I call this meeting to order.
Welcome to meeting number 26 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.
Pursuant to Standing Order 108(2) and the motion adopted by the committee on Wednesday, October 28, 2020, the committee will resume its study of the review of the employment insurance program.
I'd like to welcome our witnesses to begin our discussion with five minutes of opening remarks, followed by questions. We're pleased to have with us here today the Honourable Carla Qualtrough, Minister of Employment, Workforce Development and Disability Inclusion. From the Department of Employment and Social Development, we have Graham Flack, deputy minister; Lori MacDonald, senior associate deputy minister and chief operating officer for Service Canada; Cliff Groen, senior assistant deputy minister, benefits and integrated services branch of Service Canada; and Elisha Ram, associate assistant deputy minister, skills and employment branch.
I'm going to dispense with all of the other preliminaries because we have an experienced group of parliamentarians here to pose the questions and an experienced group of witnesses to answer them. We'll get right to it.
Welcome back to the committee, Minister Qualtrough. You have the floor for five minutes.
Thank you, committee members, for inviting me to join you today.
I'd like to acknowledge that I am joining you from the traditional territory of the Tsawwassen and Musqueam first nations.
I would like to begin by acknowledging the work you are doing on the study of the employment insurance program. I am confident that your findings will be helpful as our government moves forward with the modernization of this program.
Last Friday, we learned that Canada gained more than 303,000 jobs in the month of March. This brings the national unemployment rate down to 7.5%, the lowest since the start of the pandemic. While we are encouraged by the fact that we have regained 91% of the jobs lost during the pandemic, many Canadians continue to experience unemployment or reduced hours, especially in light of ongoing restrictions and new lockdown orders. I note in particular the challenges being faced by young people and women.
Over the last year, the COVID-19 pandemic has revealed how the EI program has not kept up with the way Canadians work or been agile enough to respond to emerging labour market trends. We also saw the shortcomings of EI as a response to the pandemic.
First, through EI, we could not help all Canadian workers who had been impacted by pandemic-related job loss. Second, we couldn't efficiently process the incoming volume of applications to quickly get money to Canadians so they could pay their bills and put food on the table.
So we made a strategic decision to go outside the EI framework to provide immediate support to all affected Canadian workers. That's how the Canada emergency response benefit came about.
Working across departments and across party lines, in a very short time we were able to design, build, legislate and operationalize this new benefit. Over eight million Canadians received the CERB during the most uncertain of times.
As many of you know, the EI program has been built upon and reoriented over many decades, with different governments having different priorities over the years. As a result, it's become the most complex system within the Government of Canada.
Colleagues, we have before us an opportunity to make EI more inclusive and responsive to the needs of Canadian workers today. Since 2015, we've made important changes to EI, including enhancing provisions for working while on claim, extending parental benefits and creating the family caregiver benefit. Additionally, we made significant changes to the EI program last September to efficiently transition Canadians from the CERB to EI. These changes included a single national employment rate, an hours credit for regular and special benefits, a minimum weekly benefit rate of $500, and simplification measures to increase the speed of processing.
I'll note that over 3.9 million EI claims have been received since last September. This is in addition to the 2.7 million applications received for the CRB, the CRSB and the CRCB.
The temporary changes to EI were put in place for one year and are set to expire on September 21, 2021, meaning that the system will revert back to pre-pandemic parameters at that time. Our work to modernize EI must take into consideration a time frame of September 2021.
We must also consider the fragility and complexity of the EI program itself. We must set priorities not only in terms of the desired policy outcomes, but also in terms of the time it will take to effect a particular change. We must also consider the effect of a change on our ability to make other changes. This is why the sequencing of systemic changes becomes an important consideration.
We can all agree that conversations about changing or modernizing EI have been ongoing for some time. In fact, some of our COVID-related changes to the EI system have been called for by stakeholders for years.
In addition, stakeholders and experts have told me very clearly that they wanted to contribute, but they also wanted to see concrete action.
