Mr. Speaker, it is pleasure to see the bill proceed to this stage.
I am glad to have the opportunity to rise to speak to this important milestone in bringing special benefits under employment insurance to self-employed Canadians. This is one of the most significant enhancements to the EI program in the last decade. It has been a long time coming for self-employed Canadians.
This fulfills a pledge by our Conservative government in 2008 to bring forward EI maternity and parental benefits to self-employed Canadians. A year ago, the said that self-employed Canadians and those who one day hoped to be should not have to choose between starting a family and starting a business because of government policy. They should be able to pursue their dreams both as entrepreneurs and as parents.
In fact, we have surpassed this commitment by also including EI sickness and compassionate care benefits. We do this because self-employed workers deserve to have access to these special benefits. We do this because extending access to special benefits is the fair and the right thing to do.
I think every member of the House recognizes the importance of the self-employment sector in the daily functioning of our economy and of our society.
In over 15% of our labour market self-employed entrepreneurs are a growing influence, not only because of their significant numbers but also because of the wealth of their ideas, innovation and jobs that they generate and create from time to time and year by year.
The self-employed form a diverse group, with widely varying situations and incomes. They include people with small businesses, farmers, construction workers, professionals, tradesmen, those in sales and those who own a home business among many others. Despite their importance, these entrepreneurs do not have the support they need when it comes to the important events of life, such as the birth of a child, adoption, illness and care of a gravely ill family members.
These sorts of events can have a significant impact on the self-employed who have little or no income protection. If they do not work, they do not make any money. Right now, they do not have any of the same EI support measures that Canadians employed by others do.
We are going to change that by implementing a voluntary system. We are following through on our commitment to self-employed Canadians.
It should come as no surprise that our self-employed have long asked for this support. In fact, a large majority of the self-employed want access to these benefits. Recent public opinion research shows that a majority of self-employed Canadians would like to gain access to EI maternity, parental, sickness and compassionate care benefits.
Eighty-six per cent of self-employed Canadians support access to sickness benefits, 84% support access to compassionate care benefits and 64% support access to maternity and parental benefits. The message from self-employed Canadians is clear.
Our Conservative government has listened and we are taking action. We recognize the challenges facing working Canadians as they deal with the dual pressure of holding down jobs and caring for their families. We recognize that nearly a third of all self-employed are women of child bearing age.
Our government knows that families are the foundation of our society. The bill is yet another example of how our government is providing support and choice to Canadian families and people recognize that.
Catherine Swift, president of the Canadian Federation of Independent Business, understands the benefits of this bill. On November 4, she said in the Montreal Gazette:
—the initiative fills a “glaring gap” for people running their own business, especially women....We have a lot of women members. They'd like to have a child and yet abandoning your business is not (an option).
We do not want the self-employed to become discouraged about starting families by ever present financial risks associated with running their own business. We certainly do not want their families to suffer because of unequal access to supports that are widely available to most other Canadians.
Given the strength of our country's economy, especially the strength it gets from our self-employed and their businesses as a country, we cannot afford to leave these people out in the cold. Stronger entrepreneurship means a stronger Canada. We need their skills, their experience and their energy and creativity to meet the challenges to come. This is why our government believes these entrepreneurs deserve to have access to EI special benefits.
We also recognize that there is an increasing number of self-employed Canadians who are taking care of elderly parents while also raising young children. The government believes that these entrepreneurs should not have to choose between their business and family responsibilities, whether those responsibilities are for newborns or parents, the young or the elderly.
By giving our self-employed the option for increased income protection, we are allowing individuals who might otherwise have to leave the workforce to stay fully engaged, to stay productive and to keep contributing to this great country of Canada. Not only does this benefit them but it also means that they can continue to make valuable contributions to their communities and the economy.
We are stimulating entrepreneurship and making self-employment more appealing to all Canadians. That is why we are extending access to EI special benefits for the self-employed and why we firmly believe that it is the fair, responsible and right thing to do.
These benefits are significant. They are as follows: 15 weeks of maternity benefits for a birth mother; 35 weeks of parental benefits for parents to care for their newborn or newly adopted child; up to 15 weeks of benefits for individuals who are unable to work because of sickness, injury or quarantine; and a maximum of six weeks to provide care or support to a terminally ill relative.
