HUMA 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, 27 February, 2001

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[English]

The Chair (Mr. Peter Adams (Peterborough, Lib.)): I see no other media here. As you know, this meeting will be televised from gavel to gavel. Shortly I will introduce our witnesses.

I would make some comments on the meeting the steering committee had last evening. We have a report from the steering committee. It was suggested that because we have witnesses, we would hear the witnesses first so they won't be delayed. Then at the end of this meeting—so it's important that members stay—we would consider the steering committee report.

Basically, just so you know, it deals with a course of action from now until the date on which we report back to the House of Commons. It deals with the witnesses we will be hearing on Wednesday and at our regular meeting time on Thursday. They will be named. It does not include the names of witnesses in the following weeks because we're still at the point of putting them together in groups in a balanced way, which we agreed at the steering committee last evening. So you're comfortable with that. The steering committee report will be following our witnesses today.

We're continuing our consideration of Bill C-2 on the Employment Insurance Act. We're very pleased to have as our witnesses today the Canadian Federation of Independent Business: Catherine Swift, who is the president and CEO—Catherine, we welcome you; and Garth Whyte, senior vice-president of national affairs—we welcome you also. For the Canadian Restaurant and Foodservices Association, we have Joyce Reynolds, who is the senior director of government affairs. Joyce, welcome. And Don Webster is the vice-chair. We're very pleased to see you.

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We know it was relatively short notice. I think you know that in this meeting and our previous meetings we've been trying to get these hearings going as quickly as we can. So we greatly appreciate your appearing here today. Our normal procedure is to have short presentations consecutively from the witnesses. Then following the second presentation there will be questions as usual from both sides of the House.

In our agenda I see we have the Canadian Federation of Independent Business first. Are you comfortable if we proceed in that order? Catherine, either you or Garth, if you'd make your presentation now I'd be most grateful.

Ms. Catherine Swift (President and Chief Executive Officer, Canadian Federation of Independent Business): Thank you very much, Mr. Chairman. It will be me and Garth who will be splitting up our presentation this morning.

We've handed out copies of our presentation. And don't be intimidated; it's mostly charts, so they shouldn't be too difficult to get through. We have also attached a study that we publicly released just last week on the shortage of qualified labour, which is related to the issue of amending the EI bill.

Currently the Canadian Federation of Independent Business represents over 100,000 small and medium-sized businesses right across the country in every sector of the economy. As you may know, we are a non-partisan, not-for-profit organization. The way we operate as an organization is our policy positions are formed on the principle of one member, one vote. So any views we espouse today are based on surveys, or indeed this particular package is based on a number of surveys of our members over a period of time on related issues.

We have a network of representatives across Canada who physically go and personally visit each of our members at least once a year. As a result, we cumulatively do about 3,500 of these visits every week. We actually tabulate data weekly as well. So we find we do, as a result of this system, have quite a decent handle on an ongoing basis on the views of Canada's small-business community.

What we found with some of our ongoing surveying of our small-business members is that employment insurance is the second-highest concern currently for our members, following the issue of total tax burden. That's number one and has been number one for quite some time. We see that EI is a major concern in every region of the country. Some of the charts you'll see appended exemplify these results in graph form.

It's also important, I think, to note that our members in the Atlantic region and other areas of Canada who have relatively high unemployment rates are significantly more concerned about EI than are some other regions in the country. The concern we see among our members is really focused on three issues.

Currently owners of small firms are concerned with the impact that the EI program has on their inability to get and retain qualified people. They find the costs associated with the EI program are placing a disproportionate burden on small firms. This EI is of course a job-killing payroll tax. Finally, the EI surplus fund is much too high and of course the majority of it is being used for non-traditional EI purposes.

Just speaking to the shortage of qualified labour, this report, called “Help Wanted”, which we released just last week and is appended to our presentation, showed the results of actually a couple of surveys we did on the whole issue of shortage of qualified labour. We'd been hearing about this in anecdotes from our members for quite some time, growing over a number of years actually. We felt it was high time that we quantified this a little better. With these two surveys, one of them had over 22,000 respondents and the other had just under 10,000 respondents. So they were based on some fairly decent sample sizes.

What we found overall was that almost half of our members were finding the shortage of qualified labour to be a concern. Even in Newfoundland, where the unemployment rate is currently close to 17%, one-third of our members were concerned with labour shortages. We extrapolated the data from our survey to include the number of firms in the Canadian economy. We found a very conservative estimate where between 250,000 and 300,000 jobs were not filled last year because businesses were not able to find suitably skilled labour.

Now, there's no one cause of this shortage of qualified labour. It's a complex problem, and there's no simple silver-bullet solution. But we did ask our firms what they felt were the main reasons they were having trouble hiring the people with skills that they needed. The number one reason was that they simply couldn't locate enough people in their region with the appropriate skills for that particular firm.

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However, we also had one out of four respondents state that they found that in their area, being on social assistance was more desirable than working, and this presented a disincentive to employment as well. In fact, in the Atlantic region, over 30% of respondents in each of the four Atlantic provinces identified the fact that social assistance was desirable as a reason.

We're very concerned that the proposed amendments to Bill C-2 will exacerbate, rather than alleviate, the shortage of qualified labour identified by small firms in our survey. We're also concerned not simply about the specifics of the bill itself, but about the signals it sends that the federal government is moving away from the principles and recommendations contained in the 1996 reforms to EI, and in fact reversing the approach taken.

We at that time, in 1996, strongly supported the government of the day's assertion that the main thrust of social security and UI, as it was then, reform had to be job creation. Small business has always maintained that the best social program is a job. We must also remember that the EI Act was designed to replace the old UI system, and that our current EI system should not revert back to the principles of the old system.

Unemployment insurance was originally established to provide assurance that benefits would be available to those who lost employment or were temporarily unable to find work through no fault of their own. But over time the focus of the program has shifted away from insurance principles, and resulted in a costly and complex social policy instrument.

We certainly agree it's important to make the EI system fairer to some claimants. One example may be the rules for parents who are re-entering the labour force. But contrary to the HRDC minister's statement of last week, we haven't seen any evidence that the intensity rule, for example, has been proven to be ineffective. Feedback we've got from our members in a number of high-employment regions actually told us it was being quite effective and having a desired effect.

Prior to the last round of UI reform, studies by the then Department of Employment and Immigration—this was April 1993—found that over a seven year period just under 50% of UI claimants had used UI three or more times, and one-third of claimants had used the UI program four or more times.

We've seen no evidence to suggest that the intensity rule is not working. We'd be very interested in seeing that if it does exist, and certainly we would like.... We don't understand the basis for the proposal to encourage EI repeat claimants.

One of our charts, number 5, shows that the majority of small business owners don't support extending EI parental leave to one year. Now, we're sensitive to the government's goal to support parents with new children. We've all had a few in our day. But we don't find that there was any offsetting consideration of the impact it would have on the small business community. That announcement was made, seemingly, right out of the blue—I believe it was a throne speech context—almost a couple of years ago, and there was certainly no consultation and no consideration at the time of the impact this would have on the business community generally, and notably small business. When you have three, four, five employees, I'm sure you can understand how having 20% of your workforce disappear for a year can have a detrimental impact on your business.

Of course, that being said, we think there are means that can be employed to help offset the impact of extended parental and maternity leave for small firms. Exempting employers from having to pay EI premiums for employees that are fill-ins during that period of time is just one example among many possibilities. So we're certainly not saying there aren't measures that can help alleviate the negative impacts.

Garth, I would ask you to continue the presentation.

The Chair: Garth Whyte.

Mr. Garth Whyte (Senior Vice-President, National Affairs, Canadian Federation of Independent Business): Thanks very much, Mr. Chairman, and thanks, Catherine.

I want to talk first about the EI cost burden on small firms and on job creation, and then a little bit about the growing surplus. I'm going to be referring to the charts at the back, starting with chart 6, and I'm going to go by them very quickly. There are several compelling reasons why employment insurance premiums should be significantly reduced now.

First, small business owners, as you can see in appendix 6, have continually told us that decreasing payroll taxes and increasing sales through consumer spending are the top two conditions necessary to assist them with hiring more employees. EI premium reductions meet both those conditions.

Second, as you can see in appendix 7, lower EI premiums are needed to offset Canada Pension Plan and Quebec Pension Plan premium rate increases—and you can see how they're going up. So even though EI has been going down, the total before-tax cost burden has been going up.

Third, if you look at appendices 8 and 9, which show the employee EI premium rate and the employer premium rate, there's still significant room to move premiums closer to the cost-even, break-even rate, which—

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The Chair: The numbers Garth is referring to are at the bottom right-hand corner of some pages.

Mr. Garth Whyte: I'm sorry.

The Chair: They're consecutive. As long as you keep going, you find them.

Mr. Garth Whyte: Mostly the ones that were missed are the ones I forgot to type in.

The Chair: That's fine.

Mr. Garth Whyte: This is information that we have from the HRDC actuary. I know you have a lot of this information, or I assume you do.

Fourth is the EI fund. If I look at appendix 11, the EI fund will reach up to a $38-billion surplus by year's end.

Fifth, it's unfair to both employers and employees that over 25% of EI premiums revenues are transferred back to general revenues, which you can see in appendix 13. I don't know if you've seen that breakout of how EI premiums are being spent. I'm trying to get to appendix 13 myself, where it's important to note—and I don't see anyone around the table who was involved when we were involved with Minister Axworthy on EI reform and the principles of what were put together—that in 1993, 80% of the EI revenues went to regular benefits. As you can see with this graph, more than 50% go to things other than benefits. I would like to talk about that later on.

