HRPD Committee Meeting

STANDING COMMITTEE ON HUMAN RESOURCES DEVELOPMENT AND THE STATUS OF PERSONS WITH DISABILITIES

COMITÉ PERMANENT DU DÉVELOPPEMENT DES RESSOURCES HUMAINES ET DE LA CONDITION DES PERSONNES HANDICAPÉES

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, November 6, 1997

• 0910

[English]

The Chairman (Mr. Reg Alcock (Winnipeg South, Lib.): Let us come to order.

Welcome to meeting six of this committee. It's the next in the series of briefings we are getting from the department.

We have with us today Nicole Senécal, who is the assistant deputy minister of labour; Michael McDermott, senior assistant deputy minister, legislative review, labour code; Gerry Blanchard, director general, operations; and Warren Edmondson, director general, Federal Mediation and Conciliation Service.

I trust in being invited here you have worked out a script for your particular song and dance. Are you leading this?

Ms. Nicole Senécal (Assistant Deputy Minister, Labour, Labour Program Overview, Department of Human Resources Development): I'm not sure I can dance that well, Mr. Chairman, and certainly don't ask me to sing.

The Chairman: Mr. Johnston started us on all of this.

Ms. Nicole Senécal: Maybe as a team we'll sing.

Mr. Chairman, I want to say how pleased I am to be with you and your colleagues. I have a short presentation, an overview of the labour program, and I hope everybody has a copy of the deck. Has it been distributed?

The Chairman: Yes.

Ms. Nicole Senécal: We'll start with the mission of the labour program. The labour program has served Canadians since 1900. I think there could be a celebration at the millennium because it will be 100 years old. The mission is to promote a fair, safe, healthy, stable, co-operative and productive work environment that contributes to the social and economic well-being of all Canadians.

[Translation]

The Labour Program does this in the following way. First, by promoting and sustaining stable industrial relations and a safe, productive workplace within the federal labour jurisdictions. Also, by collecting and disseminating labour and workplace information and, finally, by fostering constructive labour-management relations.

[English]

We have a number of major legislative responsibilities for the labour program. The main ones include the Canada Labour Code, part I, part II and part III. Mike, I understand this morning you've initiated some briefing in terms of the reintroduction of the amendment to part I, on industrial relations. Part 11 is on the occupational and safety labour standards, the Employment Equity Act, the Government Employees Compensation Act, and the Fair Wages and Hours of Labour Act.

[Translation]

In the Labour Program, there are other responsibilities that are not legislative in nature but a lot of our employees are working at them. I'll give you a few examples, such as preventive mediation, the North American Agreement on Labour Co-operation, federal-provincial relations, international relations with the ILO, for example, workplace information and service delivery all across the country.

[English]

I would just remind everyone that we are covering approximately 1 million workers in the federal jurisdiction. It's about 10% of the jurisdiction, and as you know, 90% of it is provincial.

• 0915

The industrial sectors we're covering that are really crucial to the Canadian infrastructure include interprovincial and international air, rail, road and pipeline transportation; shipping and related services; grain handling; and nuclear industries. These industries are particular because they were industries in the Constitution for the general advantage of Canada: telecommunications, radio, television and telephone, banks, and some federal crown corporations such as Canadian Broadcasting Corporation, Canada Post, and Cape Breton Development Corporation.

You'll notice that in the federal jurisdiction, under part I, we have the highest unionization of any Canadian jurisdiction at around 55%.

The next page displays the organizational structure of the labour program, how we organize to deliver on the legislative and policy and program responsibilities. I recognize Michael McDermott, and of course after my presentation he may talk about what he has been doing. You will see the product of that since he has consulted across the country and certainly advised the minister in terms of tabling the amendment to part I of the legislation on industrial relations.

In terms of program, Warren Edmondson is our chief mediator. He's the DG responsible for the Federal Mediation and Conciliation Service directorate. For federally regulated businesses and undertakings, this directorate ensures an appropriate collective bargaining framework to promote industrial peace and prevent and settle collective bargaining disputes. Beyond the federal jurisdiction, we have an objective to encourage good labour-management co-operation.

[Translation]

Gerry Blanchard, our Director General of Operations, is responsible for those business concerns coming under federal legislation and is also responsible for preparing operational policies and providing technical advice as well as functional orientation.

This branch is responsible for the training activities of inspectors and officers as well as for interventions all across the country, inspections, legal proceedings, technical examinations, dealing with complaints. And, of course, when our people visit work locations there's a lot of advice given to employers and employees concerning health and safety, work standards and employment equity.

This branch is also responsible for the Federal Workers' Compensation Service which sees to the implementation of the Government Employees Compensation Act that is administered by the provincial Workers' Compensation Boards. In Quebec, it's called the Commission de la santé et de la sécurité du travail.

This branch works in close co-operation with the ten regions as we have offices in all ten regions of the country that are particularly concerned with providing the services for all those activities.

Behind me I have Yves Poisson, the Director of Strategic Policy and Partnerships, who, of course, is in charge of strategic and liaison policies within the federal-provincial context. As you know, we have an association at the federal-provincial level that works every well which is called the Canadian Association of Administrators of Labour Legislation. It is made up of labour deputy ministers and people coming from the different provincial jurisdictions as well as the federal government. At the international level, it is also charged with representing the Canadian government at the International Labour Organization.

We also have the Bureau for the North American Agreement on Labour Co-operation in our department and it is in charge of policy and those matters stemming from the North American Co-operation Agreement, the famous NAFTA.

Finally, we have a branch dealing with workplace information. They collect the data and disseminate information concerning labour relations and collective agreements.

• 0920

I would like to interject a little historical footnote which is that the Department of Labour was created in the year 1900 first and foremost to allow for the dissemination of information on collective agreements.

[English]

If we move to the estimates for 1997-98, you will notice that the labour program budget is of the order of $107 million. The operating expenditure is in the range of $40 million. We only have a very small program of grants and contributions. It's less than $5 million, around $4.6 million. When you add that, and you add, of course, the payments and compensation respecting the government employees—because when we have an injured employee in the public service we're responsible to provide this compensation—you see this $56 million.

[Translation]

I would now like to go to our initiatives for 1997-98. I would like to say that our priorities concerning the modernization of the Canada Labour Code have to do with the reintroduction of amendments to Part I of the Act.

We also intend reintroducing very soon amendments to Part II of the Code having to do with occupational safety and health. As the bill died on the Order Paper, we are now reviewing it with our partners because there were some problems with the wording. As there was a broad consensus concerning those amendments, the thing is to agree with the partners to ensure that we have the best wording possible, one that really reflects the consensus arrived at.

[English]

We're starting, in a way, the review of part III of the code. I should say there's always consultation regarding every part of our code. We have sort of permanent consultative groups, but for the modernization of part III we're just initiating the review. We're at the beginning, and I imagine it will probably take another two years before we can really develop a legislative proposal for amendment.

We're also starting to consider the modernization of the Government Employees' Compensation Act. There's not been a review since 1950. Wording problems result in costly legal challenges, delays and administrative problems. Certainly, there is a strong requirement to clarify the coverage of employees under the GECA.

Finally, we have the new Employment Equity Act. I shouldn't say it's new any more, because it was promulgated in 1996, but it's still a very...the implementation of it is starting now. Just to remind ourselves, it's to promote and facilitate compliance, educate and raise public awareness. The new powers under this legislation are that there will be, starting now in November, an audit made by the Human Rights Commission. This time the legislation is also covering the public service, which was not the case before.

Finally—-and of course we always say that, because I don't think anybody would argue—we're certainly aiming at giving the best service possible in terms of service delivery. It's very important to us to continue to improve our service delivery.

We're starting to look at co-location with some provincial governments. We're using technology to improve our delivery. We have labour affairs officers equipped now with mobile offices linked to a central database. That is a way we see that we can anticipate cost-efficiency while providing as good service as possible to our client.

• 0925

We have a renewed emphasis on the performance indicators and service standards. We have four service standards. One concerns collective bargaining disputes. We're always aiming at settling 90% of our collective bargaining disputes without a work stoppage. If I'm right, this year we even exceeded that; in the past year we went to 94%. Our aim is to settle 70% of our unjust dismissal complaints under part III, to resolve 80% of all other part III complaints within 120 days, and then to resolve voluntarily 90% of our situation of non-compliance regarding part II on occupational safety.

Finally, Mr. Chairman—I'll finish there—we also have this workplace information directorate that, as I mentioned at the beginning, gathers information and analyses it. We have a number of publications that are extremely appreciated by specialists, not only by academics but by workers, by unions—information on the collective agreement, on the changing workplace, that was distributed through the Internet and through other means.

The Chairman: Thank you very much.

Before I start the questioning, there was work done by the department.... Here's a document: “Collective Reflections”. Would it be possible to have copies of that document circulated to members of the committee?

Ms. Nicole Senécal: Certainly, with pleasure.

The Chairman: You also mentioned this audit under the human rights legislation. Will that be reported this November or is it—

Ms. Nicole Senécal: No, it's just starting. The Human Rights Commission will start auditing a number of companies across the country.

The Chairman: We'll see the first report in a year, do you think?

Ms. Nicole Senécal: I would imagine in a year from now, yes.

The Chairman: As for your service standards, are they contained within the HRD outlook document, or do you do a separate outlook document?

Ms. Nicole Senécal: They will be in the performance report that will be tabled in Parliament under the Department of Human Resources Development.

The Chairman: Thank you.

Now, let us begin. Mr. Anders.

Mr. Rob Anders (Calgary West, Ref.): I notice you've gone to close to $5 million in terms of grants and contributions. While you consider that fairly small, I'm wondering if we can get a breakdown of where those grants and contributions have gone.

Ms. Nicole Senécal: Yes. On the contribution side we have the labour-management partnerships program, for which we spend $1.5 million. We've got another item in the labour-management partnerships program which is an assignment, an exchange between labour and the departments. It's $85,000. Then we have the NAFTA labour commission, which is about $1.4 million.

Last year—and it will be reported this year—we had a special contribution to the Canadian Centre for Occupational Health and Safety. This is a centre that we're responsible for in the department. They have a public inquiry service. They didn't have enough money. They needed some money to.... That's a centre, by the way, that the provincial government also contributes funding for. They needed a contribution to review their program in terms of updating their program. That is available to the public, and we contributed, along with the provincial government, to the renewal of that. But if you want, we can give you the details on it.

