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EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, March 21, 1996

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[English]

The Chairman: I call this meeting to order.

I'd like to take this opportunity to welcome the representatives from the Cultural Human Resources Council. It's indeed a pleasure to have you here this morning. I welcome you personally, Ms Marie Palmer, executive director, and Mr. Peter Weinrich, chairman of the board.

As you know, we're presently studying Bill C-12, An Act respecting employment insurance in Canada, and we look to our witnesses to supply us with some ways of improving the bill. So we look forward to your input.

We will operate in this fashion. We will hear your comments first. You can take 10 to 20 minutes for your comments. Then we will proceed to a question and answer session.

Thank you very much. You may begin.

[Translation]

Ms Marie Palmer (Executive Director, Cultural Human Resources Council): Mr. Chairman, ladies and gentlemen members of the committee, first of all, I would like to thank you for inviting us to appear before the committee.

As we are an organization that addresses both major linguistic communities in Canada, we generally try to present a bilingual profile. Unfortunately, such will not be the case today, because we only found out yesterday that we would be appearing here this morning. We prefer to invest all our energy in the presentation of our documents in English and that's the language in which we are both most comfortable. But we will make honourable amends by presenting our brief to you very shortly, as it is being translated right now.

[English]

Good morning, and thank you for inviting us to present our views to you regarding Bill C-12. This bill represents a very comprehensive reform to one of Canada's most important social policies. We are pleased to be able to share our thoughts and concerns with you.

The Cultural Human Resources Council, or CHRC, is a sectoral council created in 1995 by the arts and cultural sector in partnership with the federal government. CHRC has been created to develop and coordinate the implementation of a cultural human resources strategy for Canada's artists, creators and cultural workers. Studies of the human resources needs of the various cultural subsectors undertaken by the cultural sector and financed by Human Resources Development Canada were released in January 1995.

The need to put in place a body to coordinate human resources development at the national level was an overriding recommendation growing out of the studies. It was in response to this that CHRC was established.

The document ``Creating Careers'' is a synthesis report of the studies. If any of you have not received copies, we would be pleased to send it to you.

The implementation of this strategy is essential to the long-term vitality of the arts and cultural sector, which is one of the fastest growing sectors in the Canadian economy.

For your information, CHRC also administers the training initiatives program for the Department of Human Resources Development, and last year over 1,650 cultural workers benefited from TIP-funded training.

CHRC represents a significant portion of the sector with a current membership of 161 of which 80 are regular organizational members and 81 are associate members. The regular organizational membership represents, in turn, 50,000 individuals.

In several important ways the manner in which Bill C-12 impacts upon the arts and cultural sector is a microcosm of how it affects the entire economy. This is because the arts and cultural sector is itself a very diverse combination of working conditions, and this has always been the case.

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Within the sector there are individuals who work in seasonal jobs, there are individuals who work in permanent jobs, and a large percentage are either fully or partially self-employed. In our brief we have endeavoured to highlight the most important aspects of Bill C-12 as they pertain to each of these various conditions of work.

Over 670,000 people are employed in the arts and cultural sector and their work is extremely significant to Canada's economy. This work is also significant to our quality of life. As indicated in the recent throne speech, culture is at the core of our identity. Each year the sector contributes over $23 billion to the gross domestic product, and the performances and cultural products that are produced bring enjoyment to millions of Canadians. Employment growth in the sector far exceeds the national average. Since 1981 employment has increased by 32%, compared to the national average of 12%. In people terms, over 160,000 additional people are employed in our sector today than in 1981.

The various programs and policies offered by the federal government to enhance artistic and cultural development are working. They are clearly backing a winner. Yet we have a long way to go, particularly with respect to the extent that individual artists and creators benefit from the sale of their works of art.

Cultural incomes are extraordinarily low for most artists, and they often do not exceed $15,000 per year. Artists and creators often supplement their cultural income with income that is earned through other employment, yet still their total incomes remain relatively low. While the average family income is over $54,000, an artist's average total income is only $25,400. A painter or sculptor, for example, is likely to have an annual income of only $14,100. A dancer is likely to earn a total of $16,300.

While these total incomes are not large, they are often a critical component of family income where families exist. The important factor is that these people are working. They are not on welfare or in receipt of other income assistance benefits.

Mr. Peter Weinrich (Chairman of the Board, Cultural Human Resources Council):So now we come to Bill C-12, which I still have in my mind as being C-111. You'll have to excuse me if I -

The Chairman: It's exactly the same bill that we tabled on December 1.

Mr. Weinrich: Yes, good. We didn't want to have to buy a new one.

It outlines a new framework for the federal-provincial cooperation for programs that relate to labour market training and human resources development. In several ways, the new framework has the potential of curtailing essential federal training and human resource initiatives in the cultural sector. Specifically, paragraph 60(5)(b) indicates that the federal government will be essentially prohibited from undertaking training and human resources initiatives in any province without first having an agreement with that province to do so. In our view, this clause requires clarification. Are we to assume that with each of the hundreds of different training initiatives that our council undertakes with the use of federal money from the Department of Human Resources Development, we will first have to obtain a formal agreement from the provinces before doing so?

In our view, a requirement of this kind would severely curtail the efforts of CHRC to provide training to artists and cultural workers in an effective and efficient manner. The real losers in such a requirement would be the thousands of artists, creators and cultural workers who benefit from the national training program each year. We suggest that there is an urgent need for your committee and the Government of Canada to clearly outline the future role of the sectoral councils - of which we are only one - and the federal government itself in the delivery of national training and Human Resources Development programs. The national training programs are essential for the continued development of Canada's labour force, and the coordination of these programs is really vital to the health of the economy and the health of the arts and culture sectors specifically.

Bill C-12 does not extend employment insurance coverage to self-employed artists, even though the government's Agenda: Jobs and Growth discussion paper indicated that because such non-standard working conditions were growing in significance, the extension of coverage needed to be re-examined.

Self-employment is a significant component of our sector. While non-standard employment - this includes part-time work, multiple job holders and the self-employed - represents 21% of the entire Canadian workforce, over 50% of the people employed in our sector are either fully or partially self-employed. This percentage does not include the part-time and multiple job holders.

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While Bill C-12 incorporates provisions for part-time workers and multiple job holders, it does not extend employment insurance coverage to a growing percentage of the Canadian labour force. This is particularly troubling since the department's recent technical paper, which examined the cost of extending EI coverage to the self-employed, concludes that this cost would in fact be relatively small.

Ms Palmer: As I mentioned earlier, most artists and creators have more than one job to supplement their cultural incomes. In many of these non-cultural jobs they are required to pay the employee premiums for unemployment insurance. Furthermore, the employers are required to pay the employer portion. This requirement is a form of taxation without representation, since these self-employed artists are not eligible for EI/UI benefits if they are laid off.

It was our intention this morning to have Ms Judith Gouin with us. She is a self-employed artist from Temagami. We contacted her immediately yesterday after we received the invitation to appear before the committee. She made arrangements to fly from Temagami to Ottawa last night to be with us. They closed the road between Temagami and North Bay - from where she had to fly out - so it was with great regret that she had to cancel her appearance before the committee today.

However, we have attached the information relating to her situation as an appendix to our brief. It is a very timely example of the problem encountered by self-employed artists.

Ms Gouin is a self-employed artist. She was offered a contract with the Canada Council last year. The contract started on November 27, 1995. At that time, she indicated to the Canada Council that she did not wish to have UI premiums deducted. She specifically requested this. She was informed by the Canada Council that Revenue Canada said this was not an option and that in fact the Canada Council was required by Revenue Canada to make those deductions. So in spite of her desire to the contrary, those deductions were made. She made a request to draw those benefits following the end of her contract with the Canada Council. Her request was denied. Her appeal was also denied.

You'll find the documentation relating to this attached as part of the appendix. It's just occurred in the last couple of months and it's a very timely case about the problem self-employed artists have with this legislation.

She's emblematic of the sort of problem that's being experienced. Artists often pay UI premiums. They're not eligible to receive benefits. The employers who have paid the employer premiums are contributing to the UI fund for individuals who will never benefit from the program. As more and more individuals in the Canadian economy become self-employed, this inequity will become larger.

In our view, if self-employed artists and creators are not eligible for EI/UI benefits, all of the premiums they've paid during the year should be refunded to them. This provision would be fairer than the current proposals to refund a portion of premiums paid by low-income earners.

This issue is particularly upsetting to artists since other workers in similar circumstances benefit from the EI/UI program. Teachers and other school-related personnel who work on contract, for example, are eligible for UI benefits during the summer months even though it is highly unlikely that school-related employment will be available in summer. The average income for a teacher who works in the cultural sector is $52,600, compared to an artist's average income of $25,400. And the artist cannot even receive a full premium refund.

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Mr. Weinrich: We think the federal government really has to clarify the definition of self-employment as well as the regulations that govern it.

For example, clause 60 of the bill, with regard to training, is again tied to the employed person. It says specifically that the training is to be a means of helping people ``prepare for, return to or keep employment...''. To ``keep employment'' means that people must actually be facing a job loss. In that sense, how can a self-employed person be facing a job loss? I suppose they can be only if they can claim they're going bankrupt or something along those lines, but it prohibits them from the simple skills development that is essential for them in order to remain competitive in their chosen field.

The need is emphasized again by a recent decision by Revenue Canada to audit various talent agencies in Toronto. Revenue Canada considers that talent agencies are the employers of actors and hence should pay the employer premiums for UI and CPP. In fact, the talent agents are really employed by the actors and not the other way round. In other words, the actors pay them a commission in order to help them find work. Once the actors have completed their terms of the contract, the engager sends a cheque to the talent agency in the actor's name.

In fact, I understand there is a special piece of legislation that grew out of temporary employment agencies. They are a different case. Temporary employment agencies do employ their people, who are paid by the office or whatever to which they're sent. The issue of the talent agency is a very different one and it raises various fundamental questions about the nature of self-employed actors.

Are the talent agents employers of the actors and should self-employed actors be subject to source deductions from their income? Should UI premiums be paid for individuals who are not eligible for benefits? An actor may actually be contracted through or with talent agencies only two or three times a year at the most. It's certainly not a long-term employment issue.

We strongly encourage your committee to address this issue during the review of C-12 to clarify what deductions are required for self-employed artists as well as for their agents and to determine what that means for their employment status. We would certainly be pleased to work with you and with the government on this issue. It is a very important one for us.

Many people also work in seasonal jobs during spring or summer that are not standard seasonal jobs. Nonetheless, they are seasonal. Since dance, music and theatre performance schedules are offered in cyclical seasons, the artists who are employed by these organizations are laid off when the season ends. A portion of these individuals, some of them at any rate, qualify for UI benefits since they meet the criteria for weeks and hours worked. In the course of the past year the government has considered removing the seasonal job provisions from the act. As indicated in Bill C-12, such workers will remain eligible for benefits but will incur intensity provision reductions with each consecutive claim that is filed.

In our view, the intensity provisions are far superior to having no provisions whatsoever for seasonal workers. Seasonal employment is an important reality in the Canadian labour force and the government's efforts to continue recognizing this importance are appreciated.

In conclusion, the government's redesigned employment insurance plan for the 21st century, with the objective of effectively and appropriately meeting the changing needs of workers in our new economy, does not offer many assurances to our self-employed artists and creators. The new part-time and multiple jobs provisions will not change the fact that self-employed artists are not eligible for benefits. Changing the eligibility criteria to hours worked from weeks worked will also be of no consequence to Canada's self-employed artists and creators.

In 1980 the federal government signed UNESCO's Belgrade recommendation concerning the status of the artist. This recommendation recognized that every artist is entitled to benefit from social security and insurance provisions available to the rest of the population. CHRC, as a representative to the arts and cultural sector, regrets that the federal government has not incorporated those entitlements into Bill C-12.

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Once again I'd like to thank you for inviting us to appear before you today, and we look forward to your questions.

The Chairman: Thank you very much.

We're going to move right to the question and answer session with Mr. Crête.

[Translation]

Mr. Crête (Kamouraska - Rivière-du-Loup): Thank you for your presentation. I have a few questions to ask you and I would like to make a comment. I am somewhat surprised that you are recommending that there be no formal agreement with the provinces regarding labour force training.

Are you claiming to represent the Union des artistes québécois which, it is my understanding, has joined the Quebec consensus on the issue of labour force training and would not find its opinion represented in the recommendation you're making, since this does not correspond in any way to the jurisdiction that Quebec is seeking?

I would like you to explain more specifically how things would work if artists, who are self-employed, could become eligible for unemployment insurance. From a practical standpoint, how would you like this to work?