Under the proposed legislation, self-employed Canadians would voluntarily opt into the program and pay EI premiums on an ongoing basis for at least one year before receiving benefits. To access EI special benefits, they would need to have earned a minimum of $6,000 in self-employed earnings over the preceding calendar year.
The self-employed could opt out of the program at the end of any taxation year, as long as they have never claimed benefits. If they have claimed benefits, they would have to contribute from their self-employed earnings for as long as they are self-employed.
Self-employed Canadians who opt into the EI program would pay the same premium rate as salaried employees. They would not be required to pay the employer portion of premiums, in recognition of the fact that they would not have access to EI regular benefits.
In Quebec, self-employed residents already have access to maternity and parental benefits through the Quebec parental insurance plan. Now the federal government would provide the self-employed in Quebec with the opportunity to gain access to the sickness and compassionate care benefit under the EI program.
Should they choose to take advantage of the program, they would pay the same EI premium rates as employers in Quebec. Rates there have already been adjusted downward to take into account the existence of a provincial maternity and parental benefit plan.
I would like to bring to light an endorsement from an organization representing an important group of self-employed people, the realtors. Dale Ripplinger is the president of the Canadian Real Estate Association. On November 4 his organization issued a press release that it “applauds the government for taking action to address many of the inequities in the Employment Insurance program faced by self-employed REALTORS”.
The organization went on to say, “This is an important step to level the benefits playing field for self-employed Canadians. We look forward to working with the government to ensure access to EI benefits for REALTORS, which can help balance career and family life”.
I also have a quote from the executive director of the Grain Growers of Canada, Richard Phillips. In a news release on November 3, 2009, he said that the legislation is “very welcome. This has huge potential for quality of life in rural Canada”. He continued, “This could be the difference as whether one member of the family has to seek off farm employment because now families will have a choice. With over 200,000 farms in Canada, if even 10% of them choose to take advantage of these programs, this could help ensure another 20,000 more young families staying on the land”.
It is this kind of thing that allows those who are self-employed and who contribute to our economy to get some benefits that are important to them and their families and ensure that they can continue to pursue their careers and jobs.
This legislation is the most significant enhancement to the EI program in the last decade. It is in keeping with our Conservative government's commitment to make the EI program responsive to the needs of Canadian workers. It is just one of the many enhancements that we have already made to the EI program.
We added five extra weeks of EI regular benefits, helping over 365,000 Canadians while they search for new employment.
We enhanced the work sharing program, protecting the jobs of about 165,000 or more Canadians.
We made unprecedented investments in training to help Canadians receive the skills training they need to enter a new career.
Our government froze EI premiums for two years, which helped employers create more jobs and also kept more money in the pockets of employees.
We added a $60 million investment in the targeted initiative for older workers to help older workers, who obviously have invaluable knowledge and mentoring potential, to transition into a new job.
We also passed legislation recently to provide five to twenty weeks of additional EI support benefits for long-tenured workers, who have worked hard, have paid premiums and are looking to transition into a new job.
Most recently, of course, we have introduced this program, which has been very well received by many.
Our government is protecting jobs. We are helping people get trained and upgraded for jobs. Now we have made changes that allow more flexibility for employers' recovery plans.
We have had the career transition assistance initiative, which has been providing assistance to long-tenured workers who need training to transition to a new industry or occupation. The support under Bill for long-tenured workers was certainly something that was well received.
All of these ventures demonstrate that our Conservative government continues to make responsible choices to support Canadians now, to support Canadians when they need it, to support Canadians when they find themselves in a difficult time.
With Bill , we are taking steps to respond quickly to the needs of self-employed workers, so that they will also be protected in times of need.
Our Conservative government knows that families are the foundation of our great country. We believe that self-employed Canadians should not have to choose between their family and business responsibilities. They should not be forced to choose between one or the other.
Let us all support self-employed workers for their dynamism and their contribution to our economy. Let us create a stronger, more entrepreneur friendly and productive country in the process. Let us get behind our self-employed and do what is right. Let us do what they have been asking for for a long time.
I would urge all members in all parties to support this bill and to get it through the House at the earliest opportunity.
Mr. Speaker, I am very pleased to rise today to debate Bill , especially since we were able to avoid a strike with CN. I am very proud to have played some role in that and I am glad to see that things were dealt with amicably.
