[Recorded by Electronic Apparatus]
Thursday, January 25, 1996
.1020 
[English]
The Chairman: Order, please.
We'll pick up where we left off yesterday afternoon with the officials from Human Resources Development Canada in the Atlantic region, who made short presentations on the innovative job generation activities in their respective areas.
We did not have a chance to ask any questions of the officials, so I thought we'd start this morning before beginning with the employments benefits section by inviting the members to raise any questions or comments they might have to our regional representatives who have stayed over for that purpose.
I am proceeding today without any reference to anything that may have happened this morning over at Rideau Hall. We're just carrying on. We'll wait for further instructions.
[Translation]
Mr. Dubé, would you like to begin now or wait?
Mr. Dubé (Lévis): I have a question that is not addressed to anyone in particular. Yesterday, I heard the presentation of plans that are already under way. Incidentally, I'd like to say that I think this is very good - there is no one from Quebec here - but for the past few years, similar initiatives have been undertaken in Quebec through various programs, both federal and provincial.
Yesterday, I had trouble understanding and I closed by asking what, in the current unemployment insurance legislation, prevents you from doing what you've undertaken and how Bill C-111 will enable you to do so.
If it was a matter of additional money, I would understand, but I was thinking more of judicial constraints, since we're talking about legislation. How did the previous legislation prevent you from doing what you wanted to do in terms of projects that are well adapted to a given environment? Anyone of you may wish to answer me.
[English]
Ms Norine Smith (Acting Executive Director, Insurance, Department of Human Resources Development): I thought Mr. Gee from Nova Scotia might be able to put that question in perspective.
I think the answer lies partly in the flexibilities that are in the legislation and partly in the new environment that the legislation creates within the community.
Mr. Derek Gee (Director, Human Resources Canada Centre, Halifax, Department of Human Resources Development): I'll paint a little picture of how I see the legislation helping us in the future and then maybe I'll give you some idea of how it's different from what we have in place now.
Right now, we have 39 programs to administer, which is very complex and is difficult to understand for the people who are using our services at times. That is being reduced in the new legislation to five tools, five employment tools that I believe will be easier to understand and certainly easier to implement.
Another aspect of the legislation is that the new tools, in the way the legislation is presented, will help us to integrate service delivery. If we find that we're with a partner such as a province that has a similar program or service, then we in fact do not have to duplicate that. We can go with the service that best meets the needs of the community.
The new programming also allows more flexibility and judgment at the local level. Through the development of a business plan, it allows us to develop where we want to see our expenditures take place using the five tools to best meet the needs of our constituents, the people who are using our services. So at the local level we'll be able to move resources around to best meet those needs.
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For example, in Nova Scotia one of the five tools that's very successful is the self-employment assistance program. Even in Cape Breton, where we've had a difficult time, the self-employment assistance program is 70% successful, and it runs much higher throughout the rest of Nova Scotia. That's an opportunity for us to use a tool more than we have used it in the past, given that we had certain constraints around how much resources we would dedicate to each program.
Another advantage, especially in the job creation partnership tool, is that we can now enter into job development or job creation activities for long-term sustainable employment with the private sector. This is new. Also included in that tool is some ability to increase our contribution for capital expenditures, and that would also make it more flexible for us to develop projects that best meet the needs of our clients.
The other thing we have in the new legislation is an opportunity to provide services and programming for people that have exhausted their UI benefits after three years and even for five years, if they've been out on maternity benefits. Again, it allows us to be able to provide services to a larger range of clients than we can at the present time.
The tools in the legislation will also allow us to enter into arrangements at the community level for the provision of service through community employment services or through labour market partnerships and we can use resources to contract with people in the community who can provide a service or a program more effectively and efficiently than we can.
I think that answers the question.
The Chairman: Thank you.
[Translation]
Does anyone have anything to add to that question? It's a good question. You may continue.
Mr. Dubé: You said there were other independent recipients. This program existed and I believe that it allowed certain unemployment insurance recipients to go back to the labour force after an unfruitful job search. It enabled the recipient to design a plan to start a business and receive a supplementary period of benefits, beyond the 52 weeks, in order to test the plan and start up the business. Will the new legislation allow for that kind of situation?
[English]
Mr. Gee: Yes, it will.
I was using it as an example around the amount of resources we would dedicate to that activity. We felt that activity could be expanded to better serve the community. In the past we were somewhat restricted in the amount of money we could dedicate to that activity. By having more flexibility at the local level, we can adjust our budgets in such a way that if there's a greater demand for a program and if we can demonstrate that we can be very successful in implementing that program we can put more resources in there.
Ms Smith: Perhaps another important aspect of that is the example Arlene provided us with yesterday of the fisherman who was interested in getting into the berry business in the summer. The new legislation and the way it is encouraging people to look at their future is in fact leading people to want to participate in programs such as this more than they might have in the past in order to position themselves well to take advantage of future opportunities.
[Translation]
Mr. Dubé: Personally, I don't believe in that, but you're saying that more financial resources will be allocated.
.1030
We're talking about supplementary budgets for this type of project. However, I don't see anything in the former legislation that prevented you from doing that. It simply required a government decision to allocate funds to that initiative.
I'm not saying this is a bad thing, but I will have to vote in a few weeks in the House of Commons and I'm trying to understand how this new legislation will enable the government, Cabinet, to do anything new.
I know that you are an administrative office holder, but I'm talking about the new bill. What would have prevented the minister from allocating additional funds to provide more help to an individual starting up a business? You're talking about that program. To my mind, there was nothing preventing the minister from doing that in the past.
[English]
Ms Smith: There is a shortage of resources generally, not just at the federal level but amongst all levels of government. You'll recall that one of the main features of this overall legislative reform is that there's a significant reinvestment of the funds that have been freed up from the reform in order to create the resources necessary to do these kinds of programs. So $800 million in additional resources is available as a result of this legislation for this type of work at the community level, in addition to the $300 million that is available for the transitional jobs fund. Both of those are a direct result of the legislative reforms.
[Translation]
Mr. Dubé: The reform, but not the legislation. I understand completely and I think you also understand my objections. I won't go any further for the moment.
[English]
Mr. Baker (Gander - Grand Falls): On the subject of Atlantic Canada, Norine Smith just mentioned the example of the fisherperson as it relates to this bill, yet we don't have the information on what the new rules for fishermen are under the bill. I'm wondering if Norine Smith could table these rules now so we can have a look at them while we're dealing with the clauses in the bill.
Ms Smith: When the minister was before the committee last week, he undertook to ensure that this committee would have those regulations within a couple of weeks' time.
Mr. Baker: The minister was here a few days ago, so a couple of weeks would be what? A week and a half? Could you give us a date so we will know? When witnesses are on representing fisheries groups from Atlantic Canada, we have to know what the rules are under the bill. How can we ask questions of fisherpersons if we don't know what the rules are? So could you give us a date?
You have the regulations in your possession, because the commission drew them up and you have them. Does the minister have to give them to us, or can you slip us the rules?
Ms Smith: As you're very well aware, the regulations governing the fishing benefits under the act are fairly complex and the integration of the fishing regulations with the overall new directions in the fishing industry needs to be very carefully worked out. So we are continuing to work on those regulations with our colleagues at the Department of Fisheries and Oceans, and probably around the time when the committee will return to its work after its recess next week.... I understand that your first week of hearings will perhaps be devoted to national groups; I expect that we will be ready to provide the committee with the regulations by the time you get into dealing with regional groups.
Mr. Baker: So you expect that we will have them? There's no commitment that we'll have them. Are you hoping that we'll have them?
Ms Smith: We're working to that objective.
The Chairman: We will work to make sure that they keep to that objective.
Mr. Baker: Thank you, Mr. Chairman. I knew you would make sure of that.
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In dealing with Atlantic Canada and the testimony that has been given so far to the committee - and I'm sure the witnesses from Atlantic Canada here would verify what I am saying - when there was some reference made by the officials concerning people who quit to draw unemployment insurance, we don't see that in Atlantic Canada. I don't know how you could quit to draw unemployment insurance - in fact, no, you can't. As of four years ago, you can't quit to draw unemployment insurance. In Atlantic Canada, even if you wanted to, you couldn't under the present law that's been in effect for the last four years.
Under the new legislation as it relates to Atlantic Canada, I wonder if an assessment was made by the department in the statistical end to find out the number of people in Atlantic Canada, based on the statistics from last year, who would be getting cheques of less than $5 a week under unemployment insurance, which was, of course, impossible under the old act. Or how many people would be getting cheques of less than $10 a week? Was any analysis done in that area?
Ms Smith: No, we have not undertaken analysis looking at individual cheque size. The elimination of the weekly minimum creates a possibility that people who are no longer able to qualify for UI would in the future be able to qualify. The corollary of that indeed is that also, as you say, the minimum cheque that might be available might be smaller than it is today. But no, we have not done a specific analysis of individual cheque sizes.
Mr. Baker: That's surprising. I'd like to ask the representatives of Atlantic Canada to verify this. Regarding the typical construction worker, or somebody who is involved in the forest industry, for example, who works in May, June and half of July - normal - then picks up the rest of their unemployment insurance stamps in October, with the new act you'd be talking about maybe picking up 20, or 30, or 40 weeks to make up the 420.
Getting on to the question, what I wonder is, under the new act do we have some solutions that the officials have been looking at to try to assist these people in some way? They have to collect, you see; they are caught. They have to file, because if they don't file then they would be a new entrant or a re-entrant the following year because they had no attachment. So they have to file, although their cheque will be $5.50. Do you understand what I am talking about?
Ms Smith: Yes.
The Chairman: Mr. Baker, the point I was about to make was that this subject was discussed at some length yesterday afternoon before the committee. We spent the morning discussing the new benefit regime, and we focused for most of the afternoon on the problem you're talking about, which has become known as the gap.
Mr. Baker: The gap?
The Chairman: The department has provided some briefing materials, which you might want to look at, that explain, at least from the department's point of view, its understanding of the problem, the number of people affected, and how the new system will work for those types of claimants. So you would have that background when you're posing your questions.
Mr. Baker: Yes, Mr. Chairman, I understand that. In fact, I've been dealing with this for20 years now, as you know, and I know it so well and how this is going to affect people that this is why I'm asking the question.
I understand that no analysis has been done on the $5 cheques and the $10 cheques, which would have normally been $200 and $250, under the new legislation.
I wonder, then, if there is an attempt being made to try to solve the problem through short-term employment in Atlantic Canada.
.1040
Ms Smith: The presentation that my colleagues from the regional offices gave yesterday was indeed to address exactly that question, to give some concrete examples of the types of initiatives they are personally engaged in that are aimed at extending seasonal employment, developing alternative employment to provide work opportunities during the summer season between work, to follow up on the specific example you had given. So perhaps not to repeat the specifics of that, through the transcripts from yesterday you'd be able to find some interesting examples of that.
Mr. Baker: No, I watched TV, so I know what took place. But I wonder about the logistics of it. How could you have somebody in Atlantic Canada, say in the construction industry, working for400 hours or 300 hours and then going to the department of employment for short-term job creation? Is that what your suggestion is, to use that employment to fill in the gap? I think it was what you were suggesting yesterday.
Ms Smith: There would be examples of that, and we heard some interesting ones yesterday.
In your example of a construction worker who might work in May, June and July and then have no employment for a while and pick up their work again in September, I would imagine that worker is still fairly likely to be able to qualify for UI. They still have within a one-year period the extensive work you're describing, so they might have to change the period of time in which they file their claim but they still would be able to file one.
To return to one of the points you were making earlier, being a new entrant or re-entrant to the labour force is not a condition of filing. You don't have to file for UI in order not to be a new entrant.
Mr. Baker: You do.
Ms Smith: No, your status as an entrant or re-entrant to the labour work depends on your work attachment. You can never file for UI in your entire life and not be considered a new entrant/re-entrant if 20 years later you do need to qualify for UI.
Mr. Baker: Yes, but if the next year when you file you don't have 490 hours of attachment to the work force, you're considered a new entrant. So somebody who has 420 hours, who qualifies but who only qualifies for $5.10 a week UI, has to file for that $5.10. If they don't, they will not have an attachment to the work force, because when they draw UI that counts together with their 420 hours that they already qualified for to make up for their.... Am I correct?
Ms Smith: Yes, that is correct.
Mr. Baker: Absolutely. So they do have to file.
That is why I'm asking the question. I'm not asking the question, Mr. Chairman, for people who don't qualify for unemployment insurance filling it up with job creation projects, although that would be a great idea. We should get back into that. There should be a gigantic works program. Of course there should be, and I appreciate that.
There's a very serious problem here, and it has to be corrected in some way. The problem is that if the person doesn't file, they're in quite a catch. They're in quite a quandary. So they have to file even though it's $5.10 a week UI and they have their 420 hours.
Are you suggesting that there would be then employment programs to fill in the gap? This is why I asked you the question. Is that what you're suggesting?
Ms Smith: I would imagine, Mr. Baker, it's very difficult for someone to get a $5.10 cheque if they have the number of hours of work required to qualify.
