HUMA Committee Meeting

37th PARLIAMENT, 3rd SESSION

Standing Committee on Human Resources, Skills Development, Social Development and the Status of Persons with Disabilities

EVIDENCE

CONTENTS

Thursday, April 22, 2004

¿

0910

The Chair (Mrs. Judi Longfield (Whitby—Ajax, Lib.))

Mr. Réal Bouchard (Director, Federal-Provincial Relations and Social Policy Branch, Department of Finance)

The Chair

Mr. Louis Lévesque (Assistant Deputy Minister, Federal-Provincial Relations and Social Policy Branch, Department of Finance)

¿

0915

The Chair

Mr. Gary Lunn (Saanich—Gulf Islands, CPC)

¿

0920

Mr. Louis Lévesque

Mr. Gary Lunn

Mr. Louis Lévesque

¿

0925

Mr. Gary Lunn

The Chair

Mr. Eugène Bellemare (Ottawa—Orléans, Lib.)

Mr. Louis Lévesque

Mr. Eugène Bellemare

¿

0930

Mr. Louis Lévesque

Mr. Eugène Bellemare

Mr. Louis Lévesque

Mr. Eugène Bellemare

Mr. Louis Lévesque

Mr. Eugène Bellemare

The Chair

¿

0935

Mr. Yvon Godin (Acadie—Bathurst, NDP)

¿

0940

Mr. Louis Lévesque

Mr. Yvon Godin

Mr. Louis Lévesque

Mr. Yvon Godin

Mr. Louis Lévesque

The Chair

Mr. Yvon Godin

Ms. Wilma Vreeswijk (Senior Director General, Employment Program Policy and Design, Department of Human Resources and Skills Development)

¿

0945

Mr. Yvon Godin

Ms. Wilma Vreeswijk

Mr. Yvon Godin

The Chair

Mr. Yvon Godin

The Chair

Ms. Yolande Thibeault (Saint-Lambert, Lib.)

The Chair

Mr. Yvon Godin

The Chair

Mr. Yvon Godin

The Chair

Mr. Yvon Godin

Ms. Wilma Vreeswijk

Mr. Yvon Godin

Ms. Wilma Vreeswijk

Mr. Yvon Godin

¿

0950

Ms. Wilma Vreeswijk

The Chair

Mr. Yvon Godin

Ms. Wilma Vreeswijk

Mr. Yvon Godin

The Chair

Mr. Gary Lunn

The Chair

Mr. Kevin Kerr (Committee Researcher)

The Chair

Mr. Yvon Godin

The Chair

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CANADA

Standing Committee on Human Resources, Skills Development, Social Development and the Status of Persons with Disabilities

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NUMBER 007

l

3rd SESSION

l

37th PARLIAMENT

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EVIDENCE

Thursday, April 22, 2004

[Recorded by Electronic Apparatus]

¿  (0910)  

[English]

    The Chair (Mrs. Judi Longfield (Whitby—Ajax, Lib.)): Good morning, ladies and gentlemen.

    I call to order the seventh meeting of the Standing Committee on HumanResources, Skills Development,Social Development and theStatus of Persons withDisabilities.

    We're delighted today to have witnesses from the Department of Human Resources and SkillsDevelopment and the Department of Finance. We're looking forward to a very lively briefing session on employment insurance premium rate settings.

    Mr. Bouchard, you're my most familiar witness at the moment. Who would start off?

    Mr. Réal Bouchard (Director, Federal-Provincial Relations and Social Policy Branch, Department of Finance): Louis would.

    The Chair: Monsieur Lévesque.

    Mr. Louis Lévesque (Assistant Deputy Minister, Federal-Provincial Relations and Social Policy Branch, Department of Finance): Madam Chairman, I'm the assistant deputy minister for federal-provincial relations and social policy in the Department of Finance. I have Réal Bouchard with me from the Department of Finance, and Madam Wilma Vreeswijk from the Department of Human Resources and Skills Development.

    We're here today to discuss and provide information on the premium rate-setting process. I would propose to start with opening remarks and then turn to questions and answers.

