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37th PARLIAMENT, 3rd SESSION

Standing Committee on Human Resources, Skills Development, Social Development and the Status of Persons with Disabilities

EVIDENCE

CONTENTS

Thursday, April 29, 2004

0905

The Chair (Mrs. Judi Longfield (Whitby—Ajax, Lib.))

Ms. Wilma Vreeswijk (Senior Director General, Employment Program Policy and Design, Department of Human Resources and Skills Development)

0910

0915

0920

0925

The Chair

Mr. Jean-Yves Roy (Matapédia—Matane, BQ)

Ms. Wilma Vreeswijk

0930

Mr. Jean-Yves Roy

Ms. Wilma Vreeswijk

Mr. Jean-Yves Roy

The Chair

Mr. Jean-Yves Roy

Ms. Wilma Vreeswijk

Mr. Jean-Yves Roy

0935

Ms. Wilma Vreeswijk

Mr. Jean-Yves Roy

The Chair

Mr. Jeannot Castonguay (Madawaska—Restigouche, Lib.)

Ms. Wilma Vreeswijk

Mr. Jeannot Castonguay

Ms. Wilma Vreeswijk

The Chair

Mr. Gordon McFee (Acting Director General, Insurance Policy, Department of Human Resources Development)

0940

Mr. Jeannot Castonguay

Ms. Wilma Vreeswijk

Mr. Jeannot Castonguay

0945

Ms. Wilma Vreeswijk

Mr. Jeannot Castonguay

The Chair

Mr. Yvon Godin (Acadie—Bathurst, NDP)

0950

Ms. Wilma Vreeswijk

Mr. Yvon Godin

Ms. Wilma Vreeswijk

Mr. Yvon Godin

Ms. Wilma Vreeswijk

Mr. Yvon Godin

Ms. Wilma Vreeswijk

Mr. Yvon Godin

Ms. Wilma Vreeswijk

Mr. Yvon Godin

0955

Ms. Wilma Vreeswijk

Mr. Yvon Godin

Ms. Wilma Vreeswijk

Mr. Yvon Godin

Ms. Wilma Vreeswijk

Mr. Yvon Godin

Ms. Wilma Vreeswijk

Mr. Yvon Godin

Ms. Wilma Vreeswijk

Mr. Yvon Godin

The Chair

Mr. Yvon Godin

The Chair

Mr. Yvon Godin

The Chair

Mr. Yvon Godin

The Chair

Ms. Yolande Thibeault (Saint-Lambert, Lib.)

1000

Ms. Wilma Vreeswijk

Ms. Yolande Thibeault

Ms. Wilma Vreeswijk

Ms. Yolande Thibeault

Ms. Wilma Vreeswijk

Ms. Yolande Thibeault

The Chair

Mr. Jean-Yves Roy

1005

Ms. Wilma Vreeswijk

Mr. Jean-Yves Roy

Ms. Wilma Vreeswijk

Mr. Jean-Yves Roy

Ms. Wilma Vreeswijk

Mr. Jean-Yves Roy

1010

Ms. Wilma Vreeswijk

Mr. Jean-Yves Roy

Ms. Wilma Vreeswijk

Mr. Jean-Yves Roy

The Chair

Mr. Jeannot Castonguay

Ms. Wilma Vreeswijk

Mr. Jeannot Castonguay

Ms. Wilma Vreeswijk

Mr. Jeannot Castonguay

Ms. Wilma Vreeswijk

Mr. Jeannot Castonguay

Ms. Wilma Vreeswijk

1015

Mr. Jeannot Castonguay

Ms. Wilma Vreeswijk

The Chair

Mr. Yvon Godin

Ms. Wilma Vreeswijk

Mr. Yvon Godin

Ms. Wilma Vreeswijk

Mr. Yvon Godin

Ms. Wilma Vreeswijk

1020

Mr. Yvon Godin

Ms. Wilma Vreeswijk

Mr. Yvon Godin

Ms. Wilma Vreeswijk

Mr. Yvon Godin

Ms. Wilma Vreeswijk

The Chair

Mr. Yvon Godin

1025

The Chair

Mr. Yvon Godin

The Chair

Mr. Yvon Godin

Ms. Wilma Vreeswijk

Mr. Yvon Godin

Ms. Wilma Vreeswijk

Mr. Kenneth Kerr (Director General, Active Employment Measures, Department of Human Resources and Skills Development)

Mr. Yvon Godin

Ms. Wilma Vreeswijk

Mr. Yvon Godin

Ms. Wilma Vreeswijk

Mr. Kenneth Kerr

Mr. Yvon Godin

The Chair

Mr. John Finlay (Oxford, Lib.)

Ms. Wilma Vreeswijk

1030

Mr. John Finlay

Ms. Wilma Vreeswijk

Mr. John Finlay

The Chair

Mr. Jean-Yves Roy

Ms. Wilma Vreeswijk

Mr. Jean-Yves Roy

Ms. Wilma Vreeswijk

Mr. Jean-Yves Roy

Ms. Wilma Vreeswijk

Mr. Jean-Yves Roy

Ms. Wilma Vreeswijk

Mr. Jean-Yves Roy

1035

Ms. Wilma Vreeswijk

Mr. Jean-Yves Roy

Ms. Wilma Vreeswijk

Mr. Jean-Yves Roy

Ms. Wilma Vreeswijk

Mr. Jean-Yves Roy

The Chair

Ms. Wilma Vreeswijk

Mr. Jean-Yves Roy

The Chair

Mr. Jean-Yves Roy

Ms. Wilma Vreeswijk

Mr. Jean-Yves Roy

The Chair

Ms. Yolande Thibeault

Ms. Wilma Vreeswijk

1040

Ms. Yolande Thibeault

Ms. Wilma Vreeswijk

Ms. Yolande Thibeault

The Chair

Mr. Yvon Godin

The Chair

Mr. Yvon Godin

Ms. Wilma Vreeswijk

Mr. Yvon Godin

Ms. Wilma Vreeswijk

1045

Mr. Yvon Godin

The Chair

Mr. Jeannot Castonguay

Ms. Wilma Vreeswijk

Mr. Jeannot Castonguay

Ms. Wilma Vreeswijk

Mr. Jeannot Castonguay

Ms. Wilma Vreeswijk

1050

Mr. Jeannot Castonguay

Ms. Wilma Vreeswijk

Mr. Jeannot Castonguay

Ms. Wilma Vreeswijk

Mr. Jeannot Castonguay

The Chair

Mr. Yvon Godin

The Chair

Mr. Yvon Godin

The Chair

The Clerk of the Committee (Mrs. Danielle Bélisle)

The Chair

CANADA

Standing Committee on Human Resources, Skills Development, Social Development and the Status of Persons with Disabilities

NUMBER 008

3rd SESSION

37th PARLIAMENT

EVIDENCE

Thursday, April 29, 2004

[Recorded by Electronic Apparatus]

¿ (0905)

[English]

The Chair (Mrs. Judi Longfield (Whitby—Ajax, Lib.)): Good morning, ladies and gentlemen. Welcome to the eighth meeting of the Standing Committee on Human Resources, Skills Development, Social Development and the Status of Persons with Disabilities.

Today, pursuant to Standing Order 108(2), we are commencing an update and review of issues addressed in the committee's report entitled Beyond Bill C-2: A Review of Other Proposals to Reform Employment Insurance.

We have with us today three witnesses from the Department of Human Resources and Skills Development: Wilma Vreeswijk, Kenneth Kerr, and Jay Wakelin.

I will ask you to begin. You've been here a number of times. You know the drill.

Ms. Wilma Vreeswijk (Senior Director General, Employment Program Policy and Design, Department of Human Resources and Skills Development): Thank you for inviting me.

We've circulated to you a deck presentation. We thought it would be helpful, given the scope of Beyond Bill C-2—the standing committee response—as well as the fact that the minister has just tabled the latest monitoring and assessment report in the House, if we went through the presentation and could set out a broader view. Then I'd be happy to answer any questions you may have.

While the deck is detailed, I'm going to go very quickly so that we can have enough time for questions.

If you go to slide 2, you'll see the scope of the monitoring assessment report. We are looking at the period from April 2002 to March 31, 2003. What's different this time is it's the first time since reform that the commission has assessed the legislation during a period of economic recovery.

There have been changes since this particular monitoring assessment report. The compassionate care leave has come into place, and the “small weeks” threshold has increased as well.

This is our annual snapshot's next version. The report was tabled two days ago. We have extra copies of the report in French and English.

[Translation]

If you want copies, we can distribute them.

[English]

In 2002 and 2003, the labour market was very strong. More than 400,000 new jobs were created. Employment growth was strongest for women and for older workers. In employment growth, women outpaced men 3% to 2.5%.

Education was and continues to be a key factor in labour market success. Workers with post-secondary education seemed to have the strongest job growth.

Moving on to the next slide, we saw the growth pretty well all over, in paid employment as well as self-employment.