On the grants side, we have $53,000. It was made to support activities that contribute to occupational safety and health program objectives. We have $15,000 to support the standards-writing associations, Fire Prevention Canada, and to support fire safety organizations.

If you wish, I can give you the detail. We have our financial adviser here, who could give you the details.

Mr. Rob Anders: Yes, I'd love to have a breakdown, in written form preferably.

Ms. Nicole Senécal: Yes.

• 0930

The Chairman: Are you finished?

Mr. Rob Anders: I have some more, actually.

Now, one of the things I'm wondering about is the Sims review, which I think you referred to as “Collective Reflections”. I'm wondering about the presenters who would have made presentations either to a part I or a part II review. When I looked over the report previously, there were people who I thought should have made presentations who didn't, or didn't have access to them. I'm wondering how it can be changed in the future so that some of those groups or organizations have a chance to present.

Ms. Nicole Senécal: I will ask Mike to talk about that, but I'm a little confused. There are two different reports: the Sims report on the part I, the “Collective Reflections” on the changing—

Mr. Rob Anders: That was my mistake.

Ms. Nicole Senécal: Which one are you talking about?

Mr. Rob Anders: Either one, actually.

Ms. Nicole Senécal: The Sims report?

Mr. Rob Anders: More particularly, because I'm more familiar with the Sims report.

Mr. Michael McDermott (Senior Assistant Deputy Minister, Legislative Review Part I of the Canada Labour Code, Labour Branch, Department of Human Resources Development): The Sims report followed a series of meetings across the country held by the task force. In the report I think there's a listing of the people who actually made submissions and appeared, but that has to be kept in context. There was a large mailing list and the task force did mail out its terms of reference and invited submissions to a very large number of people. It met a large number of people, too.

I think we have a listing of the people who were contacted and who made submissions. They were not all in federal jurisdiction. The task force did invite submissions from people who are affected by the federal jurisdiction as well as by those parties who actually work under the code. It was a pretty extensive consultation list. A number of people who were written to did not respond, and that's their choice, I guess, but there was an attempt to engage the largest number of people possible in the discussions.

Mr. Rob Anders: By what criteria, for example, would you have chosen some of those groups to have presented, or not to have presented?

Mr. Michael McDermott: I think with the Sims task force, pretty well anybody who asked to appear before the task force was able to do so, or to write in. Now, the geographical locations were somewhat restricted. We were in every region. From memory, I think the task force went to Halifax, Montreal, Toronto, Winnipeg, Edmonton and Vancouver. That is my recollection. So there's that geographic limitation that some people may not have come to those places, but they were able to write in and a number were received.

My recollection—and I can verify this—is that anybody who asked to appear did appear. We brought some people down from the NWT, for example, to appear at a couple of the sessions. Subsequent to the task force report, there was a ministerial series of consultations on the report, again across the country. I think this time St. John's was the Atlantic Canada location and Regina was the prairie location.

The Chairman: Thank you, Mr. McDermott. Mr. Anders, we may have time for a second round if you have more questions.

Ms. Brown is next.

Ms. Bonnie Brown (Oakville, Lib.): Thank you, Mr. Chairman. It's good to welcome these folks to our midst as we're learning about the department and how it functions.

I wanted to talk about this area of policy development. I remember the days when the labour department and the federal minimum wage sort of set the tone for the country. As a result, I'm not that happy that we're beginning to relocate with our provincial counterparts. I think there was something healthy about the federal government having its own standards and, as I say, setting the pace for the whole country.

I know we've given up the minimum wage part of it, but in any case I'm wondering what you're doing, whether you're carrying on this progressive tradition and whether or not these people working in policy are looking at the future of work, the changing nature of work. I'm wondering if you consider that work will continue to be the vehicle through which society distributes wealth or, with the advance of computerization and robotization and all those things, whether we have to begin to look at some alternative structures other than work.

• 0935

Ms. Nicole Senécal: That's a very profound question and a very interesting one. Unfortunately, I didn't hear you very well at the beginning.

By co-location, we don't mean that we're somehow devolving our jurisdiction to the provincial government. As you know, in terms of serving Canadians we're aiming at serving them better. Because the jurisdiction is shared, 90% provincial and 10% federal, 70% of the calls we get in any province are from the other jurisdiction. At this moment, instead of sending the call to the provincial jurisdiction if it's not under federal jurisdiction, we're trying to serve the client to make sure that he or she immediately gets the right information from both sides.

So when we say co-location, we mean call centres, perhaps, that respond to questions. And I don't mean that we're going to blur and that we're not going to serve our clients to the same extent because we're using technology in an efficient manner. We're doing it because we think we will better serve our clients.

On the changing workplace, again, I didn't hear you very well, but if I understood your comments on the changing workplace, there are of course many issues.

One of the recommendations, “Collective Reflections”, is that a number of issues have to be addressed because the world is changing. More often now, working Canadians are in jobs that are less permanent, there are more contingency-type workers, and I don't think that at this moment our policy and our legislation are necessarily adapted to this new form of employment.

That's one of the things we want to do now in the review of the legislation on labour standards that we are just starting. We want to look at all these issues and see if we cannot do something about better protecting workers in the new reality of work.

Ms. Bonnie Brown: So you're not actually doing it. You don't have any pilot projects. You are seeing this as part of your work plan.

Ms. Nicole Senécal: We see that as part of our work plan, but another thing we are trying to work very hard at—and I know Minister MacAulay will certainly talk to you about it—is the intention.... More and more often with our partners we identify places where, for example, there is better labour-management co-operation, with better practices and new practices. We see it every day in collective agreements. There are new practices in terms of adapting to the new working world. We would like to do much more in terms of disseminating this information across the country to employers, to unions, and to workers so that they also take stock of these new practices. That's also in our work plan.

Ms. Bonnie Brown: May I ask one more question?

The Chairman: Yes.

Ms. Bonnie Brown: I notice that you have an international section, which looks at international agreements such as NAFTA, and as you know, we're beginning to negotiate something called the Multilateral Agreement on Investment—

Ms. Nicole Senécal: Yes.

Ms. Bonnie Brown: —which is going to use as its pattern our NAFTA agreement. I'm wondering if you have been monitoring the labour side, the labour standards agreement that is part of NAFTA. Are you advising the trade department of any criticisms you have of what is in that agreement before we replicate it with a larger group?

Ms. Nicole Senécal: In the context of the NAFTA agreement, there is a provision that we have to review the results of the first four years of NAFTA. At this moment, in each country, we're just initiating that study. In fact, we are at the point of appointing a panel of three independent experts to look at the issues you're talking about in terms of labour standards in the three countries. But we're just initiating that at this moment. It's going to be done in each country, but it's also going to be done by the secretariat located in Dallas, the NAFTA Commission for Labor Cooperation. Some months from now we should have an interesting report on that.

• 0940

The Chairman: Mr. Thompson.

Mr. Greg Thompson (Charlotte, PC): Thank you, Mr. Chairman.

I have a question about the Employment Equity Act. This week, as you probably know, that act was debated in a private member's motion in the House of Commons suggesting major changes to it, most of which I don't agree with. What I'm concerned about is what is happening at present with that equity act and women in the workplace in the federal government? For example, moneys are owed to women, I think to six major groups in the federal government, most of them being lower-paid workers. We're not talking about workers who are making $100,000 or $150,000; we're talking about the lowest-paid workers in the public service.

Has that equity gap been filled in recent months? For example, is there now a disparity between what male workers are paid for the same job versus female workers? Has that gap been closed?

The other part of the question, obviously, is where are we on the back payments owed the women who work in the federal service of Canada? We're talking about a group of about 190,000 women. I believe the government's latest offers—some of the government members would know better than I—will be in the range of $1.3 billion to settle. I think there's still a fair amount of disagreement on what that settlement figure should be. Maybe you could provide us with an overview of where we are.

Finally, the other issue is the unemployment insurance benefits for those workers who are actually being paid less than they should be paid. Then, as you mentioned job security today, the question is who in Canada has job security? When these women, for example, are dismissed from their work, the benefits they would receive as dismissed workers or workers displaced or in downsizing would be far less than what some of their male counterparts would be receiving. So the other side of that is this discrepancy between what they have and what social safety nets are there for those workers when their jobs are terminated.

I know it's a wide-ranging group of questions, but do your best to answer them. Thank you.

Ms. Nicole Senécal: Thank you, Mr. Thompson.

I have to admit to you I will not be able to answer the first one, because the question of employment in the public service is not my responsibility.

You were talking about pay equity for women. I'm sorry, I don't want to pass the buck, but it's just....

When I said the new Employment Equity Act also covers the public sector, I meant in terms of reporting every year in an annual report to Parliament, as we do. We're going to have the next one, by the way, some time in December. The public service will have to report in the same way as the private sector we're responsible for.

But having said that, I have to admit we don't have, in the labour program, responsibility for the public service of the federal government. So I would not be able to inform you on where we are on pay equity. I would be like you. I would probably ask questions.

On the question of the gap between women and men—and you also alluded to the fact that in a downsizing period, as happened in the last ten years with the restructuring of companies—it is true that it is even more of a challenge for employment equity to keep up the improvements on the gap between men and women. My understanding is that it has improved significantly in the last ten years.

• 0945

I have to admit to you that some of the information I cannot divulge at this moment, because it's a report to Parliament; it's the latest one. We're going to report in December, and we will give you all the data.

This is the first time, this year, that an annual report will be able to give you a trend over 10 years. Until now we just gave you the change between one year and another, but now there's enough data over 10 years that we can give you that trend. It's an encouraging one, but it still faces the problem that in a downsizing period, for the designated group, visible minority women, it's still a challenge and there is still a gap, an interesting gap.

Mr. Greg Thompson: And that report will be tabled in the House of Commons in December?

Ms. Nicole Senécal: Yes, as it is every year.

Mr. Greg Thompson: Thank you.

Thank you, Mr. Chairman.

The Chairman: Thank you, Mr. Thompson.

Ms. Guarnieri.

Ms. Albina Guarnieri (Mississauga East, Lib.): Thank you, Mr. Chair.

Welcome to our committee.

Many firms in my riding, situated in Mississauga, are informing me that in an attempt to comply with pay equity and employment equity guidelines, they have to hire outside consultants, accountants, and they've struck committees in their firms to analyse their compliance. I'm informed that the cost of this initiative and this exercise is around $1,000 per person. Do you have any evidence to substantiate what I'm being told by companies in my riding?