Lastly, I would like to discuss seasonal work. You say that it's a good thing at least that the government is continuing to assume its responsibility with regard to seasonal work. But have you calculated what seasonal workers would receive in UI benefits under the new formula? If you have made those calculations, you would note that people would be getting lower benefits than what welfare would give them.

[English]

Mr. Weinrich: There are several issues, of course, that you just raised.

We have no problem with the federal government entering into formal agreement with the provinces. At the moment, for example, we run a program under the training initiatives program, which is a national program that Quebec artists and artists from every province have benefited from. At the moment, agreement with Quebec consists principally of a phone call to the local unemployment office to discuss the particular application that we've received and wish to grant to. That's not a problem for us.

If, however, it means that we as a council have to enter into formal negotiations with every single province before we can ourselves implement a national training program, that's a very different matter. I just want to make that distinction.

On the question of the self-employed and eligibility for unemployment insurance, again, there are two parts to this. There's the eligibility for the UI payments when they're out of work. The other is the fact that training is really tied to the UI benefit. You have to be an employed person, in essence, from now on in order to qualify for any training.

It seems to me that at the very least we haven't adopted a position on this. But there could be a voluntary program of paying into the UI by the self-employed person that would entitle them to funds for skills development or training where they felt they needed this. Quite clearly, if you're a self-employed person, you can't simply go on for a half century doing the same old thing without getting into new technologies or whatever.

I'm not sure whether we have done a study about seasonal employment. Perhaps my colleague would like to make some extra comments about that.

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Ms Palmer: With regard to your question about what calculation of seasonal benefits would actually mean for artists, I think our position on this is that it is the artists' cultural community who are in a position to best speak for how they would like to see this question addressed. The indication that has been given by the community is that this is an issue in which they feel that they should have that opportunity for access. We would undertake to support that in whatever way was felt to be appropriate.

In terms of what those calculations mean in a dollars and cents way at this point is something on which we would certainly be prepared to do further research on behalf of the community, but we are comprised of the sector and we are speaking on behalf of the sector in terms of the positions that are being adopted.

If I may, I would like to add one further thing regarding the involvement of the cultural community in Quebec in the activities of the Cultural Human Resources Council.

The arts and cultural community has been a very active part of CHRC from the beginning. We have significant representation on our board from Quebec as well. That does include, amongst others, the Union des artistes, and these positions being presented today are representative of the board's desires with regard to this issue.

[Translation]

Mr. Crête: Are you trying to tell me that if we were to ask l'Union des artistes whether it agrees that the federal government should spend money in the area of labour force training without Quebec's agreement, it would agree?

[English]

Ms Palmer: What I am saying is that the cultural community feels that it is very important that there should be national coordination of training provided on behalf of the cultural sector, and the development and delivery of that training should be undertaken in such a way that it will be effective for the council to see it delivered and not subject to the sort of obstacles or impediments that would in fact harm the community as a whole in being able to access that sort of training.

As my colleague Mr. Weinrich has already indicated, a situation where it would be necessary to enter into negotiation program by program for every training initiative we wanted to deliver would ultimately become a very serious obstacle to being able to deliver to the community what the community needs at this point.

So it is our desire to ensure that can be facilitated in the most effective way possible.

Mr. Weinrich: If I could add a little to that too, the direct answer to your question is no, of course the Union des artistes would want itself to be involved.

I think this is the principal issue. In the past a lot of training initiatives that have been carried out by the federal government through the local Canada Employment Centres have not been particularly successful. I don't think there's any doubt about that. The numbers of people who have been employed or who have successfully taken employment from them has not been high.

The record of the sectoral councils, not just ourselves but in others, has been infinitely better. Over 50% of the people we have trained who were unemployed before now have employment.

If what has happened here is simply going, so to speak, from the generalist Canada Employment Centre run by the federal government to another generalist one that is run by the provinces, we really don't see - and I think the Union des artistes would agree with this - that it's a particular improvement.

What is wanted is the advice of the sectors in this training procedure. In the case of Quebec, of course, the Union des artistes would want to have a direct involvement with whatever provincial program was to be carried out.

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In terms of a national program, we would be working closely with them. There's no question about that. I think that's a very important aspect.

[Translation]

Mr. Crête: This may be a question of language. I'm not saying that artists should be ineligible, but what I read on page 12 gives me the impression that you think it's normal that there would be a rule to reduce the percentage of people who receive UI benefits year after year. Maybe I made a mistake, but I wanted to clarify that.

When you say, in the second sentence of the short paragraph in bold: "While the government has faced criticism over...", etc., I get the impression that you think it's acceptable that seasonal workers receive lessened benefits if they use unemployment insurance more frequently, but that may not be the case; it may be a matter of allowing artists to eligible under this type of system.

[English]

Mr. Weinrich: It certainly isn't the case. Earlier informal proposals were to scrap the seasonal provisions entirely. We are saying that at least this is better than nothing, but we're not saying it's the best by any manner of means.

The Chairman: Are there any further questions?

Now we'll move to the government side with Mr. Easter, followed by Ms Augustine, and then Mr. Allmand.

Mr. Easter (Malpeque): Thank you, Mr. Chairman.

Welcome. First, I would like a clarification in my own mind in terms of who in the arts and cultural community now do qualify.

In my area in Prince Edward Island we have quite a number of self-employed small craftspeople, woodworkers, and so on. We also have the theatre workers at the Confederation Centre of the Arts, and so on.

I understand the self-employed craftspeople do not qualify but the theatre people do. Is that correct?

Mr. Weinrich: I'm not specifically familiar with the Charlottetown theatre. In actual fact, I must say my other incarnation was as executive director of the Canadian Crafts Council, so I know exactly what you're talking about with respect to craftspeople.

But some performing artists may qualify and some may not. It really depends upon the terms of their engagement with the particular company that's hiring them. The same is true for the musicians as well as actors, and so on. So whether or not they are eligible does vary.

But in fact I think I'm right in saying, for example, that it was in P.E.I. that we had quite a notorious case a couple of years ago where someone was indeed eligible, had been an actor, and applied for UI and was told, well, you can't be serious; acting isn't a job that anybody is going to make a living at. They denied them the UI benefits. In fact, that was overturned subsequently, but that's not untypical of the kind of attitude we face.

Mr. Easter: Under the new system, though, when you look at Bill C-12, do you not see it as an improvement?

You mentioned the low income, and I recognize that fully in the arts and cultural area. That's sad for such an important sector of our society. But do you not see that moving to the hours-based system on the one hand is an improvement, where you can pull in multiple jobs, and secondly, for those who do qualify - and I recognize your problem in terms of the self-employed, which creates a whole other area of problems - the family income supplement area is an improvement?

Mr. Weinrich: I don't think the question of shifting to the hours versus the weeks is going to make a great deal of difference in actual fact to those who are employed. I actually don't think it will make a great deal of difference one way or the other. It's certainly true that the family one may or may not.

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You were speaking about craftspeople. It's not unfamiliar to you, I'm sure, that many craftspeople work in a spousal relationship, shall we say. They are both working in a family context, so their combined income is enough to sustain them. But again, we haven't done any projections about what might be involved in dealing with the family income issue, other than the studies that have been done in the past.

Do we not have some family incomes in those labour force studies? Have you seen...?

There are separate ones in this labour force study for each, including the crafts, including the performing arts, and so on. There are some figures in there about combined family incomes, and we could certainly make sure you have a set of those documents.

Mr. Easter: Thank you, Mr. Chair. I'll save some time for some others.

The Chairman: Ms Augustine.

Ms Augustine (Etobicoke - Lakeshore): Thank you, Mr. Chair.

Ms Palmer, Mr. Weinrich, it's good to see you here.

I have been following this issue of the intensity rule, as it is spelled out in this bill. I notice that on page 12 you indicate that:

I feel this is a chord that goes with the way I feel in terms of the intensity rule, which may appear a bit harsh, within this legislation. So I'm looking at some opportunities and some support for this, and when I look at where you talk about the cultural income on your page 4 - that is, individuals under $26,000 - I wonder whether the track on which I am heading is one on which we exempt family supplement recipients from the intensity rule.

Also, as a second part of this - I have been doing a bit of thinking and I have been talking to people and communities about this - I wonder if we can prorate the weeks of past benefits for purposes of the intensity rule. I'd like you to speak to that if you could, referring back to page 4 of your document, where you say they ``are not large, they are often a critical component of family income, where families exist''. I am really focusing on families - $26,000 and under - the intensity rule as it applies, and ways and means by which we could make this legislation benefit those individuals.

Mr. Weinrich: I certainly think your idea of exempting the family from that intensity rule, as you outlined, would be an improvement for us. Of course, again particularly in the Atlantic region, where there have been high levels of unemployment, a lot of people who were not there before in terms of full-time occupation have moved into things like crafts because virtually nothing else is offered to them. The last census produced figures that were some 2,000 or 3,000 higher than they were earlier in terms of full-time professional craftspeople. Most of them were in the Atlantic region, where they had shifted into that kind of thing. So I think the exemption of the family...would certainly be a useful step in that direction. There's no question about it.

Ms Augustine: Mr. Chairman, again I'm putting it before my colleagues on this committee and I'm looking for some support for claimants in low-income families to be exempted from the intensity rule. But I'm also adding a little bit more than I did the last time I looked for support. I'm talking now about a way of prorating the weeks for the purpose of the intensity rule. It seems to me that for those who work while on claim, there are some heavy weeks and there are some lighter weeks.

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I am asking you if you see this and how you see this working for the individuals you've laid out - for example, the painters, the sculptors, the writers and others.

Mr. Weinrich: As a system of averaging, yes. You speak of prorating, which is almost getting back to the old income averaging proposals. With prorating, as you say.... There are heavy weeks and light weeks and so on, and they are not tied to seasons in the sense of winter, summer and all the rest of it. They may be to a certain sense, because obviously craftspeople as individuals are much busier at Christmas time and all that kind of thing, but are less so in the months immediately afterwards. But generally speaking, the seasons are very different, and they are different for every individual as far as that is concerned.

The Chairman: Mr. Allmand.

Mr. Allmand (Notre-Dame-de-Grâce): Thank you.

We received your brief only this morning, but I had a chance to read it as you were talking. I just want to clarify some points. On page 5, you say in the part that you have in dark print, which is a conclusion or recommendation:

Mr. Weinrich: The 50% we're talking about are basically self-employed individuals.

Mr. Allmand: Okay, because non-standard can qualify, especially with the hours rule.

Mr. Weinrich: We're talking about self-employed.

Mr. Allmand: Okay.

I then want to go over to page 9, where you get into this whole business of people.... I presume you're always talking of artists or people in your community who have two jobs: one is as an artist or a cultural worker, and the other is in the ordinary type of employment in which they work and pay premiums. What you're saying is that when they're laid off in the employed work, they're refused benefits because they're considered to be working as an artist.

At the top of the page, you say:

Mr. Weinrich: I don't think it has ever gone to a sufficiently high court. There certainly have been appeals at different levels of the courts. I suppose the more absurd cases in a sense have in general been settled mainly by a simple appeal to Ottawa or whatever. But no, to my knowledge, it has never gone to a high enough court to produce a case law that would work across the country.

Mr. Allmand: To me, that is part of the solution unless we do it legislatively. I know that in other similar areas that's what has happened. You would get a referee or an umpire in one part of the country - as in the case of Mrs. Gouin - and end up with one situation, while somebody else in another area would end up with a positive situation.

Mr. Weinrich: That's exactly the case.

Mr. Allmand: I am going to move to the end here.

You have suggested that we include the self-employed, particularly the self-employed people from the communities you represent. Do you have any suggestions as to how that might be done? Knowing how artists work, especially painters and sculptors, some of their most serious work may be in thinking out their plan. Would it be voluntary? They decide to volunteer to pay contributions in a certain category? Is that what you had in mind?

Mr. Weinrich: Well, one of the early discussions we had about this really had more to do with injury or sickness for the self-employed. It was not self-induced, in other words. Sure, I know you can get medical insurance for it, but again it is difficult in the arts to be insured against loss of income for a whole bunch of different reasons.

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But it's also tied in with the question of training. If you are a practising artist and there are new materials you need to experience in, particularly if they are in any sense hazardous, and a lot of materials are, then where are you going to get the time and the training to do that?

Mr. Allmand: You still haven't answered my question. I'm asking if you have any suggestions as to how we would include artists and people of your community -

Mr. Weinrich: Oh, I see.

Mr. Allmand: - since they don't work regular hours. If I work in a retail business, I show up and I do 10 hours, so the 10 hours are accounted for.

Mr. Weinrich: Right.

Mr. Allmand: Would you simply allow people in the communities you represent to say, ``I'm able to pay so many dollars a month; therefore, I will just voluntarily attach''? Have you some idea? If we were to make an amendment to this law, can you help us in suggesting how we would include them as being employed, being insurable?

