[Recorded by Electronic Apparatus]
Wednesday, October 9, 1996
.0833 
[Translation]
The Chair: First of all, I would like to welcome you to this first meeting with the Standing Committee on Human Rights and the Status of Disabled Persons which has a mandate from the House of Commons to examine these issues. The committee's composition reflects the representation of the different parties elected to the House. I will introduce the members of the committee to you in a few moments, but first off, let me just say how happy we are to have you here with us today.
You can provide us with reliable information about a serious, very complex problem facing our society, a problem to which we are seeking solutions in order to ensure greater equity for workers currently employed in the job market and for those trying to break into it.
.0835
[English]
Our pleasure and privilege to be here today is unique for us, as it is unique for you to have a standing committee of the House of Commons before you. I am particularly pleased that we have representative members and we have quorum of the standing committee, which is an elected structure of the House of Commons.
I would like to introduce you to my colleagues. First is Russell McLellan from Cape Breton - The Sydneys, who has a long background and history in the House of Commons, particularly in the field of justice. I have known Mr. MacLellan for a long time and he has been extremely helpful in all fields of legal rights and equality rights and justice under the law.
A new member to our caucus and to our committee, whom we are delighted to welcome, right from the city of Toronto, is Sarkis Assadourian, from the riding of Don Valley North.
We'll introduce you further in a moment. We will go from side to side of the spectrum with the greatest of pleasure.
[Translation]
We are always teasing one another. It gives me great pleasure to introduce to you Mr. Maurice Bernier of the Bloc Québécois, who represents the riding of Mégantic-Compton-Stanstead.
[English]
in the beautiful eastern townships. For those of you who haven't visited Quebec and the eastern townships, go and visit Maurice Bernier's gorgeous riding. He represents the Bloc Québécois in the House of Commons.
We are particularly pleased to welcome at our table Mr. Steve Mantis, whom I know you have heard from before; Professor Leo Aarts, from the Netherlands; and Mr. Charles Black, from the Canadian Life and Health Insurance Association.
Our committee is basically here to learn more about the emerging issues so that we can give a more enlightened and better-based response in the House of Commons about many of the concerns that affect all of our daily lives. We make no pretence at being experts, and that is why we're so delighted to be here with you.
The whole question of management - and disability management in particular, as you well know - has become one of the most important issues facing the social, economic, and business worlds, and certainly that of public life, particularly where it looks to legislation and social policy for our government.
The disability income programs, the nature of the pressure on these programs, and the link - and I think this is key for us to understand and learn from you - between income support and the kinds of active measures that will enable the people who are in this category to get back to work and at the same time ensure that their families are able to have a decent quality of life within our society -
We understand the importance of disability management as one way of reducing the human and financial costs that face us in a society. We hope to ensure that individuals will be the benefactors of the enlightened information which we hope to gather from you. We will certainly read the speeches and the exchanges with a great deal of consideration and concern.
Without further ado, I think the order that we will call our witnesses, and the normal procedure for the standing committee, is that we will hear from the witnesses.... We have two alternatives. We could hear one witness at a time and then have questions, the questions normally starting with the opposition party and then the party of government. However, with the approval of the members who are here today, we will first hear from our three specialists.
.0840
Mr. Mantis will give us an overview, colleagues, of what has taken place over the last three days and somewhat set the stage for us. Then we will hear from Mr. Aarts, who will give us more of a balanced understanding of whether this is just a Canadian phenomenon - is it just certain provinces and the Canadians...? As you well know, there's a full partnership link between the provinces and the federal government. We would all like to know how that relates to the international world, from the wealth of experience and understanding you bring us.
From Mr. Black, we're looking forward to understanding more about the collaboration and the expectation between the public sector and the private sector, from his experience and from what he has garnered in listening to and participating with all of you, so that we are brought somewhat up to speed. Then, of course, we are going to have to go home and study.
So it is with the greatest of pleasure that I call on...unless, colleagues, you have anything you would like to add in any way. Mr. Bernier?
[Translation]
Mr. Bernier (Mégantic - Compton - Stanstead): No, I'm fine.
The Chairman: Good.
[English]
Russ?
Mr. MacLellan (Cape Breton - The Sydneys): No.
The Chair: No? Bon, allez-y.
Mr. Mantis, would you be good enough.... I could outline your your CV for the record of the House of Commons. As this is a formal meeting, the House of Commons will take note of the background of Mr. Mantis.
This gentleman was injured in an industrial accident in 1978. He reintegrated himself back into the construction industry by forming his own small business. In 1984, he helped found the Thunder Bay and District Injured Workers Support Group, where he currently serves as vice-president. We know your member of Parliament.