[Translation]

An increase in employment was observed in all provinces and in all sectors of the economy.

However, the unemployment rate rose from 7.4 to 7.5% because the level of labour market participation rose during that same year.

[English]

As you can see, the tables on sector growth and employment growth give you some of the comparisons.

I am going very quickly because I'm aware we have a time constraint. If you signal me that I'm going too quickly, I'll pause.

Moving to slide 5, the regular claims declined in 2002-2003 by 3.5%. There were about 1.4 million new claims. Benefits increased slightly during the period. Even though claims went down, benefits increased, partly because some of the claims from the preceding year carried over into this fiscal year.

There was a slight increase in the proportion of frequent claimants as a proportion of regular claims, so that the share of frequent claims went from 33.8% to 34.5%.

When we speak about fishing benefits, we are referring to only those who are self-employed. There are some individuals who work in the fisheries who would be regular claimants. In this section, we are only referring to the self-employed.

The proportion of fishing benefits represents 1.9% of total claims. The number of fishing claims increased by about 17.4% to 35,877 claims. Just since 1999-2000, the fishing claims have increased by 41%. Partly this is attributable to multiple claims. You can, under fishing benefits, take two claims in the same year, so there has been an increase in multiple claims. Fisheries received about $270.9 million in EI fishing benefits.

Special benefit claims include maternity, parental, sickness, and more recently compassionate benefits as well. We are reviewing maternity, parental, and sickness claims here. The special benefit claims increased by 2.4% to 477,000. There was a slight decrease in maternity claims, but a significant increase in parental claims, as well as in sickness claims. Total special benefits payments increased by 22%.

Partly this reflects that in the year 2000 the parental benefits were enhanced so that maternity and parental benefits were equal to a year. These benefits are now maturing, so we are seeing the results of that enhancement with increased take-up of parental benefits by fathers of 25%. While mothers continue to make most of the parental claims, it is with the fathers that we actually see a significant increase in take-up of parental benefits. As I said, it's 25%. Most of the time biological parents are using about 85% of the parental benefits available to them.

In looking at access to regular benefits, as part of the monitoring assessment report the Commission looks at three different measures. It looks first of all at the paid workers. That's done through the survey of labour and income dynamics, which is a longitudinal survey. What that shows is that regardless of the unemployment rate, access to EI, shown in the table on the right-hand side of page 8, is pretty flat, irrespective of the unemployment rate. You can see that full-time access coverage was at 96% for men and women and 88% overall.

This measurement measures for all the people who pay premiums.

¿ (0910)

[Translation]

This measure indicates what proportion of people who pay premiums would be eligible for employment insurance if they were to lose their jobs tomorrow. That figure is 88% and includes all contributors.

[English]

We have another measure that focuses on the unemployed. It uses the EI coverage survey, really looking at the people who have lost their jobs, and we are seeing results that 84% of the contributors were eligible to receive benefits under this measure.

So these are the primary measures. We also look at it overall in terms of men and women and in terms of part-timers and full-timers. A lot more detail is included in the report on the issue of coverage. The commission takes this issue very seriously; therefore, it is given a great deal of attention within the report.

In terms of access to special benefits, as you can see, it is measured also in two different ways: in one, looking at employed workers, 91% of employed workers would have been eligible to receive special benefits; and in terms of new mothers--and this is of interest because of the extension of maternity and parental benefits--more that 90% of women who left their employment for maternity leave would have had enough hours to qualify.

Once again, taking a look across the country, it's important to ascertain how responsive the program is, irrespective of unemployment rates. You can see that access is relatively equal across the country.

In terms of fishing benefits, a small, important part of the program, we do see different patterns of access. Claims, as I indicated earlier, are up for men and for women, and what we're seeing in terms of access is that the qualification or eligibility is relatively easy. This is the fifth year that the commission highlights concerns about access with respect to EI. So virtually all claimants have consistently qualified, even at the highest entrance level. The highest entrance level is the re-entrance, the new entrants level, and even at that level, 96% of fishers are able to qualify. You can see the trend over the last few years there. In fact, if I look at my speaking notes here, about 70% qualified with double the entrance requirement. So they're quite able to access.

¿ (0915)

[Translation]

As far as the duration of benefits is concerned, it does meet the needs of most Canadians.

[English]

Even in areas of high unemployment, claimants are using about two-thirds of their entitlement, and you can see how this has changed over time.

We also examined the extent to which people exhaust their claims. The proportion of claimants exhausting their claims has declined from 36.5% in 1995-96 to 30% in 2001-02.

We examined the extent to which people are shifting from EI to social assistance, the extent to which they require further assistance. A recent study that is included in the monitoring and assessment report indicates that only a small proportion of individuals who exhaust their EI go on to social assistance and that this has declined since reform.

In terms of the adequacy of benefits, it is set through the maximum insurable earnings. That is the key marker in terms of benefits. Maximum insurable earning is a formula within the EI Act that allows it to be responsive to changes in average wages. At this time, the maximum insurable level is 10% higher than the average wage. When it catches up, the formula will respond within the act so that benefits will increase automatically.

Approximately 32% of regular claimants receive the highest level of EI benefit. When we look at how benefits have changed since reform, you can see that while average wages have increased by about 10%, benefits have increased by about 13.7% in that same period. So the benefits have increased about 3% more than the average wages since reform.

In terms of the benefits, there is the family supplement that is provided to families that have low income. The benefit rate, depending on the number of children and the family income, can increase to 80%. The base rate is 55%, but the family supplement rate can move it up to 80%.

In terms of payments, there were about 182 family supplement payments made in 2002-03, an increase of about 3.8%. The proportion of EI claimants who are in receipt of family supplement is at 9.8%. You can see that this proportion has declined somewhat, and that is a reflection of the changes in wages. The upper limit for a family supplement is $25,951--I think that's the number--and that is at a frozen level. So the number of families that are in excess of that income threshold has increased over the last little while as average wages have grown.

When we look at who benefits from the family supplement, women make up two-thirds of the beneficiaries under that supplement.

Looking more broadly, the monitoring and assessment report also looks at the effect of EI on the economy. EI is there to support individuals, but it is also there to buffer the impact of a decline in the economy. So studies have been included in the monitoring assessment report to try to quantify this. This is not easy, so we've been trying to separate the effect of EI versus other elements in the economy.

There have been studies done by a number of universities and it is an ongoing thing for us to take a look at, the number of job losses that were averted as a result of EI. You can see that about 100,000 additional jobs would have been lost in 2001-02 had it not been for EI. There is a stabilization effect on consumption and in the local economies due to EI. There are also the work-sharing dimensions, which help employers manage downturns in their workforce, so there are work-sharing agreements that allow people to share work and have EI supplement that lost income.

Another issue in terms of the economic dimension of EI is that there have been concerns for some time that EI inhibited labour mobility, that because of EI, people would not move to seek out employment.

¿ (0920)

[Translation]

Among the studies conducted as part of the MAR report for 2002-2003, there is one that demonstrates that employment insurance does not inhibit labour mobility.

[English]

So EI does not act as a constraint on mobility. In fact, we've taken a look at the 14 representative communities on that aspect alone.

In the employment benefits and support measures in the part II portion of EI, we are looking at active measures that help people prepare for and re-enter the labour market. They include employment-assisted measures, job search assistance, targeted wage subsidies, and skills development.

When we look at the kinds of measures we have in place and the take-up, we spend about $2 billion each year on employment benefits and services. Participation increased by about 12%, reflecting the slowdown in the economy. The services to job-ready clients--these are employment assisted services, résumé writing, and shorter-term measures--increased by about 18%, and represent about three-quarters of the total interventions.

When you look at expenditures, however, the expenditures are on the skill development side. These are the longer-term measures, and 75% of the expenditures are in this area. You can see the graph on the breakdown of expenditures and interventions on slide 15.

The monitoring assessment report also takes a look at savings realized from EI reform. The AG raised a question regarding how we reported on that. In previous years we reported the savings on an incremental basis, from one year to the next. In this particular report there's a full review of savings in the monitoring and assessment report that tracks the savings from 1996 through to 2002-03. It was estimated that the savings from reform would total about $2 billion, or 11% of program expenditures in 2001-02. The savings are estimated to be about $1.2 billion, representing about a 10% reduction in EI expenditures.

On the difference in the numbers you see--the absolute $2 billion versus the $1.2 billion--part of that is because at the time of reform it was forecasted that by 2001-02, expenditures would be about $17 billion. So when you apply the ratio of 11% to the size of the program now, you can see that it's tracking fairly closely. There have also been increased expenditures under the act since reform for initiatives such as the intensity rule changes, as well as the clawback. These resulted in higher payouts to claimants.

There have been, as you can see on page 17, a number of improvements in the reporting. The commission endeavours, after a report like this is produced, to set out the plan for the next year.

[Translation]

In the coming weeks, we will begin discussions with the Employment Insurance Commission with a view to developing a research plan for next year's report.