[Translation]

    Madam Chair, ladies and gentlemen, thank you for extending the invitation for us to meet with you today to discuss the government's employment insurance rate-setting review process. As I mentioned,

[English]

I am accompanied by Mr. Bouchard and Madam Vreeswijk to answer your questions.

    I would like to take this occasion to first talk about the way premiums have been set since 1996.

[Translation]

    I will then provide an update on the government's review process that was announced in the  2003 budget and how the government intends to proceed.

[English]

    Between 1996 and 2001, the Employment Insurance Act required that the EICommission set the premium rate for each year at a level that the commissionconsidered would, to the extent possible, ensure that there would be enough revenueover a business cycle to pay the amounts authorized to be charged to the EIaccount and maintain relatively stable rates throughout the business cycle.

    Their decision resulted in a continued lowering of premium rates. The rate set in 2001 constituted the seventh consecutive decline. It had brought down the employee rate by about 82¢ from $3.07 in 1994 to $2.25 in 2001, with obviously a proportionately higher reduction in employer contributions.

    As you know, the government suspended section 66 of the EI Act, and hence the roleof the commission in setting rates for 2002 and 2003 through Bill C-2, and it providedfor the Governor in Council to set the rate on the recommendation of the Minister ofFinance and the Minister of Human Resources Development.

    On November 30, 2001, thegovernment announced that the rate for 2002 would be $2.20, which constituted the eighthconsecutive decline.

[Translation]

    For 2003, the rate was set at $2.10 per $100 of insurable earnings.

    This brings us to the 2003 budget, in which the government set, through the budget legislation, the employee premium rate for 2004 at $1.98, a 12¢ reduction that, combined with the reductions since 1994, will save employers and employees $9.7 billion in 2004, compared with the 1994 rate.

[English]

    Based on private sectoreconomic forecasts used in the 2003 budget, $1.98 was the rate that was estimated togenerate enough premium revenues to equal the projected program costs, which are both benefits, and administration costs for 2001. That would, thus, constitute a break-even rate on a “flow” basis.

    In the budget the government also announced there would be consultations regarding a new approach to premium rate setting. And in the budget the government provided for five principles that were to guide the way a new premium mechanism would be established and to guide the discussions during the consultations.

[Translation]

    The following rate-setting principles, which are largely based on the pre-budget recommendations of the 1999 report of the Standing Committee on Finance, formed the basis for the consultations. Premium rates should be set transparently; premium rates should be set on the basis of independent expert advice; expected premium revenues should correspond to expected program costs; premium rate-setting should mitigate the impact on the business cycle; and premium rates should be relatively stable over time.

¿  (0915)  

[English]

    In the spring and summer of 2003 senior officials from the departments of Finance and Human Resources Development held a series of meetings with representatives from both business and labour, experts around actual issues, including economists, actuaries, and accountants. We received submissions from interested parties, both individuals and groups, and we also met with the EI commissioners.

[Translation]

    With the authors' consent, individual submissions have been posted on the finance website, and we also published summaries last fall.

[English]

    We also posted on the website summaries of the different consultations that took place with the various groups. The input we got from these consultations is still under review.

    Finally, in the budget that was tabled in the House of Commons on March 23, the government announced its intention to present a new approach to premium rate setting in legislation. It would put that in place in a way that would be compatible with the principles that were announced in the 2003 budget and that would take into account the various points of view expressed during the consultations.

    However, in case this legislation was not adopted in time for the rate for 2005 to be set using this new mechanism, the government proposed--and that's now in the House of Commons in Bill C-30--to give the Governor in Council authority to set the rate. As I said, that's in the budget implementation bill. So if the situation in the fall is that the legislation implementing the new premium rate setting is not in place, the government will have the authority to set the rate for 2005. The budget also indicated that whatever rate was set, it would be set taking into account the methodology or the approach to premium setting tabled in the proposed legislation for a new rate-setting mechanism.

    That summarizes the recent history around the rate-setting process.

[Translation]

    I will be pleased to answer your questions now.

[English]

    The Chair: We'll start with Mr. Lunn and eight-minute rounds.

    Mr. Gary Lunn (Saanich—Gulf Islands, CPC): I probably won't need eight minutes, Madam Chair.