The principal goal of the group is to ensure that injured workers return to work. As well,Mr. Mantis presently works as a coordinator for the Canadian Injured Workers Alliance. He has managed the vocational rehabilitation program for the Ontario March of Dimes, and been on the board of directors of the Ontario Workers' Compensation Board.
We welcome you to the standing committee, Mr. Mantis.
Mr. Steve Mantis (Canadian Insured Workers Alliance): Thank you very much, Madam Chair. Thank you for the opportunity to present before you today.
I think I should just clarify that -
The Chair: Mr. Mantis, I'm sorry, I have committed a breach of etiquette. I do believe you should know that sitting with us is the clerk of the committee, Mr. Wayne Cole, who guides us in our daily work and organizes the tasks we have to undertake. The reason I'm doing this, for the information of all of you, is so that you see how a standing committee functions, and we don't function without Mr. Cole.
On my right hand - and believe me, when I say right hand I do mean right hand - is a policy adviser from the Library of Parliament research branch, and if I've got it wrong... Bill, you won't believe I just forgot your last name -
Mr. Bill Young (Committee Researcher): Young.
The Chair: I can't live without Mr. Bill Young, with respect to the responsibilities we all have around the table. He's a very, very important member of the team, helping us and guiding us through research and his general knowledge of the workings of the House of Commons. He's a special assistant right now to the task force on disability, which the government has out looking at many of these issues.
I'm sorry to have interrupted you, Mr. Mantis. Please go ahead.
Mr. Mantis: It's no problem. I would actually like to acknowledge that what you just did is part of the solution. Throughout the last two days we talked about how we really are operating in a changing time. Tremendous changes are taking place in our society and in our community. One of our solutions is to involve in a very primary way the workers who deliver the service and, rather than the decision-making always taking place at the top, acknowledging that in fact the workers are an integral part of the solution. They have acquired a level of expertise over years and years of doing the job, of delivering the service. If they're involved as equal partners in the design and delivery of the systems, we get much better systems.
.0845
Disability management has been the focus of this event, but for most people the focus is on disability. From the perspective of injured workers, the focus needs to be on management. If there is good management, there is going to be good disability management. If there is not good management, disability management will only be used as a tool to manage claims to reduce cost and to find ways to get rid of costly individuals.
The Chair: In other words, one side is more economic than human and the other one is more human than economic. Is that what you're telling me?
Mr. Mantis: Yes, very much so. Both approaches can reap financial rewards. The one can oftentimes be financial rewards only in one group of people. The other is a win-win situation in which not only businesses and employers benefit financially but the workers also benefit, both financially and as whole people.
Our membership tells us over and over that their number one concern is to be able to go back to work. That's where we get our status in our society. It comes from working. Of course, that's also where we're able to make a reasonable living to provide food for our families.
So we really would ask that the federal government, in this time of change, look at the opportunities that are available. As the major employer in our country, I think the federal government can really benefit, because there are more workers now working in the federal government than in almost any other sector. As an employer, there is a significant role for it to play, a leadership role that can set the stage for how the rest of us can work together.
From talking to many of the people within the federal civil service, I know that management styles there are in need of change. The workers are not really involved in the process. Decisions are made on high, oftentimes without clear understanding of why those decisions are made. Opportunities present themselves - there have been pilot projects in disability management within the federal civil service, for example - but they kind of disappear rather than being seized upon as ideas to move forward with. For some reason, they didn't meet the needs of individual managers or department heads, although I don't know why.
But we need to look at how we manage people. If we put people, our staffs, in the position where they are the number one asset that we're working with, we begin to make decisions that are going to help our companies, our government and our community as well as helping our employees.
We heard about the various ways of managing disability, reducing costs. There are many excellent examples in both the private and the public sectors. Significant savings can be had - reductions of 50%, 60%, and 100% in terms of cost savings. Economically, there are major costs involved. But once again, how we do it is going to set the stage for whether there is a long-term return or not. By investing in our people, by believing in our people, and also by involving the customers in the design of our services, we begin to say that we have everyone at the table and can hammer out these issues. We can figure out what's going to work best for all of us.
We also heard yesterday about the numbers of people with disabilities who are on social assistance. There are 213,000 across the country receiving social assistance. Different economic and computer models were built. They showed that with a bit of support in terms of personal supports and accommodations on the job, we can see a tremendous savings in getting these people into the workforce. But once again, that's not going to happen unless we have good management that cares about the people.
.0850
A very important component of disability management is education and awareness, ensuring that everybody is involved - and that means all the workers. We saw this in Sault Ste. Marie, where the manager of their program went to meetings that he called tailgate meetings. He met with all the employees throughout the city to explain what the program was, and to explain that they all could benefit from this program. He told them that it wasn't only this individual we should feel sorry for, because everyone is in fact eligible for these benefits and everyone can benefit.
