Statement made on 05 November 2009 by Senator Joseph Day
Hon. Joseph A. Day:
Honourable senators, I, too, would like to thank the members of the National Finance Committee for meeting out of their normal time to handle this bill, Bill C-50, and for demonstrating their diligence and good work of this chamber.
I would also like to compliment Senator Neufeld on his first opportunity to sponsor a bill and congratulate him on a job well done on this particular piece of legislation.
As indicated, honourable senators, we met today with Human Resources and Skills Development Canada and Service Canada to understand the amendments to this particular bill. As I anticipated yesterday in my comments, the government made three amendments at the end of the committee hearing process in the House of Commons. Two of the amendments removed the nine-month backdating provision.
Honourable senators will recall that the bill provided that those who established their entitlement period January 4 of 2009 forward would be entitled to the provisions of Bill C-50. However, there was a qualification that it was the later of January 4 or nine months plus another qualifier of the Sunday two weeks before.
I will not get into the details, but it made it roughly mid-October that, if the bill received Royal Assent after that, then the January 4 date would be moved.
The government has taken out the nine-month restriction in the amendment. On questioning, it was indicated that they went back to January 4 because of an analysis of those who were in receipt of Employment Insurance claims. They went back to January 4 to ensure that they included that large group.
I asked about the nine-month restriction, and the answer given was that, well, we did not want to leave this open-ended; it could get to be quite a number if the bill did not receive Royal Assent for a period of time. On reflection, it was more important to try to capture that group of individuals from January 4, so the nine months has been taken out. Honourable senators, I believe that was a wise amendment.
The only other amendment is one that I wish I could say that we found was necessary. We had looked at this earlier on. The government proposed this amendment to ensure that the extra weeks of benefit provided for in this bill could, in fact, be received. The difficulty is that the way the Employment Insurance Act is worded there is a period of time called the benefit period and it is during that benefit period that those who qualify can receive benefits. Benefits and the benefit period are out of sync by two weeks because of the delay time.
This bill extended, from 50 weeks maximum, 20 weeks more; up to 70 weeks that certain individuals can claim Employment Insurance benefits now; however, they had not extended the benefit period. Even though they were entitled, under this legislation, to receive 70 weeks, their benefit period was only 52 weeks; they could only receive the 50 to 52 weeks as opposed to the 70 weeks that was the intent of this legislation.
For that reason, the amendment extends the benefit period so individuals can take full advantage, if they are entitled under the rules of receiving benefits for the entire 70 weeks. That period is 50 weeks plus 20.
Honourable senators, 20 weeks is the maximum number of extra weeks that can be received. There is a reducing scale. The first test is unemployed individuals cannot have claimed more than 35 weeks in the last five years. They must have paid 30 per cent of the maximum of the annual premiums on an annual basis for 12 of 15 years to fit under this framework. As I indicated, they cannot have drawn more EI benefits over five years than 35 weeks.
Honourable senators, those restrictions create a restricted group. The concern that was expressed was that there will now be good unemployed and bad unemployed. The good unemployed will be able to receive these benefits, and the bad unemployed — the lower income workers or those who have received more than 35 weeks over the last five years — are not entitled to fit into this framework. The restrictions create two classes, and that was one of the concerns — I think it is a serious concern — at a philosophical level. We look at this legislation from a policy level, and we look at it from how that policy is implemented. We will talk more on Bill C-6 about how the policy is great but how it will be implemented causes concerns. With this bill, I am concerned at the policy level that we are creating these different categories of individuals. That concern is the biggest one that was expressed.
I failed to make one other point yesterday that should go on the record, and that is with respect to the cost. We asked today if the cost for this initiative remains unchanged, and the government indicated $935 million is the government estimate and 180,000 to 190,000 people, maximum, will benefit from this bill.
The concern is the cost. The government will create a separate board that is supposed to be somewhat at arm's length from government and that is supposed to set the premiums to break even with the benefits that are paid out. That work is intended to happen within the next year or so.
The board has now been created, and the concern is that the board has only $2 billion in their fund. Certain of our witnesses, including the Atlantic Institute for Market Studies, AIMS, the think tank from Halifax, expressed concern about the funding. AIMS said that the $935 million for this special program, which exists only for a year and a half and then it is over, should be paid out of the Consolidated Revenue Fund into the trust fund for future Employment Insurance, as opposed to taking it out of the $2 billion amount that had been transferred. Now the money for the program will start with $1 billion. There is no way they will be able to function on a break-even basis without setting premiums that are so high that absolutely no one can afford to pay them.
A problem is brewing in that regard, honourable senators, and I am confident we will need to deal with that problem at another time. It is there and it remains there.
The other concern is one expressed by honourable senators yesterday. I think it is important to indicate on the record that this situation is extraordinary. If someone looked at this situation on its face and determined that Bill C-50 came into this chamber 24 hours ago, and we are now leaning towards passing the bill at third reading, a 24-hour bill must not be looked upon as a precedent. I appreciate the words of Senator Cools and Senator Carstairs, and I endorse their words.
However, it is important to remember that we conducted a partial pre-study with respect to this particular matter. We were familiar with the bill, and we recognized how important this bill is in the economic downturn. For that reason, I encourage honourable senators to consider this legislation as a one-off, and the way we have handled it here as a one-off. I think people will understand that the Senate has done its job in passing this legislation, on division, as it was passed on division at our committee.