    I basically have two questions. I guess we're down to $1.98, which is getting a lot closer. Our argument has been year after year after year that we keep collecting a whole lot more than what the EI program uses. As you know, we've ended up with a huge cumulative surplus, $43-some billion. The rates have been coming down, yet the surpluses have still been climbing to an astronomical level.

    This chart is done in a research thing; the clerk can give it to you if you don't have it. It's a chart, and you can see how in 2003 the estimated accumulated surplus was still going through the roof. We, the Conservatives, see this and I personally see this as an issue of a tax on small business, which is the backbone of the Canadian economy.

    I listened to your testimony and I have a couple of short questions. Number one, as long as the surpluses continue to grow at this rate...and I appreciate we're starting--starting--to see a levelling off of the curve, but they're still climbing at a fairly fast rate. It tells me that, one, we have to be collecting too much. Do you see this as a payroll tax? That can actually hurt small business growth, and obviously this money is going into general revenue. What would you do with the surplus? Do we intend to give it back? Do we intend to lower premiums?

    This is from small businesses. At least half this surplus is coming from the employers and the other half is coming from the employees. We've taken some $20 billion from hardworking Canadians to create this surplus for the federal government to put in general revenue. Of course, seeing how we spend their tax dollars hasn't encouraged a lot of the....

    The Canadian taxpayer is upset right now because we have these huge surpluses, and rightfully so. Then from the employer's side it's a payroll tax. It's hurting small business growth, and that's how I see it.

    What are your comments?

¿  (0920)  

    Mr. Louis Lévesque: I'll try to address this question and provide as much information as I can in each area of the question.

    I'll go back to the growth in the surplus. What has happened is that over the period, let's say, from the mid-1990s to more or less now, the premium rates have decreased each and every year. But it was not enough to prevent real excesses of premiums over benefits and administration costs, resulting in the tally-up over time to the notional EI account, which is showing exactly that.

    Regarding the rate of growth, at the current time the only thing that would add to the accumulated surplus is the interest calculation that is currently in place; that's in terms of continuing to tally up the transactions in the account. On a flow basis, in terms of the $1.98 rate, you can always have a 1¢ or 2¢ difference, which roughly corresponds to, in terms of the benefits that will be paid out, the administration costs of the program; the $1.98 basically generates an amount of revenue about equivalent to that.

    Obviously, there will be the tapering off you are seeing in the curve. There won't be any major discrepancies on a flow basis. Still, the notional account and the balance in the account will continue to grow, given the way the interest calculation is imputed against the account. That's the only thing now that is “driving” the increase in that.

    In terms of the legislation and the intent, this is a premium-based program. There has to be a link, and it's clearly the government's intention that there be a link between the benefits and the amount that is levied. It's embedded in the structure of benefits, where it's linked to your insurable earnings, your premium is linked to your insurable earnings, and your benefits are linked to your insurable earnings. In terms of the whole issue of what's going to happen in terms of the accounting and what was done in the past in the context of a new premium-setting mechanism, that's obviously part of the elements the government will have to decide on in bringing forward a proposal about a new rate-setting mechanism.

    At this point the government has started reviewing its options, based on results of the consultations. The intent is to bring forward a proposal in order to have a proposal or, what would be best, preferably legislation, adopted for the next rate setting. But at a minimum, the intent is to have a proposal out there so people can gauge whether rates are being set in accordance with a methodology or an approach that appears to be reasonable and consistent with the principles that were laid out and upon which the stakeholders were consulted.

    Mr. Gary Lunn: Actually, I don't disagree. When we're getting down below $2, we're getting closer to what the rate should be. What I'm hearing from you is that the surplus is still continuing to grow because of the interest they are collecting, or at least the number crunching is showing it's still climbing.

    So what do you do with the $43 billion and who does it belong to?

    Mr. Louis Lévesque: Again, what is going to happen in terms of tallying up or reconciling what has happened in the past with a new, forward rate-setting approach is something that will be part of the government's proposal. I cannot give you or dare make assumptions about what the government will eventually propose. The government will eventually propose what it will eventually propose, but it's obvious that the approach will have to reconcile those views.