With this in mind, in the weeks and months to come, our government will be sharing with Canadians both our vision for a modernized and inclusive EI system and our plan to get there, including how we will address the September 2021 reversion to the former system and our plan for ongoing consultation on specific elements of the EI system.
Colleagues, a well-functioning EI system should ensure that benefits are accessible and adequate, equitable across regions and unemployed workers, limit disincentives to return to work and more generally promote a healthy labour market. While this might seem like a tall order, I am confident that we can get there and deliver for Canadians.
Thank you, and I look forward to your questions.
Thank you, Minister, for being with us today.
Earlier today, at the public accounts meeting, I spoke at length with Deputy Minister Flack and a number of others concerning the half a billion dollars that was paid to CERB recipients who doubled up or double-dipped, depending on how you want to describe it. They applied for both CERB and the EI. I am sure you'll remember this.
He expressed that there were about half a million people, 500,000 people, who did this double-dipping, so to speak. When I asked why that wasn't communicated, it was mentioned to me that it was, in fact, communicated on the ESDC website that people were to apply for only one, not both.
My concern, however, Minister, is that it caused a lot of additional cost—half a billion dollars—and I know some of that has been recouped and that CRA is going to be working to recoup a lot of the fraud that has happened with CERB. It's going to take years, we know.
As far as I am aware, is it...? You and your deputy minister knew that this was going to happen and that it was a technology issue, and you knew that people were going to be able to double-dip.
My question is, then: Why wasn't it more effectively communicated to the public that they should not be applying? On their end, 500,000 people made this mistake and applied for both. We know there were daily press conferences and every opportunity to communicate it. Can you explain to the committee why that was not taken more seriously?
I remember very often reminding Canadians to apply for one or the other. In fact, we were very aware that Canadians who were eager, and of course, concerned about being able to pay their bills might, in fact, because they didn't hear back from the first one, quickly apply for the second one.
I feel like we regularly communicated this to Canadians, certainly in my speeches. I can dig in on how often. I can't recall how often, but it feels to me like it was regularly.
The other important thing to note here is that, once this particular issue was remedied, we went out and very clearly told Canadians that, if they had received double payments at the end, they would only ever be able to receive the maximum number of weeks that they were entitled to for the entirety of CERB, so they should budget themselves accordingly.
I remember using that line a lot, saying, “Listen, if you had two payments in one two-week period, that means you have now had two of your”—at that time—“seven payments, so please, watch your finances because you have received money in advance and you will not, at the back end, be able to make that seventh application.”
Yes, thank you for that. I know that at Christmastime those letters were sent out to folks who wrongly received money, and then your government said, “Don't worry about it”, so there was a bit of a communications issue ongoing.
I recognize that it's an emergency situation, that tensions are high and that the public service is working very hard, but I think the fact that half a million people did this double-dipping would stand to show that the communication was clearly not communicated effectively enough, I would say. I'll leave it there.
I would like to ask you about the review of CERB. We know the CRA has committed, by December 2021, to provide a fulsome review of CERB. I know your department was the lead department on CERB. Deputy Minister Flack assured me that you are doing a fulsome review, but he wasn't able to commit to a date, like CRA has. He said it would be made public, which I appreciated, but can you commit to a date on that review, like CRA has?
Thank you very much, Mr. Chair.
Thank you, Minister Qualtrough, for joining our committee today to discuss the many areas covered by your department.
As you've said, COVID has really laid bare concerns that some employees are going to work sick, because they live in a province that doesn't support paid sick leave. As a federal government, we are offering income support for Ontario workers who are unable to work because they are sick: the Canada recovery sickness benefit.
Can you tell us more about this program and who can access these benefits?
Thank you very much, Chair.
The question had to do with the Canada recovery sickness benefit. I was explaining that this benefit is available to any Canadian worker who is impacted by COVID.
If you're required to self-isolate, if you're in quarantine or if you have COVID, this benefit is available to you as a Canadian worker for up to four weeks in one-week increments if, because of COVID, you've lost 50% of your work in any given week.
