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MINUTES OF PROCEEDINGS
 
Meeting No. 69
 
Tuesday, June 7, 2005
 

The Standing Committee on Finance met in a televised session at 6:52 p.m. this day, in Room 237-C Centre Block, the Chair, Massimo Pacetti, presiding.

 

Members of the Committee present: Rona Ambrose, Don H. Bell, Guy Côté, Charles Hubbard, Yvan Loubier, Hon. John McKay, Hon. Maria Minna, Massimo Pacetti, Brian Pallister, Charlie Penson, Monte Solberg and Judy Wasylycia-Leis.

 

Acting Members present: Marlene Catterall for Don H. Bell, Denise Poirier-Rivard for Guy Côté and Lloyd St. Amand for Maria Minna.

 

In attendance: Library of Parliament: June Dewetering, Principal; Alexandre Laurin, Analyst.

 

Appearing: Hon. John McKay, Parliamentary Secretary to the Minister of Finance.

 

Witnesses: Department of Finance: Peter DeVries, General Director, Deputy Minister's Office.

 
Pursuant to the Order of Reference of Thursday, May 19, 2005, the Committee resumed consideration of Bill C-43, An Act to implement certain provisions of the budget tabled in Parliament on February 23, 2005.
 

The Hon. John McKay and Peter Devries answered questions.

 

The Committee resumed its clause-by-clause study of the Bill.

 

Clause 101 was negatived by a show of hands: YEAS: 4; NAYS: 7.

 

Clauses 102 to 126 negatived by a show of hands: YEAS: 4; NAYS: 7.

 

By unanimous consent, Clauses 127 to 138 inclusive carried.

 

By unanimous consent, Clauses 139 to 148 inclusive carried on division.

 

By unanimous consent, Clauses 149 to 154 inclusive carried.

 

On Clause 155,

Yvan Loubier moved, — That Bill C-43, in Clause 155, be amended by replacing lines 1 to 36 on page 96, lines 1 to 43 on page 97 and lines 1 to 25 on page 98 with the following:

155. The Employment Insurance Act is amended as set out in Schedule 1 to this Act.

 

The Chair ruled the proposed amendment inadmissible because it was beyond the scope of the Bill, as provided on page 654 of House of Commons Procedure and Practice.

 

The Chair ruled that the following amendment was consequential to the previous amendment and therefore it was also inadmissible:

That Bill C-43 be amended by adding after line 14 on page 110 the following new schedule:

SCHEDULE 1

(Section 155)

1. (1) Subsection 4(1) of the Employment Insurance Act is replaced by the following:

4. (1) For the purposes of subsection 14(1.1), section 17, subsection 82(2) and sections 95 and 145, the maximum yearly insurable earnings is $41,500 (indexed annually) until the amount calculated in accordance with subsection (2) for a year, before rounding down under subsection (4), exceeds $41,500 (indexed annually), in which case the maximum yearly insurable earnings for that year is that amount, rounded down under subsection (4).

(2) Subsection 4(3) of the Act is replaced by the following:

(3) For years subsequent to the year in which the maximum yearly insurable earnings exceeds $41,500 (indexed annually), before rounding down under subsection (4), the maximum yearly insurable earnings is the maximum yearly insurable earnings for the preceding year, before rounding down under subsection (4), multiplied by the ratio that the average for the twelve month period ending on June 30 in that preceding year of the Average Weekly Earnings for each month in that twelve month period bears to the average for the twelve month period ending twelve months prior to June 30 of that preceding year of the Average Weekly Earnings for each month in that twelve month period ending twelve months prior to June 30 of that preceding year.

(3) Section 4 of the Act is amended by adding the following after subsection (5):

(6) For the purposes of this section, “$41,500 (indexed annually)” means $41,500 indexed annually, beginning in 2005, to the Consumer Price Index published by Statistics Canada under the authority of the Statistics Act.

2. Paragraph 5(3)(b) of the Act is replaced by the following:

(b) if the employer is, within the meaning of that Act, related to the employee, they are deemed to deal with each other at arm’s length unless the Minister of National Revenue is satisfied that, having regard to all the circumstances of the employment, including the remuneration paid, the terms and conditions, the duration and the nature and importance of the work performed, it is reasonable to conclude that they would not have entered into a substantially similar contract of employment if they had been dealing with each other at arm’s length.