Ms. Nicole Senécal: I'll ask Gerry to answer this one.

Mr. Gerry J. Blanchard (Director General, Operations, Department of Human Resources Development): I don't know if we have an actual bearing on the cost to each individual employer to bring their standards up to where they should be. We're talking about employment equity here. Pay equity is another section.

We have consultants right now travelling throughout the country, meeting groups of employers, trying to assist them as much as they can in dealing with the requirements of the act.

The actual act didn't impose any more burden on them than was there before. The burden is more in the reporting of certain things by a more fixed, formal clarification.

We try to assist, as I say. Most of our assistance is in the nature of having sessions in as many cities as we can where we have a group of our clients. We call in a group of employers, and they send whatever people they have responsible for those programs, and we try to assist them as much as we can.

Naturally, our resources are limited. We couldn't give full-time assistance to any specific employers. But I know my staff is helping as much as they can in trying to share whatever information we can so that someone doesn't have to repeat a compilation of something. We try to do it as much as we can. We try to gear ourselves so their automated systems can feed into ours, so we can cut down on the actual number of written reports and that.

But as for how much it's costing people personally, I couldn't tell you. I would venture to say that smaller employers probably have a bit more difficulty, in the sense that they may not have been organized. They don't have a personnel or human resources department with the experts on board. We also try to refer people to them and try to give them an idea of what they should be paying if they do hire and the type of people they can hire. That's about as far as we can go.

Ms. Albina Guarnieri: This range of $1,000 per employee was given to me by small and medium-sized businesses. Are your field workers finding that a burden is placed on the companies that is causing some stress? Are they reporting back?

Mr. Gerry Blanchard: Not in any significant amount that we're hearing of. And the $1,000 would be hard to calculate; as I said, it depends on what their structure is and what they have. If they have to add something to their structures that wasn't there before....

Ms. Albina Guarnieri: Yes, they've set up committees and they've had to go to accounting firms. Is there any formalized process to analyse compliance that perhaps could assist these companies, so it would take the burden off them and they wouldn't have to go outsource? Do you have a structured, formalized process to assist them?

Mr. Gerry Blanchard: Yes, we do have systems in place. We have examples of what should be done and we have people who are very knowledgeable on how to do that. We'll try to assist in any way possible any company that calls, and many of them are. One of our officers, who I talked to on Monday morning, is crossing Canada right now doing that.

• 0950

Ms. Albina Guarnieri: In light of Mr. Thompson's question, since there is some criticism that government isn't complying with its own guidelines, I wonder if you could tell me, have you found that businesses are resentful that they're being forced to comply when there's some criticism...?

Mr. Gerry Blanchard: One of the things that's coming at us is the confusion between employment equity and pay equity. They read about the pay equity fight in the papers and they point to that.

Employment equity only has to do with the representation you have in your thing. As Madame Senécal mentioned, pay equity in the federal government is not under the purview of the Minister of Labour. It's a completely different issue that's between Treasury Board, the employer, and the unions of the public service. It deals with pay equity. People throw that at us and we have to explain the differences.

I would venture to say that as far as employment equity goes, even though I know we have some departments that need to improve their things, we're making a real effort within the public service to address that and not to be in the position you're talking about. We're trying to practise what we preach.

Ms. Albina Guarnieri: That's a good motto. Thank you.

The Chairman: Thank you, Mr. Blanchard and Ms. Guarnieri.

I note that time is beginning to close in on us. Madame Vautour, you had a question, and then Mr. Thompson.

Ms. Angela Vautour (Beauséjour—Petitcodiac, NDP): I have a few comments.

Number one, on employment equity, certainly in the federal sector we still have a long way to go—a very long way to go. It's very disappointing when you look at the reality that there is a department such as yours looking over that. You really have to start putting energy into that.

I'm in total agreement with my colleague that it was very disappointing to see the debate that took place regarding employment equity, because there is a lot of inequity in the workplace when it comes to that.

It's unfortunate also that with pay equity, as you say, you can pass the buck to someone else. Employment equity and pay equity just go hand in hand, which is probably why you get it back all the time. Both are very discriminatory.

It's very unfortunate that the Liberal government is spending millions and millions of dollars in trying to stop this money that is owed to a lot of women. And a lot of women today, because of downsizing, aren't even working any more; they've all been put at the door. You should be at least advising government on that.

Also, on the gap, it would be interesting to see a report. From all the last data I got, the gap is actually increasing between men and women. So I will be very interested to see what kind of information you have to show it is closing, because right now, the jobs that are being created, maybe in the private sector or by the government, are part-time, insecure, and low-wage.

It's also interesting that your department, if you want to call it that, is under HRDC, which at the same time is cutting down employment insurance, which is making it even more difficult because of the way the government is working today. It's interesting that you're all under the same department, and one is saying the workforce is changing, everything is part-time and insecure, and within the same department you have the other arm slashing programs that could be helping those people.

There is a need for everybody to get together and start looking at the impact of what is happening.

You can reply if you want to.

The Chairman: The question was...?

Only if you choose—

Ms. Nicole Senécal: The only thing I can say is we are a large department, but we're certainly working very closely together in terms of policy orientation, and we look at all the issues. The changing workplace is part of our preoccupation at a much broader level than just the labour program; it's the department's concern.

The Chairman: I also suspect, Madame Vautour, that some of your reflections would be better directed to the minister when he is before us. But you do have time for one small further reflection.

• 0955

Ms. Angela Vautour: The other thing is, looking at employment equity, often it could be someone with disabilities, and it's more difficult for them to learn a new skill every six months. At the same time that you're trying to get these people to work, the workforce is changing, making it almost impossible to keep a job. It's very difficult for a person who could be visibly challenged to try to learn something new every six months.

Those factors are not being considered when we make decisions.

The Chairman: Thank you very much.

Mr. Johnston.

Mr. Dale Johnston (Wetaskiwin, Ref.): Thank you, Mr. Chairman.

Thank you, folks, for the overview of the department.

You did mention one thing in your presentation, though, that needs a little more detail and perhaps some clarification, and that is the audit of private businesses that will be conducted by the Human Rights Commission. If you could, enlighten me on a little bit of detail on that. That may require a lot of detail, and maybe some follow-up information later on.

Mr. Gerry Blanchard: Basically, according to the act, as of November, the Human Rights Commission is going to start conducting audits. In the new legislation they're not going to be responding necessarily to complaints any more. There's going to be the process of auditing.

I can probably get from them their game plan, or how they will proceed with that, for you. My knowledge of that is they will pick a certain number every year, based on their capacity to do it, and do a proactive audit of various firms. I assume they're going to pick and choose in accordance with some kind of plan, but I don't have the details of that. We can certainly approach the Human Rights Commission, who we deal with very closely, and get more detail on what they're planning to do.

Mr. Dale Johnston: I would appreciate that, along with the budget implications of that.

I would also like to ask if I could have an update on the status of the fair wages and hours of labour negotiations that are taking place, particularly in Alberta, at the moment.

Ms. Nicole Senécal: I will ask him.

I would also add something on the question of the Human Rights Commission. In September, with all our interested parties—employers, unions—we developed guidelines for the way the employers will be audited. We could make available these guidelines to you as well. That was so they know under what types of guidelines they're going to be audited.

I think they intend to audit 12 companies this year. I don't think they will necessarily give you the list of them, because it's confidential.

Mr. Dale Johnston: No.

Ms. Nicole Senécal: But I can certainly give you the guidelines as well.

Mr. Dale Johnston: I would appreciate that—what they base their audit on.

Ms. Nicole Senécal: Yes.

Mr. Dale Johnston: Thank you.

Ms. Nicole Senécal: On the fair wages, again, we're just starting this pilot project, as you know, but I'll ask Gerry if he wants to say a few words on that.

Mr. Gerry Blanchard: I assume by the nature of your question you know a bit about the background on this.

Yes, the pilot project just terminated last Friday in Alberta, where we met with various parties representing the various constituents in this, with the assistance of a facilitator we hired and our own people. We don't even have the report back. Evidently some of the parties asked for a bit more time to submit more information, and we've given them a period of time to do that.

We have an initial report of the meeting. Yes, there was some consensus found, and no, in some other areas there wasn't. In certain areas they were able to arrive at some general agreements, but some sectors of the province still have differing opinions.

We're waiting for all the information to come in, at which time our regional people will make a formal report that we'll be able to submit to our minister.

Mr. Dale Johnston: I have one very short final question, Mr. Chairman.

Could we have the initial report and whatever material you have? Are they willing to share that with members at this point, or do we have to wait until the final report?

Mr. Gerry Blanchard: We'll have to check with the minister on that.

Ms. Nicole Senécal: We'll report to the minister and ask the minister.

Mr. Gerry Blanchard: Yes.

Mr. Dale Johnston: I would appreciate any information we can get on that.

The Chairman: Thank you, Mr. Johnston.

I have just two comments. There have been a number of requests for information. If you could make that information available to the clerk, we'll see that it's disseminated to all members of the committee.

• 1000

We might want to make a note, Mr. Johnston, to put that question on the agenda for the meeting with the minister. I would also be interested in that information.

Finally, thank you very much. I appreciate your taking the time. It has been helpful. I look forward to seeing you several times over the next little while.

Ms. Nicole Senécal: Good. It was a pleasure to talk with you today.

The Chairman: Now we'll take a one-minute break while the witnesses clear and we get new ones in.

• 1001

• 1008

The Chairman: Okay, we're back in session. We have with us John McWhinnie, the director general for insurance policy; Gordon McFee, the director of policy and legislation development; and Diane Carroll, director of the employment insurance policy directorate. This is for an overview of employment insurance.

Mr. McWhinnie, I turn the reins over to you. I will attempt to keep the troops in line.

Mr. John McWhinnie (Director General, Insurance Policy, Department of Human Resources Development): Thank you very much, Mr. Chairman.

I appreciate that some of the members of the committee are new...from previous overview presentations we've done. With this program it's very difficult to synthesize a very complex program into a brief overview, but with the deck you have in front of you we've tried at least to give the highlights of some of the key components of the program. I'll try to walk through that as briefly as I can. I will perhaps take interventions for clarification along the line. When we get through that perhaps we can have ample time for questions more broadly.

• 1010

As you can see from the table of contents on the second page, there are a lot of different aspects to the program I think need to be touched on, some we will in more detail than others. That's generally what we'll walk through this morning.

