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]

Tuesday, June 8, 1999

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[English]

The Chair (Ms. Albina Guarnieri (Mississauga East, Lib.)): Thank you very much. We have with us today Bob Baldwin, national director, social and economic policy, from the Canadian Labour Congress, and he is accompanied by Mr. Kevin Hayes, senior economist. Welcome, and please begin.

Mr. Bob Baldwin (National Director, Social and Economic Policy, Canadian Labour Congress): Thank you, Madam Chair and members of the committee. I have passed around outlines of the speaking notes from which I'll work. I understand you'd like about 10 minutes of opening comments, and in those 10 minutes I'm going to pass rather quickly over a wide range of issues. I hope that during the question and answer period you'll focus in on the things that are of particular interest to you.

I should let you know that my colleague Mr. Hayes, who's with me, leads our work on unemployment insurance, which I thought might become an issue at some point during the discussion. I thought it would be helpful to have him here with me.

I'll just work my way through the handout material. I should point out that Kevin Kerr, your researcher, sent to me the outline of the HRD presentation material that dealt in large measure with issues related to employment, unemployment, and labour force participation. I thought I'd just comment very quickly on a couple of points that were made during that presentation.

One of the things I thought worth noting is that the cyclical pattern of employment, labour force participation, and so on of older workers is generally the same as that of younger groups, although with different unemployment rates and different rates of labour force participation. I wanted to point that out right off the top, because it does mean that insofar as you're trying to address the employment-unemployment situation of older workers, the way we handle unemployment generally is a critically important issue. In other words, the pattern of ups and downs in the rates of unemployment will tend to swing with overall patterns of unemployment.

Having said that, though, one of the things that is striking about the experience of older workers, with respect to unemployment, is that it's less likely that individual older workers will become unemployed, and when they do become unemployed, they tend to be unemployed for longer periods of time. Another way to look at it is that unemployment amongst older workers is less evenly shared than unemployment among younger workers. The group that become unemployed in old age tend to stay unemployed for long periods of time. There's less movement back and forth between employment and unemployment for older workers.

I think I can skip over a number of the other points that were made in the HRD presentation. I do want to repeat, though, a point that HRD made to you, which is that older workers of the future will be somewhat different from today's older workers in terms of their educational attainment and levels of literacy, which may mean they'll be more receptive to further training and education as older unemployed workers than is the case today. We may want to come back and talk about that.

The one last thing I do want to say about the HRD presentation, and it's also a shortcoming in some of the material that I'm going to put in front of you today, is that I think all of these issues that are being raised with you should be given a second look, specifically from the point of view of the equality-seeking groups. In other words, we're making generalizations about older workers, and I think you need to reassure yourself that those generalizations hold for older women as well as older men, and that they hold for people of colour as well as the white population. I think that's important to bear in mind, as I say, in looking at all of the evidence that's going to be put in front of you.

I guess there's one thing I didn't notice in the HRD presentation to you that I think is important. That is the incidence of very low incomes among the people who are just approaching age 65. The second page of the handout material I have for you I just called “incidence of very low incomes”—and believe me, this was put together in a hurry. But I just wanted to draw attention to the fact that if we look at the age groups 45 to 54 years, then 55 to 59 years and 60 to 64 years, we see increasing portions of those populations with family incomes of less than $10,000 a year, and growing portions with family incomes between $10,000 and $15,000 a year, which are very low incomes.

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Then you see the numbers dropping quite significantly at age 65 years. I had expected this is what the data would show, and indeed they do. Obviously once people get to 65 years of age, we do have a fairly strong basic income support provided through old age security and the guaranteed income supplement. But for the pre-65-year-olds, there is nothing comparable in place. As I say, we do see significant numbers of people with very low incomes.

Although it's not reflected in this one little table I've put in front of you today, I have had the opportunity to look at some data on the sources of income for people in these pre-65-year categories who do not have any earned income. In other words, I've looked just at people who are surviving with no labour force connection.