Mr. Weinrich: How do you determine when in fact they are unemployed is really -

Mr. Allmand: When they are working and what premium they should pay, and so on.

Mr. Weinrich: We haven't done a specific study of that. It is an issue that has cropped up from time to time and, as I say, in its various contexts, to do with sickness and with training, and so on.

It may be that premiums could be paid in the same way as when you do your income tax return. There's a CPP for self-employed people and there could easily be a UI box for the self-employed in the same way, which is a percentage of their income for the year.

Mr. Allmand: That's a good answer.

I have friends who are poets. They wake up in the middle of the night and all of a sudden they start working. Then they may not do anything for three or four days.

So the CPP example there is a good thing to look at. Thank you very much.

Mr. Weinrich: Thank you.

The Chairman: Thank you, Mr. Allmand. I wasn't aware of your involvement in the cultural industry. Thank you for bringing it to light.

Mr. Allmand: I'll let you read some of my works. They're quite inspiring.

The Chairman: Now it's on the public record, and I'm sure there will be requests coming to your office.

Mr. Allmand: I'm not making much money from it.

The Chairman: Mr. Nault.

Mr. Nault (Kenora - Rainy River): Thank you, Mr. Chairman.

I want to see if I can get some examples or ideas about what you mean in your recommendation on page 7. The recommendation says that the Cultural Human Resources Council:

I think the key words here are:

I'm very interested in finding out, first, what your concerns are about the whole issue of devolving training to the provinces as it relates to the cultural sector, and if you could give me some specific examples, if not today, then sometime in the next couple of weeks, to explain to us how you portray this fear in practical terms.

I think it's important. It's easy for politicians to say, well, give it to the provinces and they can do a better job; they're closer to the people. But you've given us a recommendation that basically suggests the complete reverse of the trend that provincial politicians, and of course some of their friends, keep speaking to.

I'd like to know if you, through your council, could give me some specific examples of why that fear is there and whether in fact there's a way around it by the federal and provincial governments coordinating in a more effective manner.

Mr. Weinrich: I think part of the fear is simply long experience. If you ask people about arts and culture and so on, it's a sort of motherhood question. The answer is that everybody supports them. People will accept the kinds of figures we've quoted to you today, but they somehow don't quite believe them. They don't think there are that many people working and that it generates that. It's still seen as a sort of fringe activity in the schools, and so on.

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Our experience in dealing with the offices, whether they were HRDC offices or provincial offices, is that many of them really do not have a good grasp of the sector and the opportunities for employment. We feel the sectoral councils do. We have a much better understanding of what our sectors and the subsectors - let's put it that way - need, and we do have subsectoral councils. We actually have a council for the self-employed, which incidentally is chaired by someone from the Union des artistes, Michel Laurence.

So we have a generalized problem. Let me put it that way. But our fear is exactly the one I stated earlier; that is, the provinces are just going to set up generalized offices that are going to be expected to deal with all the kinds of training applications that come to them for which they're not really qualified. They can't cope with that. All we're doing is transferring the federal responsibility, which was not a very successful one, to a provincial responsibility, which we don't see as being any more successful in those terms. It's the sectors that really understand what's going on and where the needs lie.

Mr. Nault: Could I then assume from your answer - and I don't want to put words in your mouth - that the problem with these provincial-type arrangements is that, in some cases, the community you're dealing with is so small that in fact it's almost impossible to create a very culturally sensitive training program with high standards? It's just too small in Canada and therefore we need a national-type program and standards in order to deal with it.

I'm trying to get a sense, on the ground, of the difference between the Quebec government, for example, saying, here's a training program for a particular sector of the cultural community, versus the federal government doing the same thing. I'm trying to get some understanding of why you have such a concern about that.

Ms Palmer: Perhaps another point that needs to be mentioned in this desire to have something that is coordinated on a national level is the need for recognition of training that also has a pan-Canadian portability so that when there are programs developed in particular provinces or regions of the country, that also fits into what is part of a larger national scheme that serves the cultural sector in the country as a whole.

One of the characteristics one has to recognize about the cultural sector is that it's also a highly mobile sector, and that people, when they work and when they are seeking work in the sector, have to be, in a number of the subsectors, prepared to move from one end of the country to the other, from one job to the next. That speaks very strongly to the need to have training programs and a human resources strategy developed that takes into account how all of the different provincial pieces of the puzzle fit into the national whole.

Our fear in terms of the ability of the provinces to see something developed that will meet the needs of the community has nothing really to do with the size of the cultural sector in the provinces. In fact, I think our real problem is continuing to obtain recognition for the importance of the size of the sector. It's not recognized within the CEC offices as they have addressed the needs of the cultural sector to this point. Through the sectoral council I think we've been able to achieve some significant successes in improving on that recognition, and we'd like to be able to continue in that vein.

Mr. Nault: If I could, I have one small question that relates to this whole issue of the provinces wanting the federal government to send a blank cheque that says, here's your portion of the training program, in this case for culture; you do as you wish.

Would you prefer then, based on your recommendation, that we negotiate with the provinces to make sure their priorities continue to be the cultural sector and that there are effective programs and training in place in that province, as we would suggest that we're trying to achieve nationally?

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Mr. Weinrich: It would be better than nothing, I suppose. But one of the problems is that in the past various federal ministers have said between $40 million and $50 million was available for cultural training across the country. When people produced the report Art is Never a Given, they had the greatest difficulty in actually tracking what happened to that money once it did indeed leave somebody's hands. I think they were able to find only about 30% of it. There were some quite bizarre stories about what some of the provinces, at any rate, considered ``culture'' in that context.

So I suppose it would be better than nothing, but our experience in the past has been that it's not a particularly effective way. Money tends to disappear and you hope for the best.

The Chairman: Thank you, Mr. Nault.

Not surprisingly, I think Mr. Crête has a question.

[Translation]

Mr. Crête: Are you aware that doing that would require a constitutional amendment, since responsibility for labour force training comes under provincial jurisdiction? That is stipulated in the constitution.

With regard to transferability from one province to another, wouldn't it be preferable to do that through the council of ministers of education, for example, and to agree on things that may be recognized as equivalent from one province to another? Contrary to what the lady has said, in my opinion, it is not the provinces that have to fit into a national vision; it's the national vision that has to reflect what the provinces have decided amongst themselves on the issue of labour force training.

[English]

Mr. Weinrich: I think we're talking about different issues here. For sure, of course, the province is responsible for education and training, and for certification, or whatever term you want to use - degrees and so on. But we're not really talking at that high a level, in the sense that if someone is trained in Quebec by an artist on a one-to-one basis, and so on, what does this mean if the person who is trained moves to Alberta? Unless the particular individuals concerned are known to each other, it really doesn't mean anything.

We're not talking about a formal training institution that would be susceptible to Ministers of Education and all that kind of thing here. We're talking about much more informal kinds of training.

The fact is that artists in Quebec have certainly benefited from the national programs we've done and vice versa. Artists have moved in and out of Quebec and have been trained by us.

Let me take a simple example. We trained six puppeteers, I think it was, in Halifax; not that they had a demand in Nova Scotia for six puppeteers, but this was the best place to train them. Those puppeteers can go to any other province in the country. The same can be true in Quebec. But we need to know something of the national demand for puppeteers before we can say yes, this is a training program that should be funded.

The Chairman: There being no more questions, I would like to thank you very much on behalf of the committee for your presentation and for your bringing to light some very interesting points. Particularly I've noted the one about the definition of self-employment and the seasonal provisions. Of course you do favour the whole notion of sectoral councils, not only in your industries but throughout?

Mr. Weinrich: Absolutely.

The Chairman: As you know, as a government we've identified 33 areas. I think 19 have already been created. It's been an excellent experience towards building a modern economy.

Once again, thank you so much for coming. We've certainly benefited from your input.

Mr. McClelland.

Mr. McClelland (Edmonton Southwest): May I apologize to the witnesses and to the committee for being late? I'm sorry.

The Chairman: That's duly noted and accepted.

We'll take a two-minute break and then we'll come back with representatives from the Canadian Federation of Independent Business.

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The Chairman: Order, please. Thank you.

As I said before the break, we are going to listen to the Canadian Federation of Independent Business, represented by Mr. Garth Whyte, executive director of national affairs, and by Mr. Brien Gray, senior vice-president of policy and research.

I'm sure the committee procedures are not new to you, but I will tell you that this committee really likes to engage in a question and answer session. You have ten to twenty minutes for your presentation.

Welcome. We look forward to your input. The major motivation of the committee is to hear from witnesses so that we can improve Bill C-12, An Act respecting employment insurance in Canada. That is indeed our mandate. Thank you.

Mr. Garth Whyte (Executive Director, National Affairs, Canadian Federation of Independent Business): Thank you very much, Mr. Chairman.

Brien Gray and I are pleased to be here before the committee. We would like to formally thank Luc Fortin and Lise Tierney for the assistance we received. They were very helpful. We also thank the committee for providing us with the opportunity to appear.

You have our presentation before you. There are some other documents to which we will be referring.

The Canadian Federation of Independent Business, or CFIB, representing 87,000 small and medium-sized business members, is pleased to have the opportunity to provide our members' views concerning the proposed employment insurance bill.

CFIB supports many of the proposals to structurally reform the current UI system. However, if the current proposals to move to an hours-based system, or as some people call it ``first-dollar coverage'', is not amended to ensure UI costs do not increase for small businesses, CFIB will oppose this bill. Our preference is to work with the government to reform the UI system so that it helps those in need, encourages job creation and reduces overall UI costs for employers and employees.

In our presentation today we will briefly summarize the principles for UI reform and identify the conditions necessary for job creation, which we have presented to this committee and the government on many previous occasions. We will also discuss the positive proposals in Bill C-12 and suggest ways to improve them.

A major thrust of CFIB's presentation will deal with the small business community's strong opposition to moving UI to hours of work and with the level of UI surplus. CFIB views these measures as hidden tax grabs. Finally, CFIB identifies four measures to significantly reduce UI premiums and to increase job creation.

First, on the principles for UI reform, we have distributed to the committee copies of CFIB's report, ``Social Security Reform: Putting the System Back to Work'', which responded to the government's social security reform green paper. It's a comprehensive document that gives the small business position on UI reform. The principles and recommendations identified in that report form the foundation for today's presentation.

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The CFIB was one of the few groups that publicly supported the government's green paper proposals. The small business community has always maintained that the best social program is a job. Therefore it is not surprising that CFIB strongly supported the government's assertion that the main thrust of UI reform has to be the creation of employment.

The CFIB's position is that the UI system must be substantially reformed so that it is financially sound, reduces costs for both employers and employees, and does not impede the normal operation of the labour market.

The OECD has reported that Canada's UI system has the opposite effect. It stated:

The goal of UI reform should be a system that is fair to the unemployed who need assistance and financially affordable for employers, employees and the economy as a whole.

From the job creator's perspective, future reform should lead to lower, not higher, UI costs for both employers and employees.

The CFIB endorses the following principles, which we feel provide direction for UI reform. These principles were identified by a coalition of all the major business groups in a report done two years ago.

First, financial integrity and program simplicity should be one of the guiding principles of Canada's unemployment insurance program.

Second, the cost of UI must be reduced to allow further decreases in employer and employee premiums. Reducing UI premiums must be a priority objective.

Third, Canadians need an affordable UI system that will help improve the performance of the labour market and the economy, not hinder it. The UI system should promote labour market flexibility and mobility, rather than creating or reinforcing labour market rigidities.

Finally, positive rather than negative incentives should be provided to the unemployed. This includes encouraging those who are unemployed to participate in training programs and to develop new skills or upgrade existing skills.

We believe these principles on UI reform provide the guidelines for the committee to evaluate the employment insurance proposals.

I'll turn it over to Brien to talk about conditions necessary for job creation.

Mr. Brien Gray (Senior Vice-President, Policy and Research, Canadian Federation of Independent Business): Good morning.

I think it's really important when we discuss the perspective of the small business community in terms of our presentation that we talk a little bit about the conditions necessary to create even more job creation from that small business perspective.

I think it's fairly well known among most people in public policy these days that small and medium-sized enterprises have played a critical and central role in the jobs and growth agenda. In fact, the Prime Minister, the Minister of Finance and many others at the federal and provincial level have said it's not going to be large government, it's not going to be large corporations, it's going to be small businesses that will create the jobs we so desperately need.

In fact, as recently as last week the Prime Minister challenged the corporate sector to get on with the task of creating more jobs in the economy. We believe that was largely targeting the big firms, because when you look at our record it's pretty good. In fact, the finance minister has said that the small business sector has created pretty phenomenal growth.