Appendix 15 shows that our members support changes in the act where the maximum weekly insurable earnings will be maintained at the $39,000 level, linking it to the average industrial wage. They can support that; however, they will be upset that this bill does not address this proportional cost burden—and some of our members have said it's a tax grab—on employers.

There's no justification for keeping premiums at such a high level. There's no justification to continue to build up the EI surplus when it is already at an outrageously high level of nearly $40 billion. It is wrong that employers pay over half a billion dollars in EI, CPP, and QPP over-contributions that are not refunded. Why should employers be required to pay premiums for students and other part-time employees who get a full-time rebate if they earn $2,000 or less and have no intention of collecting employment insurance?

Again, I ask the committee to refer to appendix 13. It shows how the premiums will be spent in 2001. The majority of the funds, as I pointed out, go to employees and to general revenues. Why should employers, especially small employers, be required to pay 1.4 times the employee rate, or 60% of the premiums? If, as the government now contends, EI premium rates should remain high to generate money for general revenues, and if the EI program should be expanded to provide more benefits to employees, then employers should not be required to bear the majority of the costs. There's no rationale.

CFIB recommends the following actions to reduce the EI cost burden on small business and to increase job creation.

One, compensate small and medium-sized enterprises for extended parental leave by exempting the employer portion of EI premiums for replacement employees.

Two, quickly bring EI premium costs down to the level required to fund the EI program. Again, we have votes from 12,000 members who are supporting this.

Three, amend section 68, which requires employers to pay 1.4 times the employees' premium rate, to gradually reduce the employer's share to equal the employee's premium level so that there's a 50-50 split of premiums. Our goal is not to raise employee premiums. Rather, as you reduce premiums, put it in the act so that it gets closer to 50-50.

Four, refund or compensate employers for EI, CPP and QPP over-contributions.

Five, introduce a voluntary premium exemption for employees working less than 15 hours per week. This would be targeted for employees, primarily students and senior citizens, who declare they do not want to pay EI premiums because they do not intend to collect EI benefits.

Six, reintroduce the new hires and/or the youth hires program. These programs encourage job creation and youth employment and were strongly supported by our members. The youth hires program terminated last year, and the new hires program ended two years ago.

Mr. Chair, if I can indulge you a little further, I would like to just talk about the burgeoning EI surplus. There has to be some government accountability here.

We're very concerned with the proposed section 66.1, which takes away the rate-setting process from the EI commission. The commission represents the EI premium ratepayers: employers and employees. With this amendment, the government can arbitrarily set the rate and can continue to use EI premiums to build up the EI surplus.

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The commission and the government have been criticized by the Auditor General, as well as by employers and employees, for allowing the surplus to grow well beyond the requirement of the act under paragraph 66(a). There is almost ten times more revenue in the EI reserve than was needed the last time the EI fund went into a deficit during the last economic downturn in the early nineties. There is no justification to allow the EI surplus to continue to grow, especially since the government is proposing to undertake a review of the EI premium rate-setting process over the next two years.

Our members want the EI account to be moved from general government revenues to a separate EI fund. The past several years have shown that the EI revenues are too tempting for governments to resist. In fact, there is no EI surplus. Following the last recession, the government publicly stated that the EI surplus must be quickly increased to ensure that premiums are not increased during the next inevitable slowdown. Our concern is that there is no rainy day fund to protect employers and employees from rate increases at the worst possible time: during an economic downturn. Since, as the government acknowledges, the EI surplus is spent, what will happen when, sooner or later, a recession hits and demand for EI benefits soars?

The government must not be put in a position where it must make a choice between raising EI rates or increasing its debt. This is an issue that should be addressed by this committee, and CFIB would like assurances in the act that the EI premium rate will not be increased if there is a shortfall due to a slower economy, which may occur while the government is reviewing the premium rate-setting process.

In conclusion, Mr. Chairman, prior to the last round of UI reform, the Organization for Economic Co-operation and Development stated that

Empirical evidence, both for Canada and a number of other OECD countries, suggests that unemployment insurance encourages voluntary unemployment, promotes marginal attachment to the labour force by subsidizing unstable and seasonal industries, and underpins high and rising payroll taxes which further deter both labour and demand and supply.

CFIB hopes that Bill C-2 does not signal the government's intent to return to the old UI system.

Employers support changes that improve the EI system. No one should be unfairly penalized for losing his or her job. At the same time, we ask the committee to apply this same principle to employers—especially small and medium-sized employers—who are unfairly treated by the same EI system. We urge the committee to support the recommendations that CFIB has suggested to help the job creators. We believe such action is necessary to reduce the disproportionate burden on small business, to address the issue of the shortage of qualified labour, and to increase the employment opportunities for all Canadians.

Thank you.

The Chair: Garth, thank you very much. We appreciate that.

We will now move to the Canadian Restaurant and Foodservices Association. Don Webster is first.

Mr. Don Webster (Vice-Chair, Canadian Restaurant and Foodservices Association): Thank you.

The Canadian Restaurant and Foodservices Association appreciates the opportunity to present the views of the nation's restaurant and food services operators on Bill C-2.

The Chair: Don, I'm sorry to interrupt. We have the presentation in English. We will circulate it when it has been translated into French.

Mr. Don Webster: Thank you.

CRFA is Canada's largest hospitality association, with 15,500 members representing 46,500 enterprises across the country. I speak on behalf of this industry, but I also speak as the owner-operator of two restaurants in the city of Halifax, and I've been in the industry for 30 years. With me today is Joyce Reynolds, senior government affairs director at CRFA.

Our purpose today is to convey our deeply felt concerns about the expropriation of the employment insurance program by the federal government. Employment insurance was established as an insurance program, and the premiums supporting this program are paid exclusively by Canadian employers and employees.

There are five things that we are asking this standing committee to do. They are as follows: ensure that moneys owing to employee and employer stakeholders are not confiscated in a new EI rate-setting process; restore EI to a stand-alone account administered at arm's length from government, with input from employers and employees; introduce a yearly basic exemption into the EI Program to make it less regressive and more progressive; modify the intensity rule if there are EI claimants experiencing unwarranted hardship, but don't eliminate it; and finally, retain benefit repayment provisions for high-income seasonal workers.

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All five recommendations are detailed in our brief. In the short time allocated to us this morning we will focus on the first three only.

We can all appreciate the need for a rainy-day fund. I have one for my business. I put aside money when times are good, so I'll have something to draw on when times are tough. When I go to the bank to withdraw money from my savings account, I expect it to be there.

Government's proposed plan to set premiums on a moving-forward basis, without considering the surplus or the cumulative interest in the EI account, would be equivalent to my bank telling me that the rules had changed and my savings account had been confiscated. I'd tell the bank it couldn't do that because we had a contractual arrangement.

But what if the bank then told me there was no pot of money with my name on it—it was a notional account only—and that it needed the money in my account to pay for its other services? My response would be that the money still belongs to me, and there is legislation protecting my investment and the bank's obligation to me. The bank couldn't say it was justified because I borrowed some money from it in the last decade. I would simply point out that I paid back every cent with interest, just as employers and employees have paid back every cent borrowed with interest when the EI account was in a deficit.

This hypothetical situation is identical to the real-life situation now facing employers and employees who exclusively fund the account. Bill C-2 gets rid of the limited accountability left in the EI program by stripping the EI commission of its rate-setting powers. Developing a new rate-setting process that ignores surpluses and interest credits would simply wipe out the $40 billion obligation to the country's employers and employees. This is unconscionable. Some would even call it theft.

The parliamentary process in these committee hearings is about accountability and integrity, and you are the guardians of accountability and integrity. We are appealing to you as parliamentarians to stop what will amount to the theft of EI premiums paid in good faith by millions of working Canadians and their employers.

I might ask Joyce to carry on.

Ms. Joyce Reynolds (Senior Director, Government Affairs, Canadian Restaurant and Foodservices Association): Thank you, Don.

The Chair: Joyce Reynolds.

Ms. Joyce Reynolds: Thank you, Mr. Chair.

When CRFA appeared before this committee back in 1994, we talked about a counter-cyclical approach to rate-setting. Although we supported it in principle, we couldn't actually support it unless there was a statutory guarantee that the surplus would be accumulated only as a cushion against economic downturn. We said that surpluses were just too irresistible to governments, and they'd been commandeered for other initiatives too many times.

Seven years later, it appears that our concerns were well founded. This is why we appeal to you, as guardians of public trust, to re-establish EI as a stand-alone account, operated at arm's length from government, so that it is responsible to the needs and concerns of premium payers.

If government insists on looking at employment insurance as just another tax, then we've got to stop pretending it's employment insurance and make it a more progressive tax. Bill C-2 and the subsequently announced rate-setting process accelerate the disturbing trend whereby the tax burden is shifted from companies that earn income to companies that employ people.

The payroll tax burden in Canada has been growing four times faster than in other G-7 countries, and Canada's payroll tax rate was third highest out of 25 OECD countries between 1980 and 1996.

Payroll taxes punish labour-intensive companies and low-income workers. They have a particularly negative impact on the food service industry, where a large proportion of employees are young and the tax rate compared to the wages is disproportionately high. This creates a disincentive to hire young inexperienced workers. As a result, young people suffer the worst job and wage losses when payroll taxes increase.

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Minister Martin acknowledged this back in 1994 when he said that there was nothing more ludicrous than a tax on hiring, which is what high payroll taxes are. He also acknowledged that they have grown dramatically over time, and that they affect lower wage earners much more than those at the high end. This is even truer today as the payroll tax burden has continued to grow.

A yearly basic exemption—or YBE—is incorporated into the Canada and Quebec pension plans, whereby the first $3,500 of earnings are not subject to CPP or QPP premiums. The YBE makes these programs less regressive. We propose the establishment of a $2,000 yearly basic exemption on EI premiums to make this program more progressive as well. The cost, the advantages, and the ease of administering a YBE in the EI program are outlined in our brief.