    Going back to what we heard in the consultations, I can say there are always a lot of messages heard about people paying a lot, there having been an excess of premiums over benefits for a significant period of time, and that influencing how they are going to establish this new rate-setting approach. Obviously, this is an element the government will consider in establishing a new approach.

    There's another thing I forgot to mention with respect to the previous question. It's not the whole story but a significant portion of the story of the late portion of the 1990s, when there was obviously the strong employment growth record in Canada, the best in the G-7. This has played a key role in the fact that despite the reduction of premiums, there's been an excess of premiums over benefits because there's been significant employment growth in Canada.

¿  (0925)  

    Mr. Gary Lunn: Well, I'll just end by saying all the forecasts are there for the job growth. I still think we haven't been lowering them.... I believe the rate was excessive; I believe we taxed Canadians and employers unfairly. In the future we'd better make sure we set these rates in a very open and transparent way. I see it's one of the five principles, but we haven't seen that in practice--at least for as long as I've been here--since 1997, and that is reflected in the surplus.

    I'll leave my comments at that.

    The Chair: Thank you, Mr. Lunn.

    Monsieur Bellemare.

[Translation]

    Mr. Eugène Bellemare (Ottawa—Orléans, Lib.): Thank you, Madam Chair.

    We hear a lot of complaints about the huge fictional surplus—I think that we can use the word “fictional”—in the employment insurance account. Your department cannot predict how the economy will go. There can be a downturn all of a sudden and then you could be paying out more than you are bringing in, is that not true? In that case, what happens?

    Mr. Louis Lévesque: The thing to understand—and the Auditor General is very clear on this— is that the employment insurance account is consolidated in the Consolidated Revenue Fund. That means that, from a budget planning standpoint, annual fluctuations are what have an impact on the government's budget balance. What I mean by that is that the notional account reflects the history of past transactions but says nothing about the budgetary impact of the program for the government. In 2004, for example, the budgetary impacts of the employment insurance program's operations on the federal government depend strictly on the premiums that are collected this year, the benefits that are paid out and the overhead that has to be covered.

    In practical terms, it is true that the government's budgetary balance in previous years “benefited” from the fact that the annual transactions showed a surplus of premiums over benefits. In the same way, if the economy runs into unexpected trouble, the federal government's budgetary balance is at risk, in that any deterioration in the annual transactions of the employment insurance program has a direct impact on that balance.

    So the question is: how can the government manage this risk? Obviously, it does so through prudent financial management. If, for example, the economy slows down and employment insurance benefits increase significantly, prudent financial planning, which includes a contingency reserve of $3 billion and a prudent approach to the economy, makes the government's overall financial framework capable of absorbing these risks.

    This is what we saw happen generally in 2003, when the Canadian economy was subjected to a certain number of shocks, such as SARS, the mad cow problems, the electricity blackout in Ontario, the hurricane in Nova Scotia and forest fires in British Columbia. All those things resulted in both increased expenditures and decreased revenues for the federal government, as well as for the provincial governments in the affected regions, but prudent financial planning makes it possible to absorb those kinds of shocks.

    The same principle applies to the employment insurance program. It is a solid fund within the government's financial framework and it gives the government the ability to withstand that kind of shock, but there would be a direct impact on the government's financial framework.

    Mr. Eugène Bellemare: Throughout your consultations, have participants suggested that there be a separate account precisely so that we can deal with the possibility of a downturn in the economy? In so doing, we would have an account and we would know whether we have to increase or decrease the premiums.

¿  (0930)  

    Mr. Louis Lévesque: I think that the question you raise is important and that it points out one of the challenges that the new rate-setting mechanism will have to address.

    Most people in the private sector, from the union or the business side, have common management experience in areas such as health insurance funds, dental insurance plans or pharmacare plans that labour and management agree upon. There is a joint management committee, and the financial management method that is used is that of a trust fund where employer and employee premiums are deposited. If they want to be prudent in their management they have to create a reserve. They make responsible decisions, for instance they know that they should not make any major adjustments to their benefits without knowing what the long-term impacts of that could be, etc. There is a management logic underlying these plans that people see as a model which should be applied to employment insurance.

