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]

Tuesday, March 13, 2001

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[Translation]

The Vice-Chair (Ms. Diane St-Jacques (Shefford, Lib.)): Good afternoon, everyone. We will begin 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, who braved some bad weather today. We have with us here today Mr. Jean-Philippe Tabet from the Cultural Human Resources Council, Ms. Jeannine Paulin, who represents an association of workers at marine product plants, Ms. Irène Marais from the Family Business Network, and Mr. Gastien Godin from the Snow Crab Industry Solidarity Fund.

I would like each of you to give a presentation lasting about five minutes, one after the other. Then we will have questions and comments. On the average, we try to limit it all to about five minutes. I may have to cut you off, but as far as possible, we try to do a second round. This means that, if you have not finished answering a question, you will be able to continue in the second round.

We will begin with Mr. Jean-Philippe Tabet. Good afternoon, Mr. Tabet.

Mr. Jean-Philippe Tabet (Executive Director, Cultural Human Resources Council): Good day. Good afternoon and thank you for inviting us to give you our point of view on Bill C-2.

Before beginning, let me introduce myself. My name is Jean-Philippe Tabet and I am the Executive Director of the Cultural Human Resources Council (CHRC). My presentation will be divided into three parts: the issues, the conclusion and, finally, the recommendations. I suppose that you received the text of our presentation in French and in English. I will be making a bilingual presentation, alternating between French and English. I hope that the translators received the text of the presentation.

The CHRC is above all a national cultural service organization, which does not at this time depend on government funding for its operations. It brings together representatives of all the cultural sectors to address the training and career development needs of cultural workers—artists, creators, technical staff, managers, members of boards of directors, volunteers and all those engaged professionally in the sector, including the self-employed.

The cultural sector comprises literally hundreds of occupations in six broad sub-sectors: music and sound recording, new media, the visual arts and crafts, writing and publishing, audiovisual and performing arts, and heritage. The sector also includes several thousands of organizations, big and small, not-for-profit and for-profit, as well as a wide range of employees and a very high number of self-employed people who are independent artists, creators, freelancers or even sole proprietors.

The CHRC operates on a very simple premise: that the fundamental resource of culture is people, with all their distinctive characteristics. The Council's mission is "to initiate, co-ordinate and promote human resources planning, management, development and training in the cultural sector."

[English]

The Canadian cultural sector is large, dynamic, highly skilled and educated. According to Statistics Canada census information for 1996, more than 670,000 Canadians work in the cultural sector as artists, creators, producers, technicians and administrators. With the indirect job creation effect, the cultural sector affects one million jobs.

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Results from a recent survey indicate that 51% of this labour force holds a university or college degree, compared to 15% of the total experienced workforce. They have their own patterns of work and training that challenge old ideas about how to prepare people for viable, lasting jobs, and how to increase their skills, competency, and mobility. The most obvious is the very large number of self-employed people in the cultural sector.

Creators, artists, writers, actors, musicians, members of film crews, small magazine publishers—most of these people are self-employed, as are significant numbers of directors, editors, curators, and museum personnel. In the performing arts, writing, and visual arts, the percentage of cultural workers is higher than 50%. It is closer to 80%.

Like other self-employed Canadians, cultural workers must address all aspects of running small businesses. Not only do they maintain and improve their cultural skills, they must plan, learn, create, produce, market, keep accounts, and deal with tax, legal, health and safety matters, developing their own training opportunities and providing their own social benefits. As a result, they need a wider range of skills than most employees do.

The cultural workforce is also geographically dispersed. It is spread out across Canada, and many of its members are highly mobile, moving from place to place as work opportunities arise.

For many in the cultural sector, job security is non-existent. This makes it difficult for the cultural labour force to take time off for technical or other upgrading. Nonetheless, the success of the cultural sector, both nationally and abroad, depends greatly on such ongoing skills improvements.

[Translation]

In many ways, the cultural labour force is the model for the workforce of Canada's future—entrepreneurial, flexible, motivated and self-employed. As increasing numbers of Canada's workers choose or are forced to adopt these characteristics in order to earn a living, the "new economy" looks more and more like the age-old economy of culture.

According to the report of the Advisory Committee on the Changing Workplace:

The workplace and employment relationships are undergoing major changes, which are occurring at an increasing pace, particularly with the use of new technologies across all industry sectors. Self-employment, short-term contracts, telework and other forms of non-standard employment are increasing in importance. Structural change has been a Canadian reality for many years, and it is accelerating. Workplace change needs to be looked at with regard to how it might better meet the needs of children, youth, adults and senior citizens.

[English]

Well, ladies and gentlemen, that's why we are here today, isn't it? We are examining the Employment Insurance Act. CHRC, the Cultural Human Resources Council, with its partners, has some proposals to make to you while you are doing this. Those proposals are what I'm going to go over now.

The system of workplace-based social benefits is at risk in the new world of work. The decline in secure lifetime employment means we must focus on new, more flexible and more portable forms of third-party benefit schemes. If people can no longer depend on having the same employer, their income security will have to come from their acquired skills to accommodate a sequence of jobs. However, the need for employer-paid pension and insurance benefits remains. An expanded role for the social insurance programs of the public sector could fill that need, and that's what I'm going to present to you now.

Canada could call on sectoral organizations such as CHRC or its equivalents to administer such programs, as well as to improve portability and recognition of workplace skills from one job to another. It is reasonable to try to establish a context of labour market flexibility in which a number of choices are available. The Employment Insurance Act provides for the undertaking of some research activities and pilot projects regarding the adaptability of the policies to the economy.

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The CHRC proposes that the standing committee recommend that the labour market partners, including the Government of Canada, undertake a pilot project to research ways for employment insurance to meet the needs of the new economy, with a focus on the cultural workforce, because 50% of cultural workers are totally or partially self-employed.

The 1997 advisory committee on the changing workplace reports, conclusion, and recommendations could serve as a guide for this research. For example, the research could look into the desired labour regulation framework, labour standards, occupational health and safety, and labour regulations that would set a common base and deliver the same basic human rights that all workers should have access to, whether employed or self-employed, seasonal-contingent or in precarious employment.

As investing in people is the key to Canada's future, the study could look also at the role of lifelong learning, as self-employed workers must have access to ongoing professional development and upgrading opportunities if they want to stay competitive. For example, sector-based organization could help to design programs appropriate to their workforce needs. They would also be well placed to determine the professional qualifications and contributions that might give access to these programs.

In the case of self-employment, the policy options vary widely, depending on whether this type of employment is a matter of choice or is imposed. Whether the person has a truly independent business differs materially from an employee as currently defined in the labour legislation. The applicability in a voluntary participation in the EI program or in some aspect of the EI legislation should be investigated, with a view to implementing such an option.

I have attached the recommendations of the advisory committee on the changing workplace for your information.

[Translation]

In conclusion, I would like to thank you for listening to me today. For the sake of over 700,000 cultural workers in Canada, I think we should discuss what this proposal would mean and undertake a pilot project to study how Employment Insurance could meet the needs of the new economy.

Thank you.

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

We will now give the floor to Ms. Jeannine Paulin, who represents the Plant Workers Association.

Ms. Jeannine Paulin (President, Association des travailleurs et travailleuses d'usine de produits marins du Nouveau-Brunswick): Good day. I represent an association of workers at marine product plants, including approximately 3,500 fishery workers. I am here today to tell you about our concerns.

The Association's brief provides an analysis of the situation, after five years of experience. It predicts even bleaker scenarios if certain changes for seasonal workers are not made immediately to the employment insurance Program.

The indicators or factors that come into play when assessing and adjusting EI benefits for fishery workers are: economic region 9; changes in the unemployment rate; the divisor and the benefits calculation; the small weeks (less than $150 per week) calculation; the intensity rule; the elasticity rule; and the duration of benefits scale.

It is important to realize the impact of each of these indicators and how they are related, in order to better understand the new employment insurance program introduced in 1996, which became fully operational on January 1, 1997. The new rules changed eligibility for benefits, as well as the level and duration of benefits. The consequences were disastrous in the coastal regions that depend on seasonal employment created by the fishery. Even more disturbing, the situation may deteriorate if the status quo is maintained. Why? That is the question we will attempt to answer. Corrective measures are urgently needed. Certain indicators must be revised, so as to correct those that are doing so much harm to seasonal workers.

I will turn now to the hours worked and the elasticity rule. Apart from the issue of new entrants in the labour market, for whom the requirement of 910 hours appears to us to be very demanding, people can no doubt deal with the minimum of 420 hours that applies to regular employment. However, the elasticity rule should be modified to make it possible to recover the hours worked in the preceding 52 weeks without pointless barriers.

