[Recorded by Electronic Apparatus]
Tuesday, March 19, 1996
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[English]
The Chairman: I'd like to call the meeting to order.
I would like to welcome Ms Susan Cox, vice-chair of the Canadian Association of Food Banks. As you know, Ms Cox, we're studying Bill C-12, an act respecting employment insurance in Canada. We are of course looking for suggestions on how to improve this piece of legislation.
We would like to hear a summary of your brief so we can engage in a question and answer session thereafter.
Thank you and welcome.
Ms Susan Cox (Vice-Chair, Canadian Association of Food Banks): Thank you very much for your patience in waiting for me and for the opportunity to speak to you.
I would like to take a minute just to fill you in on what the Canadian Association of Food Banks is. We're a national, non-profit coalition of food banks across Canada working together to relieve hunger and eventually eliminate it. Those are our goals and objectives in a nutshell.
We try in various ways to ensure that Canadians have sufficient access to nutritional food. We do this through public education, gathering information about why people use food banks, and disseminating that information as much as we can.
The Canadian Association of Food Banks only employs one part-time staff person, whose responsibilities primarily have to do with moving food across the country and finding donated trucking and transportation to get an equitable distribution of food. Most of our work and our other ambitious agenda is done by staff and volunteers of food banks, and that in fact is why I'm here today.
I'm the vice-chair of the Canadian Association of Food Banks. I'm also the assistant executive director of the Toronto Daily Bread Food Bank, which is the largest in Canada.
The most recent figures we have would appear to indicate there are currently three million Canadians using food banks in the course of a year - perhaps just once, perhaps many more times. That's about 800,000 people every month in Canadian food banks.
The food banks themselves are charitable organizations. They very rarely have any government funding, and very rarely in fact want any such funding. They tend to be in churches and community centres. They distribute food not only in food hampers, but through soup kitchens, drop-ins, and children's breakfast clubs. Increasingly, they also work to address preventative measures around hunger. The screening interviews are just as likely to end up with intervention by a local welfare authority or a referral to some other service. That's the perspective from which we operate and exist.
I have to say that the food banks only exist because social programs and income-support programs have failed so many millions of people in Canada right now. We're only there because people can't find jobs. I fear that increasingly we're there because government at various levels is backing off from responsibility for adequate income, social programs and job creation.
We took a look at the changes to unemployment insurance in the light of what we now know about the people who use food banks and their use of the UI system in the past.
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UI recipients have always been a tiny minority of food bank users. They constitute about 3% of all the people who use food banks. Put that up against perhaps 75% or 80% of users who are recipients of social assistance at either the provincial or municipal level.
The reason for that is because unemployment insurance has traditionally given people an adequate income - an income adequate to buy the food they need. Welfare typically does not and increasingly does not. In other words, strong unemployment insurance benefits tended to make food banks unnecessary. It was a very logical conclusion that we could draw from what was happening out there.
There were certain things that we looked at in the new employment insurance that we applauded. We applauded the inclusion of part-time workers and the self-employed. In fact, we had asked for that. But when I take a look at the time it takes them to qualify, I am reminded of the old adage that you should be very careful about what you pray for in case you get it. I just wonder how many people will benefit from it. I suspect you don't know either. I have to say I wonder.
That tempers our enthusiasm, but we also approve of special considerations for low-income families with children. Obviously it's a concern to us, although it does make the system look a bit more like a welfare system and a bit less like an insurance system.
At the same time, we have to wonder about what's referred to as active employment measures when $600 million has been taken out of the human resources budget and I think $800 million is being put back in through the system. I confess to being a little confused and perhaps I just don't know quite enough about it. I would just flag that as a concern. Let me move more rapidly to our main concerns.
We have three primary concerns, but I have to say our most important concern is with reduced eligibility and reduced duration of benefits. In effect, those reductions are just the beginning of a chain of cause-and-effect events that will create more hunger in Canada.
Earlier changes and reductions in UI pushed more people onto provincial welfare rolls. As those welfare rolls increased, the demand on food banks became greater. Now the eligibility is being reduced even further and provinces are retreating from responsibilities around social assistance for a variety of reasons.
The adequacy of benefits is clearly their primary concern here, but when welfare benefits are inadequate, food bank or charitable food relief increases beyond our ability to meet that need. A very clear cause-and-effect series of events leads to food bank use. In this instance, you can track it right from reduction in eligibility to UI.
I don't have figures for the whole country, but in Toronto, for example, 27% of the people we saw last year had just lost their jobs in the previous 12 months. Of those, only 25% had access to UI. So only 25% were people who had used the UI system before moving on to welfare. That's lower than the average, I think, in the province or in the country.
I think it's also worth mentioning that the stereotypes about UI that a lot of the reforms appear to be targeting - I am talking about short-term claimants and frequent claimants - are just the profiles of the people we're seeing every day. The people we see who are struggling in this economy move in and out of short-term, part-time work with quite a lot of frequency.
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Off the top of my head, I think 9% of food bank users, for instance, are construction workers, whether they're working or not. There is a very typical pattern even for clerical and service workers, now that people are no longer able to get very permanent, steady employment.
An additional concern around the reduction in access to benefits is that having to scramble in order to live increases the chances of families being destabilized. If you have to go out and beg for food regularly, if your family is in that unstable situation, then it doesn't seem reasonable to think that you're going to be very employable or very job-ready. A certain degree of stability tends to lend itself to being ready to move into jobs.
There used to be a mind-set - and this system seems to be continuing it now - that we should discourage claimants in UI, even though about half of the people are getting it now who are unemployed. In the food banks, for instance, we see between 4% and 7% of people who are waiting for their UI to kick in, amounting to tens of thousands of people across Canada who are using charitable systems because they are waiting for UI.
To put it in very simple terms, if you have less in the way of UI or EI benefits, then you have more social assistance, and more social assistance equals more food banks.
We have less ability to meet their needs, and the impact on health is quite clear. Food bank users already tell us that they consider their health to be poor, and most believe that it could be improved if they had access to appropriate, nutritious food.