3. (1) The definition “waiting period” in subsection 6(1) of the Act is repealed.

(2) The definition “disentitled” in subsection 6(1) of the Act is replaced by the following:

“disentitled” means not entitled under section 18, 21, 31, 32, 33, 36, 37, 49 or 50 or under the regulations;

4. Subsections 7(2) to (5) of the Act are replaced by the following:

(2) An insured person qualifies if the person

(a) has had an interruption of earnings from employment; and

(b) has had during their qualifying period at least 360 hours of insurable employment.

5. (1) Subsections 7.1(1) to (3) of the Act are replaced by the following:

7.1 (1) The number of hours that an insured person requires under section 7 to qualify for benefits is increased to the applicable number provided in paragraphs (a) to (d) if the insured person accumulates one or more violations in the 260 weeks before making their initial claim for benefit:

(a) 525 hours in the case of a minor violation;

(b) 630 hours in the case of a serious violation;

(c) 735 hours in the case of a very serious violation; and

(d) 850 hours in the case of a subsequent violation.

(3) A violation may not be taken into account under subsection (1) in more than two initial claims for benefits if the insured person qualified for benefits with the increased number of hours in each of those claims.

6. Section of 13 of the Act is repealed.

7. Subsection 14(1) of the Act is replaced by the following:

14. (1) The rate of weekly benefits payable to a claimant is 60% of their weekly insurable earnings.

8. (1) Subsection 19(1) of the Act is repealed.

(2) The portion of subsection 19(2) of the Act before paragraph (a) is replaced by the following:

(2) Subject to subsections (3) and (4), if the claimant has earnings during a week of unemployment, there shall be deducted from benefits payable in that week the amount, if any, of the earnings that exceeds

9. Section 20 of the Act is replaced by the following:

20. If a claimant is disentitled from receiving benefits for a working day in a week of unemployment, an amount equal to 1/5 of their weekly rate of benefits for each such working day shall be deducted from the benefits payable for that week.

10. Subsection 22(4) of the Act is repealed.

11. Subsection 23(5) of the Act is repealed.

12. Subsection 23.1(7) of the Act is repealed.

13. Subsection 24(1) of the Act is amended by adding the word “and” at the end of paragraph “(g)” and by repealing paragraph (h).

14. Subsection 28(2) of the Act is replaced by the following:

(2) Subject to subsections (3) to (5), the weeks of disqualification are to be served during the weeks for which benefits would otherwise be payable if the disqualification had not been imposed and, for greater certainty, the length of the disqualification is not affected by any subsequent loss of employment by the claimant during the benefit period.

15. Subsection 30(2) of the Act is replaced by the following:

(2) The disqualification is for each week of the claimant’s benefit period and, for greater certainty, the length of the disqualification is not affected by any subsequent loss of employment by the claimant during the benefit period.

16. (1) Paragraph 54(a) of the Act is repealed.

(2) Paragraph 54(f.6) of the Act is repealed.

17. Sections 66 and 66.1 of the Act are replaced by the following:

66. (1) Not later than November 30 in each year, the Commission shall set the premium rate that the Commission considers will, to the extent possible, over a business cycle,

(a) serve the best interests of the contributors and beneficiaries under the employment insurance system;

(b) ensure that there is enough revenue to pay the expenses authorized to be charged to the Employment Insurance Account;

(c) maintain stable rate levels; and

(d) ensure that the difference between the assets of the Employment Insurance Account and its liabilities does not exceed fifteen billion dollars.