¿ (0925)

[English]

Every single year we endeavour to improve the quality of reporting. The AG has recognized that the monitoring assessment report plays an important role, and has distinguished this program in the extent of reporting.

We have the annual report, which is an annual snapshot, as I indicated to the standing committee last week. A comprehensive evaluation has also been launched that will make a complete review of the program. That review will take place over the next two years. Preliminary results will be included in next year's monitoring and assessment report. Final results are anticipated for the 2005 monitoring and assessment report that will be tabled in the House in 2006.

[Translation]

This was an overview of employment insurance. I know that you have questions and I'm prepared to answer them.

[English]

The Chair: Thank you very much.

We will start with Mr. Roy in a ten-minute round.

[Translation]

Mr. Jean-Yves Roy (Matapédia—Matane, BQ): Thank you, Madam Chair.

I don't dare pronounce your name because I know I'd encounter some difficulty, but I do want to welcome you.

I'd like to get back to slide 8. I have very serious reservations about the statement in the first paragraph which reads as follows:

According to the survey of Labour and Income Dynamics, 88% of paid workers would have been able to collect EI if they lost their jobs in December 2001.

Now I have here a study from the Canadian Labour Congress which states the following: in 1990, following the first set of changes, only 74% of workers had access to employment insurance; in 1993, following Bill C-113, only 57% of workers had access to employment insurance; in 1994, following Bill C-17, only 51% of people had access to employment insurance; in 1996, following Bill C-12, only 42% of workers had access to employment insurance and lastly, in 2001, only 39% of people had access to employment insurance.

In this paragraph, you're not talking about eligible paid workers, as indicated in the title, but you say: “paid workers would have been able to collect EI”. So how can you possibly talk about 88% of paid workers? I would even add that this would imply that the committee's report tabled in May 2001 in response to Bill C-2 was perfectly useless.

If 88% of people had access to employment insurance, what was the point of the work we did and what's the point of the work we're doing today? In what way would it be useful for the government to propose changes to employment insurance if, as you state, 88% of workers do have access to employment insurance?

How could you come up with such a figure and make that kind of statement when all available data contradicts it, be it the report from the Canadian Labour Congress, the last Léonard report, or academic studies that we and members have had on hand in the course of our work? How can you state publicly that 88% of paid workers have access to employment insurance? That's really beyond me!

Ms. Wilma Vreeswijk: As I said, the commission takes the issue of eligibility for employment insurance very seriously and examines it closely. Paid workers are defined from two points of view. There are 14 million people working today and paying premiums. What will happen if, for one reason or another, these people lose their jobs? What proportion of them will be eligible for employment insurance benefits? That is very important information with respect to this group.

The study is based on the Survey of Labour and Income Dynamics prepared in conjunction with Statistics Canada. We used their studies as a basis. The people in the study are followed for a six-year period, on an ongoing basis, to monitor changes and determine what dynamics are involved. People's lives are complex, which is why a detailed study is needed.

The fact is that across Canada—and the percentage can vary by 1% or 2%—88% of paid workers who are employed today are eligible for employment insurance.

We used another study to gain a better understanding of the situation of people already unemployed. That study was also done with Statistics Canada and so the methodology is the same. The result for that group is 84%.

With respect to the CLC study we would have to look at the data and better understand the methodology that was used in order to give you a more specific answer. In our case, when it comes to methodology, it is basically the commission that guides our approach and asks us to look into these issues. After all, the work that we do in the context of the Monitoring and Audit Report is really under the direction of the government, employer and union representatives.

¿ (0930)

Mr. Jean-Yves Roy: Yes, but that does not answer my question.

In real life, people do not have access to employment insurance. The figures given by the Canadian Labour Congress have been corroborated by many studies since 1990. It is very clear that 39% of unemployed workers right now have access to employment insurance. The percentage of women is even lower. Just 33% of women workers have access to employment insurance benefits.

And you have just said that 88% of workers have access to employment insurance? What about the others? Why is the proportion of workers receiving employment insurance so low in comparison with your figures?

I understand what you are saying. It is obvious that if you are not working, you are not being paid and you cannot have access to employment insurance. But I am also talking about people who are being paid, people who are working and who lose their jobs but do not have access to employment insurance because of the eligibility criteria.

You are talking about eligibility for benefits, on page 8, and you say that the figure is 88%. I am sorry, but your explanation is not clear to me, and I do not understand how you arrive at 88%, when all the data from everywhere else says the opposite.

Ms. Wilma Vreeswijk: I will try to answer once again and be more clear.

When there are differences in data like this, it may be because different things are being measured. People often talk about the BU ratio, the beneficiaries to unemployed ratio, which measures the number of people receiving benefits compared with the number of people who are unemployed. That is a broader measure that includes people who have never worked, students and people who have left their jobs voluntarily. So these people are not included in our figures, but they may be in yours.

Our studies are public. I will be pleased to share them, to answer questions and to have a dialogue on this.

Mr. Jean-Yves Roy: With respect to the committee's report...

[English]

The Chair: Remember that you go through the chair.

[Translation]

Mr. Jean-Yves Roy: Thank you, Madam Chair.

With respect to the committee's report, one of the recommendations was to facilitate eligibility for the program, especially for young people. The report called for a reduction in the number of hours of work needed for first-time access to the program, the infamous 910 hours.

Did your study come to the conclusion that the majority of workers coming into the labour market have access to employment insurance?

Ms. Wilma Vreeswijk: Pardon?

Mr. Jean-Yves Roy: Do you believe that the majority of people who come into the labour market and who find themselves without work after some time have access to employment insurance? These may be women coming back into the labour market after an absence, or young people who enter the labour market and who unfortunately lose their jobs because the business closes, etc. Do you believe that the majority of these people have access to employment insurance?

¿ (0935)

Ms. Wilma Vreeswijk: Given that the employment insurance program is based on hours of work, the employment regime may affect eligibility. Since young people are new entrants to the labour market, they do have to accumulate more hours to have access to the program.

When the reform was being implemented in 1996, Canadians were concerned that there were more young people receiving employment insurance benefits. We saw a trend toward increasing numbers of young people getting employment insurance. So the number of hours was changed to deal with that situation.

Under the employment insurance program, 65% of young people who apply for benefits get them.

Mr. Jean-Yves Roy: Very well. Thank you.

[English]

The Chair: We will pick this up on your next round.

Mr. Castonguay.

[Translation]

Mr. Jeannot Castonguay (Madawaska—Restigouche, Lib.): Thank you, Madam Chair.

I would like to know why people working in the automotive industry and in the oil industry do not have a two-week waiting period before qualifying for employment insurance, whereas other people have to wait two weeks. Does that make sense to you?

Ms. Wilma Vreeswijk: The waiting period is an integral part of the employment insurance program. To my knowledge—I can check and get back to you on this—there are just a few cases where the qualifying period is eliminated. It does not apply when people share their parental leave: if we are talking about two parents, the second one is not subject to the waiting period. Moreover, the waiting period was also eliminated last year when we were dealing with the infectious disease.

Mr. Jeannot Castonguay: I am not talking about infectious disease; I am talking about automotive workers who do not have this two-week waiting period, whereas the people in my region do. I do not understand why. I am trying to understand and I am scratching my head. I probably do not have enough grey cells for that, but I would really like to understand this. I think that there is a lack of fairness in the system that needs to be examined at some point.

Ms. Wilma Vreeswijk: I can ask Mr. Gordon McFee, whom you probably know, to answer those questions.

[English]

The Chair: Just for the record, could you introduce yourself?

Mr. Gordon McFee (Acting Director General, Insurance Policy, Department of Human Resources Development): I'd be pleased to. My name is Gordon McFee, Director General, Insurance Policy, HRSD.

¿ (0940)

[Translation]

Yesterday we learned about the hypothesis that there are two situations that are exempt, if you like, with respect to how the waiting period is applied to people. According to the information that I have now and that we are verifying, the situation is not exactly the way it has been described, but the effect may be the same.

To explain, there are situations where people are laid off in order to take training, especially apprentices. In those cases—and it sometimes happens—people are provided with income during the waiting period in cooperation with our department. In other words, there is money provided to cover that period. That money does not come from the employer, but from our department, under part II of our apprentice program. If this is done in cooperation with our department, the money is not considered earnings for employment insurance purposes. So it is not deducted from benefits. The impact on these people is ultimately the same.

It happens sometimes in Ontario in the automobile industry and I believe in Alberta. There may be other situations that I am forgetting for the moment.

The waiting period is usually eliminated only when people are receiving sick benefits from their employer for a period that overlaps with the waiting period.

That is the information that we have right now. We are still looking into this to be sure of the situation.

Mr. Jeannot Castonguay: And to eventually correct this lack of fairness. Thank you.

Now, Madam Chair, if we refer to page 5 of your presentation, where it says “EI claim volume for regular benefits declined by 3.5%”; how do you categorize people that have to have 910 hours to be eligible?