    This management model, which may be interesting in the private sector, cannot be applied to the government's financial framework. What the Auditor General is asking for is that the employment insurance program be consolidated within the government's accounts. The account that you're referring to is not an instrument to help stabilize the government's financial framework, because the account only serves to follow program transactions. But, over the course of a year, the operations over that particular year are the ones that will have an impact on the financial framework.

    So, one of the challenges we have to face in establishing a premium rate-setting process is that we have to reconcile the understanding people have in the private sector with the accounting reality in the federal government, and those two things are different. Indeed, I may have an account to follow transactions, but with respect to budgetary impacts, it's what happens over a given year that counts for the government.

    Mr. Eugène Bellemare: Many people, especially opposition members, will suggest issuing refunds. Is that feasible, or is it just idealistic?

    Mr. Louis Lévesque: I'm not sure I understand the question.

    Mr. Eugène Bellemare: There is to date a purported cumulative surplus of $43 billion. Many people, opposition members or certain people in the private sector, will be asking why we do not issue reimbursements, why there are no rebates for companies and individuals.

    Mr. Louis Lévesque: If you want to reduce the employment insurance account's notional balance, it's quite easy to do: you just have to reduce the premiums or increase benefits. It's a mathematical equation, in a way. If you're dealing strictly with premiums, for each 10¢ worth of premiums, you're looking at approximately $900 million per year.

    There were some suggestions made during consultations, such as a phased-in reimbursement schedule of the EI fund surplus over 10 years. Let's say people determine the surplus to be in the range of $30 billion, because the Chief Actuary said that a surplus of $15 billion was necessary, and that there is now a notional surplus in the fund of $45 billion. Therefore you have $30 billion. If you “reimburse” that amount over 10 years, that essentially means $3 billion per year. That represents a financial impact of $3 billion per year on the federal government's budget. It's as simple as that.

    You can reduce premium rates for employees by 32¢ or 33¢. That will produce, as compared to a rate of $1.98, a “deficit” in program operations for the year. Currently, with a rate of $1.98, we are more or less at a break-even point. By reducing premium rates, you would produce a deficit in the program which, obviously, over time, would mean a reduction in the account balance. That would have an impact of approximately $3 billion per year on the federal government's budgetary balance.

    Mr. Eugène Bellemare: Thank you very much.

    Thank you, Madam Chair.

[English]

    The Chair: Thank you.

    Monsieur Godin.

¿  (0935)  

[Translation]

    Mr. Yvon Godin (Acadie—Bathurst, NDP): Thank you, Madam Chair.

    Mr. Lévesque, I can tell you that you defend the government well. I am sure you receive a government paycheque, so you are happy to defend the government. However, I completely disagree with you.

    I do not agree with you when you say that one of the reasons why the government is now running a surplus is because there are fewer people who receive insurance employment benefits. I do not agree with your statement that it is because the economy is doing better.

    Rather, it is because only 33% of women who contribute are eligible for employment insurance. When we look at the national statistics, they show that many single mothers work 20-hour work weeks, 20 to 25 weeks per year. Therefore, many of them are not eligible.

    What the minister will say in the House of Commons is that 85% of people who are eligible for employment insurance can receive employment insurance benefits. That's normal: if these people are eligible, it should be 100%. He shouldn't even be proud to say that 85% of people are eligible.

    That message has already been heard here, in committee, and I think you are well aware of all my arguments on that. Quite frankly, this meeting serves very little purpose for me, because I'm not the one asking for a reduction in contributions. I have never asked for that and I've never seen anyone take to the streets to demand that there be a reduction in contributions. However, I've seen people take to the streets to say that they are hungry and that they need their employment insurance benefits.

    For example, before an election, I've seen the Liberals strike special committees just as they are doing now, and tour the Gaspé region, New Brunswick, Nova Scotia, and the rest of the country to tell Canadians that in November, there will be a new report on employment insurance and that they can expect changes. I have seen the political side of this issue.

    I have heard the Prime Minister say in the House of Commons that money from the employment insurance fund was used to make health care transfers to the provinces. The Auditor General stated clearly that the government's actions went against the spirit of the act. This is found in the report. It is there in black and white in the report of the Auditor General. It needs to be said.