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What causes a problem is the minimum divisor of 14, which often makes the average weekly wages even lower than the actual wages. This is a harsh approach, because it is used as a basis for setting benefit levels. We understand the very praiseworthy objective, which is to strongly encourage people and the industry to work for as long as possible.

We have a hard time understanding why a slight variation in the unemployment rate would have such an impact on the divisor. This creates a problem especially when such a drop in unemployment, calculated across a large region, has little positive impact on a clientele that is an economic prisoner of the seasonal fishing industry.

Let us turn now to the intensity rule. Clearly, it is appropriate to eliminate the intensity rule, which unduly aggravates the situation and cruelly penalizes the poorest and most powerless workers in an industry that, nonetheless, contributes substantially to the economy of the community and to the national economy.

We would propose raising the level of benefits from 55 to 65% of the average wages, to a maximum of $413 per week. That would certainly be the best way to mitigate the problem of poverty in our regions and to help those workers who earn the least money, who are the poorest.

Let us look now at the role of the federal government. It makes no sense that the federal government, which set up an employment insurance program, has to step in every spring with the Solidarity Fund and, sometimes, with the help of the province, to round out this federal program. We cannot allow this annual cycle of despair and social crisis to continue, year after year. Even if the fishing industry is prepared to do its share and make every effort to offer a minimum of 560 hours of employment, the IN-213 scale of the Human Resources Development Department limits benefits to a maximum duration of between 20 and 34 weeks, depending on a highly random variable, the unemployment rate in a region that is too big, which is a real tragedy.

Each spring, the large majority of these low-income workers are inexorably thrown into this void which is directly created by the new duration of benefits scale. Instead of helping workers keep their head above water until the next season, this federal scale for sharing the nation's wealth takes them on a descent into hell. This fixed scale always applies, but it is easy to slip and fall into the now only too-familiar gap, or "black hole" mentioned in the in the NDP report, Employment Insurance, the Human Face, submitted to the Canadian Parliament by the Member for Acady—Bathurst in the year 2000. What we really need is for the minimum length of the benefit period to be set at 36 weeks.

In conclusion, when an entire industry operates on a seasonal basis, we cannot penalize either the work or the worker. A decrease in the unemployment rate in economic region 9, which stretches from Restigouche County to Albert County, will not change one iota the seasonal conditions and the income of thousands of low-income workers at the approximately 50 plants in Northeastern New Brunswick.

We obviously need to encourage this industry to offer more hours of employment at plants by diversifying and increasing its supply of raw material, but until this goal is reached, we cannot unfairly punish the low-income worker, who has to meet the needs of the main industry.

Despite this sad reality, we must remember that the fishing industry contributes very significantly to the overall economy of all the communities that depend on it.

You can surely understand that it is only reasonable to adjust certain indicators according to selected objectives, in order to cause less hardship to the thousands of seasonal fish plant workers. What is tragic for seasonal fishery workers is that they have to deal with a fishing season that contains several.

The EI regulations unfortunately do not take into account this inescapable reality of seasonal work. The solution to all of these problems is likely a program that is adapted to the needs of seasonal workers.

Thank you.

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

I will now give the floor the Miss Marais from the Family Business Network. Good afternoon, Miss Marais.

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Ms. Irène Marais (President, Family Business Network): Good afternoon, ladies and gentlemen.

I would like to begin by introducing the Family Business Network. It was founded in 1980 and subsequently restructured. The membership base of the Network is family businesses in Canada. I wonder if you know how important family businesses are in terms of the country's gross domestic product. Family businesses generate 55% of the country's GDP. Family businesses pay 50% of all wages in Canada. Family businesses are also responsible for 66% of all jobs created.

According to a survey conducted by Samson Bélair Deloitte & Touche, family businesses in Canada account for 4.7 million full time jobs and 13 million part time jobs. These businesses represent total revenues of 1.3 billion dollars.

So, when we are talking about family businesses, I think that everyone will understand that if, as Industry Canada estimates, there are approximately 2,070,000 family businesses in Canada, and if we estimate that each business employs about two people who are not dealt with at arm's length—and this is no exaggeration—this means that there are already 4 million files per year in which there is a non-arm's length relationship.

I would now like to present our brief. We know that the Unemployment Insurance Program was set up in 1941. We had to wait until 1980 to obtain recognition of wages for female associates in family businesses. And we had to wait until 1990 to gain access, at least in theory, to employment insurance.

Family businesses therefore began to pay contributions in 1980, when wages were recognized, because accountants and tax specialists said that these wages had to be reported. As of 1980, then, family businesses began to pay into the employment insurance program. In 1990, they had access to it, except that section 5(2)(i) of the act stipulates that people who are not dealing at arm's length must report this when applying for benefits. These individuals are covered by this provision of the act that they are not eligible if they are related to the employer. However, they are entitled to employment insurance even if they are related.

Each applicant still has the burden of proof. The individual must put on file that she is working and that she is a paid employee in a family business. What is even worse in the whole matter, is that all local officers have obtained discretionary power, which means that the decision they make can practically never be reversed even by the Supreme Court. This has been stated officially.

While in certain debates in the House of Commons in 1978 and 1979, and even later, demands were made by the opposition to allow female associates to benefit from the system, it was the courts that forced the government to change the act.

Following the judgment in Druken v. Canada in 1987, when the Canadian Human Rights Tribunal rendered paragraphs 3(2)(c) and 4(3)(d) inoperative, the Federal Court of Appeal confirmed the decision of the Canadian Human Rights Tribunal in l988. The Supreme Court of Canada subsequently refused to authorize an appeal by the government, in March 1989.

It is therefore in the context of this important 1990 reform that the Employment Insurance Act was amended to allow persons working for their spouse to benefit from the system. Until then, the act provided for total exclusion of these jobs, mainly held by women. The exclusion also applied to children of the employer, to blood relations. According to statistics, there are over 4 million paid employees in Canada in this position.

We thought that we had gained something for paid female associates working in small and medium-sized family businesses in Canada, but we had to face the fact that, in spite of the change to the act, there were difficulties with the issue of employment insurability.

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On page 7 of our brief, we can read that:

... the Court cannot substitute its judgment for that of an officer of an administrative organization or a public authority exercising discretionary power...

That is what I pointed out to you a few minutes ago, and you will find it on page 7 of our brief.

On page 9, we conclude, from our research, that more time should have been spent not only on identification of the relationships that are the determining factors for exclusion, but also on consideration of the elements that lead to a conclusion that employment is insurable in spite of a non-arm's length relationship.

Paragraph 5(2)(i) also causes serious prejudice to all family businesses, not only in cases where they are let go, but also during maternity leave, since the job filled is not recognized as insurable.

On page 25 of our report, we explain that, in cases where employment is subsequently determined not to be insurable, the officers have been told, by way of a clear notice, not to demand repayment except if it is thought that fraud is involved. Consequently, we believe that all the people who had to repay benefits should ask the department for reimbursement.

It is in connection with this that I received information on Ms. Viel by fax at the hotel. Ms. Viel is a farmer. You will see how absurd the EI system is. She and 43 other farmers in the region initiated a class action which, I believe, was presented to the Federal Court.

Ms. Viel works in a farm business. She owns 20% of the farm business and the referee of the Canada Employment and Immigration Commission had confirmed that Ms. Viel should be considered a self-employed person for employment insurance purposes which—and this is very important—would require her to declare 15% of the farm's gross revenue during her period of unemployment.

I would like to ask you a question. She has just lost her case, and she will have to appeal it to the Supreme Court. Unless the government changes the law, Ms. Viel will have to apply to the Supreme Court because it has been ruled that a person owning 20% of the shares of an agricultural business receives gross revenues from the business. Therefore, she is required to declare 15% of the gross revenue during her period of unemployment. Is this not absurd? Do you know businesses in which all employees own shares of the business? Are they refused employment insurance benefits because they own shares?

Take Bombardier, one of the largest family multinationals. All the employees have company shares. When they are unemployed, are they asked to declare 15% of Bombardier's gross proceeds? No one would ever be able to receive EI benefits. And yet, Ms. Viel and the 43 farm women of Témiscouata, Quebec, have just lost their case in court.

