HUMA Committee Meeting

STANDING COMMITTEE ON HUMAN RESOURCES DEVELOPMENT AND THE STATUS OF PERSONS WITH DISABILITIES

COMITÉ PERMANENT DU DÉVELOPPEMENT DES RESSOURCES HUMAINES ET DE LA CONDITION DES PERSONNES HANDICAPÉES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, April 24, 2001

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[English]

The Chair (Mr. Peter Adams (Peterborough, Lib.)): Colleagues, if we could begin, we're here pursuant to Standing Order 108(2), review of testimony pertaining to the hearings on Bill C-2 and the employment insurance 2000 monitoring and assessment report.

I welcome on your behalf our witnesses. We have Wilma Vreeswijk, who is Acting Director General, Labour Market Policy. Wilma, it's nice to see you again. Also here is Gordon McFee, Director, Policy and Legislative Development; Sonya L'Heureux, whose name—I'm sorry, Sonya—is not on our agenda, but colleagues, it's Sonya L'Heureux, who is Assistant Director, EI Policy. And we also have Réal Bouchard,

[Translation]

Director, Social Policy, Finance Canada. It's a pleasure to have you here today, Réal.

[English]

Colleagues, I think we would proceed as usual. And, witnesses, if you could proceed and take us through whatever you have to say, then we'll go to the discussion and the questions and answers afterwards.

Wilma.

Ms. Wilma Vreeswijk (Acting Director General, Labour Market Policy, Department of Human Resources Development): I believe a deck is being handed out at this time and I want to take you through it. There were a lot of witnesses. They raised a lot of issues. This helps to provide a context for that.

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Over the last few several years, EI has been altered, adjusted, to make it more responsive to the needs of Canadians and to the change in labour market realities. The big change came in 1996 to recognize each hour of work to ensure that we improve the incentives to work and to provide claimants with additional support in terms of low-income families.

We also started at that time the annual monitoring and assessment process, this report that is tabled in Parliament each year. That provides us with an opportunity to take a look at how the act is working and how it affects Canadians as individuals and communities and the economy as a whole. That's providing much of the basis for this presentation today. Very little about the act is not being reported in here. It's very clear we'll be trying to draw on the information that's publicly available, which you have.

We'll go to slide two. It is a technical presentation. We are looking at the evidence that we have observed on EI issues. We've taken a look at the testimony by the witnesses and the summary that was prepared by the parliamentary research branch, as well as the monitoring and assessment reports. Essentially we can group the concerns into the program coverage, the benefit rate, the duration of benefits, program administration, and financing. So that is how we propose to go through the presentation.

We recognize that there are many specific issues within each theme, but this is just to provide context for the later questions.

As reported in the monitoring and assessment report in regard to the economic context, the report recognized that economic growth in 1999-2000 reduced the need to rely on EI. There were 400,000 new jobs created that year with almost all the growth in full-time employment. We had more net growth in 1999-2000 than at any time since 1987-1988.

Women in particular continue to see strong gains. The unemployment rate for women dropped quite low, to 6.7%. Youth employment also fell considerably to the lowest level since 1990 at 13%. Most of the jobs for youth in 1999-2000 were concentrated in full-time employment.

So fewer Canadians needed to access the program in that year and overall claims went down for men and women for all age groups and in all regions of the country.

In terms of coverage, Bill C-2 witnesses raised the issue of access to EI. EI is a targeted program. It's designed for people who are in paid employment, who have a recent job loss or separation from employment, who are too sick to work or have the arrival of the birth of a child.

There are people for whom EI is not designed: those people who have not worked in the last 12 months, the self-employed, those returning to school, and those who quit without just cause. Other federal and provincial programs for many of these groups are provided, such as the Canada student loans program for students.

The year 2000 M and A report looked in depth at the issue of coverage. So we looked at two different measures of coverage, one looking at the unemployed and the other looking at the employed, just to give a full view of what's happening in the labour market.

If you look at slide 5, focusing on the unemployed, work was undertaken by HRDC and StatsCan called the employment insurance coverage survey. The results for 1999 indicate that 80% of those for whom the program was intended were actually eligible to receive benefits. These results are unchanged over the last two years. Of the remaining 20%, those individuals had insufficient hours to qualify.

With EI, eligibility increased significantly for multiple job holders who worked less than 35 hours but may have several jobs of 10 hours. Previously under UI, if you worked less than 15 hours, you were just not covered by the program. Overall research indicates that the move to the hours-based system did not reduce significantly the overall eligibility when we looked at the unemployed population.

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If we focus on the employed, we might ask ourselves of the 12 million people who are in paid employment in Canada, if they lost their jobs tomorrow, would EI be there for them? This line on page 6 looks at new research that was undertaken specifically for the commissioners for the year 2000 monitoring and assessment report. As shown in the pie chart, you can see that 82% of Canadians are in paid employment and 18% are self-employed. That's about one in five.

If you take the bar chart moving out from the paid employment, looking out, we then find that 88% of those people in paid employment, if they lost their jobs, would be covered by the EI program. The remaining 12% may not have had sufficient hours. So in terms of ensuring that if people lost their jobs, of the 12 million who are employed, 88% would be covered.

Looking at the issue of benefit rate and overall income adequacy, these were issues that were also raised by Bill C-2 witnesses. It's important to note that we should strike a balance between ensuring that the temporary income support is there when Canadians need it, but at the same time balancing the need for work incentives. You need to make sure that those who get the assistance do so without creating competition with the average wage in the labour market; therefore, the focus on low income with the family supplement.

As reported in the year 2000 monitoring and assessment report, about 195,000 low-income families received the family supplement. The average weekly benefits were about $254—almost 38% higher than pre-EI. Two-thirds of the people who get the family supplement are women, and the family supplement is much better targeted. It has also gone up significantly each and every year since 1996. The UI dependency provision, which was previously provided and was supposed to be targeted to low-income individuals, was at about $14 per week, but the EI family supplement moves that to $43. So in terms of ensuring that low-income families get adequate incomes, the family supplement has moved from a replacement rate of 55%, right up to as much as 80%, so that the family supplement is there for them.

In terms of the divisor, this was also an issue that has been raised at the standing committee and by some witnesses. The divisor rewards individuals who work more than their minimum entrance requirement. Thereby, it's designed to encourage greater labour force attachment. The divisor is working quite well. Only 2% of all EI claimants enter the program with less than two weeks above the variable entrance requirement. As you can see from the graph on page 8, 98% of the claimants work at least two full weeks more than the minimum requirement, but the pattern of work has changed so that we have fewer people who cluster around the minimum entrance requirement. People are working and finding that extra work and getting the extra workforce attachment to avoid the divisor; 98% of people are doing that.

Even people with short-term employment increased their hours of work since EI. I should point out that this change in pattern that we saw pre-reform/post-reform was an almost immediate response to EI, so that we saw an immediate greater workforce attachment as a result of the divisor, and 98% of the people responded that way.

