[Recorded by Electronic Apparatus]
Tuesday, March 26, 1996
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[English]
The Chairman: This is our first session of the video teleconference. It's a way for us to reach out to as many Canadians as possible so that we can improve Bill C-12, an act respecting employment insurance in Canada.
Our first video teleconference intervention will be made from the city of Toronto. It will come from the Toronto-Central Ontario Building and Construction Trades Council, and I believe we have Mr. John Cartwright with us.
Good morning.
Mr. John Cartwright (Business Manager, Toronto-Central Ontario Building and Construction Trades Council): Good morning.
The Chairman: Mr. Cartwright, could you please speak slowly when delivering your intervention so that interpretation is facilitated? As you know, we have approximately half an hour in which to hear from you. If you can give us a quick overview of the major points that you see in reference to Bill C-12, we will then have some time for a question-and-answer session. You may begin.
Mr. Cartwright: The Toronto and Central Ontario Building and Construction Trades Council represents 40,000 construction tradesmen and tradeswomen in the greater Toronto area and surrounding regions. We thank the committee for the opportunity to present our views on Bill C-12 and its proposed changes to our country's unemployment insurance program.
The workers we represent have grave concerns about the continuing assault by the federal government on Canada's social programs, and particularly unemployment insurance. The bill that you are reviewing is simply one more step in punishing the victims of a disastrous economic formula of free trade. It is fundamentally unjust and can only be interpreted as a sign that the Liberal government has lost any claim to balancing the needs of working people against corporate interests.
Is this too harsh an explanation? How does one justify slashing benefits to the unemployed when the current fund will enjoy a surplus of nearly $5 billion in 1995-96? Why is there a cut to the number of benefit weeks to the maximum insurable income, and a new re-entrant rule that will eliminate thousands of construction workers from qualification?
You know exactly why: because business lobby groups, banks and financial speculators have demanded that the jobless get less. The willingness of the Liberal government to violate its red book promises to the people of Canada in order to accommodate the business community is quite stunning. So too is the continuing adherence to the Mulroney-Campbell program of dismantling the country's social safety net.
In 1993 I engaged in a television debate with the head of the Canadian Chamber of Commerce. During that debate we were accused of making wildly inaccurate predictions about the business agenda for social programs. Indeed, their only reason for saying that UI should be cut was because of the deficit in the program. Yet here we are today, in a situation where less than half of the jobless even qualify for unemployment insurance, with business demanding even more cuts.
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The same corporations that speak for the Business Council on National Issues have been responsible for over 200,000 jobs lost as they have downsized, rationalized and shed employees. And it's interesting that in last Saturday's Globe and Mail the issue of shareholders versus job-holders was a central theme of a two-page article. The conclusion was that shareholders will have their way and demand that corporations throw more and more employees on the scrap heap.
At the same time, the changes to UI that the business community has secured have resulted in a massive drop in entitlement, from 87% in 1990 to 48% today. This is precisely the kind of harmonization with lower American standards that both the labour movement and the opposition Liberals warned of during the national debate on free trade. Yet it seems that even this level is too rich for the business spokesmen. They want you, as a committee and as a government, to agree to cut more.
The latest figures show that only 32% of the unemployed here in Ontario receive UI benefits. That means that more than two out of every three of the jobless in Ontario are now excluded. I think that's important because much of the debate has been around how UI cuts will affect people in Atlantic Canada and Quebec, but our members are certainly suffering as much as anybody else. And if Bill C-12 is passed as it now stands, an even greater number will be denied access to the system. For those who do qualify, the effective benefit rate will be far less than 55% of insurable earnings. With the proposed application of the divisor rule, our members will likely average no better than 40%. This will become the true legacy of the Chrétien government.
The thousands of construction workers who are unemployed today have not left their jobs in order to become beneficiaries of an overly generous UI program. Their lack of work is not the result of labour market inflexibilities that business lobbyists have urged you to put an end to. Instead, the disincentives that we experience are things like the cancellation of over 300 residential building projects, of the Eglinton subway, and most recently of $167 million worth of school construction.
The savaging of our industry by the deficit cutters is enthusiastically applauded by the same business ideologues who are urging you to cut faster and deeper. The situation under the Harris government's Ontario is what I just referred to, but the private sector has yet to step in to create new jobs that would make up for the massive shutting of employment opportunities in the public sector.
It is our position that reductions in benefits and eligibility should not be accepted at all by your committee. Instead, you should recommend a return to the balanced unemployment insurance program that existed prior to 1990. Canadians who are victims of the recession and the economic restructuring that continues should not be turned into a marginalized stratum of society. It may not bother stockbrokers and bond traders or the lobbyists who speak to you to have to step over the homeless sleeping on heating grates in the streets of our cities, but we in construction know only too well the social costs of high unemployment. Some of those same people who risk freezing to death could easily have been construction workers who worked beside us six and seven years ago.
You have received a submission from the Canadian executive board of the Building and Construction Trades Department. We support the specific criticism made of the bill therein, but we want to emphasize the point made on the risk of enhancing the underground economy. Making it harder for the average construction worker to qualify for UI creates an incentive for him or her to leave the formal system entirely, and I don't think that's what this government seeks to achieve.
In conclusion, we cannot agree to either the process or the direction of the proposed employment insurance. As legislators you have the responsibility to balance the interests and needs of all sectors of our society, both management and labour, both business and working people. In the face of permanent mass unemployment in Canada, which is now a feature that lives with us every day and every week and every month, Bill C-12 is quite simply unacceptable.
Thank you.
The Chairman: Thank you very much, Mr. Cartwright. Now we will move to the question-and-answer session. We will begin with a member of the Reform Party, Mr. Johnston.
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Mr. Johnston (Wetaskiwin): I'd like to ask the witness how he feels about unemployment insurance as a true insurance form that would compensate for temporary job loss.
Mr. Cartwright: I think our position is that UI should be an insurance program, but I don't think in the sense that you would like to see it, sir. We don't agree with some of the proposed amendments that have tied UI into the income people receive. We don't agree to changes to UI that would move it towards more of a welfare-style system of making up for poverty. Those issues must be addressed through the other relevant pieces of legislation. But we are not at all interested in seeing the insurance program be turned over into something where each sector has to pay according to their use, which I think is maybe one of the areas you might be referring to.
Mr. Johnston: You said that you weren't interested in seeing unemployment insurance become a welfare type of system. Did I understand you correctly?
Mr. Cartwright: That's correct.
Mr. Johnston: I think that answers my question.
The Chairman: Mr. Scott, followed by Mr. McCormick.
Mr. Scott (Fredericton - York - Sunbury): Thank you very much and welcome, Mr. Cartwright. I'd like to explore your reference to the use of the unemployment insurance program in terms of its social program objectives. Very specifically, I wonder whether you are taking exception to the fact that there is in fact income enhancement, there is income support and income supplement components to this. Are you taking exception to that particularly?
Mr. Cartwright: No. What we're taking exception to is the main thrust of the bill, which is to reduce benefits to unemployed workers, which is to make it more difficult for unemployed workers to qualify for benefits, and in particular the divisor rule, which would drastically reduce the amount of benefits our members would see because of the inclusion of dead weeks. We object to the clawbacks and we object to the very thrust of this bill, which is to further punish the victims of mass unemployment in this country.
Mr. Scott: So you do accept the idea that income supplement is an acceptable part of the bill. In terms of unemployment, if an industrial worker who is in a secure position, making a significant amount of money working in an assembly plant or something, is unemployed, do you believe they should be entitled to unemployment insurance benefits? They've not lost their job now, they're working probably 48 weeks of the year and they're off for one month and they made in excess of $50,000. Do you think they should be entitled to unemployment insurance? Are they unemployed?
Mr. Cartwright: Yes. If they're on temporary lay-off, they're unemployed and they should be entitled to that.
Let me make one thing clear. Because of the fact that in the construction industry we have the kind of unemployment whereby in Toronto over the last six years it's ranged anywhere from 30% to 70% of our membership, it doesn't mean that we wish any other group of workers to have less access to a universal unemployment insurance.
Our objection is to the banks and the speculators who have helped to ensure a high interest rate policy in this country that's put many hundreds and thousands of our members out of work. They are the same people who've been applauding the cuts to capital programs in this province and elsewhere that have thrown thousands of our members out of work. That's the objection we have to a group of people in this system.
Mr. Scott: You've acknowledged the social policy elements in the unemployment insurance bill as beneficial, and at the same time you also seem to support the idea that someone at a high income who's simply in a scheduled lay-off for a month should draw. Don't you find those two objectives incompatible?
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Mr. Cartwright: Not at all. Unemployment insurance is a system for people when they're unemployed. The people who are urging you strongest to cut benefits are people who are looking at $1-million-a-year salaries and honestly don't have any sense of compassion for the hundreds of thousands of workers who have been thrown into the streets and the more than 66% of Ontario unemployed who now don't even qualify for any benefits. Perhaps that's the area you should be more concerned with as well.
Mr. Scott: I'm not certain, Mr. Cartwright, there's anyone in Fredericton who makes $1 million a year.
In any case, you've mentioned the fact that you would like to see the elimination of dead weeks, so I assume the initiatives we would take to in fact fix the problem of the gap in the context of that would be well -
Mr. Cartwright: Sir, I'm not hearing any sound at all at this point.
Mr. Scott: I won't mention the million dollars again, but you mentioned your problem with dead weeks in terms of the calculation.
Are you hearing me, Mr. Cartwright?
Mr. Cartwright: Yes, I am now.
Mr. Scott: You mentioned the question of dead weeks, so I would assume you would be supportive of any amendment we would make that in fact would deal with the question of dead weeks in the calculation of rates of benefit.
Mr. Cartwright: Well, I'm not going to give you a carte blanche and say ``any amendment''. Our position is that dead weeks should in no way be counted as part of the period you take your qualification for benefits from.
Mr. Scott: Thank you.
The Chairman: The next questioner will be Mr. Larry McCormick.
Mr. McCormick (Hastings - Frontenac - Lennox and Addington): Mr. Cartwright, I do realize that many workers and tradespeople in your industry are out of work, and many of these are my friends any neighbours. I just have a couple of thoughts, and I'd like you to share your return thoughts with me.
I would expect you'd agree there would be some need for rationalization in the industry. Perhaps there are just too many people there. That's what can bring out one of the strong points of the employment insurance, the fact that we actually are helping people get back into work with re-employment measures. This money would not be available from any other part of the government today.
Rather than just see my friends wait and wait for jobs that may or may not show up over the next year or eighteen months, if we can assist these people in helping themselves, I think it can be a step in the right direction. Would you not agree, sir?
Mr. Cartwright: How are you going to assist them? Are you going to support them in the way a rope supports a hanged man?
If you look at the figures the Canadian executive board of the building trades presented to you earlier, you'll see that with the formulas in Bill C-12, there will be construction workers who will have their benefits reduced in some cases as low as $202 down from the current $439. How does that help anybody?
Take a highly skilled steam-fitter or an electrician who has the kinds of skills needed to wire up the SkyDome stadium or the Scotia tower project or a Ford automotive plant. What are you going to retrain them as, bank tellers, when the banks are going to reduce by 50,000 tellers? Are you going to retrain them as software technicians, when some of the software companies have just recently laid people off? Are you going to retrain them into the telecommunications industry as Nortel wipes out all of its blue collar employees from Bramalea?