What do we have to do to get things changed? We are simply saying that it no longer makes sense. The government has a surplus in the EI fund to which it is helping itself. It is helping itself to the contributions made by employees and employers in order to pay down some of the national debt. And meanwhile, employment insurance is being cut everywhere, we are down to 40%. People no longer have access to EI benefits even though it is their own money. They paid into it. How much money do you think has been invested by the 13 plus 4 million employees—that adds up to 17 million—who have contributed to EI, often since 1980, when they had access to wages?

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I find it wrong and incomprehensible that things like this would be done to family businesses in a democratic country. Do you know what the worst part is? We represent 55% of the country's gross domestic product. I asked people at Statistics Canada if they could give me figures on family businesses. I telephoned five different departments at Statistics Canada. Do you know what I was told? They drew a blank on family businesses. There are no statistics, even though we represent the country's chief economic partner. There are no statistics on us.

I have asked for funding to do a socioeconomic study of family businesses, but I cannot find any. I was told that it was not a very important project.

The Vice-Chair (Ms. Diane St-Jacques): Excuse me, but I must interrupt you.

Ms. Irène Marais: I know, I have gone over my time.

The Vice-Chair (Ms. Diane St-Jacques): I don't want to interrupt you, but you should perhaps give a brief conclusion.

Ms. Irène Marais: No.

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

I will now give the floor to Mr. Godin, from the Snow Crab Industry Solidarity Fund.

Good afternoon, Mr. Godin.

Mr. Gastien Godin (Representative, Snow Crab Industry Solidarity Fund): Good afternoon. Thank you for inviting us to take part in this working session and discussion on employment insurance.

I will begin by introducing myself. My name is Gastien Godin. I worked for 15 years or so as the general manager of a fishermen's organization and, for four years, I was the general manager of the Solidarity Fund, where I had the opportunity to work a great deal with plant workers and the whole seasonal sector. I began working for the provincial government only a few months ago, but my employer gave me time off so that I could come here, as a resource person, to speak to you about the problems related to the concept of seasonal work.

A number of years ago, beginning in 1996, the federal government amended the Employment Insurance Act to adapt it to Canada's new economy. I believe that it was necessary to make certain changes to the legislation so as to adjust to this new economy. However, everyone seems to acknowledge today that there was one element that was perhaps not given sufficient attention. At that time, we were perhaps not able to evaluate the impact of the changes on this element. We were told that the necessary changes would be made and that we would evaluate the consequences along the way. And it was thought that there would perhaps be fewer consequences; that was what was hoped. I am certain that the government did not want to see these consequences. Unfortunately, there have been some fairly serious repercussions.

We are beginning to look closely at the issue and I would like to participate in this process with you today. We would like to point out a phenomenon which is found in certain regions of the country, particularly in the northern parts of several provinces and New Brunswick. Although we are south of certain provinces, it turns out, by luck, that this problem of seasonality is the most significant in northern and northwest New Brunswick.

Seasonality is a particular characteristic of jobs in the small coastal and rural communities of New Brunswick, where fishing and the exploitation of certain primary resources are the dominant industries. Such is the case in rural Madawaska County, with agriculture and forestry, which is a well-known fact to Mr. Castonguay.

This seasonal nature of employment is accentuated on New Brunswick's east coast, along the Gulf of St. Lawrence, where the sea is covered by ice almost six months of the year. In addition, the fishing of all species of fish and crustaceans is strictly regulated by the federal Department of Fisheries and Oceans for purposes of conservation and other objectives relating to orderly management.

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I will come back to this later, because it is an important and inescapable characteristic, over which employees have no control. Clearly, what this means is that the jobs required to process certain species are of shorter duration.

Consequently, the conditions of these employees, two thirds of whom are women, especially in the Acadian Peninsula, have gotten worse since the changes made to the employment insurance program five years ago. We believe that the federal government must now go further than it is proposing if it really wants to tackle the problem of seasonal employment.

In the year 2000, Human Resources Development Canada modified the EI economic regions in some parts of the country, including New Brunswick, where it created a third region. There had been two and it created a third. This change had positive effects in one of the regions, because it had the effect of raising the overall rate of unemployment, which benefited a certain group of unemployed workers. In the other region, the calculation yielded a lower rate of unemployment, which had a negative effect on workers who became unemployed.

We must recognize that such a solution is only a partial and temporary one. It created winners on one side of the dividing line and losers on the other. We think that such a solution, which was implemented in certain parts of the country—we had it in Quebec and in New Brunswick—is only a stop-gap solution to a more fundamental problem. It does not go to the heart of the problem that is commonly referred to today as the "black hole" or gap. We do not always like to refer to it in this way, but, sadly, this is how it is referred to throughout Canada now. This gap, or black hole, is the period between two seasons when people have no source of income.

It was in response to these concerns expressed by the communities and by the main industry stakeholders that Human Resources Development Canada decided to establish a working group with a view to coming up with solutions to the problems associated with the changes to the employment insurance program. The community stakeholders and the organizations that participated in this exercise with the province and with Human Resources Development Canada believe that now is the time to submit the results of their reflections and their efforts to find solutions and alternatives to the current problems.

The Acadian Peninsula Fisheries Council, which is made up of representatives of all sectors of the industry, naturally supports this exercise and the proposed solutions. Your committee will find some proposals of interest in the report, which has been provided to you in French and in English. It is the fruit of a consultation and examination exercise that lasted several months. We are providing you with a copy because it contains some interesting proposals.

Finally, it will help to shed light on the real situation of a seasonal sector that is very important to New Brunswick's economy and to the Canadian economy. The report also alludes to a study, the first of its kind in Canada, in which we attempted to better define the concept of seasonal employment. A similar exercise is being carried out currently in Madawaska county. We hope that the findings will help you better understand the real situation of seasonal employees.

I'll end on this. This report, which was tabled in February 2000, proposes solutions to the current situation, at least with respect to one important aspect, that of the famous scale that determines the length of the benefit period. I will not go into any more details on this now, but I hope to have the opportunity to do so during the question period.

On page 20 of the French document, and on page 17 of the English version, there is a quote from the Employment Insurance Monitoring and Assessment Report presented to the Department of Human Resources Development Canada each year. I think that it's relevant to mention this here, because for the first time since the reform, it was noted that:

It is difficult to determine the impact of employment insurance program reforms on seasonal workers, because the sources provided rarely distinguish between seasonal work and non-seasonal work.

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The report then states:

Seasonal workers are often less affected than other workers by economic cycles, since their work schedule remains seasonal even in times of economic growth.

You understand? It recognizes the fact that seasonal workers do not benefit, in the end, from this economic cycle.

The third element, which is important to recognize, reads as follows:

Workers find the additional work required to avoid a reduction in their benefits.

So, therefore, what is being said is that it's not necessary to worry because they have managed to find a solution to their problem. However, we would like to demonstrate that this is not the case.

If we return to the first paragraph quoted, it's important to remember that it is true that we did not have these figures before. Today, however, they do exist and they allow your committee to better examine the notion of seasonal work and the problems related to it, not only in our region, but across the country, and to find appropriate solutions.

Thank you very much, Madam Chair.

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

We will now begin the questions. So, Val Meredith, Monique Guay, Raymonde Folco, Yvon Godin, Georges Farrah, Carol Skelton and Alan Tonks will have the floor.

[English]

Ms. Val Meredith (South Surrey—White Rock—Langley, Canadian Alliance): Thank you, Madame Chair.

Mr. Tabet, I want to thank you for appearing before the committee. Just so I clearly understand the discussion, when you were referring to all of these individuals who are in the cultural industry, are they part of unions? Are they now paying EI premiums, or are they completely outside the system as we know it?

Mr. Jean-Philippe Tabet: Thank you for your clarification here. It's a mix of both. First of all, there are within the cultural labour force contingent workers who are unionized under traditional unions such as CUPE. There are also self-employed workers who are organized under different kinds of unions, not unions per se but rather professional associations such as l'Union des artistes, ACTRA, the Canadian Actors' Equity Association, or the American Federation of Musicians. There are a great number of cultural workers who are not part of any unions.

Ms. Val Meredith: So it's a mixed bag of some—

Mr. Jean-Philippe Tabet: It's a huge mix.

Ms. Val Meredith: Okay.

Mr. Jean-Philippe Tabet: Most of them do not contribute to employment insurance. When they contribute to employment insurance, they are not able to get support from the employment insurance system because very often the primary work they would like to support themselves with is not the work for which they have made their contributions. This is because they are multiple job holders.

The forerunner of employment insurance was created in the 1950s and helped Canada to enter into the new industrial age. That serves a great purpose for Canadians. As a matter of fact, it's part of Canadian culture. A Canadian is a Canadian because of employment insurance.

