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]

Thursday, March 15, 2001

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[Translation]

The Vice-Chair (Ms. Diane St-Jacques (Shefford, Lib.)): Hello everyone.

We will begin our hearings on Bill C-2, An Act to amend the Employment Insurance Act and the Employment Insurance (Fishing) Regulations.

First of all, I would like to apologize to the witnesses for the wait. We will try to make sure that this does not happen again. Unfortunately this morning, there were delays.

This morning we are hearing from seven groups of witnesses. We will proceed in the following manner: for the first hour, we will hear from a group of four and then, at 12:30, we will hear from a group of three.

There will also be a lunch served given that we will be here late and that it will be close to question period. Therefore, everyone may eat.

Among the groups that we are hearing from today, there is Mr. Alain Jalbert from the Coalition chômage, section Manicouagan; Mr. Valois Pelletier and Mr. Michel Bérubé from the Comité de concertation régionale de l'assurance-emploi (Baie-Comeau, Rivière- St-François); Mr. Yves St-Pierre and Mr. Luc Bourassa from the Mouvement Action-chômage de Trois-Rivières, as well as Mr. Rick Clarke from the Nova Scotia Federation of Labour. Welcome everyone.

The witnesses will make a presentation of approximatively five minutes in length, and subsequently all the members, from both sides of the table, will ask questions in turn. There will be approximately five minutes to ask the question and to answer.

At some point I may be required to interrupt you, as we are going to try to respect the clock as much as possible in order to allow everyone an opportunity to ask questions. I apologize in advance.

There will be a first round of questions. Some members may have questions for the second round or when we hear from the second group, unless some members do not wish to share the question period.

We will begin with Mr. Alain Jalbert from the Coalition chômage, section Manicouagan.

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Mr. Michel Bérubé (Spokesperson, Comité de concertation régionale de l'assurance-emploi (Baie-Comeau, Rivière-St-François)): Madam Chair, given that the situation on the North Shore is similar, we will table one brief on behalf of Mr. Pelletier and Mr. Jalbert. I will be reading the brief, but the questions may be asked of all three persons.

The Vice-Chair (Ms. Diane St-Jacques): That's fine. Thank you, Mr. Bérubé.

Mr. Michel Bérubé: Thank you, Madam Chair.

The Comité de concertation régionale de l'assurance-emploi is composed of trade unions, members of the Regional County Municipalities, grassroots organizations, Aboriginal communities, employers and employees. It was formed to fight the recent changes in the employment insurance economic regions.

The government tabled Bill C-2 to reduce the impact of the changes made in 1997. This half-hearted admission is not enough, in our opinion, and in our presentation, we will attempt to demonstrate to you the need to overhaul the Employment Insurance Act.

Accessibility to the plan: the recent amendments to the Employment Insurance Act have had some major impacts on the beneficiaries of this program. Moreover, none of the objectives, with one exception, have been achieved. The government wanted to save money on the backs of the unemployed. Now that this has been achieved, over and above the surplus needed to cope with the recession, it is long past the time to adapt the plan to the realities of the labour market.

One problem does not take into consideration these new realities: one of the objectives of employment insurance reforms from 1997 was to adapt the plan to the new realities of the labour market. This quote from Mr. Pierre Pettigrew describes this:

The objectives of the employment insurance reform were to reduce costs and modernize the plan to bring it more closely into line with the social and the economic realities confronting all Canadians.

The effect was in fact quite the opposite and this was foreseeable.

Omission of the self-employed: according to Statistics Canada data, self-employed workers accounted for 12% of all employment in 1976. The report of the Employment Insurance Commission states that between 1995-96 and 1998-99, the percentage of self-employed workers increased from 16% to 18%. This is one layer of society that has not been impacted. One important element, for example, is that a fisher-owner is eligible for employment insurance, which is not the case for self-employed workers in other sectors.

Employment insurance, an injustice to students: The Employment Insurance Act does not encourage students at all, quite the contrary. As we know, more and more students are working part-time and full-time in the summer to finance their studies. They pay premiums but without being able to benefit under the plan.

Please note that I am not reading the text word for word, due to the time.

Casual employees: Casual employees are currently penalized by a number of employment insurance rules. Although these workers are already in a precarious situation, the current plan penalizes them through the intensity rule. We understand that the bill would increase the intensity rule to 55%, but we believe that this is insufficient and we say that it should return to 60%, as was the case in the former system.

Young people, too, are penalized by increasingly discriminatory eligibility rules, which change the system of insurable weeks into a system of insurable hours. Despite what government representatives say, the hours-based system penalizes students. For example, a student working 17 hours per week for 52 weeks would be no more eligible for unemployment insurance than anyone else. Even working 17 hours per week, that person would have an insufficient number of hours to be eligible for unemployment insurance.

Mention is also made of mothers returning to the workforce. Yes, there is a change in the bill, but this doesn't take into consideration a mother who wishes to return to the workforce on a part-time basis. She will not have the same access, even after two or six years, if she returns to work part-time. This is the case, for example, for regions such as the North Shore, where in three years, 525 hours of work would be required.

A plan that is out of touch with the social realities of employees: The number of employment insurance beneficiaries has been drastically reduced. Between 1996 and 1999, the number of unemployed declined by 17.2% while the number of those receiving regular benefits fell by 27.7%. Between 1993 and 1999, the number of unemployed fell by 28% while the number of those receiving regular benefits fell by more than half, 52.4%.

Special benefits: The maternity provisions of the Employment Insurance Act are discriminatory. To be eligible for maternity benefits or parental benefits, it used to be that 700 hours were required. Since December 31, 600 hours have been required, with the exception of regularly unemployed, where only 420 hours are required. We find this to be discriminatory against women on maternity leave.

Non-indexation: In the passage from unemployment insurance to employment insurance, the maximum benefits were frozen. Each year, the maximum benefits were consequently not indexed. We note, however, that the average weekly benefits increased at a rate lower than the inflation rate. This means that those who are receiving the maximum benefits were unable to increase their benefits to offset inflation. This leads us to believe that the real objective of the reform was to save money.

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Some insufficient changes in Bill C-2: What remains of the 1997 reform? All the elements are discriminatory and unfair, such as the following.

The hours-based system: First, the statistics show that the number of eligible beneficiaries has declined since 1997. Today, a new arrival might work up to 17 hours a week without ever being eligible for employment insurance. The committee suggests that we go back to the old system or reduce the number of hours required for all claimants, in other words to return to a universal plan.

The denominator rule: Employment insurance payments are based on income earned over six months. This system again benefits the government, since under this rule beneficiaries are qualified on their last 52 weeks of work, but their benefits are calculated over the last 26 weeks.

Take the case of a claimant who works 380 hours in the first part of the year and 40 hours in the second part of the year (the remaining 26 weeks). He would get $15.71 per week under this system, because his employment insurance benefits would be based on 40 hours.

The committee suggests that we go back to the old system of calculating benefits over the last 52 weeks, which would be fairer to the claimant.

The redrawing of the boundaries of the employment insurance economic regions had a dramatic effect in our area. Under the regulations, those boundaries must be reviewed at least once every five years. The most recent review was in 2000.

According to the federal government, this review is needed in order for the employment insurance economic regions to reflect the job market situation, or, in other words, for people living in areas of high unemployment to get the help they need from the plan. The regulations are very ill-suited to remote regions such as the ridings of Charlevoix and Manicouagan.

Unemployment rates are lower in the main cities, but very high in most small towns; in Aboriginal communities, it is around 50%. The statistics for these communities are not even used in calculating the unemployment rate. This effectively puts these people at a disadvantage; they are included in a sample that in no way reflects their situation on the job market.

Here is another inconsistency under the regulations: a seasonal worker in the tourist industry who lives and works in Baie-Comeau would be penalized relative to a seasonal worker who works in Baie-Comeau but lives in Blanc-Sablon, because they are not part of the same economic region.

The committee recommends that the economic regions be abolished and that a system be set up based on the individual, not irrelevant factors such as Statistics Canada areas.

The following irrelevant factors go into determining who should be lumped together into an economic region: the homogeneity of the job market, the need for contiguous regions—except in the case of islands—and indicators such as hours worked and weeks payable.

Past experience shows that these factors are quite irrelevant and do not take into account the characteristics of each employment sector or the significant differences between regions like the North Shore and Charlevoix proper.

After a meeting in Baie-Comeau with the chief actuary, Michel Bédard, we demonstrated to him that the new Lower St- Lawrence—North Shore economic region does not meet his department's criteria at all. His reaction was astounding: he told us the criteria were only guidelines, and they were not required to follow them.

Under the circumstances, it seems clear to us that this approach can have only one purpose: to boost the employment insurance fund by paying out less.

By way of conclusion, Madam Chair, we strongly believe that the plan should be based on individuals, not regions, and that an adequate system would naturally limit abuse by ensuring that those who live in areas of low unemployment go back to work more quickly than those who live in areas or regional municipalities with higher unemployment rates.

The beauty of such a system is that it would treat everyone equally and provide genuine coverage across Canada to individuals who pay the majority of premiums.

In addition, we propose that the employment insurance fund be independent and used only for the intended purposes. Employment insurance coverage would thus be based on the real needs of individuals, not those of the Minister of Finance.

In closing, Madam Chair, the proposed provisions of Bill C-2 would correct very few of the mistakes the government has acknowledged and would legalize the seizure of money that belongs to the unemployed.

Thank you very much.

The Vice-Chair (Ms. Diane St-Jacques): Thank you, Mr. Bérubé.

I will now turn the floor over to Yves St-Pierre and Luc Bourassa representing the Mouvement Action-Chômage from Trois- Rivières. Welcome.

Mr. Yves St-Pierre (Coordinator, Mouvement Action-Chômage de Trois-Rivières): The Mouvement Action-Chômage de Trois-Rivières is a grassroots organization whose main goal is to advocate for the rights of the unemployed in the Mauricie region, which includes the electoral ridings of Trois-Rivières, of course, Champlain and the large riding of Saint-Maurice.

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As far as we are concerned, it is clear that the amendments to employment insurance must be based on the notion of doing more with more. Often, over the past few years, we have been accustomed to hearing about "doing more with less" since we no longer had the resources as a result of government cutbacks. It is clear that the employment insurance fund—this employment insurance does exist and we will come back to this point later—contains enough money to do more for the unemployed and to provide better coverage in terms of eligibility and level and duration of benefits.

I would like to remind you that, right now, the fund surplus is standing at approximately $38 billion and that, according to the budget provisions outlined in what we refer to as Martin's mini- budget of October 18, 2000, the minister foresees a surplus of about $35 billion over the next five years thanks to the employment insurance fund.

This surplus, in a nutshell, represents 60% of the entire government surplus in Canada. In our opinion, it is very clear that if a decision is made to use this money for other purposes, such as to reduce taxes, for example... Not everyone will be paying for that in Canada, not everyone will be contributing to that. There's a special category of people who will be making a contribution and these are the unemployed.

In our opinion, although Bill C-2 is necessary, it cannot be justified. It is necessary because amendments need to be made and the slate of proposed amendments does include some that are essential, such as the intensity rule and the tax clawback. However, it is not justifiable because it does not go far enough. One of the main problems is, in our opinion, the whole issue of eligibility for benefits.

As far as this point is concerned, the amendment contained in the bill is extremely limited. All that it says is that individuals who have received parental benefits over the past five years may be deemed to be regular beneficiaries as opposed to new beneficiaries when they re-apply for employment insurance. Consequently, they will not need 910 hours, but between 420 and 700 hours, depending on their region's unemployment rate.

However, you must understand that, from now on, in order to be deemed a regular beneficiary, you have to first of all have received these benefits, and the people who were entitled to these benefits, since the 1996 reform, are few in number since the current eligibility requirement doubled for these individuals. It was raised from 300 hours, the former requirement, to 600 hours. This measure will, therefore, have little impact on us.