I could add that almost 500,000 Canadians have accessed this benefit since it was put in place.
Employers and workers and other stakeholders have a real stake in how the EI program works. I spent a lot of time with a variety of stakeholders and experts, getting their input and learning and hearing their priorities and their concerns. We heard from labour organizations and employer groups, and maybe I could just share a couple.
We met with the Canadian Federation of Independent Business, the Fédération des travailleurs et travailleuses du Québec, the Confédération des syndicats nationaux, the Centrale des syndicats du Québec, the Centrale des syndicats démocratiques, the Canadian Labour Congress, the Canadian Cancer Society, the MS Society of Canada and, of course, Pierre Laliberté, who's the EI commissioner for workers. We brought together a group with the Canada Labour Congress and a bunch more, such as Canada's Building Trades Unions.
We've been leaning very heavily in because stakeholders want us to consult, but at the same time they want to see action. They expressed approval of an approach where we sequence our improvements such that there's more time to dig in on the most complex and novel ideas, maybe like support for the self-employed, but where we don't delay changes when there's consensus or where we're further along in the discussion.
That's a good question.
Throughout the crisis we've been very sensitive to not overburdening the EI account, which we know could ultimately result in increased premiums and employers and workers bearing the cost of the pandemic. That's why, first of all, we made a decision to not impose the costs of the CERB for EI-eligible Canadians on the EI account, so to credit the EI account. In fact, the EI senior actuary actually revised the forecast for the account to reflect this. It's also why we froze EI premiums for two years.
It's why stakeholder outreach is so important. We heard first-hand, for example, from the CFIB that they had this concern; they're very aware that big ideas can sometimes come with big-ticket prices.
Madam Minister, thank you for being with us.
With respect to the motion on EI reform that was passed by this committee, we're moving forward. We wanted to invite you to address our concerns, and I think your presentation served that purpose. I thank you again for taking the time to come and see us, and I hope we will have a copy of your remarks, if possible.
In your opening remarks, you said that in the coming weeks, you would already be looking at changes that could be put in place by September 26 or September 21, when the return to the status quo is supposed to take place, which wouldn't work. What types of measures are you specifically looking at?
For example, some of the measures that you've adopted to relax the eligibility criteria for EI include the requirement of 420 hours of work, setting the minimum unemployment rate at 13.1%, and now the 50 weeks of benefits.
Is this part of the kind of relief that could be a basis for working on these issues?
You know, I can't, and I would be hesitant to weigh in on what specific elements will be announced as part of our vision and the plan moving forward, because as I alluded to in my last answer, this is indeed a conversation about the elements of a system, so we need to look at this as a bundle.
However, yes, I can tell you, for example, that the changes we made for COVID reasons—the simplification measures we put in place—would be a priority in enabling us to determine if we're going to extend them temporarily or if we're going to make them permanent, because those are the ones that are going to change without us doing anything, if we do nothing. It will be very important for us, based on the consultations, based on the work you all are doing as a committee, to make decisions around whether we continue with the standard unemployment rate, whether we have common hours to qualify or a benefit duration or benefit rate, and whether we keep our simplified reason for separation or separation-pay measures. These are all the things that are pressing because of the reality of September.
Those are the issues or the elements that are not only a priority for us, but also our commitments—as you said—like the one we made to sickness benefits.
I'm going to take this opportunity, not to ask you about the four weeks of sick leave, but rather to ask you about the special sickness benefits, which are part of the employment insurance program.
It deals with special benefits, which for 50 years have been 15 weeks. I don't need to explain the problem any more, because I'm sure that every one of us knows someone, whether a constituent or relative, who has come to their office to say that after 15 weeks, the benefits stopped, even though that person was suffering from a chronic illness or cancer. I have lots of examples. It was chaos every time, because it was hopeless. We know that 15 weeks isn't enough. A motion was passed to increase the maximum duration of special sickness benefits to 50 weeks.
Are you working to make this 50-week period possible?
