I call this meeting to order. Welcome to meeting number 17 of the House of Commons Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities.
Today’s meeting is taking place in a hybrid format, pursuant to the House order of January 25, 2021. The proceedings will be made available via the House of Commons website. The webcast will always show the person speaking, rather than the entirety of the committee.
Pursuant to Standing Order 108(2) and the motion adopted by the committee on Wednesday, October 28, 2020, the committee will commence its study of the review of the employment insurance program.
I would like to welcome our witnesses to begin our discussion with five minutes of opening remarks, followed by questions. We have with us, from the Department of Employment and Social Development, Benoît Long, chief transformation officer; Andrew Brown, director general; and Michael MacPhee, director general.
I'm not sure if this is necessary, but for the benefit of the witnesses, I will offer a few additional comments.
Interpretation of the video conference will work very much like an in-person committee meeting. You have the choice, at the bottom of your screen, of floor, English or French. When speaking, please speak slowly and clearly. When you're not speaking, your mike should be on mute.
Mr. Long, you have the floor for five minutes. Welcome to the committee.
Thank you very much, Mr. Chair.
The Government of Canada's legacy systems that support the delivery of our key income support programs are among the oldest IT systems in Canada still in use today. The EI system is nearly 50 years old. The CPP one is 20, and the OAS system is nearly 60. The age and condition of these systems are a continual concern for ESDC. Building and maintaining enterprise IT systems is a high-risk item for governments with low public visibility. Canadians do not think about the benefits of delivery systems until they fail.
The 2010 OAG report provides a full measure of the risks that we manage every day to deliver the benefits that over nine million people depend on every day to live. As a result of a succession of budget investments, ESDC has made progress in addressing technical debt on EI, CPP and OAS, and ensuring that benefit payments continue to flow. There are considerable costs and risks in continuing to extend the life and add on to the aged systems. Some of these include upgrades to reflect new policy changes that are costly and sometimes present significant and unsolvable technological obstacles, given the state of these legacy systems.
Some of the code is in a language that's so archaic it's no longer taught in universities. Critical personnel retire, and their knowledge slowly gets lost. Decision-makers value optionality in EI of course, as governments have always sought optionality in those cases, and it allows targeting of particular groups that need help. This challenge has also led to a complex web of rules and code built out over nearly five decades, and the people who can program this custom system are becoming fewer and harder to find.
As you may recall from last year, there were many stories in the United States about many states unable to reconfigure their UI systems because they couldn't find the right personnel to do the work. The complex application and processing requirements that underpin these legacy systems lead to higher rates of error, mistakes, missed payments and fraud. They cost money and shake citizens' trust in our systems. These systems were never intended for today's needs—both the needs of public servants supporting the government and Canadian citizens alike.
Finally, applying for benefits on these old systems can be complicated and confusing. The number of unclaimed benefits is high, particularly in the pension piece, and those unpaid are almost always our country's most vulnerable, including low-income seniors, indigenous people and persons with disabilities.
Of course, we do have a plan. Our goal is to build on the EI service quality review that was done a couple of years ago, which showed that many Canadians feel they're waiting too long for the benefits they need. The panel's recommendations at the time were for improvements to the EI program, including replacing outdated technology systems. In 2020, the Government of Canada announced in its Speech from the Throne that the government will make generational investments in updating outdated IT systems to modernize the way the government serves Canadians, from the elderly to the young, from people who are looking for work to those living with a disability.
Moreover, over the coming months, the EI system will become the sole delivery mechanism for employment benefits, including for Canadians who did not qualify for EI before the pandemic. The pandemic has shown that Canada needs an EI system for the 21st century, including for the self-employed and those in the gig economy.
Replacing our legacy system is no longer an option to consider. It's critical to continue to do that in order to allow the government to continue to function. The government has some solid lessons learned in terms of what to do and not to do. On the do list is to avoid big bang approaches, which is even more important when people's pay is at risk, and to apply agile project management techniques. That means iterative incremental progressive builds as the best way to solve problems and to channel innovation.