We feel, more than anything else, that we need to simply eliminate the newcomer category for eligibility. Who are these newcomers? They are primarily women who are going back to work after taking a leave of absence in order to take care of their children. They are also women, in general, because they are the ones found in the precarious job categories of the labour force. They are the young people who are trying to enter the job market and who also are found in the precarious jobs. For these people, we are simply stating that the bar has been set too high. They have to have 910 hours and therefore they are excluded from the employment insurance system whereas, in our opinion, it is important that they be included. To do this, we should use the same eligibility standard for everyone.

The federal government should also make substantial amendments to increase eligibility, amendments that would eliminate the new entrant rule and increase eligibility in general.

We have a table showing that, in our Trois-Rivières region, for example, a person who lost his job in 1989 stood a 97% chance of being entitled to benefits. According to the latest numbers obtained from Statistics Canada, the 1997 data, we can see that this percentage fell to 34%. Clearly, this percentage is far too low and we need to increase accessibility to this system.

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Our brief also points out that the Canadian government appears to want to make, at present, minor amendments. We are not at all confident that significant amendments will be made. If the government wants to limit itself to minor amendments, we told ourselves that we would suggest those amendments which would resolve some extremely important irritants for the individuals experiencing them, amendments that would resolve these irritants at low cost. We have, therefore, focussed on those irritants that we see the most often in our offices.

The first irritant pertains to the insurability of agricultural and horticultural workers. According to the 1996 measures, all beneficiaries, with the exception of agricultural workers, are insured starting with the first hour worked. If someone is working in the agricultural or horticultural sector, he or she must have been in the employment of the same employer for seven days before one hour can be deemed to be insurable. For all other workers, it is the first hour that counts. For someone working in a convenience store for three hours, the first hour counts. This person is not asked to work for seven days at this same convenient store. However, someone working on a farm must work there for seven days, otherwise the hours worked will not count.

This is discrimination. People do not understand that. They come to our offices and tell us that they have worked on a farm and we tell them that their hours were not insurable. “Why is that?”, they say. I am therefore asking you to explain to these people why they are being discriminated against, why they are being singled out in particular by the act. We don't understand it.

The other aspect dealt with in our brief pertains to this famous subsection 19(3) which you have perhaps already heard about. What does it state? It used to be that people were asked to declare an amount on their card and they were told that if they made a mistake, they would have to reimburse the amount if they received benefits during that same week. Subsection 19(3) establishes an employment period. If you made a mistake for a week during which you did not receive benefits, you were to reimburse this amount for a week where you did receive benefits.

People are therefore wondering why, because they made a mistake for a week during which they did not get any benefits, they are being asked to reimburse money during the weeks where they were entitled to benefits. An employment period is established. People do not receive benefits for an employment period; they receive benefits for specific weeks and they expect that, if they are being asked to reimburse this amount, that it be for specific weeks.

The Vice-Chair (Ms. Diane St-Jacques): I apologize for interrupting you, Mr. St-Pierre, but could you please conclude? It seems that your time has expired.

Mr. Yves St-Pierre: I will speak about the two or three final points very quickly.

Let's take the case of the teachers. According to another clause, teachers are not entitled to benefits for their leave periods. As a result, teachers are entitled to benefits when these benefits do not fall during holiday periods. During the Christmas vacation, their benefits are cut off. We just don't understand this.

The economic region: we have a significant problem because in 1996, Mauricie was artificially made part of Quebec Centre, which caused the unemployment rate to go down, including the unemployment rate of the Prime Minister's riding. The people in this region are, therefore, penalized.

The last point we wanted to make is that throughout the election campaign, when the candidates were making their rounds, the Liberals told us—and this can be found in a government press release quoted in our brief—that there was no particular account containing a surplus. We want to tell the Minister of Finance that an account does exist somewhere. According to sections 71 to 80 of the Employment Insurance Act, the law provides for such an account and provides that the Minister must pay interest on the amount in this account. We are simply asking that the Minister abide by the law.

The Vice-Chair (Ms. Diane St-Jacques): Thank you very much, Mr. St-Pierre.

We will now be hearing from Mr. Clarke, of the Nova Scotia Federation of Labour.

[English]

Mr. Rick Clarke (President, Nova Scotia Federation of Labour): Thank you, Madam Chairperson.

Earlier this month the CLC appeared before this committee. We are a direct charter of the CLC as a federation of labour. We represent approximately 70,000 workers and their families in the province of Nova Scotia.

In addition to that we also work very closely with community organizations and within the anti-poverty network. So I think you will find that the views and concerns that are raised on behalf of the federation clearly reflect the views and concerns of literally tens of thousands of more Nova Scotians who are not members of unions, many of whom are having difficulty finding employment and the others are among the working poor.

We do welcome the opportunity to appear before this committee to raise our views and concerns on Bill C-2. I have to say from the very beginning that we are very disappointed that Bill C-2 doesn't come near what is required to address what is needed for a modernized employment insurance program for this country and to correct some of the wrongs done by previous governments.

As indicated, we are part of the CLC, so we do endorse the presentation and recommendations made by them. However, we will try to put more of a regional or provincial perspective on the positions raised on March 1.

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I'd be very remiss if I didn't begin by expressing the anger that's felt when we watch the abuse and misuse of the EI fund. The money that is gathered in the EI fund comes from premiums for an insurance program for workers to hedge against when workers may lose a job. The program is intended to benefit both employer and worker alike, for the worker to receive benefits between jobs and for the employer to be able to retain a workforce through short periods of layoff, as we see a lot of times in our seasonal or cyclical industries.

It seems that government needs to be reminded that an insurance premium is not a tax, because that is what it's being used as. Using the EI fund for deficit reduction and other general expenditures is a misuse of the principle and intent of the insurance and its funds. The unemployed in this country were the real victims of the government's war on the deficit, by paying down the deficit on the backs of the unemployed. Because of the misuse—and in general I do not agree with the term “payroll tax”—the government has actually turned these insurance premiums into a form of payroll tax. Employers are being taxed an additional tax for providing a job and workers are being taxed for working. Others have talked about the misuse of this. It is certainly not a fair use of the money, and it is not a fair tax, if you would.

I talked about the wrongs and the concerns about this, and we also have concerns about the actual impact it has had. When we look at the poverty in this country, which is still a national crisis and a national shame, a contributor to that, among other factors, as has been quoted by Statistics Canada and others, is the gutting or the cuts we have seen to the EI system. In Nova Scotia alone in seven short years we've lost $2 billion out of the pockets and off the tables of the unemployed. That's $2 billion that's not going back into the economy.

It is also creating a direct cost to taxpayers in the sense that workers who no longer qualify for benefits or who qualify for reduced benefits that do not sustain their families have to turn to our social assistance and welfare systems, and that is putting more and more strain on an already strained tax base.

Before going on I want to address, as others have, the so-called surplus we see in this fund. It's not a surplus. It's an accumulation of unpaid benefits for which workers and employers have paid their premiums, and the money should be used for the benefit of unemployed workers.

There are a couple of issues within the legislation that we do support. I have included in our presentation the summary and recommendations of the congress. We do support the elimination of the intensity rule and the clawback penalty. We support the proposal that all clawbacks should be eliminated by extending the exemption from 30% tax back on special benefits to include also all regular benefits. We say that, by the way, with the full knowledge that it's not likely going to benefit anyone in Nova Scotia or in the Atlantic region because the vast majority of the clawback has taken place in Ontario, Alberta, British Columbia, and Quebec. But what's fair is fair, and certainly the clawback should be eliminated.

To talk about what the bill doesn't do or what we don't like about it, first of all, it does nothing to counter the human crisis created by the action or inaction of the government that has in fact seen better than two-thirds of unemployed workers not receiving benefits.

We've included in our presentation some statistics that show the impact in Nova Scotia by riding and also for the Atlantic region. The statistics clearly show the severity of the impact of the intensity rule and the qualifying and requalifying changes we saw in 1996, which had a major impact on unemployed workers in the province.

We would also like to be on record that we support the recommendation of the congress to this committee to abolish the 910-hour re-entry rule, which would enable thousands more unemployed workers who have been out of the workforce for over a year to be able to qualify for benefits.

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Equally we support the committee and recommend to the committee that the variable interest formula be replaced with a uniform 360 hours with a longer benefit period. These progressive changes will help right some of the wrongs and inadequacies that we've seen within the system and will be a major step towards modernizing the system. Perhaps then we'll be able to open the door for the over one million unemployed workers who currently cannot qualify.

Another issue that's not addressed in the bill, and certainly needs to be addressed if we're talking about modernizing the plan, is the explosive growth we're seeing in this country of non-traditional or non-standard forms of work—part-time work, temporary contracts, on-call schedules, and self-employment.

The Vice-Chair (Ms. Diane St-Jacques): If you are able to make a conclusion, because we are over time...

Mr. Rick Clarke: I'll wrap it up very quickly, Madam Chairperson.

These jobs are particularly...and it's a trend that's happening. It's not just in traditional, seasonal type of work that a lot of people think it's in. It's in new industries and the new technologies that are coming in. People are taken advantage of by being employed as part-time workers, of which the vast majority are women. That means there are more and more women who are not qualifying for benefits.

We do recommend in our presentation that if we're modernizing the bill we should at least cover 70% of the unemployed workers who would receive two-thirds of their average claimed earnings.

The last point, and I'll just summarize it very quickly, is that we're very opposed to more Canada Employment Insurance Commission powers—such as setting premiums—going to the minister, and we believe it has to be an arm's-length operation so that there's some integrity and trust in it. In fact, we should be creating an employment trust fund that has major input from the stakeholders, if you would, to de-politicize EI.

[Translation]

The Vice-Chair (Ms. Diane St-Jacques): We will now begin asking questions. I would like to remind everyone that you will have only one opportunity to speak and that the question and answer period has been divided into five-minute blocks. I would, therefore, ask you to be relatively concise.

We will begin with Ms. Val Meredith, followed Mr. Joe McGuire, Mr. Yves Rocheleau and Ms. Raymonde Folco.

[English]

Ms. Val Meredith (South Surrey—White Rock—Langley, CA): Merci. Thank you, Madam Chair. Thank you all for appearing before the committee and sharing your thoughts with us on this legislation.

My first question I'd like to raise with Yves St-Pierre. You raise the issue about young people not qualifying. We've heard witnesses before who felt it was necessary to break what they considered the cycle on seasonal workers—on people going into a workforce that was already overpopulated and couldn't sustain the market—and that the changes were made to discourage young people from leaving educational opportunities to go into a workforce that was already overpopulated.

Do you agree with that thought, that it's not necessarily a bad thing to give young people a different direction to go?

Mr. Luc Bourassa (Vice-President, Mouvement Action-Chômage de Trois-Rivières): I think I can answer this question. In our opinion, it's difficult for young people to have enough hours to reach the 910, and we think it's very important to have only one level to be inside the unemployment... We don't think it's a good idea, because it's more difficult for the youngest to have a job for all the years. It's also more difficult for them to have a job for the number of weeks, the number of hours, they need. That's why we want to have only one level. This level could be 350 or 360 hours. The committee will make the suggestion to the government, but we think it's important to have only one.

For example, we didn't include the example for the special...

[Translation]

How do you translate “prestations spéciales” in English? How do you translate "congé parental"?

[English]

Ms. Val Meredith: The special benefits.

Mr. Luc Bourassa: We don't include that inside, but it's the same thing for us. We need to have only one door to be inside the—

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Ms. Val Meredith: Okay, but what some of the other witnesses indicated was that it was important to encourage young people to make a career choice—to either get more education or to go into a career choice that gave them better opportunities than seasonal work. They felt that this change, by making it harder for young people to get into that career choice, was showing some benefit; that younger people were making career choices into more permanent-type career or educational opportunities. Do you agree with that or not?

Mr. Luc Bourassa: I think it would be a nice thing to say to young people, “Be sure you have a good opportunity to study because you will have problems with unemployment benefits.” That's a big problem, because I don't think it's a career to be in the unemployment system. I don't know anyone who chooses to receive benefits. It's not a choice; it's just a bad reality. That's it.