As I've said, I completely agree and understand how important support for Canadians is if they have to leave for reasons of sickness. Too many claimants use up their EI sickness benefits before they can return to work. I have immense respect for the will of Parliament. Coupled with that, we have heard clearly from stakeholders that sickness benefits need to be extended, so we are committed to extending sickness benefits.
As I said, as we look at the entire system—at all of the changes we want to make, being conscious, as was alluded to in other questions, of the cost to the EI operating account of all these changes and how we sequence them—that's when we'll be more comfortable committing to exact numbers.
Until then, I feel it would be premature, beyond the commitments we've already made, to comment on any one particular element.
Thank you so much, Chair. It's nice to see you again, Minister.
Campaign 2000 has been calling for repayment amnesty for low-income individuals who received the CERB since last July. The recommendation was submitted to this committee, and most recently, a parliamentary petition was launched. They are calling for a human rights-based approach towards all who have access to emergency benefits in order to cover basic expenses at a time of heightened need.
We know that the cost, for example, for families who were living on EIA and who have children increased just because kids were at home all day—for example, food costs, hydro costs and water costs. These recommendations call specifically for repayment amnesty based on annual total income and family size, and for an end to calls for penalization for anyone who received CERB and is now deemed ineligible.
You've been clear in prior committees that when the CERB rolled out, instructions weren't clear. I think your government has demonstrated that, in terms of rolling back some of the penalties it's already discussed. Is your government willing to provide CERB repayment amnesty for low-income individuals who received the CERB, including youth aging out of care?
Minister, I want to ask you about the EI Commissioner for Employers. As you know, her appointment was up in January, after 10 years. Her name is Ms. Judith Andrew. You have not reappointed an EI commissioner for employers.
You've mentioned a couple of times in our committee today the changes you are looking at making in EI. It sounds as though they are going to be quite substantive. I believe that likely is warranted, given the archaic technology we continue to hear about. My concern is that these changes are being made without an employer voice at the table.
CFIB said that 158,000 small businesses had closed by July of last summer. They estimate that another 220,000 are going to close. I'm just concerned, if there is not an employer and small business voice at the table alongside government and the EI commissioner for workers, that there is a substantial voice being left out that impacts millions of jobs.
Are you in the process of appointing a new person? Can you give me a timeline for when that's going to happen?
Thank you, Chair. Good afternoon to my colleagues.
Minister, it's wonderful to have you back. Again, I want to commend you for your openness, availability and transparency. It's great.
My first question is about EI and training support. A few meetings back, Minister, we heard from Hassan Yussuf, president of the Canadian Labour Congress, about the intersection of EI and training support programs.
One of the recommendations he had for the committee was to expand the skills boost initiative, which lets unemployed workers use their EI benefit while getting training. Indeed, a number of organizations have been calling for better integration of training and employment insurance. We see that all the time.
Our government is committed not only to modernizing EI for the 21st century but to making the largest training investment in Canadian history.
Minister, can you share your thoughts on how training and skills development could interact in the modernized, revamped EI system?
That's a good question.
Really early in the pandemic, we heard concerns from Canadians who work in seasonal employment that their EI was soon going to be running out. Because of COVID, they didn't have any employment to look to, so we ensured that the eligibility criteria for CERB included those who recently exhausted EI regular or fishing benefits. We also worked to ensure that these workers weren't left behind without support once the transition from CERB happened, by either being able to access EI because they got the hours credit or being able to access the Canada recovery benefit.
I'm thinking also of what we did for self-employed fishers whose income may have been impacted by COVID-19. We extended the eligibility criteria so they could use insurable income from the same season in either 2018 or 2019, whatever was beneficial to them.
We extended the seasonal pilot project, of course, which was due to expire in May 2020. We are looking to see how we can make it better, make it permanent and make it more available to more seasonal workers.
Mr. Long, I'm going to follow up on what you said.
Madam Minister, if there's one thing to reform in the EI program, it is the black hole that affects seasonal workers.
The seasonal industry is an important industry in our regions and in some provinces. There is fishing, forestry and tourism. We know that there is nothing between jobs.