At the outset, the Liberal Party supports the bill.
I want to talk about a number of issues in the bill that I think could be improved and need to be identified. However, I want to start off by talking a bit about who we are talking about in terms of the self-employed. It is a bit of a nebulous picture. A lot of people think of people who may be working out of their house, doing part-time or contract work, et cetera.
I asked the department to do a bit of an analysis for the committee on who these people were, especially when looking at it from the perspective of gender-based analysis for women. According to the figures for 2008, the majority of self-employed workers are male, or approximately 65% of them. Males represent approximately half of the salaried workers in that area.
Self-employed workers tend to be older and about one-third of them are women of childbearing age. This is also an interesting difference between males and females in this area. We know in the part-time worker area, the vast majority are women and a smaller number of them are males. In the self-employed area, it is the other way around.
It is also important to note that 64% of self-employed people are married, but few of them have a spouse with non-wage benefits. That is an interesting thing to look at as well. Again, it is interesting to note that, of the self-employed, women tend to earn less than men do. On average, women earn about $38,000 and men earn about $64,000. There is a big disparity in terms of what they do.
When we look at the kind of work they tend to do, it is interesting because women tend to be involved in self-employed work that has more to do with social and community issues, whereas men tend to do things that have more to do with industry, et cetera. That does not mean to say that women do not do that, but this is a bit of a different breakdown and it may account for some of the difference in income.
Also important to note is that more women than men tend to work out of the house. More men tend to work outside of their homes, which means they have offices and possibly staff and are spending a great deal more time running their self-employment like a small company. Women are probably mixing, looking after their children, caregiving for children or family and working out of their home, thereby earning considerably less.
These are interesting differences to note as we look at this legislation and how it will perform in the long run. It is very important to ensure that it benefits all people who need benefits under this program.
For quite some time now, the National Liberal Women's Caucus has advocated for covering the self-employed in the area of parental leave, compassionate leave, sick leave and so on. For the last three pink books, as we call them, or our policy on action plans for economic security for women, this has been recommended consistently.
In addition, the Standing Committee on the Status of Women has done a study on the self-employed. I will come to that in a moment when I talk about the impact on women and this structure versus any other. I will get to that a bit later. At this point, I want to clarify some other things with respect to the differences between self-employed men and self-employed women.
There is quite a difference in the kind of work they do, the number of hours they spend at work outside of the home and their income levels. Women tend to earn a lower income than men do. It is quite a considerable gap. I think that will have a great deal of impact on how this works.
With regard to the actuarial work that was done on this bill, it is my understanding that the chief actuary really did not do direct work on it, at least that is what I understood when I talked to him. This was the information we received.
Under the bill, participation would not be compulsory. It would be self-selecting or, in other words, entirely voluntary. People could actually opt out after one year if they had not collected any money. They could opt in to stay in, but that would not be mandatory.
The Standing Committee on Status of Women did a study. All the experts who presented at standing committee said that if it were not mandatory, it would not work actuarially, that it would not be self-sustaining or self-sufficient.
We posed those questions at committee. Officials told us that this was doable and workable. However, I do not think the chief actuary was quite so unequivocal on his statements when we spoke.
Since it would be totally voluntary, it is more than likely that people who would use it would be women who were expecting children, or where members of a family were not well and caregiving was needed. They may be more likely to opt in but others may not do so. I asked the actuary if this would not be a problem as there may not be enough people and this would result in the fund not being self-sufficient.
We must keep in mind that the premiums paid by those individuals who opt in will cover only their own premiums and not those of the employer, meaning the employer portion would be covered by the EI fund. When I raised this issue, an official admitted there could be a shortfall as a result of this but it would be monitored. My concern with that is a shortfall would obviously be subsidized by the EI premiums, not by the government's central fund. These premiums would be contributed by working people.
This brings me to another aspect and it is the fact that the majority of people who work part-time are women. A lot of these women pay into EI all the time. They cannot access parental leave benefits and so on, but they have children and they have to work to make a living to keep their home stable, et cetera. They in effect would be subsidizing the self-employed without ever being able to benefit from the fund. That is a bit of a concern.
Teachers who do not work during the summer are not able to accumulate the required 600 hours under the plan. I received a letter from a constituent a couple of days ago indicating that she was unable to access the fund. She asked why this was the case.