(2) On the first day of October in each year, the Commission shall cause a report to be sent to the Minister containing

(a) the reasons for setting the premium rate for the year;

(b) any change to the amount of benefits that the Commission considers will, to the extent possible, over a business cycle,

(i) ensure that there is enough revenue to pay the expenses authorized to be charged to the Employment Insurance Account, and

(ii) maintain stable rate levels;

(c) a detailed description of the assets of the Commission on the first day of September in each year;

(d) a detailed description of the amounts that have been paid into or paid out of the Employment Insurance Account since the previous report;

(e) an estimate of the amounts to be paid into the Employment Insurance Account under this Act for the following year, calculated on the basis of the premium rate set by the Commission in the report;

(f) an estimate of the amounts to be paid out of the Employment Insurance Account under this Act for the following year, calculated on the basis of the amount of benefits to be paid set by the Commission in the report;

(g) any recommendations that the Commission considers necessary for the improvement of the employment insurance system, including amendments to Acts, regulations and policies with respect to employment insurance; and

(h) any other information that the Commission considers necessary.

(3) The Minister shall cause a copy of the report to be laid before each House of Parliament on any of the first five days on which that House is sitting after the Minister receives it.

18. Section 67 of the Act is replaced by the following:

67. Subject to section 70, a person employed in insurable employment shall pay, by deduction as provided in subsection 82(1), a premium equal to their insurable earnings multiplied by the premium rate set under section 66, 66.2 or 66.3, as the case may be.

19. Sections 71 to 76 of the Act are replaced by the following:

71. There shall be established in the name of the Commission an account to be known as the Employment Insurance Account.

72. (1) There shall be paid into the Employment Insurance Account

(a) all amounts credited to the Employment Insurance Account — as that Account exist-ed immediately prior to the day on which this section comes into force — and not charged to that Account for the purposes of this Act on the coming into force of this section;

(b) all amounts received under Parts I and III to IX, as or on account of premiums, fines, penalties, interest, repayment of overpaid benefits and benefit repayment;

(c) all amounts collected by the Commission for services rendered to other government departments or agencies or to the public;

(d) all amounts received on account of principal or interest on loans made by the Commission under Part II or as repayment of overpayments made by the Commission under that Part;

(e) all premiums required to be paid by Her Majesty in right of Canada as employer’s premiums for persons employed in insurable employment by Her Majesty in right of Canada;

(f) all amounts paid into the Consolidated Revenue Fund that are

(i) received as or on account of penalties imposed under section 38, 39 or 65.1 and repayments of overpaid benefits, except interest and penalties on benefit repayment,

(ii) received on account of principal or interest on loans made by the Commission under Part II,

(iii) received as repayments of overpayments by the Commission under section 61 for employment benefits and support measures authorized by Part II,

(iv) received as repayments of overpayments by the Commission under agreements entered into under section 63, or

(v) received as interest under section 80.1;

(g) any amount provided out of the Consolidated Revenue Fund to the Commission by the Minister of Finance under section 74;

(h) any amount provided out of the Consolidated Revenue Fund appropriated by Parliament intended for any purpose related to employment insurance and administered by the Commission; and

(i) any other amounts paid into the Consolidated Revenue Fund or to the Commission under this Act for any purpose related to employment insurance and administered by the Commission.

(2) All amounts paid into the Employment Insurance Account

(a) shall become part of the assets of the Commission; and

(b) shall, as they are paid into the Account, be deposited with a financial institution within the meaning of the Financial Consumer Agency of Canada Act, a body corporate to which the Trust and Loan Companies Act applies, or an association to which the Cooperative Credit Associations Act applies.

(3) The Commission shall

(a) manage the amounts paid into the Employment Insurance Account in the best interests of the contributors and beneficiaries under the employment insurance system; and

(b) subject to section 73, invest its assets with a financial institution, body corporate or association referred to in paragraph (2)(b) with a view to achieving a maximum rate of return without undue risk of loss, having regard to the factors that may affect the funding of the employment insurance system provided for in this Act and the ability of the Commission to meet its financial obligations.

73. At the request of the Minister of Finance, the Commission may extend a loan to Her Majesty in right of Canada to be repaid on such terms and conditions, including interest, as the Commission may establish.

74. (1) Where the assets of the Employment Insurance Account are not sufficient for the payment of the amounts that the Commission is liable to pay under this Act, the Minister of Finance shall, at the request of the Commission, extend a loan from the Consolidated Revenue Fund to the Commission in an amount sufficient to meet the payments.