You've met with large organizations. There is a consensus that reform must be used to end the EI black hole.
Madam Minister, what would your solution be for seasonal workers?
That's a leap from the last question.
We know how important the seasonal worker pilot is and what a difference the five weeks make to bridge the gap between when benefits end and when their season resumes.
To me, this is just one more example of how many different scenarios need to be considered as we make any changes in EI, because we really want to make sure we're there for seasonal workers.
I hear your concern.
It's very important to me that any future EI system addresses that trou noir and makes sure that seasonal workers, where appropriate—and I think that's a really important conversation we need to have—get extended benefits, and what that looks like.
I want to hear from experts and from all of you on this committee on what possible changes you would recommend.
There's another issue. You know what it is, you talked about it in your remarks. There are gaps and flaws in our program. About 60% of workers don't have access to it.
Now, I'm going to talk specifically about women and youth, who don't have access because of their work. Women and young people are the ones in the most non-standard jobs. When a person works only two days a week, it takes them much longer to qualify for EI benefits than a male colleague who works full time for 40 hours a week. The person will have paid exactly the same premium as their colleague. So there's a kind of discrimination and, in our opinion, that must be corrected in the reform.
What do you think about it?
Actually, it will be me, Mr. Redekopp.
Minister, I want to raise the issue of the systemic failure of your department to deliver EI benefits to women, under your leadership. The issue affects women who go into premature labour.
Your department puts mothers on the child caregiver benefit while the baby is still in the neonatal ICU. Once the baby is home, the mother is supposed to be transferred to maternity benefits.
The problem is that every maternity benefit payment must be done manually for the duration of the maternity. If the Service Canada agent doesn't manually process the paperwork in time, the payments are late.
My staff contacted your officials about the specific case of Darlene, in my riding of Saskatoon West. Darlene had made many calls to Service Canada to change her EI to maternity leave after she gave birth three months prematurely.
She applied in October 2020, days after her baby was finally home from the hospital. Service Canada promptly cut her off and told her it would take three months for the maternity benefits to kick in. My office had to intervene multiple times with your officials. She is getting money now, but even a month ago she called about having another problem.
Minister, is this systemic failure, denying women maternity benefits, official Liberal government policy or simply lack of ministerial leadership by you to help women?
I call the meeting back to order.
Today the committee is meeting to resume its study of the employment insurance program.
Ms. Pohlmann, I just want to make a few comments for your benefit.
Before speaking, please wait until I recognize you by name. When you're ready to speak, you can click on the microphone icon to activate your microphone.
Interpretation in this video conference will work very much like in a regular committee meeting. You have the choice, at the bottom of your screen, of either floor, English or French audio.
When speaking, please speak slowly and clearly. When you're not speaking, your microphone should be on mute.
I'd like to welcome you to the committee, not just welcome you but also thank you for providing a brief in advance. It actually has been circulated to the committee, just so you know.
Colleagues, this is Corinne Pohlmann, senior vice-president, national affairs and partnerships with the Canadian Federation of Independent Business.
You have the floor for five minutes. Welcome.
Thank you very much, Mr. Chair. Thank you for the opportunity to be here to provide the perspective of small businesses when it comes to EI.
As you may know, the CFIB represents about 95,000 small and medium-sized businesses across Canada. As we have this discussion, it's important to keep in mind the current plight of small businesses in Canada. COVID-19 has hit them hard. Just yesterday we released new data showing that, as of April 13, 56% of small businesses were fully opened, 40% were fully staffed and just 29% were back to normal sales. We also know that one in six—about 180,000—small businesses are at risk of closing, putting as many as 2.4 million jobs at risk, and that almost three-quarters of businesses have taken on new debt—on average, $170,000 in new debt. They simply cannot afford to take on any new costs now or in the near future.
Now, EI premiums add to the cost of hiring, along with CPP, and are considered profit-insensitive, so they must be paid regardless of whether the business is making money. As smaller firms tend to be more labour-intensive than larger firms, they also tend to be more sensitive to the costs associated with EI, given that employers pay 1.4 times what employees pay.