The second concern is around the context in which this is happening. I understand that this is not the focus of these hearings, but when we look at the changes to unemployment insurance we can't divorce ourselves from the federal withdrawal from safeguarding social programs in Canada.
We live in an atmosphere in which the unemployed are regarded with a great deal of suspicion and often are widely criticized. We are living in an environment in which we seem to be happy with an unemployment rate of about 10%. Frankly, we feel that the federal government has in a variety of ways - this is just one of them - abandoned a lot of vulnerable, unemployed people.
Our concerns in this area also come to a head when we look at the cuts in welfare. I just got a look at the most recent ones in Manitoba, where for the first time I see a provincial government seeming to be almost proud of cutting a benefit to children. We've seen it in Ontario: food bank use across the province was up by about 50% from last September to the end of January. This is in the context of the imminent reduction of transfer payments, but it also seems to be in the context of a reduction of caring.
Across the country, people who previously used food banks perhaps four times a year, as sometimes in Ontario and Alberta, now are trying, at least, to get help sometimes three or four times a month. In addition to more people coming, we see a greater need, more frequency of need. It's a need that we are not meeting. We do not pretend for a minute that we are. I should also mention that.
A third of the children in food bank families sometimes go hungry because their families can't afford food. Half of the pregnant women in food banks go hungry at least once a month because they can't afford food. Almost 70% of the parents go hungry because they forgo food to give it to their families. This is the atmosphere in which we live. This is the result of that cause and effect relationship I talked about.
In view of that, I'd like to mention our third concern: What's going to happen to the money? When I tell you the extent of hunger in Canada, it's an issue of some moral dimensions. I understand that the latest reforms will save $2 billion by the year 2001. I understand that most of that money will go to pay down the deficit.
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Two billion dollars is roughly 14 times the value of all the food that's distributed through food banks across Canada right now. One billion dollars would probably close the food banks down, at least for a while.
In fact, we understand that in the budget there's a $9 million surplus for a rainy day, and we're just wondering how bad that rainy day has to be. We have a real unemployment rate of 15%. We have over one million children living in families where people can't afford to buy the nutritious food they need.
Frankly, we're appalled by this. What's happening? Why do we have this enormous cookie jar in the face of all this need? Where's the basic morality if nearly $1 in every $3 being collected to help unemployed people goes to tidy up the nation's balance sheet? How much do people have to feel the pain before we do something about it?
Our recommendations are probably fairly obvious from what I've said. We really wish these changes were not taking place, but we would urge you to reconsider these restrictions in the duration of benefits, to reconsider the eligibility, if for no other reason than the fact that they will create more hunger in Canada.
We would like to see an impact assessment on these changes, an impact assessment with the same resources and attention applied to it as are applied to looking at the impact of the deficit right now. I think that's a standard that we could apply to looking at this as what some people call a social deficit.
Secondly, we'd like to recommend that savings from the UI surplus go to address issues of hunger and poverty in Canada. We don't mean funding food banks; we don't want that. We'd rather see it in the pockets of the people who need help. Maybe it could be a child benefit or a way to ensure that people don't go hungry, but we would certainly like to see it redirected.
I know it's not your focus right now, but as strongly as we know how we wish that you would restore standards across Canada, the kinds of standards in the Canada Assistance Plan, and get the federal government involved in caring for poor people. Of course, we urge that transfer payments to the provinces, which are so often the excuse they have for reducing benefits, would be restored.
Finally, our recommendation is that you set targets and enter into a very aggressive job creation program. I think you should look at that from a variety of sectors. I don't think there's one ideological or doctrinal answer. I think we need our best minds and we need some bucks behind it. The people we're seeing in food banks want jobs. That's what they want.
I was amazed when the issue of workfare first came up. I talked to people in food banks and they said they wanted workfare. Why do they want workfare? They want workfare because it'll give them a job. Do they understand that they have to work? No, they just thought it was a way in which we were going to create jobs for them. That's what everybody wants, no matter what their abilities or their educational background. People want jobs, not just for money. They want jobs for the pride, for the self-esteem that it gives them.
I think we absolutely have to target job creation or these changes make no sense at all. Perhaps they can be justified in a different environment. Perhaps they can be justified with aggressive job creation, with a continuing federal protection for poor people, but in the absence of those two things, I'm afraid they can't. Again, we're pleased with little bits of it, but overall we're very afraid of what the future might bring. I will back off now.
The Chairman: Thank you very much for your presentation. You've brought up some interesting points.
We will start with the Bloc Québécois. Madame Lalonde.
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[Translation]
Mrs. Lalonde (Mercier): If there were to be changes made to the Unemployment Insurance Act, don't you think they should be made without additional cuts? There were major cuts in 1994, which represent a total of $2.4 billion for Canada as a whole. At the end of 1996, without any further cuts, the accumulated surplus, according to government figures and if you deduct the $700 million worth of cuts this year under the new legislation, will be at least $4.3 billion. And that is being conservative. Next year, with the cuts provided for in Bill C-17, the surplus will be far greater than the estimate for 1996.
Under those conditions, and I will use the same term as you did, don't you think it is immoral to use a so-called unemployment insurance reform to make workers and employers pay for the deficit, when in reality - and you don't hear this enough - , the government is depriving itself of $900 million a year by reducing the maximum insurable earnings to $39 000 from $42 000?
Premiums for employers and those earnings between $39 000 and $42 400 were reduced by 900 million. To make up for that, premiums were increased for lower wage earners. We got that information during an in camera session we attended. So, those additional cuts are poorly targeted. Why should those who need unemployment insurance and who will not be able to get it pay for the deficit?
[English]
Ms Cox: I agree with you, Madame. It is a moral and an ethical issue as far as I'm concerned.
I don't know the answer to your question, which I assume is rhetorical, but from my perspective and from the perspective of food banks it's inconceivable that those kinds of cuts should be taken from unemployed people.
It's part of such an unpleasant series of events happening in Canada right now, and I just don't know. I sometimes wonder how I can express how upsetting this is, how I can communicate to people the real faces and the real people I see every day. They are so ordinary but they are so desperate. They are so desperate and frightened by being without food and without adequate support.