In terms of duration, Bill C-2 witnesses also raised the issue of the period of entitlement. It should be pointed out that the average entitlement period remained the same before and after reform. The 1999-2000 average entitlement was 32 weeks. However, on average, claimants use only about two-thirds of their entitlement before returning to work. They use about 21 weeks of entitlement. About one in five claimants stay on claim for their entire entitlement period, and this figure has declined by about 14% since EI reform. Even in high unemployment areas—and the monitoring and assessment report takes a look in particular at high unemployment areas—the majority of claimants only used 70% of their entitlement.

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I'd like to ask my colleague Gordon McFee to go through some of the next slide with you. It's program administration.

Mr. Gordon W. McFee (Director, Policy and Legislative Development, Department of Human Resources Development): You will all know from the jobs you do that a key concern of both you and Canadians in general when they try to obtain employment insurance probably clusters around three major points, in respect of administration at least. The first one is how quickly we get the cheque to people who have the right to get it. Second is the quality of the service Canadians get. And the third matter is, if they're dissatisfied with cases, how quickly they can gain access to the appeal system. In those three areas I would like to say a couple of quick things. We take the service we try to provide seriously. We try to improve it continuously, in regard to both speed of service and quality.

I have a couple of facts you might find interesting. We have a target—and we've had the target for some time now—that 90% of first payments should be made within 28 days of the person's filing the claim. The latest information we have as to how well we're doing in that respect is that we're at 96.7%. We'd prefer 100%, but 96.7% is better than the target.

On the speed with which appeals are heard, our target is to have the appeal scheduled at the board of referees within 30 days of the decision arriving with the claimant. The last information I have is that right now we're at about 89%, so we're very close. It's not the 90% we'd like to have, but the interesting point is that it has gone up every year in the last four years, and we're working very hard to keep that up.

Another concern of individuals is, if they have questions, how quickly can they get through to somebody to get an answer. We have a target of 95% of callers to our telephone centre getting through with no busy signal. The last information for 1999-2000 was that the achievement was 99.9%, so that's as close to 100% as you will probably get in the real world.

We recognize that we want to do even better. We think we're doing reasonably well under the circumstances. We want to do even better and we work hard at that.

The final point of importance to us is the quality of the service and the quality of the decision. Obviously, if the decision is flawed in the first place, everyone—the claimant, us, and sometimes you folks, because they come to you for help—goes through a lot of unnecessary rigmarole, and none of us really wants that. We're working very hard to improve the quality. It's an approach designed to better inform and educate claimants and Canadians in general, so they know what they're up against when they think about EI, and to ensure that employers are informed as well, so they will do a better job and have the information required to fill in the forms the right way. The last aim, obviously, is equally important, to inform our own staff and make sure they are properly trained, so they make as few decisions with errors as possible. We have some room to improve in the area of quality. It's a major initiative this year to reduce the error rate, and we're working hard at that now.

That, in a nutshell, is roughly where we're at in trying to administer the program on a level of quality.

Ms. Wilma Vreeswijk: With the next line on page 11, I'd like to ask my colleague Réal Bouchard from the Department of Finance to take us through the rate-setting information.

Mr. Réal Bouchard (Director, Social Policy, Department of Finance): For the rate-setting the Department of Finance, in consultation with Human Resources, will prepare a document to set out the issues. Of course, in developing that paper the government will consider the views expressed by the Auditor General in the House committees. As well, we will examine the approaches and experience of other countries. This fall is when we're planning to release that paper, with a view to having consultations next year with the various stakeholders and Canadians.

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I'll say a few words about the objective of the paper. The paper is to try to determine how best to set the premium rates. There will be essentially two objectives. One is to ensure that basically the premiums cover just the cost of the program. The second is how to have a premium rate-setting mechanism that ensures some stability in the rates, to avoid fluctuations in the premiums in each year, for employers as well as their employees.

So release of the paper in the fall and consultation next year would give us sufficient time in 2003 to go through, if we have to, the legislative process. Any change then recommended and approved by Parliament could be in place by 2004.

Thank you.

Ms. Wilma Vreeswijk: To conclude the presentation, EI is of fundamental importance to communities, to individuals in this country. It is important in respect of our national and our regional economies. It is a complex and integrated program—all the pieces work together. We've provided something of a bird's-eye view of the issues. We'd be happy to answer any of your questions.

The changes that have been made, the 1996 changes, the small weeks changes, the maternity-parental, the most recent changes that have come through this committee on Bill C-2, have been effected to ensure that EI responds to the needs of Canadians and the changing labour market. It is proposed that we continue to study the evidence to make sure EI is doing exactly that. A report is going to be tabled in Parliament, and with the legislation—Bill C-2 has just gone through—we'll be doing that for the next five years. So it is an important part of ensuring that EI continues to meet the needs of Canadians and is responsive.

The Chair: Thank you, Wilma, and thank you to your colleagues.

For the committee, can I first remind you that at the end of this meeting we're going to take 30 minutes to give some direction to our researchers in framing our report.

I'll proceed in the usual way, so it's Val Meredith, Joe McGuire, Paul Crête.

Ms. Val Meredith (South Surrey—White Rock—Langley, CA): One thing you haven't addressed in this is something raised by the witnesses who appeared before us from the business community, from the hotel and restaurant association, and others, who were concerned that the way the whole program is presented to Canadians and is administered is not necessarily appropriate in today's workforce. They used examples from the business community to show that they're paying 60% of this employment insurance program, and yet a lot of the programs under it are social benefits, as opposed to work benefits—maternity benefits, those kinds of things. They felt it was somewhat unfair that they should be expected to pay 60% of the fund and that, with the changes in legislation on maternity, they should be expected to have funded that person to take the maternity leave, as well as having to pay 60% of the EI benefits of the replacement of that individual who they're going to need to bring on staff to replace the person who is gone for a year. None of that seems to have been addressed in your approach.

Maybe you feel it's not your place to give the other side of the argument, but that's certainly part of what we have to deal with in this committee. There's another voice out there saying it's not fair for low-income workers in the hotel industry to be supporting people who make considerably higher incomes, albeit on a part-time basis, and it's not right for the business community to pay 60% of an insurance program that goes beyond employment insurance—that should be shared by the general taxation of the country. How do we address those issues in this kind of program?

The Chair: Wilma.

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Ms. Wilma Vreeswijk: You've raised a number of issues. I'll respond to some of them and I'm certain my colleague from the Department of Finance will also have some comments to make.

First and foremost, the balance we strike in the EI program is a balance between ensuring that the people who need income support have it when they need it and ensuring that workforce attachment is promoted, that at the end of the day EI is not the solution. It's to promote, as much as possible, workforce attachment. At the same time, EI has to be there when people have an interruption of earnings, when they have sufficient hours. You've raised the issue of maternal and parental, and that is an interruption of earnings. Other countries have maternity and parental programs. Their businesses have adapted to those. It's important that, in a world where there's a global competition for skills, we have programs like this. Maternity and parental benefits have been around for a long time—maternity has been around for 30 years, parental has been in for 10.