In early February, the CFIB did a survey of our members on EI and found that over 90% support EI as a job-loss insurance program that covers those who pay into it. About two-thirds also support having maternity and parental benefits and sickness benefits paid for through the EI system, but only one-third support having employee training paid for through the EI system. This is likely because the EI-paid employee training that exists rarely incorporates the needs of small businesses, and that is why 90% want EI-paid training programs to be more aligned with business needs and priorities.
As you review the EI system, there are several things our members would like to see addressed.
First, over two-thirds support premium rebate-type programs that can help alleviate some of the costs associated with EI. For example, EI premium rebates can be used to encourage smaller firms to hire youth, such as what was proposed by the Liberals during the last election campaign, or they can be used to offset training costs for new and existing employees. There's also strong support from smaller businesses to make the EI system more equitable by moving to a fifty-fifty split in EI premiums and by refunding EI over-contributions to employers. EI over-contributions are refunded to employees when they do their taxes, but the employer amounts remain in the EI system. At the very least, these funds could be redirected to a premium rebate program to enable employers to offset EI costs.
We understand that the current government is looking to add EI coverage for the self-employed. When we asked about whether regular EI coverage should be made available to the self-employed, only 8% supported mandatory coverage. However, 73% were open to having it be voluntary.
In a survey we did last week, we asked our members if they would use a voluntary EI program for the self-employed, and we found that 41% said that they might use it, 34% would not use it and 24% were not sure, likely waiting to see how such a program would work and how much it would cost. We'd be happy to work more with the government on making sure that EI for the self-employed is something that will address the needs of small business owners who are all self-employed themselves.
Another issue that has been discussed is the extension of sickness benefits. Small business owners are in a unique position, as many of them do not have health insurance coverage for their employees or themselves, so some rely on the EI system for that purpose. We asked our members in February whether sickness benefits should be extended to 26 weeks. We found that 45% of our members supported that; 45% were opposed and the remaining 10% were unsure. More recently, we asked about extending sickness benefits to 50 weeks, and we found that 46% remain opposed. However, the level of support went down to 35%, while those saying they were unsure doubled to 20%. Clearly, then, more information is needed for smaller employers to understand what the costs and benefits of extending sickness benefits would be for the EI system.
Finally, I want to touch on some of the temporary supports being provided by the EI system and how they would be perceived by small businesses should some of these features be made permanent. Like with the extension of the sickness benefits, our members are fairly split about increasing the minimum amount of time workers can access EI regular benefits, increasing the replacement rate to more than 55%, and making a COVID-related sick days policy of $500 per week for two weeks—now four weeks—paid for through the EI system. However, the one COVID-related measure that was strongly opposed by three-quarters of small businesses was permanently providing a minimum of $500 per week regardless of the amount previously earned by the worker.
This is likely because many see this approach as a disincentive for some to return to work. In fact, 43% of small business owners said they had difficulty retaining and/or hiring people because they suspected that they would rather collect EI or other COVID-related income supports. This went up to 64% among those in the hospitality industry. During pre-pandemic times, only about 17% felt it was difficult to attract workers as they suspected they would rather stay on EI.
It's important that any permanent changes to the EI benefits not make anyone better off than if they were working.
All the details I shared can be found in our new report, which was released today, but they are also part of the submission that has already been circulated to all of you.
I would like to leave you with one last recommendation: Now is not the time to be making permanent changes to the EI system. Many small businesses are struggling and are singularly focused on finding ways to keep their businesses solvent to retain their own livelihoods and that of their employees. Should permanent changes be contemplated, then the vast majority of our members ask that there be full consultation with workers and employers that includes a detailed cost analysis. As the funders of the EI system, employers and employees deserve to be fully informed of the costs and benefits of any proposals, and should be given lots of opportunity to provide input.
Thank you. I look forward to your questions.
I know you have a stellar reputation with small businesses in Canada. I heard this in Winnipeg. In fact, 73% of Manitobans employed in the private sector are employed by small businesses. It's a huge employer in Manitoba. Our small business industries are very critical.