So yes, it's hard and it's a moral issue. Why would you take it from there? Why would you take money that people have put aside to care for the unemployed and use it for any other purpose but caring for them? I don't know what else I can say.
[Translation]
Mrs. Lalonde: You say that, in your experience, this reform will further disrupt families. I would like you to expand on that, because I think the committee should recognize that such cuts have not only a negative economic and social impact, but can also lead to health problems, mental health problems and increased crime. There is a price to pay. Some people become prime victims of the cuts and society pays a big price for that.
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[English]
Ms Cox: Very normal families with strong work histories, when UI runs out and they end up on welfare, are faced with the most extraordinary set of circumstances in order to survive. They have very little money to live on, and in some provinces it's an impossible amount to live on. There's the health impact of having too little to eat. Often of course it's the breadwinner in the family who will go without to feed the children, so in fact the breadwinner's health is compromised by what's going on, because people tend to give up in order to see that their kids are fed.
Not only that, but a job search becomes impossible when you can't afford the telephone any more, when you can't even ride on a public transit system any more and when all the normal things you did that kept your self-esteem up are no longer available to you, even recreational things. Typically we see families who are unemployed withdraw from their normal circle of friends. For very many of them the normalcy in their life has in fact revolved around the workplace, which is no longer available to them.
It's up for grabs. Perhaps the impact is greatest on mental health and confidence when you go out to look for new jobs, or perhaps it's greatest on physical health, or maybe it's just this whole combination of the incredible uphill daily battle it is to live if you don't have enough food to eat.
I know some of you see this sometimes in your constituency offices, but I just wish you could sit at my place for a day and watch this stream of people. Volunteers are very often themselves on welfare and unemployed. Who else is available all day long?
You can be moved to tears just by the story of some very normal, decent, hard-working person appearing before you to beg for food. All food banks do is make begging maybe a little bit more palatable. That's what we do. We do what we can do to help, but it is begging.
The Chairman: Mr. McClelland now.
Mr. McClelland (Edmonton Southwest): I think most people agree that UI premiums, both by the employee and by the employer, when they get to too high a level, become a tax that really works against additional employment, especially in a declining market where most small and medium businesses are not enjoying increasing profits. When the payroll taxes go up employment goes down. Most people would agree.
But moving on from there, I wonder if you could comment on the fact that ever since the Forget report on unemployment insurance, ever since the beginning of unemployment insurance, the desire has been to make it truly unemployment insurance and not a replacement income. Because it's easier and more palatable to make unemployment insurance income replacement, which it was never designed or intended to be, it gets distorted and we get the higher premiums, etc.
In your opinion, would we not be better to address the issue of a minimum level of income for people outside of the unemployment insurance program entirely - that is, not mix the two up - so we can address it honestly?
Ms Cox: Do you mean like a guaranteed annual income?
Mr. McClelland: Yes, exactly. Why can't we start talking honestly about a guaranteed annual income and use that as a foundation from which people can move into employment, or to break the systemic dependence cycle? Why don't we talk about that? Why didn't you raise it?
Ms Cox: I didn't raise it because I'm not sure about it, to be quite honest. There's nothing like hedging on a question, but I think a guaranteed annual income is a two-edged sword.
Let me just say the Canadian Association of Food Banks does not have a position on this issue, but if you're asking me personally, I can see both the good and the bad in it. I can see the great risk of encouraging very low wages for people that end up being topped up by government and allowing employers to pay people a very low wage.
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On the other hand, yes, it certainly is very tempting to think that there would be a guaranteed annual income. One of the last people I can really remember having pushed for guaranteed annual income was Richard Nixon, so maybe my concern has something more to do with that. Of course, it would depend on the levels, and I would think it would depend on what other protection there was for workers in that, as well as protection for unemployed people.
So I suppose that's a polite way of saying I don't know. I'm just not sure.
The Chairman: Ms Augustine.
Ms Augustine (Etobicoke - Lakeshore): Sue, I want to thank you so much for coming this afternoon and for sharing with us the perspective of the food bank.
I am becoming more and more distressed, not only as I face people in the constituency, but also in listening to your presentation as you tell the real story of the real lives of the individuals you see in the service you provide.
I think what we're attempting to do here in this reform - and I want to stress the word ``reform'' - includes some important things. One of those things is to deal with the whole issue of how we could be fair to people facing hardship. But as we look at this legislation and as we listen to some of the people who critique this, they're talking about straight insurance, etc., and they are leaving out the heart and soul that is supposed to be part of this legislation.
How can we use those measures to ensure that low-income families have some opportunity not only for work, but also some opportunity to keep themselves away from the food bank?
I have been going back and forth on this. As I read this legislation, I feel there are places in which this is really very harsh. I think we need to exempt low-income people, and especially single parents with children, from some of the harsher measures in this.
I think it's important also to know that we did a gender analysis. You asked for an impact study. We did that: how would this legislation impact on men, and how would this legislation impact on women. Taking all these things into consideration, we can quote numbers and we can give you percentages and we can do a whole series of things. But I think the intensity rule is one way. There is a whole series of things we could look at in which we can find opportunities to talk about exemptions, but it seems to me that the intensity rule is one area that I feel could benefit poor families or families with income under $26,000.
Can I ask you to speak a little bit about the intensity rule? Have you given that some thought? What about the frequent users?
Ms Cox: I have to be honest with you, I haven't really. And I haven't really weighed the way.... This is very complex. I'm afraid I just sort of moved into some areas where I really did have some good ideas.
On the other hand, I do have to say that I'm sure the government does want to get people back to work. There's really no question about it. But I just don't see that this is what's going to do it, particularly when you take money out of the system and redirect it. Alternatively, as I said, I think perhaps this would be very justifiable if it were in a different context - if it weren't for the fact of the end of CAP, if it weren't for the fact that as of April 1 people are not going to have other kinds of safeguards.
Jean, what I would be happy to do is to take a look and feed back to you.