In the corporations that are leading the way in this area, we saw that continuous learning is an integral part of the process. We can't just say that we have a program in place and it's a good program, and then forget about it. We always have to be looking at the results, we have to be welcoming feedback, and we have to be listening with open ears. And we have to ask ourselves how we can change, how we can do better.
Another area in which we would ask for support from the federal government is the area of research. Things are changing very quickly. In order for us to move forward in the best way, we need to have some evaluation of what's going on out there right now. We need to know where the best models are, and why - what are the principles, what are the components of those models - so that we have the scientific.... I stop at that word ``scientific'' because I feel like it's out there. That scientific inquiry has to involve the workers and customers as well in order to ensure that we do have the information on how we can move forward and all benefit. This is an area in which there is very much a win-win available.
We have a choice. We're at a crossroads. Which choice are we going to take?
We heard from New Zealand yesterday that they have a comprehensive program in place throughout the whole state. That program deals with people with disabilities regardless of how they incurred their disability. In our case right now, our systems are so fractured that we get different jurisdictions, be they private or public, fighting over who's going to look after you. We saw last week a fight over CPP disability benefits rather than an effort to work together in a comprehensive way. And it's very interesting, because they talked about one of their goals as being social and vocational rehabilitation. And the very important part there is ``social rehabilitation''.
We have to remember that these people are human beings. They're going through a dramatic experience that they need to be able to adjust to, that they need to be able to come to grips with, in order to be able to move forward. That component is critical in any program. We have to remember that we are people and that we have a full range of emotions: not only did I lose my arm, but I lost my self-esteem, I lost my sense of who I am, I lost my position in society, and I have to adjust to all those things in order to be successful and be a benefit to my community and to my employer.
I think my time is just about up. I want to leave you with three things. First, we need research. We need to document what's working. We also need to practice what we preach. Not only do we need to say that we're going to do all these wonderful things, but we have to live it. We have to be able to stop and introduce and affirm the people who are doing the work, and involve them integrally in the process. And we also have to involve the people who are receiving the benefits from these programs.
As for injured workers, I know people with disabilities have lots of solutions. All we need is to be invited to the table to be able to share some of those opinions with you, and we can move forward together.
Thank you.
.0855
The Chair: Thank you very much, Mr. Mantis.
That was a very important overview for us. There's no question that self-worth, self-dignity and a sense of well-being come first in order to be able to heal not only mentally, but physically.I appreciate that approach. I'm very pleased to see that you have members of the disabled community here, who I'm sure will give us some feedback.
A voice: Absolutely.
The Chair: I wasn't worrying. I knew that was our good fortune. We have to hear from you in order to be more enlightened. I appreciate that overview. Thank you.
I ask you to think about this question while we listen to the other people who will speak. You were talking about the whole question of management. This is the issue. In looking at the research model that we tried within government, it has been argued that disability management will work only where there is an accountability framework whereby individual departments and, ultimately, managers are held responsible for the cost of their absent workers.
Is that the best way? That's a cost-benefit analysis. Where's the human dimension? I'd love it if you'd think about that, if you wouldn't mind. Thank you.
Second, I'm most delighted to welcome Dr. Leo Aarts to the committee hearing. Dr. Aarts is both a senior economist at the Leiden Institute for Public Policy and an associate professor of economics at the law school of Leiden University in the Netherlands.
His current research focuses on the economic aspects of the design and implementation of social security disability insurance programs. Dr. Aarts acts as an adviser on issues of social policy to the Dutch government, politicians and labour unions. I remember reading in an excellent document - which you prepared for your preliminary program - that you've done a lot of research on the other countries that surround you, Professor. We're really looking forward to getting a good background.
I was just looking to see when you looked at the question of current trends in policy revision, a comparison between the United States and Canadian disability records and four European countries to illustrate how different policy mixtures related to disability insurance and rehabilitation, incentive structures and the broad socio-economic policy environment result in different outcomes. We're most interested in knowing more about this.
Professor.
Professor Leo J.M. Aarts (Senior Economist, Leiden Institute for Public Policy): Thank you.
Let me say, first of all, that I consider it an honour to act as a witness for your committee. I was speaking yesterday about European experiences with disability policy. It is remarkable that despite the fact that these national disability policies are in at least two respects very similar, they're very different in their outcomes.
Let me give the similarities to you. They are similar, as I said, in two respects.
First of all, they're operating within a very similar broader social security policy context. These countries are mostly European countries. The countries I have focused on, Sweden, Holland, Germany and the United Kingdom, all have universal health care insurance, a universal social safety net covering all residents, universal unemployment insurance, and finally, and maybe most importantly, they all have universal coverage for sickness or temporary disability, which makes it possible to intervene at a very early stage immediately after the occurrence of a functional impairment.