On the don't list—it may be a bit longer—is to avoid having the government assume all of the risk in building big IT systems. The private sector spent billions producing commercial off-the-shelf systems. Governments around the world are partnering with the private sector to avoid the expense, difficulty and uncertainty of designing and implementing custom systems. Canada continues to be well-advised to do the same. We should never let planning be the enemy of doing. Big IT systems are expensive and complex, take a long time to build, and benefit from numerous checks. Traditional project management approaches may not be sufficient or adequate for today's world, and the government has adopted some internationally well-known best practices in this context.
Finally, we're introducing BDM, which is an acronym for benefits delivery modernization. It's been three years in the making. We've been doing a lot of planning, and we're poised to start implementing it in the next few months. That's our goal for sure. Working with Treasury Board and ESDC, we've designed a mission-critical transformation program to meet and succeed in delivering this historic mandate.
It's going to require tailored governance, iterative and incremental building, the best talent that the public service can bring together, as well as people from across the world who we've been recruiting to help us out.
We're going to build a BDM platform over a number of years in a series of tranches—phases, if you prefer—and frankly, we're going to start this year with putting in the foundations as soon as all the approvals have been obtained. The new BDM foundation will be very agile and provide a set of capabilities that will allow future benefits to be deployed on that platform, similar to what the private sector does.
We're procuring commercial off-the-shelf technology—that's our goal—that's already useful and also successfully used across the world in many jurisdictions, some in national government, which has been tested often and deployed on complex benefits like the ones we have.
We've put in place an “equi-system”—that's our word—a series of qualified suppliers that are going to help us, and they're all world-class organizations that are meant to come together and work in partnership with us to deliver as quickly as possible the best possible systems the government can put in place.
Finally, the BDM platform—and I'll close on this—is going to expedite the onboarding of many benefits. I think it has been the goal of many ministers and deputy ministers of our department to be able to respond much more quickly to policies, policies that governments want to introduce and generally start [Technical difficulty—Editor]. We would love to be able to do it, but it's very difficult, and frankly, our systems may not be able to support it. We would like to change that as quickly as possible.
We definitely want to personalize and tailor the system to the benefits and the needs of clients. We want digital-by-design approaches and omni-channel and multi-channel experiences where people can apply on one channel and complete an application in another, and obviously bring client experiences up to par with what people would expect from the private sector.
I'll close on this point, Mr. Chair. My two colleagues are here to not only answer questions about the current state of EI but also about what we're trying to do in the future. We look forward to your questions.
Thank you, Chair, and good afternoon to my colleagues.
Thank you to Mr. Long—I like that last name—for your presentation to us this afternoon.
I'll state the obvious. EI benefits are there to catch people who lose work through no fault of their own. They're there to support Canadians, and I think all of us have seen first-hand and are so thankful for the EI program. Millions of Canadians needed that program through this pandemic. I wonder where we would be as a country without that program.
Mr. Long, I do have some questions for you. In 2017-18 EI sickness benefits provided $1.7 billion in support to 412,000 claimants. The average duration of sickness benefits was 10 weeks. However, 36% of claimants exhausted EI benefits before they were able to return to work. One of the government's commitments is to increase EI sickness benefits from 15 to 26 weeks.
Can you please explain for the committee as to how many people would benefit as a result of expanding the duration of this benefit?
Thanks for the question, Mr. Long.
As you pointed out, the EI sickness benefit right now provides support, I would say, to just over 400,000 people annually, with about 35% or 36% of them making use of all 15 weeks of the benefits that are available. The relatively simple math there is that perhaps 120,000 people might benefit from that extension from 15 weeks to 26 weeks.
It's important to recognize that whenever we make adjustments to the EI sickness benefit, there are other things that are attached to that. There are some employers who provide different kinds of top-ups to sickness benefits. There are also employers who take part in what's called the premium reduction program. This is something that provides them and employees with a reduction on EI premiums in exchange for the fact that they have sickness plans that meet certain standards.
If it were extended, we might also provide some additional support to that group as well. We'd have to do some more detailed modelling to get you a more precise figure.
My thanks as well to the witnesses for being with us.
First of all, I am very pleased that we are undertaking this important study on employment insurance reform.
The Bloc Québécois has long advocated for reforms to our employment insurance program. In its current state, the system is not up to the task. It has not been completely overhauled in 15 years. At best, it covers about 40% of workers.