Ms. Val Meredith: Just let me interrupt. My comments aren't that these people are opposed to those benefits being there. Their opposition is based on the fact that those are societal benefits; they're to encourage mothers to stay at home with their children in those formative years. They feel that's a very justifiable thing to try to achieve, but that they, as business people hiring individuals, should not be expected to pay 60% of a program that benefits all of society, that the program perhaps should be supported through some other program designed for it. They're not arguing that it's not a good idea, they're just saying it's unfair for them to be expected to be picking up the majority of the costs, when the benefit is to the society as whole, not just to them as business people and employers.

The Chair: Wilma, you have to be very brief, because we have a system here and we're already over time.

Ms. Wilma Vreeswijk: Okay.

The Chair: It's an interesting and important topic.

Ms. Wilma Vreeswijk: I think the approach that has been taken is that it's a partnership across society. There is a separation of earnings. There is an interruption of earnings when people go on maternity and parental. At this time there is constant debate concerning work and family in regard to Canadian society. The approach the government has taken is to provide families with the choice to stay home and care for their children for the period of a year, to provide the flexibility for the period of a year. Employers did adapt very well to the six-month maternity-parental, and we're confident they will be able to adapt to the extension. The replacement worker they would have hired for six months is the same replacement worker they would have drawn on for the year.

The Chair: Okay. Val—

Ms. Val Meredith: She didn't address the issue.

The Chair: I suspect we will come back to the 60% and who pays it, the point that was being made there.

Joe McGuire, Paul Crête, Diane St. Jacques, Yvon Godin, Alan Tonks, Carol Skelton.

Mr. Joe McGuire (Egmont, Lib.): Thank you, Mr. Chairman.

I was just discussing with the researcher the court case involving the lady in Winnipeg. Could you explain the implications of the verdict for the EI system and what the case was about?

Ms. Wilma Vreeswijk: I presume you are referring to the Lesiuk court case.

Mr. Joe McGuire: I'm afraid so, yes.

Ms. Wilma Vreeswijk: With the Lesiuk court case, the decision came in about two weeks ago, and at this point in time I don't think it's appropriate for me to comment on all the ins and outs of the case. The government is looking at the decision. It's a complex decision and we're certainly studying it at this point.

Mr. Joe McGuire: What did the court actually say?

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Mr. Gordon McFee: I should preface this by saying something you'll understand as soon as I finish talking. I'm not a lawyer. Quite frankly, it is difficult to understand what the decision said. The actual end of the decision itself said Ms. Lesiuk's case should be readjudicated as if the entrance requirements didn't exist, in other words, that subsections 6(1) and 7(1) didn't exist, which makes it difficult to figure out what to do in a case like that, if one chose to. The judge made other findings in respect of other issues involving EI. He was focusing mainly on someone who wasn't able to qualify for regular benefits and wasn't able to qualify for special benefits, one after the other.

Part of the challenge with this decision is to understand exactly what it does mean, what the consequences are, and as Ms. Vreeswijk intimated, we're not there yet. So anything else I might say would merely be speculation. It's a tough one, sir.

Mr. Joe McGuire: One of the items brought up in our hearings was the difficulty in qualifying for first-time applicants, the 910 hours. I notice you haven't addressed that here. And it was, according to a lot of the witnesses, a real hardship to qualify. A lot of people have to leave their area, go to Montreal or some place, and then qualify in order to live in their region. In particular, a lot of witnesses from Quebec had that problem. Did your findings support their complaints that it is very difficult for first-time seasonal workers to qualify at all? And what happens to these people if they don't? We hear the provincial governments complaining that we're really loading up on their welfare cases, because it's too difficult to qualify for EI. Do you have any statistics to support those complaints?

Ms. Wilma Vreeswijk: The new entrant and re-entrant provisions, were introduced in 1996—I think it was 1996—to ensure that when Canadians are making choices on a first job, it's very important that there should be sufficient and substantial attachment to the labour force before people apply for EI. We have to ensure that we don't create a cycle of dependency. I think everyone would agree it's really important that, wherever possible, people be given an opportunity to work, rather than going on EI.

Youth in particular provided issues that were raised during the hearings on Bill C-2. The labour market for youth has got much better. We moved from an unemployment rate of over 16% to one of 13%. So the labour market is quite strong for them, much stronger than previously. I think it's been about ten or eleven years since we've seen a labour market like this. And for the most part, when they're leaving the labour market, three-quarters of youth tend to do so because they're returning to school. Labour market outcomes for youth are far better when they go to school, and there are a number of supports in place to assist youth in going to school. Once they have post-secondary education, the employment growth is quite a bit stronger than if they don't have any secondary school. The employment rate is 5.3% if you've got post-secondary education, while the employment growth is a little under a percentage point for those without high school education.

So those people who are leaving the labour market tend to leave for school, and I think that's a good thing. At the same time, it's a balance in ensuring that EI be there and that people be able to apply for it, but that the entrance requirement ensure that significant labour force attachment is acquired before going on EI for the first time.

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The Chair: I have to move on, I'm sorry.

Paul Crête, Diane St-Jacques, Yvon Godin, Alan Tonks, and Carol Skelton.

[Translation]

Mr. Paul Crête (Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, BQ): Thank you, Mr. Chairman.

You say in your document that "the department has considered: the testimony of Bill C-2 witnesses" before drafting this document. I'd like to say to you at the outset that if this document reflects exactly what your rapporteur reported back to you, you should fire him, because he did not report any of what we have heard. There is absolutely nothing in reference to the comments made by the 60 groups that we heard from.

I am going to ask you two simple questions. Firstly, what amendments would you like to see made to the Employment Insurance Act? We have finished hearing from witnesses on Bill C-2. We have got down to the stage where we have decided to table recommendations to the House and to the minister himself with a view to making other amendments to the Employment Insurance Act. This is the chapter which is missing from your presentation. What amendments would you like to see made to the employment insurance system to make it satisfactory for contributors and benefit recipients? That's my first question.

Now for my second question, which is for Mr. Bouchard. In your document, when you talk about consultations on premium levels, I would just like to make sure you are in fact saying that in drafting the document you will consider the opinions put forward by the Auditor General and the Finance Committee. Consequently, the Human Resources Development Committee will not be consulted on this issue at all. The document that we have before us only refers to the Finance Committee. Could you just clarify this matter?

[English]

The Chair: Can we keep the pace moving, because I hate to cut off these discussions? If we can do it briefly, we can get around again.

Ms. Wilma Vreeswijk: As for modifications to the Employment Insurance Act, I'm here for a technical brief. I provide answers on how the EI Act is affecting individual communities in the economy. It's not my role, I think, to be commenting on policy choices that are best left for ministers and folks like yourself.