Ms. Val Meredith: Well, hopefully not, but—

Mr. Jean-Philippe Tabet: Well, hopefully not. I don't know if the “hopefully” is the right word, but certainly I can say it is defining. A lot of Canadians are defined with respect to that and the CPP as well. So there are those programs that have had a great impact.

In the 1980s, the 1990s, and the 21st century this type of insurance system has been drastically challenged. What we are trying to see is whether there might not be a new way of looking at that type of situation in the new economy.

Ms. Val Meredith: In all fairness, I think we've heard from other witnesses that there has to be a new way of dealing with this. Some witnesses have said that it should be an insurance program and that these other realities need to be developed outside the employment insurance program. When you talk about seasonal workers, a seasonal workforce, and seasonal jobs, maybe a program needs to be established outside employment insurance for that particular field.

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The reason some of them gave was that employers are contributing 1.4 times... they're contributing almost 60% of the dollars that go into this, and should they be funding what they consider... Some of them are asking, should we be funding these other auxiliary programs that are not tied into the fact that we have short-term unemployment?

So there is a concern that these changes in this particular act are not dealing with the realities we're facing in the 21st century.

Ms. Marais, I was also concerned about your presentation, which talked about family businesses. That can be a huge business. I don't know if Bombardier would be considered a family business or not when compared to a mom-and-pop corner store. It really has a very wide range.

Now, you made a reference to the agricultural sector and farms and to somebody who belongs to a family that happens to own a business. I am very concerned about whether they should be able to collect benefits or should be considered shareholders in that business. I think that certainly needs to be looked at.

I don't think it'll be looked at, to be quite honest with you, in this legislation. But again, do or do not family businesses pay employment insurance premiums? Do they, in the natural course of conducting their business, pay into the system?

[Translation]

The Vice-Chair (Ms. Diane St-Jacques): Madam Marais, before answering, I would like to ask you, if possible, to answer quickly because we have already gone over the allotted time.

Ms. Irène Marais: Very well.

You are saying, based on my presentation of the issue, that is that some family businesses are enormous and that others are smaller, that we should distinguish them from each other. I do not think so.

The non-arm's length relationship exists in any family business. Paragraph 5(2)(i) of the Employment Insurance Act contains a rule. Whether an employee has non-arm's length a relationship and units or shares of Bombardier or an arm's length relationship and units or shares of an agricultural business, whether this employee has an income of $500,000 or an income of $10 billion, it makes no difference. It's the non-arms length relationship and the ownership of shares that matters.

Why would you want us to dissociate them? You believe that it's not necessary in the issue that concerns us with respect to this bill. You understand what I said: there are 13 million part- time jobs in family-run businesses, which means seasonal jobs.

Therefore, I think that we are more than concerned with the employment insurance issue. What we want is to go further, to eradicate the specific discrimination against family-run businesses with a non-arm's length relationship. The government is suspicious as soon as there is a non-arm's length relationship and we are suspected of abuse or fraud.

What's worse, the government should not be able to require retroactive repayment of benefits received, because there is a section which says so specifically. I discussed specific cases that were brought up in our offices. People were asked to repay benefits received over five years. They were asked to repay them without being accused of fraud but by imposing a penalty equal to the payment requested. Yet, it states that repayment cannot be claimed.

I don't see why I should not have my say in this debate on amending the Employment Insurance Act.

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

We will now give the floor to Monique Guay, Raymonde Folco, Yvon Godin and Georges Farrah.

Ms. Monique Guay (Laurentides, BQ): I will make a brief comment and then I will turn the floor over to my colleague Christiane Gagnon, because I have to leave; I have a meeting at 4:30 P.M.

Mr. Tabet, I'm very pleased that you talked about self- employed workers. Moreover, I have been raising this issue ever since this committee began holding meetings. I think that I'm the only one who has spoken about this issue, except perhaps for a few colleagues who raised the matter, but it is very important that it be dealt with in this bill. Currently, it is not.

Ms. Marais, what you say is so true. I, personally, have had to deal with cases and conflicts in my riding, and I can tell you that the employment centre really does pull all the strings. People are deemed to be guilty without there ever being an investigation or without... They are really treated...

Ms. Irène Marais: Aggressively.

• 1615

Ms. Monique Guay: Absolutely. They pay taxes. They have been contributing to employment insurance for years, but because they have family ties, with a cousin, for instance... and on top of that they look far and wide—they have horrible problems. This is discrimination. It should not exist. I know that people from my party have examined the issue, including Paul Crête, who has tabled an amendment on the matter. I hope that this will be considered.

Ms. Marais, I hope that you push your research even further and provide us with an even more complete document so that we can do some work in this area.

Ms. Irène Marais: We participated in a J.E. show. The television station was overwhelmed with questions. I found out that, in the Gaspé, a young woman had been receiving employment insurance benefits for four years. After four years, she was declared uninsurable and was asked to reimburse the benefits and pay a penalty. The young woman did not want to do this. She had one depression after the other. This went on for nearly two years. Do you know what this young woman wound up doing? So as not to compromise the company run by her husband and her son and to avoid having to reimburse the money, she committed suicide.

Ms. Monique Guay: These are terrible situations that we should not be seeing today, particularly when you consider the tremendous surplus that we have. It is scandalous. Employment insurance must serve the people who pay premiums and who must be able to benefit from it. I will turn the floor over to Christiane, but I have noted your comments.

Ms. Irène Marais: Thank you.

Ms. Christiane Gagnon (Québec, BQ): Thank you.

After listening to the three witnesses, Mr. Tabet, I think that we are going to have to do some very serious work in order to demand a pilot project that would cover all cultural workers. I can tell you that we are sensitive to the situation of self-employed workers because we want to tailor this insurance to meet the reality of the work. We are familiar with seasonal work, precarious jobs, we know about the situation facing our young people, women and even certain men who used to rely on more traditional occupations where there was more job security. We know that employment insurance must be able to cover all aspects of the real market.

I would like to know what kind of pilot project you have. Is this a targeted project, given that the cultural field is rather vast? You named a category of people who work in all disciplines. Would this also be a project that could be identified with a specific region? If we start going in every direction at once, I fear that we will lack support.

We know that you have many demands and many proposals with respect to the employment insurance system and the people who currently contribute to it. But there are many cultural workers who do not pay employment insurance premiums. We have to look at the feasibility of such a study. I would like to forward your request to the Human Resources Committee. How could this project be achievable and feasible?

Mr. Jean-Philippe Tabet: To answer this question, I am prepared to forward to you and to the committee a study on the matter. For nearly 10 years, cultural workers have contributed, on a regular basis, 3% of the money in the employment insurance fund. We have reviewed millions of files. The cultural sector and cultural workers have made a contribution. Often the problem lies in the fact that the programs are not at all tailored to the realities of the cultural trades.

To answer your question, the pilot project essentially focusses on research and solutions. I don't have any answers to your direct questions, as to whether or not the project should take place in a specific region or in a particular sub-sector.

What is most important is that the Standing Committee's recommendation results in the government of Canada and its partners recognizing that employment insurance has become, not useless, because it provided good results for some time, but that it is now a little bit out of date. We must use the same imagination that we did back in the 1950s and in the 1940s, when we dared to unveil to the whole country a project such as the Employment Insurance Act.

Today we must take a look at what's going on in this changing labour force which includes seasonal workers, contract workers and self-employed workers, which constitute 18% of the Canadian labour force. We would therefore like to study this labour force which is not covered directly by all of these employment insurance programs.

• 1620

I don't have any more details. What I don't want are ready-made solutions. We have to do some serious work to ensure that the country takes a fresh look at the changing labour force, which is comprised of very small businesses, very small entrepreneurs, for whom the Employment Insurance Act does not really provide a good answer. I will give you a few ideas, nevertheless, if I may.

Contributing to an employment insurance system is not necessarily a good solution for self-employed workers. Why? When a worker is self-employed, he is looking for contracts. He must, just like a very small business, remain competitive, namely, keep his skills honed. If a self-employed worker does not keep up to date when he is out of a job, he will not even be able to secure a new contract. I will give you a very concrete example.

The Vice-Chair (Ms. Diane St-Jacques): Since we have already exceeded the allowed time, I will ask you to draw your conclusion.

Mr. Jean-Philippe Tabet: I apologize.

What I'm trying to say is that participating in an employment insurance program is not perhaps the best solution. Participation in an education or in an apprenticeship program, throughout a lifetime, is perhaps a solution that is better tailored to the realities of this labour force. This is what I wanted to point out.