[Translation]

I don't know anyone who chooses to receive benefits. The unemployed in our region ask three basic questions.

The first question pertains to whether or not they are entitled to benefits. The second question pertains to the amount of the benefits. The answer given by Bill C-2 is that there will be a $55 increase. This is what people understood, and the government knows full well that this is what people understood and it capitalized on this fact politically during the election campaign. That is the only question that the government answered. But people are also wondering how long they will be entitled to the benefits. The three questions that are asked by these people are, therefore, whether or not they are entitled to benefits, how long they will be receiving such benefits, and what will the amount of such benefits be.

This week, I heard people say that there was a new bill and that it would improve the current legislation. I told the claimants that perhaps they would be receiving a few dollars more, but that they would be receiving nothing during the three or four weeks of unemployment preceding the start of their seasonal employment. That creates a big problem. The benefit period is not long enough. This has been described in many briefs. You have certainly heard about this. There are not enough weeks to cover the year and it is too difficult to qualify. That is the problem with employment insurance. This is not a little detail, it is a fundamental issue.

Nobody makes employment insurance a career. There are no youth whose ultimate goal is to qualify for employment insurance. To claim otherwise is wrong. Of course, with the current situation, parents are telling their children that, because it is so difficult to qualify for employment insurance benefits, it is essential to stay in school. That may be so, but people are facing a real problem when they try to find jobs that last long enough so that they can be eligible for benefits. This situation resembles the one when we tracked down abusers and fined them heavily. It did not produce convincing results.

[English]

Ms. Val Meredith: So the short answer is you don't agree with the other witnesses' assessment that it is keeping young people in education longer and encouraging them to make other career choices? You don't think it's working?

Mr. Luc Bourassa: I don't think it's a good idea to have more hours than the others. I don't agree with it.

Ms. Val Meredith: Okay. Thank you.

[Translation]

The Vice-Chair (Ms. Diane St-Jacques): Thank you, Mr. Bourassa.

I will now turn the floor over to Georges Farrah, followed by Yves Rocheleau, Joe McGuire and Yvon Godin.

Mr. Georges Farrah (Bonaventure—Gaspé—Îles-de-la-Madeleine—Pabok, Lib.): Thank you, Madam Chair.

I would like to welcome you to the committee. We are very pleased to see you here. I think that you have demonstrated that the current system creates inequities and major problems in the region. I myself come from a resource region where seasonal work is very important. We realize that this system causes many problems.

I liked your presentation earlier. Many people complain. That puts us at a disadvantage, because the people in our region are proud and want to remain so. Some people think that the unemployed are people who do not want to work so that they can receive benefits as quickly as possible. That is not true.

The best solution to the problems experienced by the people on unemployment insurance is to create jobs so that people can work. However, we also have to understand that, in the meantime, the situation is difficult and we need to have a social security net to protect these people. The situation is not an easy one. We are also talking about sizable costs. I am an ardent advocate of these people because I see how they really live.

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Our first mandate as members of Parliament is to represent our citizens well. Your situation typifies what is going on in many regions in Quebec and Canada.

Earlier you referred to the infamous gap. I do not think that you referred to it in your presentation, but it is a reality. That means that you have to go through five, six or seven weeks with no income. In addition, the salary is often very low, which means that the benefits will be low. It is, therefore, impossible to set aside money for the five or six weeks without benefits because, indeed, it is difficult to survive during these times.

I would like to mention an important point. My point pertains to the insurability for people working in horticulture and agriculture. A minimum of seven days' work is required. The amended legislation states that we need to count the number of hours worked, which provides better accessibility. Moreover, there used to be a frequent problem for seasonal jobs. In fishing, for example, some times there was not enough fish to warrant someone working more than 20 hours per week. The people did not want to work because this 20-hour work week did not warrant a, as we used to say, "stamp". In adding up the time in hours, we provided a type of incentive to work, even if the week was short. The objective of the reform is therefore not achieved in these two sectors, because we require seven consecutive days of work.

We have heard what you have said on many occasions and it reflects the reality accurately. I would like to ask you what, in your opinion, is the biggest problem that we can resolve in the short term. You may answer that we need to resolve all the problems, but I would like to know what, in your opinion, should be the short-term priority for the government, without losing sight of the overall problem.

Mr. Luc Bourassa: We are consulting each other on that matter. I think that the gap is one priority. There is also the issue of eligibility. Eligibility to the system and the gap are the two major problems that have to be rectified by increasing the number of claimants, extending the benefit period and shortening the waiting period before people are entitled to receive benefits.

I like Yves' approach detailed in the document. He talks about a series of small measures that do not cost a lot of money, but eliminate irritants for some people. This will not cost the government very much money. Many seasonal workers live with the gap. In addition, it is difficult for young people and women to have access to the system. It is very difficult to accumulate 910 hours.

The Vice-Chair (Ms. Diane St-Jacques): Mr. Jalbert.

Mr. Alain Jalbert (Regional Counsellor, Coalition chômage, Manicouagan Section): To answer Mr. Farrah's question, in addition to eligibility, I would like to raise another source of concern. We are concerned about the whole market because the North Shore is a resource region. The forestry and mining markets are currently in a state of collapse. Governments are now sensitive to the arrival of young people on the job market.

A few years ago there was a program for older workers called POWA, but it was abolished. Currently, companies on our territory must restructure. Some workers will soon go into retirement, within the next two, three or four years. If that program still existed, we could kill two birds with one stone by first allowing older people to retire and then giving younger people an opportunity to enter the job market. I think we really should reinstate this program because all governments are aware of the situation that young people are in. I think that it could help young people to get into the labour market, while allowing older people to retire with the help of a program like the POWA.

• 1210

The Vice-Chair (Ms. Diane St-Jacques): That's all the time we have, Georges.

Now, I give the floor to Yves Rocheleau, followed by Joe McGuire and Yvon Godin.

Mr. Yves Rocheleau (Trois-Rivières, BQ): Thank you, Madam Chair.

I address this question to the people from Action-Chômage in Trois-Rivières. First I want to congratulate you for your very high-quality document that reflects the excellence of all your work both in Shawinigan and in Trois-Rivières in defending the interests of the unemployed in our region, who are having serious problems. We must become aware of the devastating effects of the changes that were made in unemployment insurance over the past few years. The number of persons eligible for employment insurance has dropped from 87 to 34%, as you said. This, better than any speech, shows how serious the situation is.

My question is about a specific issue that seems insidious to me, namely the redefinition of regions.

If I understand the written report that you kindly sent me, the HRDC office in Mauricie recommended that the recent redefinition of the region should be changed, but this recommendation was not accepted by HRDC's national management.

This involves the riding of Trois-Rivières, the Prime Minister's riding, Saint-Maurice, and Champlain riding. First, please explain to us what are the negative effects of this decision on the workers in our region.

Secondly, you say that the minister, and thus the government, has the will to eliminate the concept of a surplus, which would be buried under all the rest. But you do refer to section 71 to 80 of the Employment Insurance Act whereby the government must use two columns, one for expenditures and one for revenue. Have sections 71 to 80 remained intact in Bill C-2?

Mr. Yves St-Pierre: ...

[Editor's Note: Inaudible]

...economic division to give you a brief background.

The 1996 reform contained many elements. Some escaped our attention, and thus we did not mention them at that time, but we did mention them later.

In fact, two regions were merged, the Mauricie region and the Quebec Centre region, Drummondville, Victoriaville, etc.

There is a very high unemployment rate in Mauricie. The unemployment rate in the Drummondville and Victoriaville region is low. There has always been a distinction between these two administrative regions in Quebec, but the bill merged them together. What was the impact of this? There was an artificial decrease of the unemployment rate on the North Shore, because the fusion of both unemployment rates lowered the rate in Mauricie and consequently workers had to accumulate around 70 more hours of work to be eligible for employment insurance, as the difference from the former unemployment rate was about 2%.

When changes were made to the North Shore, we took some measures, and the local Human Resources Development office notified the department that the two regions should be divided again because the profile of each region's job market was very different. The department chose to leave them as they were.

We also got in touch with the Prime Minister's Office; we are fortunate to have an influential member of Parliament in Saint- Maurice, at least we think we do. The Prime Minister's Office answered that it would be in touch with Minister Stewart, which was done, but Minister Stewart stood by her decision. We think that this adds to the economic problems of our region. Our unemployment rate is high and we have just lost another substantial amount. If the workers could get benefits, they would spend that money, which would help boost their region's economy. Our region has been penalized in two ways. On the one hand, there is a high unemployment rate, and then the money that it needs and that the people need is taken away. This money would help the employment rate in our region.

Now we come to the surplus in the fund. The bill as it is now drafted does not deal with this issue. It does not allow the government to put the surplus into the government's Consolidated Revenue Fund.

• 1215

What worries us more, is what the government is saying. As I mentioned in my presentation, when we went to see the candidates during the last elections, both the Liberal candidate of Trois- Rivières and the Liberal candidate of Champlain told us that there was no old surplus in the unemployment insurance fund and that there was no such thing as an employment insurance account. That is what is shown in the government communiqué quoted in our brief. That is what we were told.

Now, there was a problem because the act provides for an account. The government takes the money and puts it in the Consolidated Revenue Fund, but it must have an unemployment insurance account. There must be a figure. And not only because the act provides for this, but the Minister of Finance must also pay interest on that money. You do agree that interest must be paid on something. Therefore, this money must be accounted for in some way.

We are very concerned about what the government is saying. There seems to be a shift: people are told that there is no such thing, that there is no unemployment insurance account. But there is one. It is provided for in the act. We want the Finance Minister and all the Liberal members of Parliament to note this well.

The Vice-Chair (Ms. Diane St-Jacques): Now Joe McGuire, followed by Yvon Godin.

If anyone is hungry, I invite them to get up and get a bite to eat.

[English]

Mr. Joe McGuire (Egmont, Lib.): Thank you, Madam Chairman.

Quite a few witnesses who have appeared in front of this committee over the past number of weeks have advocated that the government get out of unemployment insurance, that it should be run by the employers and employees, and they would do a much better and much fairer job of administering the funds than one run by government.

I wonder why you would think that way, in that the people who pay into it are people from prosperous economies and low unemployment rates—like Ontario, for example, or Alberta, or some parts of B.C.—and a lot of those funds that are generated from those areas are actually transferred to areas of high unemployment, like the Atlantic area.

If government wasn't there to redistribute these funds or to have policies in place that would assist regions of high unemployment and seasonal industries, would areas that actually pay into the fund, employers and employees from prosperous areas, be as willing to follow this course of action, or would they be demanding in a situation where government wasn't involved that their rate should go down dramatically, both in the employer and employee areas, and that the regions would have to fare for themselves? What they would pay in they would take out, which I think overall would be to the detriment of the regions or areas of high unemployment in northern Ontario, or northern Saskatchewan, or whatever.

I don't understand why a lot of groups are proposing government get out of this business and leave it to the benevolence of areas of high employment.

[Translation]

Mr. Valois Pelletier (Spokesperson, Comité de concertation régionale d'assurance-emploi (Baie-Comeau, Rivière-St-François): We are asking that this be managed by employers and workers. The government can go on issuing cheques. We ask that the fund itself, the deposits made in the fund and all the rest be managed by employers and workers who contribute to the fund. It is specifically meant to compensate for the loss of jobs and revenue. As far as we are concerned, this law has social implications and it must be considered as such.

This will not harm economically strong regions. They will continue contributing to the system just like all the other regions and this is the very purpose of an act with social implications: the strong should help the weak. On the other hand, we need good management and no one can manage the fund better than those who contribute to it.

The Vice-Chair (Ms. Diane St-Jacques): Mr. Clarke.

[English]

Mr. Rick Clarke: With all due respect, I think part of your comment is probably a good indication of why the committee should have travelled the country to get a better understanding of what takes place across the country. When you look at what we're proposing, we're proposing that it be established as a trust fund. As with all trust funds, there are rules and regulations. If it were administered by stakeholders, then at least the money would be used for what it's intended to be used for, and not for other governmental services.