Our sense is we've lived through a boom and bust, and our society has a funny way of dealing with tradespeople. It's somewhat like the way we deal with soldiers. They're great when you need them, and when you don't want them, you wish they would go away and hide but be available the second you want them to serve again. We somewhat object to that approach to us.
We'd be very happy if the government would do more to bring the interest rates down, which would help to stimulate the economy. We'd be very happy if the government would bring in changes to the Pension Benefits Act so that RRSPs and pensions couldn't be shipped out of the country in the billions of dollars but would have to be reinvested here.
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We'd be very happy if this government would look at many portions of the alternative federal budget presented to the government some weeks ago. It made full employment a major priority; it was not as interested in listening to the business lobbyists and their demands for more cuts to social benefits and more carving up of the social safety net in this country.
Mr. McCormick: Mr. Cartwright, do you not agree that your industry may be training more apprentices than there are jobs for? Certainly not all parts of Canada will have domed stadiums going up in the next year and a half.
And while I'm on construction projects, I want to thank you for applauding our low interest rates. As you realize, last week Canadian interest rates were lower than they were in the United States for the first time in recent history, and that will make a difference.
Mr. Cartwright: I guess I'll deal with your question on apprenticeships. Part of the aim in the red book is to talk about opportunities for jobs for young people. As I look around at sector after sector, these shareholders that The Globe and Mail talks about are demanding that jobs be shed by every corporation in every sector in our economy. I guess it begs the question, how many is too many? We think we've done a reasonable job in our industry of maintaining a balance of openness for young people to come in to learn a trade - and sometimes we've been accused of keeping it too restricted - while trying to maintain the fact that when a young man or woman does enter a trade, he or she will be able to finish the apprenticeship. Yet with policy after policy from various governments - this includes the federal government as it reduces its transfers back to the provinces, and the provinces that then reduce their transfers to municipalities - we seem to be faced with a ripple effect that continuously results in capital programs being cut and eliminated by various levels of government.
Mr. McCormick: Thank you, Mr. Cartwright. But I do believe that if we're truly going to see a behaviour change among people who use the employment insurance, with less reliance on benefits right across the country and from coast to coast to coast, then we do have to have this more active re-employment assistance. I just thought you perhaps would like to at least acknowledge that there are some good parts in the second part of this EI program.
Mr. Cartwright: I'm afraid those good parts, wherever they may be, are completely overshadowed by a tremendous slashing of benefits and eligibility in the main part of the bill. We have some very grave concerns about the direction in which the federal government is going with apprenticeship at this point in time as it seeks to move out of its responsibility for the apprenticeship programs.
So if you're looking for us to say that there's good and bad, I'm afraid I am not going to give you that comfort, sir. In our opinion, Bill C-12 is an unacceptable piece of legislation that goes entirely in the wrong direction. What's clear is that this government has bent to the interests and the demands of the business lobbyists to further punish the victims of the joblessness in this country.
The Chairman: Mr. Cartwright, I have just a couple of questions.
I understand that you've raised the issue of the gap, the divider, and have some concerns about the clawbacks and the reduction of benefits. We are moving more and more towards an era of cooperation between stakeholders, which is something that unions often talk about - bringing government, business and other stakeholders and unions together. During this time when the construction industry is undergoing some pain - and I'm quite aware of that - what is your union doing to help out your unemployed members?
Mr. Cartwright: We are a council that is an umbrella organization of some 32 different affiliated local unions. Local unions have a variety of programs to help the jobless. Most of them are involved in training and upgrading. Most of them have the contingency funds to help people who have exhausted unemployment insurance to try to at least keep the wolf from the door, in a sense. Many of our unions are involved in helping the council with unemployed members on such issues as welfare.
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The fact that some of our members have had to turn to welfare after being disqualified for unemployment insurance is sad and shocking for us, but that's a fact of life, particularly after the changes that Mr. Martin's budget introduced some two years ago. Far more construction workers do not even qualify any more for UI and the burden of their situation has been passed on to other levels of government.
At the same time, we are constantly lobbying levels of government to look at creating a full employment policy as their priority. As I've outlined, at this point in time we have failed miserably in those discussions with the provincial government on project after project that they've cancelled. It seems that capital works is the easiest thing for any government to get rid of.
I'll leave it at that.
The Chairman: Okay. Thank you very much for your presentation and your points, particularly the ones about the gap and the divisor. Those points and your general outlook on Bill C-12 have been duly noted.
Mr. Cartwright: If I could make one more point, I think there may be a sense within this government that it can take these changes through and have people forget them by the time the next election comes. I want to assure you that we will undertake to remind our members of exactly who is responsible for the major changes to unemployment insurance so that so many of them will not qualify in the future and I hope the committee would take that into consideration. Thank you.
The Chairman: Thank you very much for that comment. I agree with you. I think it is your job and duty to inform your members as to what your point of view is on not only this piece of legislation but on any other piece of legislation that this government forwards. Of course we as a committee look forward to continuing the good relationship that we've commenced this morning. Thank you very much.
Mr. Cartwright: Thank you very much.
The Chairman: We're waiting for the next witnesses, who are going to be sitting down pretty soon. They are from the national office of the United Steelworkers of America. Monsieur Yvon Godin will be here soon.
I gather that everybody has Mr. Godin's brief. Mr. Johnston, do you have the brief?
Mr. Johnston: Yes.
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The Chairman: Good morning and welcome. We are here in Ottawa to listen to members of the Canadian community outline some ways in which we can improve Bill C-12, an act respecting employment insurance.
For the members of Parliament here today, we're going to be hearing from the United Steelworkers of America, the national office. Mr. Godin is in Toronto.
Mr. Godin, you may also take this opportunity to introduce the individual next to you.
[Translation]
Mr. Yvon Godin (United Steelworkers of America, Bathurst Office): I'll let Michel make the presentation because he's the Assistant to the Director of the National Office.
Mr. Michel Arsenault (Assistant to the National Director of the United Steelworkers of America): Good morning. I'm Michel Arsenault and I'm the Assistant to the National Director of the United Steelworkers of America. With me is Mr. Yvon Godin who's an employee of the Steelworker's Union at our Bathurst office in New Brunswick.
[English]
The United Steelworkers represent over 170,000 members all over Canada, including the Northwest Territories and also Yukon. Since the beginning, our traditional sectors are members working in mines, industry, steel plants and manufacturing plants. In the last fifteen years we expanded and organized men and women working in the service industry, such as security guards, hotel and restaurant workers, nursing homes, fish processing plants, etc.
[Translation]
In our traditional sector, the members we represent have always been victims of massive lay-offs or firings as well as shared seasonal work. It's in the non-traditional services sector that our members are most affected by the proposed reform. All of our brothers and sisters have experienced several lay-offs in the course of the same year. You know very well that uncertain work, part-time or temporary work, on-call work or seasonal work is the favour of the day for all kinds of reasons. Also that you find a lot of women and more particularly single parent women in the non-traditional sectors.
We sent you our brief in February. Yesterday afternoon, after we corrected our brief on Bill C-111, that has become C-12, we faxed a copy of the revised version of our brief titled ``The Wrong Direction for the Wrong Reasons at the Wrong Time''.
Mr. Godin: Michel and I are going to read our brief and to try to explicitate our position as representatives of a great number of United Steelworkers of America members whether in the Atlantic provinces or elsewhere in the country.
During the last 20 years, the unemployment insurance program has become less and less of a program set up to compensate for periods of unemployment and facilitate getting back to work. It's become a hodgepodge of measures that replace part of the income of some of the unemployed for part of the period they're without work. I'd refer you to pages 3 and 4 of the brief.
I can give you an example. In the area I come from in New Brunswick, but it's the same for all the Atlantic Provinces, we have people working in the fisheries, forestry or the peat moss industry, and I haven't seen a lot of boats out fishing on the ice in the winter and coming back every day to Caraquet. In forestry, it's the same thing: you have to consider the quotas, and when the quotas are reached, the loggers don't have any more work for the rest of the week. So these are permanent seasonal jobs. You can say the same thing for the peat moss, that it isn't something you pick off the surface of the snow. However, these are important products for our country and so they are important jobs, but those people just can't work during the winter season.
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C-12 is badly designed. It will impose a heavy burden on tens of thousands of vulnerable Canadian men and women as well as their communities. It's the third time proposals like this, with the aim of slashing unemployment insurance, are tabled before our Canadian Parliament.
The first attempt was in the report from the Forget Commission. A Parliamentary committee with a Brian Mulroney conservative majority rejected it. The second attempt is to be found in the working document published in 1994 by the Human Resources Development Committee. It was also rejected in its original form. We're asking this committee to do the same thing.
I'd now like to touch upon a really important point. It so happens that Mr. Doug Young, our Human Resources Development Minister, is a guy from down home. He's from the Acadie-Bathurst riding and I'm from Bathurst. I represent the people from the Bathurst area, people working in the mines and fishplants of Caraquet, Shippegan, the Acadian peninsula, in other words from the same place the Minister, Doug Young, comes from.
I have a document here taken from the 31 July 1989 edition of L'Acadie nouvelle when Mr. Young was in the opposition. At the time, he sent a press release to L'Acadie nouvelle stating:
- ... Doug Young intends actively participating in future public hearings on Via Rail and the
unemployment insurance legislation.
- Passenger rail service is very important for the Atlantic Provinces. It's deplorable to see the
government so persistent in refusing to hold public hearings on abandoning certain lines...
In those days, Mr. Young used to talk about this. When we're finished here today, I'm going to send the members of the committee a copy of that press release published in 1989. To my mind, it's important because that press release says a lot of things.
A bit further on:
- The public hearings organized by the Liberal Party, he pointed out, will give the opportunity to
all stakeholders to express their point of view ``contrary to the Conservative Government who,
apparently, have decided to ignore all opposition to their project to systematically destroy
passenger train servicing this country''.
- That goes to show how much he opposed the changes the government wanted to bring in at the
time, in 1989.
- Mr. Young encourages New Brunswickers to submit briefs to the legislative committee holding
public hearings next September in the province on unemployment insurance legislation.
- According to the member for Gloucester, New Brunswick taxpayers must energetically oppose
the proposed changes which, he says, will have a serious impact on the region.
- He's forgotten all that today.
From a high of almost 85 % in 1976 and again in 1989, unemployed Canadians receiving unemployment insurance benefits have plunged to less than 60 % in 1994. I refer you to page 4 of our brief.
The new title ``Employment Insurance'' just goes to prove that Canada is now admitting it does not have an unemployment insurance program worthy of the name.
Mr. Arsenault: In the two preceding attempts of reform Yvon talked about before, there was an attempt to include a second level of beneficiaries, a level for frequent users. In this legislation, it's not there, but all its elements are there even though they've been changed into a series of complex formulae determining the right to eligibility, the right to benefits, how long they last, eligibility to benefits for low-income earners and the rules concerning the clawback of tax credits on personal income. You'll find that set out on pages 6, 7 and 8 of our brief.