We were able to see the cracks in the program during the pandemic crisis: almost 9 million workers became unemployed overnight. The program could not keep up with the task, so a suite of emergency measures had to be introduced, such as the Canada emergency response benefit, or CERB, and three new benefits.
It seems essential to us that the program be completely reformed in all its aspects: eligibility criteria and periods, benefit rates, and so on. All these considerations must be dealt with together.
Recently, the was given a mandate to review and modernize the program to adapt it to 21st-century realities. Our study will therefore be undertaken as part of that mandate. Many groups have expressed an interest in coming forward to share their views on reform.
Mr. Brown, given the minister's mandate and the questions I had the opportunity to ask her here in committee, what exactly are you working on as part of the effort to reform the program?
My question can be answered by Mr. Brown, certainly, and Mr. Long. It might be a shared answer.
We know that the pandemic has caused financial turmoil for many people. Many people, for example, are experiencing being unsheltered for the first time. We're in a crisis.
A report came out through Senator Pate's office, which indicated, “The PBO estimated that providing a [guaranteed livable income] would cost $76 billion for a typical year. In the extraordinary circumstances of increased unemployment associated with COVID-19, providing the same form of [guaranteed livable income] for six months could cost $47.5 billion.” We know—and economists have certainly demonstrated—that the actual costs would be much lower due to cost savings over time. We know there are higher front-end costs, but we know there are savings over time.
Considering the ongoing issues with EI and the confusion caused through COVID-19, is your department considering moving towards more permanent guaranteed livable income programs in light of the fact that it looks like the pandemic is going to go on and rates of unemployment are increasing?
Thank you very much, Chair.
First of all, I want to thank the witnesses for coming to committee and answering some very important questions today.
Thank you very much and, through you, thank you to all the public servants at ESDC. I understand and appreciate the challenges and the effort you're making to meet these challenges under these extraordinary circumstances.
First, on behalf of my constituents in , I also want to echo the concern brought forward earlier. On the call centres and the response to individuals, it seems to be that there's a long wait on the call. Sometimes it's just a simple correction of a mistake when people are using the automated system, so any improving you can do on that front would be greatly appreciated. I just want to share that.
I want to talk first about the parental and maternity leave and benefits. We know that the government has improved these benefits in a few ways, first of all by covering 12 weeks prior to the birth for expecting moms and also by allowing parents to choose between the standard parental benefit and the extended parental benefit for 18 months and to share the parental benefit.
With these changes, what kind of impact has there been on young families and parents? Can you share some observations about the feedback you've had on these programs?
Thanks for the question, Mr. Dong.
On the changes to maternity and parental benefits, I think you really hit upon those there. There was the first set in 2017, which allowed parents to choose between either standard or extended parental benefits. That gave them the possibility, along with maternity benefits, to receive benefits over a longer period of time, for up to 18 months rather than 12 months.
What we've seen is that about 15% of families have been choosing the extended duration configuration. We can infer from this that they have found it is preferential for their own circumstances. We don't know the exact reasons for that. We are planning to do some evaluation work to better understand why they're selecting that, but we do believe that in some provinces it helps them in terms of some of the child care responsibilities as well, and that might be the reason they're opting for the longer period.
I should note on that one that there has also been some negative feedback around one aspect, which is that over the longer period of 18 months, people receive a lower benefit rate, of course. Some questions have been raised as to whether it's sufficient. What people receive is effectively the same amount of benefits, but over a longer period of time.
The second thing, just very quickly, is in terms of the new parental sharing benefit that was introduced in 2019 and made available to a second parent some five weeks of benefits that were reserved. In many cases, of course, as we still traditionally see, women and mothers are taking the majority of parental benefits, so this often means that it's for a father, and we have started to see an uptake in terms of the parental benefit by fathers. This is one of the things that we're really keen to keep watching in coming years to see if that grows further.
Again, thank you for the question, Madame Chabot.
I would say that we're looking at a number of things. One thing is that, in our minister's mandate letter, there is quite a list of different commitments that the government has made. We've heard already about the proposal to extend the sickness benefit from 15 weeks to 26 weeks. We're also looking at how we might make progress on the other items in that mandate letter, things that would look at the supports that are provided to workers in seasonal employment and issues that we've heard there about consistent access to benefits. As I mentioned before, one of the things is certainly that 40% and looking at access to the program.