The Vice-Chair (Ms. Diane St-Jacques): Thank you. We will now turn to Raymonde Folco, and then Yvon Godin and Georges Farrah.

Ms. Raymonde Folco (Laval West, Lib.): Thank you, Madam Chair.

Mr. Tabet, my question will perhaps allow you to expand on the answer that you were giving to my colleague earlier.

First of all, I would like to tell you that I really appreciated the portrait you painted, in your presentation, of the new economy and of the important role played by small businesses, in terms of numbers and in terms of economics, across our country.

I myself was self-employed for over 10 years. I have experienced the highs and lows of self-employment. It is true that when you are self-employed, you sometimes have to work very hard. Sometimes you have to work around the clock. Sometimes you have no work at all. That is when you upgrade your skills or take holidays. You have to do something.

There is definitely a vicious circle type of problem for the self-employed worker. There is a pattern, and it is definitely not a linear one. However, when you are self-employed, you do have some control over your work—not full control, obviously, since you are bound by your contracts. Employees do not have the same control. Unless they are told otherwise by their union, employees are basically at the mercy of their employer. When you are self-employed, you have more freedom because you know from the outset that you will have a contract for a predetermined number of weeks or amount of money.

So here is my question. Given that self-employed workers have a certain amount of control over their work, how do we distinguish between those who decide, of their own free will, to stop working at some point—because, I don't know, they want to take holidays or for personal reasons—and those who have not had a contract for six months? How can we tell them apart, given that they often hit dry spells? I know that in my case, around November or December I would often wonder what I would be doing in January. Then in January, things would pick up. The same thing would happen in the summertime. How do we tell the two apart? These are technical problems, but problems that I think are nonetheless fundamental to the definition of self-employment.

Mr. Jean-Philippe Tabet: Madam Chair, I will try to be as brief as possible, but the question...

The Vice-Chair (Ms. Diane St-Jacques): You have two minutes left.

Ms. Raymonde Folco: I am sorry my question was so long-winded, but...

Mr. Jean-Philippe Tabet: No problem. The question is very tricky because it has to do with what I would call insurance fund management. Even under the current legislation, when you are unemployed, the eligibility criteria for employment insurance benefits are certainly complex.

• 1625

I will try to answer your question on the concept of self-employment. How are the "dry spells" in self-employment to be measured?

At the Cultural Human Resources Council and all of our sectoral councils, we have been quite aware that one thing that goes a long way toward showing that the self-employed worker is engaged in an active—albeit non productive—phase, is an effort to hone or upgrade his or her skills.

A commitment to ongoing learning may provide the key to answering your question. What would that look like? I have a few ideas, but no solutions. Just to give you an idea of what could happen if, for example, there was a fund for lifelong learning into which both the self-employed worker and the hirer paid, the money could be used in a dry spell for training and development. That might be the positive answer to your question.

However, there is another issue I did not raise, the whole issue of general benefits: health benefits, retirement benefits—although self-employed workers can get insurance—and of course parental benefits too. Another solution might be to allow self-employed workers to participate in employment insurance. Before coming up with solutions, we would like to study the problem thoroughly.

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

Now we will go to Yvon Godin, Georges Farrah and Jeannot Castonguay.

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

First of all, I'd like to thank our witnesses. I see that the questions are leaning pretty heavily toward the cultural side, in a group that includes seasonal workers from fish plants. I'd like to focus on the latter, which is not to say that I don't have questions for the others. I may come back in the next round with questions for them.

I'd like to talk about the Report of the Working Committee on Acadian Peninsula Seasonal Plant Workers submitted to Jane Stewart, the Minister of Human Resources Development Canada, in February 2000.

I remember, Madam Chair, that in response to the frequent questions on employment insurance that I asked as a member of Parliament in the House—you are aware of this—the minister answered that she had set up a working committee in the Acadian Peninsula, the region of the MP for Acadie—Bathurst. She answered that she had formed a working committee that was to make recommendations and that she would listen to it. Now we have the people who participated in this here, before us. When I look at page 3 of the report, I see the name of Norbert Robichaud, HRDC. Norbert Robichaud is the director for the entire Acadie—Bathurst region. We see names like Serge Brideau, HRDC; Huguette Arseneau, administrative assistant; Samuel LeBreton, regional economist, HRDC. These people were working on this, in the area that I come from.

My question is straightforward, I believe. Are you disappointed that, after the promises made during the election, and even before it, with Bill C-44, this bill does nothing—that's how I feel—except for the 5% and the clawback rule, even though the government admitted that the bill did not go far enough and that it would be open to additional changes? I would like to have your view on this. How do you feel? Excuse the word, I'm not trying to offend, but do you feel that you were in fact treated as dummies, used as figureheads? They gave you work to do, they used you as rubber stamps. I'm not mincing my words; they are biting, nasty words, but I'd like to know how you feel, as members of a committee that was set up by the Minister of Human Resources Development, not just in the Acadian Peninsula, but for the Gaspé Peninsula also. There was a committee in the Gaspé Peninsula, and today we have ended up with two or three minor changes. I'd like to know what you think about this.

• 1630

Ms. Jeannine Paulin: Thank you, Mr. Godin.

I believe that our group is the one that managed to get Ms. Stewart to come to the Acadian Peninsula. We stayed with her for over four hours, explaining to her what our experience was as plant workers and seasonal workers. It wasn't easy to reach a conclusion, and when she proposed setting up a working committee, we were delighted that, finally, there would be people working with us in this field, to try to understand the complexity of our situation regarding the employment insurance system.

We worked on this document for a number of months. When we finished writing it, and it was submitted, we were pleased with our work, because it really describes the whole situation of people working in the fishery and seasonal workers in the Acadian Peninsula. The solutions that we proposed are perhaps the same as the ones I am presenting here today, but the reason that I am proposing them again, is that they were not followed up anywhere. No action on them has been taken at all.

At the time, we thought that there would be changes. We attempted to see what was happening in the House, to determine whether our suggestions would really be followed, but we got nothing until, during the election campaign, there were promises that the intensity rule would be abolished. However, we are still a long way from getting the economy moving again in the region. We are not relying solely on employment insurance to do this, but I think that more than the intensity rule must be changed for the seasonal work that we do. There has to be a program that is tailored to this type of employment.

After all, it is not people's fault if there is ice. It is not people's fault if there is snow much of the season. It is impossible to cut wood or harvest peat when the ground is covered with snow. And it is not possible to get fish for the plants. People are going to talk to us about added value. We have added value already. People have been talking about added value for 20 years and nothing has changed.

Mr. Yvon Godin: Madam Chair, if we look at the people...

[English]

The Vice-Chair (Ms. Val Meredith): Make it quick.

Mr. Yvon Godin: Oh, I'm going to be quick. Don't worry about that.

The Vice-Chair (Ms. Val Meredith): You've had your five minutes.

Mr. Yvon Godin: Don't worry about that. I'll be very quick.

[Translation]

Madam Chair, if the Minister of Human Resources Development has agreed to have her director of human resources at the table and a document containing recommendations produced with that same person at the table, do you not see that the department is behind this? People were saying that they would welcome more major changes for the region than the 5% and the clawback rule.

Mr. Gastien Godin: I should perhaps clarify by saying that what the department did with us was in a way to give us the appropriate forum to try to find solutions to the problems together. Among these solutions, of course, was the intensity rule. We asked for that to be changed and, to a certain extent, the proposed bill takes that into account.

The real problem that we were facing and the reason that we met was to try to find a solution to the problems of seasonal workers and the black hole issue. It is unfortunately known as the black hole. On that point, I would ask you to look at the last page of the report. For us the last page is the first page. I have to tell you that we worked very late. There were even some nights when we tried to see what we could do because there was a deadline to submit this.

In Appendix 14, there was a challenge. The black hole is a problem for seasonal workers. We wondered if it was possible to find a solution within the present system, because the scale that you see here is the national scale, scale IN-213. We figured that seasonal workers could not be given more than other people. I must say that this was done pretty well by hand, since as soon as we put a figure in the computer messed everything up. We have to do part of the work that way. The computer cannot do everything sometimes.

• 1635

The Vice-Chair (Ms. Diane St-Jacques): I am sorry to interrupt you. Could you give us a short conclusion? You will certainly have a chance to come back.

Mr. Gastien Godin: Of course, Ms. St-Jacques. I will conclude.

In this table, the shaded areas indicate the proposed changes to the national scale to provide a supplement for that period in keeping with the supplement rules, but still taking into account the unemployment rate and the number of hours.