The other point that I believe your question or statement missed is that there are many unemployed workers across the country, in all regions of the country, who pay into this fund because of the hourly system but will never receive benefits from it. That money is building up into the fund because they don't receive benefits from it. That's workers in Atlantic Canada and workers in other areas that have high unemployment. They pay premiums but aren't receiving benefits. By having the stakeholders work with it, they have an understanding of the regions and of what's needed in the workplaces, and I think we'd have a lot fairer system than what we're seeing today.

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The Vice-Chair (Ms. Diane St-Jacques): Joe.

Mr. Joe McGuire: The regions would have an understanding of the regions, but would areas of prosperity and low unemployment have an understanding of the regions? They're the ones who are paying the shot. Why would they, through the goodness of their hearts, without a government to distribute these funds, say, yes, we will give 70%, we will really help out the region because we sympathize with their plight of having a seasonal industry? I think you're taking a lot for granted or have a lot of faith in your brothers who are generating the surpluses or the income from the system.

Mr. Rick Clarke: I don't think that's what we're suggesting, but certainly I haven't been here to hear all the presenters. I don't think what we're suggesting is that we no longer have a piece of legislation that deals with this program. What we're talking about is having a board or something at arm's length.

Mr. Joe McGuire: So the government would make the rules and you would...

Mr. Rick Clarke: Our concern, what we've been seeing over the last number of years, is when about 45% of the deficit reduction has come out of the EI or UI fund—to offset 45% of the deficit reduction. That's the wrong use of that money. We're saying the money belongs to unemployed workers.

Mr. Joe McGuire: But there have been a lot of years where the fund has been in deficit, where the consolidated revenue fund actually paid the shortcomings of the unemployment insurance.

Mr. Rick Clarke: I think those books are balanced now.

Mr. Joe McGuire: It has been a recent phenomenon that we have these kinds of surpluses, and with the downturn in the economy, this could be reversed pretty quickly. What do you do then?

Mr. Rick Clarke: With regard to when it was operating at a deficit, I believe those books are balanced again now.

Mr. Joe McGuire: Yes.

Mr. Rick Clarke: The reason there is surplus in there is because it's coming out of the pockets of the unemployed. What you're missing out on this is that whether it's the actual tax money that's coming out of a province or whether it's out of transfer payments, because the system has been gutted to the extent that there's over a million unemployed workers not receiving benefits across the country today...it's now coming out of our social assistance and welfare system, because there's not a lot of jobs.

In our agricultural area, we don't have the benefit of a temperate climate. We have a great agriculture industry down through the Annapolis Valley, but you cannot grow peas and beans in the middle of February. If government were so concerned about some of our seasonal industries...maybe we ought to stop the shipping out of round stock and start doing secondary manufacturing. Then we'd have year-round jobs. There's a lot that government can do. Rather than attack the unemployed, we should be attacking unemployment, and we wouldn't be having the crisis we're having in this country.

The Vice-Chair (Ms. Diane St-Jacques): Thank you, Mr. Clarke.

Sorry, Joe, that's the only time we have.

[Translation]

Mr. Godin, you may ask the final question.

Mr. Yvon Godin (Acadie—Bathurst, NDP): Thank you, Madam Chair.

I want to follow up on what my friend on the other side of the table was saying. Why should this be given to the private sector and to the workers when we have a government that is supposed to take care of the entire country? I think that the problem lies in the fact that they have lost confidence in the government as far as employment insurance is concerned. They lost confidence in the government when they read the 1997 report that said that only 37% of people were eligible for employment insurance.

After that, we never saw another such report from the government. In 1998, they didn't talk about it. In 1999, they didn't talk about it. They made the biggest mistake in the world. For once, they told the truth in their report.

Our problem is that workers are not eligible for employment insurance. That is where this 37% comes from. The government comes along with the excuse that 85% of people who should be eligible for employment insurance find a way to become so. It should be 100%. That is the problem.

I have a question. The government has often said that the reason why they've wanted to make changes to employment insurance was to prevent people from becoming dependent on employment insurance. I would like your opinion on that. Are people dependent on employment insurance or is it not rather that the government now depends on employment funds to pay its debts?

The Minister of Finance, Paul Martin, announced in October that there was a $12.3 billion surplus, of which $7.5 billion comes from employment insurance. I believe that this has become a national problem. This is where the government has lost the confidence of Canadians.

• 1225

It seems as though people are looking for a way to point out that it is they, employees and employers, who are contributing to this fund. They are asking for the opportunity to manage these funds. In a country such as ours, if Ontario and the Atlantic provinces cannot agree, or if Alberta and British Columbia cannot agree, should we belong to one country in that case?

What is a country? A country is a group of provinces who take care of each other. This is why we often said—and I will conclude on this note—that the problem in the Gaspé, the problem in the Acadian Peninsula, the problem in southern Nova Scotia, is the same as in Prince Georges, British Columbia, the same as in Edmonton, Alberta, the same as in Saskatoon. When a worker loses his job, there's a problem, and employment insurance is there for that reason.

On that note, I will give you the opportunity to make some comments.

Mr. Luc Bourassa: In fact, I am prompted to say that if we blame the unemployed for being dependent on benefits, I agree with what you say: we could perhaps challenge the government to end its dependence on premiums. On that point, we could challenge the government to do the same thing.

I'd like to come back to the black hole which is indeed a huge problem. As Yves was saying—he did a lot of work on certain smaller aspects which, I repeat are inexpensive, but which I think the committee should examine, because they do affect the whole—we must solve the black hole problem. As I was saying earlier, peoples' concern is whether or not they are going to get benefits, how much they will get and for how long. These are the fundamental questions people ask themselves. Do we have a responsible system? Are regions ready to help out others where things are not going so well? This is a basic question. This is what people want.

I also think that people are waiting for answers, for improvements to the system, and I sincerely hope that something will be done and that this will move forward.

The Vice-Chair (Ms. Diane St-Jacques): Mr. Jalbert.

Mr. Alain Jalbert: I would like to tell you a little bit about the North Shore Region. In fact, there are approximately 400 kilometres of villages in the Lower North Shore where there is no road. When we refer to people who are dependent on employment insurance, is it legitimate for them to do seasonal work when there is any? They are at home. For those who are not familiar with the Lower North Shore, we're dealing with entire villages where there are no adolescents. There are adults who have children, but the adolescents are not there, they're away at school. There are entire villages where there are no teenagers along 400 kilometres of shore. So when we say there are people who might be dependent on employment insurance, it's quite normal. We don't give them any way out: it's only natural that they become dependent.

Every region has its own characteristics, and unfortunately, when we meet to discuss laws that apply to the entire country, very often we neglect to visit the regions to get the facts in order to make the right decisions.

In the boundary redefinition of the North Shore—and I do not want to rob Peter to pay Paul—we distorted the North Shore. The people from the Lower North Shore have always had a great affinity with the rest of the North Shore: this is our territory. It was decided, despite the standards that we had set out, to amalgamate the Lower North Shore with the Gaspé. Whereas between the North Shore and the Gaspé, there's the Gulf of St. Lawrence; it is no longer a river but the Gulf of St. Lawrence. Quite often when such decisions are made, we do not go to the place, we are not familiar with the area and we impose what are sometimes quite arbitrary rules on everyone.

The Vice-Chair (Ms. Diane St-Jacques): Mr. Bérubé, you may make a final comment, but please be quite brief.

Mr. Michel Bérubé: Madame Chair, what is surprising is that we have seen here today that there is a problem as regards the country. At the time of the redefinition of the economic regions, we intervened several times, even with the minister. We feel that our presence here today is futile. We have travelled more than 2,000 kilometres to come here and the government, in our opinion, will not make the changes that should be made. The changes should be that they give people the employment insurance they pay for.

• 1230

I have looked at the redefinition of the economic regions. We do not even take the individuals who are part of these regions into account. As I was saying a short while ago, a person who lives in Baie-Comeau and a person who lives in a village next door have a completely different economic reality. But they are lumped together because we have to create a region for Statistics Canada.

We are using a database that is four or five years old, 1996 statistics from Statistics Canada on populations, on average salary. Today, the job market evolves very fast. We are in the electronic era.

What we must recognize today is that the government must implement a reform so that people who pay their insurance have a right to their insurance. There is no going back on this. We can talk about it for days. There may be invited speakers, but as you know, everyone wants to come here and say the same old thing. The government is impervious to this because they have an objective, that is to accumulate money for purposes other than that for which the money was collected. That is the problem.

The people of Trois-Rivières are trying to ask you to correct some small problems. It's not funny: we are here like beggars. Like beggars, we are telling you that there is a little problem and we are asking you to try and correct it. When I spoke to some people in Ottawa about seasonal work, I was asked what it was, whether it existed. I have been told that the people on the North Shore want to be unemployed. I am not going to name any names because these are people who are close to the department, but I asked them if they had ever come to the North Shore. They answered yes, that they had been to Tadoussac. On July 15 in Tadoussac, there's no problem, but come back on October 15 and you won't even be able to buy a cup of coffee. That is seasonal work.

Forestry workers, when there's four feet of snow in the woods, cannot cut down trees. And when there's ice, fishermen cannot fish. This is the reality of resource-based regions that allow the rest of the Canadian economy to function. But we are here today and I feel overwhelmed. I think it is unfortunate that we have had to come here today and prance about and say things that the government should have understood years ago.

Mr. Farrah said that we had to create jobs. Mr. Farrah, the minister has told us that. We established a committee that we attached to the Sept-Îles office, to create jobs. They said that they had no funding problem. Yet, we don't have a red cent to deal with the black hole. We don't have a red cent for the employment problem. It all sounds great, but as far as I am concerned, if the government wants to institute reform, it should do so, and give people the employment insurance to which they are entitled. After that, they can take measures to have as few unemployed as possible. But at present, innocent people are being found guilty before the fact.

The Vice-Chair (Ms. Diane St-Jacques): Mr. Bérubé, I do apologize. What you are saying is extremely interesting, but I do have to cut you off because we are out of time. I assure you that we have taken careful note of all your comments.

I would like to thank the witnesses who appeared here today: Alain Jalbert of the Coalition chômage, Manicouagan section; Michel Bérubé and Valois Pelletier of the Comité de concertation régionale de l'assurance-emploi in Baie-Comeau and Rivière-St-François; Yves St-Pierre and Luc Bourassa of the Mouvement Action-Chômage in Trois-Rivières; and Rick Clarke, of the Nova Scotia Labour Federation. Once again, thank you very much.

We will suspend the proceedings for about ten minutes to give the next group of witnesses a chance to come forward.

Thank you.

The meeting is suspended.

• 1234

• 1241

The Vice-Chair (Ms. Diane St-Jacques): We are resuming our hearings on Bill C-2, An Act to amend the Employment Insurance Act and the Employment Insurance (Fishing) Regulations.

I would like to welcome our witnesses: John Gagnon, of the Front commun pour la justice sociale, Acadian Peninsula section; François Vaudreuil and Jean-Guy Ouellet, of the Centrale des syndicats démocratiques; and Roger Martineau and Jean-Marc Crevier, of the Syndicat national des employés(es) de l'aluminium d'Arvida.

This is how we proceed. We begin with your presentations, which are made in turn, and should last about five minutes each. After that, we move to questions. Members from around the table have five minutes for the question and answer. I may be obliged to cut you off some times, because we try to keep to the allocated time as much as possible.

We will begin with Mr. John Gagnon, of the Front commun pour la justice sociale, Acadian Peninsula section.

Welcome, Mr. Gagnon.

Mr. John Gagnon (Co-President, Front commun pour la justice sociale, Acadian Peninsula Section): I must say that it is provincial.

I will read the brief in English, because it is my mother tongue. However, if any questions are put to me in French, I will be happy to answer them in French.