Mr. Baker: Mr. Chairman, supposing for one second you had your 400 hours, and then you needed 20 more hours. Sometimes today you need one stamp in October. You have gotten the rest of them as a woodcutter, as a logger, in April, May, June, and now you're looking for 20 hours. At $7 an hour, if you're doing labour work, that's $140. If you go to work for those 20 hours, you qualify for UI and you get $140. Divided by 14, that's $10. Multiplied by 55%, it's $5.50.
.1045
Am I not correct in that arithmetic?
Ms Smith: You'll recall in the presentation yesterday there was an example very similar to that, where the claimant in that circumstance would be using their week or two from the previous winter, not their week or two from the coming fall. They would shift the time at which they filed their claim, and they would be using the earnings from the 400 hours, with that block of work in the summertime, in order to establish their claim and establish the size of their cheque.
Mr. Baker: You mean if they had 800 hours?
The Chairman: This is an interesting exchange. The problem I have is -
Mr. Baker: The witness brought it up, I didn't.
The Chairman: But I think we're straying off the subject matter we were to deal with this morning. While it's an interesting problem you bring up and one we ought to delve into further, what we're doing is moving off the subject of the briefing we're here to talk about. So I invite you to make your point. If it's not responded to fully, let's bring it up again at another time. How does that sound?
Mr. Baker: Okay.
The Chairman: I think I understand your point, and you've made your point successfully. You've given Ms Smith an example worth looking at. I would suggest we just finish this part of the discussion.
Mr. Baker: About Atlantic Canada and the job creation possibilities?
The Chairman: No, I'm talking about this particular point about the way in which the small cheque -
Mr. Baker: Mr. Chairman, on the subject of the small cheque, most of the members here, especially from northern Ontario and Quebec, know of concrete examples in their ridings. They happen all the time. It's a constant thing to scramble for work to get that extra week at the end of the year. It's fine to say you can draw on stamps you collected the previous year, which will make up your twelve months; but perhaps you don't have that privilege. Perhaps all you've worked is 420 hours in the previous year. It puts these people in a bind.
I would like to see some statistics on the numbers of people who would be caught in that bind of being forced to file for unemployment insurance under the proposed new act although they would collect only $5, $10, or $15 instead of the normal $200 they would have collected. Now, of course, the system is different, because you're not judged on the weeks you worked but on what they call the ``rate entitlement period'' or something like that, immediately preceding - the weeks immediately preceding the time at which you qualified for your benefits.
I'd like to see some statistics, a computer rundown, for Atlantic Canada. They would be very helpful to us. Then we could figure out how much it would cost the government to write one of these cheques for $5.
These are questions that are on people's minds. This is what people are afraid of with this part of this bill - these seasonal workers who can just barely get enough to qualify.
Ms Smith: The term in the bill is ``the rate calculation period''. The alternative way of looking at the work situation you're describing would be example (f) in the presentation we went through yesterday afternoon.
I'll consult with my colleagues in the UI policy group to see whether it's possible to do that kind of very specific research on very specific claims and people's work patterns. We'll advise the committee on what we're able to do in that regard.
Mr. Baker: It would be very simple to do, because each ROE, record of employment, that's filed with the Unemployment Insurance Commission specifically sets out the weeks they worked and the dates. It's very easy to do, because it's all fed into a computer. I think we could just push a button and we'd be able to get those figures. I'm specifically interested in the figures for Atlantic Canada.
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The Chairman: Has that request been stated clearly enough for you to understand?
Mr. Smith: Yes.
The Chairman: Does that conclude your questioning?
Mr. Baker: No, Mr. Chairman, but I prefer to give other members a chance at this point.
Ms Minna (Beaches - Woodbine): My question has to do with the calculation of benefits under the new system, the 20-week averaging and that kind of thing. I want to understand. I will make sure I am interpreting it rightly.
I am looking at two tables, one that has the average unemployment rate for October 1994-95 and then one that deals with the minimum entrance requirement.
For instance, where it deals with unemployment, at 12.1% the requirement would be 455 hours. That is what it shows here.
The Chairman: Is this a question related to the insurance benefits?
Ms Minna: Yes.
The Chairman: The income benefits.
Ms Minna: Yes.
The Chairman: Again, that was discussed at some length yesterday. We are on a different subject today. Could you pose the question quickly? It is just that we are dealing with employment benefits this morning. We spent the whole day yesterday on that subject.
Ms Minna: I will be very quick about it. Basically, at 12.1% you need 455 hours to qualify. Then when you look at the phased-in peer calculation of the fixed weeks over which you averaged that, it says that over 12% you average over 16 weeks.
Ms Smith: Excuse me; I missed the page reference.
Ms Minna: I am not using the actual bill. I am using a press release document. There was a breakdown and a number of tables were attached. They seemed to be easy to use because they had information.
Basically, what I am asking is that at 455 hours, which is equivalent to about 13 weeks, you qualify, where there is unemployment at 12.1%. That is averaged over 16 weeks.
Ms Smit: Yes.
Ms Minna: There is a gap there of three weeks when the averaging is done. You qualify at 13, but you are averaged over a fixed period of 16 weeks.
Ms Smith: That is a possibility, yes.
Ms Minna: I just wanted to understand.
Ms Smith: For people who would have a minimum entrance requirement of 12 to 13 weeks, anyone who has worked 12, 13, 14, or 15 weeks would be averaged by 16 weeks.
A table in the presentation that was given yesterday morning sets that out. I can give you the page reference. It is page 9 in the presentation from yesterday morning.
Ms Minna: Thank you very much. I just wanted to clarify the formula.
The Chairman: I would recommend that if you will just take a look at those briefing documents, that will put it in context for you.
[Translation]
Mr. Dubé, do you have any questions for our witnesses who are directors in the Atlantic region?
Mr. Dubé: It won't be in terms as specific as Mr. Baker's. I acknowledge that Mr. Baker has many years of experience as a member of Parliament. Mr. Baker, I don't have your experience. I've only been a member of Parliament for two years, but in my riding office, we receive a great many requests for practical information.
When someone has their unemployment insurance cut off, we have to take a pen and pencil and calculate what happened with him or her.
This morning, we are lucky to have with us people who have experience with the application of these programs and of this legislation in the Atlantic region. I would therefore like those people to tell us about it because they are in a position to understand Mr. Baker, since they are also confronted with that kind of appeal.
Before I ask my question, I have a comment for Mr. Baker and Ms Minna who may not have been here on the previous days. In one document, Mr. Noreau stated that following the changes that had been implemented by Mr. Valcourt, etc., people always ended up finding the additional week or two that were required and did qualify for unemployment insurance.
.1055
That's a very important perception. If we seem to be implying that we're making eligibility to unemployment insurance even more difficult, people will perceive that we can go even further.
Coming from Quebec, I see that in some regions such as the Lower St-Lawrence Valley, up until now, people have managed to do the impossible to qualify. It's a psychological attitude. We haven't examined this aspect because it's not statistically measurable, but doing the impossible is a matter of attitude. I suspect that 90 per cent of our people in those regions do the impossible.
Those in Ottawa seem to think that these are resourceful people and that they will manage somehow in any event. The Reformers haven't said so this year, but last year, they said they wanted to eliminate unemployment insurance completely, and that claimants would then find some way to find a job somewhere and the problem would thus be solved.
I'd like to put the question directly to the people who manage unemployment insurance programs in the Atlantic provinces because they've heard this as I have. The committee travelled last year, and I even went to Bathurst with the chairman. We saw what happened recently in Bathurst.
People come to tell us that they can't do more because they have already done the impossible. Doing more would mean performing miracles, because there are no jobs. I would like to know if you think it will be possible for those people to perform miracles.
Mr. Norbert Robichaud (Director, Human Resources Canada Centre, Bathurst, Miramichi, New Brunswick): I won't talk about miracles, obviously, but one could reiterate what was said yesterday afternoon. If we're thinking of creating additional job opportunities, we have to look at things in a non-traditional and completely new way. We have to bring together around a table the people who have the ability to change the working environment in which we live and to reflect on things that may not have been easy in the past but which will be facilitated by the transition funds that will be available, or through a willingness to change things, and the serious intentions of the economic and political players and officials. That's what we're doing right now.
It is true that it will be difficult, but we're currently experimenting in our communities and there is a willingness to change the status quo and bring about transformations in our fish plants and our products. We're also examining existing sectors that require further developments, such as tourism. These may not be miracles, but there are new opportunities that we're examining together in a serious way. I think there are significant possibilities on the horizon.
[English]
The Chairman: Would anybody else like to add to that?
Mr. Gee: I would also like to add to it from the point of view of what I've witnessed as a different commitment at the community level. It's a commitment to get on with doing things differently.
We can take it as granted that there's a tremendous amount of work to be done, but we're finding very innovative and creative proposals coming forward. We're talking to more and more employers about the possibility of extending seasons, about diversifying by adding new services to their businesses in order to generate not only more employment for their employees, but also more opportunities for themselves as employers.
There's a way to go yet, but at the local level we're certainly noticing a different attitude, and it's certainly bringing more people to the table.
The partnerships we have today were partnerships in the past that might have been more difficult to generate, but at all levels of government and more importantly at the community level there's more willingness to come together to tackle these problems.
Mr. Max Park (Manager, Human Resources Canada Centre, Clarenville, Newfoundland, Department of Human Resources Development): Mr. Chairman, I would just like to add to that. I think we've talked about a lot of the negative stuff around the problem in the fishery, but I believe that if there has been one positive spin-off from the problem in the fishery over the last couple of years, it is that it has at last created a realization within the communities and amongst people that the past way of doing things is not good enough any more. We have to stop depending solely on the fishery and get on with creating some sustainable, new types of employment.
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I think the timing is really good, because I know we're just on the verge of introducing the province's economic zonal boards in Newfoundland. They are part of a new structure designed to implement the province's economic development plan over the next five or seven years. What that plan is going to effectively do, in conjunction with our own programs here, is bring all of the major partners to the table, maybe for the first time. The province's structure, which we're introducing now, is being funded by the province and by ACOA. In conjunction with our programs, we'll finally see all of the funds that are available from traditional sources at the same table. So I think the timing for that, coupled with the attitude that we have to stop depending on the fishery and do some different things, is good.
The Chairman: Thank you very much, Mr. Park.
Did anyone else have anything to add to finish that?
I have one final question before we break for the next group of witnesses.
One of the preludes to this reform has been a series of strategic initiatives and pilot projects that have taken place. They have been initiated by Human Resources Development in conjunction with the provinces and in conjunction with local groups. The objective of these initiatives has been to try to find novel and new ways to partner and to create jobs, particularly in areas where jobs are hard to create. I know the fruits of these initiatives underpin much of the thinking behind these employment benefits - the five tools and the programs that are being put in place with this reform.
Would it be possible to have an evaluation of these initiatives - a list of them and of how they've worked out - for the purposes of our own understanding of how these new job measures will work? And since we have with us regional people who are on the ground, could you very briefly highlight which of the strategic initiatives you are familiar with have been the most effective so that we could know to focus on them?
Mr. Ian Green (Assistant Deputy Minister, Human Resources Investment Branch, Department of Human Resources Development): Mr. Chairman, I think I'm your next presenter, but I'll get in now, if I may.
The short answer is yes, but I should put it in context for you. We had about $400 million to spend on strategic initiatives. From memory, I think we have some 20 to 25 that are in play, but it is still fairly early. Some of them were literally only set up a year ago, so we do not have detailed evaluations at this point, although I think virtually every one of the strategic initiatives has had an evaluation framework requirement built into it.
We can certainly roll up for you what we've done. We can certainly try to describe as best we can where we are in the process in terms of strategic initiatives. We can try to give you some anecdotes in the sense of what's working and not working. And we can try to focus particularly on some of the innovative approaches around employability, removing barriers or providing supports to single parents, which were some of the key characteristics in some of the programs. We can try to get that kind of material together for you. Some of it may already exist, and we can cut it. If it does, we'll get it to you as quickly as we can.
The Chairman: To the extent that you have any information on them, what I personally would like to have in one document or in one binder, if you could put it together, is the whole list of regional initiatives that you've undertaken and when they've been initiated. Could you put that together so that we could at least see, in one place, what it is that you've done?
Mr. Green: That we can do very quickly.
The Chairman: That would be a good start. If we could get that for the committee members as soon as possible, preferably before we meet again, that would be helpful.
Do any of the regional directors wish to comment on those strategic initiatives? Presumably you've been involved in implementing some of them.
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Ms Arlene VanDiepen (Manager, Human Resources Canada Centre, Souris, Prince Edward Island, Department of Human Resources Development): One of the initiatives that we have on Prince Edward Island is a literacy initiative. The partners involved in economic development realize education is the solid foundation that is required in order to have sustainable economic development. We've realized we have to start at the bottom.
One of the projects we have is the Ready to Learn project. It is an adult literacy tutoring initiative whereby you take in people in a small community setting with a facilitator and a counsellor. We have them learn in a small group for the first year of that project. There they develop a lot of skills in regard to being able to interact with others and in regard to being able to see what education can do for their future. We're into the second year of that initiative. We started off with 120 unemployment insurance and social assistance recipients, and we're pleased to say we have 100 participants continuing in it this year.