Ms Augustine: Mr. Chairman, I think it's important for me to say that if this reform is about helping people to get off the treadmill of UI and to find their place in work, then we should give them all the necessary assistance to do this. Maybe I can call on this committee to look at the intensity rule. Let's see if there is some amendment we can make in that area and see how that could be of assistance.
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Ms Cox: The only thing that's really going to get people off that treadmill is jobs. That's the bottom line. I don't know another way to do it. I totally reject the notion that for the vast majority of people this was a disincentive to work. I just don't believe it. I'm sure we could find some people for whom that was true, but not the majority of people. For the vast majority of people it was just the access to jobs. That's true in a lot of different kinds of work as well as in different regions.
The Chairman: Ms Cox, thank very much for your presentation. You can rest assured that this committee and members on all sides are mindful of the fact that job creation is an important part of governing and indeed of being a member of our society. You've made some excellent points that have been duly noted, and on behalf of the committee I'd like to express our sincerest gratitude for your presentation.
Ms Cox: Thank you very much, Mr. Chairman.
The Chairman: I'd just like to draw to the attention of the members of the committee that I've made a couple of requests in recent days. One was in reference to the maternity benefits issue that was raised by the Fédération des femmes du Québec, which needs some clarification. I've asked the Department of Human Resources Development to report to us by tomorrow.
I've also requested that Mr. Scott provide me with further thoughts and ideas in reference to the issue of the gap, and today I would like to follow up on a point raised by Ms Augustine in reference to the intensity rule as it applies to those individuals who would be receiving the family income supplement.
Ms Augustine, I would ask for you to report to me as chair by next Wednesday, so we can see whether or not your proposal can be something we could look at as an amendment to the legislation. I'd like to get that on the record and I expect the members to produce the work within the deadline. I'm sure you will. Thank you very much.
We are now going to hear from the Canadian Labour Force Development Board. We have Lenore Burton, executive director; Jean Andrea Bernard, business co-chair; and Janet Dassinger, director of training programs and policy.
Welcome. It's a pleasure to have you here. As you know, we are studying Bill C-12, an act respecting employment insurance in Canada. This committee relies on the wisdom of Canadians who have experience in this particular area as we attempt to improve the legislation. I know you come here with a wealth of experience and the members of the committee look forward to further insights into the bill.
The tradition here is basically that you will have as long as you want for your presentation, but preferably we would like to get a quick synopsis of the major points related to this bill from your point of view, and then we like to engage in a question and answer session. Welcome again and thank you very much for coming.
Ms Jean Andrea Bernard (Business Co-Chair, Canadian Labour Force Development Board): Thank you, Mr. Chair.
I thought I'd start off by just giving you a brief introduction on the Canadian Labour Force Development Board. It was created in 1991 in response to a growing consensus for a more meaningful role by the private sector partners in advising government on training priorities, allocation of resources, and accountability measures.
The CLFDB is a partnership composed of the key labour market partners, business and labour, as well as the education and training community, women, people with disabilities, visible minorities and aboriginal people.
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As you stated, Mr. Chair, I am Jean Bernard and I'm the business co-chair. The labour co-chair is Jean-Claude Parrot. Regrettably, he is unable to be here with us today. In fact he is in Geneva attending a meeting of the governing body of the ILO. Our labour board member, Janet Dassinger, of the United Food and Commercial Workers International Union, will be speaking on his behalf today.
Lenore Burton, our executive director, will be playing an important role of presenting our views, which are outlined in more detail in the handout we have brought for your committee today.
I'd like to first of all thank you for providing us with the opportunity to present our views and hopefully our constructive suggestions for the work you have facing you.
[Translation]
Why are we here today? The Canadian Labour Force Development Board's mandate is to advise the government and to promote labour force development and training throughout Canada. We also encourage real dialogue between labour market partners and encourage them to reach a consensus.
What do we mean by that? The Board's labour market partners work by consensus. We agreed on the content of this report and we hope you will appreciate that this consensus makes our recommendations special and unique.
[English]
When I talk about consensus here, I feel it is very important to underline that while business, labour and the equity groups are partners in the commission, consensus does not mean that we bring forward the position of the Canadian Labour Congress. In fact we arrive at our own view of the world and attempt to bring it in a consensus position.
[Translation]
The employment insurance program is funded by employers an employees. As premium payers, we think we should have a say in the management of the active employment programs. In our view, a qualified labour force is the key to economic growth and our competitiveness on the world stage.
We also believe that training is very valuable. It is probably the best way to develop and maintain a qualified labour force.
The employment insurance bill proposes major changes to the Unemployment Insurance Act. Today, however, we will address only Part II, which deals with the proposed employment benefits.
In 1994, our Board made a submission to your committee on the social security reform. We are pleased to see that some of our recommendations have been incorporated into the employment insurance bill.
Let me give you three examples of provisions that reflect our proposals.
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Provincial involvement: The Board agrees that there should be coordination and cooperation with the provinces. Those are essential if programs and services are to be more accessible and flexible. However, the Board recognizes that the federal government will continue to play a major role in the job market.
Local decision making: since needs and services can't be better assessed at a regional level, the Board is pleased to see that the regions will be making more of the decisions. We would, however, like to point out that the Canadian labour market is a web of regional, provincial and national labour markets, which means there must be consistent and coordinated strategies to allow labour mobility. We will give you more details on that later on.
The Board supports all of the integrated programs and services set out in the bill. We are satisfied that our recommendations on a number of integrated services were incorporated into the legislation, including a case-by-case management system that includes individual counselling and an information bank.
I will ask Janet to continue our presentation.
[English]
The Chairman: Thank you.
Ms Janet Dassinger (Director, Training Programs and Policy, Canadian Labour Force Development Board): We have a series of general concerns that I'll cover very briefly and then turn it over to Lenore, who will represent our consensus position.
The first of these concerns is that there is no role for the labour market partners. The new EI legislation accords no meaningful role to the non-government partners. The partners, which we've already outlined, are well placed to understand the impact of programs on the workplace and on individuals. As premium payers, their input and involvement should be actively sought.