What I had hoped to see was that very large portions of them would have private pension income. I was kind of disappointed in my search. I found that in the 60- to 64-year-old category only half of the people with no labour force attachment had any private pension income. For the group 55 to 59 years, barely a quarter of them had any private pension income. Yet they had no labour force income at all. So as I say, my hope that large portions of that non-employed pre-65 group would be living on generous private pensions proved not to be the case. It just wasn't there.

I know too that one of the policy concerns around older workers is concern about retirement ages. I know that in policy circles here in Canada and at the OECD there's concern that maybe too many people are retiring at too young an age. Given the passage of time, I just want to note that I think there are conflicting pressures on retirement ages right now. I just want to cite some of them.

There's a policy pressure for later retirement that revolves around rising public and private expenditures on pensions.

I think another pressure for later retirement that's really important to think about is that it's taking young workers a much longer period of time to establish themselves in well-paid jobs. That's going to be reflected in all the critical stages in their life cycles. It's reflected in terms of when they leave home. It's reflected in terms of when they marry, when they have kids. But it's also going to end up being reflected in their age of retirement. It's going to be very hard for many of today's young workers to accumulate long periods of pensionable service with a single employer so that they can retire in their late fifties or early sixties. So that's another pressure for later retirement.

I've also made note here of uncertainty regarding the future of some aspects of the retirement income system. Here I'll spare you my concerns about the fact that the old age security program is only price indexed, not wage indexed, which has important implications down the road. What I do want to draw your attention to here is that there are a number of changes taking place in the labour market that, again, are going to make it harder for people to accumulate long periods of service under workplace pension plans.

The kinds of changes I'm referring to include shifts in employment from sectors where we've had traditionally high coverage, like the public sector and manufacturing, into sectors where low coverage has been the tradition, like the service sector and so on. We have a growing amount of self-employment, we have a growing amount of employment in small firms and establishments, and there's an increasing rate of labour force turnover. All of these factors will combine to make it less likely that people will be approaching old age in the future with long periods of service in workplace pensions.

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On the other hand, there are pressures for earlier retirement. Those are the pressures that might tend to push retirement age back. There are other forces at play that will push in the opposite direction. I think by far the most important one, and the one that annoys me when I don't see it in policy discussions, is people's preferences. In my experience, people love the thought of retiring early on a decent income, where possible.

Over and above that, downsizing in the workplace has been an important source of early retirement. Both our own experience in the labour movement and what we see through statistical data also indicate to us that work processes are becoming much more intense, that people are faced with more stress than they faced in the past. This, again, mitigates against the likelihood of people voluntarily staying in their employment into old age.

The other thing I want to mention is family responsibilities. I was somewhat surprised and disappointed that in the HRD material that was presented to you, when they cited reasons people gave to explain why they retired when they retired, no mention was made of family responsibilities. I know that the general social survey has asked people about that. Certainly, for older women workers, the need to look after relatives is one of the important determinants of when they retire. I guess if we keep going through social spending cuts, that will become an even more prominent reason in the future, so I think it needs to be noted.

With regard to public policies and programs—I'm over my ten minutes, and I apologize, Chair—I'll just pass very quickly on these items, and then through questions and answers you will focus in, I'm sure, where you want to.

Again, let me repeat that the analysis and prescription needs to be looked at through the lens of equality-seeking groups. Having said that, I want to underline the point that if we're going to deal with unemployment of older workers, we have to be ready to deal with unemployment of all workers. You have to make sure that macro-economic policy is oriented toward job creation and stays oriented in that direction.

With regard to income security issues, and I think they are real based on even a preliminary look at some of the data as reflected earlier on in this presentation, I guess the main thing is that we obviously have two general types of programs that are designed to provide income security to older Canadians; namely, unemployment insurance and social assistance that, for the most part, lies beyond the federal domain.

There are things we could do with the unemployment insurance program specifically to address the reality that older workers generally face longer terms of unemployment than do younger people. We could think about things like linking the duration of benefits specifically to periods of labour force attachment. We could also go back and reconsider the 1984 amendment to the plan, under which pension and severance benefits are treated as earned income for purposes of UI.