The basic principles of the system have been maintained. That is why we were expecting that the government would listen closely to us, since that is really the direction we need to go in. I would challenge you to find another technical approach to resolve the black hole problem. It was an effort on our part and we have not yet received any response, but we hope that, beginning today, some thinking will begin that can lead to these changes. That is our sincere wish.

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

I will now give the floor to Georges Farrah, and then to Carol Skelton, Jeannot Castonguay and Christiane Gagnon.

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

Welcome, everyone, to this committee. You are dealing, of course, with extremely delicate points that are of great concern to me, given that I represent the riding of Bonaventure—Gaspé—Îles-de-la-Madeleine—Pabok, which is in somewhat the same situation as the Acadian region. We have seasonal work, particularly in the fisheries and forestry. So we are very concerned by what is happening with employment insurance.

Of course, the black hole is a phenomenon that, unfortunately, is too widespread. There is indeed a period of time where people do not have any income. When people are living on unemployment insurance benefits for a while, or even working at a low-paying job, they do not have the means to put money aside for that gap of six to eight weeks. It is very important to make the government aware of that.

Mr. Godin, I know that you may not have the resources that the departments do, but have you evaluated the needs with respect to the black hole? How should the table be reworked in terms of unemployment rates, etc.? Was a calculation done in terms of additional costs to the government?

Mr. Gastien Godin: No. As you said, it would be difficult for us to do that. Even the Bathurst region may not have the resources to do it. But there is something interesting. An appendix to this document contains a summary of a study—it is the first one in Canada—by the Applied Research Branch of the New Brunswick region of Human Resources Development Canada. It indicates the findings of a survey of seasonal workers in New Brunswick. The document was prepared in December 1999 by Francis L'Italien, Samuel LeBreton and Louis Grignon, highly respected economists in the department. There were 11,000 people surveyed.

Exact figures may not be available, but that document can give you an idea of who we are dealing with. The cost is certainly lower than if we were dealing with employees of processing plants in central Canada.

If we look at the wages of these people, we see that 68% of seasonal workers earn less than $10 and 54% of seasonal jobs provide employment income of under $5,000. It is true that the others may be earning $6,000 and over, but it is still... We also see that 43% of seasonal jobs last less than 12 weeks. That is why we had a problem with the 14 weeks. People are prepared to live with 14 weeks and make an effort to work more, but the black hole continues to exist. That is the period that... We are prepared to deal with some aspects of the reforms, but there is a problem at the end of the line.

I have the impression that the situation is similar for seasonal workers across Canada. Another witness was saying that in her region the wages were very low as well. These people do not get $413; they never get the maximum. When they are unemployed, they receive $150, $160, $140 or $130. They do not get $413. That means that these people would cost much less, and we need to take that into account. Has that been done at the national level? It is difficult.

Thank you, Madam.

Mr. Georges Farrah: What is needed is not a specific measure for the Acadian or Gaspé regions. When we talk about unemployment rates, that has to apply to all vulnerable regions in Canada. It is an important principle of fairness.

• 1640

If I may, Madam Chair, I would like to ask a question about family relationships, especially about how people are dealt with by the bureaucrats.

Of course, in Gaspé or in the Islands, everybody is related. That's a fact. Everybody is called either Landry, Arseneault or LeBlanc. Everybody is related and this is a major irritant because often, we deal with officials who are indeed fair-minded, but who are located outside our region, either in Montreal or somewhere else. I have nothing against Montrealers, far from it, but the reality of the matter is that everybody in our region is related. This is often the easiest argument that is used to justify refusal. This is a major irritant.

Do you think that this approach is applied across the board? You seem to be saying—I don't know if these are isolated cases—that officials' attitudes may mean that recipients are treated inappropriately.

I don't want to generalize here, but some people in my region have told me that when they spoke to Human Resources Development and even Revenue Canada officials, they were accused of defrauding the system. At the end of the day, they are automatically presumed guilty. I would like to know whether this is happening across the board or whether they are just isolated cases. If they are not isolated, it means that there is a serious problem.

Ms. Irène Marais: It is in fact an across the board phenomenon. As far as we understand, front line officials are free to use their own judgment in any assessment. They were not given any specific training when the insurance system was implemented. There were a lot of shortcomings and the report we drafted on our research reflects this. The approach taken by officials is to endeavour to make people into benefit abusers before the first step is taken.

If you want, I can provide you with a few examples that I am aware of. There is one thing that we refuse to accept. Once a job has been recognized as insurable and the person is eligible for benefits, why are there repeated inquiries every year for five or six years? Each year, the process begins all over again. That doesn't make sense. When a decision has been made, that should be an end to the matter. They should not start the process all over again the following year and subsequent years for five or six years running.

In a lot of market garden companies, employment ends in October and begins again in February or March. Let's take the case of a proud young woman. She went to see an official to hand in her benefits application form. The official looked at her, asked her to take a seat and said: "Yes? I suppose that you work with the soil in a company like that. Do you really expect me to believe that story? Just look at your hands, and your varnished nails and your hair."

At appeals throughout Canada, we have had stories of insults just like those. Officials conduct telephone inquiries. As a rule, in agricultural companies and in other small businesses, it is the wife, the daughter or the son of the owner who keeps the books. They do their paperwork on a kitchen table. In the minds of officials, this is illegal. An official might go to an agricultural company at 11:30 in the morning and introduce himself to the woman there as the investigator responsible for her employment insurance file. As soon as he has introduced himself, he starts by saying: "It is 11:30 a.m. and you're not yet in your office. I can hear a baby crying. You must be carrying that baby around with you. You must be answering the phone while you're making your spaghetti sauce."

We see a lot of that type of thing.

The Vice-Chair (Ms. Diane St-Jacques): I am sorry to interrupt, Ms. Marais, but could you wrap it up? We have gone overtime.

Ms. Irène Marais: In our opinion, it is not a restricted phenomenon. It is a widespread practice. Mr. Godin mentioned that in 1998, Human Resources Development set employment insurance benefit clawback quotas for its officials. When I talked to Human Resources Development about that, I was told that this was no longer the case. However, that does not alter the fact that HRDC officials have already worked on a quota system. Who are the most vulnerable of all employment insurance recipients? Whether you include fisheries or not, seasonal workers also have family companies. Who are the most vulnerable? Well, those who are related. And, this will continue to be the case if the act is not changed. It's complete discrimination.

• 1645

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

Carol Skelton now has the floor, followed by Jeannot Castonguay, Christiane Gagnon and Yvon Godin.

[English]

Ms. Carol Skelton (Saskatoon—Rosetown—Biggar, Canadian Alliance): Irene, I want to thank you. My daughter-in-law has just gone through this. She's had to go back to work after three months, because she could not go through and they would not grant her claim, because she was working for my son. Do you have a percentage of women in your organization who have been denied—any kind of figure—have had their claims refused?

[Translation]

Ms. Irène Marais: We do not have the figures because we do not have access to the statistics. I told you that I have contacted Statistics Canada to get the figures. We have applied to carry out a socio-economic impact study. We do not have the funding. Currently, our organization can draw on 11 years of employment insurance expertise. We are subsidized by Status of Women Canada. Employment Insurance falls under Human Resources Development Canada. In the time since we published our report in 1999, Human Resources Development Canada has gone through the scandal concerning inappropriately awarded subsidies. I received a message telling me that I can no longer count on subsidies for any employment insurance-related subject.

Given that it is a small organization, cutting my funding in half is designed to close us down. However, I wrote a letter to Ms. Hedy Fry last year, before she left office. I told her that she had the power to close our organization down, but she had no authority to dissolve us. I also told her that if we were forced to fight for our life publicly, we would do so. That is exactly what we are doing. We are talking about discrimination in terms of employment insurance and, in addition, they are attempting to bury any organization which is a thorn in their side.

[English]

Ms. Carol Skelton: Okay, good.

I'd also like to ask, what's the difference between the gap and the black hole?

Mr. Gastien Godin: They're the same thing.

Ms. Carol Skelton: Okay. I've heard “the gap” and “the black hole”.

Mr. Gastien Godin: The black gap.

Some hon. members: Oh, oh.

Ms. Carol Skelton: It's the big black gap.

Do you have memberships, Irene?

[Translation]

Ms. Irène Marais: Yes, we do have a membership.

[English]

Ms. Carol Skelton: Right across Canada?

[Translation]

Ms. Irène Marais: There is one in New Brunswick, Manitoba, Alberta, and in Ontario and Quebec.