The bill is necessary and we will support it. I would like the government to take a look at this area. Our party has taken the stand for quite some time that accessibility to EI needs to be 360 hours. That is where it would become really accessible to all those who really need it, especially when we look at the gender issue. The fund would then become accessible to part-time workers, most of whom are women, and also professionals like teachers and others who would have difficulty otherwise.
Under this structure, the minimum requirement would be earnings of $6,000 in a year. I am not quibbling with that, but as I pointed out earlier, men who are self-employed tend to earn a great deal more than women so they would probably reach the $6,000 within a month or two of work in a year. Meanwhile, women would have to work longer, and that is fine, but some women would be left out.
I asked the department to do a gender-based analysis on this particular bill, as I did with regard to the previous EI bill, the extended weeks of pay legislation. If there were a proper, thorough, gender-based analysis done on the EI system to enable us to see what is truly the impact on women in this country of all demographics and using proper desegregated data that is available from Statistics Canada, that would take us a long way to having legislation that truly reflects the needs and does not leave people out. This is a whole area that is extremely important that we discussed at committee. I have raised this many times before, and I raise it again because it is of great importance to women in this country.
With respect to the actuarial cost and the strength of that, it is important that the government have the chief actuary do a proper actuarial analysis of the bill to see what shortcomings and shortfalls they expect to have. Whatever shortfall there is should probably be funded through the central government, as opposed to the EI fund.
The other part that is very important to note is on the premiums that will be paid by self-employed Canadians. I am not suggesting or impugning any negative or wrongdoing. I think probably it was quite inadvertent, but certainly there is a mistake with the legislation with respect to the premiums that would have to be paid by citizens of Quebec in this area. It looks as though they will end up paying a great deal more.
The former chief actuary in fact came to committee to point that out to us. We unfortunately found this out at the end, when we were doing clause-by-clause. So it was not possible to try to amend the bill at committee, but I would encourage the government to amend the bill and fix that problem prior to the bill leaving the House. I would love to see that happen, because I think it is very important that it be done. It would be unfair and it is an error that needs to be fixed, and I would hope that the government would do that.
As I said, I am not suggesting that this was intentional. This was probably an error. It is simply an error that needs to be fixed. I would like to see that happen and I hope the government will do that very quickly.
At this point I just want to go back to the amount of money and the amount of time and the opting in and out. I know that people can opt out of self-employment if they have not used it at the end of the year. I am not sure how much instability this will create and to what extent, and also paperwork. For people who are in or out of the system at different times and then having to wait and maintain all of that, I think that would cause some instability.
I feel that the program would be much more stable and much stronger if it were a mandatory program. We had experts at the Standing Committee on the Status of Women. It was very clear that they felt that the program would not be viable or stable if it were not made a compulsory program, because some people would benefit and others would not.
It is important that the government, once the bill is passed, do a thorough evaluation of the bill, probably within a year or so of the bill being in place, and ensure that the potential weaknesses that it might have are fixed earlier rather than later. I would not want us to find, a year or two or three from now, that we have been carrying a deficit and that it is not a self-sustaining program in terms of finances and in terms of who is benefiting.
As well, it would be interesting to see how it works out with the information that I discussed earlier with respect to self-employed women versus self-employed men, because again, there is a disparity and a difference that needs to be watched very closely to ensure that all self-employed people who obviously need this program benefit. There has been a great deal of interest, a great deal of pressure, and a great deal of debate for some time now.
As I said earlier, the National Liberal Women's Caucus has for some time advocated for this. We are glad to see that in fact it is now before the House.
As I said earlier, we support the bill but there are some areas that I believe need to be looked at and addressed, because without that we do not have a bill that is as good as it can be. I would also like to see the bill be self-financing, self-sustaining, and the only way that can happen is if that kind of analysis is done long before it goes forward.
Just before I finish, I would reiterate that the $6,000 that is the minimum is not an area I am quibbling with; it is not an area that is of concern. That equates to about 600 hours. I am not quite sure how they came to that particular number. At about $10 an hour, 600 hours of work is $6,000. I understand that it would be difficult to be able to monitor hours, to some degree. It would be difficult for someone to be able to ensure that the self-employed are not in any way, shape or form hiding hours or what have you.