Basically the program is coverage of all paid workers. Obviously not all self-employed or people who do not get regular salary are covered, but contract of service can qualify as long as it relates to a legitimate working relationship. We do have special provisions for fishers. It's the only situation where self-employed workers do have access to the account. There is no age limitation on the program. Situations we tend to refer to as “arm's length” are okay, family operations or whatever, as long as the spouse or family member is treated identically with any other employee in the organization.

The program is very driven by the regional variation in economic and unemployment rates. There are 54 economic regions in the country. Depending on which region you're in, the program may apply somewhat differently in the length of claim and the benefits one would receive. All of these unemployment rates and determination of the regions are managed by Statistics Canada and based on regular three-month rolling averages, and they are updated monthly.

As to the types of benefits, there are the regular benefits, which are just basic income protection for people who have lost their employment. There are special benefits for sickness, maternity, and parental. The fishing benefits I mentioned earlier are a special regime within the program.

Part II is what we refer to as employment benefits. Those are basically re-employment training and other types of programs of support to get people back to work more quickly. This is the area which has very much been in discussion in our federal-provincial labour market agreements. It's the part II type of activity which essentially is on the table for provinces taking up the delivery.

Sub-plans are situations where employers can apply for and be approved to put in a supplementary employment benefit to top up EI benefits in specific situations. Auto makers, for example, are a good situation, where they lay people off while they are retooling a plant and they can then top up the benefits to keep their skilled labour force intact to bring them back in once the plant reopens.

On qualifying for benefits, you have to have an interruption of earnings for seven days with no earnings in order to qualify for regular benefits. If you are qualifying for special benefits you have to have had a decrease in your earnings of more than 40%, but you don't have to have the full seven days of no income.

There is a 52-week qualifying period for the program. Those would be the 52 weeks before losing your employment. As I mentioned earlier about the economic regions in the country, it would range from 420 to 700 hours of insurable employment in order to qualify during that qualifying period. If you're a new entrant or a re-entrant, that entry requirement would be 910 hours. If you're qualifying for special benefits, it would be 700 hours.

I'm speaking about hours here. It's a significant change from the UI program to the EI program. We changed from a weeks-based system to an hours-based system.

All of this is generated in terms of what salary you had and how your rate will be calculated and when your employment history is based on, what the employer would submit, in what is called the “record of employment”, the ROE.

New entrant, re-entrant, as I mentioned earlier, requires a somewhat higher qualification. You look at the last 52 weeks, the qualifying period, but we also look at what we call the “pre-qualifying period”, which is the previous 52 weeks. In the pre-qualifying period an entrant or re-entrant would have to have had less than 490 hours in either EI or some other labour force attachment, which we would refer to as “prescribed weeks”. There's an example there of how someone would not qualify. We can give more detailed examples later if people don't understand.

• 1015

Entitlement, which is how many weeks of entitlement you get, or in other words, the maximum length of your claim, depends on how many weeks you worked and what the regional rate of unemployment is in your area. The overall maximum in the country is 45 weeks and there is a 2-week waiting period that everybody has to go through. You don't get benefits for the first 2 weeks after you've lost your employment. The average claim in the country is about 25 weeks.

The benefit period is somewhat different. The benefit period is the period after which you do qualify that you have in order to use up your entitlement. Some people can take on some work and go off claim and go back on claim, but you have up to 52 weeks, which is the benefit period for any specific claim, to use it up.

Without looking at all the numbers, schedule II on the next page—I don't intend to go into detail—is a fairly easy way of just appreciating how the weeks of benefit can vary across the country.

If you look at the left column you will see that if you had 20 weeks of insurable employment and the unemployment rate in your region was less than 6%, you would only qualify for 14 weeks of benefit. The bottom right corner of the chart shows where you would get into the maximum of 45 weeks. You'd be in area with a high unemployment rate and you'd have a lot of weeks of insurable employment.

The benefit rate is calculated based on 55% of what your insurable earnings would be generally over the last 26 weeks. The maximum benefit at the moment is $413. That's based on maximum weekly insurable earnings of $750, which is an annual insurable earnings of $39,000.

There is, though, within different regions in the country, particularly because of the nature of seasonal work and sporadic work, a minimum divisor that comes into play. For example, if a person had not worked in all of those past 26 weeks, dividing all of that average earnings by 26 weeks would be unfavourable to the claimant, so there is a minimum divisor that creates a floor that is divided into. For example, in a high unemployment area the minimum divisor would be 14 weeks. You would find 14 weeks of insurable employment and divide by 14 to get your average earnings, and then take 55% of that. Of course this is much more significant in eastern Canada, where there's seasonal work.

That leads us into small weeks, which I'm sure many people have heard a lot about in terms of the press. And in January of this past year when we changed to the hours-based system it did create some anomalies, particularly in eastern Canada.

Prior to the change to EI when we were on a weeks-based system, if someone worked less than 15 hours in a week that did not count as insurable employment. Consequently, when their rate was calculated, those weeks where they worked a short number of hours were just not part of the calculation.

When we changed to the hours-based system, which gave people credit for those small weeks, if you will, in terms of qualifying for EI—and it was a particular advantage to people who worked part-time or at more than one part-time job—it created a disincentive in the sense that when people took that amount of work it now figured into the calculation of their benefit rate. Therefore when they got to the end of their period to go on claim, those small hours were calculated into the overall and it would in fact in some cases bring down people's claims rather dramatically.

So we put in place some adjustment projects to study this and try to understand it a little better. There are two types of projects operating in the country.

In eastern Canada we are bundling the small hours of weeks so that if you have two or three weeks of very few hours you can bundle those together, add them up to get one large week of work, and then calculate it into your calculation.

In western Canada, we're experimenting with another approach to it, where we are just ignoring that in the calculation, which is somewhat similar to the way the calculation was done in the past.

• 1020

Those are running, and quite favourably, I might add, in terms of resolving that problem. They were 18-month projects, so they will run out in November 1998. We're studying the impacts of those and looking at longer-term solutions as to how we'll deal with that particular anomaly.

The intensity rule is something that came in with reform, and it basically is looking at repeat claimants. In essence, after June 30, 1996, which is when the first stage of reform came in, any claimant who has been paid for more than 20 weeks of claim on the next claim would be looking at a reduction of 1% from that 55% calculation of their rate. And that would go down by 1% every year, if they were on 20 weeks of claim, to a minimum of 50%. So that impact will be seen somewhat more over time.

It's worth saying that if you're on a special benefit, such as sickness, maternity or parental, then there is no reduction from that intensity rule.

Family supplement is something else that has come in to assist low-income families in terms of providing a bit of a top-up to the actual rate. It's linked to the child tax benefit and calculated in line with that, added to your basic benefit rate up to, of course, the actual maximum rate—you couldn't go over that—or up to 65% of the benefit rate, rising up to 80% in 2000. In our current estimates there are about 350,000 claimants who qualify for this, and it averages about $30 a week to enhance their income supplement. Once again, these people would be exempt from that intensity rule I talked about a minute ago.

Under regular benefits, claimants file a report card every two weeks, and what that kicks in is a computer-generated cheque. It's pretty much automated in terms of how that runs.

There are basically two fundamental rules in order to stay on claim: you must be unemployed or working less than full time, and claimants must be available for employment and be prepared to accept suitable employment. And that bi-weekly report card is how we look at people's situation.

The other two wrinkles that have come in in recent years in terms of qualifying for EI are voluntary quitters without just cause and people who are fired due to misconduct, and they will not get benefits until they requalify under subsequent employment. For just cause, there are some examples there, including sexual or physical harassment, moving to follow a spouse, etc. Not liking your boss isn't considered to be just cause to leave your employment.

Special benefits, which I mentioned earlier, are generally sickness, maternity and parental, generally in the order of 15 weeks with an overall maximum of 30 weeks of special benefits for any particular individual. Disqualifications are suspended if you're entitled to special benefits, so it puts you in a little bit of a different category. As I said earlier, the intensity rule does not apply, and they don't count as part of your five-year claim history.

For sickness it's payable until the recovery of your illness or accident, or the maximum of 15 weeks, whichever comes first, and of course you have to have medical proof of that.

Under maternity it's 15 weeks of benefit. You have to have proof of pregnancy or childbirth. It's payable from 8 weeks before the birth to 17 weeks after, and it can be paid up to 52 weeks after the birth. It's only available to natural mothers, or what we like to call now biological mothers.

Under parental you get 10 weeks of benefits, and that's payable to a person who stays home with a newly born or an adoptive child. It's payable to either mothers or fathers, and it's payable from the week of arrival at home or placement of the child up to 52 weeks. You get an extra 5 weeks if the child has a health condition, either psychological, physical or emotional. It has to be with a doctor's permission, and at the moment the way the act reads, the child would have to be six months of age or older when it comes into the home in order to qualify for that.

• 1025

We have been challenged by the courts on that as being discriminatory according to age and our minister has decided not to appeal this challenge, so that provision will disappear, and therefore any child who comes into the home at whatever age would qualify for those extra weeks. These kinds of benefit can be split between parents or received simultaneously.

Fishing benefits: We could probably do a whole day on fishing benefits and I won't try to get into too much detail, but there may be specific questions. We've tried to give a bit of a broad brush here. As I said before, it is a special regime within the EI act and it basically allows self-employed fishers to have access to the account. Generally the fish buyers, who are either sometimes plant owners or brokers who buy the fish, are deemed to be the employer in terms of collection of payment of premiums.

In essence, the simplest way to describe it is that instead of putting them on an hours-based system, they basically work in terms in income. So a certain amount of income earned would qualify people for the program and then their benefits would be calculated on that. A lot of this flows from the Cashin task force recommendations around how we deal with that.

There are two separate seasons, which is one key point, but I won't go into the details of how those rates are calculated unless there are specific questions. Generally, they are entitled based on the earnings as opposed to hours.

Moving on to the supplementary program I mentioned earlier, those are supplementary unemployment benefits where companies can apply to the commission and receive a capacity to top up benefits in terms of specific situations, training leaves and things like that, up to 95%. Where they have their own maternity or parental plans, they can top up our EI rates to 100% of the salary of their employees. There are about 3,000 approved supplementary plans currently in existence, and about another 7,000 under maternity and parental, which no longer have to be formally registered with us but we keep track of them.

