 are many workers who have been in the same job or the same industry all their lives and now face the prospect of having to start all over again.
[English]
Bill is a temporary measure designed to provide additional support to long-tenured workers while they look for jobs in a recovering economy.
As I said, eligibility for the extended benefits for long-tenured workers will continue until September 11, 2010. This means that the payments of those extended benefits would continue to the fall of 2011, approximately one year later.
This measure to extend the benefit applies not only to new claimants, but also to existing claimants. In fact, eligibility extends back nine months from the coming into force of the legislation. This will reach back as early as January 4, 2009.
In order to ensure a smooth and gradual transition out of the measure, the additional weeks of benefits would be reduced in five-week increments, beginning in June of 2010.
[Translation]
Mr. Chairman, this temporary measure for long-tenured workers builds on other measures introduced under the Government's Economic Action Plan.
[English]
There is one program in particular that is closely linked to this proposed measure that I would like to draw attention to. This is the career transition assistance initiative, which helps this same population of long-tenured workers.
Under the career transition assistance initiative, long-tenured workers who have opted to undertake training are already eligible for extended benefits of up to two years to help them make a transition to a new field or a new occupation. We have already sent out more than 370,000 letters since January to individuals who qualify as long-tenured workers. In addition, these workers can also get earlier access to EI if they pay for part of their training using their severance package.
The economic action plan also provides other measures to help all unemployed Canadians, measures such as providing nationally the extra five weeks of regular EI benefits and increasing the number of weeks in regions of high unemployment from 45 to 50.
[Translation]
Mr. Chairman, many of the Economic Action Plan measures as well as the legislation before us are temporary.
[English]
Bill is intended to help workers faced with the difficult challenge of finding a new job. The goal is to help them bridge to new employment.
Mr. Chairman and members of the committee, I would be happy to answer your questions about this bill with the help of my colleagues, Louis Beauséjour and Philip Clarke.
Thank you to the witnesses for coming. I always enjoy it when you come here and provide your wisdom for our benefit.
I got to experience that wisdom more often this summer than I normally would, Mr. Thompson. I appreciate the work you did for the EI working group, and I certainly respect your understanding of the employment insurance system.
On this particular bill, I have a couple of questions.
First of all, I want you to take me through the math that gets to 190,000 workers. You indicate on page 4 that it's based on three factors, and you outline those factors. Can you put numbers on those factors for me, those factors that take us to 190,000 workers?
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In fact, the values were estimated based on 2006 data. Our 2006 data base contains different kinds of information on claimants. We have updated these values by changing the umemployment rate which was used. In 2006, the unemployment rate was about 6%, and our hypothesis was that the unemployment rate, based on private sector predictions, would stand at about 8.8% in 2009 and 2010. We therefore increased the number of claimants based on that ratio.
We also noted, using the same database, that approximately 30% of claimants qualified as long-tenured workers. So that is the ratio we used. Further, nearly 21% of long-tenured workers had run out of benefits. Again, we used that information.
Consequently, on an annual basis, there would potentially be 120,000 claimants availing themselves of this measure, in one year. The measure will be in effect for more than one year. We used January 4 as the start date for collecting benefits. The measure starts to end in June and ends completely in September, which represents a total period of 19 months. In fact, it is a period of 21 months, namely one year and nine months, from January to September. Based on these values, we increased the total number because we reached the figure of 190,000 long-tenured workers who would qualify.
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You cannot work out specific figures, but you are presenting specific results concerning the number of unemployed workers who would be eligible and how much the program would cost. Could you submit to us in writing the method used for your calculations and the results by period, beginning in 2006, and for 2009 and 2010, as you had indicated? As for the number of so-called long-tenured workers, about 30%, 21% of them have run out of benefits.
Based on your method of calculation, which yielded a result of 190,000 workers and $935 million, 85% of unemployed workers would have to run out of benefits. So please understand that we are skeptical with regard to your numbers. It is extremely important that you send us in writing your method and results. We want to know how you reached these results. I don't know if you have those details with you this morning. If not, we would appreciate your sending them to us within the next few hours.
Further, is it fair to say that these measures, in fact, discriminate against women? We have to take into account women who take parental or maternity leave and who, as a consequence, don't pay EI premiums for long periods of time. As a result, these women face an additional hurdle if they want to qualify for the program. Please correct me if I'm wrong.