    With respect to what Mr. Bellemare said, on how to return money to people, there is a way to do this. We could suspend contributions for a period of time. Therefore, no more money would be funnelled to the fund and the balance would be reduced from some $43 billion to $15 billion, the amount that must be maintained in the fund. That's one thing.

    Another option would be to provide contributors, workers, as well as businesses, with a program they can own, and place it back in their hands. That is what the employment insurance program is about.

    I've said this in the House and I reiterate it, this is theft, it is the worst theft perpetrated on the people of Canada. Forty-three point eight billion dollars is gone, the government stole it. This is what happened to the employment insurance fund.

    I was in Forestville this week, where 2,500 people protested in the streets. The mayors of Charlevoix, Côte-Nord, Manicouagan, and other mayors in the region had organized this demonstration. These people do not receive employment insurance benefits, but they organized the demonstration because communities are affected in regions which rely on seasonal work.

    The problem is that the federal government does not understand seasonal jobs in the country. There are no seasonal workers in this country, there are seasonal jobs. We have fishermen, people who work in fish plants, people who work in the forestry sector. We have all kinds of jobs like that and that is the problem with employment insurance.

    However, politically the government has chosen to say that in the riding of Beauséjour—Petitcodiac, some people breached the act in connection to the total accumulation of hours, but the wrongdoers will not have to pay. On the other hand, in the riding of Acadie—Bathurst, 11 people were caught and they will have to pay. It was in the news this week.

    This is what I'd like to say: the best thing to do with the employment insurance system is to finally take it out of the hands of the Department of Human Resources. It must be protected, managed by a separate and independent group. This has been recommended by all political parties, except for the one that forms the government.

    It is true that the opposition says one thing and the government does another. This is why we have a Parliament. In fact, Parliament belongs to the opposition. The government makes decisions and the opposition is able to call the government's actions into question. That is our role and that is democracy in our country. I am proud that we live in this democracy and that we have the chance to express yourselves on behalf of all Canadians.

¿  (0940)  

    But in this case, this is my question to you: have you taken the famous black hole into account in your calculations? That is, the number of people who receive employment insurance benefits, but who, from January to May, do not receive any benefits. Rather, they are on social welfare during that time. Do you include these people as being employment insurance recipients or not?

    I don't know if you understand what I mean, but some data are not taken into account. People are suffering, women are suffering a great deal. Families are suffering. I receive between 50 and 100 phone calls a day at my office. Some of the people who call say they want to commit suicide. This is thanks to our employment insurance program.

    I'm sorry, but I am not proud to be paid by the government after having defended it by saying that it had done a good job between 1994 and now. However, the government increased the waiting period for employment insurance benefits. That's indeed what the government did, but it has a role to play and must show leadership. In fact, the government used the system to balance its budget, to bring down its deficit to zero, and it did so on the backs of the poorest of the poor, because when you lose your job—and I hope none of you do—you've hit rock bottom. You can fall no further.

    I would like to know what you think of all this. I'm interested in hearing your response to my questions and comments.

    Mr. Louis Lévesque: Most of what you said had to do with benefits. I will let Ms. Vreeswijk speak to that issue.

    Generally speaking, concerning what the figures mean, is concerned, I would say that they reflect the real contributions which were made and the benefits which were paid out. If a person does not receive benefits for a certain time, this is reflected in the figures. Therefore, the numbers show the current state of the program: the number of weeks during which benefits have been paid and the number of people who received benefits. Consequently, it's clear that benefits are truly paid out. The figures don't reflect benefits which should have been paid but were not.

    Mr. Yvon Godin: Well, Mr. Lévesque, when you say that the reason there is a surplus is because the economy is doing well, and that the government's financial situation is more positive, are you being serious? You should really be on the ground to see what is happening in Beauséjour—Petitcodiac, in Acadie—Bathurst, in the Gaspé, in Nova Scotia, on Prince Edward Island and in Newfoundland. The people have had enough. The reality is that we have a seasonal problem in our area: we have seasonal jobs.

    Mr. Louis Lévesque: I was not referring to specific situations in each region of the country, but rather to the fact that, if you look at the evolution between 1994 and 2002, you will see that there was significant job growth in Canada.