[English]

Ms. Carol Skelton: Why not Saskatchewan?

[Translation]

Ms. Irène Marais: I am working with SWAN, but I have not yet taken part in anything specific. I held a conference in Saskatoon, in the fall, but I haven't yet... I cannot afford to travel and I am being starved financially.

[English]

Ms. Carol Skelton: There are a lot of agricultural workers out there who would like to speak to you.

Thank you very much for coming this afternoon—I forgot to say that.

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

Val, if you want to say something, you still have two minutes.

Ms. Val Meredith: That's fine.

[Translation]

The Vice-Chair (Ms. Diane St-Jacques): Jeannot Castonguay now has the floor, followed by Christiane Gagnon, Alan Tonks and Yvon Godin.

Mr. Jeannot Castonguay (Madawaska—Restigouche, Lib.): Thank you, Madam Chair. I would like to offer my sincere thanks to our witnesses.

Mr. Tabet, you said that employment insurance is not the answer in the new economy, where there are many small and medium businesses, many family-run businesses and many seasonal workers. You went on to say that before setting out the solutions, it would be a good idea to properly identify the problem of this new reality. Of course, we have had many witnesses now and I have been wondering whether this would be a time-consuming approach. I suppose it would. Could you comment on that?

We have seen a bill tabled which contains some elements which are designed to what I would call "patch" a system, which is far from ideal. Madam Chair, people in my riding are demanding that something be done without delay, that at least some semblance of a solution be drawn up. However, others are telling us that if changes are made too hastily, our goose is cooked and the battle stops there. I would like to hear both your comments and those of the other witnesses on this issue.

• 1650

Mr. Jean-Philippe Tabet: That is a point well taken and our board thought so as well. Undoubtedly, the Employment Insurance Act will have to be "patched up". That is for sure and we will have to act quickly.

However, we think that the act does provide for pilot projects. If I am not mistaken, this is one of the provisions of section 5 of the Employment Insurance Act. We believe that could be done right now. This would accomplish two things. Firstly, it would address immediate needs; secondly, it would not brush aside the problem areas that have been raised. Undoubtedly, we are not the only ones to have highlighted these problems. In addition, we are undoubtedly not alone in thinking that employment insurance is an outdated system, which is incapable of addressing future problems. Others undoubtedly share our view that we have to endeavour to find a way of moving forward.

There is a provision in the act, a means by this can be done. How much time would it take to design a pilot project? I don't think that more than a year would be... There are existing models.

I will give you an example. We have talked about seasonal workers, casual workers. Well, in some countries, it is sufficient to have worked 600 hours, to be able to prove that you have worked 600 hours during a given year in order to be able to take advantage of the Employment Insurance Act. There are examples of countries that have social legislation that has such provisions. Canada is not isolated from the rest of the world; Canada is part of the world and there are existing examples.

And so why not have a pilot project, a research project that could clearly and concretely set out the examples that exist? In fact they are not necessarily models, but they are examples that exist. The Department of Human Resources Development knows about them. These are not things they are unaware of. They are familiar with them.

Here is another example. Canada has sectoral councils. The sectoral councils are a tool that was developed over the last 20 years in Canada. We must use these sectoral tools. They have the means to get access to the work force. They have an economic development strategy. Let's use them. There are two ideas that would allow you to answer both your questions. Now I don't have any magic solutions, because it is a huge problem.

In conclusion, in 1948 if we had asked what the Canadian labour force was, what the Canadian labour force was made up of, we would have been told that probably 90% of the workers were self- employed. Why? Because the Canadian labour force consisted of many fishermen, many farmers, and many people who did seasonal work in our forests. But in the 1950s, this changed completely and that is why we created the Employment Insurance Act. It was to push Canada into the 20th century. Well, let's push it into the 21st century.

The Vice-Chair (Ms. Diane St-Jacques): Thank you, Mr. Tabet. Does anyone else have any remarks? Quickly.

Mr. Gastien Godin: Yes, I'll be brief. I would like to make this remark to Mr. Castonguay. It is obvious that the concerns you have expressed certainly exist elsewhere. At this point in time, people would like to see a change concerning the intensity rule. Even if this only represents $10, $11 or $15 per week, it is still significant when we think about the income level in situations that we were discussing a while ago, for children amongst others. I am sure that next week, there will certainly be municipalities, who have a close-up view of these situations, who will be able to tell you about it.

If we could be sure that the government, immediately following this stage, would commit to a second stage... If we are told that yes, we are seriously examining the problem of seasonal workers, we are considering the problem brought up earlier concerning self-employed workers, or the questions of family ties, if we had that assurance, we obviously would be cooler about it, if you would pardon the expression.

At present, we are quite apprehensive when we think about all that. We tell ourselves that the issue of employment insurance is on the table, and it is the first time since the reform that there is a will to make certain changes.

We in the Maritimes have gotten the impression, Madam Chair, that the Prime Minister regrets some of the changes that have been made. This is not partisan politics at all, I am just referring to a Prime Minister speaking to his people. We are like all Canadians, and listening to him speak, we got the impression that he regretted some of the changes. Everyone understood that he did not mean he regretted everything that was done. Clearly some members would perhaps like to give that impression, but you have to be honest. I am certain that that is not what he meant concerning all the changes.

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However, Mr. Castonguay, we in the Maritimes had the distinct impression that he was interested in our real problem, not necessarily and not only in the intensity rule. It was, rather, the "gap" issue that we have heard so much about. That is our most serious problem. Therefore, when we heard the Prime Minister say that something was going to be done, we thought that efforts would be made to deal with that. In fact, there's nothing that deals with that.

If we were given the assurance that the intention is to follow this line of thinking, well, then, we would certainly be more flexible. Under the present circumstances, we definitely want to take advantage of the situation.

Thank you.

The Vice-Chair (Ms. Diane St-Jacques): Thank you, Mr. Godin. Now, I will give the floor to Christiane Gagnon, Allan Tonks and Yvon Godin.

Ms. Christiane Gagnon: I don't really have any questions. I would rather make a remark. I think that everything is up for discussion and what is necessary is to have the political will.

We have been told many things about the reform of employment insurance: that it does not fit reality, that it is not suitable for the market or for the economy, and so forth. We have heard about work at home, about family businesses. The Bloc Québécois tabled an amendment so that the burden of proof would be reversed. This would improve things, but...

Ms. Irène Marais: Yes, but it would not change the situation.

Ms. Christiane Gagnon: That's right. I believe we must rethink this legislation in order to make it more equitable. Taking a broader view, I wonder if the question of a minimum income for example... I'm not sure.

As a member of Parliament, it's very difficult to see to what degree people are excluded from the job market, to see how precarious the situation is, how people are becoming impoverished. Workers who deserve to be paid for the research they've done, for the work that they have done... If we as parliamentarians were not paid for what we did, we would speak up and demand a salary. That is why we have elected representatives here, who are supposed to have feelers out there amongst Canadians.

I cannot add anything more because we understand the problem that several people have raised. Only four people out of ten are eligible for employment insurance, which is unacceptable when billions of dollars are sitting in government coffers to pay for a very expensive operation.

We are going to continue the fight, but we hope that the members from the party opposite will be able to transmit your message to the government in order to show the gravity of the problem.

Mr. Jeannot Castonguay: That is what we are doing, Madam Chair.

The Vice-Chair (Ms. Diane St-Jacques): Does anyone have a comment on the subject?

Ms. Irène Marais: I would like to say something. The message that we are receiving more and more often from family businesses is that they have wasted their money paying premiums for the last 20 years. First of all, the benefits never pay back more than three years' worth of premiums.

Furthermore, the fact is that family businesses are paying premiums into the employment insurance fund for more than 17 million jobs; how much does that add up to each year? Do you realize what would happen if family businesses said at some point in time that they were not going to pay anymore if changes were not made to the legislation, and if this discrimination continued? Where would Mr. Martin find his surplus in order to erase his debt?

I ask this question because that is the reality. Where does the money come from? From those who pay the premiums, from employers and employees who pay into the fund. I find it outrageous. I'm sorry for my choice of words, but I've had this issue has been eating at me since the age of 11. Every time I come here, we don't make much progress.

I'm curious. I would not want to bet on it, because I might lose, but I'm not sure that there will be any changes in the bill concerning the arm's length provision. There is nothing at all in C-2 that will change anything about that discrimination. And yet, family businesses, as I mentioned, represent 55% of GDP and 17 million jobs, and we don't listen to them. When we want to speak out, we're told to shut up because we're speaking too loudly. That is the reality that we are dealing with.