The changes to the program will lead to a decrease in benefits in all regions of Canada, and the most severely affected will be the Atlantic Provinces and Quebec, especially the East End of Montreal, where there is an enormous amount of unemployment, as well as the Gaspé and the North Shore, where you have a lot of seasonal workers.
Older workers, whose employment adjustment is supposedly a concern of this government, will see their benefits cut, on average, by 16% compared with an average of 11% for all workers. That's on page 9 of our document.
The bill does not help solve the growing crisis of unemployment in the ranks of our youth even though 25% of the unemployed under the age of 25 now draw benefits. That's on page 10 of our document. The proposal for a supplement for the economically disadvantaged is a big step away from the present program.
Unemployment insurance benefits were never tied into family income, and even the clawback through taxes was always linked to individual income. This provision turns part of the program into a welfare program. If the government wants to ensure increased income for poorer families with children, why limit this increased help to families with one member unemployed and eligible to unemployment insurance benefits?
How about the working poor and the poor families whose eligibility to unemployment insurance has expired? Why would the beneficiaries be limited to poor families with one member drawing unemployment insurance benefits? The complicated formula used to determine eligibility and the amount of benefits will leave the new families to the tender mercies of the bureaucracy and will doubtless increase the insecurity that's already part and parcel of an economy where a 9.5% unemployment rate is accepted as the standard.
Most beneficiaries will go to the unemployment insurance offices to put in a claim without knowing whether they're eligible or not, unable to determine what benefits they're entitled to with a very complicated formula that Yvon will explain later on, without knowing how long they'll be eligible or how much they'll be getting back from Revenue Canada in benefits through income taxes.
These are not incentives, they're just inhuman attacks on the most vulnerable members of our society. Even though the government seems to concern itself with the idea of work sharing, the provision of the bill concerning calculations based on the number of hours worked will encourage people to do as much overtime as possible.
The more hours worked during the 16 to 20 - week period for which benefits are calculated, the higher the insurable earnings and the more the number of weeks necessary to be eligible before the benefits will decrease. The impact of the bill on job adjustments complicates an often - used procedure consisting in decreasing the hours of work during the period preceding the total shutdown of a business.
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This practice allows the greatest number of workers to preserve a link with the labour market. However if the bill establishes a link between insurable income and real income during a determined period of 16 to 20 weeks immediately preceding the application for benefits, a great number of workers will chose layoffs over the decrease in the number of hours worked.
Using hours as a basis for calculating unemployment insurance does not help in any way part-time workers, despite whatever the bill might say. According to the government, this change will allow far more part-time workers to ensure their income. But what we're not being told is that a great number of, if not most, newly insured workers will never be eligible for the benefits.
For example, a part-time worker with 15 hours a week, based on present eligibility rules, needs 28 weeks of work to get the 420 hours necessary for eligibility in a high unemployment area, and 47 weeks to accumulate the 700 hours necessary in an area of low unemployment. They will absolutely not be eligible neither as newcomers to the labour market nor as employees coming back into the market.
We were saying before that hardly 25% of Canadian workers under age 25 are eligible at this time. If you pass this bill as it is written, we don't think there will be any more unemployment insurance or employment insurance for our youth because they'll never be able to qualify because they don't have a steady job or only part-time work and so forth.
Mr. Godin: I'll give you an example.
Consider unemployment insurance as it is today. You work 35 hours a week. People working in the fish plants are getting $7.30 or $7.50 an hour. Some work for $6.50 and others for minimum wage in non-union plants.
Take the example of those earning about $7.30 an hour. Someone working an average of 35 hours a week at $7.30 an hour for 12 weeks earns a total of $3,066. If you put the $3,066 in weekly terms over 12 weeks, you get $255.50 a week. That's your average salary. By multiplying it by 55%, the percentage you are entitled to, you get a gross unemployment benefit income of $140.53 a week. Then you have to deduct taxes.
With the proposed changes occurring between now and 1998, I think, you start your calculations with a factor of 14 which will become 20 in 1998. It's going to be 14, then 16, then 18 and, finally, 20.
Based on Bill C-12, someone working 35 hours a week, multiplied by $7.30 an hour, then by 12 weeks, earns $3,066. This amount is divided by the factor of 20, which gives you an answer of $153.30. Fifty-five percent of those $153.30 gives you weekly unemployment insurance benefits of $84.32.
Later on, in 1998 or around there... According to the wording of Bill C-12, the calculation is supposed to start at 55%. However, Bill C-12 is just the reincarnation of Bill C-111, and we already known we'll have to recalculate in three or four years and multiply the $153.30 par 50% which gives us a total of $66.65.
I'll give you another example. We're going to be using the number of hours worked formula. The government says they'll go back 14 weeks to calculate your unemployment insurance based on your earnings. Take somebody working 385 hours during the spring, in May and June - because crab fishing down home does not happen in July or August or September - and who isn't fishing anything in July or August.
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Say that person only works 35 hours. Believe me, that happens. No matter where they go fishing, they can't get the right kind of fish because the Japanese don't want them and so forth. We'll take the 35 - hour example because that can happen in any area. To qualify for the insurance, you're going to have to work 420 hours if the unemployment insurance rate is 13% and more, and 13 weeks if the unemployment insurance rate is less than 13%, in other words 455 hours.
Let's talk about 12 weeks or 420 hours. That means you're going to take 385 hours multiplied by $7.30, which brings us to $2, 810.50 for the months of May and June. In September, they go off hearing fishing. You have places where you have only men and others where you have both men and women and where the two partners in that couple work in the fish plant. I'm wondering if anyone of you could actually live this way.
Think about it. Thirty five hours multiplied by $7.30 gives you $255.50. Then you have to divide that by 14 and that's just because the legislation provides that you have to go back 14 consecutive weeks. If you go back 14 consecutive weeks, it brings you back to July and if you haven't worked during the months of July and August, then you take your $255.50, divide it by 14, and that gives you $18.25. Then you take those $18.25 multiply them by 55% and you get the grand total sum of $10.38.
Dreaming up a formula like that is simply ridiculous. I can't put it any other way. Down home, it's hurting. They say that Yvon Godin is spreading panic back home. Yvon Godin never spread panic. It's the bill that's spreading the panic and panic is really pitiful.
If nobody wants to meet those people, I'll meet them. Those people are crying when they come to see us. I can't do any more than my job when I meet those people and try to comfort them and tell them we'll continue to fight so these changes aren't passed. Some people have children. Some families are really pitiful with women crying and telling us they don't have any work. That's how it is in the Atlantic provinces anywhere you have fishing, anywhere you have a forest, anywhere you have a peat bog, anywhere you have seasonal jobs.
A great example was given by one of the economists at Moncton University. His example was even harsher than mine. He brought up the case of somebody working only 35 hours in the spring and 385 hours in the fall. You take the 35 hours in springtime multiplied by $7.30 and you get $255.30; then you take the 385 hours worked in the fall during September and October, multiply that by $7.30 and come up with $2810.50.
When you go back the 14 consecutive weeks, it brings you back to July which means the 35 hours don't count. All those consecutive hours were worked in the fall. You multiply that and you get $2810.50 divided by 14 which gives you $275.75 and 55% of that gives you $110.41.
These are two people who have worked the same number of hours over the same period of time. One is getting $10.38 and the other one $110.41. When that wasn't passed in December, I thought they'd actually drop it instead of ridiculing us.
We have no other choice but to bring it up. And I'm not upset if I'm being accused of bringing it up.
.1005
Unemployment insurance or employment insurance doesn't belong to the government any more. You manage it, but it doesn't belong to you any more. It actually belongs to the companies and employees who contribute to the fund. And the little 5 cents up to $3 that I'm going to be saving, keep it, administer that and give it to the poor who don't have any jobs any more. We live in a beautiful country and we have to pay to keep our freedom.
Down home, when I leave my lawnmower on the lawn outside, I'm happy to find it where I left it. Next year, I won't be able to leave it outside any more because somebody's going to steal it and sell it to put food on the table and buy a glass of milk for their kids.
That's the kind of decision you're going to be making here in Ottawa. That's not what the Liberal party was looking at in 1989. Doug Young himself said it at the time: ``Act energetically''. We can't let this go by. The impact on New Brunswick is not acceptable.
And I'm not only talking about New Brunswick, but also about Newfoundland, Nova Scotia, people working in the fisheries, in the Pacific, in British Columbia and the forest workers in Hearst, Ontario. Everybody is going to suffer.
You're happy when you go to the restaurant and order up a lobster claw or a lobster tail. You like that. You want to close down the fisheries, you won't have any more lobster.
You want to build a house. You use two-by-fours to raise it. Well, you want have any two-by-fours anymore. You'll have to build it in concrete and you'll be living in concrete houses. You need wood-cutters and people to go fishing in our society. You need people to work in those sectors.
These examples are important for you. You have to understand. Don't come and tell us that nobody told you so. If you come over to the Acadian peninsula where about 60,000 people live and you bring us the biggest company in the world, like GM, and if this company sets up in hires 10,000 people, it won't change a thing because fishing will keep going on. You like to eat fish just like we do. The fishery will go on. GM isn't going to hire those people when they finish their shift in the fish plants. It's not true that GM is going to hire them.
So we'll have the same problem when the fishing is over. And if GM did hire them, somebody else would find a job in the fishery. The only way for the government to help people in our neck of the woods and elsewhere working in the fishery is to take our fish plants and tell us we're going to do second- and third-level processing. That's how you can settle the problem.
This spring, we're going to be hauling our fish and instead of selling it directly to the Japanese, we'll freeze it. When there's no more fishing, we'll take it to the fish plants and the same workers will process it up to a second and even third level of processing. That's how we'll be able to increase the number of weeks worked with a view to creating permanent jobs.
When I told this to Doug Young at the St-Isidore meeting he said: ``Yes, Yvon, you're right''. Mr. Young himself has recognized that we have to create seasonal and permanent jobs.
It's fine to be sending people off on unemployment insurance for only 26 weeks and then send them off to school and so on. I've talked about this with community college directors. We could send people to schools with 15 students and two teachers per class. They've got lots of money. In grade school where you had 30 pupils, you only had one teacher and now we're trying to increase the number of pupils from 35 to 40. How come we have all that money to spend on those programs?
I'm not against training. I'm saying it publicly, I'm not against it. For example, to go to the second or third level of processing you're going to have to educate your people. You're going to develop a new industry. Now, I'm sorry to say this, but with that money all we've done is create jobs for certain public servants. And what does it get us in the end?
We have to examine the problems we have to deal with today in society and try to work together. That's why I asked Mr. Young why we weren't sitting down together to try to find solutions for our province.
.1010
We don't have to take to the streets and yell our heads off. But give us an opportunity to sit down with you. Let's examine the programs, let's do socioeconomic studies, let's do anything at all, let's organize round tables where we can sit down together and discuss our problems.
And talking about that, the proposed changes still include disqualification for anybody who is fired or resigns.
At first glance, that looks like one way of providing a reasonable disincentive for the lazy and the dropouts. However, you just have to consider the miners and their testimony during the Westray inquiry. They confirmed that they chose not to complain about the working conditions that weren't safe any more because they were afraid of being fired and losing their eligibility to unemployment insurance. So you can see they didn't resign because they were afraid of the real disaster which was losing their eligibility to unemployment insurance. How many of those 26 people died because they kept on working in that deadly hole for that very same reason?