The second concern is a lack of emphasis on training. There is no language in the legislation that recognizes and promotes training as an active labour market strategy. The proposal in the legislation to provide training only where there is provincial agreement should not preclude a federal emphasis on the importance of skills development through training. In our opinion, the federal government has an important role in providing funds for training through the employment insurance fund, and federal statements on the important role of training in the economy are warranted.
Labour markets are a shared jurisdiction, and for good reason. Canada has a national economy. There is a need for national policies in the labour market that are linked to national economic policy - for example, a national labour market policy that responds to Canada's participation in the North American Free Trade Agreement.
Our fourth concern is with mobility. A national economy can function smoothly only if there is free mobility of labour from one jurisdiction to another. Labour mobility benefits both employers and workers, as workers move from areas of high unemployment to areas of labour demand. National standards allow for smoother labour mobility.
A fifth concern is around the declining level of CRF funding. The board has consistently recommended that access to training should be based on need and not eligibility for UI. Furthermore, the board is concerned with the decline in consolidated revenue funds. Many who need skills development but may not be eligible for EI benefits will not have access to training. Some of the designated employment equity groups, especially women and visible minorities, will be particularly affected.
At this point I will turn the floor over to Lenore Burton, our executive director, who will be representing our consensus position.
Ms Lenore Burton (Executive Director, Canadian Labour Force Development Board): The board has looked at the employment benefit programs and the tools that are suggested in the legislation. I propose to go through each of them and share with you some of our concerns and the consensus view the board has developed.
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The first area I want to talk about is training, and Janet has already introduced that. Quite simply, we believe that training works. There is a lot of evidence from a number of evaluations and studies to support that belief. In the past, when a person lost his job and left the labour market at Stelco, he could go across the street and find a job that was very similar at Westinghouse. That's no longer the case. When someone loses that traditional, stable job now, something has to happen before he re-enters the labour market at someplace different. One of the key labour adjustment strategies is training.
We know training has a positive effect on the employability of individuals. This is especially so when it's linked with counselling, when it's combined with practical workplace experiences, and when private sector or community-based partners are involved. We also know that training has a very positive impact beyond employability because it helps people in their communities, making them productive members of their families and in the communities in which they live.
The very early work that's been done on skills loans and grants as suggested in the legislation is based on the Canada student loans program. The client base for employment insurance legislation is of course dramatically different. The extent to which an unemployed person who has family responsibilities, children and a mortgage would take risks on getting a loan against some promise that there will be employment at the end of it can really be debated. While officials are worried about the risk these unemployed people might present to a bank lending them money, we're very concerned that these people won't even think to access these training loans. It won't even come into their can of thinking.
In numerous consensus reports, business and labour have consistently agreed that the burden of adjustment in the economy should not be shouldered by the individual alone. The throne speech highlights this, and we have an obligation to those unemployed people to help them get back into the workforce.
Another concern we have with the skills loans and grants is that UI is an individual entitlement program that is based on earned income. But the proposed skills loans and grants will be based on family income. This will particularly affect women and remove from them their individual decision-making and independent entitlement.
Another concern relates to the extent of entitlement. In the past, the period of income support was extended for claimants who were on training, and continued for as long as they were on training or until they completed their program. But under Bill C-12 income support will not be extended beyond the initial claim period, even for those in training. This means that the training decision and all the associated up-front counselling, availability of courses, etc., will have to be made very early in the claim.
The importance of counselling and other initial services is recognized in all the public documents, but we feel that somehow the messages are mixed. On the one hand, all the legislation and public documents endorse an individualized and, as Jean said, case-managed approach for the unemployed. On the other hand, we know there are proposed reductions in staff at Canada Employment Centres, and the number of Canada Employment Centres is in fact being reduced. And we also know the community-based employment approach is pretty well over.
Also, there is concern about administering the skills loans and grants program. Because it will involve a new financing arrangement, HRDC does not have a mandate - nor will they want to have a mandate - to administer the service of these loans. It will either require provincial administration or third-party arrangements, and what we're concerned about is that we're moving to spend more UI money on administration when we could use it for training programs for the unemployed. We believe national guidelines should be in place.
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The earning supplement is a new program. It's been tried as a pilot project through a self-sufficiency project for social assistance recipients in New Brunswick and in British Columbia. The initial evaluations show positive earning gains for these clients, but a few points are worth sharing with you.
To begin with, the program is very costly to administer. Also, it serves a much different client group from the UI claimants. Studies in the U.S., especially with U.S. welfare recipients, have shown an earning supplement program works best when it's combined with training. The board as a whole recommends caution when proceeding with this benefit.
The next tool is wage subsidy. All the evaluations and studies that have been done show wage subsidy programs work best when they serve a very targeted clientele, in many cases people with disabilities, and when they are - and this is critical - combined with training.
The board has two concerns. One, the wage subsidies may prompt employers to hire subsidized workers they would have hired anyway. OECD studies have shown the displacement effect for wage subsidy programs is very high. Most of the jobs would have been created anyway. Secondly, employers may prefer to hire workers with the subsidies, displacing others who are not subsidized.
The board members do not share the optimistic scenario for job creation that has been attributed to wage subsidy programs. There is a strong consensus that they don't see a wage subsidy program as promoting job creation.
There are two other tools: job creation and self-employment. The CLFDB believes there's a critical role for the federal government in job creation. That goes without mentioning. But they're not sure section 25 of UIDU is the only source of funds that should be promoting job creation.
In the past, when the board was making recommendations on the developmental uses of UI, they always capped the job creation funds at about $120 million and didn't see much evidence that job creation programs such as section 25 of UIDU had any kind of long-term impact on creating stable jobs.
The last tool I'll mention is self-employment. We did quite an extensive study of the self-employment program and at the end came to the agreement that we would recommend the government proceed with caution on this.
The recent evaluation done by the department did show positive employment and business survival rates, but a few points should be recognized. One, the positive rates were associated with male workers who had managerial experience, who had education and other labour market experience, and who were married. Their spouses were working, so there was other family income, or their spouses were not in the labour force and therefore were a source of unpaid help.
The board has recommended that a long-term evaluation of self-employment be done.