On the earnings for employment, any earnings you get while you're on claim would be deducted from your claim. This is all, once again, reported in this two-week report card that people would send in to us. You can earn up to 25% of your benefit or a minimum of $50 before deductions would begin from that. In the case of fraud, this 25% rule does not apply and all earnings would be deducted if people are misreporting.

Basically, if there are earnings or overpayments, we then just deduct them from future benefits. In the case of separation moneys if you are laid off, these are deducted from your EI benefits, but they don't delay the start of your claim. So you can get on claim, but then we balance it out so that those are taken into account.

Under the taxation benefit repayment situation, which we call clawback, this came in with EI reform in terms of higher-income recipients of EI, linking it to their taxable income. Basically, in a nutshell, if claimants have received EI benefits in a taxation year where their income exceeded roughly $49,000, they'd have to repay 30% of those benefits. That's taken into account as part of the taxation income tax situation.

Then there are different variations on that in terms of the intensity rules I talked about for repeaters. Basically, benefits are repaid at the rate of about 30¢ for each dollar over the income threshold. That's kind of how that works. The first tax year, though, in which the clawback will really be seen will be the 1998 tax year, when files are returned in the spring. So we haven't seen how much impact that has had to date.

• 1030

I've finished off here with some other features of the program and have tried to pick things that would be of interest. We could go on for pages about sideline issues.

I think the premium reduction program is probably worth mentioning. Some employers can qualify for reduced premiums in a case in which they have wage loss insurance plans that cover up to 40% of their workforce. Of those reductions that they get, a certain portion has to be turned over to the employees. We had 40,000 applications in 1996, with a reduction in premiums of about $530 million, so it's not insignificant.

Of course, as part of the commission's responsibilities, we manage the social insurance number as well. Just as an example, we issued 950,000 cards in 1999-97.

Labour disputes are another interesting aspect of the program. Benefits are not payable to claimants who have lost their job because of a work stoppage, but they are payable in certain situations. If people are interested, we can go into that. If sickness, maternity and parental were already in place, of course, claimants wouldn't lose their benefits as a result of a work stoppage.

On overpayments and underpayments, we have up to three years to review claims. We generally do so in a fairly systematic fashion. We call it post-audit. We go back and sometimes find that an error was made or that there was a misstatement of the facts. We then have to sort things out, and we often do so. We have up to six years to recover overpayments, and as I said before, if there are recurring claims, we can take them off future claims. Generally, however, we work out some acceptable way of recovering overpayments. We do write them off if they're the result of an error or something unavoidable that happened, so that we don't put undue hardship onto the claimant. In 1995-96, for example, there were $175 million in overpayments that were established, and we will generally get about 85% to 90% of them back over time.

I'll say a word about fraud. I think it's fair to say right up front, very clearly, that the vast majority of EI claimants do not try to defraud the system. Where it happens, though, we are taking more of a zero-tolerance approach to it, to the point of being able to administer administrative penalties—which we will do. They are quite severe and are meant to be a deterrent to even thinking about fraud. The penalty rate for employees can be up to three times their benefit rate, and it can be up to nine times for employers. We really want to discourage any sort of abuse, and particularly any sort of abuse of the record of employment form. Without going into detail, these can escalate if there are future occurrences, or more than one instance.

As I mentioned earlier around the record of employment, we have the capacity to fine employers up to $12,000, so it's a fairly serious offence. In the legislation now, company directors may be personally liable in these cases, so it's a pretty strong deterrent. In 1995-96, total overpayments and penalties resulting from fraud were in the order of $200 million.

Appeals are another aspect of the program. If people are not happy with the adjudication we have given in deciding whether we pay or don't pay, or how much we pay, as their first line of redress—and this is a free process for any claimant—they can take their disputes to what's called a board of referees. We have about a hundred of them across the country, and they basically sit in communities. An independent chair is appointed, along with a representative from labour and a representative from business. They will sit with the claimants and will hear their concerns, and will hear from the commission as to why we made the decision that we did. A ruling will be made. It's not a legal ruling, it's just a ruling, but in most cases it's acceptable.

If people still feel they haven't been heard, they can apply through the commission to have their case heard before what is called the umpire. We, the commission, manage the office of the umpire administratively, but the cases are heard by Federal Court judges. A lot of the people who sit on these umpire panels are retired judges.

• 1035

If they still are not happy with the decision there, claimants can take their cases to the Supreme Court of Canada. By the same token, the commission can appeal these decisions all the way up as well. Some of those decisions then become jurisprudence in the law, and then affect the way in which we interpret the act and how we adjudicate claims across the country.

In 1996-97, there were about 34,000 appeals in the system. About one-tenth of those went to the office of the umpire, but a very small quantity—in fact, only 127—went to Federal Court in that year.

The next page contains a lot of statistics, but I thought they were worth putting in. You can look at them more at your leisure, but they do give a lot of a volume kind of indication of the magnitude of the program in some aspects. I think the annual number of three million claimants gives a pretty good indicator of how many people we deal with. In any given week, we're dealing with a million people coming and going.

Another key point is that, although I said fraud is a very serious issue with us, it's not necessarily a large portion of claimants who are involved. About 6% may be involved.

The telephone inquiries are probably worth noting. We're moving more to being able to deal with our clients in a front-line capacity with technology—touch-screen kiosks and telephone access. We get 30 million calls a year, and we deal with a lot of those by an electronic, computer-assisted.... A lot of people are just calling to see where their cheque is or how their claim is coming along. We can deal with a lot of them electronically through computerized touch-tone answering, and they can find out that their cheque is either in the mail or will be coming at a certain time. About 70% of those calls are handled without actual agents having to deal with them. I think the final bottom line of 26 million cheques per year is a bit of an indicator of the magnitude that we deal with.

On the financing of the program, it's financed by employer and worker premiums. The current premium rate for 1997 is $2.90 per $100 of insurable earnings for employees. The employer rate is simply 1.4 times that rate. Employees earning less than $2,000 a year get a rebate on these premiums. If they're just working very part-time, that will come out in the tax system and they'll get that rebate.

There's also a program in place for smaller employers. They will get a partial rebate in terms of their premium increases from year to year. Basically, it's called the New Hires program. That isn't the only reason we do it, but it is there to create some incentives for those employers who say payroll taxes are a disincentive for them to hire new employees. If their premiums go up for whatever reason, they can in fact apply to get a rebate back on them. In some situations, if some employers' premiums went up for other reasons, they would get those back as well. But this is primarily an incentive for people to hire new people.

In talking about the financing and the premium rate, maybe I'll just say a word here. There's no question that this has been in the news and the press a lot. We are getting close to the period when the rate will have to be set for 1998.

As for the process, the commission is basically made up of three people. The deputy minister of HRD is the chair of the commission, and we have a commissioner for workers and a commissioner for employers. The commission sets the rate based on a number of factors, basically by looking at economic, fiscal and actuarial analyses. Through the Minister of Finance and the Minister of HRD, a recommendation is then made to the Governor in Council, who can then approve it or not approve it.

In terms of looking at the setting of that rate, the key point is that the commission has to take into account ensuring that there are enough funds in reserve—and covering a business cycle is part of the new act—as well as ensuring a stable premium rate. This results from what happened during the recession in the early 1990s, when the account went into a very serious deficit and we had to increase premium rates dramatically.

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So those are the two factors, and that process is in play. Fairly soon, that will have to be announced in order to be in place for January 1, 1998.

That's my presentation. I'd be happy to provide clarification or take other general questions.

The Chairman: Thank you, Mr. McWhinnie.

This is an extremely large program, and that's as thorough a briefing as I've ever seen done. However, I suspect there will be a sufficient range of questions that we may want to have you back before Christmas, given that I can think of enough questions to fill the time myself. I'm going to ask members to be precise in their questioning, and I'll try to get as many on the floor as I can.

[Translation]

Mr. Crête.

Mr. Paul Crête (Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, BQ): I think the presentation was very clear but it's quite evident that one hour isn't enough to get through the whole thing. I'll put a series of very specific questions and the answers can be given after that.

Is the new rate going to be known before or after November 17? Could the board's criteria be sent to us quickly enough, especially the ones about determination? And what are the statutory and regulatory obligations concerning the annual report that you sent to the House concerning the state of the reform and the way it is being implemented?

The other question is about the demarcation of regions to determine the number of weeks of work necessary. Have you looked at decreasing the size of a given territory? If you take L'Islet, in Quebec, for example, that has just been joined to another region and that's gone to a requirement of 18 weeks of work whereas before is was only 12. Besides, the neighbours in the region next door don't have the same regulations. So I'd like know if it's possible to have more precise regions.

I'd now like to make two or three comments. I'm very happy to hear you say that this regime is not the victim of widespread fraud. If I look at the figures, I see that you have 98,000 abusers for 3 million beneficiaries which gives a maximum rate of 3%. There are certainly far more people breaking speed limits and probably more income tax evaders than unemployed people defrauding the employment insurance plan.

My last question will be to ask you whether, in the area of insurability, the steps taken between Revenue Canada and Human Resources Development Canada will lead to having the insurability evaluation done by the Human Resources Development Canada offices rather than those of Revenue Canada.

I know that there's a joint committee of the two departments on that and that a process is under way, but at this point we still have a terrible number of problems and delays in the area of insurability.

My last comment has to do with the information disseminated, especially to the smaller employers, concerning the risk there is of having to pay $12,000 for a very minor fraud like employing someone for a week to allow him to accumulate the number of hours necessary to get his benefits. It seems to me the information isn't transmitted very well if at all. In view of the size of the penalty, it would be important to have better information. I noted the president said that we'd have an opportunity to review the matter in depth.

[English]

Mr. John McWhinnie: Thank you very much, Mr. Crête.

On the new rate, I can't give you a specific date. As I said earlier, the process is in play right now. It obviously has to be done fairly soon in order for the forms, etc., to be in place for January 1. In past years, it has generally been around that time—

[Translation]

Mr. Paul Crête: Not during our parliamentary break, I hope.

[English]

Mr. John McWhinnie: If your point is whether or not there is a specific commission meeting, as I say, there are no specific dates set. That it generally has to happen before the end of November would be a fair answer, though.

As I said briefly, there are two criteria for setting the rate, as outlined in the act. The commission has to take into account ensuring a stable rate so that it isn't going to have to fluctuate greatly, and ensuring that there is enough of a reserve to cover a business cycle or, in other words, a potential downturn in the economy.

