HUMA Committee Report

LIST OF RECOMMENDATIONS

Recommendation 1

The Committee recommends that, in 2005, legislation be tabled in Parliament that would create a new entity called the Employment Insurance Commission. The proposed Employment Insurance Commission would be given the statutory authority to manage and invest employment insurance revenues in the proposed Employment Insurance Fund Account and to transfer these revenues, as required by law, to the Consolidated Revenue Fund in order to cover the cost of employment insurance. This new Crown corporate entity should be governed by commissioners who broadly and equally represent employees and employers. The government should also be represented in the proposed Employment Insurance Commission. The Chair and Vice-chair of the Commission should rotate between employer and employee representatives after serving a two-year term. Commissioners would be appointed by the Governor in Council following consultations with groups representing employment insurance contributors. The operations of the Commission and the funds under its management must be fully accounted for and reported in accordance with generally accepted public sector accounting standards. The Commission should have the authority to make recommendations to the government.

Recommendation 2

The Committee recommends that, in conjunction with the legislation referred to in Recommendation 1, statutory authority be given to establish a new reserve, called the Employment Insurance Fund Account. The Employment Insurance Fund Account, perhaps modelled after the Exchange Fund Account, would exist outside of the Consolidated Revenue Fund and act as a depository for all employment insurance premiums and other transfers from the Consolidated Revenue Fund as required by law. Funds transferred from the Employment Insurance Fund Account to the Consolidated Revenue Fund would by law be used exclusively to cover employment insurance costs.

Recommendation 3

The Committee recommends that, beginning in 2005-2006, the federal government transfer amounts from the Consolidated Revenue Fund to the proposed Employment Insurance Fund Account. This transfer must occur over a period of time, taking into consideration the year-to-year fiscal position and expected outlook of the federal government. The minimum amount to be transferred to the Fund each year must be no less than one half of the amount remaining in the Contingency Reserve at year’s end. These transfers would continue until the cumulative balance that existed in the Employment Insurance Account as of 31 March 2004 has been fully transferred to the Employment Insurance Fund Account. When that cumulative balance in the Employment Insurance Account reaches zero, all references to this Account in the Employment Insurance Act should be repealed.

Recommendation 4

The Committee recommends that a premium rate stabilization reserve be created and maintained within the proposed Employment Insurance Fund Account. This reserve should be estimated by the Chief Actuary of the proposed Employment Insurance Commission and re-estimated every five years. It should be managed prudently, provide the required liquidity needed to maintain premium rate stability over a five-year period, and should never exceed 10% of the most recent estimated premium rate stabilization reserve requirement.

Recommendation 5

The Committee recommends that starting in 2005:

i) the Chief Actuary of the proposed Employment Insurance Commission utilize independent expert advice to estimate annually a break-even premium rate that would ensure program solvency and premium rate stability over a five-year, look-forward period;

ii) the Chief Actuary utilize independent expert advice to estimate quinquennially the size of premium rate stabilization reserve that would insure program solvency and premium rate stability over a five-year period; and

iii) the proposed Employment Insurance Commission publish its recommended break-even premium rate and underlying analysis by 30 September in the year prior to the year for which the recommended rate applies.

Recommendation 6

The Committee recommends that if the rate recommended by the proposed Employment Insurance Commission is, for some extraordinary reason, different from that which the Governor in Council wishes to approve, then the government must, in setting a different rate, amend the Employment Insurance Act by establishing a statutory premium rate for a period not exceeding one year. This proposed legislative change must be subject to a vote in the House of Commons.

Recommendation 7

The Committee recommends that the government implement a $3,000 yearly basic insurable earnings exemption to replace the premium refund for contributors with low earnings. This exemption threshold would be indexed upward according to growth in average weekly earnings in Canada. This new provision should be reviewed two years after its implementation to examine its impact on hours of work.

Recommendation 8

The Committee recommends that in 2005 the government devise and implement a method for refunding employment insurance premiums to employers corresponding to over-contributions to employment insurance from employees.

Recommendation 9

The Committee recommends that the current cost-sharing arrangement between employers and employees be maintained.

Recommendation 10

The Committee recommends that the government implement a uniform 360 hours qualification requirement, irrespective of regional unemployment rates or the type of benefit. This would establish a qualification requirement based on a 30-hour week over a 12-week period.