These groups of learners have moved from their communities and into more urban settings and have now been integrated with regular college academic upgrading courses, whereas before they were in the community. We expect that by next year they will have finished their academic upgrading and will move into an institution at which they will start to learn a skill that they can use to look for work in the community. Before, they were totally dependent on some type of assistance from the government. So we're pleased to say that the first year has been successful, and we're looking forward to the project completion in 1998-99.
The Chairman: That's on Prince Edward Island. Are there any other provinces that would like to add to that?
Mr. Gee from Nova Scotia.
Mr. Gee: I have just a couple that I can handle very quickly. One is called the Step-In program. It is being co-ordinated out of Port Hawkesbury with the Collège de l'Acadie, which is situated in Isle Madame. They've taken thirty women who are in their first year of business, thirty entrepreneurs, and they have thirty volunteers who are mentoring these women.
Through the Collège de l'Acadie, they have distance learning. They are able to provide the support network that is required to help them in their first year and they can do it right across the whole province. These thirty entrepreneurs don't have to come to one site. They are from across all of Nova Scotia, but they come to the nearest site where there is the technical capability to do this.
We have high hopes for that initiative because the entrepreneurs are the ones we need to really nurture and support.
Another one, very quickly, is the community change search conferences. We are going to be working with communities about change, about getting on with things a little differently. We have one funded right now, and we hope to see this spread across all of Nova Scotia.
The Chairman: Thank you.
Mr. Park: Mr. Chairman, I would just mention one pilot that we're doing in our province. This addresses an earlier question concerning the self-employment assistance program that was on the table earlier.
One of the problems with the current SEA program wasn't just a question of money. There were some restrictions with that program that really restricted it to people who were receiving unemployment insurance or social assistance allowances. In our Corner Brook office, for example, we had documented that there were a number of people who didn't fit either one of these categories. They were looking to start their own businesses, but we weren't in a position to help them. We're in fact doing a pilot program now, the results of which are obviously not available. We're taking these non-traditional, non-UI and non-social assistance clients and are giving them access to that self-employment assistance funding so that they can get on with starting their own jobs.
The Chairman: Thank you. That's very helpful.
I look forward to receiving that package on the strategic initiatives and the pilot projects that are under way.
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That concludes the first part of our session. I'm going to break for five minutes while we welcome the next witnesses, who will be Mr. Green and his officials. They will discuss the second section of the employment insurance legislation, dealing with employment benefits.
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The Chairman: Welcome back to the human resources committee.
We now will hear from the Department of Human Resources Development on the employment benefits of the new employment insurance legislation. The panel of witnesses will be led by Mr. Ian Green, assistant deputy minister of social development and education. I would invite Mr. Green to introduce his colleagues and then he can begin his presentation.
Mr. Green: Mr. Chairman, thank you. I am joined at the table by Yves Poisson, the director general of the human resources investment directorate; Ken Kerr, who is the director of program design and who has done a lot of the work on some of the material we are putting forward to you today; and Roger Scott-Douglas, who is the director of policy and strategy in our federal-provincial relations group.
What I propose to do is to take you through a document that I believe has been circulated around the table: Employment Insurance: Promoting Jobs and Growth - Part II: Employment Benefits and Services.
[Translation]
The French title of the document is L'Assurance-emploi: Pour promouvoir l'emploi et la croissance.
[English]
I think copies in both languages have been made available to all members.
In the interest of time, I do not propose to go through the document word by word. I probably will skip through parts. But I would like to take people through it, because I think it gives a very good overview of part II of the employment legislation.
I turn, members, to the purpose of presentation page. The three objectives we have in giving you this presentation are, first, to make sure we identify the objectives and approach that underpin part II of the employment insurance legislation. Second, we would like to provide information on funding and clients, so we are clear on that. And third, we would like to outline the employment measures and services and their implications for members.
The context for change: I will not repeat this at length, as I said, other than to note that the 1995 budget made it clear there was a requirement to streamline and refocus federal employment programs. The part II measures, the benefits and services we have in front of us today, are based on the basic concept of reinvesting some of the UI reform savings in benefits that provide job opportunities and help unemployed individuals return to work. A very key point is that they are designed to provide a flexible basis for new and more cooperative relations among different levels of government across the country.
In designing the employment benefits approach, there were two major factors that should be taken into account, and that were certainly taken into account by us. One was that we built to the extent possible on the research and evaluation we had done in the department in previous programming. Second, we have developed it on the basis of the thirty years of experience we have as a department across the full range of these programs.
Before I turn to the next page and deal with the need for reform, I should note that I am being joined by my deputy minister, Mr. Jean-Jacques Noreau - which is a bit like having the cavalry arrive before you need it.
The need for reform is on the next page. I think our minister has made it quite clear in his remarks to you, and certainly in his remarks about the legislation in general, that he was strongly motivated to make the changes, particularly in the employment benefits and services, because he was very concerned about maximum effectiveness for dollars available. He was concerned that accountability in the previous programming was inadequate and not clearly based on employment results. He was concerned - and a number of my colleagues have alluded to this - that there was a large number of separate programs that were inflexible in application and indeed what was happening was that we were managing to programs as opposed to managing to clients. He was concerned that local decision-making in our programming was more limited than it ought to be. Also, he was concerned that some federal programs were perceived as duplicating provincial efforts and crowding areas of provincial responsibility.
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Also motivating this, obviously, is the fact that many organizations, such as the Organization for Economic Cooperation and Development, have been emphasizing for some years the importance of adjusting, to the extent possible, from passive measures to active measures, and a number of countries, such as Japan, Germany, Australia, etc., have very aggressively started to implement some of the changes that we're talking about today.
The new approach to active measures, which is on the next page, begins a section where we briefly give you an overview of the employment benefits and services. I would like to draw your attention to four things in the next few pages. One is our general approach; the second is the emphasis that is placed in part II of the legislation on working with provinces; the third is some funding issues; and the fourth is the issue of client eligibility.
With respect to the employment measures generally, the proposed act provides authority to establish employment benefits for insured participants and, second, to maintain a national employment service. Those are the two fundamentals of part II of the legislation.
The bill states that these two endeavours will be guided by a number of principles. The principles are important for two reasons. One is that they establish the context within which we see the tools or the parts of the legislation going forward. Second, they're an important reference point in terms of discussions with provinces about what kind of labour market programming we want to enter into jointly.
The guidelines are laid out in the legislation. The first is the need to harmonize with provincial programs to ensure there's not unnecessary overlap or duplication. The second is to aim for the reduction of dependency on unemployment benefits by helping individuals to obtain or keep employment. The third is a focus on cooperation and partnerships with other governments, community-based organizations, and employers. The fourth is the flexibility to allow decisions about implementation to be made at the local level. The fifth, an important one, is promoting individual self-reliance and responsibility of participants, making them participants and architects in plans for their career development. The last is a focus or emphasis on accountability and results, measured through effectiveness in assisting clients to get or keep work, earn more, possess marketable skills, and depend less on income support programs.
Those are the key guidelines that drive this part of the legislation.
I shall turn to the next page, which is entitled ``Working with Provinces''.
The bill contains several references to federal-provincial cooperation. This is an extremely important part of part II of the legislation. The government commits itself to work in concert with provinces in part II in the design, delivery, and evaluation of the whole range of employment benefits and measures. The bill states that the federal government will withdraw from labour market training. Over three years it will phase out its involvement in the supply of training through course purchases. It will provide support to individuals to develop their skills, but only, the bill states, with the agreement of provinces. The bill provides for a range of delivery options that can form the basis of new relationships between the federal and individual provincial governments.
For example, the proposed act would enable the federal government to reimburse a provincial government for providing its own programs to eligible participants, provided that they meet the objectives and guidelines of the act and are similar to the benefits and measures outlined in the act. It would enable us to contract with provincial governments or in concert with a provincial government with another agency to deliver benefits and measures to eligible participants, or, in cases where it's appropriate, we could deliver the benefits and measures through our own networks of human resource centres.
We have already briefed all provincial governments under the act, and bilateral discussions with a number of provinces are already under way to explore the possibilities of new agreements pursuant to the arrangements laid out in this act.
The agreements would obviously be based on the flexibility that is outlined in the proposed legislation.
In terms of funding, which is dealt with on the next page, the overall funding that is proposed at maturity would be an amount reaching $800 million per year, which would be reinvested in employment measures. It is important to note in terms of the employment benefits and services that this would be combined with $1.9 billion in measures currently provided for through what we call the UIDU, the unemployment insurance developmental uses account. Thus, a total of some$2.7 billion a year at maturity, which would be in the year 2000-01, would be made available to help unemployed Canadians adapt to the demands and opportunities of a changing economy.
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During the three years of phasing in the new system - and I believe others have previously made reference to this in their remarks - a transitional jobs fund will provide $300 million to stimulate the creation of permanent jobs in high-unemployment regions.
I should also note - and some of you might recall this - that the government announced in the 1995 budget a human resources investment fund. This fund is designed to help Canadians improve their security through employment, by linking the $2.7 billion that we're talking about today and the additional $1.5 billion in regular budgetary funding that the department has under the consolidated revenue fund. Thus, a total of approximately $4.2 billion in resources will ultimately be available for the full range of human resource investment fund objectives that we could have as a department.
On the next page we outline clients. Very briefly, the department will continue to assist a wide range of clients through our EI-funded and CRF-funded programs and services.
In terms of the employment insurance-funded measures, to be eligible for employment benefits funded from the employment insurance account, the act will state that individuals will have to be claimants currently or have established a claim that ended in the last three years. In addition, those who have received maternal or parental benefits within the past five years but have taken an extended leave from the labour market will also be eligible for assistance.
In addition, the bill makes provision for a national employment service, which encompasses labour market information, electronic labour exchanges, and other basic functions of the national employment service. These will continue to be available to all workers and employers.
The CRF-funded programs I mentioned earlier are important components of what I'm talking about, because they tend to aim at a number of clients who either would not be eligible for EI funding or would be of particular concern given the potential for their fragile attachment to the labour market. The CRF programming includes youth, persons with disabilities, and aboriginal Canadians. However, the focus of my presentation today is essentially on those clients and those aspects of part II of the legislation about which I'm talking now.
If I can turn to the new employment benefits that are outlined and illustrated in the bill and give you a very brief overview, the proposed new legislation outlines in an illustrative manner five new employment benefits: targeted wage subsidies, targeted earning supplements, self-employment, job creation partnerships; skills loans and grants.
We believe that these benefits would form the basis of a flexible set of tools and would allow interventions at the local level to be customized to the needs of individuals and to opportunities in the local labour market.
Rather than applying rigid programs, as I've indicated might previously have been the case, to individuals and communities, we would very much encourage those doing local delivery to mix and match the different elements of these benefits, to ensure that they have maximum applicability to their local situations.
We intend to incorporate what has been learned from program evaluations, our delivery experience, and pilot testing. We believe these measures have been proven, in a number of cases, to improve employment and earnings. The evidence is based on the increase in employment and earnings from groups that we studied that were compared to other similar groups in similar circumstances who did not participate in these kinds of programming. So in the past we did fairly rigorous evaluations to come to some of the observations we have on some of these programs.
Very briefly, I will run through some of the measures.
Targeted wage subsidies: In essence, employers would get subsidies for a specific period of time to hire people who are at risk of long-term unemployment or who face barriers to employment. It would be directly tied to jobs. We hope it will lever jobs for individuals who face barriers to participation in the labour market.
We lay out some of our evaluation findings here, where we had significant increases - as we looked at some of our previous programming in this area - in earnings and in additional weeks of employment, which, as I said, was based on our assessment of the job opportunities program, which we previously had in place and which offered wage subsidies.
I will not go through the examples, but I will be quite pleased to come back to them as we go through it.
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I draw your attention to the next tool, which is the targeted earning supplement. That's on page 10 of your material. This would make, we hope, work pay and help bridge the earnings gap for workers who are faced with declining wage prospects or special problems in adjusting to the labour market. In essence, it provides a temporary incentive for individuals to take available jobs. We hope it increases employment and earnings and reduces the use of income support. Early findings from the self-sufficiency projects we're running in New Brunswick and British Columbia suggest earning supplements are effective in helping people move from dependency to work.
I can talk more about that if members so desire.
Self-employment, our third tool, would help unemployed individuals create their own jobs through benefits as well as assistance in planning and starting a business. The evaluation results are laid out briefly for you there.
It's interesting to note that in areas where there are few conventional jobs there has been a significant growth in self-employment in Canada. For example, it grew by 24% between 1986 and 1993 while the overall labour market grew by 7.4%. We feel this is an area of high potential as we look to the future. We have had some very positive results in increased earnings and continued participation in the labour market from participants we've had in these programs.
Job creation partnerships, which are laid out on page 12, are designed essentially to generate partnerships with provinces, the private sector, and community organizations. The projects would provide work experience and employment opportunities by addressing the needs of their area and at the same time getting the unemployed into jobs. We've done surveys of previous projects and they've had a significant impact in increasing the annual earnings of participants.
The last tool is skills loans and grants. In essence, this is a combination of loans and grants that we would provide to individuals to assist with expenses while upgrading their skills. There would be a three-year phase-in period to allow the change-over from the current block purchase of classroom seats we now undertake. Skills loans and grants, I have to emphasize again, would be implemented only under agreement with provincial governments.