I would also like to know why you did not think of creating a measure which pays out more under the system — we all know that there is a lot of money in the EI fund — and which would benefit all unemployed workers. Why have you penalized some groups of unemployed workers?
You decided to apply a retroactive measure to existing beneficiaries whereas it would normally apply only to new beneficiaries. Let us not forget that some people applied for benefits in January. Normally, they are still collecting benefits. This is why you can go back nine months. These people have not exhausted their benefits yet, and you intend to extend them. I find it hard to accept this argument on this basis. Could you give me an explanation?
Even if we go back, people are already benefiting from the five extra weeks. Besides, in the last budget, the department was very proud of having added five weeks. We are dealing with long-term beneficiaries and not with regular seasonal workers. These people normally would have received 45 weeks of benefits, or 50 maximum, which could have taken them at least to November or December, given that this measure would be in force on October 15.
You identified these people, but the bill could also have included people who are still collecting benefits and not those who have left and are working elsewhere. For someone making their second claim... I would like to hear Mr. Clarke, because I think that if the claimant is making a second claim, he has probably received 35 weeks of benefits and he would not be eligible in any case.
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I would be happy to speak to it.
Before I get into certain sectors, maybe I should note again that this isn't a measure that's targeted for particular industry sectors or parts of the country. It is targeted at certain types of workers, but those workers are found across the country. In fact the distribution of long-tenured workers in our analysis roughly mirrors the distribution of the labour force as a whole. We find long-tenured workers showing up across the country in proportion to the distribution in the labour force, which I think is an important point.
Other parameters of the bill are certainly sensitive to the issues facing different industry sectors. When we established this 35-week limit on prior EI use, it did take into account the use of EI by certain sectors. I mentioned manufacturing, but it's important to note that included in manufacturing are parts of the forestry sector, any of the processing parts of forestry. Forest products are statistically part of the manufacturing sector.
If you look at patterns of EI use, a 35-week threshold does allow a high degree of access for sectors across the economy, including the forestry sector.
Welcome, gentlemen.
My question has something to do with the question that Mr. Cannan just asked regarding, once again, the choices that you made, or the government made, with regard to the 190,000 beneficiaries of the program. Given the fact that huge preparations were made, I suppose, with regard to this legislation, that you have produced a study of the origins of the 190,000 beneficiaries, by region, by gender, by field of activity etc.?
The reason why I am asking this question is that it is a well-known fact that in general, women on the labour market very often do not work the same hours nor do they work according to the same standards as men do. Men tend to work from 8:30 or 9:00 a.m. to 5:00 p.m. Women very often have split schedules, which means that they are working part-time, sometimes for a few hours in the morning and a few hours in the afternoon. Therefore, they were the first ones to be laid off and they generally do not participate in employment insurance programs.
I was wondering whether they were included in your analysis on the one hand, and on the other hand, in sectors such as forestry, or automobiles, as my colleague said. Did you seek out specific sectors or did you do a sector-by-sector study to see how much workers will benefit from this program in some sectors that were hit hard by the economic downturn?
First off, in my own province there's wide support, obviously, for this kind of initiative. The past social services minister of Saskatchewan, Janice MacKinnon, says that it would be better--and she's speaking in reference to the 360-hour proposal--to expand coverage and improve the benefits of those who have paid into the program for years but find themselves unemployed. Bill Ferguson, the president of the United Steelworkers Local 8782, says that it's going to be quite good and will give workers a little more time, that it's a good thing to extend benefits to people like that.
I think on the main there is very widespread support for the merits of the measures being taken here, and I commend you as individuals in terms of the work you did to put this together.
I guess I would like to also know, and maybe have reiterated for all of us here and for the public as well, about some of the other measures that the government has taken in the recent months to help long-tenured workers and older workers through the economic action plan. Second, how does this particular legislation before us now relate to them, to the older workers, the long-tenured workers? I'm thinking of particular things like the career transition assistance, the targeted initiative.
Could you give us a quick summary on each of those, and then talk about the extra five weeks that was in the prior proposal?