[English]

On behalf of the New Brunswick Common Front for Social Justice, it gives me pleasure to present our views on the government's proposals to change the Employment Insurance Act. Our coalition is comprised of labour and social groups in New Brunswick, approximately 32 groups. Some of them are social and religious. And we represent about 125,000 people.

Because of the high rate of unemployment and seasonal work in most of the regions of our province, it is our opinion that Bill C-12, passed July 1, 1996, had devastating effects on various regions in our province.

We are also of the opinion that the government's current proposals via Bill C-2 will have a minimum impact in resolving problems and issues that were created by the regressive cuts of Bill C-12.

The chronicle: The unemployment insurance program has changed significantly since its introduction in 1940. Even though the primary objective of the unemployment insurance program was and is to provide income support during temporary interruptions of work, the objectives have progressively been broadened over a number of years to include seasonal workers, temporary workers, self-employed, maternity, parental leave, long-term disabilities, and support individuals in acquiring new skills. This progressive trend started to shift dramatically in 1993-94 and came to an abrupt end with the regressive cuts to the unemployment insurance programs with the implementation of Bill C-12 in 1996.

In the brief there are some key dates, which I won't go through.

The real purpose of unemployment insurance: High employment and stable incomes are the most effective ways of building a strong economy, while a permanent job and a decent salary is the best income support available. Unfortunately, in the real world, in many regions of our province the contrary is true. There is high unemployment, there are unstable incomes and seasonal and temporary work with inadequate salaries.

The real purpose of unemployment insurance was to act as a social program to protect income and living standards during periods of unemployment and harsh economic times—and this to individuals and families, as well as the overall economy.

• 1245

In 1996, when the government of the day decided to reform the Unemployment Insurance Act, it used some of the follwing arguments. I won't go through the arguments in much detail, but in the government's purple book, A Framework to Economic Hard Times, it states: “Unemployment insurance harbours features that can discourage active search for work”. From the same book: “The program has unquestionably fostered a dependency in certain regions and industries”. Again, this was reinforced in their green book, From Unemployment Insurance to Employment Insurance, where they talk about how patterns of unemployment insurance are not consistent to a productive and dynamic economy because they establish patterns of dependency.

These were some of the arguments that came out of some of the various documentation from the government of the day. Contrary to the government's position, we believe that it's the government's responsibility to create the right economic conditions and climate to create a productive and dynamic economy. Therefore, there's no logical justification to blame the patterns of unemployment insurance for the above conditions.

Unemployment insurance does yield an important economic impact in our region and if there's a dependency, it's been created by governments and industries who have not invested in people and promoted full-time meaningful jobs by processing our natural resources such as fish and encouraging more secondary industries to develop in the area. A large number of unemployment recipients seem to be caught in the cycle of unemployment, spiralling in and out of work. But we tend to forget that it's employers who lay off people. It's employers who hire people, and they tend to create that type of spiral.

Seasonal and temporary workers make up a large portion of the workforce in our region. The nature of the economy in this region means that they cannot find permanent work and therefore become victims of an economic structure that sustains seasonal and temporary work. Low-paying seasonal jobs and temporary jobs are attractive because there are few meaningful permanent jobs available. The majority of the workers do not seek unemployment insurance as a means of living, which causes stress and anxiety. On the contrary, they seek steady employment.

In the opinion of the common front, Bill C-12 had a devastating impact on our province's local economy and Bill C-2 does little to resolve these issues. If we look at the cuts between 1994 and 1998, $927 billion was taken out of our province. This year we're looking at $275 billion with the cuts from Bill C-12, and Bill C-2 does little to resolve this. In Acadie—Bathurst, the area where I'm from, it comes up to $69 million.

Under Bill C-12 weeks were changed to hours in order to qualify. In 1996—these are calculations from Acadie—Bathurst from 1996, and unfortunately I didn't have the numbers to update this—under the old system of UIC for 12 weeks, the 180 hours, for the estimated 1,800 to 1,900 people who were claimants at that time, it gave an estimate of 270,000 to 285,000 total hours needed to qualify. Under the system implemented by Bill C-12, 420 hours were required. We're looking at a total of 785,000 to 789,000 hours, a difference for these 1,800 or 1,900 people of 495,000 to 513,000 additional hours to qualify in an area where we have high unemployment and seasonal work. It seems to make it almost impossible for these people to get those extra hours. Therefore Bill C-2 does little to change this issue also.

The Vice-Chair (Ms. Diane St-Jacques): Excuse me, Mr. Gagnon, can you have a conclusion? We went over time.

Mr. John Gagnon: Yes.

Again, on the black hole, Bill C-2 does little to resolve this issue. That's the period of time of several months when people don't qualify. That's a very big issue. Furthermore, it does little to address the levels of benefits.

There are social costs. Unemployment is not only associated with economic hardship, but social hardships also and empoverishment. There must be a concerted effort by this government to resolve this.

If we look between 1990 and 1995, the households that paid more than 50% of their income on rent rose about 42%; food banks rose between 26% and 75%. And if we look at the resolution in the House of Commons in 1989, when they talked about resolving child poverty by the year 2000, we're past 2000.

• 1250

If we look at the reasons why there are poor children, there are poor families. If there are poor families, there must be a lack of good jobs. If there is a lack of good jobs or income, we will have a family with no support.

I have a few quotes about what we went through and the effects on women.

I'm running very short on time.

In conclusion, we have recommendations. We feel that there should be a strong, more dignified employment insurance system that addresses short-term seasonal workers and temporary workers. We recommend that we incorporate the 1994 unemployment insurance structures; eliminate the divisor formula and replace it with a formula that counts the weeks worked; increase the benefit levels to 66%; start a gradual transition to return to the maximum benefit period of 52 weeks, which would resolve the black hole, the big issue in our area. The commission should be accountable for information given to claimants. If we look at the board of appeals, many claimants get the wrong information, base their decisions on that, and end up in appeals because of the wrong information they got from the commission. And the law protects the commission.

We should also look at people who voluntarily quit their jobs for good or just cause. At one time prior to 1993, you could serve penalties between seven and twelve weeks. Now you just don't get unemployment if you don't win your appeal.

The Vice-Chair (Ms. Diane St-Jacques): I'm sorry, Mr. Gagnon, but we are really over time. Maybe you'll have a chance to explain your point with our questions.

Mr. John Gagnon: I was just trying to hit the high points and I think I've hit most of them.

I thank you very much for your tolerance.

The Vice-Chair (Ms. Diane St-Jacques): I am sorry about that, Mr. Gagnon. Thank you.

[Translation]

I will now turn to François Vaudreuil and Jean-Guy Ouellet, of the Centrale des syndicats démocratiques. Welcome.

Mr. François Vaudreuil (President, Centrale des syndicats démocratiques): Good morning and thank you Madam Chair, and ladies and gentlemen.

I would like to remind you that the CSD, the Centrale des syndicats démocratiques, is a union organization representing some 60,000 people in Quebec. We represent people working in all sectors of the economy, except the provincial and federal public service.

The reform of the employment insurance system in the 1990s hurt our members a great deal. The CSD welcomed the principle of reviewing the Employment Insurance Act to remedy the unjust measures implemented in the last ten years. Unfortunately, we were extremely disappointed when we saw the bill. The government is not going far enough in remedying the unjust measures imposed on the unemployed.

Bill C-2 maintains a whole series of unfair measures affecting even more victims than the number targeted by the corrective amendments.

Moreover, there is one move we consider completely unacceptable. This is the authorization given to Human Resources Development Canada and the Department of Finance to set employment insurance premium rates, when this should be the role of the Commission. In fact, the government is being allowed to use the employment insurance surplus to meet its own financial needs, and not for employment insurance purposes. We find that completely unacceptable.

There is one more thing we wanted to say about the current legislation. Unfortunately, nothing has been done to clarify the text as it now stands. In the past, the courts have said that it was not particularly easy to understand. On that note, I should ask that the government make a serious effort to make the legislation more readable. This is part of democracy. The government should make the bill easier to understand. At present, it is very difficult to understand, and that is unfortunate.

• 1255

With respect to maximum insurable earnings, you will understand that we completely disagree with the fact that the amount remains frozen. Depending on the options selected, we would have to wait 10, 15 or even 20 years before seeing an increase in maximum insurable earnings. The government should immediately adjust the current maximum of $39,000.

I was talking about unfair measures that have not been remedied. I will give you some examples: I will talk about unfair measures experienced by people working in family businesses, as well as an amendment to the "newcomer" concept which in no way meet the needs of jobless people in a new, precarious labour market.

As for the first and second categories, that concept should have disappeared a long time ago. It is not in the bill.

Another thing we never hear about are the people who fall through the gap in spring. Yet, Madam Chair, in your riding—or near your riding—there's a bicycle manufacturing plant. Dozens and dozens of people find themselves in great difficulty because the benefits to which they are entitled simply don't last long enough. Their situation becomes extremely precarious. The employment insurance fund does have enough money to remedy the problem. The CSD firmly believes that the surplus would make it possible to remedy such problems.

As for eliminating the clawback only for people who have not drawn employment insurance benefits in the past ten years, we find this is quite inadequate. The tax clawback should not exist. In any case, we pay tax on the portion of earnings that the insurance benefit constitutes, and we should eliminate the clawback.

With respect to eligibility criteria, we consider that 350 hours is clearly sufficient. Basically, we would like the benefit period to be extended to what it was before 1990, before we declared war on the deficit. In my view, the war against the deficit has been won. Public finances are back on a sound footing. Today, this is an issue of social justice.

In addition, we should also raise the contribution refund threshold, which today is much too low. We could establish a system of formulas that could be adjusted from year to year, on the basis of the tax return period. Then, the contribution refund could kick in.

If I may, Madam Chair, I would like to take a couple of minutes to talk about the problems of older workers, whom we often forget. I'm talking primarily about people in traditional sectors like garments, textiles, footwear and asbestos, Canadians who have worked hard to build up this country. They are the ones who built up Canada, and today, because of policies established on the basis of trade agreements which we are negotiating, these people lose their jobs and are left to fend for themselves. We must take care of them. They are victims, and we have a collective responsibility towards them.

There are two ways to do this. One is to consider long-term employment insurance benefits to tide them over to age 65, at which point they are entitled to Canada Pension Plan benefits. The other would be to set up an income support program using the Consolidated Revenue Fund, because it must not come out of the employment insurance fund.

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I wanted to say something about dependency and active measures. In principle, the move toward active measures is highly commendable. It gives people a steppingstone back onto the job market. However, it does not work for everyone. Active measures may have gone too far, leaving tens of thousands of people by the wayside, getting poorer, and causing their standard of living and dignity to suffer. Something must be done. It is a matter of respect and dignity for the people who built this country.

Thank you, Madam Chair.

The Vice-Chair (Ms. Diane St-Jacques): Thank you, Mr. Vaudreuil. Before turning the floor over to our next witness, I would like to point out that the Honourable Lucie Pépin is here. Welcome, Senator.

We are now going to hear from Roger Martineau and Jean-Marc Crevier, from the Syndicat national des employé(es) de l'aluminium d'Arvida. Welcome.

Mr. Jean-Marc Crevier (Representative, Syndicat national des employé(es) de l'aluminium d'Arvida): We have a short presentation to make. We are going to try to do a review of the past five years in a couple of minutes.

We represent a union of some 3,500 aluminum workers.

In 1995-96, we worked hard to get young people jobs in resource-based areas like ours. We are from the Saguenay—Lac-St-Jean area.

In 1996, nearly one thousand people lost their jobs in the aluminum smelter industry. Those who were out of work were leaving the region and going elsewhere. The region mobilized. People were saying it was incredible to be losing our young people like that. There were several meetings, and in the end, some 5,000 workers collectively endorsed work-sharing arrangements to keep our young people in the region. It did not happen overnight. Both the provincial and federal governments, including employment insurance, supported this program. We saved almost everyone who was out of work. No one wanted to go on unemployment. People wanted to work.