The aim of skills loans and grants is to encourage individuals to make a greater personal commitment to skill development. We hope it would be more flexible and responsive than the current approach and end confusion over jurisdiction by respecting provincial responsibilities. We have had very significant results in increases in earnings and labour market attachment from evaluations of previous programs in this area.
Page 14, on anticipated participation: As I mentioned earlier, the implementation of the employment benefits will be guided by the following principles of good practice, which are included in the bill and which I've mentioned previously: cooperation and partnership, flexible design, local-level decision-making, and client commitment. I want to emphasize that the benefits will be delivered in ways that best suit the needs and priorities of each community, depending on the federal-provincial context we work out for each of the provinces.
It's impossible to predict exactly how the employment benefits will be used, but scenarios will change regularly in response to changing local labour market conditions and will be based on the consultations we have with other partners. We lay out here an example of how the unemployment benefits could be used with a mature level of reinvestment of $800 million. They briefly indicate the number of people we think could be assisted through each of the benefits and the approximate cost for participants.
We could envisage about 60,000 people per year at maturity being assisted by targeted wage subsidies, at an approximate $3,000 per participant. About 80,000 people per year could be assisted with the targeted earning supplement, at an approximate cost of about $3,000 per participant. About 25,000 people per year could be assisted with the self-employment benefit, at a typical cost of $15,000 per participant. Some 80,000 unemployed individuals could be helped under job creation partnerships, separate from and in addition to the transitional jobs fund I mentioned earlier, at a cost of about $6,000 per participant. Lastly, some 175,000 people a year could be assisted through skills loans and grants at an average cost of about $5,700 per participant, including some continuation of insurance benefits.
The next page lays out an illustrative example of the allocation of financial resources for employment benefits. I do underline that it is illustrative. It lays out, using, I believe, the current formula for unemployment insurance developmental uses allocation, the possible amounts of the $1.9 billion that could be allocated to each of the provinces. It lays out an illustrative reinvestment of savings of the $800 million, which are designed to minimize the impact of the employment insurance reforms in each of the provinces, and then lays out the total amount in terms of each of the budgets, in terms of the total amount that would be available to provinces from both the UIDU and the reinvestment dollars.
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Basically, we've done this simply to give you some sense of the ballpark that we are talking about in these funding issues.
The other chart at the bottom of the page indicates departmental expenditures that would flow, as they do now, from our unemployment insurance account, or, as would be the case in the future, the employment insurance account, and the CRF, consolidated revenue fund, dollars we currently have. You will note that in 1994-95 the UI account accounts for approximately $1.9 billion of our departmental expenditures, while CRF accounts for $2.1 billion, for a total of $4 billion. In 2001 the UI/EI account would account for $2.7 billion, and CRF, as a result of budget decisions, would be at $1.5 billion, for a total of $4.2 billion. That represents the financial universe in which we're operating.
We have as well in the legislation the second cluster of initiatives, in addition to the benefits that I spoke about. It is the new employment services. The legislation proposes that the federal government would maintain a national employment service to help workers find suitable employment and help employers find suitable workers. The national employment service is recognized as being an essential mechanism in support of the employment insurance system. The main focus of it is labour market information and labour exchange.
I should remind members that the operation of a national employment service is a commitment under the convention of the International Labour Organization.
In addition to the national employment service, the legislation indicates that related measures are proposed. There are three of them.
The first is employment assistance services, which is designed to provide necessary services to the unemployed such as assessment, career planning, job search assistance, and direction on how to access other services and employment measures.
The second is labour market partnerships, which are proposed to support national and local adjustment planning in partnership with other agencies and groups. This includes the possibility of sectoral partnerships.
It is underlined that the federal government will provide sectoral councils with financial assistance to provide training only with provincial agreement, to ensure that this is consistent with the overall approach on federal-provincial relations in the legislation.
There is also provision for research and innovation that will continue to identify better ways of helping people prepare for, return to, and keep work and address their needs in related areas.
The above elements may be delivered through other parties, including community-based agencies.
The federal government will work in concert with each province and territorial government on the design, implementation, and evaluation of these measures.
Lastly, there is a brief description here of the transitional jobs fund, to which I have made reference a couple of times. I don't know if you've had this given to you before, but let me go through it very quickly.
There is a proposal to establish a new transitional jobs fund, which has been referenced in previous statements to the committee. The proposal is for $300 million over the next three years. You have the profile that is indicated for each of the three years.
It will be designed to stimulate permanent job creation in high unemployment regions across the country. It is designed to create new jobs that are sustainable in the long run.
This additional work, as well as normal labour market adjustments, will help maintain incomes after reform.
The fund will build on the previous infrastructure program and will be implemented in close collaboration with provinces, the private sector, and local communities. The aim is to mobilize and lever as many resources as possible for job creation from a full range of partners. We hope to lever significant amounts of dollars in terms of new employment opportunities.
The initiatives will be coordinated and harmonized with provincial strategies and regional or local economic development plans wherever possible.
We estimate that the fund will create approximately 15,000 jobs, and with successful partnerships possibly more.
We have some very quick examples at the back.
That is a very quick run-through of part II of the legislation, but I think it will help give members an overview.
We would be pleased, subject to the deadline, to add anything to answer your questions.
The Chairman: Thank you very much, Mr. Green.
I'll let Mr. Bevilacqua start the questioning.
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Mr. Bevilacqua (York North): Thank you very much.
First of all, thank you for your thoughtful presentation.
I would like to address some of the issues Canadians out there are really asking about. Far too many Canadians feel government programs and the array of programs...I think you had around 39 programs in that department. There had been a lot of waste and the programs were not as accountable as they should be.
Secondly, another issue Canadians are concerned about is that government programs should direct their energies towards providing small business with the type of climate and the tools such that job creation can take place.
The other issue is also very much related to the jobs and growth agenda of this government; that is, how many jobs would be created as a result of the measures outlined in your presentation. By that, of course, I refer to the five tools of targeted weight subsidies, earning supplement, skill loans and grants, job partnerships, and self-employment assistance.
On the issue of small business, I would like for you to expand on the program of self-employment assistance and the type of success or failure this program has had in the past couple of years.
Mr. Green: There's a lot in there, Mr. Chairman.
About the large array of programs and accountability, as I mentioned in my remarks, we're moving from somewhere in the order of 39 programs down to the concentration on the five areas we spoke about. I think it's a very important shift, because a very high degree of compartmentalization was going on. We were often fitting, as I mentioned in my remarks, individuals to programs as opposed to looking at the kinds of supports or benefits we had and trying to fit them to individuals. So I think the simplification and streamlining of the programs - and I think some of my colleagues who are involved in local delivery emphasized and buttressed this - are a very important shift in terms of our programming.
On the issue of accountability, throughout my remarks I've been emphasizing something about reform, and I think our minister has emphasized it from the beginning. He wants the use of these benefits and measures to focus on very clear and concrete forms of accountability. He wants to shift us from how many people participated in a program or how many people completed a program much more to did they or did they not get put in a job; what did it do to their earnings; did it improve savings in the operation of our programs.
I think we're going to have a very large shift in the accountability framework. It's going to require a fair amount of discussion with a number of the provinces and other partners we talked about, because it's going to be important to ensure all participants in labour market programming are moving in the same direction in the kinds of results they want from their programming.
About small business tools and providing assistance to them, I would note that three of the tools - all the tools, but tools such as wage subsidies and earning supplements - can be of significant assistance to small business. Obviously the idea of the self-employment program is in and of itself designed to create small business opportunities and endeavours.
You asked, Mr. Bevilacqua, about the results we've had. It reminds me that I'm remiss in the sense that I think members have previously been given a copy of an impact document. You have a document called Unemployment Insurance - Impacts of Reform -
Mr. Bevilacqua: That was yesterday.
Mr. Green: I raise it only because at the back of that document are references to a number of the programs, and there are some very interesting evaluation results...to come back to your question on the self-employment program we're proposing. I can very quickly go through them for you, but they really are quite impressive.
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Recent evaluations of our current self-employment assistance program, which we propose to continue to operate and expand as one of the key benefits I was speaking about, have shown extremely positive results in terms of business survival rates, jobs created and reduced dependency on income support programs.
In our evaluation, an average of eight months after finishing the program, 83% of the12,349 participants were still in business. It showed an average increase in earnings of $142 a week after participation in the program as compared to what individuals were earning previously. Participants claimed 92% less UI than comparable workers and were 60% less likely to claim social assistance.
Mr. Bevilacqua: Perhaps I can just stop you there. There are a couple of features in this employment insurance program that really speak to - if there is such a term - ``uploading'' the costs rather than downloading costs to the provinces.
First, a person on social assistance who has had an attachment to the labour force in the case of maternity and parental leave over the past five years can actually access one of these tools. Is that correct?
You are also saying that social assistance costs will be reduced to some provinces because of the implementation of these five tools. Am I right?
Mr. Green: Yes.
Mr. Bevilacqua: Okay.
Mr. Green: Last, we calculate that the effect on local economies can be quite significant in the sense that the overall effect of this program has been in the order of about $188 million in 1993-94, once all of the costs have been taken into consideration.
To go back to my point about whether it gets people jobs, not only does the program get individuals jobs, but some of the evaluations have shown that each individual who takes this program in turn employs or hires another individual in terms of participation in the program.
It significantly increases their earnings and it reduces their dependency on UI and SA, which has benefits not only for the federal government but for provincial governments as well.
Mr. Bevilacqua: One of the issues I often hear about, whether it's here in Ottawa or in Vancouver or Montreal, wherever the case may be, is that Canadians are quite tired about duplication in our system of government. How has this exercise in employment insurance clarified the roles and responsibilities of the provincial and federal governments?
Mr. Green: Part II contains a number of provisions that would enable us to work quite closely with provinces at a number of levels.
For example, where a province is already running or wishes to run a program substantially similar to the kinds of programming envisaged for the kinds of benefits and services envisaged in this legislation, there is a provision for us to work with them in terms of the province assuming the responsibility to deliver the programming provided it is consistent with the general guidelines and the direction of the legislation. In fact, a province could, if it wishes, take over delivery of our federal government programming. Irrespective of all that, the legislation makes it quite clear that it's our desire to design, implement and evaluate our programs, wherever possible, with the provinces.
We feel that gives us the potential for significant flexibility in terms of trying to dovetail, streamline and better coordinate programming between the two levels of government, and not only between the two levels of government but among a wide range of partners involved in terms of labour market programming.
We think the flexibility is there for arrangements that reflect the situations and needs of individual provinces and that have an overall approach to labour market programming that makes sense for the country at the same time.
Mr. Bevilacqua: How do the five tools respond to the needs and challenges that UI exhaustees often face, i.e., acquiring new skills so they can get back into the workforce?
Mr. Green: I am also reminded by my colleague that an important element of the federal-provincial dimension is of course the clarification of responsibilities with respect to training, where we clearly understand provincial interests in terms of education and training and are moving to organize our programming to reflect that.
At the same time, it ensures that any of the benefits and services we put in place would be very sensitive to provincial responsibilities in terms of education and training. How do the benefits and measures respond to the needs of individuals?
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Mr. Bevilacqua: UI exhaustees.
Mr. Green: Many UI exhaustees are going to be faced with concerns about how to return to work. Many will be concerned about having to find work, potentially at a lower level of income, in making the readjustment back into the labour market.
Earning supplements would help individuals to make that adjustment. For many individuals who are exhaustees, we can also provide a wage subsidy to a business that can help in the transition for that individual into a position that the business might not otherwise wish to provide.
Mr. Yves Poisson (Director General, Human Resources Investment Directorate, Department of Human Resources Development): These individuals would be eligible for the employment benefits, which is not the case now because under the current legislation only current claimants can have access to the active measures that are available.
Mr. Bevilacqua: Could you expand on that? What does that actually mean?
Mr. Jean-Jacques Noreau (Deputy Minister, Department of Human Resources Development): If I may jump in, this is a very important aspect of this legislation. The definition of ``UI recipient'' in this legislation is not only the one who is in receipt of a cheque this week; it is a person who either is in receipt of a cheque or has been in the system in the last three years. That includes what you've referred to as exhaustees and people who would otherwise be on social assistance.
It has a very positive impact in making these people eligible for the employment benefits that Ian described. We anticipate that it will reduce the impact on the social assistance costs to the provinces, because they will be able to avail themselves of these federally funded measures that will be delivered either by us or by the provinces.
So it is broadening the clientele eligible for these programs in a very significant way, up to covering in the order of magnitude of 85% of the unemployed people in a given province.
Mr. Green: If I may add, it is targeted in many cases to the problems that we know they face in terms of adjustment or re-entry into the labour market.
Also, just to build on what the deputy said, the expansion of the definition is extremely important from the point of view of social assistance caseloads in provinces, because the number we're talking about is significant; it is in excess of 40% of social assistance caseloads in provinces.
Mr. Bevilacqua: And this applies right across the board? In other words, if a person is accessing the family income supplement, for example, where people will be given benefits of up to 80% of their average earnings, if I'm correct, if they exhaust that benefit then they can also move on to one of these employment measures; namely, the five tools. Is that correct?