The Chair: Did you want to follow that, or do you want to go to Monsieur Godin?

[Translation]

Mr. Paul Crête: I have one brief follow-up question.

You are here today as department representatives and you are required to produce a report on amendments to the employment insurance system. Does the department plan to make changes to the employment insurance system? Can you tell us where, at the very least, there are some areas that the department would like to look at quickly with a view to establishing whether changes need to be made? The message that we are getting from department officials is that the current employment insurance system is working very well. This is something that the witnesses that we have heard from have refuted completely.

[English]

Ms. Wilma Vreeswijk: If there are particular areas you would like to have information on, particular witnesses who have raised issues, I'd be happy to provide technical support in regard to those issues and answer the question. But it is not my role to be commenting on the policy agenda of the government.

[Translation]

Mr. Paul Crête: You have told us that you conducted an inquiry, and that you have considered comments that were made. These comments included remarks on the eligibility of young people, women and seasonal workers. However, your report does not assess these issues. You are here today to assist us in doing exactly that. Take the case of women, for example; are you going to be in a position to tell us whether or not they are eligible and just like everybody else? Are young people eligible in the same way as other people? What percentage of these two groups are eligible?

In your document, you talk about recent job loss. Are you now admitting that you omitted the long-term unemployed and that they are no longer your responsibility? These are just some examples, but don't you have any other areas where your point of view might contradict or support the arguments that we have heard? We would like to have some genuine detail on these issues because we have now moved on from the witness stage. We heard testimony in a preceding stage and we have decided to table recommendations on the amendments that should be made to the bill.

[English]

Ms. Wilma Vreeswijk: You raised the issue of women and EI, how well EI is supporting women and the labour market realities women are facing. The monitoring and assessment report spent a fair bit of time looking at women and EI. It reports on the fact that women are facing the best labour market they have faced in 25 years, that more women are working than ever before, and that—

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[Translation]

Mr. Paul Crête: Just a moment. The employment insurance system will operate in both boom and bust periods. Our assessment cannot be influenced by the fact that jobs are created during periods of economic growth. That has nothing to do with an assessment of the employment insurance system. This type of approach would be completely wrong. Jobs are created through economic efficiency.

Yes, Mr. Chairman, I am going through you.

The employment insurance system is responsible for managing unemployed people. Do you recognize that these are two very different issues?

[English]

Ms. Wilma Vreeswijk: I think there is a recognition that it's important for EI to function within the full business cycle. That's certainly true. That is why the monitoring assessment process is there, to look at EI and how it responds to changes in the economic cycle and to ensure that it's there for individuals and communities.

As to whether EI will be there should there be a downturn in the economy, every single month in regions right across the country the entrance requirements and entitlements are adjusted to reflect changes in the economy. UI and EI have been supporting Canadians for 60 years. We are taking a look to make sure it is responsive to the needs of Canadians, but the adjustment that happens every single month ensures that if there are localized changes, the entrance requirements and entitlements are adjusted accordingly.

[Translation]

Mr. Paul Crête: I have one example here of the total contradiction between these two issues. For example, when the employment situation improves in a given region, the situation gets worse for seasonal workers, because when unemployment rates drop unemployed people are required to work more hours to qualify for an unemployment benefits and they are eligible for fewer weeks of benefits. This is the type of situation that we have recently experienced in my region. Instead of being entitled to 32 weeks of benefits, people are only eligible for 22 weeks. This example shows that we cannot link economic growth to the employment insurance system. They are two different issues. We must have growth, but we also need an employment insurance system, which addresses the requirements of the labour market.

[English]

The Chair: Okay. We have to stop there. We'll come back to Monsieur Bouchard's question, I'm sure, later on. But if I could comment before I go to the next question, it seems to me that your own monitoring and assessment report says it's been more difficult for women to gain access to programs. It's not my turn, but it's a comment. And we can come back to it, I'm sure.

Diane St-Jacques, Yvon Godin, Alan Tonks, Carol Skelton, Anita Neville, Monique Guay.

[Translation]

Ms. Diane St-Jacques (Shefford, Lib.): Thank you, Mr. Chairman.

My question deals with maternity leave and is for Ms. Wilma Vreeswijk. On the issue of eligibility for maternity leave, several people have told us that 600 hours is unrealistic. It is common knowledge that many women work part-time and accumulating 600 hours becomes a problem for them.

It has also come to my attention that there is a problem in terms of precautionary cessation of work. This issue was not necessarily raised during our hearings. I don't know if you are aware of this problem, but I would appreciate some information on the problems that arise when women leave work on the grounds that they have a problem with their job, and at the end of the day they are not eligible for benefits. It seems that this problem stems from the fact that they are not considered as salaried workers and at the end of the day, they are not eligible for maternity leave.

In addition, I don't know whether you have looked at this issue from the perspective of the new one-year maternity leave program, but those women who are on maternity leave for a year and who become pregnant again during this time are not eligible for a second period of maternity leave. This is a problem that comes up in the new extended maternity leave program.

[English]

Ms. Wilma Vreeswijk: I'll certainly speak to the issues of accessibility and those of post-pregnancies, and my colleague Gordon will speak to the other issue.

In respect of accessibility, the government did reduce the number of hours required to get into maternity and parental and sickness benefits in the last year.

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When you look at that 600 hours, if you're working 30 hours a week, you can get into EI with 20 weeks of work. If you're working part-time, as little as 12 hours a week, within a year you certainly are eligible for the maternity, parental, and sickness benefits.

When we looked at the number of people who are actually able to access the maternity-parental and the number of hours that women do get when they apply for maternity-parental, we note that 80% of women who are applying for maternity-parental have over 1,100 hours of workforce attachment. The extent of workforce attachment of women prior to taking maternity-parental is quite significant.

In terms of the issue of closed pregnancies—I'm trying to keep my remarks waxing eloquent and focused—there are a number of issues to take into consideration and some recent changes that were made to the EI Act that helped manage that.

First of all, we've spoken about the accessibility—we've lowered the number of hours required. In addition, the parental benefit can be shared between the mother and the father, so that the mother can return to work while the father takes care of the child—that 35 weeks can be shared between two. In addition, we've introduced a new element to the EI Act, which is the ability to work while on claim.

Previously, if you were working while on claim—while on parental benefits—it got clawed back entirely. The working-while-on-claim provisions that are in the other part of the act in the regular benefits are now extended to the parental portion of the special benefits. Individuals can accumulate hours while they are on claim. While they are on leave, they can be working part-time. As I indicated earlier, regarding the number of hours, if you worked as little as 12 hours a week within a year, you're able to access EI under special benefits.

The Chair: Let's do this part very briefly. Gordon, can you do it briefly? If you can't, we can't do it. I'm serious, a minute.

[Translation]

Mr. Gordon McFee: Yes, just a moment.