In conclusion, we would like to leave you with one message. We recommend that, relative to all the employment benefits that are suggested, the largest amount of funding from UI should be directed to training grants, and that the programs then allow the provinces, local communities and individual workers to acquire the skills they need to make a transition into stable employment.
Thank you for your attention. We welcome your questions.
The Chairman: Thank you for your remarks.
We're going to start with Mr. Dubé. Mr. McClelland, you'll have a question after that.
Mr. Allmand (Notre-Dame-de-Grâce): Excuse me. Could I just start by this clarification?
You just said ``the largest amount''. You mean the largest amount under the employment benefits.
Ms Burton: The employment benefits, yes.
Mr. Allmand: You said under the UI benefits. You didn't mean that.
Ms Burton: I meant employment benefits.
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Mr. Allmand: Right.
The Chairman: Their presentation, Mr. Allmand, deals with part II, I believe.
Ms Burton: Part II, employment benefits.
Mr. Allmand: I know that, but in the wording, you said the largest amount of UI should be used for training. You meant the largest amount of employment benefits -
Ms Burton: Should be used for training grants.
Mr. Allmand: Yes.
The Chairman: Does that satisfy you, Mr. Allmand?
Mr. Allmand: Yes.
Ms Burton: Thank you.
The Chairman: Wonderful. We'll move to Mr. Dubé.
[Translation]
Mr. Dubé (Lévis): Ms Bernard, at the beginning of your presentation, you objected to the fact that you could not get enough information to do a more detailed study. The Official Opposition had the same problem. We had a lot of trouble getting enough statistics, especially on the impact these measures would have on some sectors and especially on the beneficiaries. We also wonder about some of the data we received in extremis. But that isn't really my point.
At the beginning of your presentation, you stresses the word "consensus", which caught my attention. Did you know that that term is often used in Quebec when talking about manpower training? "Quebec's consensus" is used to refer to anyone who is part of the Société québécoise de développement de la main-d'oeuvre.
The Quebecers who reach the consensus want just one thing: to have all the federal money earmarked for labour market training transferred to Quebec because training, just like education, is a provincial jurisdiction.
I am sure my question does not surprise you. You saw me coming at a hundred miles an hour. You say you support national standards. You spoke of an integrated approach, of course, but you also wanted it to be a federal integrated approach. You also spoke of cooperation with the provinces.
Let me read you an excerpt from a letter, not from a Bloc Québécois member or a Sovereignist Minister, but from a former Liberal Minister, Mr. Bourbeau, who, three years ago, said, when speaking of cooperation between the federal government and Quebec:
- The success of these initiatives has always been moderate, even during times of great
cooperation between the two levels of government. The coordination mechanisms itself made it
more cumbersome and difficult to manage labour programs in Quebec.
You are the one who used the word "consensus". How does it fit in with the Quebec consensus on manpower training?
Ms Bernard: I used the word "consensus" when referring to the Canadian Labour Force Development Board.
Mr. Dubé: You no doubt have Quebec representatives. Have you consulted them? How can you say you have reached a consensus when you know that in Quebec - and I'm sure you are aware of this - , there is a huge consensus to advocate decentralization? I don't really understand your position.
Ms Bernard: Maybe we are on different wavelengths.
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I have learned to use certain words in business to get my message across. When I use the term "consensus", I meant there should be a system where all parties work together towards a common goal that will benefit those affected by the changes. Individually, we may be very interested in political discourse, but that should not affect the work of our Board. We feel all governments have a role to play in training in Canada.
There must be a clear vision, some direction, a strategy. There must be an integrated system that works, etc. And the operation and process must be affective.
[English]
I'm sorry; I lose my explanations when I'm speaking French. Can I switch to English?
The Chairman: Absolutely.
Ms Bernard: What I'm saying is that when you get to the process and administration level, all of this should be working together. I believe that our board, as Canadians representing all the partners, believes there's a role for all our governments to play. Where that role begins and ends is for the political processes to work out.
The Chairman: Thank you, Mr. Dubé. Mr. McClelland.
Mr. McClelland: Well done.
Ms Bernard: Thank you very much.
Mr. McClelland: I want to congratulate and thank you all for a very professional and very good presentation and some very useful documents, at least documents that I'm going to find useful. I wonder if it would be possible to get a bibliography or a list of participating people and the businesses to be appended to this report, because it would be of value to me to know just who makes up this particular group.
Ms Burton: We've brought that with us and I'll leave it with the clerk.
Mr. McClelland: Thank you.
Now I'd like to concentrate on the training aspect of it. It's a very positive aspect and I think very worthwhile. In other areas, other venues, it has been previously identified that there is a serious catch-22 aspect to the training in that you have to be attached to the labour market before you can get training. How do you get into the labour market unless you have training?
The whole notion of separating the funds available for training from the UI and making it paid out of general revenues would tend to make sense, particularly since the UI premiums, both employee and employer, are in a surplus position. It would also allow this to remove that serious catch-22, particularly as it affects persons with disabilities. Anybody who's not part of the labour market is in a catch-22 when they go into a UI office and they don't qualify for training. How do you get training? You know, it's that kind of thing. Would you care to comment on that?
I have one other question and then I'll be finished. In my personal experience and any business experience I've ever had, I understand and I concur totally with your notion that wage supplements and subsidies, business supplements and subsidies, are absolutely useless. The only reason people participate in it is because if they don't their competitor will, and it does displace workers who would have been hired in any event.
Ms Burton: On your question about CRF versus UI funds, the board has consistently said that the decision that a person needs training should be made independently of their eligibility for a program. Whether you're eligible for UI shouldn't determine the fact that you're the one who's going to get the training and that somebody who's not eligible for UI will not. Lots of times that eligibility for a program skews things so it's not the people who are in need of extra skills but the people who are eligible for the program who get the program funds.
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Mr. McClelland: Thank you, Mr. Chairman.
The Chairman: Thank you, Mr. McClelland, for being brief, concise and to the point.
Mr. Regan.
Mr. Regan (Halifax West): Thank you for coming this afternoon. I have several questions.