There's another respect in which these national policies are very similar, and that is the policy instruments that are available in different modifications. They are available in all these countries, and they range from cash benefits, of course, and in-kind benefits to wage subsidies or partial benefits or disability allowances, instruments that make it possible to return to work partially.
.0900
Yet despite these similarities the policy outcomes are very different.
I should add first, before I go into the differences, yet another similarity in policy outcomes. This is not a European phenomenon only; it can be observed in all OECD countries. That is a constantly increasing number of people receiving disability benefits. In the 1970s and 1980s the figures have doubled and tripled, depending on which country you look at, but it's a common phenomenon everywhere. It's only recently that the numbers stopped increasing in Holland and in Germany. Another thing is that although the increase is similar among the various OECD countries, the levels of disability recipiency in Europe are much higher than they are in the United States or indeed in Canada.
Despite these similarities, policy outcomes are very different. In Europe at the one extreme there's Holland, where transfer recipiency amounts to 151 or 152 disability benefit recipients per 1,000 people in the workforce. At the other extreme is Germany, where they have 55 people on disability benefits for each 1,000 people in the workforce. So in Holland benefit recipiency is three times as high as in Germany. In Holland we spend 4.6% of GDP on cash benefits. In Germany, 2% of Germany's GDP is spent on cash benefits. That's a huge difference.
One of the reasons for these different outcomes is the difference in the incentive structure. It's the difference in the incentive structure that is implied by the standards and the procedures as they are laid down in the national law of these countries, and maybe even more important, that is the way in which these standards and procedures are applied by the program administrators.
When I speak of incentives and incentive structure, it's very important not to look only at the incentives that work towards the employee, such as the benefits he or she is going to receive when awarded a disability pension, but also at the incentives for the employer and, since the third party should not be forgotten, also the incentives for the program administration.
In a way, Holland is doing badly. It has had its emphasis in disability policy on compensation, which has been very costly. It has, of course, contributed to the easing of the burden of disability for people who are suffering from functional impairments, but it hasn't done much to get people back into work and back into society. Its performance has not been very good. But now we are making a turn in policy arrangements I'll tell you about a bit later.
The Chair: Dr. Aarts, am I understanding you to say it was a much more human policy but not economically sound?
.0905
Prof. Aarts: It's certainly not economically sound. I doubt whether it's a very human policy. It offers the easiest way out, which is very costly and in the end may be the best solution, not even for the people who are suffering from functional impairments.
Holland, as I said yesterday, is the champion of disability benefit recipiency in Europe, indeed all over the world. There's a strong incentive for the employee to apply for disability benefits, because benefits are high and requirements were relatively easy. There's no incentive for the employer to retain functionally impaired workers within the firm. We had an administrative system in operation in which relatively generous standards are applied by administrators who are accountable only to themselves.
Germany, on the other hand, shows that in a very similar context, with a similar disability policy arrangement, you can arrive at very different outcomes. Germany has been the European champion of work for the disabled. The German program has moderate benefit levels for the employee, fairly adequate, not very low but not as high as in the Netherlands, but substantial incentives for employers to hire disabled workers. There are fines for German employers if they do not meet legal hiring quotas for disabled workers. And Germany has strictly monitored the administrative process. Of course the incentive structure cannot account for all the observed differences in policy outcome, but there can be no doubt the incentive structure matters, and as far as I'm concerned matters a lot.
Let me tell you about some of the policy measures that are being taken, current trends in disability policy.
In Holland a number of measures were taken to adjust the incentive structure I was just talking about. First, benefits were reduced. Second, employers' accountability was increased by introducing elements of experience rating into the system and by privatizing part of the social disability insurance system.
I'll explain that. From January, short-term social disability programs, which cover sickness and temporary disability up to twelve months of disability...from January, employers are held responsible for paying at least 70% of the forgone earnings for the workers who cannot perform their current duties. I should add that in the Netherlands we don't make a distinction between work and non-work-related injuries and illnesses.
The employer then is free to seek coverage from private insurance or to self-insure. Furthermore, government proposes.... The first measure is in place. Furthermore, government proposes to give employers the opportunity to opt out of the national disability insurance system for the first three years of disability benefit recipiency. Furthermore, the social insurance administrations, which were run by semi-public organizations governed by employers and union representatives, are in the process of being privatized.
.0910
Holland is extreme in these kinds of measures, but Sweden, where numbers are equally high or almost as high as in the Netherlands, moved in the same direction, reducing benefits and increasing employers' accountability by introducing experience rating into the system. They have also privatized, in the way I just pictured, the first six weeks of sick leave and short-term disability as we did in Holland for the first twelve months. They are moving in the same direction, albeit a little less radically and maybe more wisely.