I also thought it appropriate to draw your attention to the fact that we've actually experimented here in Canada in the past with programs targeted to older workers, like the program of older worker adjustment and its predecessor, the LAB program. On income security, let me leave those out as possibilities.

You should also, though, think about the regulation of workplaces through the Canada Labour Code, part III. Generally speaking, by international standards, I understand in all Canadian jurisdictions our regulation is pretty minimal when it comes to advance notice of layoff. This can be important in allowing workers to prepare themselves to take a new job and in terms of mandatory severance. In Canada, the quid pro quo for workers, the quid pro quo for lax law in this area, was a generous UI program that no longer is quite so generous as it was. You may want to think again about regulatory devices.

I would remind you, too, that several years back the Minister of Labour was quite interested in provoking a lot of dialogue about workplaces, how they're organized, how they ought to be regulated. He did all this under the title Collective Reflection on the Changing Workplace. I think this is quite relevant to your mandate and you might want to think about this further, because, as I said before, the work intensification is one of the important factors that is shaping people's decisions about how long they stay at work.

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The casualization of employment is having important impacts on people's ability to accumulate pension credits. The general lack of formal training in our workplaces is one of the things that may be contributing to the difficulty that older workers have when they are laid off. So, again, you may want to pick that up.

There are clearly a number of training and labour market program issues to get into. I want to note that the current context of resource cuts, devolution, the introduction of skills, loans and grants, is moving us away from a system where workers are actually entitled to training and education. Our sense is that it's undermining the infrastructure that is needed to help move workers from job to job, and we may want to talk about ways of correcting those problems.

There are some related public pension issues, but I won't start on them because, by habit, if I start on public pension issues, I'm hard to stop. I'll stop right here.

Thanks, Chair.

The Chair: Thank you very much.

Mr. Hayes, do you have any comments to make or will you just be dealing with questions? Yes? Thank you.

Madam Ablonczy.

Mrs. Diane Ablonczy (Calgary—Nose Hill, Ref.): We thank you gentlemen for coming. We know you have done some sterling work in the area of helping workers with employment and, unfortunately, unemployment issues, and we appreciate having the value of your expertise here.

I too could get going on public pensions and their sustainability, but I'll spare everybody that.

I want to talk specifically about helping workers with the realities of the workplace, the things you talked about, Mr. Baldwin, the fact that you don't carry your lunch bucket to the dear old widget works for 40 years and retire with a gold watch and a nice pension any more. Employment is much more short term, and changes are likely to take place throughout a worker's lifetime, and particularly now for older workers that is causing some severe hardship.

One of the things I want to get a comment on from you is this area of severance benefits being treated as income. You mentioned that, and I wonder if you could briefly go over the reasons you feel this policy should be revisited.

Mr. Bob Baldwin: They're issues of principle and practical considerations. I'll respond and then invite my colleague to add anything he may want.

At the level of principle, I'd argue that if the pension and severance benefits are not being earned at the time they're paid, if they're earned income at any period in time, they're being earned prior to layoff and not after a person is laid off. I think it was wrong in principle to adopt the position the government did, which was that they're earned income at the time the person is unemployed.

As a practical matter, there are a couple of things to consider. One is that basically we're putting people in a situation where we're forcing them to take their current consumption or their current living out of their accumulated severance and pension benefits by saying they can't have unemployment insurance until they run these benefits down to zero, which means that any role they might play either in providing for a secure retirement or in financing a new small business or something like that is all eliminated. We're basically saying to these people that they have to consume it right now.

Mrs. Diane Ablonczy: So it can't serve two masters. It can't help you adjust to a new line of work and also pay your current living expenses.

Mr. Bob Baldwin: Yes, exactly.

Kevin, did you wish to comment?