We're trying to look very broadly. Of course, it'll be the government that will need to decide how to take things forward, but I would say that we are really trying to look at what can be put in place in terms of supports for workers. We're also thinking about the connection to what's often called “part two” of the program. These are the labour market transfer agreements with provinces and territories.
These agreements therefore support training. The other measures help workers return to work. So we have not only the income support aspect, but also the support to facilitate returning to work.
I share some of the concerns of MP Gazan about people's lives being at stake here. They're looking for EI benefits that they have earned and have paid for. I'm a little concerned with the direction we're going, doing another study on this, or working on a study, without going back to the last larger study on EI back in June 2016 of the 42 Parliament, entitled “Exploring the Impact of Recent Changes to Employment Insurance and Ways to Improve Access to the Program”. That's the study I'd like to talk about.
The number one recommendation—I think it's very fitting that we talk about the first recommendation, which is going to be important during a pandemic—is as follows:
The Committee recommends that the federal government review the eligibility requirement for “valid job separation” to allow employment insurance claimants who find a new job during the benefits period to retain their EI benefits should the employment not be suitable.
In the context, I'm worried about the families and individuals out there who may have lost a job, unfortunately, because of the restrictions out there, or who claim EI, find another job, but then are out of work when maybe another lockdown occurs in their province. I'd like to hear an update on the number one recommendation from that report.
Has the EI program added to the flexibility so that these workers don't fall through the cracks?
I can start, and then perhaps Michael can come in.
l would say, first, that the department responded extraordinarily quickly. We had a few hundred people who could work remotely in the first week of the pandemic. Within about six weeks, we had 28,000 online, working from home. I think what you are seeing is a department that was quickly able to deploy both technology and equipment to its employees. To put 3,000 people quickly into that mode was quite rapid for us. We had never done that before.
Of course, it's not enough, but it's really because of the historical demand and the wave that hit the department. We don't believe that there was anything more...than what we actually did accomplish.
The challenge is how to sustain this. We have people working from home in every part of the country. In the context of call centres, we have to train people. They have to be able to answer questions. People would get extremely aggravated if they were calling and the people they were reaching could not answer their questions. Not everyone is an EI agent nor is everyone a pension agent. I don't mean to say that we have done enough. Certainly, we did our very best, and we also acted quite quickly.
The technology, itself, was deployed relatively rapidly because investments in that specific technology had been made a year or two before. Without modern technology and telephony, we would have been completely unable to respond to this pandemic.
I will jump in there, Benoît.
With respect to self-employed workers, they may opt in to the EI program to obtain access to special benefits but not to job loss benefits. They are not eligible for those at all.
In terms of opting in to obtain access to special benefits, like maternity and parental sickness benefits, it's a very small proportion of workers who do. About 25,000 self-employed workers have opted in out of about, perhaps, two million to three million self-employed workers across the country. What we've seen is that, given the choice, people prefer not to pay into that insurance scheme, which could be for a number of reasons.
The group, incidentally, that tends to opt in are younger women, and they're opting in because it's the only way they can obtain access to maternity and parental benefits.
This is where I think, then, you'd need to think about, first off, whether this is something voluntary or mandatory. If you think about employed workers, they don't have an option. They are required to pay in.
The second thing is, really, to think about how you would assess their incomes. The thing is that someone who is a paid worker is receiving a regular paycheque, whether that's weekly or biweekly. There's a clear record of what they're receiving. The challenge, then, with self-employed and gig workers is that this may not be the case. The timing of their incomes can also vary. Sometimes they could be working consistently yet only receive a paycheque—I guess I should I say “income” or “revenue”—once a month or once every, let's say, four months.
Think about a real estate agent, for example. If you get a number of sales, you might get quite a bit of income at once. If you don't, there could be several months between receiving revenue. There's a great diversity among self-employed workers and gig workers. That's where some of the challenge comes from.
There would be an opportunity for some public input whenever a change is made, because regulations need to be pre-published before zones can be changed. However, the process for reviewing the EI zones or boundaries is actually led by the EI commission.