There has been consistent growth in jobs in our sector. There have been some who would say that there is a ``jobless recovery'' going on. We don't believe that's true. In fact, if you look at self-employment and small business, they've more than offset the losses in government and in large business.

With regard to the Prime Minister's challenge, we've taken up the challenge. We have recently sent a job survey to our members. I believe it's in your packages. The purpose of this is to ask the job creators what the specific measures are that will work or not work from their perspective in providing jobs in the economy, given that it's still a pretty darn tough economy. What needs to be done? How can we create more jobs out there?

We believe this will be the most comprehensive survey of its kind specifically among the job creators. We'll get information on hiring practices, effects of changes to UI, and the business owners' views on job creation.

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Mr. Allmand: Could someone go outside and find out what's happening out there? We can't hear the witnesses, even with the amplification.

The Chairman: It's part of creating jobs for Canadians, though.

Mr. Gray, I apologize. It's just that there are renovations going on in the Parliament Buildings at this point.

Mr. Gray: That's fine.

With regard to this job survey, I really apologize. Unfortunately, the timing of it was such that it's still in the field. We have some preliminary results that we think will have some bearing on the proposed EI bill, but in terms of the full roll-out, that's going to happen in the near future.

I should say with regard to previous surveys, however, we found out that.... We did a survey in the fall of 1995 that we called the hard facts survey, which is really an economic indicators report. That's indicated on page 5, figure 1, in your brief.

There it demonstrates that the conditions necessary to hire more people are, first and foremost - and this is no surprise to anybody; 82% said they needed more customer orders or more consumer demand. But that's followed by three issues that are totally controllable by the government: decreased payroll taxes, stable government policies, and the elimination of the deficit.

With regard to our job survey, the preliminary data reinforce those findings of last fall. They are telling us that reduced payroll taxes, reduced taxes on consumers and reduced administration and paper burden are three of the most important things that must be achieved.

As I say, there have been consistent results here in Canada that say that high payroll taxes, the cost of administration and rigid labour policies have been a net drag on job creation. This is consistent with the OECD job study, as Garth remarked earlier on, so I think it's really important when we're looking at job creation. Remember, most of the job creation is happening in the one to five employee category and then in the five to ten.

If you're looking at those areas and you want to encourage growth of employment further, you have to look very seriously at the drag that continual increases in these kinds of taxes will have on the private sector. We're here to help. We're here to contribute. But we really need you to keep those things in mind.

Mr. Whyte: I'm going to move on quickly to talk about this bill, which is 140 pages long. We're not going to go through it clause by clause, but there are some things we want to talk about.

First is what we feel are the positive proposals in Bill C-12.

As I stated previously, CFIB strongly supports the government's contention that the current UI system is in need of substantial reform. Concern among our members has steadily increased over the years, and as you can see in figure 2, it's now ranked number four behind deficit reduction, total tax burden and regulation and paper burden.

Ironically, or not so ironically, in regions where there's higher unemployment this priority is ranked even higher. For example, in the Atlantic region UI is ranked as a high priority by 60% of our members.

Employers are supportive of the overriding purpose of the bill: to help encourage unemployed Canadians get meaningful employment. The present UI system is more of a disincentive for people to get back to work.

The preliminary results of our job survey show that 44% of the 9,000 respondents said they have problems finding people in their community with the skills their businesses require. When asked why they have problems finding skilled help, over one-third identified overly generous UI and other social payments as a problem. This is a message from the job creators.

It can be argued that the proposals in Bill C-12 are the bare minimum changes required and any further amendments will offset the modest positive impacts. However, CFIB supports several proposals that are another important step to needed structural changes to the UI system.

Under the insurance benefits side, CFIB supports the bill's clauses that require higher entrance requirements. We agree with the proposed new benefits regime that reduces the maximum benefit duration. We support introducing a new intensity rule that gradually reduces benefits for claimants who receive benefits year after year.

We also support increasing the clawback for high-income earners. We are very supportive of the bill's proposal to offer a family income supplement for those families that truly need more benefits, and we support allowing claimants to work to supplement their benefits.

In another area, CFIB has recommended for several years that the government cap the maximum insurable earnings, which have been increasing well above annual average wage increases. This gap has grown to the point where the government is justified in freezing the MIE until the year 2000.

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Under the employment benefits side, CFIB and the employer community support the employment insurance shift from passive income support to active labour market services. The change in focus by promoting more individual self-reliance and responsibility to obtain meaningful lasting employment has long been advocated by the business community. It is encouraging that the federal government plans to work with the provinces and local communities to eliminate duplication and increase the effectiveness of these services.

We also feel it is very positive and long overdue that the government is collapsing the myriad of different employment programs into five measures that will be monitored to ensure they deliver concrete results. Employers have been critical that many of the current training programs are ineffective. It is essential that the proposed new programs are constantly evaluated to measure their effectiveness in achieving the ultimate goal of assisting unemployed people to obtain meaningful employment.

It is for the above reason that we are skeptical about the expansion of the self-employment assistance program. Two years ago, when employers asked how many meaningful lasting jobs resulted from the program, the government was unable to answer. Today the government states that the self-employment assistance program resulted in a net economic benefit of $188 million in 1993/94. However, several key questions still remain unanswered. How many jobs were created? How many jobs did this program displace?

Many employers will argue that they are paying UI premiums to fund a program that helps individuals to compete with their business. Others believe that UI programs such as this one help subsidize the underground economy. In the past, employers had to deal with an unskilled underground economy. Today they are competing with a highly skilled underground economy. The government should monitor very closely the positive and negative impacts of the SEA program.

CFIB is also concerned that the wage subsidy program does not turn into a grant to business. The government must monitor this program very closely to ensure that it is not being abused. The majority of our members do not support grants or training tax credits to defray the cost of training workers.

Finally, CFIB is skeptical about the proposed National Employment Service. This doesn't mean it's not a good concept, but we are concerned that the updated employment information service will not be effective and at the same time will be very costly.

Again, we've brought in some preliminary results of our job survey. We asked our members about the most effective methods of finding new employment, and if you look at figure 3 you will find that only 14% used the Canada Employment Centre, and 0.5% used the federal government's computerized job matching service. We know this program is just getting up and running, but it is critical that we also ensure that it is measured in effectiveness, not just relaying information but helping people find meaningful employment.

Now we want to move to one of our core issues, and that's our strong opposition, as it stands, of moving to hours of work. We do not support the current proposal in the Employment Insurance Act to expand coverage to the first hour worked, because many small business owners will see their UI costs increase. Figure 4 shows that 83% of the business owners do not support expanding UI to include more part-timers.

The government's ``Guide to the Employment Insurance Legislation'' lists the advantages of moving to an hours-based first dollar coverage. However, it doesn't discuss the numerous disadvantages that, unless reconciled, will seriously impede job creation in small firms. We have a lot of competition today.

We support a lot of the structural changes in this bill. We feel there are some ways to amend this that will help us support the bill, but here are what we feel are some of the negative impacts of moving to an hours-based system.

First, it hurts small business. The human resources development department's analysis of moving from the current system to an hours-based system found that over 235,000 businesses, over 90% of them small firms, which are the job creators, paid more. Over 400,000 businesses broke even, and only 65,000 businesses paid less at the current $2.95 UI premium rate. In other words, a significant number of small firms will experience an increase in UI cost and very few firms will experience a decrease in cost. And this is the government's own analysis.

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This is recognized by the government, which introduced a premium refund for small business. However, this is a temporary provision that lasts only two years. After that date, those firms will have to eat the payroll tax increase. It should also be stressed that a $500 threshold is not nearly generous enough.

Our second concern is that this initiative will hurt job creation. As Brien mentioned earlier, it is evident that small firms create the majority of net new jobs. It's seen here that small firms will be hit hardest by an hours-based system. As we show in the job survey, reducing and freezing payroll taxes are by far the most effective measures to encourage employers to hire more employees.

The third issue is something we have discovered: we feel this will hurt part-time workers. It is the young people, especially students, who will be hurt. Often, a business will hire a new employee on a part-time basis. They will then give more hours when there's more steady business and if the employee meets their needs. Business owners have told us they're not willing to risk the livelihood of their full-time employees, risk their business or risk their home - which is used for collateral - to hire another full-time employee before there's enough work to sustain that job.

Over the past three years, the government has been studying this issue. The primary rationale has been to make the system more fair to part-time workers and to alleviate the record of employment administration burden. However, we have not seen a study on the nature of part-time work to understand the full implications.

We're giving this committee our report, ``Part-Time Work and Benefits in Independent Firms in Canada''. We're killing you with paper, but we think it's important. This report is based on the responses of over 10,000 small and medium-sized, independent business owners. As many as 70% of them said they had at least one part-timer on their payroll during the previous 12 months. Of those who hired part-timers, two-thirds stated that they hired at least one part-timer for less than 14 hours per week. Figure 5, though, shows a better picture.

Figure 5, on page 13, identifies the reasons a firm hires part-timers on a part-time basis. Approximately 28% stated that it was a way to reduce payroll taxes, which validates the idea that payroll taxes hurt job expansions. However the top reason was to allow flexibility to deal with business periods, cited by 58%. The next reason, at 38%, was that the business was not able to sustain a full-time work commitment because their cashflow was uncertain. One out of four respondents said the employees were only available on a part-time basis. Finally, more than one out of five stated that part-time work was at the request of the employee. It is apparent that what is happening in the marketplace is not an exploitation by greedy employers; it is a matching of employer and employee needs, and for part-timers this type of work is often closely tailored to fit their individual lifestyles.

Finally, we haven't heard much discussion about this, but this is one of our major criticisms of moving to hours of work without making some important amendments. As it is currently proposed, it's an unfair tax grab. As currently proposed, the measure to move to an hours-based system is unfair to small firms because it will significantly hurt their cashflow for their business and their employees. Although many employees will get a premium rebate if they earn $2,000 or less per year, employers will not receive a refund, and many employees, especially students, will not want to wait a year to receive their rebate; they want their money immediately.

More importantly, we believe this initiative is a ticking time bomb of the same proportions as the GST - and we know the GST intimately - which very few people have talked about. Employees will be shocked when they receive their first paycheque in 1997. Imagine their reaction when they learn that not only have their Canada Pension Plan contributions increased but that their UI premiums have been front-end loaded, similar to the CPP. Imagine how many employees will be outraged after a modest pay increase in December, only to find that their January cheque will be less than it was before the pay increase. The employer's payment will also be front-end loaded and cause cashflow pressures. They will also be justifiably outraged.

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The final issue is the UI surplus. By the end of 1996, the UI fund will have accumulated more than a $5-billion surplus. This is more than enough to ensure that the premiums will not increase during tough economic times. If the government continues to build up the UI premium surplus in 1997, it will be viewed as a hidden tax increase.

It is essential that the UI surplus or reserve fund not be used as a slush fund for more program spending.

Therefore the government should pass legislation to ensure that such a fund will be used only for maintaining premium stability or for reducing the UI deficit, not to pay for new or expanding program expenditures.

It is also worth clearing up the misperception held by many within and outside government that the UI deficit has a negative impact on the federal budget.

It has also been suggested that Finance should use the UI surplus to lower its deficit rather than lower premiums. This is a very misleading, short-term option, which wouldn't impact on the federal deficit over the medium term.

The UI program is financed 100% by premiums paid by employers and employees. If the fund has a shortfall and is in a deficit situation, then that shortfall is paid back to the federal treasury, with interest.

It is time for the federal government to stop including the UI deficit, or surplus in this case, as a major component of the deficit reduction debate. Instead, it is a major component of the job creation agenda and the number one priority should be to reduce UI premiums to spur job creation.

To deal with the employers' concerns about the first dollar coverage and this UI surplus and high UI costs, the CFIB recommends measures to reduce UI premiums significantly and to increase job creation. We have four.

First, we recommend a volunteer and/or a student premium exemption. Since many part-time employees do not want UI coverage or to pay UI premiums, the committee should recommend an amendment to Bill C-12 that allows for a voluntary employee exclusion from paying UI premiums, but only when the employee declares that they do not want UI coverage and they expect to work less than 14 hours per week. This would significantly alleviate the cost burden and still be fair to part-time employees.

Second, we recommend a UI premium holiday for expanded payroll or new hires. This measure, which eliminates UI premiums for expanded payroll, was widely supported by the business community when the government implemented it in 1993. Over 18,000 business owners were surveyed on the impacts of this measure on their business, and 80% said it would have a positive impact. There was much higher support in the Atlantic region.

By offering a premium refund for small business, the employment insurance proposal recognizes this as being a positive measure. However, this proposal is not generous enough, since it is offered only after a $500 increase in premiums and it terminates after two years.