Mr. Kevin Hayes (Senior Economist, Social and Economic Policy, Canadian Labour Congress): One of the ironies of all of the changes on severance came at a time when the governments developed a keen interest in self-employment, and the changes that were brought in 1984 cost the older workers in Canada over $1 billion a year in the sense that they had that kind of money to provide for the adjustment. It also happened, ironically, that the changes in the severance and pension rules came at a time when, typically, the majority of layoffs in the 1980s and 1990s were permanent. Unlike the 1970s, where temporary layoffs accounted for three-quarters of the layoffs in a given year, now roughly three-quarters are permanent.

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So from a labour market point of view and the effects it had, and from the point of view of adjustment and providing older workers with the opportunity to use their savings to invest and use what in fact most people regard as assets—savings such as severance and pension income surely are, in the sense of the way it's treated with respect to UI—transferring it as an income stream and treating it as earnings undermined a whole lot of what were maybe laudable labour market objectives. So we've been pushing to have severance and pension income not treated as earnings for purposes of unemployment insurance.

When you look at the changing nature of who receives unemployment insurance, the study we did with Statistics Canada's numbers back in January shows that the only group that has not proportionately, in absolute terms, been hit by the UI changes most severely were the older men, but it was very marginal. They were just barely staying even.

What did happen since 1989 is that older women have been hurt badly. While older men, for example, had increased in numbers—older men meaning those over 45 years of age—older women suffered a 5% drop in benefits. So one of the issues here with respect to older workers is the gender. We believe women are discriminated against, because they are penalized under the UI system for leaving the labour force for child care reasons. So I think in looking at these issues we should distinguish between what's happening to men and what's happening to women.

Mrs. Diane Ablonczy: I have one more issue that I want to explore with you, and others may do the same.

You mention in your presentation the difficult issue of balancing the interests and ability to pay of the younger workforce, who are supporting a lot of our social programs, and the income squeeze that a lot of older people are feeling, particularly as their ability to earn income is diminished for various reasons and the fact that they have no pension benefits to fill in that gap. So as you know, as we all know, there is this difficult balancing act.

One of the things I've been asking witnesses on this issue is if there's more we could or should be doing to assist workers throughout their working life, and particularly as they become older, in preparing before the fact for the kinds of adjustments and changes that are almost inevitable. I wonder if you have done any studies or have any comments on that dimension of the issue.

Mr. Kevin Hayes: I was just going to say on that particular point that with the recent changes to unemployment insurance under the EI Act, Bill C-12, a lot of the infrastructure that provided that very assistance you're talking about, of helping people to adjust—counselling services, training, all of that—was severely undermined with those changes.

Over $1 billion has been cut from income support for training since Bill C-12, or starting just prior to Bill C-12, both from the UI system and from consolidated revenue programs. But on the employment programs to assist non-profit and for-profit organizations, even the provinces did not have the infrastructure in place, as the Canadian Labour Force Development Board has pointed out in their study, when the devolution took place.

So yes, the point you're making about having that kind of ongoing support for people going through this adjustment and to prepare for an adjustment when they're older is simply not there. A lot of what was there is not there any more and hasn't been picked up by anybody.

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Mr. Bob Baldwin: I'd like to add a couple of things. I think that during my presentation I made reference to the possibility of making training through UI available more as a right than it has ever been to date, which could facilitate workers getting access to training and education through their working life. I also think we need to put back on the public policy agenda, at least for debate, the question of why it is that so little formal training is provided at Canadian workplaces for Canadian workers. The government was willing at least to try to create some moral suasion around this issue at the end of the eighties and early nineties. I think it's time to put it back on the table again, which is part of the reason I'm interested in the collective reflection exercise.

Also, I think that both family leave and support for care of family members is a relevant issue, because as I said before, a lot of older women are being forced to leave the workplace to look after relatives and there's no support for that. I know we have very different perspectives on public pensions and their efficacy. From my point of view, they're far more effective, efficient and equitable than private arrangements. And given what I said earlier about the difficulties people are going to have in accumulating long years of service under workplace pensions, I think we actually have to consider strengthening public pension programs as one of the ways of coping with the reality that people want to retire and spend some time outside work.

Mrs. Diane Ablonczy: You and I could maybe talk about that sometime.