The last review was completed at the end of 2018. There were no changes taken forward subsequent to that. There was a new review launched. We're required to review those boundaries every five years, partly because, of course, they are used to administer the program. Once those results are presented to the commission, they might or might not make recommendations to the minister in terms of changes to the boundaries.
When we review those boundaries, we're looking at whether each of the regions is as homogeneous as possible in terms of labour market conditions and the unemployment rate. Those are the two things that we are chiefly looking at and we're trying to find the boundaries that provide labour market regions that are as consistent as possible, also keeping in mind that we need to be able to administer it, so we probably don't want to create too many different regions.
We are at 62 regions right now. There's a review in place. If there's a proposal to make any changes, that would be subject to a public regulatory review process.
Are there any other interventions with respect to the news release? Do we have consensus to publish the news release as drafted?
I see thumbs-up all around. We'll take that as being adopted by consensus.
On the second item, you will have received two study budgets prepared by the clerk and circulated for approval. One is in connection with the study that we have currently undertaken. It's a study budget of $3,750. Let's deal with that one first. This, as you know, colleagues, is primarily for the provision of headsets and the like, because nobody is travelling these days. The floor is open with respect to the approval of the budget of $3,750 for the EI program study. Are there any interventions, questions or comments?
Can we take the budget for this study as approved by consensus? I see consensus. It is adopted.
You have a second budget before you with respect to the rapid housing initiative study. It's the same narrative. Are there any interventions, questions or comments with respect to the budget of $2,500 for the examination of the rapid housing initiative?
Go ahead, please, Mrs. Falk.
Are there any other discussions, comments or questions with respect to the approval of the budget for the rapid housing initiative study? Can we approve the budget by consensus or do we require a vote? I believe I see consensus in the room, so that budget is adopted.
The third item, colleagues, is that, as you may be aware, private member's bill, Bill , an act to amend the Canada Labour Code regarding compassionate care leave, was referred to the committee by the House yesterday, I believe. It's for us to now do an examination of that private member's bill and report it back to the House. I know there have been some discussions between the parties and the bill's sponsor, , who is, as I understand it, available to come to the committee on Thursday.
I open the floor for your thoughts on scheduling, how much time you expect we will need and any other comments you may have with respect to how we dispense with this matter that has been referred to us by the House.
I recognize Mr. Housefather.
Thank you very much, Mr. Chair.
I have indeed been in discussion with , including today. We would both propose that we cover the bill in one hour. I mean one hour of testimony from Mr. Jeneroux and one hour of clause-by-clause afterwards, so that it would be completed in one meeting.
As you had mentioned, Mr. Chair, is ready to come to the committee as early as next Thursday. Of course, he bows to whatever date the committee wishes to have him here, but given the situation and wanting to get the bill back as quickly as possible to the House, I think it would be ideal if we could have this next Thursday. I think there will be amendments that all members of the committee and all parties will agree to.
Hopefully, Mr. Chairman, you and the committee could agree to that.
I'd be happy to respond.
To the questions Mr. Vis asked, himself asked that it be one meeting. You can consult with him, but I've had that conversation with him. He wants to get it over with as quickly as possible in terms of getting the bill back to the House. Certainly, if he has witnesses that he wants to appear with him in his one hour, he can always bring them, if the committee agrees.
The second thing is that we've gone over amendments and basically it's one amendment where we would be extending bereavement leave to 10 days from five days. It would apply as well to caregivers. In 's original bill, different caregivers, depending on where they were in their caregiving time frame, would get up to three weeks or no bereavement leave, depending on where they were in the process. Now we will propose to the committee—and what we both agreed to—that it would be 10 days of bereavement leave for everybody. Right now it's five days of bereavement leave for those who are immediate family members. It would be extended to 10 days and it would also encompass those who are caregivers. They would also all get 10 days of bereavement leave.
It's a pretty simple amendment to the bill. That's the only substantive amendment.
Again, as soon as and I submit it properly to the clerk, we'll send copies to everybody and discuss it with everybody over the course of the next week.
Thank you, Mr. Housefather, for your feedback. We largely agree, and I am looking forward to discussing your amendment at the meeting.
I have just two comments, Mr. Chair.
I think we should set a deadline for amendments to be submitted, in the event that other opposition parties are also interested in amending the bill. I would suggest Monday, or Tuesday at the very latest, to provide parties with enough time to see them and discuss them, and to ensure that Thursday goes smoothly. I agree with the date being Thursday, and I am happy to have bring witnesses.