The problem with the CSST is that if the benefit is paid directly to the person concerned, this is not a good situation for that person. However, if the benefit is paid through the employer, the benefit period may be extended and in that case, there is no problem. We became aware of this problem a few months ago. We have spoken to the CSST in Quebec and together, we have implemented a temporary system to deal with such cases. This system allows benefits to be paid through the employer. We are endeavouring to develop a permanent solution to this problem, because temporary measures are only good for a short time.

A further problem is the fact that the EI benefit is based on gross income, whereas CSST benefits are based on net income. The percentages are also different.

Consequently, simply paying benefits through the employer resolves the problem on a short-term basis. As far as a long-term solution is concerned, we are currently conducting talks with the CSST in Quebec.

[English]

The Chair: If we could move on, because perhaps you were looking for it, in chapter 2 on page 15 of the monitoring and assessment report, it says:

...data has found that the switch did not significantly reduce overall eligibility, though eligibility for men increased and eligibility for women and youth declined slightly.

It's Yvon Godin, Alan Tonks, Carol Skelton, Anita Neville, Monique Guay.

[Translation]

Mr. Yvon Godin (Acadie—Bathurst, NDP): Thank you, Mr. Chairman.

I really have some difficulty understanding why you are here today. I'll try to explain what I mean.

First of all, our committee wants to table proposals to the government. I am sorry to have to say this, but everything in the document that you have given us is false. The other witnesses who came to speak to us said completely the opposite. These witnesses were workers and employers. Close to 98% of them told us that they didn't agree with the fact that they had to pay employment insurance premiums while the government didn't.

All the witnesses we heard from, with the exception of four, told us that they would rather not have an employment insurance system at all. They said that the system doesn't work. They stated that the system didn't work for seasonal workers.

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I am very disappointed that the department makes no mention of seasonal workers in its report. You are telling us that the devisor is working. That's wrong; it's not working. It is not my intention to slap you over the wrist this morning, but I feel that I have to tell you that it's sickening to always hear the same line from the minister, in the House of Commons or from you in our committee. In my region, this devisor has meant that the federal and provincial governments are forced to pay people to pick up bottles at the side of the road just so that they can accumulate sufficient hours to be eligible for employment insurance. And then statistics are telling us that the system works. It doesn't work!

There are people who are stressed out throughout the spring because they only get $125 or $160 a week to feed their families. Your system does not work. It does indeed work for someone in full-time employment because that person does not need to use the system, but for someone who does need to use employment insurance, such as the seasonal workers, it doesn't work. I am disappointed that you make no mention of seasonal workers in your report.

When we heard witnesses on Bill C-2, they talked to us about seasonal jobs. The issue of seasonal work has not yet been addressed, Mr. Chairman. There is a problem there, and it is to be hoped that this committee will table recommendations and that the department will stop telling us that the system is working when there is a $35-billion surplus in the employment insurance account. This is money that has been stolen from workers.

I want to hammer home my message here. Perhaps I am going to be forced to demonstrate again. If I have to I will whip up support among people. We need leadership, because your government continually steals money from the employment insurance system when families are suffering, Mr. Chairman. It is to be hoped that this committee will table serious recommendations to the minister by June 1st, because the situation we have now is outrageous. It is absolutely outrageous.

During our hearings, I asked you several questions, Mr. McFee. You were supposed to give me an answer, but I am still waiting. How is it that when those people who are related to their employer make an employment insurance claim, their claim is automatically sent for screening by Revenue Canada every year? That's harassment. These people are being brought to their knees. They go months on end without any income. It's really shameful! You told me that you would give me a reply, but you failed to keep your promise. That is unacceptable. It is outrageous that every time a person makes an employment insurance claim...

[English]

The Chair: That's all right, go ahead.

[Translation]

Mr. Yvon Godin: You there, you will be able to speak when it's your turn; it's my turn now. We have a chairman here, you are not the chairman. Understood?

It's not right because there are families who are suffering. Don't come and tell us that the picture is rosy. No, it is not rosy. Excuse me, but I have to tell you that there are children who go to school with an empty stomach and that's your fault, you, the government, who represents them and who makes recommendations.

I can no longer accept testimony like that. You say that more people are entitled to employment insurance benefits because of the hours. You used to need 150 hours and today you need 700. A pregnant woman now needs 600 hours whereas in the past she only needed 300. Quite honestly, I'm disappointed by the explanation that you've given us here today. One can only hope that when you come back in the future, you will take into consideration what this committee heard. The committee heard that people in seasonal jobs are no longer entitled to employment insurance and that you don't recognize those jobs.

[English]

The Chair: Yvon, if I could, first of all I would like to congratulate the translator.

Thank you very much.

Some hon. members: Oh, oh!

The Chair: If any of you would care to—I think you should comment on it, by the way, but I do understand there's a line between the political and the departmental. A lot of things Yvon said are worthy of comment.

Ms. Wilma Vreeswijk: I'd first like to comment on the issue of exhaustees, seasonal workers, and whether the duration is long enough for folks.

If we look nationally, certainly we know that one in five people is using his or her full entitlement, that the average entitlement hasn't changed since UI, that there are 32 weeks of entitlement, and that most people are tending to use about 21 weeks of their entitlement. That's the national picture.

But I think it's also important to take a look at what's happening at the community level. Certainly we did that. Part of the commission's review of what was happening with EI was in terms of looking at the communities and looking at the unemployment rate in various communities, because that issue was raised by you, Mr. Godin, and by you also, Mr. Crête. When we look at the unemployment rate and we look at specific communities—if we look at Miramichi, for instance, where the unemployment rate was 15.6% in 1999-2000, 53% of their duration was used. That meant that for those individuals, they still had entitlement left over when they ceased using EI.

• 1200

If we—

Mr. Yvon Godin: Come to the peninsula and tell me the numbers. Come to the Acadian peninsula, the people working in the fishery, not in the Miramichi. Come to my riding and tell me, Mr. Chairman, of the people in the peninsula working in the fishery who don't qualify from February to May. Tell me about those. Tell me about the ones in Gaspé who work in the fishery, not the ones in Miramichi who work for gun control there. Tell me about the ones who work in the fishery on seasonal jobs. Those are the ones I want to hear about.

I see the misery every day. I see people crying in my office, and people who want to put a bullet in their head. Tell me about those. Those are the ones I want to hear about.

I like the guy from P.E.I. intervening in my discussion when it's my turn. You have the problem there too.

The Chair: You've had your time.

Mr. Yvon Godin: You're telling me to shut up when I—

The Chair: No, I'm not tell you to shut up—

Mr. Yvon Godin: Three times he intervened when I was speaking and I don't appreciate that.

The Chair: A short reply, please.

Mr. Gordon McFee: Extremely short. I don't want Mr. Godin to be mad at me. I didn't get back to him on arm's length before today, because I didn't have the answer before today, but I have it now. I said I'd get back to you, and I'm getting back to you now.

On arm's length we did two things. First of all, we did a survey with CCRA to get an idea of how many cases we send over to them on that issue.