It seems to me that these figures are all well and good, but when it comes down to it, is it possible to measure how many people are not even eligible because they cannot get their 910 hours? I live in a region where seasonal work is extremely important, and it is vitally important for the Canadian economy. But it seems that that fact is not recognized. Sometimes people are 50 hours short and so do not have their 910 hours. It is fine to say that young people are staying in school more—I have no objection and I support that—but we still need people in the seasonal industries, which are so important for our economy.

How are those people taken into account? Where do they fit? Do they not fall between the cracks?

Ms. Wilma Vreeswijk: That is exactly why we look at access to employment insurance in two ways, not only for those people who are unemployed today, but also for those who might lose their jobs. We are really trying to get a better understanding of this.

With respect to seasonal workers, these people in seasonal industries are obviously doing very important work in communities across Canada. That is clearly acknowledged in the audit and evaluation report. That situation creates unique challenges for the workers and their communities.

I know that there are questions right now about seasonal workers, and I believe that the minister said yesterday that he was looking into them. There have been changes aimed at giving greater recognition to seasonal work, such as the changes to the rule [Inaudible--Editor], the changes to the clawback and, recently, an increase with respect to short weeks.

But this is something that we are seriously looking into right now, since they are indeed important issues.

Mr. Jeannot Castonguay: As far as the short weeks are concerned, I once heard a presentation on the subject. We are dealing with a lot of figures, Madam Chair.

It was said that the short weeks would be beneficial, but when people have to add the small weeks to their regular weeks because they have not worked enough hours to qualify, it ultimately dilutes their income. If, for instance, a person needs 24 regular weeks to be eligible, that person will not include the short weeks during which less than $225 were earned. But if a person has only worked 12 weeks, but at a significant level of income, and if this person has to add the short weeks, it's not an incentive any more, quite the opposite. In fact, this person is more or less penalized. This is a subject of great concern to me, as are the famous work zones.

When people work in the same industry, but live in different economic zones, some workers will qualify based on having worked a certain number of weeks, at a certain income level, whereas others will not have the same advantage because they live elsewhere. However, the two groups work in the same industry. In my opinion, the system is unfair and the situation must be closely reviewed.

Does the government intend to rectify this situation as soon as possible? These workers will soon be on employment insurance, and it is very difficult to explain to them why these kinds of differences exist.

¿ (0945)

Ms. Wilma Vreeswijk: As regards the short weeks, it's true that a worker must qualify before subtracting the short weeks. Indeed, that is the case.

As far as the regional zones are concerned, I would like to explain their raison d'être. There are 58 regional zones in Canada. The reason they exist is because the employment insurance program is supposed to be sensitive to local and regional changes in the labour market. So, if an industry closes its doors in a particular region and workers are laid off, we want the employment insurance program to reflect the fact that, suddenly, in that particular region, it has become more difficult to find a job because more people have lost their employment. That is why the 58 zones were created: to ensure that the program adapts to changes in the labour market.

Another reason they exist is because, even today, if there is a half percentage change in the unemployment rate in a given region, the required number of hours giving access to benefits also changes. It is for those reasons that the program exists. So when people compare their situation to that of others, when they compare the situation between two regions, it is quite possible that the respective labour markets in each region are different from each other, and that difference is reflected.

Mr. Jeannot Castonguay: We have an economic zone called Madawaska. It was combined to a riding in the south of the province, namely Charlotte. There was a huge difference in the unemployment rates of these two regions. We got the distinct impression that the two regions were combined to tighten the eligibility requirements for employment insurance benefits.

If the Madawaska region, which has an employment rate of 11%, is combined with another region which has an employment rate of 4%, it creates a new economic zone.

The people living in our area do not work in the southern part of the province; they work in the north. Despite the fact that the economy is flourishing in the southern part of the province, the people living in my area are suffering. That's not right. I think this blatantly unjust situation must be rectified. The problem has to be recognized and corrected.

Madawaska was combined with Restigouche. The unemployment rate was very high in Restigouche. Perhaps the idea was to help the people living in Madawaska by separating them and by combining Madawaska with the riding of Charlotte. But that's dragging them down even more. It's not right.

It's important to tell you about what is really happening on the ground. That's what I'm trying to do. It's a fact of life for ordinary people, it's a fact of their daily lives. Believe me, they will never become rich from receiving employment insurance benefits.

[English]

The Chair: Mr. Castonguay, I assume you're going to want a second round. I'll put you in the second round, because your ten minutes are up.

Monsieur Godin.

[Translation]

Mr. Yvon Godin (Acadie—Bathurst, NDP): Thank you, Madam Chair. You know, it reminds me a lot of the spring of 2001, shortly after the 2000 election. Every political party was saying the same thing.

What the Liberal member, Mr. Castonguay, said demonstrates once more that every political party—apart from the government and the departments—is again saying the same thing. I also believe that if your document contained the truth, if it described the way things really are on the ground, you would not be here before us. If it were true that 88% of Canadian workers who pay into the system received employment insurance benefits when they lost their job, you would not be before us this morning.

I would like you to send the first report to the committee, the one which was published after 1996. That report contained the real numbers for that period. Also, the report was never drafted that way. At the time, I remember that we had strongly attacked the government because the numbers were similar to those of the Canada Labour Congress. I would like you to send the first report which was published to the committee.

Are you familiar with that report? You are. I would like us to get a copy of the report. It contained the percentage of people who were paying into the employment insurance system but who were not getting any benefits. The rate was really low, about 40% or . So we realized there was a huge problem and we wanted the report to say so. But the report was not drafted to reflect that fact. The report was drafted using a different language.

Can you explain to us the difference between that first report and subsequent ones? How were the number of people receiving employment insurance benefits counted? Do you know how that was done?

¿ (0950)

Ms. Wilma Vreeswijk: Madam Chair, I will try to answer the question, but...

Mr. Yvon Godin: I know it's hard for you to do so. It's not part of your mandate.

Ms. Wilma Vreeswijk: No, I'm sorry. It's because I was not working on the employment insurance program in 1996. So I would first like to become better informed on the subject.

I would like to be very clear on certain things. The results we are presenting to you today are contained in studies carried out for the commission. The results are contained in a commission report which is presented to the minister. We have discussed these results with union and management representatives in order to elicit as many suggestions as possible and to be well informed.

Yes, we will send you the report. That's easy for us to do, because we have the report. However, since 1996, the Auditor General has pointed out that we are working at improving the Monitoring and Assessment Report. It possibly needs to be improved even more. However, we are trying. The report contains several pages dealing with eligibility to the employment insurance system. We know that these are important issues and we are studying them closely.

Mr. Yvon Godin: But, Madam Chair, are there people who are still paying into the employment insurance system, but who are not eligible for benefits, because they are not included in the precious 88%, as indicated in the report? For instance, there are single mothers who work 20 hours a week and do not qualify for employment insurance because they were never able to work 910 hours, and there are other such groups. Are you telling us that 88% of all workers who pay into the system today would be eligible for employment insurance benefits if they lost their job?

Ms. Wilma Vreeswijk: The 88% figure is a national average. It's a system based on the number of hours worked. Some groups work fewer hours. That's why it is harder for part-time workers to qualify.

Mr. Yvon Godin: Are they a part of the 88%?

Ms. Wilma Vreeswijk: Yes, they are. Eighty-eight per cent is the average. In the case of full-time workers, both men and women, they are eligible in 96% of the cases. For part-time workers, the rates are 57% for women and 41% for men.

The report does recognize that since the system is based on number of hours, part-time workers have a harder time qualifying than full-time workers do. Self-employed workers are not eligible.

Mr. Yvon Godin: Madam Chair, I'm not talking about difficulties.

Are you willing to say that Statistics Canada is giving us the wrong figures? In fact, it was Statistics Canada which did the study for the Canadian Labour Congress. Are you telling us that Statistics Canada is not giving us the right statistics by telling us that only 33% of women and 38% of men in Canada are eligible for employment insurance?

Ms. Wilma Vreeswijk: To answer your question, I would have to see the study you are referring to. We have been trying to locate it since last week, but we did not find it.

Mr. Yvon Godin: I will give you a copy.

¿ (0955)

Ms. Wilma Vreeswijk: Perfect, we will look at it. Otherwise, we would be comparing figures without knowing what we are measuring. That's important. We want to make sure that we're talking about the same thing. We would be very pleased to look at the report.

Mr. Yvon Godin: Madam Chair, it is very surprising that the Department of Human Resources does not have those figures, whereas since 1997, I, personally, have been bringing them to this parliamentary committee. We have always spoken of the fact that each year, the figures are getting lower and lower.

Ms. Wilma Vreeswijk: Thus, you're talking about the ratio of claimants to the unemployed.

Mr. Yvon Godin: You're saying that in Canada, of the people who contribute to the employment insurance program, only 33% of women and 38% of men would be eligible for employment insurance if they were to lose their jobs tomorrow. That's what Statistics Canada is saying.