    Mr. Yvon Godin: In Vancouver and Toronto. I know, people are leaving our area to go work in Alberta. As for construction, there are no more jobs where I come from. That's a fact. Yes, there has been job growth, but not in the regions. Rural regions have been forgotten, and employment...

    The 2 x 4 you need did not come from Ottawa or Toronto. Cod and lobster did not come from... I said so in the House of Commons and I will repeat it here: you can't go fishing on Yonge Street in Toronto or Sainte-Catherine Street in Montreal; the fish comes from our area. But Chaleurs Bay freezes over in winter, which means that there is seasonal employment.

    It's all very well and good to say that Canada's economy has grown, but the employment insurance program is not supposed to help areas where the economy is doing well, it's to help people who have lost their jobs. That's the point of this program. Don't you agree with me that people have been affected?

    Mr. Louis Lévesque: I think that Ms. Vreeswijk is in a better position to talk about access.

[English]

    The Chair: I'm going to allow the response, but then your time is up and you'll get the second round.

    Mr. Yvon Godin: I don't think there are going to be too many questions after that, Madam Chair. You will see that there are not going to be too many questions if they answer and we give them the time to answer. Probably the meeting will be over after that anyway.

[Translation]

    Ms. Wilma Vreeswijk (Senior Director General, Employment Program Policy and Design, Department of Human Resources and Skills Development): As you know, every year the Employment Insurance Commission, along with representatives from the unions and management, reviews the program to ensure that it meets the needs of Canadians. The commission analyzes the effects of the program on women and seasonal workers, and it assesses whether the program reflects changes in the economy. Even though the economy has improved, we recognize the fact that the economy did not improve to the same degree everywhere in the country. Therefore, the program adapts to changes in the local economy in the regions. The program responds to changing regional needs.

    So, if the unemployment rate has fallen in Toronto, but not elsewhere, eligibility for employment insurance benefits will be adjusted according to how hard it is to find a job in a given region.

¿  (0945)  

[English]

    That is the way it works at this time. If the unemployment rate is going down in one region but not going down in another, you will find the response from the program will vary depending on the unemployment rate. So even if you have a 0.1% change in the unemployment rate, you will get a change in the number of hours that may be required to get access.

    Mr. Yvon Godin: Specifically, though, do you agree with Statistics Canada when they say among the women paying into the program, there are only 33% who receive it? Do you agree with that?

    Ms. Wilma Vreeswijk: What is done is that the commission looks at access and looks at it in three different ways, both in terms of the employed and the unemployed.

    With respect to women and their treatment under employment insurance, it is monitored quite closely because of the questions that have been raised. What we are seeing is that women's access to EI for maternity and parental, for example, is at 90%. We are not seeing any great difficulty in getting at these benefits. Whether they are full-time or part-time, those--

    Mr. Yvon Godin: Is it 90% of the ones who qualify?

    The Chair: Mr. Godin, we're 11. I'll give you, after Madame Thibeault, a very short time.

    Mr. Yvon Godin: On the second turn, then.

    The Chair: So you don't mind if Monsieur Godin continues? I'm not going to let it go on too much longer

    Ms. Yolande Thibeault (Saint-Lambert, Lib.): No, he can go ahead. I'm just trying to feel my way around this committee.

    The Chair: I'm not going to let it go on too much longer, but if you have another couple of minutes, I will--

    Mr. Yvon Godin: The meeting's scheduled for two hours.

    The Chair: I appreciate that, but we're not going to spend two hours on that.

    Mr. Yvon Godin: Are you having a problem as a representative of the government, or what?

    The Chair: No. Just go on, Monsieur Godin. You told me yourself you were almost finished.

    Mr. Yvon Godin: The 90% you're talking about who qualify, are you using the same language as the minister? Is it because they do qualify? In those 90%, is part of that the ones who don't have the 600 hours?

    The problem for the women is that many women are mono-parental people and many of them don't get 600 hours. When you say 90% of the women qualify, are they persons who normally qualify because they have the hours? The 33%, according to Statistics Canada, is because people pay into it but they don't qualify.

    Specifically, when you talk about your 90%, are you on the same line as the minister when you say 85% of the people qualifying in the program, qualify?

    Ms. Wilma Vreeswijk: Let me explain.