(2) The Minister of Finance shall set an interest rate and terms and conditions for the repayment of the loan that are more advantageous to the Commission then those that the Commission can obtain from a financial institution.

20. Sections 77 and 78 of the Act are replaced by the following:

77. (1) There shall be paid out of the Employment Insurance Account

(a) all amounts paid as or on account of benefits under this Act;

(b) all amounts paid under section 61 for employment benefits and support measures authorized by Part II;

(c) all amounts paid under paragraph 63(a);

(d) the costs of administering this Act, including administration costs paid under section 62 or paragraph 63(b);

(e) any amount paid by the Commission to Her Majesty in right of Canada under section 73; and

(f) any other amount to be paid by the Commission under this Act, including all amounts paid by the Commission under an agreement with the government of a province.

(2) Despite any other Act of Parliament, amounts mentioned in paragraph (1)(a) shall be paid by special warrants drawn on and issued by the Commission by electronic means or bearing the printed signature of the Chairperson and Vice-Chairperson of the Commission, and amounts mentioned in paragraphs (1)(b) and (c) may be paid by the special warrants.

(3) The special warrants are negotiable without charge at any financial institution in Canada.

21. Section 80 of the Act is repealed.

22. Subsections 96(4) and (5) of the Act are replaced by the following:

(4) If a person has insurable earnings of not more than $3,000 in a year, the Minister shall refund to the person the aggregate of all amounts deducted as required from the insurable earnings, whether by one or more employers, on account of the person’s employee’s premiums for that year.

(5) If a person has insurable earnings of more than $3,000 in a year, but the insurable earnings minus the aggregate of all amounts mentioned in subsection (4) are less than 3,000, the Minister shall refund to the person an amount calculated in accordance with the following formula if that amount is more than 1:

$3,000 - (IE - P)

where

P is the aggregate of all deducted amounts mentioned in subsection (4); and

IE is the person’s insurable earnings in the year.”

 

On Clause 155,

Monte Solberg moved, — That Bill C-43, in Clause 155, be amended by replacing line 8 on page 96 with the following:

“provided by the experts in budgetary estimates designated by the standing committee of the House of Commons that normally considers matters related to finance under”

 

After debate, the question was put on the amendment of Monte Solberg and it was negatived.

 

By unanimous consent, it was agreed, — That the result of the vote on a previous amendment be applied to the following three (3) amendments which are therefore also negatived:

That Bill C-43, in Clause 155, be amended by replacing line 22 on page 96 with the following:

“information provided by the experts in budgetary estimates designated by the standing committee of the House of Commons that normally considers matters related to finance”

That Bill C-43, in Clause 155, be amended by replacing line 9 on page 97 with the following:

“experts in budgetary estimates designated by the standing committee of the House of Commons that normally considers matters related to finance under section 66.2,”

That Bill C-43, in Clause 155, be amended by replacing line 27 on page 97 with the following:

66.2 The experts in budgetary estimates designated by the standing committee of the House of Commons that normally considers matters related to finance shall, on or”

 

On Clause 155,

Monte Solberg moved, — That Bill C-43, in Clause 155, be amended by replacing line 15 on page 96 with the following:

“before August 15 of the previous year, any”

 

The question was put on the amendment of Monte Solberg and it was negatived.

 

By unanimous consent, it was agreed, — That the result of the vote on the previous amendment be applied to the following amendment which is therefore also negatived:

That Bill C-43, in Clause 155, be amended by replacing line 33 on page 96 with the following:

“year, on or before August 15 of the previous”

 

Clause 155 carried.

 

On Clause 155.1,

Yvan Loubier moved, — That Bill C-43 be amended by adding after line 25 on page 98 the following new clause:

155.1 Schedule I to the Act is replaced by Schedule I set out in Schedule 2 to this Act.

 

The Chair ruled that the following amendment was consequential to the previous amendment and therefore it was also inadmissible:

That Bill C-43 be amended by adding after line 14 on page 110 the following new schedule:

SCHEDULE 2

(Section 155.1)

 
Yvan Loubier moved, — That Bill C-43, in Clause 156, be amended by replacing lines 26 to 33 on page 98 with the following:

156. Section 23 of the Department of Human Resources Development Act is replaced by the following:

23. (1) There is hereby established a Commission to be known as the Canada Employment Insurance Commission.