Ms. Wilma Vreeswijk: The studies referred to on page 8, and on which the commission based the Monitoring Assessment Report, contain Statistics Canada figures and studies. Therefore, in order to respond, and I would like to, I think the best thing to do would be to have you share the study with us. We will look at it and we would be pleased to tell you what the difference is. In fact, I have the impression that we are perhaps measuring two different things.

Mr. Yvon Godin: But do you not find that your percentages, the 88% and 90 or 91% you talk of, are really quite high? Personally, I don't see why the government is panicking and rushing to change the employment insurance program just before an election. Do you recognize that there is a problem with employment insurance?

Ms. Wilma Vreeswijk: Madam Chair, I'm here to give you as much technical advice as possible and to tell you what is going on with the employment insurance program. The questions I'm being asked should be directed to--

Mr. Yvon Godin: Very well, let's talk about technical advice. In your report, you say that there are fewer people who resort to social assistance when they no longer qualify for employment insurance. This is what is written on page 11 of your presentation. It says that there are fewer claimants who apply for social assistance after having exhausted their employment insurance benefits.

Has a study been done to understand the reasons for this? For example, if two spouses in a couple receive employment insurance or if one of the two spouses works, typically, the other person is not eligible for social assistance. You say that fewer people receive social assistance. Has a wide-ranging study been done to understand why people are not eligible for social assistance?

Ms. Wilma Vreeswijk: This study was done for the report. There's a reference at the end—we're just looking for it—which describes the scope and object of the study.

In Appendix 5 of the Monitoring and Assessment Report, there's a description of the study, the methodology used, the results, and who was responsible for what. Everything is in there. If you would like more information, it is in the report.

But to answer your question, when the commission undertook its study, it studied the interaction between employment insurance and social assistance, but it did not study the reasons why people are not eligible for social assistance: it is a provincial program. Thus, programs change from province to province, and since eligibility for social assistance is not a concern of ours--

Mr. Yvon Godin: However, Madam Chair--

[English]

The Chair: I'm just going to remind members of the committee that in the end, our witnesses are not responsible for setting the policy, but administer it.

While you have some very valid questions, a lot of these questions—and I'm not pointing to you totally—have to be answered by the minister.

Mr. Yvon Godin: In the question I just raised, it has to do with the report and how they get the numbers.

The Chair: No, no, Mr. Godin, I wasn't referring to your last question. I was reminding people in general about that. It wasn't specifically directed at your question.

Mr. Yvon Godin: I referred to numbers in the book.

The Chair: Yes, I'm just making a general statement.

Mr. Yvon Godin: In case we come in with something that should not come—

The Chair: That's correct. It's just as a precaution.

Thank you.

Madame Thibeault, please.

[Translation]

Ms. Yolande Thibeault (Saint-Lambert, Lib.): Thank you, Madam Chair.

Good morning, Ms. Vreeswijk. I have a brief question. It won't be long, you'll see.

Let us go back to page 8 of your slide presentation, please. It says that access to EI benefits for the unemployed increased slightly. The last sentence reads: “Immigrants are more likely than Canadian-born workers to be eligible for EI.”

Can you explain to me what that means?

À (1000)

Ms. Wilma Vreeswijk: Since last year, immigrants became a part of the study. I'll just explain why, briefly, and I will try to answer your question.

The role of immigrants in the labour market is becoming increasingly important. Immigrants will contribute to the growth of the labour market. In ten years, growth of the labour market will be attributable to immigrants. Thus, when considering employment insurance, it is important to see how immigrants behave. This is something new for us and something that we will delve into over time.

These are the results that we obtained with respect to newly-arrived immigrants to Canada. Their access is not as high; it is 83%.

When speaking of immigrants, it is higher because we refer to all immigrants, those who arrived here recently and those who have been in Canada for several years already. Indeed, for them, access is 87.8%. But for newcomers, it is 83.9%. These figures are based on those who do not have jobs.

Ms. Yolande Thibeault: How do you explain that? Is it because those people are able to accumulate more hours of work each year? Why are immigrants able to become more eligible to receive EI benefits than people born in Canada?

Ms. Wilma Vreeswijk: To answer your question, I would have to study the way recent immigrants work compared to immigrants who have been here longer, to understand their work patterns.

Ms. Yolande Thibeault: When you speak of immigrants, you mean the two groups that you have just described: recent immigrants and those who have been here longer.

Ms. Wilma Vreeswijk: Yes, we're talking exclusively about access, we're not talking about the way they work. That is something we could add. Since this is the first time we are studying this, we have preliminary results. However, over the next few years, we can add a bit more information to explain the gap between immigrants and Canadian-born workers.

It is a matter of access, it is not a matter of whether or not they are receiving more EI benefits. It is a matter of eligibility, this must be made clear. We are not saying that immigrants receive insurance employment more often than Canadian-born workers.

Ms. Yolande Thibeault: That is not at all what I had understood. I find this really interesting because as you said, over the years, we will be needing them more and more. I think it is a very good idea to begin a study which could lead to more definitive conclusions.

Thank you very much. That will be all, for now. Those are all the questions I wanted to ask.

[English]

The Chair: Monsieur Roy.

[Translation]

Mr. Jean-Yves Roy: I'd like to come back to one thing. I have a very specific question to ask you.

I'm looking at the unemployment rate for Newfoundland, on the table on page 1.4 of appendix 1 of your document. Newfoundland's unemployment rate for 1995-96, was 18.4%. The second highest rate is that of 1999-2000, which stood at 16.9%, which happens to be closest to the 2002-2003, figure which is 17%.

Can you tell me the amount of benefits received by Newfoundland in 1995-96, and the amount of benefits received in 2002-2003, when the unemployment rate was practically the same? Are the amounts the same, or was there a decrease?

À (1005)

Ms. Wilma Vreeswijk: To explain that, we can go to page 2.1 of appendix 2, where we can find the total benefits for Newfoundland and Labrador for the years 1995-96 up until 2001-2002 and 2002-2003. The table shows the changes in benefits.

As well, in the case of Newfoundland, for the fisheries, we can see all of the benefits. The table also shows changes to benefits in all provinces. Regular benefits can be found on page 2.3, fishery benefits on page 2.5. The type of change which took place is also shown.

Mr. Jean-Yves Roy: That wasn't my question. I want to know the total dollar amount of benefits received by Newfoundland, for example in 2002-2003, in 2000-2001 and in 1995-96. Do you have any data which would allow me to compare the amount of money which was received by Newfoundland in benefits in 1995-96 as compared to the amount received in 2002-2003?

I can't get a clear idea of that, because the unemployment rate was the same. I want to know if there was truly a drop in eligibility. If there was indeed a drop in eligibility, then theoretically, the amount of money given to Newfoundland should have decreased as well. Yet, I do not have this information. That is my question. I want to know how much money the Department of Human Resources and Development gave to Newfoundland in benefits in 1995-96 as well as in 2002-2003.

Ms. Wilma Vreeswijk: In fact, the report describes and compares changes from one year to the next. We would be pleased to send you the exact amounts.

Mr. Jean-Yves Roy: I want to go back to the CLC study, which I believe you have or will have a copy of.

Look at the benefits received by each province, according to Statistics Canada. You cite the source in the following statement:

This is a Canadian Labour Congress computation based on the Statistics Canada Labour Force Survey and Employment Insurance data.

Yet, everywhere else in the document, when we check the amount of benefits received by each province, we see a staggering drop, whereas the unemployment rate in Newfoundland remains the same. The 88% rate you talk about is therefore impossible. If the unemployment rate is the same and if there is a significant decrease in money paid out, it is because somewhere along the way someone did not receive the money.

Ms. Wilma Vreeswijk: Madam Chair, we never said that everyone is eligible for employment insurance. We are saying that 88% of people are, which implies that 12% of are not. As far as the current study is concerned, we would be pleased to take a look at the figures. I can't give you an answer today, but by checking the data, we will be able to compare the methodology used, and ensure that we're comparing oranges with oranges and not with apples. In this way, we will be in a position to explain why this report differs from the MAR report.

Mr. Jean-Yves Roy: I'd like to get back to a very specific question concerning Matapédia—Matane.

At the time of the first reform, I was in the federal public service. Moreover, I know the figures for Matapédia—Matane virtually by heart. For the first year of the reform, the amount paid in benefits in that riding was less than $32 million. In the past 10 years, the average is less than 53.1%. Let me point out that these figures were provided to me by local offices of Human Resources Development.

This means that with the same rate of unemployment, Matapédia—Matane lost $531 million in benefits over 10 years. That's impossible. You're telling me that in my riding, 88% of workers have access to employment insurance. That is false, madam, and since these reforms, the data prove it. In reality, we've observed a constant reduction in the amounts paid out in benefits despite the fact that the rate of unemployment remains the same. I repeat: the unemployment rate is the same.