I believe one of you indicated that the skills, loans and grants aspect of the active measures are to be based on family income or eligibility for them, and that isn't my understanding. I had a look again at section 61 of the act, which provides the commission with authority to provide that kind of financial assistance, and it makes no mention - and I can't see any nearby - of family income being a requirement or a consideration in whether to provide those loans or grants.
My understanding is that the intention of the government is that the decision about who to give skill loans and grants and what portion should be a loan and what portion a grant would be dependent on the needs of the individual and the individual situation of each person.
My understanding is that the experience of the department has been that people who pay even a small portion of the cost of the training themselves, surprisingly enough, do better and are more successful in the training and afterwards than those who do not. The question is: do you feel people should contribute to the cost of their training? That's the first question.
Second, in terms of employment benefits, at the moment under the UI bill, in order to qualify for benefits like training, you have to be on UI. With the changes to this bill, it becomes available to a lot more people. Those who are on UI and those who have been on UI within the last three years can qualify, and those who have had maternity leave benefits in the last five years can qualify.
As I understand it, 45% of people on social assistance meet those qualifications, have been on UI within the last three years. So you are in fact widening the eligibility and the number of people who actually qualify for training under this kind of program. I think that's a positive step. I'd like you to comment on that.
Lastly, what you're suggesting to us is that your board should remain involved in making decisions about these active measures and how much to spend and where across the country. Why not, as this bill suggests, have those decisions made locally based on local needs and the local labour market and have people involved at the local level in making those kinds of decisions?
Ms Burton: The first question you asked is do we feel people should contribute.
We shouldn't assume that if somebody doesn't have the money to put into their training, they're not contributing. I'm thinking of apprentices. Traditionally the apprentices' education, the cost of their courses, has been paid out of the UI fund. But apprentices earn much lower wages. They're giving up income for the training they receive in the workplace and for their course costs. So if you asked an apprentice, he would say he is actively making a contribution to his training.
On the question of widening the eligibility, you're right. Now, with the new rules, it will capture a lot of the people who are on provincial welfare programs because they've fallen off the UI rolls. That the board would applaud.
But there are people who, as Mr. McClelland said, haven't made that attachment to the labour market yet. Those are people who are not eligible for UI and therefore will not be eligible for training. They are women who are returning to the labour market after a long period of absence, new immigrants, etc.
.1705
On the question about local level, the board has been very involved in trying to promote community boards where community partners, principally the labour market partners, would be involved in making decisions locally. This is something we support, because 80% of the action in the labour market occurs at the local level. That's where employers recruit the skilled workers they need and that's where people work, learn and train. As Jean said in her introductory remarks, that was something we saw in the bill we came to the committee before to endorse and we were pleased to see it there.
The Chairman: Mr. Nault.
Mr. Nault (Kenora - Rainy River): Thank you, Mr. Chairman.
Ms Dassinger: Can I speak for a minute?
The Chairman: So you have further answers.
Ms Dassinger: Yes. Just on the question of individuals making a contribution, I would like to support what Lenore said in terms of people making contributions that are probably not immediately evident in terms of putting hard cash on the table. Also, when you require contributions you are creating differential access to low-income earners because people who come out of low-paying employment who have not had an opportunity perhaps to save funds are going to have much more difficulty accessing those loans and grants. I think that's pretty evident.
In terms of local decision-making, I think it is a good concept, but it requires structure and process. If that were not the case, we would probably govern by town hall instead of by parliamentarians. I think there is some logic to having a process and it's not clear to us what that process is going to be.
We, as a board, have long supported a coherent infrastructure of labour market boards, beginning with a national board, to the provincial boards and local boards. It's a very coherent kind of approach to simply say to a community that without providing them - and I shudder to use this term - with the tools.... To be able to manage decision-making in a very positive way can open us up to ad-hockery and a real patchwork of different communities being able to make good decisions. The effect of those who are not able to make good decisions will be on the recipients.
Finally, I think there is a great deal of value to information-sharing at the national level. We know that from sharing information in our provincial reports. It's very enlightening to know some of the progressive and innovative things other provinces are doing. Without that opportunity we may be duplicating efforts.
The Chairman: Thank you. We'll go now to Mr. Nault.
Mr. Nault: I thank you very much for coming.
I'm enjoying Miss Dassinger's other hat. It's very interesting compared to her previous hat, since I used to wear her other hat in my previous life.
One thing that intrigues me the most about this whole debate - and you folks are right in the middle of it, even though a lot of commentators, especially the media, haven't picked up on it - is this whole jurisdictional battle between the provinces and the federal government. In effect, it will have a dramatic impact on our abilities to compete in the future. So far, most commentators have bought into the fact that the provinces do a better job than the feds, therefore they should get all the training and the feds should get out. That's the perception we are hearing day in and day out.
Quite frankly, that's not the perception I get when I ask the constituents in my riding what they think the federal government should do. They strongly believe we should be strongly involved in training, education, and social services. They believe we could have a coordinated effort, as we do with health care.
The provinces are interested in having the federal government get out of training. Quite frankly, I think in some cases that's why this legislation is skewed in a way that says we're just going to go as far as we can under our jurisdiction and we can't go any further.
Generally, I'd like to know how you foresee us getting some national standards out of this whole nonsense we're involved in. It's not only with provinces like Quebec. Alberta and Ontario are now talking all sorts of nonsense. It's getting to the point now, quite frankly, where those of us who are strong federalists believe that what the people need is a good, comprehensive training apparatus of some sort, and you're involved in that. How do you see us doing that under a particular federation we see ourselves evolving under?
Ms Burton: Boy! Did you save the hardest questions for the end of day?
To begin with, we've done training in the past through government-to-government seat purchases. If we say that hasn't perhaps been the most effective way to undertake the training cooperation between the federal and provincial governments.... It hasn't been effective, but that doesn't mean that training doesn't work, or that if provinces are going to have a key role in providing the training infrastructure in their community colleges to support the training that a role for the federal government, obviously, for the UI fund, which is a national program, is going to be funding the training....
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Currently, under the student loans and grants program, there are federal guidelines in place. The program is administered by the provinces. Individuals then take their eligibility and are able to access the training in post-secondary institutions.