It is interesting, though, to comment on your earlier observation about training programs, that new studies have shown that what keeps younger workers bonded to an employer is not profit-sharing and those kinds of opportunities, but it's really training opportunities, opportunities to grow and learn new things. So I think this on-the-job training is very relevant for all ages of workers.

But I'll turn the question over to my colleagues. Thank you for your responses.

The Chair: Thank you. That's a valuable observation.

[Translation]

Mr.Crête.

Mr. Paul Crête (Kamouraska—Rivière du Loup—Témiscouata—Les Basques, BQ): Thank you for your presentation. If you were in the position of having to propose something concrete tomorrow to address the situation in which workers find themselves, what would you in fact propose? I'm talking about workers who are over the age of 50 where their company shuts its doors. They don't necessarily have opportunities to re-establish themselves in the work force. To ensure that these individuals earn a decent income, what key measures would you include in as trategy targeting this group? According to your table, at a certain time in their lives, people are poorer or their situation is more tenuous. Some must be relieved when they finally turn 65 and qualify for their pension. Is there some way, either by looking to employment insurance or another appropriate mechanism, or ensuring that these older workers earn a satisfactory income?

[English]

Mr. Bob Baldwin: Let me take a crack at this, and then I'll ask my colleague to respond.

In terms of elements of the strategy, the first component has to be some reasonable income support, because whatever else these folks do, they have to have some assurance that they can live. Clearly it's most desirable, often from the point of view of the people themselves and from other perspectives as well, that they find gainful employment. And components of doing this include the need for counselling services, the need for access to labour market information, and in many cases the need for access to education and training. Maybe most importantly, they need some specific place they can go where they can be made aware of and gain access to all of the available labour market services they might need.

In the current context, what I want to underline is that our sense is that rather than bringing these various elements together now that would help people move from one job to the next, they're in fact being fragmented at this moment in time through the process of devolution. They're being starved for resources.

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There's one other thing I want to touch on because of some questions I saw being put in front of the committee. It's clear there are going to be people becoming unemployed in a geographic context where the employment prospects are not great, which would mean that another component you might want to add to the full range of programming would be some kind of local economic development programming where jobs are not available right now. I see those as the main components of the program.

I will add one other thing that has been a source of frustration for us for quite some time. It is that our sense is, subject to a special caveat vis-à-vis Quebec, that neither level of government will ever be driven totally from the training and labour market field, and in fact much of the debate about whose jurisdiction these things are in is futile. In the last analysis, both levels of government need to be involved, and we need to spend a lot more time on mechanisms for coordinating activity between the two levels of government rather than debating exclusive jurisdiction.

[Translation]

Mr. Paul Crête: Have you done any studies on the number of affected workers who stand to benefit as a result of active measures and those for whom passive measures are the only solution? Active measures are designed for workers over 50 who lose their job. Their skills are assessed and they re-enter the labour force after being re-trained. However, for some workers, this isn't an option. Have you done any studies? In your view, what measures are viable?

What about re-introducing POWA, the Program for Older Worker Adjustment, either in its original format or with some changes?

[English]

Mr. Kevin Hayes: I'll echo and get more specific on the points Bob has raised.

On the income support side, to give you some specific examples that relate to older workers, we would advocate some measures on the unemployment insurance changes that would essentially give longer benefits to older workers through a scheme something like four extra weeks of benefits for each year in the labour force, for example.

Also, we recommend treating training as an entitlement. By that we mean a person would have the option, under the unemployment system, of opting for training or education leave where they initiate it themselves. Again, it could be structured in a program sense somewhat like, again, for every year in the labour force you're entitled to so many weeks of training under unemployment insurance in which you have the income support.

We are absolutely opposed to the present scheme, which now essentially transfers the burden and cost of training to the individual through a loans program. It's absolutely outrageous to think that a person, when they're unemployed, can obtain a loan. To date, with the exception of maybe Alberta, which has a limited scheme whereby the government provides training loans, no government in Canada has yet come up with a loans scheme that in any way is going to provide the opportunity for the unemployed to receive training. So the present proposal for having workers borrow is simply wrong.