(2) The Commission shall be composed of 4 commissioners, as follows:

(a) a Chairperson;

(b) a Vice-Chairperson;

(c) a person representing employees; and

(d) a person representing employers.”

 

The Chair ruled the proposed amendment inadmissible because it was beyond the scope of the Bill, as provided on page 654 of House of Commons Procedure and Practice.

 

Clause 156 carried on division.

 
Yvan Loubier moved, — That Bill C-43 be amended by adding after line 33 on page 98 the following new clause:

156.1 The Act is amended by adding the following after section 24:

24.1 (1) The Governor in Council shall appoint the commissioners who will represent employees and employers from a list of nominees provided by associations representing employers and employees in Canada.

(2) The Governor in Council appoints the Vice-Chairperson from among the Deputy Ministers or the Associate Deputy Ministers of the Department of Human Resources Development.

24.2 (1) The Chairperson shall be appointed by the House of Commons on the recommendation of the Minister following consultation of the commissioners representing employees and employers.

(2) The Chairperson shall not vote, but shall cast a deciding vote in case of an equal division.”

 

The Chair ruled the proposed amendment inadmissible because it was beyond the scope of the Bill, as provided on page 654 of House of Commons Procedure and Practice.

 

Clause 157 carried on division.

 

On Clause 158,

Yvan Loubier moved, — (b) by replacing lines 12 to 42 on page 99 and lines 1 to 6 on page 100 with the following:

other Act, the other Act is amended by adding the following after section 28:

28.1 Despite section 28, the Commission may, as it considers necessary for the purpose of assisting it in setting the premium rate under section 66 of the Employment Insurance Act, contract for the services of persons who have specialized knowledge and may fix and pay the remuneration and expenses of those persons.

(3) On the later of the coming into force of section 156 of this Act and section 20 of the other Act, subsections 20(1) and (2) of the other Act are replaced by the following:

20. (1) There is hereby established a Commission to be known as the Canada Employment Insurance Commission.

(2) The Commission shall be composed of four commissioners, as follows:

(a) a Chairperson;

(b) a Vice-Chairperson;

(c) a person representing employees; and

(d) a person representing employers.

(4) On the later of the coming into force of section 156.1 of this Act and section 21 of the other Act, the other Act is amended by adding the following after section 21:

21.1 (1) The Governor in Council shall appoint the commissioners who will represent employees and employers from a list of nominees provided by associations representing employees and employers in Canada.

(2) The Governor in Council shall appoint the Vice-Chairperson from among the Deputy Ministers or the Associate Deputy Ministers of the Department of Human Resources and Skills Development.

21.2 (1) The Chairperson shall be appointed by the House of Commons on the recommendation of the Minister following consultation of the commissioners representing employees and employers.

(2) The Chairperson shall not vote, but shall cast a deciding vote in case of an equal division.

(5) If section 28 of the other Act comes into force before section 157 of this Act, then, on the day on which this Act receives royal assent, section 157 of this Act is repealed.

That Bill C-43, in Clause 158, be amended

(a) by replacing line 4 on page 99 with the following:

158. (1) Subsections (2) to (5) apply if

 

The Chair ruled the proposed amendment inadmissible because it was beyond the scope of the Bill, as provided on page 654 of House of Commons Procedure and Practice.

 

On Clause 158,

Monte Solberg moved, — That Bill C-43, in Clause 158, be amended by replacing line 37 on page 99 with the following:

“information provided by the experts in budgetary estimates designated by the standing committee of the House of Commons that normally considers matters related to finance”

 

After debate, the question was put on the amendment of Monte Solberg and it was negatived.

 

Clause 158 carried on division.

 

By unanimous consent, Clauses 159 to 172 inclusive carried on division.

 

The Short Title carried on division.

 

The Title carried.

 

At 7:54 p.m., the Committee adjourned to the call of the Chair.

 



Richard Dupuis
Clerk of the Committee

 
 
2005/06/15 4:04 p.m.