Such requirements have nothing to do with a system designed to protect workers rather than punish them or, as in the Westray case, to kill them. I am a former miner and the Westray affair is something that hits close to home.
Let me give you an example. The public investigation into the Westray mine has clearly revealed that the governments and inspectors concealed facts and failed to assume their safety responsibilities. We know that the miners went to find out what their unemployment insurance entitlements were and that they were told that if they claimed unemployment insurance, they would lose their jobs and if they resigned, they would not be entitled to unemployment insurance.
Which one of you is able to live without money and look after a family and children? It led these people straight to the grave.
You must give some thought to the decisions you are making, they are serious ones. It is time to start making decisions that have a beneficial social effect, not only decisions that are good for big business like the Royal Bank, with its annual profits of 1.2 billion dollars, and companies like Brunswick, Noranda Inco and Stelco, factory owners and some of the big groundfish fishermen.
You are going to have to take a good look at the consequences before you make your decisions; you will be held accountable. If you do not consider yourselves as accountable, or capable of making important decisions for the people of Canada, and think that no one will blame you, then you'll soon have to face your conscience. I am speaking to you from the heart, I am not trying to put on a performance here. What I'm saying to you today comes from the heart. I am an ordinary person who happens to be working for the union now but I come from the grassroots and I've worked underground. I've worked in the mines and I know from experience the problems faced by our workers.
These changes always seem to target seasonal workers and those who do not have steady jobs. Implicit in this reform is the idea that the unemployed are responsible for their lack of job security and the fact that the available work in their area is seasonal in nature.
As I already said, the boat sets out for fishing in the spring. We are not the ones who set the crab quotas. Last year the government authorized 20 000 metric tons of crab for the crab fishermen. Now it wants to lower the quotas to 16,000 metric tons. Do you know what that means? It means a reduction of three workweeks in the fish plants. That is something we have no control over.
I am not talking about fish in the sea, but about our plant workers. They have no control over the fact that there is no longer any fish in the sea or any groundfish. The groundfish fishery has been closed. Some plants have completely shut down their groundfish line.
For example, in Shippagan where there used to be 1,400 employees there are now 300. The entire groundfish line was shut down. They called our people slackers, that's something I find utterly objectionable. They are not slackers or lazy.
Take a look yourselves, in the different parts of the country you come from. Go to Calgary and you'll see lots of our people working there. Go to Prince George and you'll find lots of lumber-jacks from New Brunswick and Quebec in that part of the world. There are lots of New Brunswickers in Vancouver, Toronto, Oshawa, St. Catharines, Northern Ontario, in Hearst and Kapuskasing, all these places. They are among the first to be hired because people know that New Brunswickers and Maritimers are hard workers. They get hired.
It is unacceptable to call these people slackers. I don't want to hear anyone say that our people are slackers, they are hard workers. But I think that you too might become a slacker if you were paid $5 to $6 an hour.
.1015
That's how the Maritimes have been treated. Even though we've been treated this way, and there aren't any industries that have set up business here, and we have nothing but natural resources, mines, the fishery and peatbags... People here have paid meagre wages and now we're told that our unemployment insurance will be cut. They're taking away all we've got and we're left to suffer.
But we want to stay there. We love our Acadia. And when you go there on holiday, I'm sure that you love our Acadia. We don't want to lose it. We have to work together and try to create jobs. It isn't true to say that we haven't talked about creating work, it's something we discuss every day: let's start creating jobs and we won't have any more problems.
Let's talk about our young people who are called slackers and lazy. In Caraquet, a textile company has just been set up, Wink, requiring 150 workers. Between 800 and 1,000 people showed up to get hired; only 150 people got jobs and none of these people have quit. They work 12 months a year, they are not slackers. At the Brunswick mine, there aren't any quitters either; these people are not slackers.
The federal government installed CPP offices in Bathurst in a federal building. They offered 60 jobs to people in the area and 800 people showed up for hiring. Some slackers! Give these people jobs and they'll work.
What I'm asking your committee to do is to make recommendations. Changes will not come about through punishing people. It will be a new form of slavery and you'll be turning people into murderers. You'll be driving people to suicide, to theft, at a time when we need to work together.
Mr. Young needs to take another look at his ideas and to think over his responsibilities because neither he nor his changes are welcome. He himself attacked the party in power in 1989 saying that the proposals would be disastrous for our province. Today he is doing the opposite of what he said. This is unfortunate and unacceptable.
The government background papers attempting to justify extensive changes to unemployment insurance are inadequate and specious. The government states that unemployment insurance costs have increased since 1982 when the relevant comparison should be made with the program as it existed before the recent cuts. The two things can't be compared because the costs have been declining.
The fact that our unemployment rates are higher than in the 60s is being blamed on unemployment insurance without taking into account the doubling of average interest rates for the past 15 years since 1980. The fact that people are now jobless for longer periods is also blamed on unemployment insurance. There are high interest rates and technological changes and what about free trade and public service cuts? The government stresses that premium rates are 50% higher than six years ago without noting that in the meantime we have gone through the most serious recession since the 1930s and that the unemployment insurance fund has been generating a considerable surplus.
Let me say a few words about that. The new technology wasn't betrayed by the workers. I'll give you an example. There used to be 1,400 guys working in the Brunswick mine in New Brunswick. I'm giving you the example of New Brunswick because it's the one I know best and it's the one most affected. The 1,400 workers in the Brunswick mine produced 8,000 tons of ore a day. Today, there are only 830 workers producing 10,500 tons a day. We haven't heard about the company laying people off. There have been reductions through attrition with people taking their pension at 57 or 55. But in the meantime, there's no work for our young people in Brunswick Mines. Between 1974 and 1980 people were being hired there. In the fisheries there used to be about 100 people to filet the herring, but now this is being done by machines and similar things are taking place elsewhere.
.1020
The government has been providing money, I call it welfare payments, to big business for investments in high tech. Now that this new technology is in place and business has put people unto unemployment, we claim we no longer can afford to pay unemployment insurance benefits. It isn't even the government that pays, it's the businesses, the same ones that are laying people off because of technological change.
Now the government claims the system is too expensive and the changes are necessary. So the workers will have to pay 5 cents for every $3 but big business will still be getting 900 million dollar hand-outs. That is unacceptable.
That is what the government is doing. I remind you of your responsibility. You are going to have to face up to your responsibility because that isn't what you told the people you would be doing.
I know, I was present when Doug Young came to Inkerman. He said: ``I'm going to defend you''. Now, he says he's going to cut our unemployment insurance and our livelihood. Does that make any sense?
That's why people no longer have any trust in politicians. They make promises that they don't keep just for the sake of reelection. You are not here to make people suffer but to work with the community, with local inhabitants and businesses and come up with a happy medium that will be acceptable to everyone. That's what we have to do.
I am making a plea to you on behalf of our workers... That is not your function not at all. You are here to represent the people of our country and you have a responsibility.
I know that you are going to be asked a great many questions. Some people will be making comments. Take a close look and find out who is really abusing the system. It isn't the people. They need help. You have to sit down with them and find solutions.
[English]
Mr. Arsenault: We believe that Canadian working people need a better unemployment insurance system, not a cheaper and weaker system. We also believe that Canadian working people are prepared to support a better system.
We think that the government should increase the replacement rate from 55% to 60% of insured earnings to 66 2/3% of the same insured earnings.
We also think that you should extend the maximum benefit duration for all workers who are participating in training programs designed to improve future employability.
We also think that you should eliminate the discriminatory provisions for voluntary quits.
We should also retain program design elements that provide for benefits for seasonal workers.
Where employers are abusing the UI program, we should design specific measures to counteract the abuse.
Also, general experience rating of employers is not viable.
UI premiums should apply from the first dollar of earnings and should apply to all earnings, with no maximum.
Parental benefits should be enhanced by extending the maximum duration to one year and by increasing the replacement rate to 75%.
The federal government must adopt employment targets as the basis for its macroeconomic policy-making.
The Bank of Canada must be ordered by the Minister of Finance to abandon its single-minded pursuit of zero inflation and to reorient monetary policy to support employment targets.
[Translation]
Unemployment rates of 10 to 15% seem acceptable to the government of Canada. This is not so in our view. Of course it would be far better for us to devote our efforts to a full employment policy rather than attacking the most disadvantaged elements of our society by cutting off their already very low revenue from unemployment insurance.
Thank you for your attention. If you have any questions on our presentation or our project, we'll be happy to answer.
[English]
The Chairman: Thank you very much. We certainly enjoyed your presentation. We have heard from a number of unions, and as members of Parliament we certainly appreciate hearing from you, since you represent many people with some specific issues and concerns.
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As committee chair, I can also give you the assurance that what you have said has been duly noted. We are quite open to changing sections of this bill to make sure that Canadians will be dealt with in a fair way, and also with the hope that some of the measures we have will in fact enhance job opportunities here in Canada.
We have a five-minute round of questioning. We will start with the Bloc Québécois. Mr. Crête.
[Translation]
Mr. Crête (Kamouraska - Rivière-du-Loup): I'd like to thank you for your presentation. In a system saturated with technology you've given voice to a cry from the heart and I think it's all to your credit.
The first point I'd like to make is the following. Am I faithfully reflecting your position when I say that instead of making cosmetic changes to unemployment insurance, you are asking the government to define a new social and economic contract with the regions of Canada? Before penalizing anyone, we should implement policies for the diversification of regional economies and give people enough time to develop the skills and capacities required for more economic self-sufficiency.
Did I correctly understand you to say that such action would be necessary before making any cosmetic changes? The reactions we've seen in several regions of Canada is due mainly to the fact that there are no economic diversification measures accompanying these decisions, which only aggravates the negative impact of the proposed reform on workers. That is my first question.
My second question is a more pointed one but may serve to enlighten the debate. You know that a Liberal member, Ms Augustine, suggested that people with low incomes, that is of less than $26,000 a year, and with seasonal work, not be affected by the frequency rule that would have the effect of decreasing income by 1% for every 20 weeks of unemployment insurance benefits. In other words, the member is not calling into question the principle of reduced benefits for seasonal workers but would like to have it set aside for those with a low income, with a family income of less than $26,000 a year.
Do you think it's acceptable to make this kind of change while retaining the principle of a penalty for seasonal workers who must have regular recourse to unemployment insurance?
So I've put a double-barrelled question to you. Thank you for listening to me.
Mr. Arsenault: I'll attempt to answer the first question, Mr. Crête. Yvon will answer your second question relating to the $26,000.
I think that you've grasped the message of our presentation. We understand that governments have budget problems and debts and have to borrow for basic expenditures. On the other hand, we also know who is profiting from this debt and the interest paid on it. It very often goes to Canadians with investments, the most privileged element of our society.
Our position is that the debt problem will not be solved by hitting the most disadvantaged. On the contrary, as Yvon explained, we will be creating a much more violent society - I don't want to be an alarmist about it, but a society where people will not be inclined to use democratic methods to survive from day to day.