The $6,000, in and of itself, is not the only parameter that I would like to see. I would like the government to take a look at the hours of entrance as opposed to just the money, the income. The $6,000 is something that I suppose some self-employed men and women could earn very quickly and the 600 hours could take longer. However, I am focusing on the hours because, for me, it is very important for accessibility. As I said, there are part-time people who are paying EI all the time but cannot access any of the programs that we are now talking about in this House and bringing forth for others.
There are teachers who do not work through the summer but do not build up 600 hours easily and therefore are also not eligible. The case that I received in my office is an adoption case where the parent cannot access benefits for that very reason.
Therefore, I would encourage the government that once this bill is passed, and if they amend it earlier that would be great, to really, truly look at the accessibility of it and look at the 360 hours for accessibility, because that in fact would allow part-time workers, most of whom are women, to access it.
Employment insurance is not a luxury. It is not something that we receive as a top-up on some other income. For most families in this country, it is keeping body and soul together. It is keeping a roof over their heads. It is paying their rent and keeping food on the table for their children. It is very critical that employment insurance not only be a strong system but also that it does not leave people out.
Unfortunately, poverty in our country is still very strong, especially now with the downturn in the economy. While the economy is picking up, the reality is that it is a jobless recovery. Whether we like it or not, no matter which way we look at it, that is the reality. In Toronto, my city, the unemployment rate is the highest I have ever seen. Probably, realistically, it is somewhere around 15%, maybe even a bit more. It is very high.
For people who are struggling to survive, to pay rent and to get their jobs and their training, EI is a huge piece of our safety net. A strong EI gives people a chance to be able to rebuild their lives, which then gives them access to training, and so on.
The other thing, before I finish, that is very important and most people forget is that 80% of caregiving in our country is done by women. This talks about parental leave and compassionate leave, but women do 80% of the compassionate leave and they are subsidizing all the rest of the economy. This is why it is very important to me that the government review that aspect of the bill.
We support this bill, and I would hope that the government, in partnership with us, will actually look at some of those areas that need to be addressed.
Mr. Speaker, I am very pleased to have this opportunity today to speak to Bill , the Fairness for the Self-Employed Act.
I should say at the outset that the Bloc Québécois is opposed to this bill. I do not think that will surprise anyone, in light of the questions I have been asking the past few days. Although we were absolutely in favour of the principle originally behind this bill, we cannot support it, because it would be blatantly unfair for self-employed workers in Quebec. The Liberals and the New Democrats can see this unfairness, but have not bothered to speak out against it. On the contrary, they have endorsed it.
Let us have a look at some of the aspects of Bill . This bill would allow self-employed workers to be eligible for special EI benefits: maternity benefits, to a maximum of 15 weeks; parental or adoption benefits, to a maximum of 35 weeks; sickness benefits, to a maximum of 15 weeks; and compassionate care benefits, to a maximum of 6 weeks.
Contrary to what the Bloc Québécois called for, this bill does not enable self-employed workers to have access to regular employment insurance benefits, but only special benefits. That is important. I believe that self-employed workers themselves understand what this bill means for them. This bill will be implemented on a voluntary basis. Self-employed workers will voluntarily enrol and contribute. They will have to earn a minimum of $6,000 in the calendar year preceding their claim to be entitled to 55% of their income. They will have to enrol when they file their income tax return for 2009 in order to have access to benefits the following year. Consequently, a self-employed worker will have to have contributed for a whole year before he or she can access these benefits.
We cannot support the bill because of the contribution rate that has been set for self-employed workers in Quebec: $1.36 per $100 of earnings. Allow me to explain. Bill proposes to allow self-employed workers to contribute voluntarily to the employment insurance system. However, unlike salaried workers, they would be entitled only to so-called special benefits, which, as I said earlier, include maternity and parental benefits, sickness benefits and compassionate care benefits.
Since Quebec already has a mandatory parental insurance plan for both salaried and self-employed workers, it goes without saying that Quebec must receive some sort of compensation to reflect the fact that self-employed workers there cannot receive the same benefits as Canadian workers. Moreover, salaried workers in Quebec already pay lower EI premiums because they also pay into Quebec's parental insurance plan.
