HUMA Committee Report

Strengthening the employment insurance premium rate-setting mechanism.  Report of the Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities

Bloc Québécois Complementary Opinion

Context

The Bloc Québécois would like to thank all the groups and individuals from Quebec and Canada who appeared before the Committee.  The Bloc Québécois was struck by the expertise and concerns of the many witnesses who appeared with regard to the establishment of the new Canada Employment Insurance Financing Board.

It is helpful to recall that the Committee on Human Resources, Social Development and the Status of Persons with Disabilities tabled a report during the 38th Parliament, in 2005, regarding the management of the employment insurance program, recommending the establishment of a separate employment insurance fund and the reimbursement of the money used for other purposes.  Moreover, the Bloc Québécois introduced Bill C-280, which was supported by the Conservatives and the NDP, to establish a separate fund, increase the powers and representation of workers and employers on the Canada Employment Insurance Commission and require the federal government to reimburse the fund surplus that was used for other purposes.  In 2006, we took up the issue again with Bill C-357, which repeated most of Bill C-280, except that it left it up to the government to determine the method of reimbursement.  Although the Conservatives had supported Bill C-280, strangely, they voted against Bill C-357. 

While the Bloc Québécois for the most part supports this report, we note a number of omissions that we feel the need to point out.

Reimbursement

Since October 23, 1990, when the federal government stopped contributing to the employment insurance fund, it accumulated a surplus of over $54 billion, according to the Canadian Institute of Actuaries.  This astronomical sum, left unmonitored in the consolidated revenue fund, was used by the federal government to pay off the deficit, pay down the debt and interfere in areas of jurisdiction of Quebec and the provinces.  The Bloc Québécois has always spoken out publicly against this and has called for this money to be placed in a separate fund to improve the current system.  The Employment Insurance Financing Board does not in any way address the scandalous use of this surplus for other purposes.  When the Minister of Human Resources appeared before the Human Resources Committee on April 29, 2008, with regard to the Main Estimates, he maintained that the government would provide $2 billion to the Board.   “I’m going to say that the $2 billion we put in, I think, does recognize the fact that premiums have come in during the time we’ve been in government and were utilized for things other than employment insurance benefits, and so we are fixing the problem going forward.” It is utterly absurd to admit that money was diverted from the employment insurance fund and then claim to be fixing the problem by appropriating $52 billion of the $54 billion diverted.

The Bloc Québécois accordingly recommends that the federal government table in the House of Commons a plan to reimburse all the employment insurance contributions that were diverted for purposes other than paying benefits.  The amounts reimbursed must be used solely to enhance benefits under the current employment insurance system.

What to do with the surpluses?

The Committee heard from a number of witnesses who called for improvements to the employment insurance program and pointed out that its surpluses have been accumulated at the expense of protection for people who lose their jobs.  The Bloc Québécois shares this view.  Both in the 38th Parliament and in the 39th, we have proposed substantial improvements to the program with bills C‑278 and C‑269 respectively.  We consider that the premium rate should be high enough to give the unemployed adequate protection:  coverage of 60% of their income based on the best 12 weeks, available after 360 hours of work.

But it is all too obvious that the only thing the Conservatives want to do in the event of a surplus is reduce the premium rate, instead of using the surplus to improve living conditions for the unemployed.  The Bloc Québécois has always denounced the government's cold and calculating approach. The Conservatives see a reduced premium rate as the best way of pleasing big business, while realizing that it will do very little to help workers.

It is thus vital that the surpluses be large enough to allow a far-reaching reform of the program.  This is why the Bloc Québécois is recommending that the Board be authorized to accumulate surpluses making possible on the one hand establishment of a $15‑billion reserve fund capable of covering one business cycle in the event of a recession, and on the other hand improvements to the system, which was what a majority in the House of Commons showed they wanted when they supported Bill C‑269.

The Board’s negative effects

The Bloc Québécois notes that the Employment Insurance Financing Board will significantly reduce the role of the Employment Insurance Commission, which evaluates the system every year in a monitoring and assessment report.  The Commission will no longer have the power to make recommendations on premium rates, for example.  We consider it essential that the Commission’s new responsibilities be defined as soon as possible and that it has the power to recommend improvements to the program.

We also think it is imperative to ensure that there is majority representation of employees and employers among the Board’s directors.  We support the proposal put forward by a number of witnesses, to the effect that representatives of the two contributor groups should be chosen from lists submitted by themselves.  In our view it would be unacceptable for the government to set the overall orientations of a board in which it has invested not one red cent of public money.

Conclusion

In the opinion of the Bloc Québécois, the Employment Insurance Commission could have taken on the role that has been given to the Employment Insurance Financing Board:  the government simply wanted to create an additional barrier against any improvements.

As the promoters and defenders of the independent employment insurance fund, the Bloc Québécois's Members of Parliament intend to make sure that their proposal, and the best interests of the jobless, is not distorted to gratify this government's neoliberal obsession.  The independent fund, coupled with reimbursement of the $54 billion, represents an extraordinary opportunity to improve a defective program that is still today leaving thousands of workers destitute.  We will not lend ourselves to the government’s manoeuvre.

Overall, the Human Resources Committee has fully understood the government’s manoeuvre, as the recommendations in the current report show.  But we must not forget the fundamental objectives underlying the desire for an independent fund.  They are what we wanted to recall in this complementary opinion.