Mr. Green: Yes.
Mr. Poisson: They will continue to be eligible for these measures, even if they don't receive an actual UI cheque.
[Translation]
Mr. Dubé: Since there are not many of us on this side of the table, Mr. Chairman, I would ask you to be tolerant.
The Chairman: We will give you time to ask your questions.
Mr. Dubé: First of all, Mr. Bevilacqua is the parliamentary secretary and I understand that he's asking questions that put the spirit of the reform in a good light. I also understand that the people who will answer me have a duty to talk about the good points of this reform. But, Mr. Noreau, at one point yesterday, you said there were various hypotheses in the context of this reform.
The government has decided to proceed with this type of reform, but it could have used a more traditional approach, such as reducing accessibility in order to save money. We must therefore remember that first, we must save money, but now we're talking about new services. Someone would have to draw me a picture to make me understand, because I get the impression that it is as if were talking about a meal. In order to make the guests accept the fact that there will be less soup and a smaller main dish, we're giving them a bigger helping of dessert. In this instance, with regard to employment services, we're essentially changing the form and presenting this as something new.
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Sometimes we're talking about 38 or 39 programs, but here, we're talking about five new services which, in fact, are combined. I'm not asking you for an answer today - if you have it, so much the better - but at a later date, I would like you to provide us with a list of the new, consolidated, programs in which those 38 or 39 programs will be combined. That's all that's actually new.
Let us take the new measures: Skills Loans and Grants. There used to be a program called Aid to Student Workers. Through that program, an unemployment insurance claimant could not only get training, but also receive an extension of his or her employment insurance benefits.
I have lots of projects for the partnership. I listened carefully and I understood the people who came here this morning and yesterday to present various initiatives that have been achieved. I know full well that these were things that had already been undertaken and that therefore already existed.
The self-employment assistance program already exists. Targeted income supplements already exist. For example, organizations that work to develop employability can help you in Quebec and elsewhere. There are various categories, including youth. There is even a category of organizations to help people who are at a serious disadvantage when it comes to employment; that already exists. Targeted wage subsidies already exist.
Therefore, what's new here apart from the combination of programs and greater flexibility in the five programs? I would like to know what's new. We're being presented with a new approach and the dessert formula to make us swallow a reduction of benefits for a lot of people. I'll come back later with other more detailed questions.
Mr. Noreau: Mr. Dubé, when you're trying to help a person find a job, you provide him with counselling, for example. Very often, we decide that a person needs training. We're not claiming that the methods are new, but we are claiming that the approach is very different. It is much more flexible. There are fewer compartments. You have a drawer where you have money distributed in compartments. We're telling you that we're going from a money drawer with 39 compartments to a drawer with five compartments.
Therefore, it's more flexible. We can move money around more easily. We can adapt it better to people's needs. What is particularly new is that if there are comparable tools in the province, we are committed to not inventing our own. We are making a commitment to the province, through a contractual agreement whose form has yet to be set out, to delivering our services and benefits in co-operation with the province. This frontal attack against duplication and overlap, which has been criticized so often, is also new.
We're committed to working in co-operation with the provinces and, if necessary, to use the tools the provinces already have instead of inventing our own.
Mr. Dubé: I have more questions, but I will spend some time dealing with your answer regarding co-operation with the provinces. What happens if a province cannot reach an agreement with the federal government? I submit the actual case of Quebec, where I come from.
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Take the example of organizations that work to develop employability with whom you currently have agreements and whose contracts, which generally extended to August or September, have been shortened; they will expire on March 31 instead. Offices of these organizations told me that they would have a transition period, but they didn't know how long it would last.
I therefore have two questions. First of all, what will happen if you don't succeed in reaching an agreement with a province? Will that be an excuse to stop dispensing services or will you continue to provide them? Secondly, and more specifically, how long will the organizations with an independent charter have to live in this current climate of insecurity?
Mr. Noreau: I will start by answering your second question, regarding organizations. There will be a transition period that we expect to last about one year. We've given ourselves three years to withdraw from training. We will have to review our agreements with these organizations and talk to them to determine whether they can offer services in keeping with the guidelines set out in the legislation. We will be adjusting their budgets and client groups accordingly. So there will be one year of some uncertainty, but the bill provides for entering into contractual agreements with third parties.
As to your first question, if we cannot agree with the province at all, we will continue to assume our responsibility and to try to get unemployment insurance recipients back to work.
However, I'm not thinking of any situations in which we would not agree, and I don't think I want to try to imagine such a situation. It is in the provinces' interest that we reach agreement. We have here a golden opportunity to make one part of our federation work through co-operation with the provinces. I'm told that at the moment our discussions with the provinces, including Quebec, are underway and are promising. These discussions have not been completed, but I am sure that we will reach agreement. I should mention in passing that the agreements will vary from province to province. There's nothing to say that a particular province will want an agreement of the type we have now. The agreement with Quebec will definitely be different from the one we have with New Brunswick or Prince Edward Island.
Mr. Dubé: You've made provisions for new services in this bill. One of the objectives of the new approach is to inform you about some individuals who are not unemployment insurance claimants strictly speaking, but have been once in the last three years.
The federal Human Resources Development Department currently offers employability development services even to individuals who are not receiving UI. Let me give you a brief specific example. I read with interest the material you sent us this morning, particularly regarding women who want to rejoin the labour market after spending a number of years at home raising their children. These women will reach their forties without ever having received UI benefits, or, if they did receive them, it was a very long time ago. What will happen to these people, who apparently account for only 15% of the total? Once again, I would point out that at the moment, in some organizations, women in this situation may account for up to 40% of the total. Now you're going forward with a new proposal, which is more restrictive than what we have at the moment.
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Mr. Poisson: The bill contains some provisions called employment assistance measures, which Ian Green presented earlier. These measures are delivered by third-party organizations, which are different from the ones you referred to. These organizations will continue to serve these client groups, because we are not requiring that these people already be active claimants or have received benefits in the past. Access to these measures is broader elsewhere in the bill.
Mr. Dubé: Which clause is that? If you don't know, perhaps you could tell me later?
Mr. Poisson: It is clause 60(4)(a).
Mr. Dubé: Along the same lines, people in the field have told me some things about the self-employment assistance program, which is designed to help people start up a business. If the rumours are unfounded, we will reassure them.
At the moment, a person who has not found a job at the end of the benefit period, despite repeated efforts, tries to enroll in this program to set up a business. However, from the information that is going around, apparently such a person will no longer be able to do so, because, after the initial benefit period, he or she will not be entitled to an extension. I would like you to tell me what the facts of the matter are.
I would like to make another comment, but I'm not asking you for a reaction. To some extent, when people have exhausted all possible avenues, they have often exhausted their personal savings as well. In addition, individuals who own their own businesses are not entitled to unemployment insurance. Thus people who try to set up a business and have not succeeded after a year, find themselves, six months later, in a situation where they're not even entitled to unemployment insurance, because they own their own business.
Mr. Poisson: It is true that when people take part in a self-employment program, they will receive benefits until the end of the benefit period. Consequently, we encourage people to study these options as early as possible during their benefit period.
However, at the end of the benefit period, people may be entitled to other types of income support which are not yet really defined, but which are part of the detailed design of these programs. So there will not be a complete interruption of income support at the end of the benefit period.
Mr. Dubé: However, the details of these conditions have not yet been worked out.
Mr. Poisson: As to the availability of fund, I think that... As you know, organizations that help such individuals set up their own business usually work in cooperation with groups such as chambers of commerce, industrial commissioners, the Business Development Bank of Canada and others which help people find capital. That is the approach followed.
Mr. Dubé: The transitional fund is described as something new, and a figure of 300 million dollars is mentioned. I would like draw the committee members' attention to the fact that we're talking about 60 million dollars for the first year, 140 million dollars for the second year, and 100 million dollars for the third year. The Minister has some latitude regarding projects and can approach them in two ways.
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First, the Minister has a discretionary fund. How much is the discretionary fund for this type of project which some members of Parliament have used on some occasions in the past, and will this fund still exist under the new legislation?
Second, the Minister could provide funding for pilot projects. Will the Minister continue to use the fund other than the transitional fund to finance pilot projects? Are we really talking about new funds, or are we simply making official things that are already going on and called by a different name at the moment? I hope I'm wrong, and that is not true.
Mr. Poisson: The vast majority of the department's funds are decentralized locally, and the Minister has delegated project approval authority, which is generally about $150,000 per project at the local level.
With respect to section 25 projects, a small reserve, less than 10% of the total, has been set aside to ensure that we can react more quickly to changing situations and to the fact the projects which exceed the local budgets may be presented over the year.
This year, funds have been set aside for job creation and experimentation measures. The strategic initiative with the provinces is an example of such a measure, as are local initiatives in the labour market area. We spoke about this earlier. Given the nature of these projects, namely that we cannot anticipate the source of the demand, nor the value of the projects that will be presented, the minister has retained the right to approve them. I believe that answers your question. There are no secret funds anywhere.
Mr. Dubé: I see. Could you give us a breakdown of this transitional fund, and tell us how much will be kept by the minister, and how much will be decentralized?
Mr. Poisson: Nothing has been decided yet.
Mr. Dubé: You said that because of competition from other countries, the federal government has to increase the money it spends on employment services.
You gave the example of Germany, where the federal government spends 35 per cent of its resources, not only those of the Human Resources Department, on ways to help people find employment to compensate for the effects of globalization. We are witnessing a restructuring. In view of the minister's new proposals, can you tell us what percentage the government intends to spend on employment services? I could work it out myself, but I'd like you to give me the answer. I believe our figure will be much lower than Germany's.
Mr. Noreau: I would like to clarify the meaning of that paragraph, Mr. Dubé. It distinguishes between passive income support measures, such as sending an unemployed person a check, and active measures, such as those described in the law presented by Ian. Germans invest up to 35 per cent of their unemployment insurance fund in so-called active measures. Our percentage...
Mr. Dubé: This is money the federal government spends in the labour market; it is not unemployment insurance.
Mr. Poisson: Once the bill reaches maturity, the figure will be between 20 and 25 per cent. At the moment, it's about 10 per cent. So it will at least double. But these percentages don't take into account provincial budgets and measures dedicated to the same purpose.
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Mr. Dubé: Last year, I travelled with the committee, as did the other members of the Standing Committee on Human Resources Development. The consultations cost nearly one million dollars. The committee on seasonal work as well as other committees also studied the issue. Academics also produced a series of studies. I would like to know how much this round is costing us and how much it will cost in the future.
If you have those figures, Mr. Noreau, perhaps you can tell us how much the current phase, whose purpose is to educate the public about the reforms, is costing us?
Mr. Noreau: Please understand that I don't know the figures offhand, but we can give you a ballpark figure which will just represent an estimate. Many employees in my department spend80% of their day providing services to the public, and 20% are working on developing the reforms.
The people you heard from this morning provide services to the public in the Atlantic provinces, and they came here to help us explain to you that there are measures... Therefore, I can't give you a specific figure, but I can give you an idea of how much is being spent on this round. I'll need at least a week to come up with an answer.
Mr. Dubé: Thank you. That was my last question, Mr. Chairman.
The Chairman: Thank you, Mr. Dubé, for your questions.
[English]
Ms Minna: I want to go back to the funding of the employment programs and how that breaks down in terms of the services.
Firstly, the human resource investment fund has the UI and EI dollars, which at maturity will be $2.7 billion. Would the $1.5 billion CRF also be administered by the development fund?
Mr. Green: No. The $1.5 billion is consolidated revenue fund programs that would not be part of the UI or EI account. It would include programs such as programs for youth, programs for disabled persons, programs for aboriginals -
Ms Minna: I understand that. What I meant was, will they be administered in terms of administering by the fund? In other words, if there was a community-based organization or what have you that qualified for funding, is it the development fund that would administer that?
Mr. Green: No. They won't be administered by the fund in the sense that the commission won't be responsible for them as it would be in terms of the legislation; but obviously, in looking at them from a policy and program perspective, we would try to link them as closely as possible to the overall labour market objectives we have. So where we had programming for youth that was under way, we would be very sensitive to the kind of programming that we were doing under the benefits and measures. So they'll be linked in that sense, but they won't actually be run by the commission. This legislation will not be the statutory framework within which they will operate.
In fact, some of the programs have a separate statutory framework, such as the Canada student loans program, for the sake of argument.
Ms Minna: I thought that most of the consolidated revenue fund was wiped out by the budget, that it was being phased out. Are you saying that the $1.5 billion is still there and will be there at maturity in 2001?
Mr. Green: Yes. Based on our current reference levels, we're projecting that the $1.5 billion will be there.
Ms Minna: In 2001.
Mr. Green: Yes, subject to future decisions by -
Ms Minna: But I'm going by current decisions that have been made by previous budgets so far. That money is still there?
Mr. Green: Yes.
Ms Minna: Then I guess my understanding was flawed.
The documents talk about doing programs with the agreement of the provinces. We will not be doing anything without provincial agreements. Where will community-based training fit into this? Will they have to be dealing with the provinces after the agreements with the provinces, or dealing directly in some areas with the federal government? In what areas would this be, and how are we handling the transition? There's a lot of worry, because that whole area is not clear and these organizations are very vulnerable.