Mr. Don Webster: Mr. Chair, I'd just like to say again that we appreciate the opportunity to appear today. We trust you will want to make the EI payroll tax burden less regressive by establishing a yearly basic exemption. This will boost the take-home pay and job opportunities for low-income Canadians. We urge this committee to restore integrity and accountability to the EI system. Thank you very much.

The Chair: Thank you, Don, Joyce, Catherine, and Garth.

We proceed now to the questions and answers. I think most of you know the system, but in this case we have about five minutes per member. This is a larger committee than average. The five minutes includes the reply, so I may shorten your replies. I hope you won't be too upset. At the same time, I will in fact try to keep the members' presentations fairly short.

I have a list—Val Meredith, Raymonde Folco, Paul Crête, Diane St-Jacques, Yvon Godin, Alan Tonks. That's where I am at the moment. Val Meredith is first.

Ms. Val Meredith (South Surrey—White Rock—Langley, Canadian Alliance): Thank you, Mr. Chair.

Thank you for appearing before the committee. I think it's very important that we hear from the people who create the jobs. I assume that probably a very high percentage of the jobs in this country are created between the hotel and restaurant industry and the small and medium-sized businesses. So thank you for taking the time to come out on such short notice.

I am interested in your belief that the shortage of qualified labour is a great problem in this country, and that this legislation is not going to help but is going to hinder the situation. Can you make the transition for me? How do you bring it into the legislation?

Mr. Garth Whyte: We distribute it as a positive story, as an opportunity for everyone—employers, employees, governments at all levels—to work on the issue. We encourage you to read it because it's getting picked up across the country all the time. Now we're getting lots of demands. We tell it by sector, by province. So we saw it as a positive story.

With parental leave being expanded under EI.... We're not against parental leave, but no one thought about the impact on a five-person firm—and almost 80% of all firms have fewer than five employees—of losing a key employee for a full year. It can be devastating and it can be harmful. Our members are very family-oriented and many of them are family members, but that is an issue.

The second issue is we're concerned.... I know I only have five minutes, but this is the most recent OECD report. It's from the Economic Survey of Canada, August 2000. It says that any renewed easing of eligibility criteria beyond that already announced should be resisted. These risks create casual labour force participation and dependence on EI, moving away from the insurance principles adopted in 1996.

We support fixing the system when necessary—we don't want to blindside anybody. I want to get that straight, because our members will get calls and we want to give help to those who need it.

We are concerned about the intensity rule. I've looked through all the research and the monitoring reports, and I have not seen evidence that the intensity rule is not working. We're concerned when, going into the last round of legislation, people are using it three, four, and five times over a seven-year period. We think that's wrong. We're keeping people dependent, instead of trying to help them get meaningful work. We see a disconnection when there are 250,000 to 300,000 jobs not being filled at the same time that some people are maybe using EI over and over again.

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Ms. Val Meredith: I gather from what you say that you feel these people who continually use EI could be filling the job vacancy out there.

Mr. Garth Whyte: Yes.

Ms. Val Meredith: Why is that happening?

Ms. Catherine Swift: We know that for a fact, because we've heard precisely that from members. We should note too that we found shortages of qualified labour right across the board. If you look through the study, you'll see this. It wasn't just certain skill sets that are in short supply—some of the high-tech industry demands and so on—but from entry level right through to fairly specialized skill areas. A lot of qualities our members valued were ones such as willingness to work.

Systems that encourage people to stay on the kind of dependence cycle Garth mentioned reduce willingness to work. We know it's been proven to happen in many industries and regions of the country. When we heard back from our members, they were seeing more of a tendency to stay at jobs for longer periods.

As well, this is a time when our economy is rapidly changing—with the whole impact of technology, old industries versus new industries, and so on. I think everyone has an interest in trying to take a longer-term perspective, and to help our economy adapt to what we believe the new economy of the future will be. At a time when we already have such severe skill shortages, it's a bizarre thing to be loosening employment insurance regulation. It's just the worst timing imaginable.

Ms. Val Meredith: I would like to ask the hotel and restaurant association people, what would be the average income of your workers who support an EI program?

Ms. Joyce Reynolds: About $12,000. We have a lot of students and part-time employees.

Ms. Val Meredith: So they're making $12,000 a year and paying EI premiums.

Ms. Joyce Reynolds: In some ways. There's a transfer of premiums from our employees who pay on their first dollar, to high-income seasonal workers who earn four and five times that amount as a result of this change in legislation.

Ms. Val Meredith: What would be the—-

The Chair: This will have to be very short.

Ms. Val Meredith: If they qualify for EI, what would those people who make $12,000 a year be collecting? I understand it's 55% of their income, if they even qualified.

Ms. Joyce Reynolds: Well, that's why we recommended back in 1996 that there be a student EI exemption. We lost the 15-hour-week exemption in 1996, and that cost the industry millions and millions of dollars. That's why the payroll tax burden has been so difficult for our industry operators to bear.

The Chair: Raymonde Folco.

[Translation]

Ms. Raymonde Folco (Laval West, Lib.): My first question is to the Canadian Federation of Independent Business. In the brief you just presented, you say:

... what is the government suggesting to encourage repeat claimants to find a lasting, well-paid job?

I think that even if the intensity rule is the focus of a great deal of discussion on both sides of the House, and you yourselves began the discussion—there is one point that has been discussed very little—namely, skills training and development. You said so yourselves, and I think that all of us around the table know that there are small, medium-sized and large companies that are looking for employees. I have some in my riding, we all do. They are looking for employees.

However, candidates do not have the required skills. Companies do not necessarily have access to skilled workers, and I too am not necessarily referring to the high-tech sector, as you just mentioned. I am referring to skills of all sorts.

The government is proposing precisely not to rely too heavily on the intensity rule, but rather to add to it greater skill training and development opportunities. This would enable people, particularly young people and older individuals who are looking for a job—people aged 50 and over—to train to get jobs with these employers who have positions available.

So I would like to hear what you have to say about this, because for us, the Employment Insurance Act does involve the intensity rule. We can talk about that, but there is also the fact that employment insurance is used to help people get the training they need to qualify for jobs that are available at the moment for which they do not have the appropriate skills. I would like to hear your comments on that, please.

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[English]

Mr. Garth Whyte: There are things we agree with, and things we disagree with. When we put out this report on the shortage of qualified labour, we did not emphasize employment insurance at all. If you look at the report, we listed a whole bunch of strategies that need to be adopted by everyone. There's a strategy for high schools, for colleges and co-op education, for mentoring, and for helping people learn how to get a job instead of just writing a résumé—which we find is not the most effective way.

We also did a study on youth employment, which we gave to MPs—though I don't know if many of you have it. It's on our website. We found that one out of four youths had never had a job after graduating—never had a job. We think that's wrong to have no work experience, so we'd like to see mentoring involved.

We believe we also have to educate employers on how to hire people. Some employers don't know how to find people, and we have to get involved with that. There may be match-making opportunities. But we also feel we shouldn't exacerbate the problem.

Newfoundland is approaching a 17% unemployment rate, and yet a third of our members say they have a problem finding qualified labour. There's a disconnect there somewhere that we have to work on together.

But when we look at this bill, it doesn't even consider our membership, the job creators. It says what we're going to do on the employee side, but it doesn't even address the shortage of qualified labour. That's why we bring up the intensity rule: if you can prove to us this is not working, if you can say this is wrong, then we'll look at it and try to find new ways.

What we didn't read in the text was if that's the case, what is the government's strategy to help people get off the EI cycle? We think the intensity rule is part of that strategy, and we've been told by our members that it works. It's not a lot of money. But if they encourage people to stay on the job, that helps.

We feel there are multiple strategies here—

The Chair: There's one minute left between you, one minute.

[Translation]

Ms. Raymonde Folco: I don't want to interrupt you, Mr. Whyte—and I do not have the figures before me, of course, while you do have yours—but the results of our research were counter to what you and Ms. Swift just presented. Our research proves that the percentage of regular benefits and benefits to fishers paid to frequent claimants has remained relatively stable, around 40%, since the period before the reform. That is my first point.

Second, this is not a stand-alone piece of legislation. It is being put forward in the broader context of training. Thus, when you say that the bill does not touch on training, that is true, but there is other legislation that deals with training more specifically. That is why I wanted to hear what you had to say about this.

The Chair: We need a very brief answer.

[English]

Mr. Garth Whyte: Okay, I would agree with you. There's more than the bill, and we don't want to focus on the intensity rule, but we had to talk about it. We did have research that showed the number of times people were repeaters, and I have yet to see the research backing up this bill. I would challenge this committee to find that research. I can find it going into the previous reform, and I can't find it now.

The other observation is that the problem with EI has been political decisions, not analysis. If we can find things that lead people to meaningful employment, that should be the goal for everyone here—not just to make political decisions. We have broken it out by the Atlantic region, and our Atlantic region employers have said this is a concern.

The Chair: Paul Crête, and then Diane St-Jacques, Yvon Godin, Alan Tonks, Carol Skelton, Anita Neville, Paul Crête again, Mark Eyking, Yvon Godin, and Jeannot Castonguay.

Paul.

[Translation]

Mr. Paul Crête (Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, BQ): Thank you, Mr. Chairman. I would like to tell our witnesses that when someone earns $500 a week and he gets 55% of that, namely $275 a week while he is unemployed, it is not necessary for him to go down to $250 a week in order to try to find a job. At $275 a week, the individual is already looking for a job, because he cannot support his family on $275 a week. The intensity rule is in no way going to encourage people to work more. If people get the proper training to help them find another job, then yes; but if we do not train them, if we just punish them, such a rule will get us nowhere. I think we have seen this demonstrated.