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We believe that the way to solve our economic problems is to adopt a full employment policy. We must come up with clever and innovative ways of keeping people in the different regions of Canada and creating jobs for them.
For example, in the Maritime provinces and in my native area of the Gaspé Peninsula where people live off the fishery, it is clear that by adding to the processing of the product we would be contributing to the solution of the problem. It would be far more constructive than cutting off unemployment insurance benefits. These people have seasonal work and they don't have any choice in the matter. When there's no longer any fishery, they are limited by quotas, etc.
These people want to live and work in the part of the country where they were born. I think the government, particularly the federal government, is taking the wrong approach. It's the most disadvantaged in our society who are being penalized. I respectfully submit that the deficit you are faced with was not created by people from the Gaspé Peninsula or New Brunswick or by the poorest elements in our society. They have nothing to say about the economy of the country. It was created by your predecessors and some of you as well who kept adding on to this deficit over the years. The problem won't be solved by striking a blow at the most disadvantaged.
Mr. Godin: Why go through all this and come up with new formulas? What purpose is served? What interest would the government have in doing this? I don't want to be negative and say that no kinds of changes are possible. People earning over $26,000 would not know what their income will be. They won't even be able to make the calculations. Will they be able to get by?
I come back to the same point. We are not dealing with the problem. For the permanent seasonal workers, there will always be the fishery. Lumberjacks will continue to work in the forest but they won't be able to work in winter because they won't have their quotas. Peat grows on land. Why limit them to 55%? Don't talk about reform, just say you're cutting back on unemployment insurance and that will be the end of it.
You say you're undertaking a reform for the sake of improvement but no improvement will result. You are certainly not going to improve the economic situation by reducing benefits to 55% and then to 50%. You'll be giving back the money to the companies. They'll still get their 900 million dollars. You're not helping the economy. You can't count on big business to create more jobs.
We need the money to create employment with our natural resources. I've always said that the Maritimes have been used as a kind of reserve. If Ontario's looking for workers, they phone New Brunswick to send in people. If they need people in Alberta or British Columbia, they know they have a labour pool in the Maritimes, that's where the poor people are.
You can send us industries but that will not solve the problem of our fisheries and our forests. I'm sure you like to eat lobster and when you come to visit our part of the country, you love our fishing villages. You also like to have wood to build your houses. These seasonal jobs will continue, they are not an abuse, they are part of our society and our economy as well as our natural resources.
You can't log wood in Montreal. You can't go chopping down trees in Montreal or Ottawa. I visited Montreal and Ottawa quite often and I know that when you want to eat lobster, you have to come here to get it. These are the kinds of jobs we have in our area and we have to be careful about what we are going to do to them.
Instead of catching lobster and crab and sending it to Japan, let's do some processing here. Give us the tools we need. I am part of a national committee for the training of fish plant workers. If I didn't believe in training and job creation, I wouldn't be a member of this committee. We work together with Newfoundland and the other fishing provinces to come up with solutions aimed at helping our people. That's the only efficient way to go about it.
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To answer your question, I can't see any changes here that would put an end to abuse. If you create jobs, people will work. The day people refuse to work even if they're in good health, then I might be in agreement with you.
[English]
The Chairman: Thank you, Mr. Godin. We have some more members of Parliament who would like to ask you some questions.
[Translation]
Mr. Scott: Thank you and good morning, Mr. Godin and Mr. Arsenault.
[English]
I'd like to speak to the gap and the calculation of dead weeks. Monsieur Godin gave us some figures. I would assume then that he would welcome the amendments that have been put forward and which would eliminate the use of dead weeks, or zeros, in the calculation. I would assume also, Monsieur Godin, that you are aware of those amendments and the commitments that were made by the former minister and the present minister to do that.
Secondly, no one has spoken very much about the conversion from weeks to hours in terms of the calculations. Surely there is some recognition that using hours to calculate is going to be beneficial to those people working in seasonal industries because of the fact that many work long hours for short periods of time. I'd like to see that acknowledged.
Finally, there seemed to be a suggestion in the text that would be against the use of the UI premiums for active measures, yet at the same time I heard someone speak of the extension of benefits for training purposes or for people who are taking training. Could you please clarify that?
Mr. Arsenault: Which page in the text are you talking about, Mr. Scott?
Mr. Scott: On page 4, at the very end of that section, it contrasts employment insurance against unemployment insurance. I guess what's intimated is that our change to employment insurance from unemployment insurance is an admission that Canada no longer has a system of unemployment insurance worthy of the name. This suggests to me that the philosophy you are embracing is one by which we would simply allow people to have their incomes sustained while they're unemployed, whereas I think the government's idea here is that we would in fact see a larger obligation than just income, rather than helping people prepare to be re-employed. That seems to be a significant switch - an improvement, I would say. So I just wondered how you drew this conclusion.
[Translation]
Mr. Godin: If I've understood the question properly, you are asking for our opinion on the number of hours. I appreciate your remark and I'm sorry I didn't raise the subject.
I think it is very important. Even if the bill is adopted, we are going to have to sit down together and consider the pros and cons. Let me give you an example. I was one of the ten people who were against that provision. Calculations will be necessary to recognize the number of hours worked.
I'm one of those people who went to Ottawa to protest because people were not able to work a full week and might just as well throw out their time cards. I'm not afraid to stand up and say so; I spoke out then, and I'm speaking out today. The subject was even discussed one evening on the television news Le Point. I did not know they were going to come out with that proposal without submitting it to us and giving us a chance to discuss it.
I'll tell you what I'm afraid of. If we adopt this hourly system, how will we prevent people taking advantage of our workers? Our fishery workers don't put in many weeks of work because it is seasonal. I'm afraid with this system of hours, they'll work even less. What really worries me is if there is no limit to the number of hours in a week or a day, these poor women will start working at 8 o'clock in the morning and won't finish until 3 or 4 in the morning. That's why we said that an attempt might have been made to convince the fishermen to try and control their catches.
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So you might find the fish quotas being taken in three weeks instead of six, seven or eight. People will be working day and night seven days a week. That would be unfortunate. What could be done to bring this under control?
On the other hand, if two shifts are put to work, people will work three days a week and there will be even more unemployed in the system. I wanted to make my concern known. I may be mistaken but I'm telling you this because one of the fishermen said to me: ``we'll do a quick job of catching the fish and get it over with''. I answered that he would have to think of the people who would have only three weeks to do the work. The number of hours would increase. In some of the fish plants I have seen women who have taken off their shoes, if you can imagine, Mr. Scott, they took off their shoes because their feet were bleeding. They'd been standing in front of a conveyer belt from the morning until 3 o'clock in the morning. That's what worries me.
If you give it some thought, you may have a solution to suggest. I'm not really against the hours but we do need a solution. The way in which the idea is presented today frightens me.
[English]
Mr. McCormick: From your presentation it's not clear if the steelworkers union has any members across the country outside of northern New Brunswick. Assuming that you do, would you comment on the similarities or the differences between the EI part II - those are the re-employment measures contained in this bill - and the very successful adjustment program used by the Canadian Steel Trade and Employment Congress in Ontario? In my view, the similarities are very striking.
[Translation]
Mr. Arsenault: We've had a good experience with the Canadian Steel Trade and Employment Congress. At present we are attempting to extend it to the mining and other sectors such as the fisheries. With government assistance, vocational training has been taken over by people in the field. The steel workers' union has supported job training and we are also in favour of having workers take part in it.
Several collective agreements throughout Canada provide for joint committees for job training, particularly in the steel industry. We have a very clear position on this. We devoted meetings to the subject and we received a clear mandate from our members: the only way to keep the industry in Canada and one of the ways to adapt to technological change is through job training. But this requires money. No one can be against this, and, I repeat, it's a way of keeping our jobs.
I'd now like to react to the first comment of the last speaker. I don't know whether he was present at the beginning of my presentation when I explained that the steel workers' union has members throughout Canada. We also explained that in the non-traditional sector, which employs mainly women, part-time workers, people who don't have steady work, or may be on call, etc., there may be a misunderstanding.
We were not only referring to New Brunswick or Quebec, but to Canada as a whole. From the Yukon to Newfoundland, there are people who are confined to these sectors, people who are on the brink of poverty. Our presentation referred to all our members across the country.
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In conclusion, we would like to say - and Mr. Scott told me that he would ask a question on this matter - that we support job training, government-sponsored job training. In our opinion, this is the solution to the problem. We also believe that it is somewhat reprehensible to take money out of the pockets of the poor to pay for the job training of others. We object to this provision of the bill.
At a certain point, you have to weigh the options and balance things out in a democratic society like ours. You can't always solve your problems on the backs of the poor. I hope this answers Mr. Scott's questions, as well as the last question asked regarding our position on job training.
[English]
The Chairman: The last speaker was Mr. McCormick, and just for the record, he has an excellent attendance here in committee and was here when you started your presentation.
On behalf of the committee, I would like to thank you very much for your presentation. You've certainly given us a perspective to take note of. One of the messages I would like to relay back to your membership is that we are certainly going to work very hard in this committee to make sure that the bill is improved to address some of the key concerns you have clearly stated in your presentation. Thank you.
Mr. Arsenault: Thank you very much.
The Chairman: That concludes the video-teleconferencing from Toronto. We will now move to presentations from two groups, the Réseau national d'action éducation femmes and the Fédération nationale des femmes canadiennes-françaises.
.1047
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The Chairman: I'd like to welcome Madame Monique Hébert, Madame Marie-France Gosselin, Ghislaine Foulem, and Diane Vachon.
As you know, we are presently reviewing Bill C-12. Our purpose here is to improve this piece of legislation, and we count on Canadians like yourselves to give us some insight and perspectives into the bill that may help us do that.
As you know, we have approximately half and hour, which means that if we can get an overview of your points we would be interested in asking some questions and receiving some answers so that we can clarify some of your major objectives. Welcome, and please begin.
[Translation]
Ms Monique Hébert (President, Réseau national d'action éducation femmes): My name is Monique Hébert and I am the president of the Réseau national d'action éducation femmes (Women's national education action network). Ghislaine Foulem, my colleague, and I will make a joint presentation of our brief.
We would both like to share our views on issues which specifically affect francophone women who represent the minority in areas where they live.
We will not be discussing all of Bill C-12 in our analysis, but we will deal with the provisions which specifically affect women.
Our network represents francophone women, groups and individuals, throughout the country, from Newfoundland to British Columbia.
Our mission is to bring about social change which will make society more egalitarian and fair by helping francophone women in Canada gain greater access to French education.
Ms Ghislaine Foulem (President, Fédération nationale des femmes canadiennes-françaises): My name is Ghislaine Foulem and I am the president of the Fédération nationale des femmes canadiennes-françaises (national federation of French-Canadian women). The federation is made up of 25 francophone women's groups from every province outside Quebec, and our purpose is to help francophone women develop and reach their potential through, amongst other things, financial independence.
Our federation has been in existence for over 80 years. Our work is based on dialogue, training, political representation and networking among francophone women leaders.
In Canada, women are often financially disadvantaged. We have heavy family responsibilities while working at unstable and low-paid jobs. Women receive less pay for their work, and they often receive less support to find better employment. In spite of that, however, women try to contribute to the Canadian economy by working in part-time, sporadic, low-paid jobs, without receiving social benefits, even if they would rather work at better-paying, steady jobs.