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Mr. Poisson: Yes, I think we're aware of that situation, and as the deputy mentioned earlier, there's going to be at least a one-year transition.
We're looking at bridging the gap between the end of this fiscal year and the time when the new legislation will fall into place. Under the new legislation there is a possibility of funding the activities of many of these groups under employment assistance. That's a provision under the exact clause I mentioned to Mr. Dubé earlier.
About the training activities of these projects, we said we're going to phase out the purchase of training over a period of two years and we'll review the activities of these projects with them, having in mind that service to clients should be maintained and improved if at all possible.
The overall resolution would be part of those protocols of the agreements we will conclude with the provinces. In the meantime, I think we'll simply maintain the level of activity to the extent we can and the budget permits.
Ms Minna: To be a little more specific just for my own sake, a long-time welfare recipient would fall under this CRF funding programming, not the HRIF. It's separate. Now, say they were going to a community-based organization for assistance because they require the counselling, the work skills, and so on. Would that organization get money from the province or the federal government, at some point? Is it possible that if there were an agreement with the province all that money would be coming through the province and nothing through the federal system?
Mr. Poisson: They might receive money from either the province or the federal government, or maybe a combination of both. If we are successful in harmonizing measures for the various groups, that would be quite an interesting outcome.
Ms Minna: So those organizations that have received a letter saying funding is cut as of the end of March are now going to be receiving something that will assist them through the transition so they don't have to shut down?
My concern is that there will be community-based organizations that are very good but that will just shut down, which means we lose a certain amount of infrastructure, and bringing it back is not that simple. It takes thousands of hours of volunteer work, and volunteers, who generally run these organizations, may lose that commitment when you lose that kind of program. Especially in some smaller centres across the country that's very vital.
Are these organizations being informed? Is a plan in place for the end of March? March is fast approaching.
Mr. Poisson: Our local offices, which are responsible for most of these decisions, are in close touch with these organizations and they should know by now what their status would be.
Ms Minna: As far as I know, as of yesterday all they were being told was that there will be no funds as of March 30. That's what I'm getting from organizations I met with up until two days ago. I'm just giving you what we're dealing with on the street here.
Mr. Green: We should discuss the specifics of that with you, because we have been in contact with our regions, and they in turn with local offices. Many of them have been talking to their local groups for some months now. If we have individual groups that are getting fairly limited or blunt messages, we would be pleased to hear about it, because we have been trying, through the regions, to talk to groups.
It is clear that some adjustments will have to be made in the programming. It is probably also true that not all groups will continue to get exactly what they got or continue to be financed. But we've been quite sensitive to the needs to keep partners in play and to keep them involved, because they continue to be, in our view, an important part or partner of the process. If there are specific problems, we would very much like to know.
Ms Minna: I'm glad to hear that. They're not quibbling about the fact that there might be cuts or what they might be, because they understand things might change. It's more a matter of how they get past this transitional period and survive.
The Chairman: Mr. McCormick.
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Mr. McCormick (Hastings - Frontenac - Lennox and Addington): Thanks very much for appearing at this time, gentlemen. I commend you for allowing and encouraging so much judgment to come from the local communities in all this legislation. I think the decision-making there will be reflected in the future such that you will have made a good decision. I think it will be a win-win situation.
When I look at all the money that's available for transitional job funds and the funding within the employment benefits service, my question is how the regions are defined.
I'm a new member of Parliament. I represent the riding with the most miles of road in Ontario. I have over 5,000 miles of road. When you have this many miles of road, that's linking many communities that are in a sparsely populated area. It is nothing as large as northern Ontario, but I run from the St. Lawrence Seaway-Thousand Islands area up to Algonquin Park.
So I'm really concerned.
I've heard this concern before in many other government moves and manipulations previously: the decisions are made in areas or regions, but by the time they get down to the local level, we can have somebody being a great loser who is 40 or 50 miles away from the region that wasn't approved for some program or some assets, whether it be money or just to give us information on programs.
I wonder if you could speak to this for me.
Mr. Green: On the issue of the transitional jobs fund and how the regions are defined, my sense is that the allocation of the dollars will be focused particularly on regions with high unemployment rates, in particular regions with unemployment rates above 12%. I don't have immediately available to me how that breaks out in terms of provinces or sub-regions, and I don't think we've decided on that finally yet.
Mr. McCormick: Perhaps there's a need even besides sub-regions. Again, these small, micro, satellites, communities that are in between major centres -
Mr. Noreau: You will remember that last August we announced the new configuration of the service delivery network of this department. Essentially it means that we will move to 300 fully autonomous service points backed up by 600 or more automated kiosks. Remember that. This is the unit. We call this the service point, the service unit, a human resource centre. This is the unit around which we think the decision-making, the resource allocation, and the program mixing will be done. A region is not Ontario; it's much smaller than that.
It is not only we who have reached the conclusion, after a long time spent in working on labour market issues, that decisions concerning the solutions to unemployment and labour market problems have to be made at the local community level. That's where the problem is definable; that's where it is going to find its solution.
When you're asking what the region is, my answer to you is that essentially it's the local community. That's where the partners have to come together; that's where we have to play - not at a national or a big regional level. So whether it is the delivery of the transitional fund or the delivery of normal programming that will flow out of this new legislation, the big emphasis is on delivery with the partners in the community at the natural labour market level.
Mr. McCormick: Thank you for that. I want to touch on this just a bit further.
On the transitional job funding, for example, I'm not holding you to this but will all that funding be going only to, say, Atlantic Canada and northern Ontario, as being most worthy, or could that funding be available in other areas of Canada, with the UI rate at whatever the qualifying...?
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Mr. Green: If the funding is allocated on the basis of focusing on high-unemployment regions, those which have a very high impact in terms of the EI changes, it would not go just to Atlantic Canada. It would go in addition to Quebec, Ontario, and western Canada.
Mr. McCormick: Thank you very much. I appreciate that.
I do think you have many excellent benefits for small business. I indicated yesterday, for example, that record of employment is a major step forward. I just wonder whether you want to speak on, say, the self-employment assistance, which will lead to real small businesses. I know it's been very successful, but I wonder if we should give you an opportunity to speak more on that.
I'm just reading a U.S. book now about Mr. Gates. The whole world is talking about the new economy. If we're investing $4 billion back into Canadians here, I wonder how you're going to use the new technology with small business, with entrepreneurs, for opportunities for Canadians.
Mr. Poisson: I think in Canada we've developed a fairly unique and interesting model to assist these people in creating their own jobs. That may be a first point. We've established and we fund delivery agents, which are providing technical assistance and support to people interested in creating their own business. These organizations will also usually provide information on the program, screen the participants, and make recommendations on who should be selected to receive the assistance; for example, which UI claimants would get it from among all those who may apply.
Earlier there was some reference to the results of the evaluation. The detailed evaluation will in fact be tabled with this committee when you resume your hearings at the end of the month. It may be possible to look at it in more detail then.
I can speak a little about the highlights of that evaluation. It would indicate that out of more than 12,000 participants in 1992-93, 83% were still operating their businesses at the time of the survey, which was conducted eight months after the end of their participation in SEA.
These businesses are profitable. The average participant realized a positive return on investment within a month of completing SEA.
In addition to improving their own situation, participants created new jobs for other workers, as was mentioned earlier. Some 36% of the businesses hired employees, and a total of more than 7,000 full-time-equivalent jobs were created in 1993-94.
Of course they also generated net economic benefits. When we know that the rate of employment creation is much larger for self-employed people than for regular forms of employment...I think this program proved to be helpful for a large number of people.
I don't have any precise figures, but new technologies are one form of the business activities that are supported by the program. They are something that can be available even to people living in remote communities. New technologies in fact can help create businesses in vary small communities for people who are imaginative and have the entrepreneurial spirit.
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Mr. Green: We anticipate that - and I think I spoke to this briefly earlier - some 10,000 to 16,000 jobs may be created through self-employment programs. It is interesting to note that in the examples we've given you, two of the three examples deal with technology. We anticipate that technology is going to be a very important element of the self-employment program as we look to the future.
Mr. McCormick: Thank you. I'm going to throw something in. Perhaps you will find it of interest or perhaps not.
As I travel eastern Ontario and mention how I think there are a lot of good things coming, especially with this bill and the opportunities that you will give at the local level, I'm running into a few ``old-time'' municipal people - perhaps politicians - who say, ``Well, I'll believe that when I see it.''
You've been successful many times across the country, but this.... You're making great inroads here and I certainly recognize that it will help a lot of people. I also have to make it my task to take the information back and share it so they can realize that the opportunities are there.
You mentioned these same municipal people. They feel that all governments are doing nothing but withdrawing money and services and dumping on them, but you mentioned that people who are unemployed and not receiving UI benefits but who have a work attachment may sometimes have an opportunity to make use of some of the programs that would be available. I wonder if you could just speak a little more about what those opportunities might be and how they might come forth.
Mr. Green: Can I just talk to you about eastern Ontario and communities and municipalities? I'm no expert. I have a little bit of familiarity with eastern Ontario, and I have spent some time with our officials who work in the area. One of the things that strikes them is that communities that seem to be doing the best in terms of adjusting to changing economic conditions are communities that have been able to organize themselves, pull partners together and develop a strong and coherent plan for the future. In many cases they use some of the tools we're talking about.
My experience in terms of dealing with people who are working at the community level in eastern Ontario is that there are many elements of this package in terms of the emphasis on local delivery and the nature of the tools we're talking about that they see as being a very positive addition to what they can do. So we think we have something here with instruments, measures and tools that can be helpful to them. And that's not only if the level of the legislation works, it's in terms of talking to people in communities.
In terms of the work attachment, I'll....
Mr. Poisson: With respect to the second part of your question, people who are not active claimants would have access to the employment benefits and measures. For example, if someone used UI a year or two years ago and now needs assistance to get into a job, the wage subsidy mechanism or the earnings supplementation or the other measures can be used and would be available to that person.
There are some distinctions that have to be made in terms of the income support level. Of course that person won't receive a UI cheque, but the benefit itself would be available.
Mr. McCormick: I have a comment for Mr. Green. I'm glad your people are sharing this information with people in eastern Ontario. Eastern Ontario wouldn't be any different than any other part of Ontario, but so many of these community leaders - and I don't expect you to comment on this - put so much into the organization that came forth from the federal government and the provincial government under the OTAB umbrella. Rural areas put in a lot of their own time, effort and expense and of course then they felt the carpet was withdrawn. I certainly am glad to hear this beneficial and positive information coming from you today.
I thank you very much, Madam Chair.
The Vice-Chair (Ms Minna): Thank you.
Our next speaker is Ms Augustine.
Ms Augustine (Etobicoke - Lakeshore): Thank you, Madam Chair.
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At first my question was going to be around the definition of high-unemployment regions, but I liked your answer. I will therefore take a different tack at this point in time and ask if you will speak to the targeted wage subsidies. Can you spell out a bit more clearly for us who the clients are, what the kinds of employers are, and what expectations you have in that category?
Mr. Green: I am sure my colleagues can help me out, but again I would draw the attention of the committee members to the Impacts of Reform document, the end of which does have some sort of basic information on the programs laid out.
The targeted wage subsidy is a program with which we had some experience under the job opportunities program that we previously ran. It is essentially designed to provide employers with subsidies for a specific period of time to hire and to train people, or to hire and provide skills and coaching to people who are at risk of long-term unemployment or who face barriers to employment. They could be, for example, disabled persons or persons who have limited work experience.
The measure is designed to help offset the costs and other barriers that an employer faces when hiring a targeted individual, therefore it is an incentive to an employer to hire someone who they might not otherwise hire. We have found in the past that it tends to be more cost-effective for long-term unemployed and other employment-disadvantaged workers.
There are a couple of things that we are probably going to have to do in terms of the programming to make it effective. We're going to have to target, fairly carefully I would think, clients and employers to ensure that effective matches are made. That goes to your point about kinds of employers. They obviously have to be employers who have a commitment to the program. The match is in their interest in the longer run. And we are also going to try to ensure this benefit is designed to ensure that we do not get into a revolving door of new workers. We are basically helping an employer who has no long-term commitment to helping the individual.
We are going to have to be cautious about the number of people assisted in any given area. It is going to have to remain relatively small when rated against total hiring to ensure that we do not distort the local labour market. We are conscious of this in terms of how we set up the program.
I think the evaluation findings are worth mentioning briefly. Between 1991-94, we did a comprehensive evaluation of participants in the current wage-subsidized program called the job opportunities program. We did find the program was particularly successful with social assistance recipients and disabled persons. In 1993-94, we had about $42 million directed to about12,000 clients. That would be an average cost of about $3,500 per agreement. The agreements were up to about six months in length; 24 weeks was the average. Wage subsidies received about 90% of the funding and about 10% went to skills development coaching, etc.
In terms of improving their overall employability, we got some very interesting results. There was an average increase of about $6,500 in earnings and 17 weeks of employment for participants. In terms of earnings and participation, those are very significant results.
I do not know if anybody remembers, but this is a different set of data numbers from those contained in the paper I just circulated to you. The reason is that there were two evaluations done, and this is the result from the second evaluation. But even if the first one was 14 or 17 weeks, the impacts are really quite significant in terms of the operation of the program.