    Mr. Yvon Godin: Yes, please.

    Ms. Wilma Vreeswijk: The 90% are people who qualify. If you have 100 people who apply, you will get 90% who will have sufficient hours to become eligible for EI. So these are the people who qualify. Of the 100, you'd have 10 who wouldn't.

    In the number that you're referring to--and I'm sorry, I have slightly different numbers--I think you're referring to the benefit-to-unemployment ratio. The benefit-to-unemployment ratio essentially takes all the people who are unemployed--those could be people who haven't worked in many years, people who are students, people who are unemployed--and then calculates the number who receive benefits. So it may include people who don't pay premiums. So it is a very rough measure, not an accurate measure, of the people for whom the program was intended. It is intended to cover the people who pay premiums.

    As I said, we do look at two other measures to try to make sure that we understand and fully understand who is eligible and ensure that the program is there for the people who need it.

    In terms of the 90%, the eligibility has come down. It went from 700 hours to 600 hours to reflect the different work patterns. So more women are able to access. We are seeing that with as little as 12 hours per week over the course of the year, someone is able to access maternity and parental benefits.

[Translation]

    Mr. Yvon Godin: You stated clearly that if 100 people applied for special benefits, 90% of them would be eligible, but what normally happens is that a person applying for benefits knows that he already has the required number of hours under his belt. Furthermore, you said that when the required number of hours fell from 700 to 600, more people became eligible. So do you agree that there are still many people who pay into the system, but who are not eligible because the threshold with regard to hours worked is too high?

    According to Statistics Canada, only 33% of women who pay into the employment insurance system are eligible when they apply.

    Would you disagree with that?

¿  (0950)  

    Ms. Wilma Vreeswijk: I have not seen the Statistics Canada study, but I must point out that the figures we use, 90% for women and for special benefits, as well as the other figures relating to general benefits, overall benefits—not just special benefits—show that 88% of people who have lost their job qualify under the program. These studies have been confirmed by Statistics Canada and were carried out with the participation of Statistics Canada. These studies were done for the commission, studies involving the participation of Statistics Canada.

[English]

    The Chair: I'm going to give you another three minutes, and then we're going to wrap it up. You will then have had 20 minutes, which is about what you would have expected to receive, even in a two-hour meeting.

[Translation]

    Mr. Yvon Godin: I appreciate that, Madam Chair.

    You said again that 88% of people who qualify for employment insurance receive benefits.

    But when you say that 88% of people qualify, it's because they have worked enough hours. Are there people who pay into the system, but who are not eligible for employment insurance benefits, and therefore do not apply? Honestly, you know what I am trying to get at.

    Ms. Wilma Vreeswijk: If you calculate the number of people who pay premiums and who, if they lost their job today, for one reason or another, would qualify for employment insurance benefits, you would come up with 88%.

    Mr. Yvon Godin: That figure contradicts the information provided by Statistics Canada to the Canadian Labour Congress, the CLC.

    Thank you.

[English]

    The Chair: Thank you.

    I appreciate the patience that members of the committee and our witnesses have had.

    We always enjoy your visits with us. I thank you for your participation.

    Mr. Gary Lunn: The truth is that nobody actually cares about anything except an election.

    The Chair: Well, some of us do, actually.

    I just want to remind members of the committee that after the briefing that we get on order in council appointments on Tuesday, we will have an in camera session to look at future work plans.

    Kevin, perhaps you can...as I got my meetings mixed up.

    Mr. Kevin Kerr (Committee Researcher): On Tuesday, officials from the PCO will brief the committee on Governor in Council appointments, relating to the whole issue of the government's initiative regarding prior review of these appointments. After that, there will be a discussion of two work plans that have been drafted by the committee.

    The Chair: One of those talks is about “Beyond Bill C-2”, and the other is about access to post-secondary education. So those are the two items.

    Mr. Yvon Godin: Is that next Tuesday?

    The Chair: Yes.

    But with that in mind, I've also booked on Thursday, on your behalf, officials from HRSDC to come in to talk about Bill C-2 and the formal response to “Beyond Bill C-2”. All right?

    Are there any other questions or concerns?

    The meeting is adjourned.