• 1150

I'm working backwards today. Usually, people start by paying their compliments, and then they express their criticism. Here I started with the criticism, and now I will come to my compliments.

I find the Canadian Federation of Independent Business's presentation very clear on the matter of the surplus—on the fact that in the year 2001, $5 billion will simply be used for other government spending.

I would like to know from both groups whether you agree that we should remove from the bill the clause that provides, as the Library of Parliament says in its notes:

This provision would relieve the CEIC from its legal responsibility to establish an EI premium rate each year so as to ensure that there is enough revenue over a business cycle to cover EI costs and to provide for stable premiums over the same period.

There is a clause in the bill which provides that the Employment Insurance Commission will no longer determine the rate. It will be up to the government to do this, and it will be able to legally divert the fund's surplus.

Do you agree that we must at least remove this clause from the bill? Perhaps we could discuss this later, in the context of a debate on payroll taxes. You have some interesting material on this.

What is your attitude to this? I would like an answer from both groups. Would you like the clause in the bill that makes this change to be eliminated?

Second, would you be in favour of postponing this debate until later, during our discussions on another bill or at some other time when we are talking more about payroll taxes?

[English]

Ms. Joyce Reynolds: Absolutely. We would like to see that clause removed. We would like to see the committee go further and recommend that the account be a stand-alone account, as it was prior to 1996, and that decisions that are made with regard to employment insurance be made with input from both employers and employees, the premium payers and the beneficiaries of the program. Unfortunately.... As we mentioned in our presentation and as Garth pointed out in his, $5 billion to $7 billion in over-contributions for the past five years isn't right, and this has to be stopped.

Mr. Garth Whyte: We would agree as well. Actually, we work well with the committees, and we respect the committee process. Both you and we have inherited this bill. This bill is done, but I encourage you as committee members and members of Parliament to look at this issue. Park this issue, and let's look at the bigger issue. I should point out something we forgot to mention, that these are facts you're going to be receiving—personal stuff. We only started a week ago. We have 100,000 members, and if it's not important to them, they're not going to do anything. Part of it is that they think it should be a separate fund, and they're going to be sending stuff to you and to every member of Parliament, and I think—

The Chair: This is part of Paul Crête's question.

Mr. Garth Whyte: Yes, it is, because they didn't support what you're suggesting, namely, to do things with the surplus, to make it a separate fund, but also to study it. That's our main message here. If you can show that this is going to help job creation, if it's going to help people who are being hurt by the current system, and if there's a rationale for taking that additional money, then let's hear it and we'll work together on it. But to arbitrarily say some things and then say that we're going to keep building up the surplus and then study it, we think that is wrong.

[Translation]

Mr. Paul Crête: You also say in your brief:

CFIB would like assurances in the Act to ensure the EI premium rate will not be increased if there is a shortfall due to a slower economy which may occur while the government is “reviewing the premium rate setting procedure.”

The phrase is in quotation marks, and you mentioned it in your presentation.

What type of solution would you like to see? Would you like to see the government put back into the plan the money that was accumulating and that it provide some guarantee that the fund will be treated as one to which the government owes money? In this way, we would not be going back to employers and employees in the future for contributions at the time of an economic recession, specifically when we would need to have lower payroll taxes than during a period of economic growth.

• 1155

[English]

Ms. Catherine Swift: The amount the fund is now taking in every year on a surplus basis would be sufficient to get us through, in all likelihood, any recession. I don't think anyone realistically believes, since the $30-odd billion has already been grabbed for other purposes, that it would be very logical for the government to put that amount of money in. But from this day forward....

We've both talked about separate funds and the notion that there be accountability, which is the opposite of what's happening in this bill. The removal of accountability is what's being promoted in this bill. The assurance that premiums will not go up at least puts a cap, a limit, on what the government can do in terms of their confiscating these funds for purposes about which premium payers haven't been informed.

The Chair: I'm going to switch two Liberal members; I've been asked to do so. Alan Tonks and Diane St-Jacques will follow Yvon Godin. Alan Tonks.

Mr. Alan Tonks (York South—Weston, Lib.): Thank you, Mr. Chairman.

I thank you both for your presentations. They're very helpful. There's been some fairly strong rhetoric—or terminology, not rhetoric—namely, the term “expropriation” with respect to the surplus and the terms “unconscionable” and “theft”. I come from a municipal background, and when people start throwing those things out, we say “Whoa, hold it a second; what do we mean here?” So I want to understand that issue a bit better.

I know and I think we all recognize that we would like to have it funded; if it's a pension fund, we want to make sure it's funded actuarially against the draw on the fund. We do know, however, that with the cyclical nature of our economy it's going to be up and down. Now, I think you're aware that we've attempted to reduce premiums. Seven consecutive times we've reduced premiums, and I believe that we're now at $2.25. I take it that you would like to see that continue to happen.

You also indicate that, as part of this characterization, this $5.4 billion should be in its own separate fund. At the same time, you acknowledge that beyond the experience-rated nature of the fund, you want more training programs and so on.

I have two questions. One, do you really think that actuarially the fund itself would ever be able to sustain the nature of draws that we've seen historically, the $2 billion surplus between 1989 and 1992 and a $6 billion deficit that the general fund had to pick up?

My second question concerns the $5.4 billion surplus, which, through general revenues, goes into training programs and other programs that of course have an impact in terms of meeting that second point. You don't think so?

A voice: No.

Mr. Alan Tonks: Okay. Those are my two questions, and I would like to get some explanation on that.

The Chair: I think it's Garth Whyte.

Mr. Garth Whyte: I would like members to turn to appendix 11. These aren't our numbers. These are the actuary numbers. If you look at the zero line, that's when the fund's in balance. That's the amount that's necessary to pay the cost of the program. That dip that happened.... There were two recessions, and the one we know was in 1992. Joyce, Catherine, and I lived through it and worked with the government on EI. It went down to $6 billion, and look how quickly it went back up.

Why would we use strong words we are normally reluctant to use? Why? I can read the Auditor General's report, and I can read other things. I'm just going to read a letter from one HRDC minister in 1996, where he said:

The government is committed to reducing fluctuations in the cost of EI for businesses and workers through more stable premiums over the business cycle. This is the reason that the government intends to build a reserve in the EI Account.

That was from Doug Young, and I've got one from Minister Paul Martin. I've got another from Minister Lloyd Axworthy, and I could go on and on.

Now, the most it ever went down was $6 billion—the most. So we argued over a $10 billion surplus, and they said they needed $10 billion. The actuary said you may need $15 billion over the cycle.

Ms. Joyce Reynolds: Maximum.

Mr. Garth Whyte: Maximum. I have front page stories that said that. Can you justify needing a $38 billion surplus that continues to grow? No. We say that the $5.4 billion that went into general revenue, as seen in appendix 13, should have gone into a separate fund. This money shouldn't be flowing out all the time.

What you're doing is taxing the job creators and the employees for a bunch of money that they shouldn't be paying. This is a tax. So yes, we do use words like “unconscionable”, because in the act it says the premium rate should be stable over an economic cycle.

• 1200

I would say ten years is a pretty long cycle, and to continue building up a surplus, and then to tell us that the surplus is gone, and then to continue building up the surplus, knowing that between $5 and $6 billion is outflowing.... And this is not to training programs, by the way. The other part is for training programs, which we could discuss. We decided not to, but we can discuss that. I don't know if Minister Stewart wants to go back to the HRDC training review process she's been going through.

This is unconscionable.

The Chair: Alan Tonks.

Ms. Joyce Reynolds: Can I just add to that?

The Chair: [Inaudible—Editor].

Mr. Alan Tonks: No, let them continue.

Ms. Joyce Reynolds: The other thing we've received in letters refers to your question about the $6 billion deficit in 1992 and how it quickly evaporated from a $2 billion surplus in 1990. What government sometimes forgets is that government withdrew its portion of the funding in 1990, prior to which they were paying up to 18-20% of the cost of EI. If government had continued to pay into the program, that deficit in 1992 would have been negligible.

There is another reason why a $5 billion or $6 billion surplus would be adequate. We've been hammering and hammering on this for the last five years. That's why we have to call it unconscionable now, because we are being ignored.

The Chair: Yvon Godin.

[Translation]

Mr. Yvon Godin (Acadie—Bathurst, NDP): I want to start by thanking you for coming here today to express your views. However, I do have some reservations about some of your points. I'm going to tell you what they are.

I will start with you, Mr. Whyte. You know my predecessor, Doug Young. In 1989, when he was a member of the opposition, Doug Young made the following comment in our area. I am quoting an article from L'Acadie Nouvelle, dated July 31, 1989:

According to the Member for Gloucester, New Brunswick taxpayers should energetically oppose all the proposed changes which, in his view, will have a serious impact on the region.

On February 17, 1993, the Honourable Jean Chrétien said:

By reducing benefits and further penalizing those who voluntarily leave their jobs, it is clear that the government has very little concern for the victims of the economic crisis. Rather than dealing with the root of the problem, it is attacking the unemployed.

These were the words of the Prime Minister and the minister who made the changes.

Now I'm going to come to the figures you mentioned and to my concerns. When you say that you cannot find people to work for you, I would like to know whether your studies take into account the number of hours you give your employees.

Let us take the restaurant sector as an example. It is a well- known fact that some people in this sector work only 20 or 25 hours a week, and that is why they do not want to work in a particular place.

As an example, I did a quick calculation. If I take the example of a region where someone works in a restaurant for 30 hours a week on average at minimum wage, he or she would earn about $210 a week. If we calculate the employment insurance, which is 50% of the salary, given the intensity rule, the person would get—and I repeat, this is on average—if we take $7 and multiply it by 50%, the person would get $3.50 in EI benefits. Then, 5% of this amount is 17 cents, or $5.25 a week.