In Germany and the U.K. there is no immediate need for radical changes in their policies, although there is a constant worry that social security spending overall is also too high in these countries. There is a constant pressure on the system to reduce costs and to reduce benefits.
May I leave it here?
The Chair: Yes. Thank you very much.
Dr. Aarts, do you have some kind of graph or presentation in which you indicate the comparative measures?
Prof. Aarts: Yes, I have it on paper.
The Chair: As part of the general background we look at when we're doing public policy, all our colleagues like to have comparative analyses of other countries. That way we can see where the best experiences might be and where we might best focus our energy, or at least know that we're not totally out of line, that other countries are suffering in the same way or having similar problems.
I want to thank you very much. I'm curious if afterwards you could explain further what you mean by experience rating. How do you rate emotional impact and loss of self-worth in the qualifications for rehabilitation? You have to build your own sense of motivation to do something and you have to feel good about yourself.
I thank you very much.
We now welcome Mr. Black, a senior adviser for insurance operations at the Canadian Life and Health Insurance Association. Mr. Black is a graduate of the University of Western Ontario, a fellow of the Canadian Institute of Actuaries and a chartered life underwriter. Mr. Black has spent nineteen years in a variety of assignments with a major insurer, and has chaired the committee on human rights - oh, boy, that's good to hear. The committee on human rights is what we are, and we're going to look at all aspects of this from a human rights perspective. Mr. Black, you're doubly welcome from that perspective.
So he has chaired the committee on human rights for both the Canadian Association of Accident and Sickness Insurers and the Canadian Life and Health Insurance Association. In 1993 Mr. Black supervised the revision of the association's guidelines on the right to privacy. He is an active participant in the Canadian Standards Association initiative to develop a national standard on privacy.
Mr. Black, it might be of interest to you to know that members of this committee were listeners and learners at the international meeting of privacy commissioners held in Ottawa ten days ago. It was quite an enlightening experience. Dr. Ursula Franklin's overview was quite stunning. If you don't have a copy, do apply to our office. You'll see the link that she makes between privacy rights, human rights and business rights. It's quite fascinating.
As this committee is embarking on a study of privacy rights and the world of work, your whole background fits so well into this human rights and disabled committee. We welcome you and look forward to hearing about the relationship between the public and private sectors or anything else you'd care to add.
Mr. Charles C. Black (Senior Advisor, Insurance Operations, Canadian Life and Health Insurance Association): Thank you, Madam Chair. Unfortunately I wasn't able to attend that meeting of the national privacy commissioners, so I certainly welcome your comment. I will follow up and seek out some of that information. The area of protecting the confidentiality of personal information is a very important area in itself. Unfortunately there are many important meetings and it's just not possible to cover them all.
.0915
In that vein, I would like to begin by commending you and the members of the standing committee for finding time to participate in our meeting here this morning and to hold a session of your standing committee hearings in conjunction with the National Conference on Disability and Work. As Steve and others have indicated, this has been a remarkable conference. I've found it a very exciting conference. I hope in your brief time with us you can pick up some of that excitement and some of the content that is emerging over our three days. Congratulations on taking this initiative. It's certainly much appreciated.
In the few minutes available, I would like to respond to your suggestion to focus on the relationship between the private and the public sectors. In doing so I will focus on one aspect of that primarily, the income security area, because that's the area that life and health insurers are primarily involved in. Just in passing I note that there are many other areas, certainly including the delivery of rehabilitation services, which many people in the audience are involved in, and many other aspects where close relations between the private and the public sectors are very important in dealing with this area of disability and work.
In responding to that area I'd like to make a few comments on the private disability insurance area and who the CLHIA is and who the insurance companies are and what our focus is. Then if time will permit I'd like to move to a specific comment as an example of areas I hope your standing committee can consider.
First of all, CLHIA is the trade association or the industry association for life and health insurance companies in Canada. I should mention there is essentially a second insurance organization, the Insurance Bureau of Canada, which represents property and casualty insurers, which also have an important role in the disability area through the no-fault auto insurance benefits.I have to say I'm as much of an innocent in understanding those benefits as many of you are, and that is not part of CLHIA.
Our member companies - and as I say, there are approximately ninety members of CLHIA - for many years have been providing a range of personal insurance benefits: life insurance, pension, and in particular in this area of disability in work, income replacement insurance, which is often referred to as ``disability insurance'', so I'll tend to use that term.