Our third proposal is a significant reduction in UI premiums. UI premiums should be significantly reduced in 1997 for several reasons. First, it will reduce the overall tax burden, which will in turn spur job creation and consumer spending. Second, it will offset the anticipated CPP premium increases. Third, it will ensure that the employment insurance bill will not increase UI costs.

Our discussions with the UI commission and the HRD department show that there is an opportunity for significant UI premium reductions of in the range of 60¢ to 70¢ in 1997. A 10% reduction in premiums equals approximately $700 million. Since the government is anticipating another $4.5-billion to $5-billion surplus, there's ample room for reduction of this magnitude while still maintaining the $5-billion surplus, which will be built up in 1996.

Finally, the CFIB believes this bill should begin the process to move to a 50-50 premium split between employers and employees. Another way to alleviate the tax burden on the job creators is to move closer to a 50-50 split of UI premiums. The current premium structure, wherein employers pay 1.4 times the employee premium, is not equitable, especially since the proposed bill will ensure that about $4 billion will be allocated exclusively to employees for training and other programs. On top of that, employees who make less than $2,000 will have their UI premiums refunded but the employers will not.

The vast majority of our members, 87%, feel that there should be equal cost-sharing of premiums.

We're not saying that you should hit employees. What we're advocating is a gradual move to a 50-50 split, which can be accomplished by decreasing them at a slower rate than employee premiums. This would promote greater equity in the system while still providing a modest premium decrease for employees.

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In conclusion, Mr. Chairman, the challenge facing the UI reform process is to create a financially stable, sustainable system that assists those people who are in need without impeding job creation. A healthy small business sector in which new business formations and business expansions are encouraged will not only result in further job creation and economic growth but also relieve pressure on UI and the social safety net.

CFIB has made some constructive suggestions for change to improve this bill. We have also made four recommendations to reduce UI costs significantly. These recommendations can be achieved without significantly altering the structural changes proposed and can be funded without significant cuts to the system. Without these changes the EI bill will be seen as contributing to job losses instead of contributing to job creation.

The Chairman: Thank you, Mr. Whyte and Mr. Gray. Now we'll move to some questions.

Mr. Crête.

[Translation]

Mr. Crête: In reading your brief, there are some aspects that lead one to believe - and I would like you to elucidate once I'm finished my comments - that you're maybe advocating an unemployment insurance program that is truly limited to the sole issue of unemployment insurance and that the government... For instance, on page 25, you say that if specific programs should be implemented to correct regional economic disparities, this should be done outside the unemployment insurance system.

You say the same thing regarding the system for fishermen. You say that a system like that should be separate and administered by a given department, but not necessarily within the framework of unemployment insurance.

Do you mean by this that the unemployment insurance system should concern itself only with unemployment insurance, and that like any other insurance system, it should only ensure that claimants can obtain benefits, and that all other aspects be withdrawn?

If that is your position, I would like you to explain certain things. Do you think that a change like that can be brought about without a global strategy that sets out all the other elements that have to be dealt with elsewhere and ensures that equivalent programs are implemented? All across the country, particularly in the Maritimes and in Eastern Quebec, people want to work, because they are not deliberate frequent users, but they have no idea what this reform will lead to if its negative effects are not somewhat countered.

At the beginning of your presentation, you said that if the hour-based system was not changed, you could not support the bill. A bit further on, you discussed the elements that should be corrected. Would you accept the proposal only if we completely replace the hour-based system by the current weekly system or by any other system that you may propose or on condition that we accept all the other amendments you proposed, such as the one concerning students?

[English]

Mr. Whyte: Thank you very much. Those are excellent questions.

You were referring to the social security reform paper we presented in response to the green paper. If I could, I would like to answer the second question first, move to the first question, and then move back to the third.

Yes, we do think we have to look at it in a holistic manner. We do think UI is only one portion of the social security reform process. We also believe it's not just the federal government, it's the provincial government and the community. It's not just government; it's everyone. It's everyone's issue. It's the employer's issue. It's the employee's issue.

Yes, it's a much bigger item. Our members have indicated that, and they care very much about their communities. Our members stay in their communities.

So I agree with that. This is the first premise.

The second point is that ideally it would be nice to make UI just a pure insurance program. But we recognize there are things in there it would be very difficult to move out, for example maternity leave. We have not been attacking maternity leave or saying we think it should be removed.

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Our members also recognize that if you are going to reduce UI benefits significantly you have to have some offsetting measures to help people find meaningful employment.

So our members are supportive of active employment measures, and my dealings with the business community and the business liaison group to the Canadian Labour Force Development Board indicate they support that. But we should recognize that until 1990 the government paid a share of the UI fund, the UI cost. Then they pulled out. The split moved from not 50-50 but...to 1.4 times for employers and 1.0 for employees.

So the government pulled out their share. But until then they recognized that UI was more than just an insurance program, that there was a lot of general benefit to the broad public. Then they pulled out. But they still left in the fishermen's program, for example. They're putting other things in this program, for example training initiatives.

To me that's a strong rationale, to compensate for the fact that it's not a pure insurance program, to move it to a 50-50 split in premiums. If you add up the $2 billion of developmental uses in the program, if you add up the $800 million we're talking about for training programs, if you add up the $300 million-plus for fishermen's benefits and you add up maternity benefits and you add up the rebate for employees who work for less than $2,000 worth per year, there are significant benefits out there other than to employers...to pay into an insurance program. That's why we feel justified in trying to work out a strategy with this committee and the government to get closer to a 50-50 split of premiums, not hurting individuals but helping employers.

That's the answer to the second question. The third question deals with hours of work.

We think there are legitimate reasons to move to hours of work. There is an equity issue. There's a concern for people who work three jobs and are not covered under UI. People have to be covered. At the same time we don't feel people should be blind-sided because we're going to third-dollar coverage. If you look at the winners in this bill, they are not the job creators or small business. That's our concern. On one side we talk about job creation - we even call the bill one about ``employment insurance'' - but we feel we're hurting job creation by doing it.

With a voluntary exemption, it seems to me everybody wins, except perhaps the government. The government have said they're doing this for principled reasons. But if the government are saying they're doing it as a tax grab to the tune of $10 billion, that's not legitimate.

So we feel there are some things you can do to save the bill and still amend the hours-of-work issue. Maybe a student exemption partially offsets it. But I'll tell you, we as an organization will have a very difficult time going out to the opinion leaders in every community across Canada and saying this bill is good, but by the way, your premiums are increasing.

Also, if you have that anticipated $4.5 billion to $5 billion surplus, if you significantly reduce premiums in 1997, which is outside the mandate of this bill but still very doable, you can sell the bill, because overall premium costs will decrease for everyone.

[Translation]

Mr. Crête: I have a brief supplementary question. Starting from what amount might the reduction in premiums create a sufficient momentum that would truly create jobs? One could be led to believe that if they are only reduced by a small percentage, it may not have any real effect, but there may be some amount starting at which it may become truly significant.

[English]

Mr. Whyte: There are two issues here. Actually, in our employment survey we ask our members if a 75¢ decrease would have an impact on expanding payroll or employment. We're asking that question. However, indications are that it's the direction. We have found that if payroll taxes increase, they're job killers.

[Translation]

Mr. Gray: I would like to add that there is a great deal of talk about job creation in the Canadian economy. In English I would say: "We want jobs but...". A lot of policies go against that objective. Both at the federal and provincial levels, payroll taxes are being increased incessantly. Recently, Quebec added a tax on training.

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At the federal level, we were subjected to increases in the pension plan. Our objective may be to create jobs, but government policies often go against that objective. That's why we attach so much importance to unemployment insurance premiums, especially since starting in 1997, both in Quebec and Canada, there will be a significant increase in the pension plan.

Mr. Crête: Let's look at your hypothesis. If there was voluntary exclusion, for example for people who work fewer than 14 hours, and that the government had to find - I'm not saying I agree with this - the same amount of revenue somewhere else, do you think it would be acceptable that the amount lost from those who work fewer than 14 hours be recovered by increasing the ceiling from $39,000 to $41,000, or something like that, which would also avoid the anti-job effect of the reduction in the current ceiling?

[English]

Mr. Whyte: Your questions are very good, because we are trying to focus on that type of issue. We are trying to find solutions that will not cost more money.

Let's do the math. In the proposal the bill says it will save $2 billion. Yet they're only spending $800 million. Where is that other $1.2 billion going, and why can't some of that money be used to offset that? That's number one.

Number two, aside from the extra $2 billion in savings, at the current premium rate, if it continues in 1997, there will be $4.5 billion to $5 billion on top of the current $5 billion surplus. So there's an issue that's not being discussed here, and that's the hidden cashflow issue of deficit reduction.

We went after the Reform Party's alternative budget when they only wanted to use $3 billion to reduce the deficit. We don't feel that's credible. We've talked to the finance minister about this. We feel there's a way out of this. We support a $5 billion surplus as it stands now, but we feel another $5 billion on top of that is just unreasonable.

The Chairman: Thank you, Mr. Crête.

We'll move to Mr. McClelland.

Mr. McClelland: Thank you very much.

I thank you for a good presentation, and as you would imagine I concur with virtually all of it.

I'd like, though, to explore the whole notion of part-time work and the proliferation of part-time work. Is it a chicken-and-egg situation? In this bill, will moving to hourly work actually encourage or discourage the proliferation of part-time work?

There are many people, me included, who feel the proliferation of part-time work is very detrimental to community. Part-time work started with giving students and others who wanted the flexibility of getting in and out of the workforce a means to do so. It has evolved over the past ten years to a situation where primarily large corporations are able to escape payroll taxes, escape commitment to employees, escape unions - escape all of the negative aspects of hiring people - and it has grossly distorted the labour force in the small business sector.

Most of the small businesses I believe we're talking about are in the retail and service sector. Most of these are the businesses or enterprises that provide the entry level jobs for most of the new entrants to the job markets.

I believe it is very detrimental to society as a whole to have replaced full-time work as the norm with part-time work as the norm. It's impossible for people to have a family. It's impossible for people to have a sense of community. How do you get a car loan? How do you get a mortgage if you have three different jobs? You don't have any sense of stability or permanence.

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By taking this route, the very positive aspect is that it takes away some of the impetus for people to use exclusively part-time work.

The problem is that the increasing payroll taxes, which we have already explored, are a great job destroyer.

I know from personal experience that when business is not expanding, when you cannot get more money, the only way you can keep your doors open is by reducing your costs. One of the very few variables is people, so people go. So when the payroll taxes go up in January 1997, the employment is going to go down. That is the only thing that can happen.

Can we do anything to square the circle? On one side, going to hours worked is going to start to level the playing field for part-time versus full-time employment. On the other hand, when all these costs will kick in, it's going to be a very real job destroyer. That's the question. You touched on it in advocating reducing the taxes.

Mr. Whyte: Yes.

One of the reasons why we gave you this report was to fill in some background and answer some questions on part-time work.

First, there is the severity of the problem, which we were talking about for the past ten years. As we point out here - and I think this is validated by a lot of other research - in 1984 nearly one in seven employed people worked in some form of part-time employment. By 1994 this proportion had risen to one in six, overall. So let's keep it in perspective. When you watch all the media and everything, it sounds as if it's a huge trend. It's increased, but it's not as significant as people set out.

The second observation is that we found out from our members when we surveyed them that the number one sector where they hire part-timers is community services. There, 84% said they hired at least one part-timer. The next area is retail, at 79%. The next area is agriculture, at 78%. The next is hotels and restaurants. Business services are sixth or seventh down the line.

It's important to point that out. I've lived on the prairies, and you know that you hire people when it's time to harvest. You make hay while the sun shines. You hire extra people.

So it's very difficult when you try to deal with the part-time phenomenon with just one type of solution.

I agree if you look at the small versus the large. The small don't have unions. They're not avoiding unions. Often it's the request of the employee, and often it's the first-time, entry, job for people.

On that point it's worth exploring the part-time work. I think it will take away some of the penalties of part-time work per se, but, at the same time, we'll have to survey our members to know how that will have an overall impact. We don't feel as if you should just destroy job creation in that regard.

Secondly, it's cyclical. You don't hire someone full time first and then put them in part time. You first hire someone part time to deal with peak periods or as you get more work. As you get more work, you then will put them on full time.

Mr. Gray: Just to add to that, it's not directly on target in terms of part-time work, but about two weeks ago we released in Quebec an original research work. We did it in Quebec because of their entertaining the notion, as your committee did earlier, of reducing the hours of work in a week or somehow curtailing overtime hours. The interesting thing about this research, which was based on Statistics Canada data, is that what really happens is if you have growth in the economy, you'll have more employment.

You'll also see that usually more overtime is an indicator that a healthy economy is coming down the road. It's a little bit like Garth just said. Whether we're talking about overtime hours or part time, it's a precursor for more orders, more confidence, and more full-time jobs.