Secondly, we checked in New Brunswick to see what the anecdotal information was. I'll stick with the statistical stuff for now. We get 2.7 million applications for EI a year. The total of everything we send over to CCRA is 54,000, which includes arm's length. It's much more than arm's length. It's every employer-employee relationship we send over. That's about 2%. That's statistical information.

The survey indicated that 75% of the cases that we deal with where there's a

[Translation]

family relationship between the two people are not sent to the Canada Customs and Revenue Agency; we settle those. Among the 25% of cases that are referred to the Agency, 24% are deemed uninsurable. Therefore, according to the data, it would seem completely inaccurate that each of these cases is submitted to the Canada Customs and Revenue Agency.

[English]

The Chair: Alan Tonks, Carol Skelton, Anita Neville, Monique Guay.

Mr. Alan Tonks (York South—Weston, Lib.): Thank you, Mr. Chairman.

I was going to suggest that if anyone throws these on the floor, they should in the middle of the meeting have to go and retrieve them.

I was going to raise a point of order. As opposed to doing that, I just want some clarification. We are hearing from staff their analysis. I thought in the half hour, Mr. Chairman, we were then going to try to give some policy change direction. I thought we were maybe shooting the messenger a bit in terms of the analysis that has been given, and within that, let me frame my question, because I—

The Chair: I'd like to comment. First of all, I listened as carefully as I could to the translation and there was a mixture of things in there. I think it is very appropriate that the staff hear the experience of our members. I think it's equally appropriate that they do not reply or respond, if they feel it's not in their area to do so.

Mr. Alan Tonks: I understand that, Mr. Chairman, and I think I'm going to try to... You can see if I can work within my own parameters with respect to that balanced commentary.

The Chair: Sure.

Mr. Alan Tonks: We have been told in the benefit rate that the top-up—for those who are low-income families—has improved and that the improved higher benefit rates would appear to be assuaging the low-income families. But when I look at the $254 per week for a family, that doesn't appear to be very much money, even with the top-up.

I think there's a linked issue here with respect to establishing the rates, establishing the benefits, and what the state of the fund is in terms of its surplus. That benefit doesn't appear to really be sufficient to me. We were told that many people supported increasing that from 60% to 65% in terms of a benefit rate.

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Now I'm going to go over the parameters I've established. I'd like a response on whether you think that is a policy direction we should look at. I understand that the rate of payment has improved, but does it reflect, from a compassionate perspective, what we should be establishing as a reasonable level of support?

If I've gone over the line, you can rule me out of order and I'll ask the question when we get back in. But I think that's what we were trying to get—just a response back, not etched in stone, Mr. Chairman. Just what would the staff's perception be of that?

Ms. Wilma Vreeswijk: These are important questions for ensuring that there is income adequacy. Certainly, when looking at the issue of benefit rate, we need to strike a balance between ensuring that sufficient support is provided to those people who need it and ensuring that we have the work incentives right. That is why we have the family supplement, which has, as you pointed out, gone up each and every year quite recently. The top-up provided was $14 per week under UI per week; it's now $43. The average benefit for all EI claimants is about $280. So the family supplement is bringing people very close to the average benefit.

As to whether the amount is enough—and I think that is an important question—our studies have shown that only 12% of those who became unemployed experienced a drop in consumption one year later. That's a pretty important measure of whether the level is sufficient or not.

There's a fair bit of discussion on women in EI. Two-thirds of the recipients of the family supplement are women. Of the maternity-parental claims, 74,000 get the family supplement. So the family supplement is better targeted and more generous than previously. It has increased over the last four years, each and every year. In fact when one compares the total spending on the family supplement in 1999-2000 with the preceding year, it went up by 10% to $161 million.

The Chair: Very briefly.

Mr. Alan Tonks: I think the self-employed represent some 12% of the population. We were told there was enough support for those to be covered by an employment insurance program, though they presently are outside the program. Is this an area we should be continuing to explore, to find a program that would support those who are presently outside our EI program?

Ms. Wilma Vreeswijk: It's a pretty complex area. The research has shown that it's not clear what proportion of people actually would like to be regarded as self-employed. Some self-employed prefer to be treated as entrepreneurs rather than as employees. As a case in point, the Canadian Federation of Independent Business has been doing some research in this area. Eighty percent of their members are saying the self-employed don't want to be covered by EI, don't want to pay premiums. And for those who do want it, it's not clear whether they would like it to be a voluntary or mandatory program. A voluntary insurance program is very difficult to administer, because very quickly your expenditures outpace your contributions. If you only pay when you think you're going to need it, it becomes difficult to classify it as an insurance program. So the different perspectives on the issue are not clear.

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The other thing is, it is very difficult to establish when someone who is self-employed is voluntarily between contracts or is simply between contracts. That makes coverage of self-employment a difficult issue to manage.

The Chair: I think we have to move on. Next are Carol Skelton, Anita Neville, Monique Guay, and then the chair.

Ms. Carol Skelton (Saskatoon—Rosetown—Biggar, CA): I have two very brief questions. The first one is, why do employers pay 1.4 times the premium workers do? Second, training was brought up a lot during presentations to this committee, and I was wondering if rebates to employers for their employees to take training have been considered.

Ms. Wilma Vreeswijk: On the employer-employee premium issue I would like to ask Mr. Bouchard to answer, and then I will tackle the training issue.

Mr. Réal Bouchard: The ratio of 1.4, employers to employees, goes back to the 1972 legislation. As to why 1.4, it's a bit hard to say today, but I think there were probably two reasons. One of them was that somehow, rightly or wrongly from an economic standpoint, the employers were seen as being partly responsible for some of the layoffs. The other one was that in the initial legislation there was a provision, which disappeared in the mid-seventies, that talked about experience rating for employers. I don't know whether 1.4 was some kind of midpoint, but that would have provided some flexibility for Parliament, if it wanted to introduce experience rating, to play around the factor of 1.4. That provision was abolished five or six years after the legislation was introduced. But if I had to say today, those are probably two explanations why initially, back in 1972, that 1.4 was introduced.

Ms. Carol Skelton: There was the question of training.

Ms. Wilma Vreeswijk: This was the idea of premium relief or some kind of support to employers for providing training. It's certainly an interesting idea regarding the importance of education. Skill development, I think, is recognized in the knowledge-based economy. The increase of opportunities Canadians have to upgrade their skills is important and recognized widely.

As for providing some kind of rebate for employers, one would have to consider a number of things when undertaking something like that. How would you define training? Would you end up displacing some of the current expenditures of employers—and a lot of employers do invest in training their employees. It's also important to note that EI part II currently supports training, under the employment benefits and support measures portion of the act, which assists those people who are EI eligible to get training.

Ms. Carol Skelton: The construction industry and the different industries we spoke to talked about apprenticeship training that was taken. Originally, when the apprentices started their training, their first two weeks were paid, so that their families did not go without. That was clawed back, and for the first two weeks of their apprenticeship training they don't get any funding for their families. So there are a lot of young men and women who are not taking their apprenticeship training because of that. Therefore, we're finding industries in this country that haven't trained workers. That's my concern about it.