You know what they say about angels and fools. It would be impossible for the board to step in to try to solve the constitutional question. We'll leave it to those who are far wiser than we.
But to support training financially and in the sense of a training culture and having training high on the public agenda -
Mr. Nault: Based on that, though, the question I asked you is very specific. I'm not saying that we shouldn't transfer dollars to the provinces to administer the programs. I'm concerned about this patchwork that doesn't have standards. If I decide, as an Ontarian, that I want to work in Quebec, quite frankly, under the present system, in most industries, I can't. They won't let me, which is a problem. But then, in some cases, my standards may not be high enough if I allow this to sort of evolve in a patchwork fashion.
The whole objective, based on mobility, which we talk about, is that you should be able to work anywhere in your country and have national standards that say that these are your qualifications. So if you meet them, you can go work on a construction site in B.C. or anywhere else. How do I do that if the provinces continue to tell us to butt out? That sounds like a nice thing in the media, but quite frankly it does a disservice to the working men and women we're trying to serve.
So I'm trying to find out how you do that and sort of make everybody happy at the same time. Let's do the job and be happy, I suppose, is the theme here.
That's my last foray, Mr. Chairman. I'll leave that difficult question with them.
A voice: Maybe you should leave this on the floor.
Ms Burton: The board would say that part of the answer is having your non-government, private sector partners involved. We have in place emerging sector councils that are trying to put in place occupational and skill-set standards for their sectors and apply them in their industries where that industry exists.
As Janet mentioned earlier, we envisioned provincial and local boards - the SQDM is extremely active and a part of the consensus that you referred to earlier - having non-government partners and business and labour involved in setting those occupational standards and in working with the education community on credentialing. That's something on which the board has been doing a lot of work: trying to put in place agreed-on guidelines for the purchase of training and working with community colleges, the post-secondary sector, to do that. That's our best shot at it now.
Mr. Nault: Thank you.
The Chairman: Any further questions? Ms Lalonde.
[Translation]
Mrs. Lalonde: I would like to hear a little bit more about learning. Your main recommendation is to put money into that. I believe you used the English term "training". Is that correct?
[English]
Ms Burton: Yes.
[Translation]
Mrs. Lalonde: Training and the French term "formation", are not the same thing. Training is more learning.
[English]
You see the problem with translation. I should speak English, but I have to stick to my principles.
[Translation]
I have to speak French, even though it is longer. In French, you use the term "formation" in your last recommendation, the most important one. You say:
- relative to the other employment benefits proposed, the largest amount of funding should be
directed for training grants.
I have the English version in front of me which says: "...be directed for training grants".
Why do you use two words that I think have different meaning. In my view "training" means learning, business training, working with machines. To me, that is what training means. "Formation", is much more broader than that. The word includes training, but also other types of learning. I know that in the real world, some would like to see more training and others think we should focus more on general education. I would like to hear your views on that.
[English]
So what is your recommendation?
Ms Bernard: What she's saying is in the French translation. This relates really to apprenticeship. That's the absolute sort of... [Technical Difficulty - Editor].
Ms Burton: We use the words ``training grants'' because we're referring to the skills, loans and grants program. Perhaps we should have said ``skills grants''.
Ms Bernard: Yes.
[Translation]
Mrs. Lalonde: And in French...
Ms Bernard: You are right when you say that it is related to learning. You say the word used in French has a broader definition. Frankly, this is the first time... Our Board is quite large and many people do express their opinion, and no one has ever said there is a difference between those two words. I think the words we use in English mean what you are saying in French.
[English]
The Chairman: Do you have any further questions, Madame Lalonde?
[Translation]
Mrs. Lalonde: So you are not recommending loans; you are recommending training grants.
Ms Bernard: Yes.
Mrs. Lalonde: Thank you.
Mr. Dubé: What just happened is a clear example of the problem with enforcing national standards in Quebec and in the rest of Canada, in French and in English. We have just witnessed the problems that can pose. All committee members have just experienced that first hand.
[English]
The Chairman: As long as we don't forget the big picture, which is to give people the skills required to find work.
Mr. Regan.
[Translation]
Mr. Regan: I wonder what the European Community does to come to any agreement. It must be a major challenge for them, but somehow they manage.
[English]
I want to raise a point about the wage subsidy issue. Someone suggested to me that one way to maximize the benefit of that program and the effect of it would be to front-end load it, so to speak. In other words, often if someone is starting at a company, the biggest cost to the employer is in the early stages, the first couple of months, for example, of that person's employment, where the big training is and the lowest productivity, because the person hasn't learned to do it.
This person suggested to me that our wage subsidies should be focused so that the majority of the subsidy is at the front and then it declines later on, in let's say the first six months of employment or whatever. What do you think of that idea?
.1720
Let me just clarify that. This person suggested, for example, that perhaps three-quarters or 60% of the subsidy would be paid in the first three months or the first third of the period, then 35%, and then 15% in the last three, that kind of thing. I suppose you haven't authority to discuss it, but I'd like your reaction.
Ms Bernard: Here I would have to speak as a business person who has recently retired, and not as a board member.
Given that business generally doesn't feel comfortable with wage subsidies, I would hesitate to jump on a quick fix. I would attempt to go back and rethink the thing and see if there wouldn't be a better way of doing it. Quite candidly, given that I haven't worked down into the details of this, it would be presumptuous of me to even suggest an example here.
Mr. Regan: Fair enough.
The Chairman: Thank you very much. What I really appreciate about your brief is the focus you've given to a clause of the bill that so far has really not gotten a fair hearing from other presenters, I don't think. So, on behalf of the committee, I would like to express once again our warmest and sincerest gratitude for what I consider a very good presentation. Thanks very much.
Ms Burton: Thank you, Mr. Chairman.
Ms Bernard: Thank you.
The Chairman: I would like to inform the committee members that tomorrow we will be starting the hearings at 3:30 in Room 371, West Block. We will hear from the Movement for Canadian Literacy and One Voice - The Canadian Seniors Network.
The meeting is adjourned.