In 1998, almost three years later, we had to go back to the membership. We had a general meeting attended by some 3,000 people. We had to tell our people that if we wanted to keep going with work sharing, we would, but without government assistance. According to Ottawa, the main reason was that there was no more money for work sharing. We know that money came straight from the employment insurance fund.

I do not need to tell you what the debate was like at that meeting. I have been through meetings and strikes. I can tell you that at that meeting, it was worse than a strike vote. I am not talking about us. On the whole, people were saying we were dealing with crooks and getting stiffed. I could go on, but that is the gist of it.

In 1996, there was a 15 or 16-billion-dollar surplus in the employment insurance fund. At the end of the meeting, a resolution was passed. We were directed to get it through to the federal government that the surplus should be used to help the unemployed.

Now, we're once again in litigation. We are about to go to court. We come from a region with a very unenviable record. The city of Jonquière—Chicoutimi has the highest unemployment rate in the whole of Canada. That's self-evident when you consider what we've experienced. Let's take last year for example, or more particularly the federal election that we have just had. We were in the media spotlight more than usual, undoubtedly, because of the election. Laid-off workers from many sectors, including forestry, held demonstrations. Unemployed people came to demonstrate with their children. Close to 5,000 people took part in these demonstrations. It was really the unemployed who took part in these demonstrations. It wasn't working people. They were people who were unemployed, but who wanted to get back to work.

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You have to admit that promises were made. We were told that it was essential to amend Bill C-2 on employment insurance. Mr. Alfonso Gagliano, who came to visit our region, made commitments. Mr. Coderre also came to our region. They came one after the other. Minister Cauchon came. He came to look at our sector. At the end of the day, the message they left us with was that they understood our plight very well and that what we were experiencing was similar to what was happening in Gaspé, in Chibougamau, in Chapais, and to fishers in Nova Scotia. They told us that we would be pleased with the amendments that were going to be made to employment insurance.

People believed what they were told, even to the extent of electing a Liberal member in Chicoutimi, which was quite unprecedented, at least to my knowledge. I don't remember having seen a Liberal member for this riding in my lifetime. That meant that they felt reassured by what the government had told them. We're now waiting to see what's going to develop and we have great expectations.

The Vice-Chair (Ms. Diane St-Jacques): Mr. Martineau, you have one or two minutes left. Could you please try not to go over the allotted time?

Mr. Roger Martineau (Representative, Syndicat national des employés(es) de l'aluminium d'Arvida): Thank you, Madam Chair. I will be brief. I'm going to sum up.

Our organization would like to thank Ms. Danielle Bélisle and Ms. Paquette for having been so kind as to work for us. This enabled us—it's of course an honour for us—to represent Saguenay—Lac-Saint-Jean workers.

I'll be brief. I want to deal with the following points: benefits, reserves, setting premium rates and discrimination in the system.

You will get a copy of our brief next week. I'm sorry you couldn't have one this morning. It has not yet been translated. And I'd like to apologize for that.

On the issue of reserves, I'd like to put all that in a more down-to-earth context. Our children have piggy banks. We put money in their banks and tell our children to save it for a trip to Quebec next summer, because, even we Quebeckers like to travel in Quebec. Therefore, the child expects the money in the piggy bank to be used for the trip.

Let's compare that to employment insurance. Employment insurance is for workers. Employers and workers contribute money to this fund. Employment insurance is also designed for seasonal workers. In Quebec, there are lots of them. We have a large tourist industry also.

These people face major difficulties when they are laid off. Unfortunately, Chicoutimi and Jonquière are not large cities. Therefore, when these people are made redundant, they go to the Chicoutimi or Jonquière office to establish whether they are eligible for employment insurance. This is where things start to go badly. They are told that they have not worked a sufficient number of days. The unemployed people tell the officials that they want to find a job. They return home and feel down in the dumps.

These people want to work. We have a region of builders and people want to work. When I hear that people don't want to work, I am displeased. Let's travel. Let's leave Ottawa and go into the regions, and not only during elections.

As to the reserves, we know that they are astronomical. For April 2001, we are hearing of some $34 billion. We have to make a choice. We have money. There is no problem. We have to ask for the service. The Canadian government is here to manage all of that. It is all very well and good, but as a good manager, it should not help itself from the fund. Where I come from, that is called theft. So, let's provide the services. Let's provide 52 weeks to the people so that they will work.

Now, as to the actuarial reserves. Currently, there is an actuary. This gentleman must be very well paid. He must do good work. When the gentleman makes recommendations, the government should at least listen and consider the recommendations.

Now let's move on to the premium rates. With his team, this gentleman must examine the premiums, what there is in the fund, what must be paid out, the surpluses, but he cannot walk off with the surpluses. He has to improve the program.

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Now, we know what is currently going on in all the regions. I think that my colleagues have informed you at great length of the discriminatory effects of employment insurance earlier on. I will therefore be brief, Madam Chair: there has to be as little discrimination as possible. Please read our document with great attention. We would like to thank you on behalf of the Syndicat national des employés(es) de l'aluminium d'Arvida and on behalf of the people from the Saguenay—Lac-St-Jean region, whom we are honoured to represent. Thank you very much.

The Vice-Chair (Ms. Diane St-Jacques): Thank you very much, Mr. Martineau and Mr. Crevier. Thank you to all of our witnesses.

We will now move to the question period. We will hear first from Carol Skelton, and then Georges Farrah, Monique Guay, Joe McGuire and Yvon Godin.

[English]

Ms. Carol Skelton (Saskatoon—Rosetown—Biggar, CA): Good afternoon, gentlemen, and thank you for coming in front of us this afternoon.

From your presentations, I'd like to know if you feel that the EI administration should go back to the employers and employees and try to keep the government out of it as much as possible.

[Translation]

Mr. François Vaudreuil: The answer is yes.

The Vice-Chair (Ms. Diane St-Jacques): Does anybody else want to respond? Mr. Martineau? Mr. Gagnon.

Mr. John Gagnon: I did not understand the question.

[English]

The Vice-Chair (Ms. Diane St-Jacques): Could you repeat the question?

Ms. Carol Skelton: Would you like to see the EI funding—the large funds for the EI program—and its administration go back to the employees and employers, instead of the government agency?

Mr. John Gagnon: Yes. I think in some of the recommendations that we've heard and in my brief—I didn't get to that recommendation... I think it should have its own autonomy. It should be arm's length from the government. By all means, I think most of the social labour groups and progressive people in this country are saying exactly that.

Ms. Carol Skelton: Okay, thank you.

[Translation]

The Vice-Chair (Ms. Diane St-Jacques): And now Mr. Crevier.

Mr. Jean-Marc Crevier: We want to be managed differently than government and we want it to be well managed.

The Vice-Chair (Ms. Diane St-Jacques): Mr. Martineau, would you have anything to add?

Mr. Roger Martineau: Yes. We could use the services of the actuary, given that he makes good recommendations. He must know how to count, given his team.

The Vice-Chair (Ms. Diane St-Jacques): Thank you.

Val Meredith.

[English]

Ms. Val Meredith: Thank you, Madam Chair.

Actually, I think all three of you have referred to the EI fund as social equity, social justice—that it should be there for something other than unemployment reasons.

We've heard from other witnesses who felt that—I'll be honest with you, it was more or less the business community, the employers—they were paying approximately 60% of the money that goes into this fund and they felt it should be based on unemployment specifically.

Although they felt that the government had a social obligation for gappers, or the black hole, or seasonal workers, or people who found themselves in this situation, they felt that money should come from the general revenue where all Canadians contributed to the fund, rather than using an unemployment fund for purposes other than people temporarily losing their jobs and needing some insurance money to help them through a period between employment.

[Translation]

Mr. Jean-Guy Ouellet (Legal Counsel, Centrale des syndicats démocratiques): Historically, the government contributed up until 1990, and over the past years, up to 25%—it had been up to 56%—of the funds insured by the federal government. In 1940, the provinces transferred the power to the federal government to implement an unemployment insurance program, because it was felt that only the federal government had the financial resources to launch such a program.

On the other hand, it is clear—and I believe that employers would agree with the president of the CSN—that the constitutional power granted to the federal government is to collect the premiums in order to be able to pay the benefits to people who are unemployed, which the current federal government is not doing. In fact, as you can see in our brief, the federal government accumulated a $34.5-billion surplus as of March 31 last, according to the Auditor General, and it is forecasting an additional $30 billion in the policy and budget statement made last October. And you have references to this in the brief.

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Therefore, it is just about $65 billion for the next five years, whereas there are now 34 to 37% of individuals who are covered by the plan. Therefore, it is clear that everyone agrees that people should be covered by the plan and that contributions—the federal government now has the power to impose premiums upon employees and employers—should be used for the purposes decided upon in 1940. I would invite you to read the debates held in the House at the time, when Mackenzie King and the minister of the day stated that this would never be used for any other purpose than to provide unemployment insurance benefits, that these funds would never be used for health care or for anything else. These were the debates that took place at the time. We could provide you with specific references if you wish.

The Vice-Chair (Ms. Diane St-Jacques): Mr. Martineau, do you have any other comments?

Mr. Roger Martineau: I would like to make an additional comment. Are employers, those wonderful employers, as badly off as the poor workers who lose their jobs because of the economic situation or any other reason? We know that employers have tax carry-overs. For example, Alcan, who is just about the main employer in our region, benefits from being able to carry over taxes to the tune of $1.2 billion. Employers cannot come up winners in every case. You have to remember the workers and the people at the grassroots level, you have to keep in mind the poorest in our society. Employers can say whatever they wish, but I think that the Canadian government should think of the people, because the government is there to serve the people.

Thank you.

The Vice-Chair (Ms. Diane St-Jacques): Thank you, Mr. Martineau.

[English]

A very quick comment, Val.

Ms. Val Meredith: This is just for clarification.

I think the people who are concerned are the small and medium-sized businesses. The kind of pressure that's put on them is extreme, to the point where they either have to limit the number of people they employ because of the high cost of doing business with CPP and EI premiums, or they cease to employ anybody because of this kind of commitment. What they're saying is they don't mind helping their workers but they do mind getting into other kinds of social programs through the taxes placed on them by EI premiums. The greater community should be picking up these programs, not them.

[Translation]

The Vice-Chair (Ms. Diane St-Jacques): A brief comment please, since we have gone overtime.

Mr. Jean-Guy Ouellet: I would remind the honourable member that the premium rate for social programs in Canada are lower than in the United States and are amongst the lowest of the G-8 or G-7 countries in terms of gross domestic product. As well, small and medium businesses are in tune with the local economy. When people no longer get unemployment insurance benefits and no longer have any money to live off of, it is the small and medium businesses who end up going bankrupt. That is why, perhaps, they don't have enough money to hire more staff. It's a vicious cycle.

The Vice-Chair (Ms. Diane St-Jacques): Thank you. I will now give the floor to Georges Farrah, who will be followed by Monique Guay, Yvon Godin and Alan Tonks.

Mr. Georges Farrah: Thank you, Madam Chair.

And now it is my turn to welcome you to this meeting. I think that your comments are very pertinent. Given the problems that your members can face, I think that your representations are legitimate.

I would like to ask a question of the people from Arvida. By the way, Madam Chair, you know that in my riding we have the Magdalen Islands. There are many former Magdalen Islanders who live in Kenogami, well what was called Kenogami before the amalgamation. Oh, it's still called Kenogami? At any rate I just want to give you a little message while we're here. I would also have a question for the people from CSD.

Of course, I was not in a position to attend all the hearings, but you did mention the fact that there is a challenge before the courts. In your opinion, basically the Employment Insurance Act is unconstitutional. That's the first time I've heard it referred to in this way. I would like you to elaborate because I know that you didn't have the time to get into it. It's not your fault, far from it, but could you tell us a little bit about the reason behind this court challenge? I know that it's not easy, it must be a rather complicated issue, but can you tell us the reasons why you feel that this legislation is unconstitutional?