By the way, there's no correlation between unemployment rates and the use of overtime or part time. There's not a direct causal relationship. But it's really crucial for you to be very careful not to entertain those as being full-employment solutions.

On the tax side, I spoke earlier in my remarks, in French, about the whole business of your wanting jobs but we're going to go to first-dollar coverage. This is a tax aimed at the very job creators that we've got going in the economy, those who employ one to ten employees. You want jobs, but if you're looking at the notion of adding costs to business either through reduced hours of work or training tax levies or those sorts of things, it transfers to the provinces and then down to the municipalities. You get to property taxes, which again rob the bottom line.

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We have cash-starved businesses out there that are still clinging on. The tax structure has changed so that the mix is more on profit-insensitive taxes than profit-sensitive taxes. As a result of that, they can't get out of the quagmire. They can't bring in internally generated funds to make their financial statement look better and get the banker off their back.

Now, if you have cash-starved businesses out there and you come along with keeping adding on to these cost structures, then it's not only going to be a disincentive to hire; I would submit it's an incentive to let people go. It will free up money. It will free up your cashflow.

So be very careful with this equation.

The Chairman: Mr. Allmand.

Mr. Allmand: I'm afraid I don't understand many of the proposals in this brief. The brief says the federation is opposed to those parts of the bill that would include more part-time workers. Yet it's business that has been pushing more and more workers from full time to part time and other types of non-standard work, including temporary work. As a matter of fact, I saw recent figures where part-time and non-standard work is almost double what it was a few years ago.

So you're pushing more and more jobs into the part-time area and you're saying they should not be covered under the unemployment insurance system. One question is how are these people to stay alive when they lose their jobs, when they're put out of work against their will, when there's no work for them? Are you suggesting we have more soup kitchens? Are you suggesting we increase the provincial welfare systems? You're pushing them more and more into part-time work and non-standard work, but you don't want them covered.

Also, just from a business point of view, how are you going to maintain purchasing power in a recessionary period? I can recall just a few years ago in Sudbury when the nickel prices went down and there were massive lay-offs, it was the unemployment insurance system that kept small businesses alive, because people could still pay their rent and still buy their groceries, buy their clothes, keep food on the table. Purchasing power was maintained at a certain minimum. If you have an expanding percentage of part-time workers - and that seems to be the trend, non-standard workers - who are not covered by unemployment insurance, have no purchasing power, it's certainly going to give impetus to the recession and cause more bankruptcies and more trouble to businesses in the recessionary period.

So I have two questions there. How do you expect these people, this growing number of part-time workers, to pay their rent, buy their food, if they're not covered? How do you expect business to be maintained in a community when there is decreasing purchasing power or no purchasing power because there's no unemployment insurance or little unemployment insurance?

The Chairman: Mr. Regan.

Mr. Regan (Halifax West): I want to talk about the UI reserve you referred to. You don't feel it should go over $5 billion. The reserve should not be in excess of that level. It seems to me having a good reserve will prevent sharp increases in the premium rates during recessions. We saw in the last recession that at the beginning of the period there was a surplus of $2 billion in the fund. But it went into a deficit of $6 billion. So there was a shift of $8 billion. With your proposal, you would see a deficit of $3 billion, or you would have during that period. That could again lead to sharp increases in premiums. In the last recession we saw an increase of 33%, or a third, and we also saw 200,000 jobs lost because of that.

The Chairman: Mr. Nault.

Mr. Nault: My question deals with the perception you've left on the table that the government is after some sort of tax grab, based on the fact that we're going to first-hour coverage. My understanding is that maximum insurable earnings, which as you know are something you've pushed very hard to have stabilized and reduced, this reform, will result in about a $900 million saving to yourselves, which is a premium rate reduction for employers from $4.20 to $4.13 per $100, resulting in further premium reductions of another $350 million. The total that you'll save in 1996 in the MIE, I'm told, is $1.25 million.

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Now, you've made a somewhat interesting statement today in that it's a tax grab because we're going to cover part-timers. But when I look at the reduction in MIE, quite frankly, overall you are going to save a significant amount of money as small businesses. In fairness, would it not be correct for us to say that what we're doing with the first-hour coverage is distributing the pain - if you want to call payroll taxes pain - to all the employees and employers in small business firms and you are not giving preferential treatment to those who decide to try to exempt themselves from the system by hiring people at less than fourteen hours? That is very much a fairness issue and therefore doesn't distort the economy by having people compete with each other by trying to get away from payroll taxes.

I'd like your comments on that, because if I was a business person who hired just full-time people and you were representing me here today, I would be damn mad. That's because you're suggesting very strongly that we want exemptions for those who go out and get out of the system, while those of us who have businesses that have to hire full-timers can't.

The Chairman: Thank you, Mr. Nault.

We'll have the wrap-up to all the answers now.

Mr. Whyte.

Mr. Whyte: Let me start with the first one.

Among our membership, we have up to a 90% renewal rate, so our members are very pleased with our position. We work on one member, one vote, and we're very confident that we do represent our members very clearly.

In our statement we say it would be perceived as a tax grab if the deficit were to be increased beyond 1997, and with first-dollar coverage. Let's talk about it.

We were very supportive with a 5¢ decrease this year and with the maximum weekly insurable earnings being capped. We could go into detail to talk about the formula of the maximum weekly insurable earnings, but I really urge the committee to look in detail at the formula, at how it works over ten years. You'll find that people will benefit when it's frozen because the formula is finally going to catch up to when there were recessionary years and it's going to be penalizing. So let's put that first on the table.

Secondly, who benefits from the capping of the maximum weekly insurable earnings? We were supportive; 30% of our members will gain on this. But who really gains on capping them? The job creators? No. It's big business and big government. You're the big winners on capping the maximum weekly insurable earnings.

Now, who benefits by going to first-dollar coverage? Is it small business, the job creators? No, big business and government are again the big winners.

We agreed, and I said in the questions that we feel there's an equity issue. If someone is working multiple part-time jobs, he or she should be covered. There are reasons why the idea of hours of work is good. We don't feel, though, that 90% of the small business community.... Using Human Resources Development's own statistics, they show that the big losers will be small businesses, the job creators.

How, on one side, can you say that this is to help job creation, while on the other side the job creator is asking you to please not raise payroll taxes, but this does it? It does.

We're trying to work with you to solve this problem. We feel there's ample room to do it.

Let's move on to the reserve. The last time there was a $6-billion deficit. The last time rates went up we agreed that you had to build up the reserve. The question is, how much and how fast? The issue is that there has been a lot of downsizing. The program was $20 billion; it's now $16 billion. So I doubt very much that we'll see a $6-billion surplus ever again.

The second issue is that on the $5-billion surplus that we currently have, that's to save a band. If you talk to officials, they'll say this will be a band of 50¢, so we can ensure that premiums will never go up 50¢. Well, let's pursue that.

What people are suggesting is that we'd rather keep the rate at $2.95 to build up a $10-billion surplus so that rates don't increase, rather than reduce it from $2.95 to $2.30, only to then have to increase it to $2.80 when there's a recession. We also believe the best way to stimulate the economy is not to give the money to government and then have it come back, but to have it in consumers' and employers' hands at the outset to build it up.

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We have to be fair here. Beyond the $5 billion, we're not doing this for the surplus. If you look at the budget presentation, you will see this is to cashflow requirements right now for the deficit. If that continues, it will be perceived as a $10-billion tax, not as a $10-billion surplus for UI.

Question number three was on opposing part-time workers. We don't oppose compensating part-time workers. We're not pushing that. But in a recession -

Mr. Allmand: Well, you say 83% of small businesses do not support expanding UI to include more part-timers.

Mr. Whyte: Right. We don't support passing on UI to part-time workers who, at their own request, want to work part-time, or who work peak periods. But also, during the recession, our members cut their own salaries and their staff salaries, but they held onto their staff. The numbers you were pointing out were holding on to their employees during the recession.

One of our members owns a shoe store on Main Street in Winnipeg. He hadn't had a person walk into that store for a full day during that recession, and he still had three employees there.

To portray employers as not caring about their employees and to portray that they're somehow using the system is false and wrong. Obviously you have to go out and walk on Main Street and talk to our members and see how they do care about their communities and their employees.

Mr. Allmand: Some part-time workers are in my office.

Mr. Whyte: Well, there you go. You also are hiring part-time workers. I don't believe you're a bad person.

Mr. Allmand: No, I mean they're coming into our offices.

Mr. Gray: Yes, but talk to the employers too and find out what they're doing and why they're doing it. Don't just listen to those people coming into your office who are employees who may have been in that circumstance. It's kind of like the consumer relations department in Ontario designing a consumer relations bill based on only the complainants. Surely you have to go for a little broader base in terms of determining where the problems are than just asking the complainants where the problem is.

I keep coming back to this tax issue, but I might just say we've done some research. We took the example of an Ontario manufacturer with 25 employees. Between 1990 and 1996 the wage growth in that sector, on average, would have been about 16.7%. Total payroll tax growth in Ontario for a manufacturer of that size, based on our typical case, was 45.88%. That's huge. UI premiums during that period went up 53.1%.

You can't have it both ways. You can't say you want jobs from our sector - and we're doing a hell of a job right now - and then turn around and keep bringing things into a program that will keep escalating costs either now or in the future.

We're trying to be here in a cooperative way, in a fair way, trying to continue to do our role in the economy in the way we've done conscientiously and our members have done conscientiously. There's no agenda here, for the vast majority of small firms, to deny or displace their workers.

The Chairman: Mr. Gray and Mr. Whyte, on behalf of the committee, I personally would like to thank you very much. I don't want you to leave with the impression that somehow we do not appreciate the challenges small businesses face. As a matter of fact, very few things are more difficult as we deal with the changing Canadian economy than to run a small business in this environment.

It is our hope that we can in fact improve this piece of legislation to make sure we aid in the process of job creation, which still remains either number one or number two, depending on who you talk to, vis-à-vis the important issues we're challenged with as a government and indeed as members of Parliament.

I would also like to congratulate your membership on its performance vis-à-vis job creation. We could all do more. Governments can do more, small businesses can do more, unions can do more. But it is only through a cooperative spirit that we can get this economy rolling and in fact improve the lives of Canadians. Ultimately that's the real test, and that's what we're charged with.

Thank you.

Mr. Gray: Thank you, Mr. Chairman.

The Chairman: We're going to take a two-minute break. We will be back with representatives from the National Association of Women and the Law.

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The Chairman: Before we hear from the National Association of Women and the Law, I would like to remind all members, both the government side and the opposition, that on a number of occasions I have requested that if you have ways in which you feel you can improve the legislation, bring that forward to me as chair so that we can analyse your ideas. To date, Mr. Scott, Mr. Regan and Ms Augustine have made some proposals. If there are members of this committee who have other proposals, please bring them forth.

This morning I noted that Ms Augustine had expanded on her views relating to the family income supplement as it related to the proration of the weeks of past benefits for the purpose of the intensity rule. For those who work while on claim, this would provide additional incentive to work by reducing the impact of the intensity rule on future benefit levels. Of course, this is going to require a bit more work, and the chair has requested Ms Augustine to have it completed by Monday.

Mr. Nault.

Mr. Nault: Mr. Chairman, just to refresh your memory, we also requested a look at the maternity benefits and the entrance requirements. That was given to us by some witnesses last week as a problem to resolve.

The Chairman: I've received some material from the department and I'll be tabling it later on this afternoon.

Mr. Allmand.

Mr. Allmand: I wonder if our research staff could look into the proposals made by the first witnesses this morning, the group representing the artists and cultural communities, in particular including the self-employed artists in a way similar to the inclusion under the Canada Pension Plan. They seem to put forward a system that was very unfair. People who really were paying premiums could never collect. I'd like us to look into that to see if some kind of an amendment could be possible.

The Chairman: Duly noted.

Mrs. Lalonde.

[Translation]

Mrs. Lalonde (Mercier): I received a letter from Ms Augustine saying that she was going to table an amendment. Has she in fact tabled that amendment? If so, shouldn't we have received it?

On behalf of the Official Opposition, I ask Minister Young to table the amendments he talked about. He answered that he would table them at the end of the work. I would like to know how you intend to proceed.

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[English]

The Chairman: At this point this is what has happened. Whenever I have heard ideas that I think personally, as chair, may in fact improve the legislation - because this is the purpose of this committee - I have requested that members of the committee give the committee a sort of framework of their idea or what it's based on. In the case of Mr. Scott it was the gap, in the case ofMr. Regan the divisor, in the case of Ms Augustine it's in reference to the intensity rule and its application to the family income supplement. The members have forwarded to me the framework, which is available to all members of the committee and will be distributed by the clerk to everybody. That's where we're at now.

