Statement made on 04 November 2009 by Senator Joseph Day
Hon. Joseph A. Day:
Thank you, honourable senators. I will briefly outline some of the issues that we found in studying Bill C-50. We undertook a pre-study of this bill in the Standing Senate Committee on National Finance. Permission to begin the pre-study was approved by the Senate as a whole, and we were directed and authorized to begin looking at Bill C-50 before it arrived here in the Senate.
Seeing and viewing the progress of Bill C-50 in the other place, we felt that there would be some degree of urgency when the bill finally arrived here, and we wanted to have an appreciation of what was in the bill. As it turns out, that pre-study has worked nicely. I anticipate, once this second reading is concluded and the bill is referred to our committee, that we will not spend as much time as we normally want to spend on a bill of this nature because of the fact that we have had an opportunity to conduct the pre-study, in part. I say "in part" because we saw the bill coming and we knew it would arrive quickly, so we did not conclude all the study we might otherwise have undertaken, and we did not report back on the bill because of that fact as well.
For the information of honourable senators, Bill C-50 was introduced in the House of Commons on September 16. It had second reading from September 17 to September 29 of this year. We are having second reading out of our normal time frame this afternoon, having received the bill today. It then proceeded to committee. It came out of committee and committee report on October 29. We anticipate because of the pre-study that we will not need to study it any more than one or two days. The House of Commons had the bill for well over a month.
Honourable senators, I give you those statistics so that you and I will be armed when we are confronted with the typical argument that we are not sensitive to the plight of the unemployed and that we do not recognize the importance of moving legislation through as quickly as we can.
Honourable senators, we are continuing to do the job that we are intended to do here, so that the benefits can be out there for the individuals they are intended to benefit. That is exactly what we are doing in this case. Senator Gerstein and I and the rest of the members of our committee ask honourable senators for their permission to move this bill through the Senate expeditiously, but nevertheless cautiously and responsibly, so that the benefits can be out there.
We know there are amendments, and we have not studied those amendments. Senator Neufeld referred to certain amendments that were made to this legislation. We will want to study those.
However, one of those amendments addressed the importance of having Royal Assent to this bill by mid-October and removed it. One would wonder why there would be, in a piece of legislation, a requirement for Royal Assent by mid-October. If it was after mid-October, then certain people at the front end of entitlement would drop off.
Why would that be put in a piece of draft legislation? I think honourable senators may want to think about that a little bit. I would hope that it was not in anticipation of that bill having been passed in the normal course in the other place and then pressure would be put on us in this place to pass it by mid-October. Were we not to do so, certain people would be lose their entitlement. I would hope that it does not appear in a piece of draft legislation for that reason.
Honourable senators, three different panels appeared before us in committee on this matter. The overview of the discussion from the panels of the non-government people was that, generally, this will help a certain number of individuals and it should be passed.
There are individuals who have not typically claimed Employment Insurance over many years. I will remind honourable senators of what Senator Neufeld has already indicated: At the top of the scale are the claimants who have contributed at least 30 per cent of their maximum EI employee premiums in at least 12 of the 15 preceding years. They have been working away for 12 of the 15 years and they have contributed at least 30 per cent of the maximum. Additionally, they have not claimed more than 35 weeks in a five-year period.
That is a pretty special group of individuals and that point was made.
One point made about that at our committee was that this was really favouring the upper income segment. It does not help the lower-salaried individual who is not likely to have contributed at least 30 per cent of the maximum EI benefit premiums. It obviously does not help any of the workers out there who have claimed more than 35 weeks over the past five years, and there are many of those. It does not help individuals who are seasonal employees through no fault of their own. That is the job they have and they do it well during that seasonal employment, but there is no opportunity to find alternate employment for the rest of the year. It does not help them.
When we passed Bill C-10 and gave the extra five weeks, we recognized it was during an economic downturn period and that there was a need for help. However, it was a need for help universally. It applied to everybody. Everyone who needed Employment Insurance received the extra five weeks. In fact, honourable senators will recall that there was already a program in place giving an extra five weeks in areas of high unemployment. If we had focused on that a little more, we might have not felt the urgency to get Bill C-10 through as quickly as we did.
However, that was only for areas of high unemployment, whereas Bill C-10 was universal.
Surely, that has to be the concept that we accept with respect to insurance. It does not matter that someone happens to be a lower-income employee. It should not matter that someone is a seasonal employee. It should be universal.
The main problem with this legislation is that it is not universal. It applies to a maximum of 190,000 people and will cost between $900 million and $1 billion for that select group of individuals.
That was the fundamental complaint that we received with respect to this legislation. Yes, it will help those select individuals, but there is a need for a fundamental review of the Employment Insurance regime across the board. It has been used over the years by many different governments for situations that should have been funded out of general revenue, as opposed to being funded by those people who are paying into Employment Insurance and the employers who are paying into this program through an employment tax.
That is the main complaint that we received during our hearings on this matter.
Honourable senators, it is piecemeal legislation, but it does help. To the extent that it does help that group of individuals, as we reviewed the legislation, we found nothing in terms of its wording or what it is trying to achieve that would cause us fundamental concern. The only complaint is that it is too restrictive and it treats a group of individuals who are probably the best suited of all unemployed people to obtain assistance in other ways and through other programs, which was referred to by Senator Neufeld.
We had Bill C-50, the Budget Implementation Act, 2008, which created the Employment Insurance Board. Then we found out the board had not been appointed yet. Its main job is to set the premiums and, shortly after that, premiums were fixed for 2008, 2009 and 2010. Therefore, assuming no further legislation, the first time the board will be involved in setting premiums will be in 2011.
Government policy is that it will set premiums such that this program will break even. However, only $2 billion has been put into the trust fund, whereas everyone who came before us, including actuaries and various industry representatives, said it should be in the range of $15 billion to $20 billion. Then it could work like an arm's-length insurance group. However, it will be poorly funded. It will not have the funds to do the job it is supposed to do, and it has not been appointed in any case.
That is the beginning of the reform of Employment Insurance. There is a need, honourable senators, for a fundamental review of this whole area. After the Budget Implementation Act, 2008, Bill C-50, passed a year and a half ago — it is coincidental that the number was the same as today's legislation — we had Bill C-10. We dealt with Bill C-10 and the five-week extension. Now we have Bill C-50, and Honourable Senator Neufeld has advised us there is another bill forthcoming, Bill C-56.
Each of these is important in its own right, but when dealing with a program piecemeal like this, there will be the unintended consequences of one piece of legislation interfering with another piece, or one group of people being disadvantaged to the advantage of another.
I suggest to you, honourable senators, that although it is unlikely that we will be proposing major fundamental changes to this piece of legislation — and I say "unlikely" since I do not know what the committee will feel after it has a chance to review these amendments — behind this is our feeling that there should be fundamental review of the entire subject of Employment Insurance.