The other scheme we've been talking about is providing extended benefits to older workers, or not necessarily older workers.... But the present method of relating the extension of benefits to the unemployment rate is much too stingy at the moment. In other words, the extension of benefits related to the unemployment rate should probably be double what it presently is. That would bring it roughly to what it was in prior years.

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Right now, as you probably know, 40% of the unemployed have not had paid work in the past 12 months. Older workers have longer bouts of unemployment, and the job search is more difficult.

The other specific thing that has to be done is with respect to the infrastructure that provides for counselling, and that kind of thing. There has to be a lot more support for both government-provided counselling and assistance in working through the difficulties of adjustment, and non-profit organizations that provide that support. But it certainly has to be provided at the front line, and it's not there any more. It's disappearing.

With respect to the local economic development, there have to be schemes that provide for job opportunities locally that will not be provided through normal macro policies. So you would have to have more of those kinds of economic development strategies.

Certainly on the income side you can't talk about adjustment without talking about providing for the basics of paying the rent and paying for the groceries. Until you have an adequate income support program in place, it will not work for older workers.

The Chair: Thank you.

Madam Davies, followed by Mr. Scott.

Ms. Libby Davies (Vancouver East, NDP): Thank you, Chairperson.

First of all, I'd like to thank the CLC for coming today on a very important issue that often doesn't get a lot of attention, and that is older workers and what happens to them when there's massive restructuring and layoffs, and just how difficult it is for older workers to get the help they need, with all the cutbacks we've seen.

After listening to some of the comments you've both made today, one issue I want to ask you to talk a little more about is the training side and what this committee could be looking at in a concrete way, particularly as it relates to the EI fund.

A lot of witnesses and a lot of people have said we need to make sure there are much better retraining opportunities available for older workers, but how do we do that? We've heard about programs in the past that no longer exist, but how do we do that in the future? One of the possibilities the committee has looked at is the idea of individual EI training accounts.

You've already made the point that the idea of a loan or individual workers having to pay for their own retraining is something the CLC opposes. But in terms of some independent financing, I just wonder what your thoughts are on the idea of individual accounts, versus what I think the labour movement has promoted in the past, which is jointly administered accounts, possibly through unions, the employer and the government, where it's a more kind of universal approach.

But as I say, the suggestion is being made that we look at individual accounts. Whether or not they would just be from the worker or have an independent source of financing is something the committee would look at further. The building trades, for example, have been very successful in having jointly administered, trusted accounts. It seems to me we should be building on that kind of success we've had in the past.

I just wonder if you could talk a little about that, as it relates to training or using EI in some way.

Mr. Kevin Hayes: The building trades have negotiated for eons for cents per hour for training. A key part of the success of some of that, particularly as it applied to the apprenticeship training system, was the relationship it had to unemployment insurance and the federal government support for the in-classroom portion of that training.

A lot of that has disappeared, as you know. The federal government support for apprenticeship training was in the range of $200 million a year, and now it's about $10 million, which has had a significant impact. There's a conference this weekend in Winnipeg to look at the stress of the apprenticeship system. We may be witnessing the disappearance of the apprenticeship system unless something drastic is done about it.

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With respect to the individual accounts, I think what we are seeing is a key way of doing that. Through the unemployment insurance system you earn entitlements to training through your UI premiums, basically, and it would operate in both ways, not simply that the employer would tell you when you need training, but also the individuals themselves would have the possibility of deciding to take leave for training. That would apply particularly to older workers who suddenly find that technology requires them to upgrade their skills. That is one way of doing it.

The other important part of it—and its importance must not be underestimated or understated—is what we call the infrastructure that provides that support. We have it through some of our sector councils like the Canadian Steel Trade and Employment Congress, which provides that kind of support for the retraining of workers that are affected, by the steelworkers' union and the employers, and they work cooperatively.