We will assess the new wage subsidy elements. Where we establish wage subsidy measures, we will obviously keep this kind of stuff in mind, and we will obviously want to assess it in terms of increased employment and earnings and reduced dependency on income transfers, which goes back to the emphasis on accountability that I mentioned earlier.
Ms Augustine: May I ask, then, about the status of those agreements and how you arose from job opportunities into the present system.
Mr. Poisson: The current agreements have a defined duration, so they will go through to their stated end. We will start signing agreements under the new legislation when it is be proclaimed.
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Ms Augustine: At the end of each -
Mr. Poisson: Yes. If an agreement is signed before proclamation of the new legislation, it will simply continue to the end. There are transitional clauses to provide for that.
Ms Augustine: Thank you very much.
The Chairman: The next questioner is Mr. Baker.
Mr. Baker: Thank you, Mr. Chairman.
I wonder if the witnesses could tell us whether or not there will be any direct employment assistance not to the areas of Vancouver or Toronto or Montreal or Ottawa or any of the larger centres, but to what I'm referring to: the very tiny, small communities that would be adversely affected by this legislation - ones in which you have many people who are 55 and 60 years of age and who have always been seasonal workers with very little opportunity for other employment. These are the people who have worked in fish plants, who have worked cutting wood and this sort of thing.
Take Joe Batt's Arm, for example. What employment measures will there be? Will there be employment measures for these people to be able to work after the new bill comes in if they find themselves with not enough insurable hours to collect unemployment insurance?
Mr. Poisson: In addition to our network of regular offices and other types of service that will be available through kiosks and other mechanisms of that nature, under the new legislation it will be possible to fund employment assistance services, as was referred to earlier. I'm sure you know some of these mechanisms, Mr. Baker, because they exist already in the form of outreach projects, for example, or in the form of projects administered by various community groups across the country. One of the purposes of this type of service is precisely to bring this assistance in remote areas or to particular groups. It is something that will continue under the new legislation.
Mr. Baker: No, excuse me, but it doesn't presently exist. If somebody who is 55 years of age does not get enough stamps to collect unemployment insurance in Joe Batt's Arm, there is no direct job employment program, apart from a training program, that will give him or her the opportunity to get enough stamps to qualify for unemployment insurance. We have a bill here now that will increase the needed qualifications to draw UI. What you're saying is that you're referring me to regular offices, kiosks and these standard employment assistance services. I'm talking about actual direct job creation projects and community development projects.
Mr. Poisson: I think what you're referring to is what we call the transitional jobs fund. One of its main objectives would be to create the additional work that would be needed in some of these communities. These projects also should create permanent and long-lasting jobs.
The job creation partnership is not limited to three years. It's one of the five tools, and it would be available as a permanent measure to assist in the creation of employment.
Mr. Baker: So these people who won't qualify for unemployment insurance in Joe Batt's Arm, in Fogo, and in all of these communities, will be able to look forward to additional works programs in their communities so that they can go to work. Is that what you're saying?
Mr. Poisson: Under the transitional jobs fund, that's definitely one of the things we want to do. However, I think the managers of the local offices, the regional people who are here, also explained a number of the activities that are going on in local communities at this time. In particular, we're facilitating processes by which community groups, municipalities and interested parties can sit down together to look at the possibility of developing additional employment opportunities, at extending the season, at ways of creating jobs during the shoulder season. We're confident that through having the people at the community level working together, and with the assistance of the transitional jobs fund, it will be possible to alleviate a number of the very difficult situations that I think you're referring to.
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Mr. Baker: When will the application forms become available? By that I mean, in particular, new application forms for new projects. And we're not talking about training programs now, are we? We're talking about employment programs.
Mr. Poisson: I think these funds will become available when this legislation is proclaimed. I don't think there is any plan to have a transitional jobs fund if this legislation is not passed, so it's all -
Mr. Baker: Who will approve the projects? Is it your department that will do so? Do people fill out an application form and send it in to your local office, the employment office, in order to get approval there? Is that the way it will take place?
Mr. Poisson: There are currently some funds available under the job creation transition activities - I referred to that earlier - and there is also the targeted labour market initiative. Under one type of initiative or the other, it is possible for groups to submit projects. In fact, quite a number have done so already. There are no standard forms that have to be used, but these projects are analysed and are processed, and some of them - quite a good number, in fact - have already been approved.
In fact, in answering the request from the committee to table information on the strategic initiatives, it would be our intention to table information as well on the targeted labour market initiative projects and the job creation transition activities that would eventually lead into activities of a type similar to those that might be funded under the transitional jobs fund. This information should be available to you pretty soon.
Mr. Baker: Good.
Moving on to the self-employment training program for small businesses and so on, allowing people to collect their unemployment insurance while they either go into training or they start a new business doesn't cost the government any money. Has the department ever analysed what the effect would be to allow everyone who is in a training program to collect their unemployment insurance while they attend that training program? I'm talking now about everybody who is in a training program. To put it in your words, make fee payer seats a universal thing.
Mr. Poisson: I can comment on that. I think the first point that has to be made is that there is a cost to the UI system to support the active measures.
Mr. Baker: Why?
Mr. Poisson: If you're entitled to receive your benefit for a given period, there is an extension of your benefit period when you participate in an active measure. There is also a cost associated with the measure itself - with the training, for example. If you look at the current programming, this is incremental to what would have been charged to the UI system in the absence of such measures. In fact, if you look at the current ADO budget of $1.9 billion, about $1.2 billion of this total would not have been spent if these programs had not existed. So the first point, I think, is that there is a cost, and we can come back to that in greater detail if you would like.
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Mr. Baker: No. There wouldn't be any cost if you just allowed people to collect their UI while they are attending a course of instruction to upgrade themselves. There wouldn't be a cost if you left it at that. What you're talking about are the extensions. In fact, under the present rules you can extend yourself for three or four or five years if you wish. I know people who've been in school for four years and have had extensions. That's possible to do.
What I'm talking about is somebody who qualifies for unemployment insurance. Have you ever analysed just opening it up so that...? If you have two people working in the same job, one of them goes into your office and qualifies. The other person goes in a little bit late, when all the so-called seats are gone or the fee payer allotments are finished and doesn't qualify. So you find two people sitting in the same course who did the same work. One person is getting benefits under this program we're talking about and the other one's not. My point is that it doesn't cost the government any money to allow that person to collect his UI if he's in a course of instruction. Have you ever analysed it, because it doesn't cost you any money?
Mr. Poisson: With respect to the current rule, under the current legislation when someone is referred to a course under section 26 as a fee payer, that person is entitled to an extension of his benefit period. So that means there is a cost to the UI system.
There are situations where people would decide to take a course.... For example, seasonal workers would take courses while receiving UI during the winter in communities where there is absolutely no work. This would be deemed to be quite acceptable by the insurance agent and these people would in fact be receiving their regular cheque without extension while they're on a course.
If I understand what you are suggesting, you're saying this should be extended and be available to everyone who wants to take some training. This is something that has implications for educational institutions. It is something I think that.... In fact, there have been discussions with provinces on questions of that nature, including the numbers of fee payers that our offices can refer to colleges and other training institutions. There is not an unlimited number of seats in training institutions and colleges.
Referring to the statement of the Prime Minister on training, I think this is possibly one of the aspects where federal intervention in training was in fact an irritant for provinces, because, if I understand what you're saying, there is a risk. I think that if a federal office refers an unlimited number of people and allows an unlimited number of people to take training courses, it puts a lot of pressure on schools, on colleges and on training institutions more generally to in fact provide these seats. There are costs associated with that.
Mr. Baker: In other words, you would have too many people training. Anyway, I think we'll have to agree that we're not understanding one another.
Let me just pass on to the final thing, regarding your self-employment initiative whereby you allow somebody to collect unemployment insurance and at the same time have earnings that do not affect their unemployment insurance. In other words, the money is not taken back by the commission. You don't have to pay it back. It's a very worthwhile program.
I am wondering, though, under this bill, under this clause, about the definition of earnings. Is it defined as earnings from employment or is it just earnings?
The Chairman: Mr. Kerr.
Mr. Ken Kerr (Chief, Human Resources Investment Fund, Design Task Group, Department of Human Resources Development): Yes, earnings from self-employment would count against someone's benefits. So unless someone were referred to the self-employment benefit, he would not be able to retain the earnings from his business endeavours.
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On the other hand, as a matter of policy, the insurance group has modernized the definition of what it takes to qualify for your regular benefits. In other words, they've modernized the definition of what it means to be available and actively looking for work. They've assured us that people who are investigating the possibilities of self-employment are going to meet the policy definition and qualify for their regular benefits. Once they are in business, those benefits would count against earnings.
Mr. Baker: I'm asking you the question because in the bill the word ``earnings'' is used when you talk about whether or not you're allowed to make.... You're not permitted to make over 25% of what you collect on UI. The word ``earnings'' is used. But, Mr. Chairman, if you turn the pages, you'll notice that ``earnings from employment'' is the term used. I was wondering whether there was a change by the department in the use of the word ``earnings'' in the bill. But now, if I understandMr. Kerr, ``earnings'' must be ``earnings from employment''.
I don't know if there is anybody here in the room who can verify this -
Mr. Green: Mr. Chairman, I don't -
Mr. Baker: - because it's a very important point with this bill, Mr. Chairman, if the definition is changed, when trying to get at those millionaires who are allowed to collect dividends that are not counted as earnings. Do you see? That's not counted as earnings, so I just wondered if the definition has changed. It looks as if it has changed.
Mr. Green: I don't believe it has, but I'm not an expert.
Mr. Baker: Mr. Green, hasn't it changed?
Mr. Green: I don't believe it has, but I'm not an expert. But, Mr. Chairman, given that this is an important point, wouldn't you want to deal with this as you go through clause by clause with someone here who actually knows about the issue?
The Chairman: Yes.
Mr. Baker: Yes. Mr. Chairman, it's very important because it looks to me as if it has changed, because it says ``earnings'' and then when you go to other parts of the bill it says ``earnings from employment''.
The Chairman: Do you have the bill in front of you?
Mr. Baker: Yes.
The Chairman: Could you point out where it says ``earnings'' and where it says ``earnings from employment''? Perhaps our officials can check whether there's a distinction in terms of the operative definition.
Mr. Baker: Under ``Deductions from Benefits'', subclause 19(2) on page 22 of the bill says:
- Subject to subsections (3) and (4), if the claimant has earnings during any other week of
unemployment,
- Even the original says if a claimant has ``earnings'' during a waiting period.
It's an interesting change - what I think is a change - and I'm hopeful that when you go through clause-by-clause study we'll see that what in effect has been done by the officials or by the department is the closing of that loophole for millionaires who are drawing UI today because they don't have to declare their earnings. Their earnings are from dividends. If you drive a taxi or shovel snow you have to declare your earnings, but some millionaire can draw UI and the dividends are not earnings. There is one law for the rich and one for the poor.
I'd appreciate an explanation of that in clause-by-clause consideration.
Mr. Green: Mr. Baker, we can even check before then for an answer for you.
Mr. Baker: Good. I hope the news is good.
Some hon. members: Oh, oh!
The Chairman: Let us know as soon as if possible. It's been duly noted.
Mr. Baker: Thank you.
The Chairman: Mr. Nault, did you have a question?
Mr. Nault (Kenora - Rainy River): Yes, Mr. Chairman, and I don't want to drag this on because I know everyone has things he or she wants to do.
On the whole issue of the agreements with the provinces, my perception is that we're leaning in the direction of agreements with provinces on the skills and training, based on the assumption that all of the provinces feel the same way as Quebec does.
In fact, that's not true. There's a very big difference between how Ontario and Quebec feel about the federal government. Therefore I want to tie this whole issue about the fact that OTAB exists in name and local boards are now gone - they never were put together, as far as I can tell, but there was a start in northern Ontario that didn't get off the ground - and because of that I want to hitch this whole issue of the flexibility at the local level to the fact that there really is no mechanism. I'm using northern Ontario, the community and the region I know best, in this whole approach.
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Can you give us some explanation or some further elaboration sometime in the next weeks as we get into this discussion as to how this flexibility will work in the regions and at the local level?
I've been meeting with the local manager - as I think all good MPs should do on a regular basis - to talk about this and how we will implement it, simply because we don't know what the province wants to do, whether it's in or out of training and whether it's going to have any money at all for training. In fact, quite frankly, if they're not willing to put a dollar into training or education, why should we have an agreement with them to use our money? I would certainly like an explanation of how you propose that will work.
The local decision-making again follows on what Ms Minna was talking about earlier. You've made it quite clear that there are certain people who can qualify for training. Someone on welfare is unable to qualify unless he goes to a different program. We don't know whether we're going to be in charge of that program or whether somebody else is going to be in charge of it. Now, how do you have local flexibility if in fact...?
One of the people I'm trying to help who comes to my office happens to be a welfare individual who's been off for four or five years but has a great idea. I want to use federal money to get that person off welfare and into the workforce, but there is no flexibility in that regard. That was what I thought flexibility was going to be all about. I would really like you to explain and to elaborate on the definition of the local flexibility, because every situation is unique.