I don't think you can make me believe that someone who gets $5.25 a week more has an incentive not to look for a job.

Second, I come back to the staffing of small and medium-sized firms. Is there something offered to people to encourage them to stay on?

As you may know, I am from the Acadie—Bathurst region, where there are jobs available. For example, a company has just opened its doors there and needs 300 people. There were 1,000 people lining up at the door to get a job. That is why you will have a hard time convincing me, unless the jobs being offered are now reasonable. Maybe that is the question you should be asking in your research work as well.

[English]

Mr. Garth Whyte: I'll go for it.

First, we're a non-partisan organization, and we quoted Minister Young because he was the minister at that time; I could have pulled out others. The whole thing we're trying to do is de-escalate the politics, and we truly believe the most important social program is a job. I think that's what we all should be talking about. There are regional differences and issues by region, in respect of jobs and what they're being paid. So I think that's the number one issue.

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We're coming to the table, and we will continue to come to the table. By the way, the minister of HRDC quoted us and our study last night because of the new thrust that's mentioned in the throne speech regarding the shortage of qualified labour. So I don't think we have to defend that. I think it's there.

Second, the responses we get are from 22,000 business owners across the country. And we have to match the jobs. They're not all low-paying jobs, but I would argue that even low-paying jobs are important to somebody. Everybody needs job experience, and a job is good for your first-time entrants, people that are coming out of school. So there's nothing wrong with a minimum-wage job, in many respects. But most of them aren't minimum-wage jobs. And when our members in Atlantic Canada and in New Brunswick are saying they're having a hard time finding qualified people—

Mr. Yvon Godin: I don't believe that.

Mr. Garth Whyte: I know. That's why we've got to talk, because they're saying that.

Mr. Yvon Godin: I don't believe them—

Mr. Garth Whyte: You have to talk.

Mr. Yvon Godin: —because they are abusing those people. I know, I live there.

Mr. Garth Whyte: I know. And our spokesperson—

Mr. Yvon Godin: And that's the reason—

Mr. Garth Whyte: —in New Brunswick is Stéphane Robichaud, who's from Tracadie. You know Stéphane Robichaud.

Mr. Yvon Godin: Yes.

Mr. Garth Whyte: Okay.

Mr. Yvon Godin: And people cannot live at 20 hours a week.

Mr. Garth Whyte: No.

[Translation]

The Chair: The chair is still here.

[English]

Ms. Catherine Swift: If owners of small firms are abusing people, we wouldn't see public opinion polls that show time after time people prefer to work in small and medium-sized firms rather than large firms. They're much more pleased with that work environment. So people do not abuse people in that situation. That's simply not the case. Thousands of owners of small businesses can't be wrong.

[Translation]

Mr. Yvon Godin: Mr. Chairman, I think that when people have trouble finding jobs in regions such as ours, there is a problem somewhere. And that is what we need to talk about.

Second, I would like to ask a question, because these are small firms, and they should perhaps be considered. What do we do in the case of men or women who work in plants and whose jobs end after 10 weeks? What do we do about them?

[English]

The Chair: Can I ask the witnesses to hold those questions in their mind? We'll get around to Yvon again, and you can build it into the reply, because I do want to be fair. It's Diane St-Jacques, and then Carol Skelton.

[Translation]

Ms. Diane St-Jacques (Shefford, Lib.): Thank you, Mr. Chairman.

Thank you for being here and thank you for your presentation. Although I agree that we have to consider the employers' side of the issue, I am going to focus rather on that of the employees.

I want to come back to something Ms. Swift said about people who live on welfare. You seem to be saying that in your reports, these people were not being encouraged to go back into the labour force. I would like to know whether your comment was based on a study or merely on a perception, because, unfortunately, the perception is often that people on welfare do not want to work, and that is incorrect.

I think there are some people who live on welfare who feel comfortable and who will continue to do so. I have met some people who want to get off welfare, but they do not always have the resources available to get back into the labour force.

Training is a tool, but I think we can go beyond that. These people who have lived on welfare for a number of years are not used to schedules. They have been “beaten down” so they don't always have the resources they need to get back into the labour force. My question is this: was your comment based on some studies, and have you looked at any ways of helping these people out?

My other comment is about the intensity rule. Mr. Whyte was saying that the intensity rule had been introduced to get people off the EI cycle. But, what do you do in places like the Maritime provinces or the Gaspé Peninsula, where people have no choice, where the work is seasonal? They have no jobs. Would you tell them to move, to change provinces? There are no jobs.

These are the people we're trying to help by eliminating the intensity rule, and I see no other solution. Perhaps you have something to offer these individuals, because they are the ones who are most affected by the intensity rule.

[English]

Ms. Catherine Swift: The study we distributed does indeed have suggestions in it. We always feel it's incumbent on us to make some constructive suggestions. The comment came from the members that we surveyed in the Atlantic region. They offered as one of the reasons they were having difficulty finding qualified people the fact that there was a preference. Thirty percent, in fact, said there was some preference for staying on social assistance. So that came from a survey of several thousand owners of small businesses across Canada, many of whom were in the Atlantic region.

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The problem is multi-faceted, but includes the kinds of problems you point out. Someone who is out of the labour force for a long time becomes unemployable. We question how it does that person any good to promote a system that, with an intensity rule removed, unfortunately has the effect of encouraging more people to be on a social assistance program for a longer period of time. We couldn't agree more. It doesn't do anyone any good to have economies in the country, or in certain industries, that are essentially dependent on an EI cycle.

Regarding the earlier comment about a factory that's open for ten weeks, why do you think the factory ended up being open for that magic ten weeks? Well, that conformed to a regulatory program. I guess this is typical of any program of this kind over time. There is always going to be a portion at the balance.

If you look at tax rates that penalize low-income workers—quite punitively—you can see why someone would say that when I work, this chunk is taken away from me in tax, and when I don't work.... Maybe that kind of treatment should be considered as well, because low-income earners are hit very hard—proportionately—by income tax in this country, as well as by payroll taxes such as EI.

We agree that there are a number of solutions, including some training education system considerations. We advise our members. We try to give our members better tools to help employees, to promote training of employees, to find more appropriate people, and so on. That is very much part of what we do as an organization. There is no question.

But if we look back to reforms that happened in our UI system in the seventies that permitted inclusion of larger groups eligible for UI, the number of unemployed skyrocketed overnight. To say that there's no connection between the eligibility structure of a program and the number of claimants is.... Look at the history of UI and EI in Canada, for example: there's definitely a connection. We feel that the job is the solution.

The Chair: We should wind up for replies, if you don't mind.

Diane, I think that Garth would like to say something, but it's up to you.

Ms. Diane St-Jacques: It's okay.

The Chair: Okay, Garth.

Mr. Garth Whyte: This is an emotionally charged issue, but I think we have to do our homework whenever we approach issues. I'm just asking whether you've seen proof that the intensity rule is not working. Then so be it. We haven't seen it.

When we did the first round of EI reform, one of the purposes was.... Well, they went to...[Inaudible—Editor]...because they said that the economy was going to part-time work. We said that was wrong. You start with part time and then you move to full time. We have been proven right. That last round was wrong.

Our members have also said there are issues—in the Maritimes, for example—where we think the EI system needs adjusting. For example, when a skilled fish-cleaner person is needed because there is a big catch, the UI system won't allow the person to work. The people are being penalized. Our members support change to the system to allow them to do those quick short-term jobs.

If you are saying that these people should just stay on EI, and we can't find other solutions, then I'm saying that if it's identified as a social program, I don't believe that employers should have to pay 60% of the cost, when they're saying they can lower the EI rate by two percentage points.

The Chair: We can come back to all of these things. It's Carol Skelton now.

Colleagues, we're starting to go through the parties again. I'm going to try to pick up the pace.

Ms. Carol Skelton (Saskatoon—Rosetown—Biggar, Canadian Alliance): I want to clarify this. Do you believe that the EI program should return to its original mission, which was to provide protection against job loss risks? Do you think the social programs that have been attached to it over the years should be removed, and henceforth funded by all levels of government, or by other means? Or do you want the training portions continued, and the social programs continued with it?

Mr. Garth Whyte: That's a hard question to answer in 30 seconds. The quick answer is yes, we think it should go back to insurance principles. Our members agree that maternity benefits should be thrown out into general revenues. They support that.

The training programs are suspect. We would think that if it leads to meaningful employment, then maybe we're in. But often these training programs are for the sake of training. The only evaluation technique is whether or not an individual has received training. Instead, what it should be is whether an individual received training that led to meaningful work. So that's open for debate.

However, we do think that the primary focus should be an insurance program to help those people that need protection against job loss through no fault of their own.

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Mr. Don Webster: We talk about low-income workers. One of the points we've made, and the CPP-QPP fund has recognized this, is the yearly basic exemption. In CPP it's $3,500. What we're asking for is a benefit to employees who.... A large portion of their small wage is going to CPP, to EI payments, to taxes, disproportionately to those of high-income earners. One of the things we're suggesting is that what is beneficial to everyone, to employers and employees, and one of the aspects we'd like looked at is a YBE of $2,000 on EI payments. We think that would be beneficial to all concerned, and a step in the right direction.

Ms. Carol Skelton: Thank you.

The Chair: We'll go to Mark Eyking, please.

Mr. Mark Eyking (Sydney—Victoria, Lib.): Thank you.