However, I want to confirm whether any of the other opposition parties or the Liberal Party are interested in bringing witnesses. If that's the case, then we should probably discuss what we believe to be an appropriate number, particularly if we have only two hours to do all of it. We're happy to have and then a Conservative witness in addition to him. I believe that's how that works. Since it is his PMB, he will be coming and then we can put forward a witness, so that would technically be two witnesses.
I am wondering if there is interest from other parties in having witnesses, and if there is, then we may have to squeeze in four plus Mr. Jeneroux in one hour. I just want to make sure that we're aware of the time crunch we may have, if that's the case.
Thank you, Madame Chabot.
Colleagues, I think we have a consensus.
I am going to propose, following on Ms. Dancho's recommendation, that any amendments that a member of the committee wishes to have considered should be submitted to the clerk by 5:00 p.m. eastern time on Monday; that the committee consider Bill one week from today, on Thursday, February 25; that the first witness be the sponsor of the bill and that he be welcome to bring along any witness he wishes; and at the conclusion of witness testimony, which would normally be an hour, that we move to clause-by-clause consideration.
I think that also allows us the flexibility to add witnesses, if that is the will of the sponsor or the committee, but that we start with and exhaust the witnesses, which it appears will be just him and one other, before we move to clause-by-clause.
Is that acceptable, and if it is, do we need to put it in the form of a motion to be discussed and voted upon? That's what I would propose, based on what I've heard so far.
I see some thumbs up. Is there any discussion on that? If not, can we take that as the consensus?
Ms. Dancho, go ahead.
Are there any further interventions?
Colleagues, it's pretty clear that we do not have consensus, and there are two issues before us. I think, unless anyone has a better idea, that we're probably going to have to put this to a vote. The first issue—and I'm going to need a motion on this—is whether the committee will, in fact, conduct an examination of supplementary estimates (C). We need to decide that. If that is answered in the affirmative, then the second question would be whether the scheduling of the examination of supplementary estimates (C) would be referred to the subcommittee.
If I may, I'm now calling for a motion that this committee conduct an examination of supplementary estimates (C), including the calling of witnesses. Could someone move the motion for me? Thank you, Ms. Gazan.
Is there any discussion on the motion?
I would like to raise a point of order. Although the discussion is quite interesting, it is more like a dialogue.
I said no. I must admit that I am concerned about the work schedule. If we had never gone through the exercise of examining supplementary estimates, which we have done twice, I would be concerned.
First, we were given the mandate to conduct the study. I am sorry, but I have not read the entire email, and I don't know what timeframe we have or which minister is involved in these matters.
I agreed with our colleague Mr. Brown's fine idea. I'm open to receiving suggestions and reviewing the matter in subcommittee to determine how we can fit the study into our work schedule. I remind you that we have all taken on this study as a priority and that was not by chance.
If we had another two years to conduct a study, it would be a different story. Our reform study is also affected by the fact that, if we don't have time to study it, we will see a period of uncertainty between the end of the temporary benefits and unemployment insurance in September. We need to combine the two issues.
I really did not see that we had deviated from the schedule. However, if we have consensus, I'm prepared to agree to transfer the whole matter to the subcommittee and then let them come to the committee with a proposal. At that point, I will be able to say whether or not I agree.
Thank you for that suggestion, Ms. Dancho.
With that, do we have consensus to proceed in that fashion? The subcommittee will seek to get its work done promptly, ideally as soon as this Tuesday. Do we have consensus on that or do we need a vote? I don't think we need a vote. I think we've talked this through. We will proceed in that fashion.
In terms of our schedule, colleagues, this coming Tuesday the 23rd we will have our second meeting on the EI study. There will be witnesses from the Canada Revenue Agency and Statistics Canada on the first panel. The second panel will be the C.D. Howe Institute. On Thursday the 25th, we will commence our examination of Bill . The week following is a constituency week, and the work of the subcommittee will dictate what will be done when we return. That's a bit of a look ahead.
Is there any other business to come before the meeting? Is it the will of the committee to adjourn? I think it is.
Ms. Chabot, you have the floor.