The second area of particular interest in the area of disability in work is the extended health care benefit or supplemental health insurance benefit that provides coverage for many important health care services that are not covered under the Canada Health Act or under the various programs that provincial governments have established. I'm thinking here of prescription drugs, where coverage under the public sector varies from province to province. I'm thinking of prostheses, which are very important in the area of disability in work. I'm thinking of nursing services and supplemental hospital areas, which may or may not be covered from one province to another and where there is a great deal of variation.
A challenge to the private sector in the area of relating and coordinating with the public sector is to avoid duplication but somehow fill in those gaps and provide the best possible benefits to Canadians, both those with a disability as we think of it and also those who simply have a health care problem. I'll focus primarily on the disability income area, because I think that's the area of greatest significance.
Traditionally the primary focus of life and health insurers has been on the provision of the benefit: payment for the drug bill, payment of monthly or weekly income when someone is unable to work because of an injury or disability. Increasingly there's recognition that this should be the primary focus, but it shouldn't be the only focus. We should take a holistic approach; insurers can play a role in the rehabilitation - in the social rehabilitation aspects and in the vocational rehabilitation aspects that Steve Mantis mentioned. As I say, this has not been the primary focus, but for many years now there has been recognition that this is a role insurers can play.
.0920
Madam Chair, this does relate to a comment you made earlier of a cost-benefit relationship, because obviously if someone can be returned into gainful employment, the need to continue paying disability benefits stops and the cost of disability insurance thus can go down.
Very recently, I would say in the last five years, there has also been recognition - and this too is growing - that insurance companies in the relationship of the benefit plan area can play a role in terms of the prevention aspect. We've heard quite a bit over the last couple of days in terms of occupational health and safety, but I think there's recognition that there is a need and there is potential in the workplace to focus on other areas, such as stress, general health education, and health promotion that I hope will reduce the number of disabilities. Probably the most important step that can be taken is to prevent the disability from ever happening. That's an important area that I would say is just emerging as a focus for our industry.
There are some characteristics of the private insurance mechanism that I think are vital to understand in looking at the relationship between the public and private sectors. To me the most important one is that private insurance operates almost totally in a voluntary environment. Unlike the cash sickness benefits under the unemployment insurance plan, unlike the disability benefits under the Canada and Quebec Pension Plans, unlike the benefits under Workers' Compensation plans for workplace-related injuries and illnesses, and unlike the no-fault benefits under auto insurance plans across the country, when you come to private disability insurance and private extended health care insurance, there is no law, there is no regulation, and there is no requirement that employers, unions, other plan sponsors, or individuals avail themselves of such coverage. It's generally available, but it's strictly a voluntary environment, and that has many implications.
Frankly, persuading people that they need disability insurance is a very hard sell, and persuading employers that they should provide that coverage for their employees can be a hard sell as well, given the many competing needs for compensation dollars. So that voluntary aspect is I think very important and determines many aspects of the way in which the current system operates.
The second area that I believe is important to understand is that this is a very competitive area. As I mentioned, we have roughly ninety members within CLHIA, many of whom are competing actively with each other toward the delivery of disability income and extended health care benefits. The competition can be very positive in many ways; it also can have some negative implications.
On Monday, in addressing the conference, Mr. Bob White raised the concern of private organizations in the delivery of service as leading to a profit motive. My view is that's largely a bogeyman, and I think in a well-functioning competitive system there is a natural break on the opportunity to earn profits. Within the life and health insurance system, there's one aspect thatI wouldn't say is unique, but that is certainly not common in the private sector, and that is that many of the insurance companies that are competing actively are non-profit organizations. We call them mutual insurance companies, and that's a term that's not well understood, but in the very simple terms they are cooperative organizations. They have no share owners. There are no shareholders to get profits on the business. The members - the people insured by that company - are the stakeholders, if you will, in the company. Other companies are share-owned, typical corporations, but they must compete with those mutual corporations.
.0925
So as I say, it's not a unique situation, but it is an important aspect. These and other characteristics, particularly the voluntary aspect and the competitive aspects, lead to a fairly flexible system and a variety of provisions in many of the benefit contracts that you would find if you did a survey of even major employers. That can be confusing, but it is a way of addressing the demands and the needs of individuals and organizations across the country to be able to provide that flexibility.
In terms of coordination, I think we all recall a childhood game of crack the whip, and in some ways private insurers feel as though they're at the end of the line in that crack the whip game, although I think we all realize that the injured worker in many ways is at the end of that crack the whip line.
The focus on coordinating with the other forms of benefits and other procedures is very important to the private insurers. In particular, in the recent hearings regarding reform of the Canada Pension Plan, your colleague Mr. David Walker issued a strong challenge, which we are responding to, to work closely with the Canada Pension Plan and other parties in delivering the services to make sure that the benefits are delivered most efficiently and to the maximum benefit of the injured or disabled - I'll use that term, because it's illness as well as injury that we deal with - individual. That coordination is vitally important to avoid duplication and to be as efficient as possible.