I want to ask you about something that happened earlier today in the public accounts committee. The NDP member of Parliament, , said that your research was dubious. We were talking about the impact of the pandemic. I was quite concerned by that, given what you've just shared with me: new immigrant businesses, women-owned businesses, small mom-and-pop shops. These are the businesses that create the culture of Canada in all of our ridings as members of Parliament.
I want to hear from you. Could you explain to members of the committee your perspective on the integrity of the CFIB, what you've heard from your members, and how critical the situation is for them, given the pandemic this year?
It has definitely been an incredibly difficult year. Given that we are an organization that has done survey research for decades already, we were well positioned when the pandemic began to get to our membership quickly to really determine what the impact was and what was happening. I would even argue that we were probably the only organization that was able to do that as quickly as we did.
A lot of that research was used quite extensively within government, because there wasn't much other research happening at the time. With our average survey, especially at the beginning of the pandemic, we were getting 8,000 or 10,000 responses to a survey, which was more than enough to make sure it was representing what was actually happening. Even today, we're still getting about 4,000 to 6,000 responses to every survey.
Many times over the years, because we're an advocacy organization and people will suggest that maybe our research is biased, we have done much research to try to validate that it isn't. We have found that when our research is done in a different way by others, it is pretty much on par with the information we have. We've had government departments duplicate our research, because they didn't necessarily believe it at first, and then find the same thing that we found.
I would say it is not dubious. It's a fairly good reflection of what is happening out there in the small business landscape in Canada.
Ms. Pohlmann, thank you very much for joining the committee today. Your perspective is obviously very important to the study that's in front of us.
My father used to own a small business, and I used to work there during my high school days. I understand how resilient small businesses are and how important they are to the neighbourhood, so, through you to your membership, I want to thank them for doing what they do.
Small businesses are also very crucial to the economic recovery post pandemic. That's why the government has introduced a series of financial assistance programs, including CEBA, the rent subsidy and the wage subsidy, until June of this year. What kind of feedback have you been hearing from your membership regarding these financial support programs?
Like you, I look forward to seeing what will be in the budget on April 19 to support small businesses further.
Last March, Canadians realized that the EI system just wasn't designed to handle the unprecedented pandemic we were facing. That is why the CERB was created, to support what I think was eventually eight million Canadians who had lost their jobs.
In September of last year, we transitioned back to a simplified EI program and created the Canada recovery benefit for those who did not qualify under the previous EI qualifications.
Based on the input from your membership, how would you say the flexibility within the Canada recovery benefit will create more incentive to work? Have you heard anything back from them on that?
Good afternoon. Thank you very much for being with us.
I salute the Canadian Federation of Independent Business, or CFIB. Before I became a member of Parliament, I had the opportunity to work with the CFIB, particularly in Quebec, with Martine Hébert, on the Commission des partenaires du marché du travail, a forum for social dialogue where labour issues and labour conditions were very important.
I've read your brief and your recommendations. The reason a committee was asked to reform the EI program is because we found that the current program didn't meet the needs. Because your businesses are important, the government had to put in place other measures as a result of the crisis. It's true that this crisis is exceptional, but without these measures, it would have been difficult, and you recognize that.
The goal of making EI more inclusive for workers is to ensure a better social safety net. In that sense, what measures could be taken to improve the program, in your experience?
There is a lot to look at when it comes to modernizing the employment insurance system, which is something I think our members are not opposed to doing. The issue right now is that for many of these changes that may be looked at or are being proposed, it's unclear exactly what the implications would be. There's a lot of openness, as I mentioned, where our members are very split on things such as expanding sickness benefits. They're very much split on increasing that 55%.... I can't remember what it's called right now, but that amount you get in terms of EI benefits.