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Even if there are many francophones in Canada, they nevertheless remain a linguistic minority. As a consequence, francophone women who are in a minority situation often face double discrimination, based on their gender and language.
Here are some figures which you should know. Women make up the vast majority of single-parent families in Canada. In 1991, over 80% of single-parent families were headed by a woman, a figure which has remained relatively unchanged since the 1960s. The vast majority of part-time jobs are filled by women. In 1994, 69% of all part-time workers in Canada were women, a figure which has also not changed much over the last two decades. In 1994, 1.6 million women, or 26% of working women, worked part-time, compared to only 9% of men.
Women generally earn less than men. In 1993, the average gross annual income of women aged 15 years of age or more was $16,500, which represents only 58% of the average income for men. Working women's average earnings are much lower than men's. In 1993, women who worked full-time, all year, earned $28,400, which represents barely 72% of men's earnings.
Also, over two thirds of francophone women living in a minority situation earned less than $10,000 in 1986. One out of three women living outside Quebec, and whose native tongue is French, works part-time.
Ms Hébert: So, it would not be surprising if you concluded that Canadian women face discrimination, especially francophone women.
The purpose of a reform should be to improve an existing program to make it fairer and more equitable. The purpose of the proposed bill seems to be the reduction of federal expenditures on the backs of claimants. May we remind you that most Canadian men and women want to work. Even though 69% of women work part-time or on contract, they do not necessarily do so by choice. The situation is due to the reality of our market place.
For the first time, the bill would see to it that part-time workers could receive unemployment insurance. We believe there are approximately 500,000 part-time workers. But will this change come on the backs of the working men and women, especially women who will not be able to claim UI anymore?
The bill also proposes a supplement for families whose income is less than $25,921. Why does the bill introduce family income testing, when employment insurance is, in fact, a personal insurance system? We recognize that the change will benefit single-parent families, but we fear that it will make women more dependent on their spouses.
Tightening eligibility criteria, reducing benefits and pay-out periods by imposing penalties on frequent users are initiatives which will not necessarily encourage people to work. In fact, employment training should be better adapted to the far-reaching changes the Canadian job market is currently undergoing.
The employment insurance program should create a fair and egalitarian society. But the bill will unfortunately not achieve this. At least, that's our conclusion. The system had become unaffordable, unproductive and open to abuse, but the government is now proposing a system which would make individuals responsible for employment.
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In our opinion, it is unfair to make individuals bear the burden of unemployment, and to claim that there is a generalized problem of fraud and abuse. Because of social inequities, women will be hit hardest by the proposed reforms and may end up even poorer.
We will focus on three issues: hours worked, maternity leave and job training. As we said at the beginning, we will not examine the entire bill, but only certain specific parts.
Regarding the calculation of benefits on the basis of hours worked instead of workweeks, this is a major change which will have tragic repercussions for women because they hold down most part-time jobs.
Under the employment insurance bill, a person working an average of 15 hours a week will have to accumulate 910 hours before being eligible for unemployment insurance, which represents sixty 15-hour workweeks. So a person would have to work for more than a year before being eligible. Again, this implies that women will be penalized, since they make up 70% of part-time workers.
These new provisions will therefore directly affect women. Because of the precariousness and instability of part-time jobs, few women will be able to accumulate the required number of hours to be eligible for unemployment insurance within a reasonable time frame. As well, benefits will be based on the average income of the last 14 weeks worked.
If women worked fewer hours during that period, their benefits will be lower. And what about people who are on call for schools or hospitals, or people who work occasionally because there's not enough work?
Under the proposed reform, benefits would also be lowered from 57% to 55%, and even 50%, for claimants who received benefits more than once in five years. This will directly affect women, because they hold down most occasional and low-paid jobs.
If the reforms are implemented as drafted, they will make it harder for women who work part-time to be eligible for benefits. So women will be hardest hit by this bill. Women want real jobs; they do not chose to work in low-paying jobs.
Ms Foulem: Let's move on to maternity benefits. They say that the future of a country depends on the new generation. I think you'll agree that maternity cannot be biologically transferred. So women are the ones who have to stop working at the end of their pregnancy.
In fact, if men took over that task - unfortunately, that will never happen - it would cost the government more, since the most recent Canadian statistics reveal that women who work full-time earn, on average, 72% of what men make. We have been saying for a long time that women on maternity benefits should not be penalized in any way. Under the current system, women receive only 55% of their salary when they go on maternity leave.
We realize that the government does not want to penalize women who receive parental leave benefits, even if they receive these benefits more than once over five years, as opposed to frequent claimants. But women still suffer financially just because they bear the children. We need a support program that does not equate maternity with layoffs, resignations, or illness. We want to make the government aware of the fact that poverty is widespread among Canadian women.
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In fact, women account for more than half of the low-income population. According to Statistics Canada, in 1993, 56% of all low income people were women. Still, many women were never eligible for maternity leave or unemployment insurance benefits.
In light of all that, you will understand why we work hard to make benefits available to more women. Since women are being encouraged to start up their own businesses and to create jobs, how can we find a way to make them eligible for unemployment insurance or maternity benefits?
Regarding the fact that some women may have to remit up to 30% of their maternity benefits to the federal government, we want the government to make it easier for women to have babies; by doing so, it will be investing in the future of our country.
Ms Hébert: Let's move on to job creation and training programs. Under the proposed reform, the federal government would relinquish its responsibility in the field of manpower and employment training. The implementation of these programs would be negotiated with each province, and they would vary considerably from one province to the next.
It is important that the federal government be aware of the fact that the provinces don't always realize what francophones living outside Quebec go through. We understand that Quebec wants to take over manpower and employment training policies, but shouldn't the federal government help everyone else?
Take, for instance, the management of school boards. The Canadian Charter of Rights and Freedoms states that francophones have a right to their own school system in French. But the commitment of provincial governments to this principle has certainly not been a shining example. We have to go to court, and even to federal court, to make them recognize our rights.
We have good reason to doubt the good faith of provincial governments when it comes to upholding francophones' rights. In this area, we believe that the federal government must ensure that provinces create programs which meet minimum standards of accessibility for minority francophones groups. Without this guarantee, francophones might not be able to access government programs in their own language.
Lastly, out of respect for the principle of fairness for men and women, and of equality, we wish to make the federal and provincial governments aware of eligibility criteria for job training programs. The programs should be designed so that women have equal access to them.
It is important that job training programs allow francophone women to find jobs and thus participate as full-fledged citizens in Canada's economic prosperity.
Members of our federation have indicated that they believe the federal government can take positive measures in the area of training by setting aside additional resources for women. Women are undervalued in the job market and are paid only 72% of what men make.
Ms Foulem: We believe women's work is undervalued, underestimated and underused today, except when they do volunteer work. There was a United Nations report which said that unrecognized women's work throughout the world was worth $ 11 trillion, as compared to $ 23 trillion for recognized work. It's time we started thinking about the economic contribution of women in the world and specifically in Canada.
When you talk of employment insurance, you cannot ignore job training or job creation. We want the federal government to take into account the situation of women, including casual, part-time and sporadic workers.
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The women we consulted - and we consulted with more than 100 women throughout the country - highlighted the importance of taking a closer look at shared work. Many women told us about bad experiences with shared work because their employers were against it for what often appeared to be far-fetched reasons.
More women may be hurt financially by the proposed reform. Lastly,the reform puts the fate of training for francophone minorities into the hands of Canadian provinces, which will make it more difficult for them to survive culturally, linguistically and economically.
We have several recommendations.
We believe the Canadian tax system has to be reviewed in order to make it fairer, more equitable and acceptable for all Canadians.
We believe the employment insurance system should help workers who do not have full-time jobs, as well as independent workers.
We have to establish affirmative action job training programs at the provincial level to meet the needs of francophones and women.
Finally, we have to find a maternity benefits system which does not financially discriminate against women and which is more flexible in taking their family situation into account.
[English]
Now, for the record, we would welcome your questions in both official languages.
The Chairman: Madame Lalonde, followed by Ms Augustine, for five-minute rounds.
[Translation]
Mrs. Lalonde (Mercier): Good morning, and thank you for your brief. I believe it is important to explain the situation of francophone women living outside Quebec and the specific problems they have to deal with.
I would just like to comment on part of your brief before moving on to specific questions. On page 6, you say:
- Because the system had become unaffordable, unproductive and open to abuse...
- Current official department estimates project that by the end of 1996, without the reform, there
will be... I found the figure: the other day I said 4.7 billion dollars, but I was wrong. The
estimated accumulated surplus under the reform will be 5.8 billion dollars. So, it's not true that
the system has become unaffordable and unproductive.
But we cannot just focus on cases of abuse. If you try to build a system based on preventing abuse, honest people will be penalized.
You made very specific recommendations. I would like you to give us more details. Regarding maternity leave, you seem to want it to be separate from employment insurance. Am I mistaken? If so, what would you recommend?
Regarding job training, you say that the system has to be fairer. Do you have any specific proposals, such as quotas? How would that work? How could we improve the situation?
I'll begin with those two questions.
Ms Hébert: Mrs. Lalonde, thank you for pointing out our mistake. I was also aware of that fact, since people have been talking about the surplus on the radio. However, there is also a perception that we have to compensate for a shortfall, that there is a bigger deficit, but not necessarily as it relates to unemployment insurance. The reform might bring about the right kind of change.
As for our specific recommendations, let me clarify our position on job training. There are several solutions. You're right, one of them is quotas. Another would be to set aside a fair percentage for francophones depending on the situation in a given province. In some provinces, they were never given anything - I won't name the one I'm thinking of - and in that case we could give them a bigger share to compensate for what they didn't get in the past, while keeping in mind Section 24 of the Canadian Charter of Rights and Freedom.
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Of course, provincial governments should have a say. I realize that this area of jurisdiction may be handed over to the provinces, but they must realize that they are first and foremost responsible for their francophone minority.
Ms Foulem: Some working women are eligible for maternity leave, but we wanted to point out in our brief that women are being encouraged to start their own businesses. Many do so, but they have absolutely no protection when they decide to have a baby.
When a woman is pregnant, she is not sick. It's a natural process and we have the right to build the country by having babies. But at the moment, women have no incentive to have children since they have to stop working to look after their kids, or when complications arise.
So women often end up without an income or with a vastly lower one. Therefore, we believe women should be encouraged to have children by knowing they can count on income when they cannot run their own business or work at their job any more.
Mrs. Lalonde: Regarding the impact an hour-based system would have, several people have told the committee that this may be a good idea. But most of them, including the Federation of Independent Business, said that the system, as proposed by the bill, was an impediment to employment. The Fédération des femmes du Québec and the Association des femmes et le droit both said that while the proposal may benefit 5 per cent of women, it would be disadvantageous to 25 per cent of women, namely women who work between 15 and 34 hours per week. Do those general figures also apply to the people you represent? Are your conclusions similar?
Ms Foulem: Eligibility for unemployment insurance benefits, whether it is based on weeks or hours, should be determined within a one-year time frame. Many women who currently work 15 hours or less per week do not pay UI premiums.