If we lose $531 million in 10 years but have the same unemployment rate, there's no doubt that you have to admit that someone somewhere did not have access to employment insurance. That rate of 88% is impossible, at least in my riding.

I can give you figures for Bonaventure—Gaspé—Îles-de-la-Madeleine—Pabok provided to us by the local offices of Human Resources Development. In their case it's at least $658 million in 10 years. Thus, we see that since 1993, we're talking about less than $32 million the first year, another negative amount for the second year, and so on and so forth.

In short, how can you tell us that 88% of people have access to employment insurance? That's impossible.

À (1010)

Ms. Wilma Vreeswijk: During the reform in 1996, many changes were made, and it's important to acknowledge that they did have an effect. Thus, the MAR report clearly mentions that savings were achieved in the employment insurance fund.

Mr. Jean-Yves Roy: If there were savings, it's because people were not eligible for employment insurance.

Ms. Wilma Vreeswijk: Many changes were made to the program. One of the goals of these changes was to save money. That was announced very clearly at the time of the reform.

Mr. Jean-Yves Roy: Thank you, Madam Chair.

[English]

The Chair: Thank you.

Monsieur Castonguay.

[Translation]

Mr. Jeannot Castonguay: Thank you, Madam Chair.

Let's discuss the infamous divisor rule which I think is causing headaches for everyone. I think it's a major pain in the neck. In your opinion, does the divisor rule continue to encourage people to work longer?

Ms. Wilma Vreeswijk: Does it encourage people to work longer? Our studies show that since the divisor rule was established, people are working two weeks longer than was the case previously.

Mr. Jeannot Castonguay: Could you consider that this may have the opposite effect and also encourage people to work under the table?

Ms. Wilma Vreeswijk: I cannot answer that question.

Mr. Jeannot Castonguay: You don't have any figures about that?

Ms. Wilma Vreeswijk: No.

Mr. Jeannot Castonguay: It would be important for us to get the numbers which would help us understand the effect some of our rules are having, which may be to create disincentives. Let me tell you why.

When you actually talk to people, and once you actually have their trust, they'll tell you that, under certain rules in the system, their income is not calculated based on their best earning weeks over the last 52 weeks. There are fluctuations in seasonal work. Some people might get $15 an hour at one point, and at other times get between $5.75 and $6.25 an hour. If this happens in the course of the previous 26 weeks, and if their income is established based on those numbers, people are penalized and therefore tell themselves they won't be idiots and will work under the table. The underground economy really exists.

Is there any way to measure this situation and to convince the government that it has to be corrected? This type of economy exists, it has been evaluated and now we know what the impact is. It has a domino effect. Do you think that could be done? Are there any ways of doing that?

Ms. Wilma Vreeswijk: I will answer your question in two ways. First, I cannot tell you how to evaluate the underground economy. As far as the divisor is concerned, over 90% of people manage to find the two weeks they need to maximize their benefits. In my opinion, people have found a way to adapt to the divisor effect.

I am not saying that parts of the employment insurance system should not be reviewed. It is important to review the legislation every year. We have to make sure that the program does not lead to unintended consequences. That's why we are continuously reviewing it and holding discussions. We want to better understand the Employment Insurance Act.

À (1015)

Mr. Jeannot Castonguay: I would like to come back to the issue of the 910 hours and to people who lose their job for the first time, or who want to qualify after being out of the job market for some time. Can we find the numbers for these people? They have told us that they unfortunately cannot qualify. Statistics are all very well and good, they make a good impression, they use up paper and are impressive, but is it possible to find out how many people there are who cannot even qualify for the first time? Just imagine, if you can't even qualify the first time, you end up always waiting to qualify for the first time. Do you have any way to find out how many of these people there are?

Ms. Wilma Vreeswijk: It's the reason why we are trying to assess how many of those who have jobs today would qualify if they lost their job. We want to know who would qualify if they applied. That's we are trying to calculate that figure. There are two ways to calculate it: either you begin with those who have already lost their employment... However, it's very difficult to assess the situation of people who have lost their job but do not apply. You can't count them. That's why we begin with those who are employed today. If they lost their job, would they be eligible for benefits? That's the reason why we are studying this situation.

[English]

The Chair: Monsieur Godin.

[Translation]

Mr. Yvon Godin: Madam Chair, I would like the witness to clarify what she just said. Are studies based only on the number of people who apply for employment insurance? Canadians are not stupid. If they know that they don't have the required number of hours, they won't apply.

Ms. Wilma Vreeswijk: That's the difference between the two approaches. That's the reason why we study the situation from two angles.

Mr. Yvon Godin: That's the reason why, Madam Chair, in LaSalle—Émard, in the riding of the Prime Minister, there is a loss of $39.8 million a year. But I do not think that it is a riding which is in trouble. In the Prime Minister's riding, why did employment insurance benefits fall by $39 million per year since 1993? Are these people included in the 88% or not? The unemployment rate is the same there. I have a problem with that.

Ms. Wilma Vreeswijk: Madam Chair, I don't understand the question.

Mr. Yvon Godin: You said a little earlier that changes were indeed made, and that there were indeed savings. It's hard to get an answer. We can't get an answer from the minister in the House of Commons.

We're still talking about statistics, Madam Chair. What do they say? That 88 per cent of people qualify for employment insurance benefits and are entitled to them, but not those people paying into the system. Is that true or not? The answer should not be very long; yes or no?

Ms. Wilma Vreeswijk: On page 8, it says that we are studying the situation of people who pay premiums...

À (1020)

Mr. Yvon Godin: ...and who are eligible.

Ms. Wilma Vreeswijk: No, I'm sorry.

The figure indicates what percentage of people throughout Canada pay premiums, that is to say about 14 million people. These people are eligible for employment insurance benefits if, for one reason or another, they lose their job. The national average is 88%. As well, on page 8, there is a graph which describes how that changes with the unemployment rate. The average is 88%.

Mr. Yvon Godin: Madam Chair, I would suggest to the committee that we call the representatives of Statistics Canada who worked on the study for the CLC. They should explain to us how they arrived at those figures, because it is important. What is the difference between the two? That's the answer this committee needs, Madam Chair.

I think that we should continue this study, which is important. We should call the CLC before the committee next week. We need to find out why they said what they said in the documents they made public and which contain Statistics Canada's figures. As long as Statistics Canada produces figures which are good for the government, everything is dandy.

You know, being number one in Canada is a fine thing, but it is not a good thing to be heading up the list of the poorest ridings. Employment insurance benefits have fallen the most in my riding, of all the ridings in Canada, since 1993, which amounts to a loss of $81 million per year. In a small province like New Brunswick, we lost $270 million a year and received, under phase 2 of the employment insurance system, $91 million a year to try to create jobs and providing training.

Those figures have to come from somewhere. You say that, based on the national average, 88% of people who would lose their job tomorrow would be eligible for employment insurance benefits. I personally have a problem accepting that, because, if that were truly the situation, we wouldn't have a problem. Last week, in Forestville, 2,500 people would not have taken part in demonstrations. The priest would not have addressed the 2,500 people and told them that this is not a political situation any more, it has become a human interest issue, a cry for help. The member of Parliament Georges Farrah, at the first meeting of this committee after the 2000 election, said that he was addressing a heartfelt appeal to the minister.

Ms. Wilma Vreeswijk: You shared the results of the study with us today. We would be pleased to go over it to understand how the Canada Labour Congress' methodology differs from ours. I am sure that there is a very simple explanation. We have to make sure that we are measuring the same things.

Mr. Yvon Godin: When you study it, I would like you to also go over the first report published in 1997, which was the famous report that led us to strongly criticize the government, and which contained the same figures as Statistics Canada's documents. The three reports should be compared: the first report, the calculations used for the subsequent reports, and this one, and then the results should be interpreted for us.

Ms. Wilma Vreeswijk: We would be pleased to describe the different methodologies used, because it is important to make sure that we're talking about the same thing, to compare oranges with oranges.

Just to be clear, I want to say that we are also studying the situation, because we also want to better understand it. If anyone else can contribute something new, we want to know about it.

[English]

The Chair: This is something you could do in writing, and not necessarily have to come back to the committee for it.

Monsieur Godin, I would remind you that we have always had wonderful responses from the department when we've asked them to come back with information, so I look forward to having that. After you've reviewed the information, then you may have other questions to pose.

Mr. Yvon Godin: Oh, yes, I'm not disputing that. I'm very pleased that they're going to do the study.

À (1025)

The Chair: I just wanted it on record.

Mr. Yvon Godin: That's why I think we were going to move forward with that. I'm very pleased with that.

The Chair: Excellent.

You have two minutes left.

[Translation]

Mr. Yvon Godin: Let me give you an example. Last June, 550 people in our riding demonstrated in the streets because they were not eligible for employment insurance benefits based on the 52-week period, because of the start of the fishing season. But you can't decide when to start fishing in Chaleurs Bay, since conditions have to be right.