Recommendation 11

The Committee recommends that the maximum benefit entitlement for regular benefits be extended to 50 weeks, the same as that afforded special benefits.

Recommendation 12

The Committee recommends that following an assessment of the pilot project that extends benefit entitlement by five weeks in high-unemployment areas of the country, the government, following consultations with the proposed Employment Insurance Commission, modify benefit entitlement so as to provide an additional incentive to work for a longer period of time than the minimum hours of work required to qualify for benefits.

Recommendation 13

The Committee recommends that the proposed Employment Insurance Commission consult program contributors and report to the government on the feasibility of providing a supplementary benefit beyond the proposed 50-week maximum period so as to help unemployed workers 50 years of age and over cope with extended periods of unemployment. The amount of the supplementary benefit and its duration should depend on lifetime contributions to employment insurance.

Recommendation 14

The Committee recommends that the government repeal the current method of calculating average weekly insurable earnings and in its place adopt a new rate calculation period equal to the qualifying period. Only those weeks with the highest earnings in the new rate calculation period would be included, and these earnings would be averaged over the best 12 weeks of insurable employment.

Recommendation 15

The Committee recommends that the government increase the benefit rate from 55% to 60% of average weekly insurable earnings. 

Recommendation 16

The Committee recommends that the government, following consultations with the proposed Employment Insurance Commission, establish a nation-wide pilot project to assess the impact of a variable benefit rate that ranges from between 61% to 65% of average weekly insurable earnings, depending on the number of insurable hours worked in excess of the minimum hourly qualification requirement.

Recommendation 17

The Committee recommends that following the completion of the evaluation that is currently underway to assess the effectiveness of employment benefits and support measures, the federal government use this information, to the greatest extent possible, to ensure that spending under the next generation of labour market development agreements focuses exclusively on those measures that have achieved their intended results.¹ In addition, the federal government must negotiate with provincial and territorial governments to establish an appeal process for individuals who are denied access to employment benefits and support measures. 

Recommendation 18

The Committee recommends that the Employment Insurance Act be amended to include mobility assistance in employment benefits and support measures. Mobility assistance would only be paid once a job is verified and confirmed. As with other employment benefits and support measures, this assistance would be based on voluntary participation.

Recommendation 19

The Committee recommends that the government amend section 78 of the Employment Insurance Act to require that at least  0.8% of estimated total insurable earnings be allocated to employment benefits and support measures and that the additional funding that results from this be used to provide meaningful training to those who qualify under a more inclusive definition of “insured participant” pursuant to section 58 of the Employment Insurance Act.

Recommendation 20

The Committee recommends that the government initiate a pilot project to assess the effectiveness of providing a premium refund to employers who: (1) provide training to alleviate skill shortages; (2) incur training costs while replacing workers receiving maternity/parental benefits; (3) provide training to seasonal and older workers; and (4) provide workplace literacy training to their employees. If the pilot project finds this training incentive to be effective then it should become a regular feature of the Employment Insurance program and its cost should not be included as part of the expenditure limit contained in section 78 of the Employment Insurance Act.

V.      Other Recommendations

Recommendation 21

The Committee recommends that the government amend the Employment Insurance Act to exempt foreign agricultural workers and their employers from making contributions to employment insurance.

Recommendation 22

In view of the growing incidence of self-employment in the Canadian labour market, the Committee recommends that the government consider developing a framework for extending EI coverage, both in terms of regular and special benefits, to self-employed workers.

Recommendation 23

The Committee recommends that the government amend the Employment Insurance Regulations so as to not consider pension, severance and vacation income in the determination of earnings for benefit purposes.

Recommendation 24

The Committee recommends that the government amend subsection 5(3) (and if necessary, section 5(2)(i)) of the Employment Insurance Act with a view to remove the presumption of guilt if an employer and an employee are related.

Recommendation 25

The Committee recommends that the government ensure that every district office in the Department of Human Resources and Skills Development employ a claimant’s advocate.

Recommendation 26

The Committee recommends that the two-week waiting period be eliminated for those engaged in approved training.

Recommendation 27

The Committee recommends that the government study the possibility of extending sickness benefits by 35 weeks for those who suffer from a prolonged and serious illness.

Recommendation 28

The Committee recommends that the government study the possibility of extending compassionate care benefits for families whose children must receive medical attention outside of the locality in which they reside.

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1	The Bloc Québécois maintains that the federal government must respect the Quebec-Ottawa accords on labour market development.