But under the bill, everyone will pay premiums and people may have to work up to 60 weeks to cross the 910-hour threshold. This means they will never be eligible for benefits, despite the fact that they will have paid premiums. As a consequence, their income will fall even more.
In regions where women are in a minority situation and where the education and training levels are not very high, they mostly work in unstable jobs and often only work 10, 12 or 15 hours per week. They don't pay any premiums. Again, they will never be eligible for benefits paid out under a system which they will have paid into.
Mrs. Lalonde: So you agree that they should pay premiums, but on the condition that they be eligible...
Ms Foulem: What we are saying is that 910 hours is a formidable figure for these people.
Mrs. Lalonde: Indeed, it is unfair and unjust, since it makes people who have the lowest incomes pay.
Ms Foulem: That's always the case.
[English]
The Chairman: Ms Augustine.
Ms Augustine (Etobicoke - Lakeshore): Thank you, Mr. Chairman.
I want to move away from ethereal and other kinds of discussion to focus on the bill itself, because I take the work I do on this committee very seriously and want to make sure that we make the necessary amendments to the bill, since there are indications that this is the work of the committee. The minister will be receptive to ensuring that we, as a committee, make the amendments that would make this the best possible bill.
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The Department of Human Resources did a gender impact analysis. The aim of the bill is really geared towards fairness and equity, as you mentioned in your preamble. I'm trying to understand. My questions will be short ones directed at trying to understand your objections, trying to understand why you use the word ``penalize''. You say this bill will penalize women. So bear with me and I'll go through my short questions, because I'm really grappling to see where exactly you're coming from.
The new employment benefits will ensure that we meet the needs of women at the community level. When we did the social security review, we kept hearing people say, bring things to the local level and give us some way of tailoring or intervening at the local level. Given the way this bill is directed at meeting community needs, what are your concerns regarding the employability needs of francophone women?
[Translation]
Ms Hébert: Thank you for asking those questions, even if they are simple or short. Sometimes they go straight to the mark.
One of our major concerns is that 25% of francophone in minorities women have at the most a grade eight education. At the dawn of the 21st century, it is worrisome that one woman out of four doesn't have more than a grade eight education. So, we need training programs which directly address that problem.
[English]
Ms Augustine: As to the availability of grants and the access to training, as spelled out in this bill, aimed at sustainable employment, do you see any measures in there that you think could be of benefit to francophone women?
[Translation]
Ms Foulem: I'd like to respond to that question. In some parts of the country, people work full-time at seasonal jobs but only for a short period of time. These people may work between two to four months a year.
Employers who receive funding to train these employees would certainly like to try to help them upgrade their skills to offer them better jobs, but in the case of fisheries or tourism, for instance, there are only three or four months of work per year. So what good does job training do? It doesn't create any jobs, because there are none.
There has already been talk of this kind of scandal. By giving training, you create illusions. Employees who signed up for training had certain illusions, because they hoped to ultimately land a job. But, unfortunately, it did not turn out that way. There's been talk of training in high technology, but that mostly applies to major urban areas. In the country, high tech jobs are rare or not very significant.
We fear that the money put into training is not doing what it was supposed to do. We need targeted programs and they have to be carried out with care. You can't take money from the unemployment insurance account and give it to employers to hire a few extra employees whom they would train in good faith, when the training does not necessarily help these employees get full-time or part-time jobs.
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[English]
Ms Augustine: In other words, we're talking about the $300 million transitional jobs fund. We're also talking about the $800 million reinvestment of the UI savings into those active measures and looking at those two funds going into things such as wage subsidies and the women's supplement. You do not see that as beneficial to women?
[Translation]
Ms Foulem: In some parts of the country, there is no equal access to jobs. All the good intentions we've been talking about do not necessarily apply to rural areas where most of the francophone women we represent live. That's the problem. There have to be some exceptions.
I understand that it is not easy, because our system is centralized. The fact remains, however, that we cannot apply the legislation in the same way for everyone, because everyone is not equal, everyone does not have the same income, nor the same needs. For example, the costs for someone living in Vancouver are not the same as the costs for someone living in the Maritimes. The cost of living is different at the two ends of the country. So, there are all these factors which...
[English]
Ms Augustine: Also, it is my understanding that flexibility was built into the system. I'm not too sure I understand why this is not clear to the witnesses.
[Translation]
Ms Foulem: Because it is not clear.
Ms Hébert: Excuse my ignorance, but will the three million dollars and the eight million dollars be reinvested by the provinces or through federal government mechanisms?
I am very happy to hear that as my colleague said, flexibility is part of this new bill. As we said at the beginning, our presentation does not analyze the entire bill. We have come to present the issues that are of concern to our constituency, the people we do represent.
[English]
Ms Augustine: My intervention is really to make sure that when we talk about the fact that we're meeting community and local needs, the new benefits will be targeted to ensure fairness and equity. I was addressing more or less your perspective and the perspective of different clients in different parts of the country.
I want to move on, if I may, to my final question. The concern I have is that 350,000 low-income families with children, two-thirds of which are headed by women, receive on an average 7% more than they would be getting today. I wondered whether you've looked at the general, overall benefits there will be for that large percentage of women. Some of them, as you say, are part-time, but it's those individuals at $26,000 and below.
[Translation]
Ms Hébert: We have not directly addressed that issue. However, having participated in consultations with women in the province, I can say that it is the principle that is very worrisome. When you think that UI premiums will be collected individually, but that benefits will be based on family income, that's what is worrisome.
We know that family income, generally, is the man and woman's income put together. The woman who will already have earned less while she was working will again end up with less money in her pockets, when she goes on UI, because that insurance will only make up for the shortfall needed to bring their income to roughly $26,000.
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The principle of family income is what is worrisome. In that area, women will no longer be entitled to earn as much as men. It is reverting to the idea that women's salaries serve only to supplement men's incomes.
[English]
The Chairman: On behalf of the committee, I certainly would like to express to you our sincerest gratitude for bringing to our attention some of the key points that concern you. Your presentation was quite focused and specific to those key issues. As members of the committee, we certainly appreciate that, and we will take it into consideration. Thank you very much.
Ms Hébert: Thank you.
The Chairman: I would like to bring to your attention that tomorrow, Wednesday, March 27, 1996, at 3:30 p.m., the Minister of Human Resources Development will be appearing in front of our committee here in room 237-C.
I have a further housekeeping item. I would like to table with the clerk a list of documents that were provided to our standing committee when we were studying Bills C-111 and C-112, a list including the summaries of the UI evaluation studies, the evaluation studies themselves, and a number of other reports of which our committee has made use - and, of course, reports that are available for all members to read as they attempt to improve this piece of legislation. I ask the clerk to distribute this particular list as a reminder of all that is available to us.
[Translation]
Mrs. Lalonde: Do you have a brief?
[English]
The Chairman: Our next presentation will be from Mr. Georges Campeau, from l'Université du Québec, and Jean-Guy Ouellet, lawyer.
Welcome to the human resources development committee.
You know why we're here. We're trying to improve a piece of legislation. We've heard from a number of organizations and individual Canadians as to what possible means we have at our disposal to improve this piece of legislation. We as a committee have benefited quite a bit from the wisdom of so many Canadians who have appeared in front of us, and we look forward to hearing what you have to say about this bill, with the view of improving this piece of legislation. Thank you very much for coming.
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We have approximately half an hour. We usually give 10 to 15 minutes for the presentation, followed by a question and answer session - something that the members of the committee really appreciate, because it allows us to focus in on some of the key issues you raise.
Once again, welcome. You may begin.
[Translation]
Mr. Georges Campeau (Professor, Individual Presentation): Thank you, Mr. Chairman. I would like to make a clarification concerning the procedure. My name is Georges Campeau. My colleague, Jean-Guy Ouellet, and I are lawyers specialized in unemployment insurance law. I am also a professor at the University of Quebec at Montreal.
Unfortunately, because of the short time we had to prepare, we are submitting our brief this morning. We were unable to send it to you earlier. Of course, it is only in French. We wanted to make copies for you, but we did not have time. It contains some small errors. First of all, it is not just my brief, but represents our joint position.
I am going to give you an overview of what our brief contains. It covers general issues concerning the thrust of unemployment insurance and certain measures that we consider unfair and even blatantly unconstitutional.
I will make the presentation, and my colleague Jean-Guy Ouellet will deal with the more specific legal issues. Then, we can begin a debate. Essentially, our brief raises three points.
The first point is the following. In our view, Bill C-12 is in keeping with the reform unemployment insurance has been undergoing since 1990. This reform challenges the basic thrust of unemployment insurance, primarily the aspect of solidarity among the different regions in Canada and with respect to a specific type of employment, seasonal work.
Secondly, we have some comments on the change in thrust since 1990. As you know, Bill C-12 will accentuate this trend. There is a change in thrust in the sense that since the government withdrew from the UI fund in 1990, an increasing number of other measures are being funded.
For example, I am thinking about all of the measures to enhance employability and training and even cuts to the UI fund. We feel that this thrust poses a serious problem in terms of equity for the people who contribute to unemployment insurance.
We also feel that this change in focus runs counter to the constitutional provisions set out in paragraph 92(2)a) of the British North America Act which deals with the federal government's jurisdiction over unemployment insurance.
I'm going to go over these points one by one. It is important to remember that unemployment insurance in Canada was set up following a constitutional amendment in 1940. I think it is very important to have that in mind. May I remind you of certain points of history. Essentially, in 1935, Mr. Bennett's conservative government introduced a bill which covered, among other things, this important aspect of unemployment insurance.
The bill was invalidated in 1937 by the Imperial Privy Council which was, at that time, the highest legal authority for Canada.
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The belief at the time was that the setting up of unemployment insurance was similar to private insurance and that private insurance fell under civil law, affected the work contract and was therefore the responsibility of the provinces.
In 1940, all of the Canadian provinces agreed to a constitutional amendment to transfer this jurisdiction to the Parliament of Canada, or the central government. I would point out that the jurisdiction which was conferred at that time dealt solely with unemployment insurance; in other words, the provinces agreed to a constitutional amendment which would give responsibility for issues dealing with unemployment insurance to the government of Canada.
Continuing along historical lines, I might add that when unemployment insurance was set up in 1940, Canada had been at war for several months. This was also after the great Depression of the 1930s, when Canadians experienced extremely high levels of unemployment, great distress and great misery. So to remedy this situation, a decision was made to set up unemployment insurance.
It is also important to note the choice of social insurance with tripartite funding, where not only employers and employees were called upon to contribute, but so was the government. It is important to note that the government recognized its responsibility with respect to unemployment, in keeping with the aspect of social insurance that has been part of our unemployment insurance scheme since the beginning.
Immediately after the end of World War II, the plan was expanded, so much so that coverage went from 42% of the population in 1991, to more than 75% in 1955 and to 96% in 1971.
The perspective was the following: the majority of Canadians were asked to contribute to the plan, primarily to set up a system of solidarity vis-à-vis people and regions which were the hardest hit by unemployment.
From the beginning, there was concern for solidarity with the regions which were hardest hit by unemployment - obviously one thinks of the Maritimes, but it was not the only region in Canada - and this concern has been constant throughout the existence of unemployment insurance.