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There has to be some way to either give the money back to apprentices and people who want training to upgrade their skills or give something back in a rebate to the employers so they can pay them for those two weeks. We're finding a lot of our apprentices are about 28 to 30 years old and a lot of them have families. They're not getting any funding for those two weeks.

Ms. Wilma Vreeswijk: The two-week waiting period is an insurance feature of the act. It's like the deductible on your car and house insurance.

In terms of apprentices, the apprentices are covered. They can get EI benefits at the point in time when they are in the classroom portion of their training.

Ms. Carol Skelton: That's all fine and good.

This goes to Mr. McFee. For most of those apprentices, their courses are for two months. You can't apply until you start school. They're finding those fellows, ladies and men, aren't getting cheques for over two and a half months. How do you feed a family for two and a half months if you don't have your cheque?

Ms. Wilma Vreeswijk: It is a shared responsibility between the individual, the government, and the employer. There is nothing that stops employers from also providing support during that two-week period.

The Chair: Anita Neville.

Ms. Wilma Vreeswijk: I'll let him respond to the other issue.

The Chair: Anita Neville.

Ms. Anita Neville (Winnipeg South Centre, Lib.): Thank you, Mr. Chair. I'll be brief.

I want to go back to the question concerning those who are self-employed. You may have expanded on it in your presentation. I apologize for being late. I was at another committee.

You say on page 6 that less than one in five are self-employed. I'd like to turn it around and ask you what the growth in self-employment has been and what portion of that growth is women. Do you have those figures?

Ms. Wilma Vreeswijk: I can talk a little bit about it. I'm not sure I have the figures in terms of self-employed and women.

In terms of self-employed, it is an important part of the labour market. The number of people who are self-employed does not change depending where you are in the cycle. It's pretty stable, even through economic changes in the business cycle. It actually went down last year. More people went into paid employment and full-time employment than previously. As the monitoring and assessment report underscores, there are less self-employed last year than in the preceding year.

I'm sorry, I've forgotten the last question.

Ms. Anita Neville: I'm surprised to hear you say that because anecdotally there seems to be an increase particularly in women—maybe not just women but people who are doing contract work. We had several presentations from the cultural industries speaking about those who are working on contract and their role within that world. They proposed the possibility of a pilot project to deal with the issue of the independent contractor, for whom I have considerable sympathy.

Have you, as the department, given any consideration to this issue and to the issue of the self-employed? I'm not talking about the business owner. I'm talking about the private contractor who takes his skills and markets them.

Ms. Wilma Vreeswijk: Without going into too much detail on this, I could go into more and am prepared to do more.

Ms. Anita Neville: I'd like more.

The Chair: You have two minutes left.

Ms. Wilma Vreeswijk: There you go.

Statistics Canada has done research to try to see if there's a link between self-employment and the business cycle. It's important because then you get a sense of how many people are involuntarily becoming self-employed because they've no other choice. We're seeing it's quite stable in terms of the number of self-employed.

Ms. Anita Neville: It's not a question of voluntary self-employment; it's the nature of the work they do.

Ms. Wilma Vreeswijk: Yes.

Ms. Anita Neville: It's that community I'm concerned about, not the business cycle.

Ms. Wilma Vreeswijk: It may change depending on the sector. We'd have to look at the different sectors to try to get a sense of the characteristics—

Ms. Anita Neville: Have you done that?

Ms. Wilma Vreeswijk: —of the self-employed in particular sectors.

There is research that's constantly going on, certainly not just by me but by a number of different organizations and think-tanks across the country on the self-employed. The characteristics change depending on the sector.

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Ms. Anita Neville: Could you provide me and the committee, whoever's interested, with references as to where that information can be found? Again, I'm interested to know whether the department has contemplated any pilot projects based on the recommendations of the cultural industry to look at this area.

The Chair: We would ask for that. For example, with the point about the proportion of self-employed going down last year, it is possible that the actual number went up. I don't mean for now, but could you let us have that? Anita, is that okay with you?

Ms. Anita Neville: That's fine.

The Chair: Okay. To move on, it's Monique Guay, and then, by the way, the chair, Joe McGuire, and possibly Paul Crête, all in together. Is that right? We must finish at 12:30 p.m.

Monique Guay.

[Translation]

Ms. Monique Guay (Laurentides, BQ): Mr. Chairman, it's funny, but we always seem to be running short of time when it's my turn.

Mr. Chairman, I think that we can see a glimpse here of the difference between the bureaucracy—this is a document that comes from the department—and what we saw in the testimony of people we met when the committee sat. These are two completely different worlds. In this document, I see only nice things: everything's fine, everything works, everything's just hunky-dory. The witnesses who appeared before us did not express the same things at all.

I'm very uncomfortable with a document like this. If I showed this to the people who are looking for work in my riding, they would tell me it makes no sense. I have concerns and I also have questions. With regard to the self-employed, I think that Anita has raised some important questions. I can tell you that the number of self-employed workers in Quebec increases every year and those people are not covered by employment insurance. Does the department intend to examine that situation and remedy it? Will those people someday have the right to contribute to the employment insurance system and also benefit from it? That's my first question. Has the department done anything to look into that?

My second question is as follows. In the new report, you state that in drafting the document, the government will take into account the views expressed to date by the Auditor General, which is a very good thing, because you will see that the auditor general makes recommendations that are not at all in keeping with the general tone of your report. You also say that you will take into account the views expressed by the House of Commons Standing Committee on Finance.

So it's the Finance Committee that will make decisions about employment insurance policy and, if I understand this document correctly, it's the Finance Department that will take over the employment insurance fund. It makes absolutely no sense that the Standing Committee on Finance make decisions instead of the Department of Human Resources Development. To my mind, this is a complete aberration. I'd like to raise all the concerns that my colleagues on this side of the table raised. We cannot accept this.

I think that you have to go back to the drawing board and do your homework because you don't impress me one bit. Everything is fine, everything is rosy, everybody is entitled to unemployment insurance; but that's not the reality. That's not at all what we are experiencing in my riding. That's not at all what women are experiencing. Preventive withdrawal from the workforce for women is nowhere to be found in this, but we see it every day in our offices. We see it every day by meeting with people who come to see us to tell us that the system isn't working.

So I invite you to go back and do your homework and make concrete proposals taking into account what witnesses expressed before the committee and then prove to us that the report that will be tabled in the House will truly reflect what's going on out there.

Thank you.

[English]

Ms. Wilma Vreeswijk: I'd like to ask my colleague from the Department of Finance to answer any questions with respect to the review of the rate setting. I believe that's the particular section you were referring to.

[Translation]

The Chair: Mr. Bouchard.