The provincial government invested $3.1 million into projects to help people work more weeks. Is this situation taken into account within the employment insurance system, since you say that things are not so bad because people are qualifying? This is something you said a little earlier. When you calculate the numbers, do you not exclude people who are involved in government make-work projects, such as picking up trash along roadsides? Is this type of work taken into account or is it considered normal?

Ms. Wilma Vreeswijk: What do we take into account? If you are referring to eligibility, we include each insurable hour worked, each hour worked for which a person is compensated. If the person is an independent worker, that person is not included in the program. As it now stands, the program does not include independent workers, except for fishermen. Fishermen are included as independent workers as far as fishermen's benefits are concerned.

Mr. Yvon Godin: Madam Chair, I only have about 30 seconds left to hear the answer.

I want to know if a person who has been employed in a make-work project is considered as being on the job market?

Ms. Wilma Vreeswijk: I will ask Mr. Kenneth Kerr to reply.

Mr. Kenneth Kerr (Director General, Active Employment Measures, Department of Human Resources and Skills Development): The answer is yes, those are insurable hours. The employer is an employer in good standing, be it a municipality...

Mr. Yvon Godin: In that case, the figures are wrong as reflected in the statistics. It's artificial.

The government has to pay for these other programs in order to replace employment insurance benefits. It's an artificial situation.

Ms. Wilma Vreeswijk: I think that what Mr. Kerr is saying is that if a person had a regular job which paid him or her a normal wage, those hours worked would count. If the person is compensated, for instance, by the employment insurance fund, that's something else.

Mr. Yvon Godin: But if someone gets paid by the government for working on a special project—if the person is not paid out of employment insurance, but by the government...

Ms. Wilma Vreeswijk: If the person is being paid by the provincial government, that has nothing to do with the employment insurance fund.

Could you be a little more specific, Kenneth?

Mr. Kenneth Kerr: I could add, Madam Chair, that many of these projects are very innovative and help extend the working season within seasonal industries, be it a project to extend the tourist season or one which adds value to the forestry sector. I realize that we cannot put the fish back into the water, but many of these projects are an important contribution to the community.

Mr. Yvon Godin: But that was not my question. I wasn't talking about the contribution this work makes, I wanted to know whether it was considered normal work for your purposes. And the answer is yes.

[English]

The Chair: Mr. Godin, you're going to have to wait until the next round. You're way over time.

Mr. Finlay.

Mr. John Finlay (Oxford, Lib.): Thank you, Madam Chairman.

I must say that I'm glad that Monsieur Godin found something positive to say before he finished.

I looked at this report, and it seemed to me a very positive report. It indicated that less money was being spent doing more, which I thought was a good thing. It indicated that improvements in many of the programs under EI were quite obvious.

I want to ask a question about page 8 on the deck. I need a little understanding of “Despite significant variations in the unemployment rate, access to EI was similar across all regions of the country”.

Ms. Wilma Vreeswijk: On this table on page 8, it is important that the employment insurance program be responsive to changes in the labour market. If the unemployment rate is high and people have more difficulty finding work, can they have the same access, or similar access, as regions where the unemployment rate is lower? And that is what we are comparing here.

You'll see in terms of this bar chart here that the darker areas show the unemployment rate, and that in some areas where you have double-digit unemployment, access is at 88%. In areas where you have much lower unemployment, as in the prairies, you have access at 86%. So you can see that access in the EI regions we talked about earlier...as the unemployment rate changes, both the entrance levels--the hours required to enter into the program as well as the entitlement--change to respond to changes in the unemployment rate. It is quite responsive. Even a half a percentage point or a percentage point change in the unemployment rate will result in changes in the hours and in the entitlement.

À (1030)

Mr. John Finlay: Because there's less work to be done or less employment, they can get EI benefits for having worked fewer hours.

Ms. Wilma Vreeswijk: That's right. So where the unemployment rate is high, the number of hours required is lower, and where the unemployment rate is low, it's easier to find work, and it recognizes that it's easier, so it's a bit harder to get into EI. That is the basis of the variable entrance requirement and the range of hours that we see.

Mr. John Finlay: It seems to me, Madam Chairman, that this answer simply underlines what I said at the beginning. I think this report indicates that HRDC are on top of the problem.

Thank you.

The Chair: Thank you, Mr. Finlay.

We're into our final round, and I'm going to limit this to five minutes.

Monsieur Roy.

[Translation]

Mr. Jean-Yves Roy: Thank you, Madam Chair. I am going to try one more time, because I don't seem to be able to understand. I have a thick skull indeed.

How does Statistics Canada calculate the rate of unemployment?

Ms. Wilma Vreeswijk: The unemployment rate is based on the Labour Force Survey.

Mr. Jean-Yves Roy: No. How? What is the methodology?

Ms. Wilma Vreeswijk: The methodology? I think Statistics Canada would be in a better position than I am to explain its methodology to you. I'll use an expression which is not as refined as it should be, but they conduct a survey and then they conduct a follow-up of people to find out whether they are jobless or searching for work. That's the Labour Force Survey.

Mr. Jean-Yves Roy: How often is this survey carried out?

Ms. Wilma Vreeswijk: Every month. Statistics Canada publishes its results at the beginning of the month for each of the 58 regions.

Mr. Jean-Yves Roy: I would like to come back to Matapédia—Matane. If you go to page 16 of the document I gave you...

Ms. Wilma Vreeswijk: Page 16?

Mr. Jean-Yves Roy: Yes, there is a reference to Matapédia—Matane. You can see that in 1989, the monthly average as set out by Statistics Canada was 7,590 employment insurance claimants, whereas in 2001, that figure was 4,640, despite the fact that the unemployment rate had not changed.

You find the same situation in almost every riding, Châteauguay, Chicoutimi—Le Fjord and so on: the unemployment rate in Quebec has not really changed. It hasn't really changed in Matapédia—Matane. So how is it that the number of claimants in 1989 was 7,000 people or nearly 8,000, and that in 2001, that figure is 4,640? This is Statistics Canada's monthly average.

À (1035)

Ms. Wilma Vreeswijk: First, this document is based on federal ridings. It is not based on employment insurance regions. So it's very difficult for me to give you an answer. The employment insurance program is not based on ridings.

Mr. Jean-Yves Roy: The region includes two federal ridings: Matapédia—Matane and Bonaventure—Gaspé—Îles-de-la-Madeleine—Pabok. In 1989, in Bonaventure, the monthly average number of employment insurance claimants was 10,210 people, and in 2001 it was 6,660 people. If you look at the two ridings which make up the region, there is a decrease of nearly 50%, and the unemployment rate in Gaspésie is about the same as it was when... You can refer to 1990-91: the unemployment rate barely went down, but the number of claimants decreased by nearly 50%.

Ms. Wilma Vreeswijk: I can't speak to what is happening in those particular ridings, but I can say that several factors may affect a person's eligibility. As described in the Monitoring and Assessment Report, this year there was an increase in the number of independent workers. Currently, independent workers are not eligible for employment insurance benefits, which may affect the number of people who are eligible. Therefore, if there are more part-time workers, it may affect the number of hours worked and therefore one's eligibility. In short, the way people work affects their eligibility.

Mr. Jean-Yves Roy: In that case, your 88% figure is false; it does not hold true for our area.

Ms. Wilma Vreeswijk: No, I'm sorry, as I said, I'm not really in a position to talk about federal ridings and specific regions, but I can say, as I did earlier, that 88% is the national average. We realize, however, that within this average, a lot depends on whether a person is an independent worker or not. For its part, Statistics Canada will include those workers.

Mr. Jean-Yves Roy: No, not self-employed workers. This is where I have difficulty giving any credibility to the figure of 88%, because this is not the reality throughout the country, not just in the ridings of Matapédia—Matane.

Statistics Canada's data since 1989 show a steady reduction in the number of claimants. You tell me that Statistics Canada does a monthly survey. Either their methodology has changed, or this is in fact what is happening. Look, I have to rely on someone to arrive at an opinion.

[English]

The Chair: Mr. Roy, your five minutes are up. I'm going to give Ms. Vreeswijk a minute to respond.

[Translation]

Ms. Wilma Vreeswijk: As I said, it is very difficult for me to comment on federal constituencies. I told the chair that I would do two things: share our studies and review your studies. I am pleased to do that. It is very difficult for me to make comments in this regard.

Mr. Jean-Yves Roy: Madam Chair, this is not a question, just a comment, because I asked a question earlier.

[English]

The Chair: Your comments are taken into consideration in the time that you have. I'm going to--

[Translation]

Mr. Jean-Yves Roy: On a point of order, Madam Chair. I asked for some information earlier, and I would like it to be provided to the committee. We talked about a comparison of unemployment rates for Newfoundland.

Will you be giving the figures to the committee? I am not referring to the number of claimants, but rather to the amount paid under the EI program to Newfoundland in 1993 and the amount paid today.