Mr. Gilles Grenier (Legal Counsel, Syndicat national des employés(es) de l'aluminium d'Arvida): I am the lawyer who undertook the case on behalf of the union. And by the way the CSD is also in litigation. Mr. Ouellet could perhaps discuss it. I can't necessarily give you a quick summary, but basically, one of the reasons that we're bringing forward is that there are certain measures which are discriminatory under section 15 of the Charter.

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For example, there are different eligibility criteria for different groups, for example for young people. When one is young, one of course joins the labour force at some point in time. When you are a newly arrived immigrant, then you also have to join the labour force. Thus, they have a better chance of being subject to the 910-hour rule than others.

We say the same thing applies to pregnant women. We feel that the 600-hour criteria, instead of 700 hours, gender-based discrimination. Of course, a pregnant woman wants to obtain benefits. Why, in her region, where there is not necessarily a lot of unemployment, should she needs 400 or 450 hours if she loses her job, whereas if she wants to have maternity benefits, she needs 600 hours or 700 hours? What is the criterion and how does it stand up in the face of the Charter? That is what we are challenging.

Generally speaking, there are arguments relating to the shared jurisdiction. For example, in our system, the manner in which taxes are levied is adopted through a procedure at the House of Commons. Legislation is required. Here, through devious means, a premium is collected, but without offering a service that is of the same level. Mr. Martineau said that we had to either increase services, or reduce the premium, since it is an insurance program. Within the framework of an insurance program, there is a insured risk and I pay a premium based on that risk. Within the plan, that hasn't existed since 1996. The premium required and the benefits offered are not in balance. Therefore, you either reduce the premium rate, which would make employers happy since they are of a different mind-set, or you keep the same rate and increase services. That's the message that we want to get across to you. Basically, without going into detail, that's it.

In the brief that you will receive next week, there will be a section of four or five pages where you will find a summary of these reasons. We do apologize to all honourable members including the anglophone members, but the document had to be translated. We cannot distribute the document unless it has been translated. Ms. Bélisle said that it would be distributed some time next week.

As to the proceedings, they are public and we make reference to the case number in our brief. There are also phone numbers there. If you want copies, we will be pleased to send them to you.

The Vice-Chair (Ms. Diane St-Jacques): Mr. Ouellet, do you have any comment?

Mr. Jean-Guy Ouellet: As to the constitutional aspect, on the one hand, the CSD brief goes along the same lines, namely that it is discriminatory to the new entrant in the first category and second category. On the other hand, there are other appeals that have been launched. There is one in Winnipeg and one in Montreal. The Lyne Périgny case has been heard recently dealing with the whole new entrant issue. So, there are several cases dealing with that.

On the other hand, you have to remember that there have been very few commissions of inquiry on the Employment Insurance Act. There was the Forget Royal Commission which recommended abolishing the idea of the new entrant and of the first category.

As to the constitutional aspect, there is the matter of the division of powers and there is the power under section 91.2A. I would remind you that the first try at adopting an employment insurance act was judged unconstitutional by the Privy Council in London. The decision stated that it was an insurance act. The Employment Insurance Act is basically an insurance act.

Since then, the Supreme Court has stated on several occasions that it is an insurance act. Thus, contributions must be used to provide benefits to the unemployed. If there is a large number of people, namely some 63% who don't have access—there are people who pay premiums and who will never have access—it is obvious that the power granted to the federal authorities is managed unconstitutionally.

The Vice-Chair (Ms. Diane St-Jacques): One last question, very quickly.

Mr. Georges Farrah: On a different topic, witnesses have appeared before you and their brief dealt with the new dimensions of the work place, and specifically mentioned self-employed workers. I know that that goes beyond the scope of your brief, but I wonder whether the union has given this issue any thought. One of the problems with self-employed workers is their ability to come together to make joint demands or to be adequately represented since obviously they do contribute or they may contribute.

Therefore, has there been any thought given within the labour movement to the idea of starting some type of group? It's perhaps a clientele for the future. How would you see it?

The Vice-Chair (Ms. Diane St-Jacques): A very quick response, Mr. Vaudreuil.

Mr. François Vaudreuil: You're asking me whether that is a clientele that we are targeting. We don't think in terms of clientele within the labour movement. Do those people have specific needs? Yes. When people come to meet with us, we look at what we can build with them. It's obvious that we have to open the plan to self-employed workers, because they're people. These are people who, in many cases, are subject to contracts and yet have no power to negotiate. And since legislative measures dealing with union- management relationships, whether provincially or federally, give them very little room to band together for collective bargaining, to establish a reasonable chance for improving their living conditions, we feel that the Canadian government should take the initiative of providing the same protections to self-employed workers. Therefore the answer is yes.

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The Vice-Chair (Ms. Diane St-Jacques): Thank you, Mr. Vaudreuil.

Now, we will go to Monique Guay, who will be followed by Joe McGuire, Yvon Godin and Alan Tonks.

Ms. Monique Guay (Laurentides, BQ): Thank you, Madam Chair.

I would like to indicate that the first association of self- employed workers in Quebec was created in my riding. They came to meet with me and they are trying to bring together the people in the province of Quebec. By the way, they do not contribute to employment insurance, but they do want to be able to do so in order to have some employment insurance benefits. You have to remember that self-employed workers now account for 18% of the Canadian population. Therefore, they have to be taken into account. Things are increasingly moving in this direction.

I have two or three questions for Mr. Vaudreuil, but very briefly, because I will give the floor to my colleague who has a group from his riding with us today.

Mr. Vaudreuil, you mentioned a program for seniors. Would you accept a POWA program of the type that we had previously?

You also mentioned family businesses. I come from a tourist area. My riding is the Laurentides riding. There are many small family businesses in the riding and the problem they often face is that when these people apply for employment insurance they don't qualify. It's as if they were found guilty without ever having being charged. They must demonstrate their innocence or demonstrate that they paid premiums in order to be able to receive benefits. How would you change that? What changes would you make?

Mr. François Vaudreuil: There are two questions. Jean-Guy will be able to answer the second, the one dealing with families.

As to the POWA, the answer is no, because the program would be so diluted by the end of the day that it would most closely resemble welfare. To all practical purposes, it would not allow people to live with dignity. But the programs which preceded the POWA, the WAT program for example, allowed people to live with dignity up until retirement age. Therefore, as to the POWA program that we last dealt with, the answer is no.

Jean-Guy, I will let you answer on the issue of families.

Mr. Jean-Guy Ouellet: For families, on page 7 of the brief, we recommend the elimination of the non-arm's length provision and of the burden of proof, and we refer to a Federal Court of Appeal decision which, in a minority judgment, decided that it was discriminatory and that it should be repealed. To find an argument against this measure which requires women in 97% of cases to prove that their conditions are similar to that of an outsider, the CSD would be in favour of repealing the provision.

The Vice-Chair (Ms. Diane St-Jacques): Ms. Girard-Bujold.

Ms. Jocelyne Girard-Bujold (Jonquière, BQ): I would like to welcome Mr. Crevier, Mr. Martineau and Mr. Vaudreuil. I know him well. I want to speak with the employees of the Arvida union.

You said earlier that you had a good grasp of the problems in our region. You also said that employment insurance was created for people, so they would have insurance and security and be able to get work or go back to work.

There are problems in the regions. There are self-employed workers, seasonal workers and older workers. In my riding, there are plants laying off between 250 and 350 employees 55 and over, who have nowhere to turn. No matter how much we ask of them, no matter how much we consult the current legislation, they have nowhere to turn.

You also said that during the election campaign, some people met ministers who made three quick trips to our area before going back to Ottawa, and who made commitments. Mr. Crevier, you say you are expecting big things from them. Are you satisfied with this bill? What would it have taken for this bill to satisfy you?

Mr. Jean-Marc Crevier: As Roger Martineau was saying earlier, 910 hours is too much, way too much, in our opinion. We basically want the number of hours required to qualify for employment insurance to be lowered and the benefit period to be extended. In a nutshell, we see those as the two most important reforms.

Ms. Jocelyne Girard-Bujold: But you were also saying earlier that we might have been on to something good. I was involved in that, and we created a lot of jobs back home. Jobs were saved, and when we went back to see them, they said there was no more money in the fund.

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Do you not think that clause 66.1 of Bill C-2 will allow the government to seize the astronomical surplus in the employment insurance fund, thereby depriving you of the active and passive measures needed in order for workers to make a decent living and to retire decently, as Mr. Vaudreuil said?

Mr. Jean-Marc Crevier: In 1996, federally, it took $1.2 million from the employment insurance fund to create 200 jobs in the aluminum industry. That was important to us. We know that even now—and earlier I heard the people from the North Shore talking about this—for sawmills and forestry, the price of lumber is falling. Thirty percent of Quebec's lumber comes from our area. Shifts are being cancelled.

Yesterday, in La Presse, it was reported...

Ms. Jocelyne Girard-Bujold: Three hundred and fifty...

Mr. Jean-Marc Crevier: It will be more than that. Up to 600 sawmill workers will be laid off. Groups of those workers have already attempted to meet with Abitibi-Consolidated Inc. to ask whether it was possible to make arrangements, at least temporarily. If those people truly did not want to work and wanted to take advantage of employment insurance, they could. They have enough hours; that is no problem. They can get employment insurance, but that is not what they want. They want to keep working. They asked whether arrangements could be made. As we speak, the workers and the company agree, but the government does not. The government says it is too costly. When you look at the numbers, you can see that the cost is minimal.

Ms. Jocelyne Girard-Bujold: Were you not hoping to see very concrete action in this bill to live up to the expectations of regional workers? The regions really do have unique problems all across Canada.

Mr. Jean-Marc Crevier: I just want to say that you can't be against that. These days, nobody wants to be unemployed. Everybody wants to work and, if the measures provided for in this bill get everybody back to work, that's great.

Ms. Jocelyne Girard-Bujold: They do not. Don't you think some should have been included?

Mr. Jean-Marc Crevier: There are no measures of this type. That's my point. Include some in the bill and we will be happy.

The Vice-Chair (Ms. Diane St-Jacques): Thank you very much.

Joe McGuire has the floor, followed by Alan Tonks.

[English]

Mr. Joe McGuire: Thank you, Madam Chair, and welcome, everyone.

I'd just like to get your opinion on what you think of the idea that every hour counts, or the hourly rate system versus the old weekly rate system. When we instituted the hourly rate system, we thought a lot of people were eliminated. They never could qualify because their employer would cut them off before fifteen hours were up, so they would have to go to another fifteen-hour job. They never could collect, so they were brought into the system. I know some of you have said other people are now kicked out of the system because they can't qualify.

Compare the two systems—every hour counts versus the weekly system—in the regions where there's seasonal employment and where there are long hours in tourism or long hours in fishing. Their hours accumulate much faster than in the old system. Now it's possible to get two weeks' work in one if you have enough hours—for example, if you're in a construction profession where you have a lot of hours in the summer and no hours in the winter, or that sort of thing. We thought this was an improvement, in that a worker would have every hour counting and every dollar counting.

I'd just like your reaction to how this system is working, Mr. Ouellet.

[Translation]

Mr. Jean-Guy Ouellet: First of all, if in terms of the hour system, 35 hours had not been chosen as a standard working week, the bill would have been perfectly acceptable. Of course, this standard advantages some seasonal workers, but it also means that women become ineligible because they work part-time. This 35 hour standard means that there is an element of discrimination. However, the CSD's proposal picks up on what the Forget Commission suggested; a single calendar of 350 hours. This was the only royal commission to look at this issue and it decided on 350 hours.

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I would like to point out to you that this bill was passed to help part-time workers. The previous time it was 15 hours. Fifteen hours was equivalent to a stamp, as it was called at the time. Fifteen hours equalled one stamp. Prior to 1990, women with 20 hours were eligible for almost 50 weeks. If the unemployment rate was above 11.5%, these women were eligible for 50 weeks of benefits. In 1990, this benefit period was reduced to 35 weeks. It was further reduced in 1994 and currently 20 hours is equivalent to 20 weeks of benefits. Women today do not even meet the system's minimum eligibility criteria, whereas in the past, these same women fell into the first category when they had worked 20 weeks. These people who had worked 20 weeks were called "fat cats". They were at an advantage because they had succeeded in obtaining 20 weeks of employment. Between 1999 and today, these same people, these same women, who worked 20 hours a weeks for 20 weeks do not even attain the basic eligibility criteria under the act. That's a problem.