It's very interesting that there are two groups coming here today that are not very sensitive, I find, to rural and seasonal businesses and their employees. You know, if there's four feet of snow in the woods, you can't get in the woods. It happens every year for three or four months. These people need assistance and should not be penalized every year because there's snow in the woods. It's the same with packing potatoes or cutting fish. I find your slant on this very urban-related and not rural-sensitive at all.

Even in the restaurant business, many of these places can only stay open for three or four months, and that's it. For the person who is cleaning or doing the laundry, it's not their fault that it's closed. So I find the slant on that very interesting. These people cannot move from northern New Brunswick to some centre for two months and get work. It doesn't happen. They can't move their families.

What I also find interesting—and maybe it's something to look at—is that, for instance, fish plants close for four or five months, but it happens that a boat comes in and people have to work for one or two weeks. Yes, we should be looking at the idea that these people can come in to work and are not going to be penalized and have to go through the whole system. I find that very proactive and sensitive to the rural areas, but I have to disagree with the other thing. It's not the fault of these workers that they're in these areas and there's no work. They're miles away and they have families.

Also, I think the UI system helps to keep these industries intact.

Ms. Catherine Swift: I would just say that over half of our members are rural. We actually disproportionately overrepresent rural businesses as opposed to urban ones. I don't know why that is, but they seem to be more keen to join our organization.

We also are able to disaggregate our data by large urban, small urban, larger rural, or smaller rural region, and we do disaggregate our data on that basis. Our members in the rural regions are just as concerned, if not more concerned, about some of these issues. One of our charts—

Mr. Garth Whyte: Figure 8 is the one that breaks it out by rural.

Ms. Catherine Swift: —actually breaks it out.

Mr. Mark Eyking: I don't need too many figures, because I live in a rural area. I know what the concerns are.

Ms. Catherine Swift: Figures are quite useful, though, and thousands of small businesses do have some interesting views.

Mr. Garth Whyte: Sorry, it's in the other report on the skill shortage.

Ms. Catherine Swift: Yes, the “Help Wanted” report.

Ms. Joyce Reynolds: Can I also say that you believe we're not being sensitive to those employers and employees in rural areas, but maybe we feel the government is not being all that sensitive to low-wage employees. Basically, with the clawback provisions in this bill, you're saying that those earning over $48,750 on a part-time basis or on a seasonal basis should not be clawed back. But what you're saying then is that there should be a transfer from employees in our sector—employees who may be making only a few thousand dollars and who have a very low possibility of being able to qualify or collect for benefits. They have to pay on every dollar they earn at work, and that money is being transferred to those employees who are earning on a seasonal basis four or five times what employees in our sector are earning. So I would argue that government is not being very sensitive to those employees either.

Mr. Mark Eyking: We're not being sensitive to the employees who make $10 an hour for 20 weeks, is that it? I'm not talking about somebody who makes $40,000 in two months. I'm talking about people who only make $10 an hour in a fish plant, and every year they have no choice when the fish plant closes. Why should you be penalizing them for going on unemployment?

The Chair: Very briefly.

Mr. Don Webster: I guess the challenge is how we break this down. If the intensity rules are, as is presently suggested, too harsh for some recipients and are resulting in unwarranted hardships, then these reforms should be modified. They shouldn't be eliminated. The intensity rule could be removed once a recipient's benefits drop to a specific level, or the cut-off for classifying a beneficiary as a repeater could be relaxed. You don't throw the baby out with the bathwater.

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The Chair: Paul Crête, then Anita Neville, Yvon Godin, Jeannot Castonguay, and then the chair, and we'll finish.

[Translation]

Mr. Paul Crête: Thank you, Mr. Chairman.

The frustration of our witnesses may stem from the fact that of the premiums paid in 2001, $5 billion will go to... If we were to try to remove a piece of the pie proportional to the intensity rule, it would be almost impossible to see what more that would give to people on EI. The most significant impact is definitely the $5 billion that the government is pocketing and not putting into the plan. Do you think we can really wait any longer to find some solution to this problem?

If we do what the bill says, we will be legalizing this diversion of funds, and we will never be able to get that money back. If this clause of the bill is withdrawn, we will remain in the present situation, in which the government diverts a surplus, without having the legal authority to do so. Do you not think that this is a much more important priority than the intensity rule, which, ultimately, will not have as much of an impact on the surplus as the $5 billion that your members are paying in premiums and losing? I understand that this may be very frustrating for you. Employees are paying premiums and employers are paying even more.

You talk about the federal payroll taxes paid by employers. We see very clearly that EI contributions are completely disproportional to the needs of the system. Is this not your priority?

[English]

Ms. Catherine Swift: We couldn't agree more, in the sense that we would rather see the people who are in seasonal employment.... For example, we would like to see that $5.4 billion.... And we should note that not only are these the actuary's figures, they're very conservative and are based on some really conservative assumptions; they'll probably be higher, but we'll take it as $5.4 billion. We would like to see that $5.4 billion put in the hands of employers to create jobs for those people who are in those seasonal industries. That's the ultimate solution, not maintaining an on-again, off-again, EI-dependent culture in particular industries, regions, or whatever.

[Translation]

Mr. Paul Crête: I think you agree with what I just said.

My other question is about students. There is a proposal to exempt students from paying premiums on a voluntary basis. Is that based on the fact that today, only some 25% of young people who pay premiums actually get benefits when they are unemployed? In 75% of cases, young people are being shafted by the system. They pay starting the first hour they work, but they never collect any benefits. If they earned more than $2,000, they cannot get a refund. Do you share the view of student associations, among others?

[English]

Mr. Garth Whyte: We think so, but again, we're throwing things out here. If there are cases in Tracadie or other places where people are being hurt, we think the system shouldn't hurt them.

Secondly, wouldn't it be nice, though, if we could find solutions to get people meaningful employment? That's all we're saying, all right? I don't think we can disagree with that.

The second is on students. I think many students—and we all were students at one time—are wondering, “Why am I paying this? I want to keep money in my pocket. I don't want to pay this. I'm not going to be collecting it. Why am I doing this?”

And let's talk about something else. Students can ask for a refund, and they get the refund. Employers do not get the refund, so how does that help employers in your region when they work less than $2,000 worth? The employers still have to pay the EI premiums. That has nothing to do with EI.

[Translation]

Mr. Paul Crête: Mr. Whyte, students cannot get a refund if they make more than $2,000. If they make more than $2,000, they are not entitled to a refund of their contributions.

[English]

Mr. Garth Whyte: Right, and the other thing we threw out—again, we're just making suggestions, because we would like them to be tested—is that a student should be able to put her hand up and say HRDC will not be collecting EI because she's going back to school and therefore does not want to pay EI, and she and her employer should not have to pay. What is wrong with that? Who loses there?

The Chair: Anita Neville, then Yvon Godin, Jeannot Castonguay, and the chair.

• 1225

Ms. Anita Neville (Winnipeg South Centre, Lib.): Thank you.

Let me begin by saying that I'm new to the process, but I'm not new to the issue. So I welcome your information here. I find this very useful, and I find both presentations very interesting.

I wonder if I could pick up on a comment Ms. Swift made a moment ago, on the $5.4 billion. I didn't hear what you said about where you thought those dollars should be going.

Ms. Catherine Swift: We feel they should go into premium reduction. That's why we're saying you should create a separate, actuarially sound fund—such as the CPP has finally evolved into after years and years of misuse, which is why we've had to see the premiums increase over the last few years. We would like to see a similar treatment for the fund generally.

That would mean, with some reasonable contingency for downturns and so on, say $10 billion—just to err on the side of generosity. Historically, even if we just had $5 billion or $6 billion in there, that would probably cover it. That's what we would like to see: over time, the system basically pays for itself—not having a big chunk of it going into goodness knows what every year.

Mr. Garth Whyte: A quick response: when we were going through reform—

The Chair: Let's speak through the chair.

Ms. Anita Neville: Okay. Go ahead.

The Chair: I know you're not going to argue.

Mr. Garth Whyte: I'm sorry. Excuse me.

The Chair: But just in case you start to argue.

Ms. Catherine Swift: Never.

Mr. Garth Whyte: Going into the last round of reform, we asked our members: “Would you be prepared to pay something additional to deal with the structural unemployment issue?” The people we're talking about said yes. But first there has to be a trust that money is not being stolen and siphoned off to the tune of $40 billion.

Ms. Anita Neville: You lead into my next question. I have—

The Chair: Through the chair.

Ms. Anita Neville: Through you, Mr. Adams—through the chair.

You talk about paying for structural adjustments for the labour market. This is a broad question, and I've had some experience on a local level. Could you tell me how your employers are prepared to participate in retraining, redeveloping individuals, the labour force, whatever?

Ms. Catherine Swift: Lots. We've actually done surveys, which we'd be happy to provide you with, on the level of training activity in the small and medium-sized business sector.

Ms. Anita Neville: That would be very interesting. Right.

Ms. Catherine Swift: They are already very active. Part of the help-wanted report shows, again, what qualities employers most look for—qualities such as willingness to learn, because there's going to be training. But if somebody comes in and says “Yes, I want to learn”, employers are happy. That's really what they want—these kinds of attributes, qualities, not specific skill sets.

We hope these data can be constructive for job seekers as well as employers, because businesses are generally willing to train if they feel that a person is willing to learn. Naturally it will pay off for the firm.

Ms. Anita Neville: I would be really interested in seeing your surveys and the questions you used to develop this document. I find it interesting, though I'm not sure I agree with everything in it.

The other question you raised earlier was the whole process of setting EI premiums. You're undoubtedly aware that the legislation is recommending a two-year process, done by Governor in Council. It's proposed that there will be a long consultation process. Have either of you any suggestions as to the nature of that consultation process?

Through the chair, Mr. Adams.

The Chair: Thank you.