Again, I thank you for the opportunity to make these comments and commend you for being here this morning.
The Chair: Thank you very much, Mr. Black
[Translation]
Would you kindly begin, Mr. Bernier. We are eager to hear what you have to say.
Mr. Bernier: I too would like to thank the organizers of this conference for giving us the opportunity to hear different viewpoints expressed over the past two days and again today. I also want to thank you for having invited our committee to meet with the conference participants.
I have listened very closely to many of the guests speakers who have spoken since Monday and again this morning. I will try to be as brief as possible because of time constraints. As parliamentarians, we are concerned about the public in general and about workers. This is precisely the main objective of this conference: to look at people who were employed, suffered an injury or illness and had to leave the job market, either temporarily or for an extended period of time. There are also hundreds of thousands of people across Canada and Quebec who, for all kinds of reasons, have never been in the job market and who do not have any occupational health and safety benefits. Therefore, they are not entitled to the same benefits - if one can speak of benefits when one is disabled - they would have received had they been in the job market.
This is an issue that we must grapple with as parliamentarians. It is interesting to hear people tell us that we could reduce the cost of disability benefits if we focused our efforts instead on getting people back to work. As parliamentarians, regardless of our political affiliation, we are looking for solutions to this serious problem. There are two major obstacles in our path: on the one hand, the extremely high unemployment rate and the shortage of jobs, and on the other hand, the development of incentives to get people back to work.
I realize that this is not the objective of this conference, but it would be interesting for us, at some point, to discuss the linkages between the different programs which provide assistance to persons who have suffered an accident or some form of illness. I direct this question to Mr. Aarts in particular and to the other experts sitting around this table.
.0930
The Chair: I would ask you to take note of Mr. Bernier's questions and of the questions of the other committee members and we will provide answers at the end of our round table discussion, since we only have nine minutes. Mr. Black, Mr. Aarts and Mr. Mantis will then proceed to answer the questions. Thank you.
Mr. Bernier: Mr. Aarts spoke to us about the German experience where the law imposed quotas on employers for hiring persons with a disability. I would like you to elaborate a little further on this for us. Here in Canada, employers are naturally opposed to the imposition of quotas. We have always shied away from moving in this direction. Could you tell us a little about the effectiveness of such a measure and about what happens in these countries you spoke about earlier in the case of persons who are not in the job market. Thank you.
.0935
The Chair: Thank you.
[English]
Mr. MacLellan, please.
Mr. MacLellan: I have three questions.
Dr. Aarts, you mentioned that in Germany there is a level of the number of disabled people that must be hired. I wonder what that level is and if you could explain a little more about it and how it works.
Also, Mr. Black, there is a lot of discussion now, as I'm sure you are aware, that provincial social assistance programs, private insurance and Workers' Compensation plans have been more aggressive in pushing clients to claim disabilities under CPP. The plan is under study right now because of the increased benefits that are being paid under that plan. Do you see that there is perhaps a trade-off going on here, that the private sector is pushing more of a claim onto CPP? Do you see that perhaps that should be altered in the future? Is there more that the private sector could do, perhaps with respect to what's been said earlier about insuring the first six weeks or twelve months of a disability program through the private sector?
You also mentioned that there's no law regarding the private pension plans. We have terminology such as ``reasonable accommodation'' and ``undue hardship''. What exactly do these terms mean? Are there ways that disagreements between the private sector in disabilities and the would-be recipient are resolved? How? What is the litigation on this? Is it difficult? Is there arbitration? How do you see the situation now and what should it be in the future?
The Chair: Thank you very much, Mr. MacLellan.
Mr. Assadourian.
Mr. Assadourian (Don Valley North): Thank you. Being the only one from Toronto on the panel, I welcome everyone to Toronto. I am not from Toronto; I am from north of Toronto, the city with heart.
My question is addressed to Steve Mantis. You mentioned that we have 215,000 workers injured. That's out of a workforce of how many? What would be the percentage of injured workers in Canada? How do we compare that percentage with G-7 countries, if we can do any comparison?I think we have to know what industrial nations are doing and how we are catching up with them.
Do you see an increase in injuries in Canada, or has it decreased?
On my final question, I would like to have comments from all the speakers, if possible. We are having elections south of the border now, and one of the candidates had injured himself in the war. Nobody ever mentioned or discussed his handicap, and he himself did not use this campaign to promote the cause of injured people.
I wonder if any NGOs you know of have made any studies or research on the impact his being injured has had on his campaign or on his election. I think that is important because that speaks about individuals - not only the injured but rather how the population at large perceives injured persons.