It is true that women work several jobs. They do not do that for the good of their own health. They do this because they are often stuck in part-time work. They don't qualify either. The hour-based system means that everybody has to pay as soon as they start to work. One of the things that we have spoken out against in our brief is that people who earn under $ 2 000 get their contributions back, whereas in Quebec, if you are at $7 an hour and you work 419 hours you earn more than $ 2000. Consequently, even when people pay contributions, they are not eligible. We are suggesting that in the future, contributions should be paid back up to a national average for eligibility.

In terms of hours, it's clear that the eligibility system, unless it is drastically reduced, as various organizations are proposing, is adequate. Perhaps weeks should be used to determine benefit periods but in terms of eligibility, the hour-based requirement will have to be reduced so that a woman who works between 15 and 17 hours a week during the tourist season, in Gaspé or in any other region for that matter, can be eligible.

[English]

The Vice-Chair (Ms. Diane St-Jacques): You still have thirty seconds.

Mr. Joe McGuire: On the Acadian Peninsula, do you find the hourly-based system to be an improvement over the old system?

Mr. John Gagnon: They're about the same. I think the principle or concept of going from weekly to hourly is probably progressive, but it's likely the threshold levels—910 hours and 420 hours for new entries and re-entries—are too high. In my brief a while ago, I stated that 12 weeks gave 180 hours, as compared to 400 hours, and I gave the examples of the different hours it would take to qualify. We're a highly seasonal area. Some of these workers have worked 10 years. There's a black hole, and I think there are a lot of people who don't qualify in the hourly system. Even though the concept's a good concept, the thresholds are really too high and they have to be brought down.

Mr. Joe McGuire: Okay, thank you.

[Translation]

The Vice-Chair (Ms. Diane St-Jacques): Mr. Yvon Godin now has the floor. He will be followed by Alan Tonks, who will wrap up our session.

Mr. Yvon Godin: Thank you, Madam Chair.

First of all, I would like to welcome you all here today. I think that Mr. Gagnon gave a very eloquent answer to the question. The problem does not lie in the number of hours. The problem is not the number of hours, weeks or even months. The problem lies in the number of hours required for eligibility. Nine hundred and ten hours is outrageous, even 600 hours or 700 hours is outrageous. That's the problem. Every hour worked should be counted in the eligibility formula, but when the government moved in that direction, it decided to count the number of hours because more people are eligible that way. However—and you will excuse my choice of words here, I often refer to it that way—eligibility at 910 hours is daylight robbery.

Having said that, I would like to come back to Mr. Gagnon. On page 7 of the French version of his brief, he writes:

The Commission should be accountable for all information given to a claimant. (There are many cases when a claimant was given wrong information, and made his decision based on this information, then is penalized. In all cases the law protects the Commission.)

In my riding, people go to see the Commission to obtain assistance in filling out their employment insurance application forms. These people are government employees, but sometimes, they provide false information. Based on this false information, the government rules that the claimant has made a mistake and that he in fact owes $10 000. He is told to appeal and that he is protected by legislation. I am sorry but everyone has to be aware of the legislation. That's the first question I would like to ask Mr. Gagnon.

My second question will be brief. I want to give Mr. Gagnon time to reply, because I know that you are going to court. You talk a lot about discrimination regarding all aspects of employment insurance.

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You mentioned self-employed workers, for example, and that's where I begin to get worried. Before we go on to self-employed workers, I want to say that there are workers from the same family who are told by the government that they are eligible for employment insurance. They are told to contribute to employment insurance, to contribute billions of dollars to the fund, but the day comes when they apply for employment insurance, they are sent to Revenue Canada to ascertain whether during the employment insurance benefit period they have applied or have gone to the bank to deposit money in their husband's name. I am sorry, this is where they are raked across the coals. They are told that they owe $20,000 or $25,000 and no investigator bothers to tell these people that they are perhaps not eligible for employment insurance and that they should not pay contributions. Once again that is daylight robbery.

Those are the two very important questions that I want to ask.

Mr. John Gagnon: Mr. Godin, I am sure that you are right. I sit on the appeal board in my region and we see a lot of people who have been misinformed, and who have made their decision based on this information and now find themselves in an appeal. But, we can't do anything for them. They owe up to $10,000. Some of them are almost bankrupt. That makes no sense. The Commission must be accountable or must appoint an official. We should not have a situation where just anybody can give out information. We need a more efficient system than the one we have now. It's something we see often.

In terms of your second question, I think we need more flexibility. The system needs to be more flexible. Some people have good reason for leaving their jobs, but if the Commission considers that a reason is not sufficient, these people are not eligible for employment insurance benefits at all.

The other thing that I wanted to say is that under the old system, we could penalize people of a couple of weeks of benefits. We don't have that option now. We need flexibility in the current system.

I don't know if I have answered your question.

The Vice-Chair (Mr. Diane St-Jacques): I think that Mr. Ouellet would like to say something.

Mr. Jean-Guy Ouellet: On the issue of disqualification, we are suggesting that at the very least, people should not be totally disqualified, or that there should be some type of appeal mechanism. As for the case of people who assist their self-employed spouse, and who are, therefore, not considered to be unemployed or are considered uninsurable, I think that that is an inappropriate interpretation. It is inappropriate because an increasing number of decisions are based on this aspect. Unfortunately, many people have faced a very restrictive interpretation from the outset and they now believe that they are not longer eligible for employment insurance. The appeal court, when it hears cases of this type, has become a lot more lenient recently in terms of this notion and people have seen their eligibility for employment insurance taken away from them when they were not eligible for it in the first place.

It is clear that when investigators see that there are people who are helping their spouse and being paid to do so, they are immediately viewed as being cheaters. Perhaps we should give some courses to these Commission officials so that they realize that the people before them have contributed to the system and that they are there to help them and not the other way around.

Mr. Yvon Godin: I have another very brief question.

The Vice-Chair (Ms. Diane St-Jacques): Yes, but it has to be very brief.

Mr. Gilles Grenier: The angle taken is one provided for in constitutional law. We did not deal with these issues because, in law, there may well be inequality or discrimination—and here I'm thinking of people working in the horticultural or agricultural sector—but is it discrimination under the Charter? We decided to take a very legal angle to attack the law on two or three aspects where we think we can win. That does not mean that we covered everything that we felt was inequitable, iniquitous and unfair. This is done through other proceedings, such as going before the Employment Insurance Commission, and this can go all the way up to the Federal Court of Appeal. But this is not the angle that the SNEA opted to take since we did not want to focus on the 1996 piece of legislation as a whole, but on certain aspects which we felt we could attack from the constitutional perspective.

Mr. Yvon Godin: I would like to know whether or not you have evidence showing that the investigators abused their authority. For example, people in my region are telling me that they are called to the offices, that there are women who leave in tears because they are shown treatment that is worse than that given to murderers. The first thing that the police officer would say in such a case is that the person has rights, that he or she is entitled to call a lawyer and all that. At the employment insurance office, there are some investigators who are telling people that they do not have the right to have a witness. These people are brought to an office, an investigation is made and there's a lot of pressure put on them. I would like to direct this question to the people sitting here at the table because we have experienced this in my area. This has been experienced in Prince Edward Island and Newfoundland. I would like to know if this ever occurred in Quebec.

The Vice-Chair (Ms. Diane St-Jacques): Mr. Godin, you are entitled to only one answer. Mr. Ouellet, you may answer.

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Mr. Jean-Guy Ouellet: I am a lawyer and I have been representing unemployed individuals exclusively for 18 years. I specialize in unemployment insurance issues and in rulings made right up to the benefit adjudicator level or by judges of the Federal Court of Appeal, and who have said that the investigators have demonstrated a lot of imagination. I have dealt with situations where the individual did not speak any official language. This person came with her daughter, so that she could understand me, and the investigator prepared a five-page report.

These situations are not common. For the most part, investigators act properly, but there are some, who are, moreover, not held in high esteem by their colleagues, who create problems. Unfortunately, there are a lot of people who lose and there are many people who leave in tears or who have been investigated at any hour of the day. This is quite common.

The Vice-Chair (Ms. Diane St-Jacques): Thank you, Mr. Ouellet.

Alan Tonks will ask the final question.

[English]

Mr. Alan Tonks (York South—Weston, Lib.): Let me see if I can sum up what you have said—and I'm sorry I missed part of your deputations.

The surplus in the fund is projected to be very large. Some say it will be many billions of dollars. At the time when this surplus is building up, there is a fall from 87% who were qualified to 35%, or something like that. The adjustments that are made to the bill in terms of clawbacks, intensity rules, and so on are not going to improve that percentage from 35% for women who are re-entering from maternity benefits.

The issue with respect to seasonal employees is that because the bar has been raised so much in terms of the number of hours required, they will never be able to qualify. Therefore, we have a huge surplus, and we have no benefits, either in terms of the benefits of extending the amount of time that people are protected, or in terms of those who would qualify.

In terms of the economics of this, you cannot see this coming together at all. What would be the cost, if I may... Have you done any projections lowering the hourly based criterion to something like what has been suggested, to 360 hours? Have you done any costing with respect to that?

[Translation]

The Vice-Chair (Ms. Diane St-Jacques): Mr. Ouellet, do you wish to answer?

Mr. Jean-Guy Ouellet: ...

[Editor's note: inaudible]

...legal expert.

The Vice-Chair (Ms. Diane St-Jacques): I thought that you were getting ready to answer. Mr. Grenier.

Mr. Gilles Grenier: I haven't added it all up, but I think that it would be quite easy to do so. I will make a simple observation. With the current premium rates, the fund has $7 billion in surplus and costs of $12 billion or $13 billion. We know that 7 plus 12 make 19. If you wanted to keep the same premiums, you could increase the services by seven nineteenths without even dipping into the already accumulated $34 billion. This would be tantamount to almost doubling the services provided by the system.

Mr. Jean-Guy Ouellet: I would like to remind you that about $7 billion in regular benefits are paid and that the surplus is standing at $7 billion. We could very easily cut this amount in half and therefore reach the projected 350 or 360. That would be in keeping with the proposal made by the only royal commission to ever examine the issue.

[English]

Mr. Alan Tonks: If you were to see a change to the bill, an amendment, what would be the single most important change? I know it's very difficult to prioritize, but what would be the single most important reform you'd be looking at?

[Translation]

Mr. Roger Martineau: We think that work needs to be done on eligibility and on the 52 weeks.

The Vice-Chair (Ms. Diane St-Jacques): Mr. Vaudreuil.

Mr. François Vaudreuil: I would give exactly the same answer.

The Vice-Chair (Ms. Diane St-Jacques): Mr. Gagnon, do you wish to make a comment?

[English]

Mr. John Gagnon: I'd give the same answer.

[Translation]

Mr. Roger Martineau: We agree.

The Vice-Chair (Ms. Diane St-Jacques): You all agree.

[English]

Mr. Alan Tonks: I wish I could write you a cheque.

[Translation]

The Vice-Chair (Ms. Diane St-Jacques): Our day is now over.

I would like to thank all of our witnesses today: Mr. John Gagnon from the Front commun pour la justice sociale, Acadian Peninsula section; Mr. François Vaudreuil and Mr. Jean-Guy Ouellet of the Centrale des syndicats démocratiques; and Mr. Martineau and Mr. Crevier of the Syndicat national des employés(es) de l'aluminium d'Arvida. I would like to assure you that all of the members of Parliament here were very pleased to hear your comments and have taken note of them. I apologize for the delay.

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I would remind my colleagues that our next meeting will be held at 3:30 p.m., in the same room, namely 253-D, Centre Block.

The meeting is adjourned.