The Vice-Chair (Ms. Diane St-Jacques): Thank you, Ms. Marais. Does anyone else have a quick comment? No?

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I give the floor to Alan Tonks, and he will be followed by Yvon Godin.

[English]

Mr. Alan Tonks (York South—Weston, Lib.): Thank you, Madam Chairman.

First, thank you to the witnesses. We've heard some new things today about the relationship and dependency issues, the issue related to an extremely important sector that adds tremendous value to Canadian life in the cultural community, and the problems that emanate from self-employment, which are particularly related to that sector—perhaps a little different from the application of seasonality, if you will, to other sectors, the fisheries, and so on.

In your presentation there are some tuning issues we've dealt with. For example, we are getting rid ofthe intensity rule. There are still problems with the gapping issue, and we'll have to look at that further.

I compliment this document; it was an excellent piece of work. Those things I've just referred to are tuning, and they're short-term. But in regard to long-term sustainability, there is a whole list of other recommendations that have come through. Is there any mechanism in place that is going to monitor the implementation of these recommendations, so that we can have some measure of their effectiveness? Surely this is the longer term readjustment of the employment and economic situation you have referred to.

Mr. Gastien Godin: The document itself recommends that there has to be a mechanism of evaluation for the measures that could be put in place.

Mr. Alan Tonks: Have you been invited to be part of the measurement of these activities?

Mr. Gastien Godin: No. This document has been given to the minister, but there was not really a follow-up with the community on what has been proposed. We are still waiting for a follow-up. In the document, as you've seen, one part is dealing with the unemployment change. But another one... Because the people in our community don't want to stay in that situation forever. That's why there were some proposals looking for diversification, education, training, and all that. At that level too there has been no real follow-up at this time. So we're still waiting. The government has been re-elected now, and maybe there is a certain timing, so we are still optimistic. We are still confident that there will be some follow-up in certain matters.

Mr. Alan Tonks: I realize that the parameters of our discussion and investigation here are defined by the EI bill. But it seems to me there is a bigger issue here. Where you have recommendations for local economic development, then we also, as a committee—HRDC is our domain—should be making sure there is a follow-up and a measurement, an inclusiveness, if you will.

I guess my question isn't for you—it's an observation I share with the committee: where we are apprised of these kinds of initiatives, we all should attempt to make sure they are followed up.

Mr. Gastien Godin: I know there is a specific recommendation for complete evaluation of the proposed measures.

Mr. Alan Tonks: Thank you.

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[Translation]

The Vice-Chair (Ms. Diane St-Jacques): Mr. Tabet, you'll have to be brief because we have to leave in 10 minutes.

[English]

Mr. Jean-Philippe Tabet: It has nothing to do... We did not know we were going to talk about something that is really at the periphery of employment insurance, but it is so vital for the survival of many regions in Canada.

There are mechanisms that HRDC could use. Those mechanisms are the sectoral councils. Those sectoral councils are directly linked with our communities, and in fact there are two sector councils in the fishery industry. They are my colleagues, they are independent organizations. But they have the pulse of the industry. So there is already a mechanism by which such activities could be monitored. What is very important in employment insurance, in my view, is the fact that it has always been a system that was outside a community. What we are seeing more and more is a dialogue—and it is necessary—between this type of system and its community.

It is only an example, but the sectoral councils, both at the provincial level—because they exist at the provincial level—and at the federal level might provide the new system to deal with issues relating to what we are talking about. I'm sure you know your sector council in the fishery. Daniel could have been here with me today, if I had known.

[Translation]

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

We will conclude the question period with Mr. Godin.

Mr. Yvon Godin: Thank you, Madam Chair.

First of all, if I have enough time to ask another question, I would like to put it to Ms. Marais.

In my area, we also have small to medium-size businesses. To use the vernacular, we could say that they are crucified daily. I would even go so far as to say that we should have a royal commission on Human Resources Development Canada because of the theft and fraud this department is guilty of, and we should stop accusing the little people of theft and fraud. I will qualify what I am saying. I will tell you why.

First of all, small to medium-size businesses are often family businesses. They have to contribute to employment insurance, Madam Chair, because we're told they have the right to have employment insurance. In my riding, there has never been a person who was related to the head of a business and who applied for employment insurance, who was not subjected to an inquiry by Revenue Canada. On top of that, they search and search and finally discover that a man's wife made a deposit at the bank, while receiving unemployment insurance. They claim she worked while receiving unemployment insurance. I ask myself, Madam Chair, if they ever, by means of a recording, with the technology we have today, discovered that this woman mentioned to her husband, while they were in bed at night, how much money they have in the bank, they would certainly cut her unemployment insurance.

You can see how ridiculous this has become. I would like to hear your comments on this.

Does it ever happen that Revenue Canada or Human Resources Development Canada tell people that they will be the subject of an inquiry because they paid for a period of 20 years and we've been stealing their money for 20 years? This is a serious problem. I welcome the fact that you are here today to tell us this story. I often see cases like these in my region. I am sure that you, Madam Chair, when you were on our side of the table or on our side of the House, were saying the same things as we do. The new members of Parliament were saying that they'd like to be on the government side because changing employment insurance is a necessity. Today, we see that C-2 is the same as C-44. It's as though you were hit by lighting. It hit us like a ton of bricks.

Mr. Godin is not related to me, but he's made some valid comments. He knows that the government is ready, after C-2... Now they are all worried. If we don't pass C-2, we will lose it. Is the government prepared to make these changes to employment insurance immediately after the bill's passage?

I'm going to come back to our small to medium-size businesses who, in plain English, are being crucified daily. They are actually going through hell.

Ms. Irène Marais: Real hell. Mr. Godin, you cannot imagine how things are done. People are obliged to have employer-employee relationships that are like those you would have with a stranger.

I will say this. Women must be paid by cheque. Look at how employment insurance works. If a woman takes her paycheque and deposits it into a joint account because she doesn't have a personal bank account, she will be accused of fraud because this is a trick to funnel money back to her husband.

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Officials make these kinds of accusations. On the one hand, more and more businesses allow their employees... I have a nephew who is an engineer at Bell Canada. He can work at home. He receives a salary. He works when he thinks best, at midnight or at 7 o'clock in the morning. There's no investigator to spy on his activities, to see if he's doing laundry while he's on the telephone, or if he's working on his computer.

As for family businesses, they'll stoop to rummaging through our houses to see if someone's doing some bookkeeping on the corner of the kitchen table. Within the context of a business, if we're watching over a sleeping baby or stirring up a batch of spaghetti sauce, we're practically swindlers, and this is ongoing. They even went so far as to accuse a woman and ask her for a reimbursement because they considered that she was ineligible, because she received a salary, and according to their assessment she should have been working 35 hours a week whereas she worked 55. Employment insurance refused to grant her benefits, pointing out that she had not been paid enough for the work that she was doing and that this involved a fraud.

Do you know how far they will take it? Will there be some fairness somewhere, at some point? When I speak, everyone thinks that I am angry. Actually, I'm angry because of this file; I am stuck with this issue. You cannot imagine the calls that we receive sometimes. It's incredible.

Mr. Yvon Godin: Just imagine what it's like when you're a member of Parliament.

Ms. Irène Marais: Yes, and you have to carry on.

The Vice-Chair (Ms. Diane St-Jacques): Is that all, Yvon? You have a few seconds left.

Mr. Yvon Godin: Since I have a few seconds left, I'd like to share another example with you. In this instance, a small business owner loses her job because there's no more work for one of her company's employees. She gets caught, because the inspector discovered that she had used the company car and credit card to buy gas. She is then told that this constitutes fraud and that she must pay $30,000.

Ms. Irène Marais: I agree with you. This has happened. Let me explain. A woman had received $20,000 in benefits. They wrote to her—without laying any fraud charges—and said she should pay back $20,000 plus a $20,000 penalty. What I'm trying to say is that employment insurance itself defrauds people quite illegally, because it is illegal to demand retroactive benefits without a fraud having been proven. And this is happening across the country.

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

On behalf of my colleagues, I would like to thank you for coming and also for your comments which have given us food for thought, and will contribute to our debate later on. Thank you Mr. Jean-Philippe Tabet, Ms. Jeannine Paulin, Ms. Irène Marais, and Mr. Gastien Godin.

I remind my colleagues that there will be a meeting at 3:15 p.m. tomorrow, in Room 237-C of the Centre Block, which will be followed by another meeting at 5:30.

Good afternoon.

The meeting is adjourned.