Our membership would be open to looking at a number of things in terms of modernizing the system, but a lot more information needs to be provided in terms of the costs and benefits of those systems, so that the employers who pay 60% of the EI program have an opportunity to really understand what these changes mean for the benefits both to society and to their employees. For many of them, if they have to let their employees go, it's often a very difficult thing for them to do, and they want to make sure their employees are going to be well served. At the same time, what are those costs going to be? Ultimately, they're going to have to pay 60% of that, and they want to make sure there's a proper balance and an opportunity to provide input. Those are some of the things we need to look at first.
There are, of course, a few things we would like to see for employers themselves. They would like to see a bit more equity around who pays the premiums. For a small business owner it's a big hit for them to take, so they would like to see a more even split or even some way to allow smaller business owners to maybe pay only 1.2 times more and, up to a certain threshold, 1.4 times more. We have a lot of ideas there to look at how we can make the EI system more palatable and easier for owners of smaller businesses to understand or to use, especially if we start to make other adjustments to the EI system that may end up increasing the cost of it.
It's an interesting question, because we often look at that from a seasonal employer perspective. We've heard often from seasonal employers that they really want to hold on to those people and not have them get other in-between jobs, because they've been trained and they're well known to the company. They want to make sure of that, but they can't keep them year-round because the business is only really functioning for, say, six months of the year. It's a challenging one for sure.
We've spoken to seasonal employers in the past. Many have told us that in order for them to be able to retain those employees throughout the year, they would be willing to pay a bit more for EI, for example. Make it more of an experience-rated type of program, like most other insurance programs are, so that the more you use it, the more you'd be able to pay. That's from the employer perspective.
There may be other solutions we can look at in those particular areas where seasonal workers are an important component of that community and for that employer. If we can do that, maybe there are ways in which we can be more creative about making sure those employees are there when they're needed. Obviously, you know, we want to make sure it's fair to everybody, including the EI system.
Thank you so much, Chair.
The heart and soul of my riding of Winnipeg Centre is small businesses. I'm a huge supporter of local small businesses. They are what really makes Winnipeg Centre vibrant. We actually even have some of the best restaurants and award-winning chefs in the country: Check out Deer + Almond on the Food Network. I'm very proud of our businesses.
One of the frustrations I've had is watching this current government give billions and billions of dollars to corporations, while small businesses in my riding are struggling to stay afloat. They are saying that if there's another lockdown they literally don't think they're going to make it. This will destroy our community, and we know that small businesses are the largest employer in the world—not just in Canada, but in the world.
Do you feel that the help that has been given to small businesses during the pandemic so far is sufficient?
I would say it has been vastly improving over the course of the pandemic. At the very beginning, some of the first ideas that came out were nowhere near sufficient. Thankfully, after lots of feedback and advocacy work—not just from us but from many others as well—the government pivoted and started putting out programs that were quite a bit more generous.
I would say that the wage subsidy program and the Canada emergency business account program have both been very important to many small business owners and have helped many of them get through the really difficult times.
Could improvements be made? They could, absolutely, especially to the rent subsidy program, for example. There are definitely things we think could be tweaked to make them even more accessible and easier to access. They continue to be important lifelines.
One area that I certainly think still really needs to be addressed is how to help small businesses deal with the debt they're accumulating, because for many of them it's going to take years to get out from under that debt. That's one area we think still needs some work.
Thank you, Ms. Gazan. That concludes the time we have.
Ms. Pohlmann, I want to thank you for your patience, first and foremost. Although it appears that you've been shortchanged in terms of your time before the committee, we got you all to ourselves, so you probably faced twice as many questions in the last half hour as you would have if you had to share the stage. We certainly appreciate the advice that the CFIB gives to successive governments, and it has been doing so for 50 years.
I would be remiss if, before we adjourn, I didn't point out to you some of the excellent work that has been done in my province of Prince Edward Island by Erin McGrath-Gaudet over the years. She has been an extremely articulate advocate for small business, to the point where the last time the government changed she was hired as the deputy minister of economic growth. The credibility that she has with the business community is serving her and the new government here in Prince Edward Island very well. If that's an indicator of the calibre of talent you have, you have another 50 years in you.