I mentioned briefly the career transition assistance initiative in my opening remarks because that's a fairly significant measure that was introduced in the action plan targeted at the same population that we're dealing with in this legislation. The difference is that the extended benefit was for a longer period of time, but targeted at those people who make the significant decision of undertaking long-term training for up to two years. So if an individual wanted to make a fairly fundamental change in their occupation or career, they would work in conjunction with their provincially delivered training providers, and the federal employment insurance program would provide income support for up to two years.
There's also a related measure. At present there's a period of time, if you're in receipt of severance, to wait before benefits can start. If that individual decides to invest part of their severance package in training, they can claim EI and receive benefits much earlier than before.
Those are two measures that were done as part of the career transition assistance for the economic action plan and are being unfolded.
The other measure specifically targeted to older workers—this isn't specific to EI eligibility—is the targeted initiative for older workers, focused on smaller communities, less than 250,000 population, that are facing particular challenges. This is supporting fairly innovative projects across the country to deliver group-based projects for groups of older workers who are facing similar challenges. There are projects unfolding across the country. There were previously a limited number of provinces participating in the initiative. We've now signed new agreements with Manitoba, Nunavut, and Ontario, so now all jurisdictions except Alberta are participating in the targeted initiative for older workers that saw some enhanced investments in the economic action plan.
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There was a point of discussion. There was no proposal or anything. So either it was something that was worked on that wasn't presented to the group--which was the purpose of the group--or else it's kind of a haphazard thing in reaction to later events. In either case, it seems to me that it's one of the reasons we need to have witnesses to have a look at this and find the loopholes and perhaps assist you.
One of the concerns about the EI system in the last number of years, for which we all probably bear some responsibility, is that it's become increasingly complex. This bill seems to make it even more complex. Even the Prime Minister indicated back in June that we should be trying to simplify the system, when you look at regional rates and a whole bunch of other things. Under this bill, subsection 12(2) becomes subsections 12(2.1), 12(2.2), 12(2.3), and 12(2.4). It creates a distinction as to when EI benefits are claimed. There are four periods; it sets out six possible types of extension, different payments. This seems incredibly complex.
In light of that, have you added new people to Service Canada? Have you hired new people to administer this? The last time new measures came in there were delays as a result of that.
What is the cost to the department for the administration of this new program?
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You understand how important it will be to do this.
I would like to discuss another aspect, that my colleagues also discussed. You can determine in a targeted way the number of older workers whom you will help because of the aging of a part of the population and of the populations of the smallest communities, as you call them. The last time we met you, we learned that you could get your data straight from the income tax returns.
I understand that you did not go through the exercise of determining the number of people by region and by sector, but I think that it is possible to do this. Could you give us the figures by region and by sector of activity, for things like forestry, the oil sands, the fisheries and other things? Will fishers from the Gaspé Peninsula or from the Acadian region, for example, benefit from these measures? At first sight, these people will not receive anything. I wish I were wrong, but nothing up to now shows that this is the case. You could tell us if this is so.
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Perhaps we could listen to our colleague to understand what he's afraid of.
Last week, we had adopted a schedule for our business, so four days this week and two when we return. It seems that this does not involve any delays to the schedule already set out in the bill. We have checked, and to date, I don't think that this will delay anything.
What is important, Mr. Chair, is that we be able to hear from witnesses. Last week we had agreed to submit a witness list, and we did so. I think that it would be unrealistic to sit more often than scheduled this week, because we are already all extremely busy, unless we add meetings next week. We could look perhaps at that option.
For now, I would like to hear more from our colleague, in order to learn why he is concerned that the deadline will not be met, when last week, everything seemed to be fine.
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When the four meetings had been proposed, I must admit that we had not taken into consideration the fact that Parliament would not be sitting the week of October 15, I wasn't here when you discussed that.
To respond to Mr. Lessard's question as to the urgency, it is that, every day that we lose after October 15, is a day that a worker will also lose, meaning January 4, 5, 6 and 7. We want to do something for workers, but we are in danger of losing workers, and I don't want that to happen. That is the reason for this proposal. I want to make sure that workers can benefit from this measure.
For our part, we are prepared to add a meeting this week, either Wednesday or tomorrow afternoon, it doesn't matter to me. I would be okay with working in the evening too. I used to be a miner, and working the night shift does not bother me. We could do it for workers, especially if it is to help them as soon as possible.