To come up with the reduced contribution rate, the chief actuary of the employment insurance commission makes a relatively simple calculation that he publishes each year in his annual report on the break-even contribution rate and the maximum insurable earnings for EI. This calculation is as follows: the actuary calculates the portion of expenditures that pertains to parental insurance leave. This portion is then subtracted from the contributions Quebec workers are required to make.
The reduction is direct and based on a calculation, which means that the compensation accurately reflects the portion of expenditures that pertains to maternity and paternity benefits. This is a fair and equitable way to set the contribution rate for Quebec workers.
But in the case of Bill , the government is completely ignoring this logic and proposing a totally excessive and abusive contribution rate for self-employed workers in Quebec.
For some reason, the government has decided to ask self-employed workers to pay exactly the same premium as salaried workers, even though they are not entitled to the same benefits. In other words—and I think all my colleagues here know it—salaried workers receive compassionate care and sick leave benefits, but also regular employment insurance benefits. However, self-employed workers, as I was just saying, will only get special benefits. They will not receive regular benefits, but they are being asked to pay the same premium.
Salaried employees and self-employed workers will pay into the same fund. That seems illogical for the reasons I just mentioned.
That means that Canadian self-employed workers will pay $1.73 in premiums, which would allow them to receive the three so-called special benefits. Self-employed workers in Quebec will have to pay $1.36, but those premiums will allow them to receive just two of the three special benefits. It just so happens that those two benefits are by far the least expensive. If I am not mistaken, the compassionate care and sick leave special benefits represent roughly 25% of the cost, whereas parental leave benefits represent 75%.
It took the working group some time to get answers to its questions on Bill . Nonetheless, according to the estimates that were finally forwarded to us by the Department of Human Resources and Skills Development, maternity leave benefits will probably represent 70% of the cost of this new plan for the employment insurance system. You do not need a math degree to know that by paying $1.36, or 79% of what Canadian self-employed workers will pay, Quebeckers are being had.
In other words, Quebeckers are being asked to provide 19% of the funding for the plan, but, according to the department's numbers, they will collect only 6% of the benefits. That is scandalous.
We all agree that it makes sense for insurance plans to spread the risk. That is a basic principle of insurance. Insurance of all kinds is a risk-sharing endeavour that requires all beneficiaries to assume a portion of the risk because they cannot predict what events might cause them to lose their income for one reason or another. What we take issue with, however, is the disparity between how self-employed Canadian workers are treated and how self-employed Quebec workers are treated. The Canadian portion of the plan will result in a huge deficit at a contribution rate of $1.73, while the Quebec portion will produce a huge surplus at a contribution rate of $1.36.
It is expected that the Quebec portion of the sickness and compassionate care benefits, the only benefits to which self-employed Quebec workers will be entitled, will cost some $22 million in 2014, whereas premiums collected from Quebec will amount to $45 million. In contrast, in Canada, also in 2014, benefit payouts will be on the order of $280 million and premiums, $178 million. In other words, the government is asking self-employed Quebec workers to absorb the deficit for self-employed Canadian workers.
Of course we believe that is unfair. And we are not the only ones. We asked Michel Bédard, who was the departmental chief actuary for over 12 years, to provide an estimate of what he considered to be a fair contribution rate for self-employed Quebec workers. As it turned out, Mr. Bédard confirmed our initial suspicions. The contribution rate to be imposed on Quebeckers will be outrageously high, and the return they get will be ridiculously low.
That is why the Bloc Québécois cannot support this bill.
We know that, generally speaking, this government's employment insurance measures in no way meet the needs of Quebeckers. I said so yesterday and I will say it again: the program for long-tenured workers does not apply to Quebec forestry workers. The additional five weeks are a temporary measure. Self-employed workers in Quebec already had access to parental leave, and the contribution rate for compassionate care and sickness benefits is three times what the rest of Canada will pay. So there is a serious problem regarding employment insurance.
We now realize that it is Quebeckers who are always paying for others, although improving the employment insurance system, as the Bloc Québécois as been proposing for several years now, would be a good way to help all workers. We therefore cannot support this bill for the reasons I have just given.
I encourage our NDP and Liberal colleagues, especially those from Quebec, to ask themselves some serious questions and examine this issue closely, because it is very clear that self-employed workers in Quebec will be the ones to foot the bill for everyone else when it comes to this employment insurance fund.