Northern Ontario is very different from Toronto. I'm sure my colleagues would agree with that. It is very different from Newfoundland - even though George and I are both very rural. I would like to have that explained to us as we go down the line. I don't expect you to give me all that information today. But I think it's important because everybody expects, as the minister has said convincingly over a number of months, that local decision-making is going to be a big key to the way we deliver these programs.
From what I've read so far in your presentation and from what I've heard, I don't think you've really given any local powers at all. It sounds like you want to let them have a little bit of say, but they really won't have a lot of say, in my mind at least. Maybe I'm reading these documents wrong. That's why I would like you to elaborate a little bit further, if you could.
Thank you.
Mr. Green: We think we're giving them a lot of say. More importantly, they think we're giving them a lot of say, as I think you saw in terms of some of our local representatives.
In terms of the local delivery issue and our thinking around it, we would be pleased to tell you about what we're thinking and where we see it going.
It is quite true that in the province of Ontario the thinking on labour market programming is evolving. It is hard at the moment to know precisely where it will end up. That may create an environment within which, in terms of Ontario, we're going to have a period of discussions where they may not be too clear for a period of time about exactly what's happening. We can certainly try to be clear about our sense of what local delivery would mean and the kinds of things we would want to do about that. We would be pleased to do that.
In terms of someone coming into your office who is on welfare.... First, I should note a point I made earlier and that I think the deputy made earlier. We anticipate that our client eligibility definitions will on average make about 45% of the people who are on welfare eligible for the benefits that we're talking about, which is a not insignificant number.
Second, the national employment service and a number of the measures attached to it will be available to a wide range of Canadians, including individuals who technically may not be eligible for the benefits.
Third, the answer to the question about the individual who is not eligible for some of the measures because they don't fit the client eligibility issue is that then we will have to look to CRF programming, because that would be the only avenue left to us in terms of responding to their needs should the government decide it wanted to set up programming to do that.
Mr. Nault: I have a point in conclusion, Mr. Chairman.
Could you then give us your rationale as to why 45% will probably fit and the other 55% won't, and your rationale as to why you think the 45% on welfare is important and the other 55% isn't?
I ask that because in some cases we're the ones who are responsible for them ending up not being able to qualify for UI so they end up on welfare. So it's important to remember that we could take the blame for that to a certain extent.
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The real issue of local decision-making is that if there is a particular, unique program or endeavour going on in the region that happens to apply to a bunch of welfare people, so what? The point is that we want to get these people off the dole and into the workforce. That's where the decision-making is the key.
I'd really like an explanation and a rationale. Is it because it's a tremendous cost? No, because as you've shown on your graph here, Ontario is going to get a total employment measures budget, by the year 2001-02, of $719 million.
So I've got $719 million to play with, and northern Ontario is going to get a certain chunk of that pie. If I decide that in my region some of that will go to welfare recipients, then so be it. It's a local decision and we'll stand by it, we'll live with it if you allow us to do that. That's what real local decision-making is about.
So this is why I want to get some sort of rationale from headquarters as to why you've decided that 55% don't really fit into it and the other 45% do. You must have some sort of documentation that can explain it for us as we go down the road.
Mr. Green: I can try now briefly. Can I just underline, though - I may not have made this clear earlier - that the transitional jobs fund will not be restricted to those who will not fit the eligibility definition that is in the legislation. In other words, it will be available to all Canadians. It was set up that way because of the recognition that it needed to have a wider eligibility base given that it was designed to be a transition fund as we move through. I think that's an important element of this fund to retain.
The question of why some social assistance recipients are eligible while others aren't really goes back to the client eligibility issue and the decision around why we established a definition of eligibility that was based on the idea that one is either a claimant or has exhausted a claim within the last three years. The 36 months was picked on the basis that the employment insurance account is based on premiums and is based on an insurance concept. We did not feel we could go too far beyond the 36 months, which is a three-year timeframe, in terms of retaining the insurance basis of the program and recognizing the fact that they were premium payers in terms of the program. Members may disagree with that timeframe, but the logic was that we felt there has to be some connection to claims in the program in terms of the insurance concept of the program.
Mr. Nault: All right. Lastly, then, don't mix up the transitional fund. That's a very separate thing intended to get us by the difficult period. I'm talking about the long-term abilities for people to get back in the workforce, and I'll give you an example.
If you want to look at the electoral boundaries, I now have over half the aboriginal population communities in Ontario. I have 56 first nation communities. Most of those people - and I stress ``most of them'' - have never worked. They've been on welfare their whole adult life. They don't qualify for any of this stuff. I assume there'll be some sort of special agreement that is being put together for aboriginal people, and I've had some discussions with the minister about that.
The point is that there are non-native people who are in the same boat. Even though they've been on welfare since they were 18, if they all of a sudden decide when they're 30 years old that they want to go back to school to get into training, I have to apologize to them and tell them they don't fit into the criteria because they've never been on UI in the last three years. I don't think that cuts it. That's where the local decision-making should have some flexibility or some pool of funds - be it 10% of the total budget of your region or whatever it is - to be able to do these kinds of things. That's where local authority is important, which is what we're trying to get at. I think it's important, at least, and what we're trying to suggest is not in your guidelines as of yet. If it is, I missed it somewhere.
Mr. Green: We do, Mr. Chairman, have the Pathways to Success program, and we are in the process of establishing framework agreements with aboriginal organizations to further devolve it to them. The program is $200 million a year, $150 of which million comes from the consolidated revenue fund. Access to it is therefore not based on the sort of eligibility criteria that you find in the legislation. So there's a significant funding source there for aboriginal employment issues. We've used it in the past, and it will be available in the future.
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Secondly, Mr. Axworthy had indicated that he wanted a significant part, I believe up to$15 million, of the job transitions fund to be reserved for the aboriginal community as part of the transitional programming.
I do not know precisely the issues to which the member is referring, but there is a pot of money there that is available for aboriginal programming in this area.
Mr. Nault: Let me go back to where I started from. I would like a complete explanation of what local decision-making will mean, because my sense of it is that what you are saying is dancing around the issue: that there will be funds for here, there, and everywhere but the local people will not decide that; that it will be done out of headquarters. Headquarters will tell the local people, ``This is what your local decision-making will allow you to do''. Therefore you have limitations on local decision-making. That is factual.
It is so now. I have had people who could not fit come to my office a number of times.
Believe it or not, we can be very imaginative in rural Canada to make things fit. Let us have the opportunity to do that with a budget, and we will get people back to work - much more than you would imagine.
The problem is that this document does not tell you what the decision-making criteria are. It just sort of says, ``We will be flexible''. Well, I am very flexible, but there are days during which I am not as flexible as I am on other days, depending on what kind of mood I am in.
We need to know that, because we are going to be asked that as we go down the road. Every witness is going to ask that question. Every aboriginal group is going to ask us how the aboriginal fund is going to work for them.
I know about Pathways. I know that Ovide Mercredi is going to control the $200 million. I know there is already a lot of dissension about that in aboriginal communities. I deal with aboriginal people every single day as a member of Parliament because I represent so many of them.
I want you to know that we need that information in order to be able to talk to the witnesses.
The Chairman: Good point.
[Translation]
Do you have another question, Mr. Dubé?
Mr. Dubé: It's more of a comment. I would like to compliment the members sitting across the table for asking more openly critical questions. As a new member of Parliament, I am hoping we will see the day when the rules of Parliament will give each member the right to express a critical opinion for the purpose of improving our laws. I was particularly struck by a question raised by Ms. Minna. She was concerned about the future of certain community groups in her area, but this no doubt also holds true for every area.
It's a fact that several community groups, over the years, regularly availed themselves of section 25, and, in Quebec, of job development programs. That's all I wanted to say. A member must represent the interests of his voters and acknowledge what is happening.
People have a lot of concerns these days. Many community organizations don't feel... It's all very well to have five guidelines and flexibility, as Mr. Nault said, but it is worrying. I will conclude by telling the officials that they will have to make changes, but not too fast, since they are dealing with people who provide community services.
The chairman will no doubt recall, for instance, all those community services that provide the famous soup kitchens. There are many organizations which help government help the unemployed and poor people to improve their lives. We must always remember them. Thank you.
The Chairman: Thank you, Mr. Dubé.
[English]
With respect to clause 58 of the legislation, the provision that extends accessibility to employment benefits to those claimants who have established a claim that has ended in the past 36 months, or three years, and those who have received maternity or parental benefits within the past five years, could you explain why it is limited to three years in the first case? Is there any particular reason why you chose three years? It's better than no years, but I just want to know why the limit is set at three years.
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Mr. Poisson: I think there's probably some practical reason in terms of the type of coverage that it would provide. There is no theoretical answer to this question. We feel that 36 months is a period of time during which someone still has some connection with UI and that although it includes a fairly wide number of people, it is a number that can be managed.
With respect to the five years, which is the other time period mentioned later on concerning women who have been out of the labour market and so on, the five-year period relates to the fact that this is a duration mentioned in the collective agreements that have clauses of this nature. We picked it up that for that reason. I guess that's the only explanation I can really give.
The Chairman: Okay. So there's no real theoretical reason why it's three years. It's basically been picked....
Mr. Poisson: It seemed to be a reasonable period of time.
The Chairman: Mr. Green.
Mr. Green: That's in addition to the issue of the maternity benefit issue reflecting the fact that many parents would stay home with their children until they start school -
The Chairman: Yes, that's understandable.
Mr. Green: - for five years. As for my earlier point made in response to a question, the36 months was very much trying to strike a balance between safeguarding the insurance contributions of employers and employees - I mean the premium payers - and giving as many unemployed persons as possible a chance at active measures to get back into the labour market. So it's not arbitrary. It's trying to balance two fairly important objectives in terms of the operation of the EI account.
The Chairman: Sure. Now those people who qualify - and help me in my understanding of this - would be eligible for the five employment benefit programs.
Mr. Green: Yes.
The Chairman: They'd fit into that category. This may be covering ground we've already covered, but I want to go over it for my own benefit. Let's start with the targeted wage subsidies. It's not specified in the legislation. Just the parameters of those subsidies.... What's the maximum? How long would they be available? Who would be eligible? What would the circumstances be? Do you know the answers to those questions?
Mr. Poisson: We have documents that have proposals on some of those more detailed design issues, but there is a very important section in the legislation that says we're going to work out these benefits in concert with the provinces, so we cannot on the one hand say that we're going to sit and discuss these things with provinces and kind of adjust the programs or adapt the programs to some specific needs or considerations brought to our attention and at the same time say this is how it is going to work.
In response to a previous question about who the targeted clientele would be, we have a fairly good idea of the type of jobs and the type of employers who would be interested. In terms of the duration, the comparison would be with a similar measure that exists now where on average people receive a wage subsidy for 24 weeks.
However, the rule of the program is much more flexible than that, and I think the duration can be for at least a year, as it is currently, in fact. There have been suggestions that it could be up to a year and a half and then the local people could make the decisions. That's part of what we mean by flexibility. It's based on the individual circumstances of the client and on the particular type of jobs and circumstances of the employer. There is a discussion and some agreement is reached as to what is appropriate for this type of client and would lead to results, because that's also a very important dimension of the legislation.
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We're saying that the purposes of these active measures are to put people back into jobs and reduce dependency on UI. In making these local decisions, people will have to make some trade-offs between how much to invest and how much should be invested in a particular claimant or individual and what will result at the end.
The Chairman: If I understand you correctly, the five tools are generally specified in the legislation, and the details, including all of the different parameters around the design of these specific tools, will be worked out with the provinces.
Mr. Poisson: Yes.
The Chairman: In agreement.
Mr. Poisson: Yes. I think that -
The Chairman: And those details would specify, for example, how much flexibility would be available to a local group or to the local delivery agent or to the individual, the maximum length of time that a wage subsidy could apply or any of the other employment measures could apply in a particular province once it's worked out with the provinces?
Mr. Poisson: Yes. However, if members of this committee think it would be useful, it would be possible for us to table short documents that describe further than this line in the legislation what this tool or that tool is....
Mr. Green: And to be clear, those backgrounders are essentially sort of aides-mémoires for us in the sense of looking at how long you could run it for, what periods of time, what kinds of businesses, what kinds of matches. They're very much background think pieces that were developed for us, but that's all they are.
The Chairman: It would be helpful to know, because obviously if you've got a certain amount of money that you spend on these measures and yet to distribute it across the provinces in a fairly equitable way.... The looser you design these arrangements, the fewer people you can help, and the tighter you design these arrangements, the higher the possibility is that you're not going to get people back to work with those measures.
Mr. Green: We anticipate, though, in terms of our discussions with provinces, that we may have some variation in terms of the extent and use of some of the benefits. So we would not, for example, be working on the basis that in every province they have to spend x on earning supplementation. It may well be that a different province with different labour market conditions might use different kinds of measures in different ways.
The Chairman: Well, it would be helpful to have a little bit more information on your thinking behind designing these measures with which you're going into these negotiations so we have an idea of what they're going to look like at the end. We'll receive those from the department. Is that okay?
I have no further questions. I will thank our witnesses and we will adjourn to the call of the chair.