The other thing, which was mentioned earlier, is that employers have a major responsibility in training. I think the Quebec idea of a training levy, which requires employers to contribute up to 1% of their payroll toward training, is very, very important. We have to increasingly see in the workplace that it is where the centre of the training takes place. That doesn't mean you don't do in-classroom training, but certainly the employers have a major responsibility. Increasingly we are finding, as was pointed out earlier, this is a demand our members are making of unions. Training is becoming almost as important as wages in negotiations.

In recent years, the Canadian Auto Workers had negotiated huge training levies or contributions from the employers, and it's somewhat analogous to what the building trades have been doing for years.

Mr. Bob Baldwin: Could I just add one little thing. I think having adjustment contacts, though, it's really important to underline the point that it's probably not appropriate to treat training as a stand-alone service you're going to provide the workers. They often need a package of services, of which training is a really important component. I think just vis-à-vis your proposal, it's got to work...for adjustment, it's got to work in an institutional context where the displaced workers not only have access to the training, but they may need counselling as well, they may need labour market information, etc. I wanted to underline that because I don't think it would be good enough just to give people a cheque and say, go and buy some training.

Ms. Libby Davies: If I could just follow up, I think that's a very valid point. If someone's been with a particular company or an employer for a long period of time, to just sort of spell them off and say “Well, here's your cheque, and off you go; go find your way in this new world” is pretty cruel. To provide the social infrastructure as well and the support components is very important.

In terms of the training levy you talk about, where we've seen that, that's been through individual negotiated collective agreements. Has there been any other instance in Canada...is that something you would foresee under a federal role, to try to mandate some kind of training levy within the federal jurisdiction?

Mr. Kevin Hayes: Well, we have argued in the past that the federal government can do it, and in fact does it to some extent, through the unemployment insurance system. It's not gone to the extent of mandating it. What we're saying is, if you built into the unemployment insurance benefit structure and premium structure the entitlement idea—in other words, that training leave or training is as legitimate as job search in the adjustment process—that's what we've been pushing for. We're essentially saying that training be treated the same as job search for entitlement to unemployment insurance benefits.

That would go a long way, we believe, to furthering the possibility of training almost being mandated. But clearly the idea that Quebec has of requiring employers to shoulder their responsibility for training is...and if employers don't do it, where there are unions, the unions are increasingly putting it on the bargaining agenda.

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The Chair: Thank you very much.

I have a quick point of clarification. When you said that people throughout their working life should have the right to training, and to piggyback onto Diane's and Libby's comments, are you aware that the U.S. Congress has put out a study saying there's a training crisis in the United States and that by the year 2005 they'll have to retrain 70% of their workforce? Do you have any similar studies that indicate trends in Canada?

Mr. Kevin Hayes: No, we don't. In fact, one of the appalling things that's happened around this training debate over the past 10 years is how little information we do have. Statistics Canada, for example, does not do a survey of the training that's provided. It has the adult education and training survey, which is useful, but in that survey you are not provided with the extent of training that is provided, the kind of training, the kinds of courses and so on. So there is an information gap.

In the United States, I think, they're finding as they move toward full employment, in terms of low levels of unemployment, that employers are doing what cannot be done when they have high levels of unemployment, and that is that they have to provide training. I just found that out at a presentation last week on the American situation. So, yes, there's an interesting development there.

The Chair: Thank you very much.

Madam Ablonczy, do you have any more comments?

Mrs. Diane Ablonczy: No, I think we've covered that well. Thank you.

The Chair: Thank you very much. You've been very succinct.

Mr. Norman Doyle (St. John's East, PC): Madam Chair, I have one.

The Chair: Mr. Doyle, please go ahead.

Mr. Norman Doyle: On the unemployment insurance end of it, we've gone from a weekly to an hourly kind of system to qualify for benefits. What has been the overall effect on the workforce in going from the weekly to the hourly benefit system?

Mr. Kevin Hayes: The most important impact has been the incredibly negative impact it's had on women, because part-timers, men or women, are not qualifying. Of course it's having a huge disruptive effect on the adjustment process, particularly for women in the workforce or in a workplace that's dominated by women in part-time jobs.