Mr. Réal Bouchard: I have a very brief comment. As the text indicates, the reason why there's a reference to the Auditor General and the Standing Committee on Finance and the reason why we also say "to date" is that, naturally, in both cases, be it the Auditor General or the Standing Committee on Finance, a report was produced either last year or at some other time. One should not read into that that if this committee were to prepare a report that it would not be taken into consideration; on the contrary. So, Madam Guay, Mr. Crête, Mr. Chairman, the answer is simply that in preparing this document for the fall, we will take into account not only the views of the Auditor General and the Standing Committee on Finance as expressed last year or the previous year, but also those of this committee.

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Ms. Monique Guay: That's fine, Mr. Chairman.

[English]

The Chair: Mr. Bouchard, on the same lines—and I'm sharing my time with Joe McGuire, so we do have to be brief—you describe the review and the purpose of it, to do with the size of the surplus, and I think you said stability in rates, or something like that. I don't think, whatever that surplus is in reality, we've heard anybody who does not consider it too large—it's huge. Whatever the prospects for the future, there's just too much money there above what is necessary. That's one.

Second, on this business of stability and the rates, has there been instability in the rates? What is the purpose of the review? Are you going to come up with a figure—the surplus should be such and such?

[Translation]

Mr. Réal Bouchard: First, I have a comment about the surplus. As the Auditor General said himself before this committee, the surplus, at least that accumulated to date, is a surplus that really only exists on paper because of the integration of the books with the Treasury. This won't necessarily be the case in the future if premiums continue to exceed benefits. This annual surplus has not yet been spent. Therefore, to date, the cumulative surplus exists on paper. Therefore, taking it into account to set the rates is somewhat artificial. I believe that's why the Auditor General and to some extent, the Standing Committee on Finance, had stated that there should be more clarity, and more transparency in the way the rate is established, etc.

With regard to the stability of the rate these past few years, since, to all intents and purposes, we are almost at the peak of an economic cycle, the expenditures, among other things, have been quite stable and the rate has naturally decreased.

In a normal economic cycle there would generally be far more fluctuation. There would be a few years of increase and a few years of decrease, for example, but not necessarily from one year to the next. Stability consists in striking a balance between the two objectives pointed out at the outset, that is, having a premium rate which, on the one hand, is more closely tied to the actual expenditures and is not used for other purposes and, on the other hand, is useful to ensure a certain stability. That means that in cases where the economy is very strong and we are at the peak of an economic cycle, the stable rate we're talking about would naturally be higher than the rate we would need for the current year. But inversely—

[English]

The Chair: Okay. It surprises me that you need any sort of elaborate new review to deal with such things. Surely they're considered all the time in the history of this program, the size of the surplus and the rates. We need some decisions, do we not? We need decisions perhaps on size, decisions perhaps on rates, but do you need a complex review for that?

Paul Crête, do you want to make the same point?

[Translation]

Mr. Paul Crête: I'd simply like to clarify something for the committee. Bill C-2 suspends the rate determination process for two years. Does the department still feel bound by the fact that under the Employment Insurance Act, the account must be administered in accordance with an economic cycle, as you pointed out earlier, or are you saying that during this two year period, you no longer feel you have any responsibility to meet this obligation of following the economic cycle? According to my understanding, this is being suspended for those two years and during that time, the rate can be determined independently from what would have been necessary if the economic cycle had been completed.

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Take the case of a recession, for example. I am not wishing that on us, but it's just to illustrate what we are talking about. Does your analysis take this factor into account or does it completely abandon the obligation set out in the Employment Insurance Act?

The Chair: Mr. Bouchard.

Mr. Réal Bouchard: The two-year suspension simply consists in allowing that the document be published and that consultations take place, and so forth.

Mr. Paul Crête: But couldn't that have been done under the old process?

Mr. Réal Bouchard: Yes. But if a document is published in the fall, as anticipated, it will explain the situation, the problem, the issues and will provide direction and possible solutions and so forth. What people have in mind is that it is preferable, and even appropriate, to ask the Commissioner to examine what rate should be set next year, when a public document will be released about those issues. That's the only reason. And what will happen during those two years? What rates will the government set? Of course, we will see that when it happens, in the fall. Generally speaking, that will give us an idea of where we stand. In a way, it will be in keeping with the trend that was established regarding rates in the past six or seven years, as we move gradually toward a rate that would cover the costs of the program and nothing more.

[English]

The Chair: Okay.

To conclude, Joe McGuire, briefly.

Mr. Joe McGuire: Thank you, Mr Chairman.

A problem I ran into over the Easter break concerned complaints from fishermen's helpers and plant workers in regard to what they have to go through to qualify for EI, compared with what a fisherman has to go through. They're telling me that a fisherman can work for two months in the spring and draw for ten, while they have to slug away trying to get enough hours in the fish plant, and so on. They wonder why there are two different sets of rules. I think it's got to do with the antedating court case, whereby basically a fisherman can take a break in the middle of the season. He can qualify twice, while under the old system he only qualified from December 15 till the end of April, I believe. Now he can draw twice. It's getting all around the country now that this is unfair.

Ms. Wilma Vreeswijk: I'll just comment on our policy perspective and turn to my friend Gord to comment on the more difficult aspects of it.

The EI program is on an hours-based system, except for fishers, where it's on an earnings-based system. That is a recognition of how fishing is done. Fishers can be working 10, 12, 14 hours a day for an intensive period, and they are often in situations of self-employment. So we found a way to calculate their work effort through an earnings-based system. The plant worker is within the other part of the act, which is really looking at the number of hours, and their hours are much more regular. So you end up comparing two different groups who have very different work patterns in respect of their eligibility for the program.

Mr. Joe McGuire: So it's more a political problem—it certainly is for me.

The Chair: Very briefly, Yvon.

Mr. Yvon Godin: I have a point of clarification. You said that during the two-week waiting period for people going to an institution to get a training program, they could get paid by their own employer, if the employer wanted that. But according to the EI, if they get paid for those two weeks by the employer, it's not a two-week waiting period, they cannot get EI. For that two weeks you cannot get any pay at all.

The Chair: Okay, I understand that. Wilma?

Mr. Yvon Godin: I don't know if it's correct information or not.

Ms. Wilma Vreeswijk: I'll look at it. My understanding is that the employer can pay for that two weeks.

The Chair: I would be grateful if you could get that to the committee, as well as the information Anita asked for.

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Mr. Joe McGuire: I don't think Mr. McFee finished answering my question.

The Chair: Gordon.

Mr. Gordon McFee: My brilliant answer was going to be that we're aware of that situation and we're working on it. It's not very helpful, I know, but that was it.

The Chair: I want to thank Wilma Vreeswijk, Gordon McFee, Sonya L'Heureux, and Réal Bouchard for being with us today. We thank you very much.

Colleagues, I'm going to suspend for a few minutes while they rejig the consoles, and then we'll continue in camera. So we're suspended now for three or four minutes.

[Editor's Note: Proceedings continue in camera]