But I just want to put this into its proper context. If we remind ourselves every day when we are here that the reason why we are here is to improve the legislation and we think it is the responsibility of the members of the committee to come up with amendments or ideas, they in fact improve the legislation.

[Translation]

Mrs. Lalonde: Mr. Chairman, you know that our debate deals essentially with cutbacks. We are opposed to the cutbacks contained in this bill, but we are not opposed to a reform of unemployment insurance. We disagree with the fact that given the current surplus, it is necessary to proceed with new cuts in order to change unemployment insurance.

Could we discuss that at some point?

[English]

Mr. Nault: Mr. Chairman, I have a point of order.

The Chairman: Just one second. I'll deal with the question.

Mr. Nault: It's rude to the witnesses to be getting into a heavy debate when they're sitting here waiting. Why don't we have the witnesses and then we can get into this discussion this afternoon before the next witness comes?

The Chairman: Yes. I just want to make a very quick point.

As chair, the way I'm going to be running this committee, I want to make it very clear, is I'm going to come out with a better bill for the people of Canada than what's here now. There are going to be amendments that are going to be forwarded by members of Parliament. The responsibility of the members of this committee is to improve the legislation.

That's where I'm focused. I'm focused on this like a laser beam, and I'm not moving away from it. I want a better bill for the people of Canada coming out of this committee in the bill I report to the House, period.

Mr. Crête.

[Translation]

Mr. Crête: Everyone wants an adequate unemployment insurance reform, and that will entail a bill at some point. However, bear in mind that this bill has not received second reading and our suggested amendments may require us to adopt a very comprehensive approach. We just want to know how things will proceed so that we don't end up with a series of small technical amendments and then have the members opposite say that opposition members did not do their job because they aren't tabling any substantive amendments. So that is the fundamental issue that must be dealt with first.

I agree with Mr. Nault that this does not have to be resolved before hearing witnesses. But these things should be set straight to avoid any imbroglio. If we are going to talk about amending the intensity rule, we must first agree on its definition before proceeding with amendments to an amendment.

[English]

The Chairman: I agree with both you, Mr. Crête and Mr. Nault, that we should proceed to the next witnesses, who are patiently waiting to begin. But I would also draw your attention to the comments I made at the beginning of the hearings, where I thought I set the framework of the debate quite clearly.

Mrs. Lalonde.

[Translation]

Mrs. Lalonde: We have received a few briefs in English only. I am not blaming the writers for that because they write them in their mother tongue, and that is to be expected. But it is up to the committee to provide members with a translation. Some members of our party are not bilingual. I think they are also entitled to get the documents in their own language.

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[English]

The Chairman: This is a housekeeping item, and a very important issue, by the way, that we will deal with at a steering committee that we'll be calling shortly.

Now I would like to welcome, from the National Association of Women and the Law, Martha Jackman, member of the NAWL and professor of law at the University of Ottawa; and Louise Shaughnessy, director of legislation and law reform.

As you know, we are presently reviewing Bill C-12, an act respecting employment insurance in Canada. As you've probably already heard, our major focus here is to improve the present piece of legislation, and we count on experts like you to help us as members of Parliament improve this piece of legislation.

We have approximately one hour. We'd like to engage, obviously, in a question and answer session, so if you can give us an overview of your major points, we'll have more time for the questions and answers. Welcome and thank you. You may begin at any time.

Ms Louise Shaughnessy (Director of Legislation and Law Reform, National Association of Women and the Law): Thank you very much for the opportunity to address the committee today. It's an issue we feel very passionately about.

We are apologetic about the fact that our brief is only available in English. The reason for it is the budget cuts we've been experiencing. We would really also like to see that the committee proceedings would be translated as well.

The National Association of Women and the Law is a national, non-profit organization dedicated to helping achieve women's equality through its law and policy reform work. We've been in existence for over 25 years, and during that time we've made numerous representations to parliamentary committees on a variety of issues, including at least three on unemployment insurance during the past six years.

NAWL has very substantial concerns about the impact of Bill C-12 on women. Our comments are of two general kinds.

First, we object to the bill's overall policy thrust in that it seeks to impose the burden of fiscal restraint on some of the most vulnerable workers in the country, many of whom are women.

Secondly, we have specific concerns about the gendered impact of certain provisions. These provisions fail to take into account the particular circumstances of women workers and in many cases would have a disproportionately negative effect on women.

It is interesting to note that this bill has been touted as being advantageous for women. NAWL feels that the proposed law not only frustrates the aims of Canada's employment equity program, but we also believe contemplated changes would give rise to a breach of the equality sections of the Canadian Charter of Rights and Freedoms.

The remainder of our comments will illustrate how women would be particularly disadvantaged by the operation of this proposed legislation.

In our view, the government has chosen an approach that blames those who are most vulnerable to economic dislocation and recession for their own misfortune. Most of these workers are women. The proposal to introduce an intensity rule to reduce benefit periods, to increase the requisite number of hours for eligibility, and to count weeks of zero earnings in determining benefit levels, for example, are regressive. They punish those most in need of insurance benefits, who are in need because of systemic discrimination that disadvantages them.

These changes are proposed in order to reduce premiums for the relatively advantaged participants in this system, to reduce expenditures, and to contribute to deficit reduction. It is NAWL's position that this approach is both unfair and economically unsound. It threatens to undermine the stabilizing role of the UI system in our economy and to impose a further economic burden and social stigma on those who can least afford to bear it.

The government has recognized the importance of exposing new policies to a gender-based analysis in order to safeguard against policies that disadvantage women or fail to meet the needs of women. In its federal plan for gender equality, the government committed itself generally to ensuring that all future legislation and policies include, where appropriate, analysis of the potential for different impacts on women and men.

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In particular, the government promised that the unemployment insurance reform process will consider the unique social, familial, and labour market realities of women. We urge the committee to hold the government to this pledge by recommending a reassessment of, and appropriate amendments to, Bill C-12 in view of the problems identified by us to date.

Women still do not enjoy equal access to or benefits from the paid labour force in Canada. The government itself has recognized in the federal plan for gender equality that women continue to be overrepresented in non-standardized employment, including part-time, insecure, temporary, seasonal, and low-paying jobs, and that more women are being pushed into such work as a consequence of economic restructuring. As such, they experience unique difficulties in qualifying for unemployment benefits and training. Moreover, aboriginal women, women who are members of visible minorities, immigrant women, and women with disabilities are more likely to be in low-paying physical labour positions with few or no benefits than are other women in Canada.

Some 69% of all part-time workers in Canada are women. It is important to note that many of these women are not working part time by choice: 34.6% of women working part time would have taken full-time work if it were available. An additional 16.7% said they were only working part time because of family responsibilities. Moreover, in both the full-time and part-time labour markets, women continue to earn lower wages than men.

All these factors contribute to women's disproportionate representation among those living below the poverty line.

It is critical to appreciate the link between these gender labour force statistics and women's disproportionately high contribution of unpaid caregiving work to the economy and to society. Neither workplace policies nor state policies on child care and other matters have adequately addressed the potential conflict between paid work and family responsibilities.

In 1992, women with a spouse and children spent approximately 2.5 hours per day on unpaid domestic work, about an hour more than did their male counterparts. The same women spent an additional 2.2 hours on child care activities if they had at least one child under the age of five, double the amount of time men spent.

Women's unpaid caregiving labour places a variety of barriers between women and the paid labour force. It can result in extended absences from, or delayed entry into, paid work, and the loss of training, education, job experience, promotion, and other career opportunities. It often limits the number of hours women can work outside the home, as well as their mobility and hence their access to jobs in other regions. In fact, mothers are more likely than other women to work part time.

Also, women are much more likely than men to leave their jobs because of personal or family responsibilities. In 1993, 6% of unemployed women left their jobs for this reason, as opposed to almost no men. As well, women in the paid labour force are almost three times more likely than men to be absent from work because of personal or family responsibilities.

What this means is that women have disproportionately disruptive, low-paying, precarious attachments to the workforce.

Not only have these facts about women workers not been adequately addressed in the design of Bill C-12, but the proposed law would serve to raise even higher the barriers for women to jobs and to economic stability. NAWL submits that without the changes recommended below, the bill will have especially negative effects on women and will exacerbate women's economic equality.

The bill proposes to determine eligibility for benefits based on hours rather than weeks of work. NAWL supports the principle of extending coverage to more part-time workers. However, as currently designed, the bill would also cut off many part-time workers who currently are eligible for insurance.

Under the bill, some of those who work between 15 and 34 hours per week would be disqualified from receiving benefits unless they could find and keep jobs for a greater number of weeks. Currently they are required to work only 12 to 20 weeks, as long as they work more than 15 hours per week. For some individuals it would more than double the number of weeks needed to qualify for benefits. This would have an especially harmful impact on women, who make up most of the part-time workforce. Many women who currently qualify for benefits would be cut off, though they would continue to pay premiums.

Women tend to have fewer weeks of employment at their jobs than do men. This can be linked to the fact that women bear most of the burden for unpaid caregiving responsibilities. Of women working, 44% are employed for under 49 weeks per year, and of that, 44% are concentrated in the 14- to 26-week category.

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Paragraph 7(2)(b) of the bill and the accompanying table could be amended to avoid prejudicing part-time workers who presently qualify for UI benefits. This could be achieved by providing benefits to persons who have worked the greater of 180 hours or 12 weeks in high unemployment regions. For low unemployment regions, this would translate into the greater of 300 hours or 20 weeks. This would allow those with less than 15 hours of employment per week to enter the system by logging 180 to 300 hours, depending on the region, but it would not disqualify any part-time workers who currently are eligible for benefits.

The bill sets an even higher entrance requirement for those it defines as new entrants or re-entrants to the workforce; that is, those with less than 490 hours of work in the preceding year. This effectively diminishes the number of new part-time workers who would be brought into the system. It would have an especially negative impact on women re-entering paid work after a period of absence due to family responsibilities and on women entering or re-entering paid work following a marriage breakdown. Moreover, these higher entrance requirements are not sensitive to varying rates of employment in different regions.

Women with children are considerably more likely than men with children to be out of the paid labour force. Approximately half of the women presently not employed have either not worked outside the home in the last five years or have never been a member of the paid labour force. Of the other half, 9% left a paid job because of personal or family responsibilities. These facts highlight the continuing reality that it is largely women and not men who make career and economic sacrifices to care for children. They should not be penalized for this.

NAWL submits that these new and re-entrance provisions would exacerbate present economic inequalities between women and men. They would erect an additional barrier to women's economic security at moments in their lives when they are already struggling to overcome the disadvantages imposed on those who do caregiving work.

In particular, it is well known that women already suffer a drop in average living standards relative to men following divorce. Moreover, the trend in family law has been to award less support to women following divorce and to encourage them to become self-sufficient. The government should not be enacting legislation that further reduces the transitional support available to women in these situations.

NAWL objects to the suggestion that new entrants or re-entrants to the paid force are somehow abusing the insurance system.

For many women, the bill would dramatically increase the number of weeks of employment required to qualify for maternity benefits under clause 22. The same can be said of parental benefits, which are almost exclusively claimed by women.

In order to qualify for such benefits, a person must be a ``major attachment claimant''. Currently the 20 weeks of employment required to meet this criterion under the UI system can be satisfied by working at least 15 hours per week. The bill would change this requirement to 700 hours. A woman who works 15 hours per week would now need almost 47 weeks to qualify for maternity benefits.

The government has provided no justification for reducing the coverage of maternity or parental benefits, both of which are essential prerequisites for women's economic equality. NAWL objects strongly to any measures that would undermine the availability of these benefits.

The government has also seen fit to retain the two-week waiting period for maternity and parental benefits. This is nonsensical if the rationale is to allow the claimant two weeks to find other employment. A person on maternity or parental leave is not looking for other employment.

We recommend that the definition of ``major attachment claimant'' be amended to require the greater of 300 hours or 20 weeks, at 15 hours per week, of employment. This would allow some part-time workers with less than 15 hours per week of employment to access maternity or parental benefits without jeopardizing persons who are currently eligible. We also recommend that the waiting period for maternity and parental benefits be removed.

Basing the amount of benefits on the last 14 to 20 weeks of work will also prejudice women workers. Weeks of zero earnings or reduced earnings will be factored in. Workers who will be most negatively affected will be seasonal workers, who are largely already some of the poorest, and service industry workers, of which women comprise 53%. Of all women workers, 86% are employed in the service industry, as compared to 63% of men.