• 1045

Those are the criteria, but there are a lot things they take into account and get a lot of advice from. One of the key things the two commissioners do as a result of this is consult a lot with their constituents, both the employer and the worker communities.

There is a range of things, but the precise two elements in the act are the stability and the business cycle.

In terms of mandatory obligation for a report to Parliament, as part of the EI reform there was an obligation for a monitoring report to Parliament. That is being worked on. It's a little early in terms of having concrete data.

In terms of the timing of that, I might turn to my colleague Ms. Carroll. I don't think there was a specific schedule for that.

Ms. Diane Carroll (Director, Employment Insurance Policy Directorate, Department of Human Resources Development): Under section 3 of the act it states that the commission will submit the report to the Minister of HRDC by the end of December. The commission has to actually give it to the minister by December 31, 1997. The minister then has 30 sitting days to table it in the House. So 30 days after whatever date he receives it, the latest date being December 31, he must table it.

[Translation]

Mr. Paul Crête: There are certainly other answers.

[English]

The Chairman: Thank you.

Mr. John McWhinnie: The next issue you raised was on the allocation to regions. I think your question was whether there was an intention to reduce. Certainly from our perspective there isn't any—

[Translation]

Mr. Paul Crête: Or increase...

[English]

Mr. John McWhinnie: —motive or particular issue. Statistics Canada works on this. Our actuary for the program is involved in that process. This is always a delicate issue because in any region you have a border. Often that is a street or a neighbourhood, so somebody is in one economic region and his or her neighbour might be in another economic region. It's an issue that is fundamental to the whole nature of having variable rates and whether people qualify.

As Ms. Carroll has just indicated, every five years there is a major review of that. Where there appears to be an inconsistency that may be unfair, it's looked at. But there isn't any specific agenda in terms of trying to reduce those.

I appreciate your comment on the fraud. I think I'll ask Gordon McFee to answer on the Revenue Canada issue.

The Chairman: Perhaps we can hold off on that right now. I note I have four other questioners and about 10 minutes left.

Mr. Crête, we'll bring that forward perhaps at a subsequent meeting.

If I may, I have Mr. Wilfert, Ms. Vautour, Mr. Thompson and Mr. Anders. Mr. Wilfert.

Mr. Bryon Wilfert (Oak Ridges, Lib.): Thank you, Mr. Chairman. I have two short questions.

First of all, on the issue of appeals, members' offices tend to get a lot of calls, particularly since there have been cutbacks in staffing and that. What is the role of a member, particularly when there is an appeal before the board or before the umpire? People ask for letters, they ask for all sorts of interventions.

Second, what is the cost of appeals? You have a significant number, almost 34,000, to the board of referees alone. What are the criteria for an appeal? How is that administered?

Mr. John McWhinnie: On the question of the role of the MP, there isn't a specific role in our process. As you say, you are there to support your constituents. If a constituent has a beef with us, the board of referees is there to have a factual, open and fair hearing of that situation.

Sometimes we get to a board of referees and information we haven't been aware of is brought forward. That can have a real bearing on the hearing. In this situation, if people are asking for assistance, that might be a place where we could help deal with that.

• 1050

On the criteria for an appeal, there really are none, in the sense that anybody has a right to appeal the decision. Sometimes we can deal with those administratively because they don't understand why we've made that decision, but if they still feel they have been wronged they have that right to appeal. In other words, a lot of those appeals are fairly straightforward, but there is no turning them off.

The cost is in the neighbourhood of $10 million per year to administer that whole appeals function. It isn't a lot in terms of the magnitude of the program, but there is a right of appeal for everybody in the country to be able to do that. There have been some cutbacks, it's clear, but we have come out of a period of backlogs and there are not the waiting periods there were before.

The Chairman: Mr. McFee, do you have a comment?

Mr. Gordon McFee (Director, Policy and Legislation Development, Insurance Policy, Department of Human Resources Development): Two seconds, Mr. Chairman. I just wanted to let you know a briefing is being given tomorrow morning to MPs' assistants, particularly assistants who work with this kind of thing. I'll be giving that briefing. I think it's even in this room; but it's around here somewhere. Part of what will be in the briefing is exactly the question you asked: the role of the MP's office on appeals and the best way we can serve you and the client, obviously, through that process.

It might be helpful to your assistant, sir.

The Chairman: Ms. Vautour.

[Translation]

Ms. Angela Vautour: Good morning. I'd like to be able to spend five hours with you, but I only have five minutes. This matter is one that is dear to my heart as I'm a seasonal worker from the Atlantic region. You mentioned the Atlantic several times and it's quite true that the changes brought to unemployment insurance have affected the Atlantic region very much.

I have a few brief comments and then I'll have a few short questions.

I find it rather strange that the whole country is busy with this pilot project while it was clear, even before the legislation was passed, that it was already known that one hour would be equal to an insurable week. So it is clear that the committee that is implementing the new legislation was very much aware of the situation. I was personally very active in this whole matter in New Brunswick and I made sure that certain MPs like Andy Scott knew very well that I had a good understanding of what was in their bill and that one hour was equal to one week.

I wish to make it very clear that it certainly was no big surprise for the department since I am the one who apprised them of the situation. I would therefore like to know whether steps have been taken to ensure that the problem is rectified once and for all and that the Act is changed.

It is a big problem in Atlantic Canada. A lot of people work in the plants two or three hours a week in the winter. So I think it is important to review the maximum number of insurable hours of work. The problem must be resolved.

There are also fraud investigations. I would like to congratulate you on admitting that for a long time fraud was used as a pretext to make changes to unemployment insurance. And now, you yourselves are even saying that is not the central problem in the system. I therefore think the real reason must be found, but I also think that everyone knows what it is.

As for the investigation, I think you have to see what is happening with those who qualified for unemployment insurance, who have received unemployment insurance cheques for three years and who are now asked to account for them.

You spoke of eliminating the overpayments. There is no such thing. I know people who have annual salaries of $15 000, $22 000 or $25 000 and who have a family, and who are being asked to reimburse sums of up to $7800. The government refuses to disregard the overpayment. I think we should start putting a little more human kindness into the decisions being made.

You spoke about client service. That is our major concern. The Buctouche employment centre, which served 5000 clients, was closed. First of all, those 5000 clients could get access to the employment centre without making a long-distance call.

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Now, those 5000 clients must call the 1-800 number in Bathurst and leave a message. Bathurst calls back Buctouche, and leaves a message for the client to call back. Finally, only a small number of them get through.

[English]

As I say, I need hours, but I'm trying to do it in five minutes.

[Translation]

People used to get their first weekly cheque after a four-week waiting period, whereas now, they must wait 8 weeks before getting that first cheque. I get tons of phone calls about that and even the calls that were for the neighbouring member of Parliament because he is never in his office.

So you have to be realistic. When people who need their weekly $150 or $200 cheque wait up to 8 weeks to get their first cheque, you can't say that client service is your first concern.

I forgot to talk about a process that used to take 15 minutes and now takes two hours: filling in the forms at the employment centre. And when I say two hours, that is a minimum. So you can't say client service has improved.

There is also the duration, but I will stop here. All in all, I am very disappointed with the current unemployment insurance system. It is not employment insurance and that is very disappointing.

[English]

The Chairman: Thank you very much. You have certainly set a standard that I'm sure Mr. Crête will try to live up to.

[Translation]

We will save that for another time.

[English]

Mr. Thompson and Mr. Anders, I will give you a bit of time, but we are right up against the deadline for this, and I do want to get in the other group, which is equally large. I would also remind members that we will have time for another go at this in the next series of meetings.

I would just ask Mr. McWhinnie to make his response very short.

Mr. John McWhinnie: I'm conscious of the time. I'll try to be very brief. You have covered a wide area.

I think the short answer on the small weeks issue is that we have recognized that as a problem. We have put the pilot projects in place and we're looking at those in terms of studying those for what sort of permanent solution would be satisfactory, given the situation.

Another quick point about compassion—that was the word you used—on some of the overpayments. We are looking at that whole policy. In fact, speaking of appeals earlier, we did have a Supreme Court decision that asked us to look at extenuating circumstances in the period overpayments are adjusted.

About client service, let me just say it is a priority. We are very concerned about it. We have had to downsize our department considerably, by 5,000 employees, by a number of points of service. We are moving to what we hope is a more efficient electronic telephone capacity for people to apply and get information on their claims. That isn't always necessarily an instantaneous improvement in service, but we are consciously concerned about that. It is a priority. We measure those indicators of speed of service and quality of service on a regular basis and our minister is extremely concerned when people have to wait for cheques, which is unreasonable. That is a high priority in terms of our delivery.

Thank you for your comments.

The Chairman: Mr. Thompson.

Mr. Greg Thompson: Thank you, Mr. Chairman.

To get back to the changes in the act and the surplus that has built up in that fund, I submit to you the changes to that act in 1996 were put in there for one purpose, and that was to increase the amount of surplus in the fund and to be used by the Minister of Finance simply for his own political purposes.

At this time, at the end of this fiscal year, as you know, there's going to be over $12 billion surplus in that fund. What really angers me is that with the changes to that act, it then becomes a political decision by the Minister of Finance whether those rates are increased or reduced. I submit to you as long as we have the present Minister of Finance, those rates are not going to be reduced.

What really angers working Canadians, I think, and most business people, is that $2.90 rate per $100. If it were reduced even to the $2.30 level it would create 170,000 jobs in this country.

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The other part of this of course is the fund itself and the sort of mean-spirited changes brought about in 1996, which are basically hitting the people in society who need the help the most. If we go back to the people they've hit in this act, we see that they're hitting repeat users. For example, they're hitting people who are self-employed in the fishing industry, and of course in that general sense there's been a reduction in the duration of the number of weeks, and the premium amounts have been increased as well, so we're hitting the people who need help the most.

I'm talking, Mr. Chairman, about a part of the country where we do have double-digit unemployment, but I'm not talking about the 10%, 11% or 12% range; in parts of my province, New Brunswick, we have 40% unemployment in some regions. These are the people who need the most help.

I'm telling you that I think it's unconscionable for the government to sit on a surplus of $12 billion when there are people in the poorest part of the country who need help. They need help desperately. And the question is, what do we do with that surplus? Do we simply apply it against the debt?

My feeling—and I think it would be the feeling of most people with a social conscience—is that the money should be used for training programs, entrepreneurship programs and programs to get at least some of our younger people into the workforce, Mr. Chairman.