So that we can address those issues, I would appreciate your comments. Thank you.
.0940
The Chair: Thank you very much.
I believe we're starting Mr. Black.
First, I'm telling you your organizers are going to have a cat fit. Second, I can only tell you the House of Commons standing committee has not had - this is wonderful public education - as many people in attendance at one meeting.... We are utterly delighted you're here. We hope you will understand how difficult it is to have experts of the quality we have around this table. You're really in a room in the House of Commons. You are actually seated in the non-physical arrangement of the House of Commons. There wouldn't be space for all of you to sit there. So we're delighted you are here.
Mr. Black.
Mr. Black: Thank you, Madam Chair.
Mr. MacLellan, I wish we had a lot longer to address the very important issues you raised. I'll try to touch on them very quickly. In terms of coordination, essentially the mechanism that exists is that the Canada Pension Plan disability benefit is available to all Canadians. There is no variation in the plan, whether or not private or other coverage exists. This is a cornerstone of the disability income security system and has been since, I believe, 1971 when this benefit first became available.
Private insurance plans try to build around this with the main objective of making sure that when an individual is disabled the income replacement is roughly at the same level, whether or not the individual qualifies under Canada Pension Plan. Traditionally, the definition of disability has been interpreted somewhat more tightly under CPP than under private disabilities. There are many situations where people would not be approved for CPP but would be receiving private, and if someone is disabled they need the same level of income. So there is an offset or a coordination approach built into many insurance plans.
I don't think there has been a material increase within our industry in urging people to apply. What has happened is that over a period of time there has been some change in our understanding in the administration within CPP in terms of taking a more liberal approach. Certainly there are cases where, in the past, the claim administrator in an insurance company would automatically assume that disability will not qualify under CPP.
Now there is confusion and uncertainty. The claim advisers don't feel they can predict whether that will be approved by CPP, or at least this has been the case in the last few years. Much more commonly, they would say apply to CPP and see what happens. Also, what we've seen over the last several years is the -
The Chair: Mr. Black, I'm going to have to ask you to shorten your answer. You have three answers and three minutes.
Mr. Black: The success of appeals has increased. There are increasing numbers where people would be turned down the first time, then would appeal and would be approved for CPP. Again, insurers have encouraged people to pursue this route simple because it happens.
I'm sorry time doesn't permit us to go into some of the other areas. It is very important that the facility is there for private insurers to fill some of the gaps, although as I indicated the voluntary nature of the business certainly has to be taken into account.
The Chair: Thank you, Mr. Black.
Mr. MacLellan has asked, and we will certainly accommodate the request, that you return to this committee so you can be more informative for us in this regard. Thank you very much.
Professor.
Prof. Aarts: Thank you. I'll be as brief as I can can.
There were actually three questions. First, by ``experience rating'' we mean a rating system in which employers pay a contribution rate depending on the number of work injuries and the number of people who are on the disability program.
There were two questions asked by your committee. One is what happens to people who are not in the workforce and have never been in the workforce. I can tell you what there is for them in the Netherlands. People who have a functional impairment from birth or from before they enter the workforce, say, are entitled to a flat-rate pension, and all people, whether in or out of the workforce, are entitled to benefits in kind, such as wheelchairs, house modifications, car adjustments if necessary, etc. People are provided with a flat-rate pension and with benefits in kind.
.0945
As far as the employment quota is concerned, the Canadian employers are not in an exceptional position. Most employers have a mandatory quota system. In the Netherlands it has been debated for many years and we've never got further than a sort of advised-by-the-government quota. Germany is special. The United Kingdom also has a quota system, but the required quota is only 3% and the enforcement is very weak so it's virtually non-existent. In Germany it is existent. There one of each sixteen job slots should be occupied by a person who is considered severely disabled.
The Chair: Dr. Aarts, I'm sorry, I'm going to have to cut you off. Since it's going to be very hard for us to have you appear again before our committee, I would appreciate very much if you would table for us the work you have presented so that it can be appended to the minutes of the meeting and available for those who wish copies.
Mr. Bernier.
[Translation]
Mr. Bernier: Could Mr. Aarts provide us with written answers to our questions?
The Chair: Fine. Thank you.
[English]
So if you wouldn't mind, will you please write any of the responses to the questions of the panel -
I'm sorry that you won't be easily available to come back, but we're going to ask the others back, and, Steve, the same thing goes for you. Through Joe Comuzzi in Thunder Bay you can certainly be in touch with us, and we'll certainly be in touch with you.
I am sorry, but we have inconvenienced your conference, for which we are sorry. I know that many of you are going to other sessions, so I very much appreciate the opportunity we've had to use your time and learn from your views in your presentations.
With that, the meeting is adjourned.