Ms. Wilma Vreeswijk: We will give you the comparative data showing what's happened in Newfoundland between 1996 and the present.

Mr. Jean-Yves Roy: Thank you.

[English]

The Chair: I think she made that commitment before.

Madame Thibeault.

[Translation]

Ms. Yolande Thibeault: Thank you, Madam Chair.

I would like to come back to page 11 of your slides. This question was raised by Mr. Godin a little earlier, but I think we got a little off track.

It seems to me that if the department decided to do a study that shows that fewer claimants apply for welfare after using up their EI benefits, you must have a good reason to explain that. When I look at all of this, I find the statistics rather vague.

What are you trying to prove to us? What are you trying to tell us with that?

Ms. Wilma Vreeswijk: The commission asked us to study the duration. It wanted to know whether the duration was long enough for claimants. If not, does this cause people problems? Will they turn to welfare for the remaining time? These things are related.

As you see on page 11, about one-third of individuals use up all their benefits. This figure has dropped since 1996. Do these people go on welfare? That is why we were asked to do a study. It was very important for us to know that.

À (1040)

Ms. Yolande Thibeault: I see that the number is quite low. Do you mean that people wait to stop receiving EI benefits before they start working? Is that what this means?

Ms. Wilma Vreeswijk: It is difficult for me to answer the question. Is the period long enough? That is what we are concerned about, because people ask this question. We have looked at the issue nationally, but even regionally, we looked at 14 communities to see what happens there. Even in regions with very high unemployment rates, we can see that people do not use more than 70% of their weeks. That means there are no issues of concern to us regarding the various types of workers. We will continue to try to determine whether there are any unexpected effects. We will ask that other things be done to help us better understand the various population groups served by EI program.

Ms. Yolande Thibeault: I think that is quite clear. Thank you very much.

[English]

The Chair: Thank you.

Monsieur Godin, you have the last five minutes, and I know you're going to end on a very gentle note.

Mr. Yvon Godin: Madam Chair, you know I'm always gentle.

I'm gentle to the working people who lost their jobs and don't qualify for EI. I'm gentle to the women in this country who have kids and cannot feed them. I'm gentle to the 800,000 people paying into EI who do not qualify. I'm very gentle to them.

I have a hard time being gentle to the government that made $43.8 billion on the backs of men and women, working people who pay into the system.

I want to get the record straight. I know I lost two minutes of my time for that statement, but you're provoking me every time I raise a question. That's why I lose time.

The Chair: No, I won't take off the two minutes, but I'm going to remind you to be gentle to the officials, who do not make policy.

[Translation]

Mr. Yvon Godin: The Prime Minister made a statement in which he recognized there is a problem with seasonal workers. The minister also made a statement, and the Prime Minister asked a group of Liberal members of Parliament to travel around the country to try to come up with some solutions.

Could you tell us what type of solutions we need to deal with this problem?

Ms. Wilma Vreeswijk: Seasonal workers and industries are an important part of Canada's economy. Hence, they are of concern to us. These workers and industries are part of communities throughout the country. There are seasonal industries in all the provinces. It is therefore important to understand whether the employment insurance program is working for them.

Minister Volpe explained clearly in the House of Commons that we are reviewing these issues to better understand what challenges face seasonal workers and what impact the EI program has on these communities.

We acknowledge that not all the solutions necessarily lie with the employment insurance program. Sometimes, there are regional development or other matters involved. It is important that we have a better understanding of these issues. We are doing some studies on this at the moment.

Mr. Yvon Godin: What is the rush to make changes next week?

Ms. Wilma Vreeswijk: I am not in a position to answer that question. However, we look at all the various initiatives and recommendations, including those made in this committee's report three years ago. We are looking at all of the recommendations. These questions are really for the government.

À (1045)

Mr. Yvon Godin: Thank you. I was nice, wasn't I?

[English]

The Chair: Monsieur Castonguay, I know I had said that--

[Translation]

Mr. Jeannot Castonguay: I have a brief question, Madam Chair.

By increasing the income ceiling for small weeks from $150 to $225, did we encourage people to work longer, or did it rather work to reduce the hours accumulated? In the end, it encouraged the accumulation of hours. Do we have any data on that at the moment, or has the measure not been in place long enough for us to determine that?

Ms. Wilma Vreeswijk: We had some pilot projects on small weeks. The objective of the pilot projects was to better understand the interaction at work before making changes. We have evaluated these pilot projects. The Auditor General has recognized the quality of our evaluations and the fact that they were well-founded.

Our evaluation showed that with the legislative provision regarding small weeks, people were working two more weeks. That had a very good impact as an incentive. At the same time, it enables us to recognize that people work differently. Their work patterns are not necessarily uniform during their period of work. There can be variations.

Mr. Jeannot Castonguay: Have you been able to determine whether this measure has had an impact on the accumulation of hours or is it too soon for that? No?

I have another question. There has been talk of reducing employment insurance premiums at some point. On the other hand, benefits are also being reviewed. What recent data allow you to say that the current level and duration of benefits are adequate? How do you go about defining that?

Ms. Wilma Vreeswijk: We look at two things. First, we look at the period of use. As I said earlier, people generally use up two thirds of the employment insurance benefits. Even in regions with high unemployment rates, people generally do not use more than 70% of the employment insurance benefits.

We also look at what happens with the amount of benefits. We saw that the amount increased more than average salaries. We're looking into this aspect.

We are also checking what happens with the family supplement, which provides a higher replacement rate. We also look at what happens with people's expenditures during the year in which they receive EI benefits. We want to see whether there is a sudden drop in expenditures. We have noticed that generally there is a drop of about 12% in expenditures during the year in which people receive EI benefits.

We look at several things to see whether the duration and the amount of the services are adequate.

Mr. Jeannot Castonguay: I saw figures of 10.6% and 13.7% on the industry side. The fact remains that 13.7% is not very much. That would produce an income between $272 and $309 a week. That is why I am asking you whether it is really adequate.

[English]

Are we in touch with reality?

[Translation]

Personally—and you would probably agree—I could not live on that and support a spouse and family.

In determining a reasonable amount, do you adopt the approach that giving them very little will force them to work longer, in regions where there are no jobs? Was that the objective?

I'm trying to determine how you go about determining incomes of this type, which are ridiculous.

Ms. Wilma Vreeswijk: At the moment, the act provides 50% of the maximum. The maximum is 39%, which is higher than the average wage. So we lean toward what happens on the wage side. We also check what happens when people get EI benefits, for example, whether their expenditures changed.

As I said, there was a 12% drop in expenditures by people who received EI benefits. That is how we go about this.

À (1050)

Mr. Jeannot Castonguay: Thank you.

Ms. Wilma Vreeswijk: Perhaps I am not being clear in French. I could give you the explanation in English.

Mr. Jeannot Castonguay: No, that is all right. Perhaps we will need another discussion group. We could try to look at these issues at that time. This is a very complex issue.

Ms. Wilma Vreeswijk: Yes.

Mr. Jeannot Castonguay: For many people, Madam Chair, this is a very complex issue, so much so that in some cases, people prefer not to worry about it. That is something we can actually see happen. The system is so complicated that people decide what the heck. They say it takes too much energy to try to figure out the system. It is a sad state of affairs.

Some people who have worked in this field for a long time still have trouble explaining how it works. So imagine the poor devil who is trying to qualify for EI. He finds it is beyond him.

Thank you, Madam Chair.

An hon. member: He works in the underground economy.

Mr. Jeannot Castonguay: Right.

[English]

The Chair: Thank you very much.

[Translation]

Mr. Yvon Godin: Madam Chair, I would like to know whether a copy of the CLC report, which was distributed in the department, could be sent to members' offices.

[English]

The Chair: The one that Mr. Roy had? That one was distributed to the witness only, because it was in French only. We did not have an English copy. You'll understand that.

Mr. Yvon Godin: I will not make an argument on that one, and you know that.

The Chair: I suspected not.

Just before we wrap up, I'm going to have the clerk very quickly review the witnesses we have scheduled for next week.

The Clerk of the Committee (Mrs. Danielle Bélisle): On May 4 we have employee representatives. We have confirmed the Canadian Labour Congress; the Fish, Food and Allied Workers;

[Translation]

The Confédération des syndicats nationaux and the Centrale des syndicats démocratiques. The Canadian Union of Public Employees will probably be appearing as well; I am just waiting for their answer.

Next Thursday, we will hear from the following employer representatives: the Canadian Construction Association, the Conseil du patronat, the Canadian Restaurant and Foodservices Association and the Retail Council of Canada. All these groups have confirmed that they will be appearing.

I am still waiting for a reply from the Canadian Federation of Independent Business, the Forest Products Association of Canada, the Canadian Manufacturers and Exporters and the Canadian Association for Women Executives & Entrepreneurs.

[English]

The Chair: Okay, thank you.

I'm sure you'll find that's a very full and.... Excellent.

Okay, thank you all.

The meeting is adjourned.