Mr. Garth Whyte: As other members have suggested, I think you should do your homework first and suggest something to us before changing the act and saying okay, let's do it. All we see that doing is delaying, for another two years, something we know the answer to already. You're taking too much, more than is required for both benefits and the program—just to keep beefing up the account.

We're also suspicious that it's getting so large now that even the Auditor General has to say this is wrong. The actuaries are saying it's wrong, that there will be a revolt. So let's have a review, and say that you know the money isn't there and that we have to start over.

We're concerned. We know we'll be consulted. We put a lot of those other recommendations in place because we're hoping we can go back to our membership and say we know—

• 1230

The Chair: Very, very briefly.

Mr. Garth Whyte: Here's what's happened to employers: EI premiums went down 21 cents, CPP went up 40 cents—a net increase.

Ms. Anita Neville: I know that.

Mr. Garth Whyte: Maternity benefits have been expanded to a year, so now a person's gone for a full year. They've just identified that the shortage of qualified labour is at its all-time peak. The third thing is that now we're changing EI benefits to make it easier. Another issue is that the youth hires have been eliminated, which is another important thing.

All those things add up to a different message to our members, saying “Do you really care about the shortage of qualified labour?” These signals are saying the opposite.

The Chair: If Joyce is going to say anything, you have to stop.

Mr. Garth Whyte: Joyce, sorry.

Ms. Joyce Reynolds: What we're most concerned about is that this process is going to look at the finance committee's recommendation to set rates on a moving-forward basis. That means it's not going to consider the surplus in the account or the interest going into the account. That sets up all kinds of alarm bells before we even start.

I want to get back to the earlier question about student exemption. We had a lot of support from MPs of every party when we made that recommendation back in 1996. One difficulty was how it would be administered, and that seemed to be one of the reasons we weren't able to get it off the ground. But a YBE would accomplish somewhat the same objective as a student exemption. It would be very simple to administer, and it would also solve the problem of students who make more than $2,000 or $3,000. They would get the benefit of the exemption as well.

The Chair: Yvon Godin.

[Translation]

Mr. Yvon Godin: You were saying at the beginning of your presentation that the EI system was not designed for the current situation, which is different from past years.

Do you agree that in the past, for example during my father's time, people were working in the forest all year long? They worked in the forest with horses until very late in the year, and they tried to earn a living. Today, wood harvesting is mechanized, and the government imposes wood quotas on the companies. It tells them that once they've cut a certain quota of wood, they can no longer work.

The same is true in the fishery. In the past, people worked using small boats for 35 weeks a year. Now they fish from 10 to 15 weeks a year. There are large boats, most of which are supplied by the government. The fishing is done quickly, the quotas are reached quickly, and there has been a decline in the catches.

The system may have changed, but jobs have changed as well, and we have to adapt to the problem we have created thereby.

Mr. Chairman, I have another concern. There has been some talk of exempting working students from paying premiums. Would that not encourage employers to hire only those individuals who would not pay premiums, because they too would not have to pay? Most of the time, when a company hires only part-time employees, they do this so as to avoid paying benefits. This would encourage employers to hire people only until they earn $2,000. Once they have earned $2,000, they would be dismissed and others hired in their place; a pretext can always be found. In that case, we would not be giving people full-time work, but just part-time work. That is what concerns me when we open the door in this way. We are encouraging employers to give their employees fewer hours of work.

[English]

Ms. Joyce Reynolds: The $2,000 YBE would apply to everybody, regardless of whether you make $39,000, $10,000 or $12,000. It isn't as if you could be fired once you reached $2,000. Not that we think anybody would do that, but that's not how the YBE works. It does make the tax just that much more progressive. People who earn less don't have to pay a higher percentage of their income into the EI program.

• 1235

Mr. Don Webster: We presently have the YBE of $3,500 in the CPP plan.

The Chair: Since we are on television, we should explain that YBE means yearly basic exemption.

Mr. Don Webster: We haven't seen any manifestation of what you're talking about. As Joyce said, it's a level playing field, and there's no risk to the employee in this particular scenario.

Ms. Catherine Swift: I'd like to address your first comment on what is really structural unemployment. Of course jobs have changed, industries have changed, and our economy has changed, and I think we need to change our social systems as a result. Unfortunately, a lot of the structure we seem to be moving back to in some of these reforms to the EI system is very 1970s, when a lot of these changes were originally made.

We're suggesting that of course we need more diversity in the type of employment we have in different parts of the country, and it's by no means just in the Atlantic area. We see it in a lot of rural areas, in northern Ontario, and so on. We very much see it among our members.

It's the promotion of job creation in a diversity of sectors, and our data show it's in demand. There's no question it's in demand. I think we have to collectively deal with the gap between demand and supply.

The Chair: Yvon, very briefly.

[Translation]

Mr. Yvon Godin: Personally, Mr. Chairman, I think people should work. The problem is that there are no jobs and I would like you to find a solution to that problem.

People who live in Toronto know that they cannot catch lobster on Yonge Street. You cannot trap lobster on Yonge Street or on Sainte-Catherine, in Montreal. Do you still like to eat your lobster? Are you telling me that you want to abolish the fishery? You like your two-by-fours? Not many trees are cut down in Toronto, Montreal or Vancouver. We have to have seasonal jobs. If you attach some importance to seasonal work, I am with you. However, if you simply say that we are going to cut these people off and this will force them to go elsewhere, what will we do with this important industry that we need here in Canada?

[English]

The Chair: That was a long question.

Mr. Garth Whyte: I think we should have a meeting with our Atlantic people, because there would be an argument right now, Mr. Chairman.

But having said that, I think we're in violent agreement. I agree that people in Toronto—and I'm not from Toronto—may not know that you can't catch lobsters on the street, but I think people in Atlantic Canada know that you don't catch jobs with UI.

Where do you get the jobs? You get them from small business. Small business has been creating the vast majority of the new jobs. This is what our members said in the 22,000 responses, with well over 2,000 from Atlantic Canada. I think there's a disconnect between those who want a job and those who need people to work. That's what we're putting forward here.

If you have documentation, such as we did going into the last round, that shows the intensity rule doesn't work—and I'm not talking about Tracadie, but across the country—then show it to us.

Our concern is that every time there's a change in EI, there's one sentence saying this doesn't work and we're moving on to this. It's always done for political reasons rather than being based on analysis, and it keeps getting us into trouble. It keeps those people in rural Canada and other places on this treadmill, and I don't think that helps anybody.

Mr. Mark Eyking: [Inaudible—Editor].

Mr. Garth Whyte: Sure there are, and we have a lot of members there.

The Chair: Okay, Mark.

I want colleagues to bear in mind that we have to deal with our steering committee report before we finish, so it's not that I'm cutting off these very interesting discussions.

What we're going to do is this: first up will be Jeannot Castonguay, then it's going to Val Meredith for an interjection or something very short, then it's going to be the chair very briefly; and then we will move to our steering committee report. Jeannot Castonguay.

[Translation]

Mr. Jeannot Castonguay (Madawaska—Restigouche, Lib.): Thank you, Mr. Chairman, and I would like to thank our witnesses as well.

In our region, Madawaska—Restigouche, there is seasonal work in forestry, construction, the fishery, agriculture and tourism. The people who do this work are professionals in their field. I defy you to go out and cut down a tree; you will find out that it is not easy.

Unfortunately, in our part of the country, the seasons are very short and these people lose their jobs involuntarily. I am sorry, but it is not always their fault.

The fact is, Mr. Chairman, statistics can be used to demonstrate anything whatsoever. People who are good with figures can make them say anything they like. I respect that, and I do take statistics into account, but sometimes, I take them with a grain of salt.

There are some statistics that show that since 1996 the percentage of regular benefits paid to frequent claimants has remained stable at approximately 40%. This shows that the intensity rule did not have the expected effect. However, I must tell you that in our region, the intensity rule amounted to quite a bit of bread and butter for families that lost $11, $12 or $15 a week. It may not be much for me, but it is for them.

• 1240

I think we have to be cautious. I agree that the long-term objective must be to have year-round work for everyone. There is a transition period, however. We tell our young people that they will live in a different culture, in which they will have a number of different careers during their lives. We tell them that they will do two or three different jobs, one after the other, season after season. However, in the meantime, what do you have to offer people who lose their jobs, who have seasonal work and who, moreover, I repeat, Mr. Chairman, are not seasonal workers, but professionals with seasonal trades.

[English]

The Chair: Garth.

Mr. Garth Whyte: We agree with a lot of the comments you can make about certain regions.

What we're challenging this committee with is whether it is government that creates jobs or business that creates jobs. In particular, is it small business? What is this bill and this committee recommending to help the job creators when they're saying they can't find between 250,000 and 300,000 positions? The challenge—this is not an argument, but a challenge to all of us—is that if we could match those positions with those people who need jobs, we could reduce the EI rate by two percentage points. Think about that. To us that's a huge opportunity. We can argue and say there's no hope. We're saying there's hope. Your recommendation says we're going to offer some relief to the people paying these premiums, Mr. Chair. That's our challenge to this committee.

The intensity rule is where we're questioning the issue. We can understand a lot of the other issues. We have not seen any analysis. You're giving anecdotal stuff, but if you can give us the actual hard data.... As our colleagues have said, there are cases where the intensity rule should be modified, but should it be thrown out completely? Everyone in their heart knows of examples where people are going on EI and using the system, and especially people from Atlantic Canada. No, there's nobody. Okay. Well, there's nobody.

An hon. member: [Inaudible—Editor]

Mr. Garth Whyte: Well, I think there is. So I think that's something that needs to be addressed.