I'll conclude by saying that the Auditor General states the same thing. He says we do have an adequate reserve now, and he's saying there should be more transparency in the act, Mr. Chairman, along with an actuarial analysis of the fund so we can determine what that rate should be. It shouldn't be a political decision made by the Minister of Finance, Mr. Chairman.

The Chairman: Thank you, Mr. Thompson and Madame Vautour. Because you're guests here today, I will let you make those statements, although I suspect the statements that you've made to these witnesses are really statements that should be made to the minister. They are policy questions that the minister has to deal with, and I don't think it's particularly fair to expect Mr. McWhinnie or Mr. McFee to respond—

Mr. Greg Thompson: Mr. Chairman, my question would be—

The Chairman: I would also like to note that the Auditor General was here earlier in the week, and there was in fact a statement from a chief actuarial officer that the surplus should rise to $15 billion in order to sustain the kind of cyclical nature of the fund.

However, I invite you to come back when the minister is here. I think we could have a very healthy and useful debate on that particular question.

Mr. Greg Thompson: Thank you for your generosity, Mr. Chairman. I'll be back.

The Chairman: Thank you. I would appreciate that.

Mr. Anders, you had a question.

Mr. Rob Anders: Yes, I have two brief points. First, for those people who are self-employed, for example hairdressers, my understanding—

The Chairman: You're not making a comment, are you?

Mr. Rob Anders: No. I'm asking if there has been any consideration of allowing people who are self-employed—like hairdressers—to opt out of paying into the EI premiums because they have no ability to collect. For them it basically amounts to a tax. Has there been any consideration of that?

Secondly, of course we've heard talk about the EI surplus today, about how it's $12 billion and should go to $15 billion, etc. I'm just wondering what we're expecting for yearly surpluses in the future and whether we can predict what this overpayment surplus will probably be.

Mr. Gordon McFee: With respect to hairdressers, barbers, taxi drivers...there are three or four different kinds of occupations like that which fall between the cracks, in a way; that is to say, they're somewhere in that nether world between self-employed and regular workers, if you like. There's a special set of rules for those people. I could send them to you.

The bottom line is that if the person owns the equipment, owns the chair and all that kind of thing where they do their work, as opposed to the owner of the shop owning it, they're self-employed. If not, they're regular workers. It really depends on their particular situation. There's not a holistic or monolithic rule for that.

The Chairman: Thank you, Mr. McFee.

Mr. Anders, did that answer both of your questions or just the first one?

Mr. Rob Anders: That answers the first one.

As for my second one, right now we're looking at a $12 billion surplus in the EI account. Some people have said it requires $15 billion. I'm just wondering where it is expected to go if we're going to be adding how many billions over the next few years. Where is this thing going to wind up? Do you have projections?

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Mr. John McWhinnie: Well, the whole status of the surplus is clearly indicated as to what the rate is set at. The rate for 1998 is not set yet, and where it would be set prior to that is what will determine that. So I would only be speculating, and I think I would defer to the chair, as we did with the other questions, as perhaps a question best delivered towards the minister.

The Chairman: It's a useful debate, but it should take place with the minister.

I have two, I'm told, model interventions in that they will be brief and concise. Mrs. Chamberlain.

Mrs. Brenda Chamberlain (Guelph—Wellington, Lib.): Number one, I just want to address Mr. Thompson's point. He is incorrect. In the last three years this Liberal government reduced EI premiums three times. So I want to put that on the record. It's important to have accurate information if we're going to throw things around in the committees.

Mr. Greg Thompson: Well, I don't agree.

The Chairman: Careful, a debate might break out here.

Mrs. Brenda Chamberlain: Second, to Madame Vautour's point about the pilot projects, I think the pilot projects are a good idea. However, they have been put in place at the expense of the rest of Canada, quite frankly, and to the benefit of eastern provinces. We have to realize that. The short weeks in EI are wrong. There's no question that we don't have that right yet. If someone works for one or two days, they are better off to decline the work. We have to fix that. That's still a problem, and because you have now excluded regions in the east of Canada with pilot projects, we're carrying the brunt of this in the rest of Canada. So we have to fix that. We have a major problem.

The Chairman: Mr. McWhinnie, did you wish to respond?

Mr. John McWhinnie: I'd like to make a quick response on the pilot projects. Pilot projects are running across Canada in high unemployment areas, and the defining factor for qualifying for pilot projects, those economic regions we talked about, is based on high unemployment areas. So they are across the country and we are in fact using them to understand what—

Mrs. Brenda Chamberlain: But the bulk are in eastern Canada.

Mr. John McWhinnie: Twenty-nine altogether.

The Chairman: Mr. Tremblay, I promise you one incredibly short question.

[Translation]

Mr. Stéphan Tremblay (Lac-Saint-Jean, BQ): I have a very simple question and it will be quick. If you have any statistics on those who were entitled to employment insurance in the past but who no longer are, I would like to have them. Just like my colleague, I used to be a seasonal worker and I can tell you that right now there are bush pilots who would normally have qualified for employment insurance but who are no longer entitled to it. Do you have those statistics?

[English]

Mr. Greg Thompson: Mr. Chairman, just for clarification, I disagree with the comment made by the member opposite, because today the rates are too high—

The Chairman: Sorry. Thank you. Evocative statements produce evocative responses. I'd like to keep it on questions, please.

Mr. McFee and Mr. McWhinnie, did you catch Mr. Tremblay's question?

Mr. Gordon McFee: Yes.

Mr. John McWhinnie: Yes.

The Chairman: Thank you. A very brief response, please.

Mr. Gordon McFee: We will see what information is available and supply it.

The Chairman: Thank you.

That concludes this. We have one more set of witnesses, on income security. However, Mr. McFee, Mr. McWhinnie and Ms. Carroll, thank you very much. I appreciate it.

If you're supplying information in response to requests, I would ask that you supply it to the chair of the committee and he will undertake to circulate it to all members.

Thank you very much. We'll take a 60-second break to move out one group and move in the new one.

• 1109

• 1114

The Chairman: Let's come back to order and get started.

This portion of the briefing is on income security programs. I' like to welcome here Ms. Drummond, director general of income security programs; Mr. de March, director of legislation; Mr. Taylor, director of the disability and reconsiderations division; and, I want to note, Mr. Steve Goldberg, who is here as the project manager of income security programs redesign.

Mr. Goldberg, I should tell you, is also the director in the Manitoba region. During our little dampness last spring he worked extremely hard. He had many of his staff out on the sandbag lines and worked hard to get us some youth assistance programs to help people clean up. It was really a model of how the department can work with the community, and we really appreciated it.

Welcome to all of you. As was previously done, Ms. Drummond, I assume, will lead off and start the process.

Away we go.

• 1115

Ms. Cathy Drummond (Director General, Programs Directorate, Income Security Programs, Department of Human Resources Development): Thank you very much for inviting me here today. I want to talk briefly about income security programs and what we do, and the programs we manage. Then we'll be very pleased to answer your questions.

Income security programs administers the Canada Pension Plan and the old age security program. They have been around for a relatively long time, as you know. Old age security has been around since the 1950s, and the Canada Pension Plan is about 31 years old.

Our objective is to develop and deliver the programs for seniors and their spouses, the disabled survivors and migrants. It's important that we include the other beneficiaries, as well as seniors, of those programs. We pay in excess of about $40 billion in benefits each year, in about 7.5 million separate payments a month.

Of the two programs, the Canada Pension Plan is a contributory program, contributed to by workers and their employers. It provides benefits to most Canadian workers and their families in the event of retirement, disability or death.

Old age security, on the other hand, is paid from general tax revenues. It provides retirement income to Canada's seniors in the form of a basic old age security benefit. For lower-income seniors there is also the guaranteed income supplement, or the spouses' allowance.

Our beneficiaries include, at one point or another, most Canadians—at the moment, 3.8 million seniors, 380,000 early retirees between the ages of 60 and 65, 292,000 disabled Canadians and 106,000 of their children, 790,000 widowers or widows, and 95,000 orphans. We also count as our clients the 10 million Canada Pension Plan contributors.

That's our clientele at the moment. We're expecting about a 26% increase in our clientele over the next 10 years.

In order to meet that challenge, we have to look at our administration. We are going through some changes. We want to be able to offer in-person service at all of the 300 human resource centres across Canada, but our push has been to try to move as much as possible to either written communication with our clients or telephone. This is the most efficient service in terms of both cost to the government and our responsiveness to the clients.

We have organized in seven main telephone centres across the country now. We have ten mail centres. We have just over 3,000 staff specifically dedicated to income security programs.

Our business volumes were about 1 million client interviews over the past year; 3.5 million telephone calls; and 2.3 million applications processed. So we've had a fair volume of business, which, again, is increasing every year.

We have a couple of major challenges that I think you've probably heard about, one being the ISP redesign project. This project was initiated over 10 years ago with the aim of upgrading our quite outdated technology—our computer systems are about 30 years old in both programs—and to streamline and improve the business processes in the income security programs.

We wanted to build a system that would ensure that our payments were more accurate, that it would be more easily adaptable to legislative change and that we could modernize our delivery system.

We have recently had an independent risk assessment that concluded that the project as it was designed and the objectives were valid, but that the time and money constraints dictate several changes in the implementation. So at the moment our plan is to try to capitalize on the improvements we've made to date in the project.

Steve will be able to talk to you later about that if you would like to know more.

We are working on the maintenance of our current systems, preparing them for the year 2000, and on the implementation of any legislative changes. Our longer-term aim with the project now is to try to do it in smaller and more manageable chunks, rather than by a major redesign of the four systems we're now running into one.

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The other major challenge the program has been facing is on CPP disability. We had, as you probably know, a major increase in caseload. It nearly doubled from the mid-1980s to the mid-1990s, although you need to note that most industrial nations went through the same increase as we experienced here in Canada. We've had a marked increase in workload, and now we have a marked increase in appeals, and some backlogs with the review tribunals and the Pension Appeals Board.

We have, however, seen a significant reduction in beneficiaries over the last two years because of some administrative changes we've made. We feel we now have the handling of initial applications well under control. We've also recently regionalized our operations in disability, hoping to put our operations close to the clients and in the future be able to benefit from some partnerships with workers' compensation boards and other providers of disability services.

I would be very pleased to talk to you about our planned improvements in CPP disability as well, but perhaps I should leave it there and let you ask questions.