The major issue with the hourly system is not whether it's hours or weeks; the issue is the threshold. In other words, we went from a threshold of 15 hours a week under the old system to 35 hours, and that's where the problem is. In other words, it's the total quantity of hours that are required.

Administratively, or in terms of systems design, whether it's an hour or a week is not the critical factor; how many hours required to qualify is the critical issue. So the hourly system is fine inasmuch.... I wouldn't want to characterize an increase from 15 to 35 hours as intrinsic to the hourly system, but that's increasingly the way I think some people are seeing it. It's the fact that the hours went from 15 to 35. Then in the case of special benefits the requirement went up an equal amount; in other words, there's 20 weeks by 35 hours instead of 20 weeks times 30. So you have maternity claims dropped out. We think about 12,000 women a year are not receiving maternity benefits that would have been eligible under the old rules.

Mr. Norman Doyle: The latest statistics I heard said that only 37% of the people who are unemployed actually qualify for unemployment insurance. What's causing that? Is it an accumulation of all these changes that have come about to the UI system, or what?

Mr. Kevin Hayes: We'd say there are three reasons. The first reason is the stiffer qualifying rules that have been introduced with each legislative change. But the other thing that probably counts for two-thirds of the drop in percentage of the unemployed covered relates to the fact that none of the changes in the nineties address the changing labour market.

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There are two major outstanding facts with respect to changing labour market. Number one, the percentage of the unemployed who haven't worked in the past 12 months is now 40%. That's a huge increase in the duration of unemployment.

Mr. Norman Doyle: What was that again?

Mr. Kevin Hayes: The percentage of the unemployed who haven't worked, who haven't had paid work, in the past 12 months is now 40% of the unemployed. So of the 1.3 million unemployed, 40% of them have not worked in the past 12 months. So the reference period for unemployment insurance benefits is too short, 52 weeks, and it should probably be 104 weeks.

The other major fact on the changing labour market that we have to take into account is that almost all of the job growth is in what some people call “precarious work”, self-employment and part-time. Again, another 40% of all of the jobs in Canada now are either self-employment or part-time—or 38%, to be more precise. In both of those categories the unemployment insurance system doesn't cover them; really it doesn't protect them. So you have it on the employment side and you have it on the unemployment side, and those changes in the labour market have to be addressed.

The third fact is that 12% of the labour market now is in temporary contracts, so we don't have the permanent detachment. So that again jeopardizes people from receiving UI benefits. So we're at 37%, 36%, because of, we believe, those factors. The cuts obviously are a third of the problem, or the issue, but two-thirds have to do with the fact that the system does not reflect the 1999 labour market.

The Chair: Mr. Baldwin, feel free to jump in.

Mr. Bob Baldwin: I will add one point, because we've tended to talk about training and unemployment insurance as if they're two different issues.

I did want to underline the point that almost all of the federal government's support for training in recent years has been delivered through the unemployment insurance program, and that all of the problems of access to unemployment insurance we've been talking about as an unemployment insurance problem are in fact an access-to-training problem as well. And it's really important that the committee remember this, that these declining percentages are declining percentages of people who will be eligible for training support.

Ms. Libby Davies: So just to be clear, then, if you're one of the unemployed workers who is no longer eligible for EI, then you no longer have access to those training things as well.

Mr. Bob Baldwin: Yes. That's right.

Ms. Libby Davies: So that's pretty devastating.

Mr. Bob Baldwin: Yes, because almost all non-UI funding for training has been eliminated.

Ms. Libby Davies: What was there?

Mr. Bob Baldwin: At one point it was more than a billion dollars a year, and it was especially important for people with no recent labour force attachment. It was important for immigrants. It was important for women coming back into the labour force. It was important for people who had been unemployed for such long periods of time that they were no longer able to qualify for unemployment insurance.

Ms. Libby Davies: And they no longer could—

The Chair: Thank you very much. This was a presentation well worth waiting for, and thank you. It will help us in our deliberations.

The public portion of this meeting is adjourned. We will take a 10-minute recess and then we will come back in camera.