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The proposed legislation would reduce by up to 5% the amount of benefit to be received, depending upon the number of times unemployment benefits were used in the last five years. Again, this would have a negative effect on women, because of their increased likelihood to take time off for family responsibilities and their increased likelihood to have less job tenure, as discussed above. This would also greatly affect some of the most economically depressed areas of the country, most notably the east coast fishery workers and other seasonal workers.

Although we appreciate the government's attempt at recognizing the need to supplement the incomes of poor working families, we feel that this should not be at the expense of the non-working poor.

Additionally, NAWL believes that it would be problematic to make eligibility contingent on aggregate spousal income. The effect would be to force unemployed women into dependency on men. This undermines women's autonomy and is especially dangerous for women in abusive relationships.

The intention of the insurance scheme is to replace earnings of the individual worker. To consider income of the family unit is to change the characteristics of the original scheme.

If the supplement is to be retained, however, we believe that it should be extended to all low-income individuals in order to help counteract the aggressive impact on the most vulnerable. Additionally, cheques should be made out in the name of the woman of the household, as then money would be more likely to be equitably shared.

There should be full indexation of the supplement so that persons will not lose benefits purely because of inflation.

Part II of the bill sets out provisions that allow Human Resources Development Canada to continue the National Employment Service and to negotiate with each province for the delivery of employment benefits that will replace the training and counselling programs currently available through HRDC.

Not only do these proposed changes eliminate national standards for training programs, but they also threaten the existence of training programs altogether for provinces who do not wish or cannot afford to participate.

In addition, by eliminating federal purchase of training programs, the federal government gives up the bargaining powers that come with large bulk purchases. This will affect the availability and accessibility of both private and public training, affecting those in rural and remote regions most.

Women constitute a large proportion of those undergoing and needing retraining to ensure employability now and into the future. Often it is only through national standards and federally sponsored programs that programs can come close to meeting the distinctive needs of women.

Further, only one of the proposed employment programs is a training program; that is, the skills, loans, and grants.

Subclause 61(2) means that without the partnership of the provincial government, there may be no training program available at all. Considering the continuing importance of training and retraining in Canada's current labour market fluxes, the abrogation of the national responsibility for training to the point of jeopardizing the existence of training programs in a given province is unacceptable.

In sum, NAWL believes that the proposed changes that eliminate federal government responsibility for training will seriously undermine the availability and quality of training in Canada.

Women are often the first workers out the door in times of economic change. Many are also limited to predominantly part-time work in the service industry and are marginalized largely because of the necessity to incorporate labour activity with child care responsibilities.

Realistic and affordable retraining opportunities are crucial to maintain employability and to allow government to live up to its commitments under its employment equity program.

NAWL has made numerous recommendations on training in the past, most recently to this committee under Mr. Axworthy's social security review.

We believe that the proposed employment programs fall far short of assisting this process.

If the federal government feels it must withdraw from training, then we would recommend some safeguards: that in any agreements for delivery of training programs by provinces, communities of the private sector should be accompanied by adequate federal transfers to ensure the quality and availability of programs; that the federal government should also require, as a condition of those agreements, that training be delivered in a way that promotes the goals of employment equity for women and that takes into account the particular training needs of women, including disabled women and immigrant women.

Finally, NAWL is extremely concerned that this bill would fundamentally change the essence of the system as an insurance system. The government has been reported as stating that the $2 billion that is to be saved by insurance and employment program cuts will go largely into the Consolidated Revenue Fund, even though some is being reinvested in training and transitional programs for eastern Canada and northern Ontario. Thus, a program that was completely self-funded by employers and employees is now being used by the government to generate general revenues. That is more akin to a tax.

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Additionally, we believe that the way in which the proposed legislation would impact on women constitutes a breach of the equality provisions of the charter. Such changes as increased number of weeks to qualify, reduction of benefits, and penalizing new, re-entrants and frequent users all impact on women the hardest because of women's precarious work situations, which have resulted from their disproportionate share in family responsibilities and other systemic discrimination.

These measures will force the perpetuation of these trends. Women will take low-paying, insecure jobs. Workers will be discouraged from taking part-time work, which seems to be a regressive trend given that there are fewer and fewer jobs to be spread around more and more workers.

We urge the government to seriously reconsider the effects this bill will have on women, its own obligations to promote women's equality under the charter, its employment equity program, and its commitments under the federal plan for gender equality, and amend it accordingly.

Thank you.

The Chairman: Thank you very much, Ms Shaughnessy.

Madame Lalonde.

[Translation]

Mrs. Lalonde: Thank you very much for your brief. You may not know this, but the Fédération des femmes du Québec also - and this is no surprise - highlighted the fact that the bill may violate the Canadian Charter of Rights and Freedoms, because it may be systemic discrimination.

Since you are called the National Association of Women and the Law, could you tell us what you are basing your statements on?

Ms Shaughnessy: I will let our constitutional expert, Ms Martha Jackman, answer that.

Ms Martha Jackman (Member, National Association of Women and the Law and Law Professor at the University of Ottawa): Yes, we fully endorse the stand taken by the Fédération des femmes du Québec.

If I had to sum up our position, I would say that we think the bill adversely affects the equal rights for women provided for under section 15 of the Canadian Charter of Rights and Freedoms in four major areas.

First of all, as indicated in our brief, 70% of part-time workers are women. Given that fact alone, any legislative amendment that has a disproportionate effect on part-time workers is discriminatory against women.

We therefore object to amending the formula used to calculate unemployment insurance eligibility based on number of hours worked rather than number of weeks.

The bill extends unemployment insurance benefits to 5% of female workers who did not have any protection before because they worked less than 15 hours per week. But the chosen formula penalizes 25% of women who work between 15 and 34 hours. This change, then, is generally a huge disadvantage to women.

Secondly, increasing the number of hours required of new workers or of those returning to the workforce - a great number of whom are women, especially those returning to the workforce after maternity or parental leave - will disproportionately affect women, and this once again violates the principles of equality found in section 15 of the Charter.

One of our strongest objections to this bill concerns the amendments Louise Shaughnessy described. Ninety-nine per cent of employees who take maternity or parental leave are women. Obviously, any change that reduces eligibility or these leave benefits has an extremely disproportionate effect on women. That also violates the protection granted under section 15.

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Finally, calculating benefits entitlement based on family income rather than an individual's income is a disadvantage for women. We strongly support programs to reduce poverty among Canada's poorest families, but do not think the unemployment insurance system is the most effective way to do so, especially to eradicate child poverty. Poor children are not less poor because they come from working families rather than unemployed families.

We therefore think that calculating benefits based on family income discriminates against women and will not help reduce child poverty.

Our last point - and we will probably disagree on this one - -, is on the federal training programs. We think that giving provinces full jurisdiction over training has major drawbacks. In several briefs we submitted to this committee and to others, we complained about the fact that existing training programs were discriminatory against women. Those programs do not meet the needs of women who require training.

In our view, if the federal government manages or at least oversees training, it will be easier to enforce standards that would help meet women's needs. If each province is responsible for its own programs, it becomes impossible to force them to offer training programs that provide equal opportunities for women.

As you know from the briefs we already submitted to your committee, the National Association of Women and the Law recognizes that Quebec has distinct social needs. We therefore never insisted on national standards in Quebec. However, we do insist that other provinces should enforce national standards that are favourable to women.

[English]

The Chairman: Do you have more questions?

[Translation]

Mrs. Lalonde: Thank you very much. We will certainly re-read your brief, which sheds some light on the fact that women will be more affected by this bill than others will because of childbearing, caregiving and their place in the job market.

[English]

The Chairman: Thank you, Madame Lalonde.

Ms Augustine.

Ms Augustine: Thank you, Mr. Chairman.

Thank you for your presentation.

Mr. Chairman, there is one point of clarification I think it's important to make. When I talk about the intensity rule, I'm not including people on maternity leave. I'm not applying this to parental benefits or to maternity leave.

Do the witnesses know that we did a gender impact study on employment insurance and Bill C-11 at the time? It was made public. Do you know of the analysis that was done in this regard?

Ms Shaughnessy: Yes.

Ms Augustine: Somehow, from your brief, I got the impression you were saying that we have not followed what we said we would do coming out of Beijing. I just want to set that record straight. We did do a gender analysis and we did follow what we said we would do in this exercise.

Ms Jackman: Yes, we read the gender impact analysis statement that HRDC did and unfortunately we consider it to be deficient to the extent that it doesn't identify the weaknesses in the bill that we discussed today. We're not disputing the fact that it was done. We're perhaps disputing the tone of the document.

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Ms Augustine: Okay, but you didn't say clearly, ``Yes, I know you did it, but at the same time, I didn't agree with the conclusions, and there were some things that were missing.'' In reading your paper, the impression I got was that we somehow neglected or didn't do what we said we would do in terms of government policy coming out of Beijing, and I want women to know that this was done.

Ms Jackman: Yes, thank you, that's an excellent point. This is an interim brief, which we are going to amend based on your comments, and we'll certainly make that very important point: that you did it and we didn't agree with it, rather than that you didn't do it at all.

Ms Augustine: There are several things, Mr. Chairman, that I want to put on the table before I pass on. One is, in looking at the hours-based regime that we have in here, I was a bit surprised at the numbers we're given. Of the approximate 500,000 part-time workers, 270,000 are women, and in addition, 36,000 women who do not qualify under the present system will be able to qualify under EI with no change in their hours of work. I felt that that was a benefit for women, yet your critiques seem to be contrary to those numbers and those figures as they present themselves to us.

Ms Jackman: The point we were trying to make in our brief is while potentially 40,000 more women workers will be covered, this is done in a way that penalizes over 100,000 part-time women workers. So while we're absolutely 100% supportive of the government's efforts to bring all women working part-time under the UI regime, we'd like the government to do it in a way that does not penalize the vast majority of part-time workers - those who work between 15 and 34 hours.

The Chairman: Thank you, Ms Augustine.

Mr. Regan.

Mr. Regan: Thank you, Mr. Chairman. Thank you, witnesses, for coming before us today.

I want to ask your view on another aspect of the bill, and that is the clawback for high-income earners and whether you support it. Is it your view that the bill supplements the incomes of poor-income families at the expense of the non-working poor, as you put it? It seems to me that what the government has done in fact is taken out dollars at the high end and put them in at the low end.

Certainly people in my riding and my area, for example, have said to me for years, ``Why should a person who makes $50,000 or $60,000 a year, every year, in maybe 6, 8, or 10 months then be able to collect in so-called insurance every year and supplement his or her income when they've already got a high income?''

Do you support the idea of taking dollars out at that end, saying ``We're going to claw back more from the high-income earner''? That's not real insurance obviously, if people can take the same amount out every year without any increase in premiums.

Secondly, do you support the lowering of the maximum insurable earnings, which has a similar effect?

Ms Jackman: Our many briefs to the finance committee make it clear that we are extremely supportive of a progressive income tax system. We believe that inequities in the distribution of wealth in Canada should be dealt with through the income tax system rather than through the UI system.

Like most of the witnesses, I believe, who have appeared before the committee who share our political views, we believe that the maximum insurable earning and clawback rate should remain as they are now, particularly since any savings to be gained by cutting in this area are not poured back into the system in terms of increasing beneficiaries or increasing benefits to low-income workers.

Our impression is that in general it's again a deficit reduction measure that has as its only purpose deficit reduction.

The Chairman: Any other questions? Mr. Easter.

Mr. Easter: Mr. Chair, I'm having some difficulty with the position on hours of work. I'm wondering if you have any numbers in the 15-to-34-hour category. Certainly we're led to believe that by moving to an hours of work system, you get away from that 15-hour trap that quite a number of women are caught in; you can bring in the hours under multiple work.

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On balance we believe that by going to the hours system - there will be winners and losers certainly, there's no question about that - but on balance there will be a lot more winners, in particular women, who will now qualify who didn't previously qualify. What's your response to that?

Ms Jackman: We've relied on Stats Canada statistics that are contained in a brief of the Canadian Council on Social Development. The statistics suggest that while the changes might pull in an additional 5% of women workers - that's to say 5% of the female workforce that works 1 to 14 hours a week - it does it in a way that penalizes the 25% of workers who now work between 15 and 34 hours and who are eligible for benefits based on the 20-week rule.

Mr. Easter: I wonder, Mr. Chairman, if we could ask the research staff to come up with some numbers in that particular area, because it's been a point raised previously. I believe that on balance the winners would be higher than what your figures are saying. Could we have the researchers look into it and provide us with a briefing note?

The Chairman: We will.

I'd simply like, on behalf of the committee, to thank you. You've raised some points that of course have initiated some debate, which is the healthy part of committee work. We will look at the points you've raised as we try to improve this piece of legislation. Thank you very much.

I'd like to inform the committee that we will be meeting this afternoon from 3:30 to 5:30.

The meeting is adjourned.

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