The Chairman: Actually, as you are going through this, it strikes me that it's a difficult brief in the sense that CPP is undergoing fairly substantial changes right now. The seniors' benefit this committee will be struggling with into the new year, although I understand Mr. Goldberg will have shaped up so well that it will go through this committee just like that.

Mrs. Brown, perhaps you could go first.

Ms. Bonnie Brown: As an MP with a constituency office, as far as your outfit is concerned, my major problem is with CPP disability. The problem revolves around this. You're saying the incoming cases are now under control. I imagine they are smaller in number than they were in the last few years. Have the criteria not tightened up?

Here's the problem we face out in the ridings. People know other people who are on CPP disability. Some of those people who got it ten years ago jogged over to my office in their Adidas suits. At the same time in my office is someone who is seemingly, to my eyes, so crippled up and shaking and pale and sick that it's obvious to me, someone who isn't a medical person, that this person can never work. The doctor has said as much. But this person has been turned down and we're trying to help them write an appeal.

I think the reason your appeals are up is that the initial applications are being screened so much more tightly to keep the numbers down. But it's very difficult in a community when some other fellow, with rosy cheeks and Adidas on, is already on the program and the new applicants have to....

I'm just asking people in my office, are you confined to bed forever? If they say no, I say, well, then you don't have much chance.

It seems to me the criteria have gone from being far too loose to being far too tight. I feel if they are not up in their bedroom flat on their back all day, 24 hours a day, probably they won't get it. That has been my experience with all the ones who have come through my office.

Ms. Cathy Drummond: We did write new guidelines in response to some criticism from the Auditor General and evaluations of the program we had.

What happened is that in the late 1980s not only were we under huge pressure, with a doubling in the number of applications coming in and, quite frankly, not enough medical staff to handle it...so we had a lot of new staff, and at times we were probably inconsistent.

• 1125

On top of that, there were Pension Appeals Board rulings that declared that we needed to take socio-economic factors into account, and that influenced some of the decisions that were made. The Pension Appeals Board has since changed its mind about that, and we have gone back to a very strict reading of the legislation, which says that a person's disability must be severe and prolonged, preventing work of any sort.

Ms. Bonnie Brown: I know what the criteria are. I'm just talking to you about the live body to come into the office.

Ms. Cathy Drummond: Let me get to this. We do have a reassessment program, and we are very pleased if a member of the public wants to suggest a reassessment of one of our clients. On the other hand, severe disability cannot always be recognized by looking at somebody. The person who jogs to your office might indeed be dying of cancer. So you can't judge on how you see someone.

Ms. Bonnie Brown: I understand. These are some cases where I've had the file and had a chance to look at it—in the two cases—and it seems to me it depends.... The big criterion for me is what year they applied in. If they applied in a certain year, it was easy to get.

I did want to ask you about this reassessment thing. Is it only responsive to complaints from somebody, or are you doing sections of your population of recipients on a regular basis, and how big an annual budget does it have?

Mr. Doug Taylor (Director, Disability and Reconsiderations Division, Department of Human Resources Development): I can try to answer that question for you.

In the last three or four years we've enhanced the reassessment part of the program significantly. We went from a very small effort, mainly because of a lack of resources, to a major effort.

We'll reassess clients based on any number of criteria. They could be externally driven. Someone might send in a letter and say they saw their neighbour jogging to the store one day. We'll reassess those clients. We'll also look, though, at other types of information that come to our attention.

As an example, when we first put somebody into pay, when we grant them a benefit, we may determine that there's a chance for recovery in perhaps two years, after an operation or rehabilitation or what have you, so we'll pre-schedule a reassessment and go back and look at that client two years later.

We'll also look at the earnings history information from Revenue Canada. If we spot that there have been earnings reported to Revenue Canada, we'll investigate those as well.

So those are just a couple of examples of the sorts of things we're doing, but the program's been beefed up significantly and the results have been very good so far.

Ms. Bonnie Brown: Have you got a budget line number for me?

Mr. Doug Taylor: Our budget for the current year is in the neighbourhood—let's keep it in the neighbourhood, I guess—of $15 million.

Mr. Rob Anders: I'm wondering if you have young people inquiring into your offices, asking questions, basically protesting or disturbed by the idea of paying into the CPP when a lot of them are possibly considering or have heard about the unfunded liability and whether or not they will actually have a chance to collect.

The other two things are with regard to non-sponsored immigrants, as mentioned in your overview here. Do you know how much money is paid out to that group for both guaranteed income supplement and spouse's allowance?

Ms. Cathy Drummond: On your first question, young people inquiring or expressing protest, I see, more or less, the letters that are coming in to the program on policy issues and I do see some reports of, overall, the kinds of questions coming in on our telephone lines, particularly the line set up for the CPP reform or the CPP legislative process. I wouldn't say that there's a very high number of expressions from young people. There's an occasional letter or call, but very, very few, and I have had no reports from our front-line offices that there are young people particularly coming in to talk about the CPP.

On non-sponsored immigrants, I can't tell you a budget line.

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Mr. Terry de March (Director, Legislation Development Division, Programs Directorate, Income Security Programs, Department of Human Resources Development): Perhaps I can ask you to clarify. With non-sponsored immigrants, of course we're generally dealing with landed immigrants. We have hundreds of thousands, perhaps closer to 1 million, of landed immigrants—hundreds of thousands, anyway—receiving benefits, people who have come into the country and who have been here for a great many years.

We recently passed legislation through the income tax amendments in 1996 dealing with sponsored immigrants and reducing their eligibility to certain benefits. If they are here and receiving eligibility on the basis of an international agreement on social security where they would have very little residence in Canada, their benefits for a guaranteed income supplement would in fact be prorated. Those changes were introduced recently.

As far as landed immigrants are concerned, we have tremendous numbers of people who are receiving benefits. They are treated equally with Canadian citizens under our legislation as lawfully being residents of Canada.

The Chairman: They are under our laws.

Mr. Rob Anders: Would it possible to get a breakdown of the numbers in terms of the amount of money that's paid out?

Mr. Terry de March: To landed immigrants versus Canadian citizens?

Mr. Rob Anders: Sure.

Mr. Terry de March: No, I don't believe it would be. We simply are required within the legislation to check their legal status in Canada, and I'm not aware we have any kind of...we do not track people on whether they are landed immigrants or a Canadian citizen receiving benefits.

Mr. Rob Anders: What about for sponsored immigrants? Is any money at all paid out there?

Mr. Terry de March: To sponsored immigrants? Yes, sponsored immigrants are legally in Canada. We have these new rules, as I was saying, which were introduced last year and which greatly reduced their eligibility to benefits. Obviously non-sponsored immigrants compared with that very much larger population of landed immigrants, other people in the country, would be significantly less—very small numbers, I would suggest.

Mr. Rob Anders: Is it possible to get the numbers on that?

Mr. Terry de March: From us, I'm not sure. I would suggest Immigration would have the figures on people arriving in different categories of legal residency in Canada, and then with the different age bands that could be received.... If they have statistics on that by age, you might be able to derive the number of people who would be eligible.

Of course, for our purposes they still must meet the basic residence requirements under the Old Age Security Act. If they were not in Canada subject to an international agreement they would have to be here 10 years before being eligible for a benefit. It's not a question that a non-sponsored immigrant can simply arrive in this country and receive a benefit automatically. You would have to meet all the current rules of the plan.

The Chairman: Mr. Wilfert.

Mr. Bryon Wilfert: I have two questions. The first one is this. I often get people in my office who qualify for disability pension for CPP under your rules but don't qualify in Ontario for workers' compensation. I don't understand why they can't collect workers' compensation. They say, oh no, I wasn't eligible, or, I didn't meet the requirements, but it's a lot easier if I walk in and get CPP. I've heard that several times from people who say, well, I can do that.

Ms. Cathy Drummond: I cannot quote what the requirements are under workers' compensation in Ontario, but I would suspect these people have not had a workplace injury. That would be the most likely reason why they don't qualify for workers' compensation.

Mr. Bryon Wilfert: Again, they tell you where they have worked and what the situation is—

Ms. Albina Guarnieri: They have been rejected.

Mr. Bryon Wilfert: They have been rejected, yes. And I'm not alone.

Ms. Cathy Drummond: I'm afraid I have no idea. I really don't know what the criteria are for the Ontario Workers' Compensation Board. It varies from province to province. Normally if anyone had an injury that was severe enough to get onto CPP disability, then one would assume it would be severe enough for workers' compensation. I would have to assume that in this case it was not a workplace-related injury, or the person was not covered under a workers' compensation plan.

Mr. Bryon Wilfert: I'm certainly not alone in that observation.

I wondered what kind of review or what kind of analysis is done in terms of provincial legislation as to.... Are the rules too loose in terms of CPP versus others, and why they wouldn't qualify?

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Last, I have a comment. I wish they would rip out all of the phones in the federal government and put real people on the phones, because I'm going to always pretend that I have a rotary dial phone. I hate having to punch 40,000 numbers into the phone. If you're going to serve your clients, the public, I suggest you go back to having real people who can answer real questions answer real phones.

Ms. Cathy Drummond: Well—

The Chairman: Thank you, Mr. Wilfert.

You may answer, Ms. Drummond, if you choose.

Ms. Cathy Drummond: I just want to point out that for a program facing a 40% increase in clients by 2011 there is a very large cost involved in having every phone call answered by a person. However, I quite understand your point.

The Chairman: If I may pose a question, I was interested in your comment that you're expecting a 26% increase over the next 10 years. There's been a lot of discussion about what happens when the baby boom begins to impact upon the retirement numbers, but that won't happen for another 12 or 13 years. So even prior to my cohort beginning to hit this program you're expecting a 26% increase. Is that because people are staying on the program for greater lengths of time?

Ms. Cathy Drummond: That has a lot to do with it. Canadians are living a lot longer, certainly much longer than was predicted a number of years ago. So that's why there's an increase.

The Chairman: It's one of the benefits of a universal health program.

In any event, I see no more questions.

I thank you. I suspect we're going to be seeing a lot of you as we go through the seniors' benefit bill and all of that in the relatively near future.

I have just one final thing in closing. For the information of members of the committee, the Centennial Flame Award will be awarded to Angela Jackson, who was selected through the process we had in place over the last little while.

Thank you very much. That's all until one week from Tuesday, when we'll be having a steering committee meeting at 8.30 a.m. and a full meeting at 9 a.m.