[Translation]

Mr. Jeannot Castonguay: Statistics can be made to demonstrate anything whatsoever. We have been told that since 1996 the intensity rule has not had the expected effect. In fact, it has penalized people. We may tend to forget that $12 a week is a lot of money for someone who is poor. Don't you think we should eliminate this rule and admit that it did not have the desired effect. We need employment incentives, but I think it is too harsh to say that this would encourage people to latch on to a cash cow. I am sorry, but I do not agree on this.

[English]

Mr. Garth Whyte: Maybe we could say it differently. I think we all agree we are doing a disservice if the people are on EI for five times over a seven-year period and that some solution has to be looked at. Or do we just say that's the way it is and it's always going to be that way? If that's the case, it's a social program we want, not an insurance program. That's where we would like to see it uncoupled. If that's what your party wants to do, then it should be paid by everyone, and not just paid through an insurance program and we pretend it's insurance, because this is a social program. We're trying to find and offer ways of asking, in a proper and compassionate manner, how can we create more jobs?

[Translation]

Mr. Jeannot Castonguay: If I understand correctly, you were saying that people who get employment insurance benefits for seasonal work are people who want to benefit from a social program. In a nutshell, that is what you are saying.

[English]

Mr. Garth Whyte: No, I'm not saying that at all.

We're saying a couple of things. We're saying there are seasonal workers who are making $60,000 a year. Should they be paid EI? You talked about lobster. They make some pretty good dollars. Should they be paying EI? How long do we continue this? But I don't want to get on to that. You're right, Mr. Chair, that's not our major—

The Chair: Next is Val Meredith, but very briefly, if you would.

Ms. Val Meredith: The interjection I want to make, Mr. Chair, is that it's not just Atlantic Canada and Quebec. I have four boys. Two of them have left home to find work in Alberta. Young people are leaving the farms to find work someplace else. I think we have to address the issue that Banff, Alberta, which is a really great place to work and to live in, is talking about importing people through an immigration process to take these jobs.

I appreciate your coming here and giving us something to think about as to how we perceive workforce needs and our employment programs. I would like to thank you for appearing before the committee. But it's not just Atlantic Canada.

The Chair: This is something you might be able to answer briefly, and then perhaps you could give me or us some information about it. It's for the CFIB.

• 1245

We all receive the results of your surveys. Some of the diagrams, charts, and so on we have here are based on your surveys. I can well imagine that your 100,000 members are a good sample of the industry. For example, Catherine, you said the rural area is somewhat overrepresented. I just wondered if you have any figures on the way the 100,000 in general are representative in other ways.

With respect to the individual question, say you pose a question on parental leave and the reply comes back. Do you publish the percentage response? Information is important, data are important—you said this several times. Do you, for your own interest look at that response, not simply as a percentage of your businesses, but in terms of the gender of the respondents, the regional variation in that particular question? I'm thinking of one question now: who in the small business replies? Is it the principal or is it someone else?

If you could answer that briefly, then later, because I'm sure all members of Parliament are interested.... Do you do that with your individual questions?

Ms. Catherine Swift: We do indeed. This year is actually our 30th anniversary. Survey methodology typically does come up in these discussions, as it should, because obviously it matters in terms of legitimacy and what not. Our research methods are very much statistically pristine. We can disaggregate our members. And our members are only the owners of the business. That's a requirement for membership, that it has to be the owner of the business. That's whose views you're getting. We can break it out by gender of owner, sector to three digit SIC, region right down to postal code—

The Chair: Catherine, do you typically do that, though?

Ms. Catherine Swift: Yes, we do.

The Chair: Okay. Thank you.

Ms. Catherine Swift: Even some of the data you will see in the various stuff we've distributed today has breakdowns—obviously we haven't included all of it.

If anyone is interested, I might add, we're happy to disaggregate further than we have. In our raw data we do have the disaggregations; we just can't burden you with massive quantities of things. I know a number of people have said you can argue statistics, or you disagree with our results, or whatever. Of course, everyone is entitled to their opinion. If we misrepresented the views of our members, we wouldn't have existed for 30 years as an organization, because they are voluntary members, who are paying dues out of their pockets. They don't have to, there's nothing compelling them to.

The Chair: That's plenty for me. If I kept the others short, I have to keep myself short.

I want to thank the representatives of the Canadian Federation of Independent Business and the Canadian Restaurant and Foodservices Association, namely, Catherine Swift, Garth Whyte, Joyce Reynolds, and Don Webster. This has been a very useful session for us. We particularly appreciate the fact that you came on relatively short notice. Thank you very much.

We're going to continue with our meeting. Feel free to leave or stay as you see fit.

Colleagues, we have circulated the report of the steering committee. I'd be grateful if someone would move that, so that I can comment on it. I see Diane St-Jacques. Okay, it's moved.

The parts are self-explanatory. The key part here is that we would report to the House of Commons by March 23, which is the second Friday after the break. That means—if you move backwards, you'll see the paragraph concerned—that the committee will have to do clause-by-clause on the 21st or the 22nd, as time requires. We have to complete it by the latest at a time on the 22nd when the staff can prepare it for presentation to the House of Commons. That's one.

We asked members to prioritize the witnesses they have suggested. We have received some response to that. We would be most grateful for any other responses to it.

Then there is the question of the rest of this week. You'll see the paragraph there, that the committee hear on February 28, which is this week, and it lists what we might call expert witnesses—you see them there—in particular, Dr. Alice Nakamura. We still don't know if she's going to come, but if she's available, she will be here. If she's not, we agreed that she would be fitted into the schedule later.

Then on March 1, which is also this week, you'll see we have the representatives of the Conseil du Patronat, the Canadian Labour Congress, and the Confédération des syndicats nationaux. They will be here on Thursday of this week.

• 1250

You will see it then says that from now on—and something is not here that I'm going to have to explain—we're going to ask the witnesses for a good written presentation that we will circulate. They will take about five minutes each for introductory remarks.

We have agreed to move briskly through the order as we see it here. If we split the witnesses into two groups—for example, the first hour, and then the second hour, when we'll go through the list as usual—the members who did not ask questions in the first hour will be given priority in the second hour. We all agreed to that.

The thing not mentioned here is that we agreed in the first two weeks after the break to proceed with at least two meetings on many days. Tomorrow we will have a list of the actual meetings, but I can give you an indication of them now.

The first Tuesday back, we will meet at 10 in the morning until 12 or 12:30, and then at 3:15. The first Wednesday back, we will meet at 3:15—that's caucus day, of course—until 5:30. Food will be provided, and then we will meet from 5:30 until 7:30. On the first Thursday back, we will meet at 10 a.m.—not 11 a.m.—proceed through lunch and then meet again from 3:15 until 5:30.

The second week back—we're now at March 20—we will meet at 10 a.m. and then at 3:15. Then on the second Wednesday, we will meet at 3:15 and in the evening. By then, we might be dealing with witnesses in the first meeting, and perhaps clause-by-clause in the second. But we may still have witnesses to meet in the evening. By Thursday, we're into clause-by-clause at 5:30.

In particular, in meetings where we have grouped the witnesses and balanced them out, we'll go with five-minute presentations and then a rapid question and answer period.

Now there's one more thing I have to say. This Thursday we will take a short part of the meeting to re-establish our subcommittees—our subcommittee on persons with disabilities and our subcommittee on children and youth at risk. We will have the proposed chairs of those committees here. It is my hope we will move the motions very quickly, and then proceed with our witnesses.

Colleagues, is that a reasonable summary?

Judi Longfield.

Mrs. Judi Longfield (Whitby-Ajax, Lib.): The only thing we didn't put in is that we agreed to have a good balance regionally—to have as broad a cross-section as possible of labour and management and all of those other things.

The Chair: I agree, and we're going to struggle with it. As you know, it becomes not only the lists, and then members' priorities, but there's also availability. Ms. Nakamura is a good example. We'll do everything we can to balance those things out.

Is there anything else I need to know?

Ms. Anita Neville: Are you committed to beginning the Tuesday and Thursday meetings at 10 a.m.? I have a conflict with another committee with legislation going through.

The Chair: I suspect, Anita, that closer to the time we might be able to juggle it, but at the moment the sense we have about the deadline of March 23 is that we simply have to put in the time. You'll find that if we don't put it in then, we will be calling another evening meeting or something of that sort.

Could we take it under advisement?

Ms. Anita Neville: Fine.

• 1255

The Chair: I have to say to all members that duty on standing committees with legislation takes priority over all others. I see you're indicating that you're on two committees with legislation. If I had to choose between the two, the first committee to have a bill referred to it would take priority.

Some hon. members: Oh, oh!

The Chair: And this bill was referred first by the House of Commons. We'll take it under advisement. But colleagues, the steering committee discussed this last evening at some length.

Paul Crête.

[Translation]

Mr. Paul Crête: I am very pleased with the agreement we reached. I think it will enable us to hear from virtually all the witnesses who can provide us with interesting, new information. Unfortunately, we are still limited in that. We cannot amend Bill C-2, but thanks to our witnesses, we will have an opportunity to realize that we need to find a solution to all the other problems with which Bill C-2 does not deal: discrimination against young people, eligibility for the plan, and many other problems related to the employment insurance program. I hope we will enjoy the same co-operation we had in establishing this schedule.

[English]

The Chair: For our colleagues who were not at the steering committee meeting, when we get to clause-by-clause and amendments we are constrained because of the direction given by the House of Commons. But there are no such limitations in discussion, debate, and hearing witnesses. So we'd be glad to explore the other possibilities. It may well be that the committee is left with experience that can be used in another way.

Those in favour of the steering committee report within the context just discussed?

Some hon. members: Agreed.

The Chair: I see none against, so it's carried.

Colleagues, we meet again tomorrow at 3:15.

Thank you very much. The meeting is adjourned.