Moreover, on page 3, I give you a historic overview of the Canadian economy. I say that the economy has always had an important seasonal component - I'm not telling you anything new - inasmuch as the economy has long focused on the development of raw materials. And since the Canadian economy revolved around raw materials, certain types of jobs or occupations - I'm thinking here of fisheries, and forestry - were linked to the seasonal economy.
From the beginning, measures were designed to protect all Canadians, not only people who had full-time employment, but also people who had seasonal jobs.
Footnote 6 refers to a quote which shows that the people who initially designed the scheme - the first bill was introduced in 1935 - were concerned with solidarity and wanted to set up an unemployment insurance system which would take regional disparities into account.
Moreover, in the statement that Prime Minister Bennett made in Parliament in 1935 when he introduced the measures in his New Deal, he referred to the concern for remedying a certain number of injustices through unemployment insurance. It was the cornerstone of the New Deal, and it dealt with disparity not only among individuals affected differently by unemployment, but also among the regions.
I would like to quote an excerpt from Mr. Bennett's statement which is found on page 4. I draw your attention to the last part of the quote:
- Reform measures will therefore be submitted to you as part of a comprehensive plan designed to
remedy the social and economic injustices now prevailing, and to ensure to all classes and to all
parts of the country a greater degree of equality in the distribution of the benefits of the capitalist
system.
Obviously, it was out of concern for setting up a fair social insurance system for the various regions of the country, which has always been an essential characteristic of unemployment insurance in Canada. Moreover, sharing the cost of unemployment among the various regions is also a government contribution to unemployment.
I would now like to point out that by 1935, the United States had already set up an unemployment insurance scheme; it did so a few years before Canada. But our plan was characterized by an approach with much more solidarity, because it called for a government contribution in addition to a broader contribution base among the various regions of Canada.
Now, what have we been confronted with since 1990? One of the measures in Bill C-12 seems very important to me, and it is the famous measure which calls for a set period to determine benefits.
Bill C-12 continues to dismantle the protection the system provided for the unemployed. A key element of the bill is the creation of a fixed period of consecutive weeks to determine the amount of insurable earnings regardless of the period of work. So the salary used to determine the amount of benefits will no longer be based on the last weeks of works but on a fixed period varying from the last 14 to the last 20 calendar weeks, whether the person has worked or not during that period.
You understand the impact of this measure, and I think that especially in the peripheral regions like the Maritimes, there will be a considerable impact in terms of decreases to insurable earnings that can be used to determine benefits. That is very significant.
Moreover, if you examine Bill C-12, you will see that certain measures attempt to limit its scope. At least there is the December 31st, 1998 time frame after which the Commission will have to report to the House.
I think that this is the most serious measure in Bill C-12, which challenges to the greatest extent the initial thrust of the plan which was designed to ensure solidarity, especially vis-à-vis the regions, and this is what distinguished our plan from the American one.
The second issue I would like to raise is the change in thrust that the plan has undergone since 1990. Of course, I am referring to C-12 and UI reform.
In my view, it is of course a reform, but it is more like the continuation of a reform that was undertaken by the Conservative government in 1990 and pursued in 1993 and 1994 in the Budget. We are now in the fourth phase of this reform.
I would like to point out the inequity of this measure for the simple reason that more and more, the government is using unemployment insurance contributions for purposes other than paying unemployment insurance benefits.
To us, this measure seems very unfair for contributors who may not be able to benefit from their contribution.
I would like to refer to my text to elaborate on the various changes that have been made in chronological order.
The main stages in the change of thrust are as follows: in 1977, various measures concerning work sharing, job creation and training were introduced into the Act. These measures, described recently as ``active measures'', allow UI claimants, among other things, to collect benefits while taking a course the Commission has referred them to.
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Bear in mind that in 1977, these measures were funded using the federal government's contribution to the unemployment insurance fund. In 1990, significant changes were made to the UI system, which substantially changed its thrust. Thus, with the reform in 1990, the government put an end to its financial contributions and at the same time increased the amounts of money taken from the UI fund for these ``active'' measures.
So you can see that the funds devoted to the ``active'' measures that I have just listed were increased and at the same time, the government withdrew from the unemployment insurance fund. It is easy to understand that that created a deficit. How will they compensate for this deficit? By increasing contributions or by cutting benefits?
Since 1990, we have witnessed both phenomena, significant cuts to benefits in particular. These measures have been financed through cuts in the system. It is important to note that these reductions have had a considerable impact on the eligibility of some contributors, primarily the people who were undoubtedly the most in need of unemployment insurance.
I will give you an example, and I will refer to the press conference Mrs. Barbara McDougall gave when she introduced her strategy to enhance manpower in 1989. At that time, it was pointed out that the first series of cuts to unemployment insurance would exclude 30,000 people from the unemployment insurance system, 30,000 Canadian men and women throughout the country who would be forced to go on social assistance.
You can see that the various cuts made to UI since 1990 have made Canadian people considerably poorer. It's one thing to want to help the needy and the unemployed by organizing all kinds of food banks two weeks before Christmas and one week after New Year's, but we must also realize that this impoverishment is the result of cuts that have been made to the biggest income security system in Canada: unemployment insurance.
Moreover, during this first wave of measures in 1990 - I am referring to studies conducted by the Quebec government, by the ministère de la Main d'oeuvre et de la Sécurité du revenu (Ministry of Labour and Income Security) - it was predicted that the first wave of cuts would force 10,000 more people onto social assistance in Quebec. Among the 10,000 who were excluded, most were young people, women and heads of single-parent families.
So you see that this new thrust is detrimental to people who have unstable jobs and who need to resort to the protection of unemployment insurance the most.
Now, getting back to Bill C-12 which is before us, I draw your attention to the second paragraph on page 7 of my brief.
Bill C-12 provides eligibility to training measures, not only for UI claimants but also for people having collected benefits over the past three years.
This is an extremely important change as compared to what existed before. This way, the system will fund an increasingly large part of employability measures which in the past were funded through the Canada Assistance Plan and are presently funded under social assistance by excluding a greater number of people from the basic protection that unemployment insurance should provide for them. Thus, the federal government can maintain an active presence in funding social assistance while decreasing transfer payments under the new Canadian Health and Social Transfer.
The 1995 Estimates contained a significant reduction in budgets which are now run together under the new Canadian Health and Social Transfer. In fact, the problem was shifted; in other words, part of social assistance will no longer be paid out of the CHST but instead out of the unemployment insurance fund.
In addition, a significant part of the last resort assistance will be met using unemployment insurance premiums, with workers at the bottom of the ladder making a disproportionate effort, representing 2.95% of their salaries, to fund occupational training.
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I think it is extremely important to recognize that social assistance, primarily the federal government's contribution through the Canada's Assistance Plan, is supposed to work for the neediest members of society, since people with high income contribute to it.
But if you have to draw on the unemployment insurance fund, workers will contribute on a regressive tax basis. I should not use the word ``tax'', because it is a contribution, but the contribution will be regressive inasmuch as someone who earns $30,000 per year, for example, will now contribute 2.95% of his salary. And someone who earns $100,000 a year will not pay more because of what you call the ceiling. If the ceiling is decreased to $39,000, it is clearly a regressive tax which will be used to fund social assistance.
As I pointed out earlier, the presence of such a huge surplus in the unemployment insurance fund raises the question of equity for all Canadian men and women and all parliamentarians. How can we ask people to contribute 2.95% of their salary to unemployment insurance and then use that money telling them that they will have reduced access to benefits because the money is going to be used to pay for something else which, in reality, should come from the consolidated revenue fund? This is what's at stake in this bill and it is extremely inequitable.
All low income earners who need the protection of unemployment insurance and who contribute, like people from the Maritimes who will be forced to undergo cuts, are entitled to receive these benefits. They're being told that they are not entitled to benefits because the money is going to fund something else. Under this new policy, these measures are clearly unfair.
This brings me to my initial point, the issue of constitutionality. As I often tell my students, when discussing social programs or anything else in Canada, the Constitution is never far away. It's important.
Allow me to remind you of what I said earlier, and I have included a quote from the famous Privy Council decision made in 1937 in my text, and that is that the government of Canada ruled that generally, social assistance was a technical mechanism which falls under provincial jurisdiction.
A constitutional amendment was adopted in 1940, which gave the federal government jurisdiction over unemployment insurance. The Parliament of Canada did not receive jurisdiction for anything else. Essentially, it was given jurisdiction over collecting premiums for the payment of unemployment insurance benefits. But what is happening now? I explained that to you earlier. These benefits are not being paid to people who contributed them, or fewer benefits are being paid, and the money is being used for other purposes. Personally, I think that this way of proceeding raises serious concerns regarding the constitutionality of these measures.
So you can see that through these premiums, not only is the federal government interfering in areas of provincial jurisdiction such as manpower and social assistance, but it is doing so to the detriment of people who would be entitled to receive these benefits. This seems extremely important to me, because constitutionally, the government of Canada has jurisdiction over collecting premiums for the payment of benefits, and I stress that point. But premiums are being collected and they're being used for other purposes. That raises serious concerns regarding inequity and also raises concerns of a constitutional nature.
In my brief, I draw a parallel with the decision brought down by the Quebec Court concerning the Quebec car insurance plan. The Court ruled that money earmarked for compensating accident victims could not be appropriated and used for other purposes. The Quebec Superior Court deemed these provisions ultra vires.
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I simply mean that the logic applies even more so in the case of the Constitution of Canada, because the concept of unemployment insurance, social insurance, is in the Constitution.
Before concluding my remarks, I would like to highlight another constitutional dimension. This new thrust, which involves using premiums for purposes other than paying benefits, is based on cuts and restrictions in unemployment insurance.
In my view, these restrictions have a discriminatory effect on certain groups of people. I explained earlier that the initial reform in 1990 had an impact on certain groups in Quebec - there were studies - , primarily women and single parents.
I would like to point out that I am not just talking about direct discrimination, but also indirect discrimination as a result of prejudicial action.
Because of the policy for this fund, the legislative measures that flow from it have a discriminatory effect on certain groups. I'm obviously thinking about Canadian women who, as was mentioned earlier, are disadvantaged in terms of employment.
This is essentially what we wanted to say. Of course, you realize that given such serious findings, we did not envisage amendments. As you know, this gives rise to some constitutional issues and I think that we have to be particular about these details.
I give the floor to my colleague Jean-Guy Ouellet.
Mr. Jean-Guy Ouellet (Lawyer, appearing as an individual): Thank you.
We do not intend to examine all of these clauses, but instead to draw your attention to three elements of the reform which seem to achieve just the opposite of the objectives set out in this reform.
The first element is the rate calculation period set out in paragraph 14(4)(a) of Bill C-12. I am the practitioner. The theorist has just spoken. I'm going to give you three examples which clearly indicate how unfair and absurd the fixed period is.
The first example is one of a worker who files a claim in November 1996. For 16 weeks, this worker, because his employer is having difficulty, has been working 14 hours a week at $10 an hour. The business closes and he files for unemployment insurance in November 1996. According to the rate calculation period, the interruption of earnings occurs at the end of his job. The 14 hours at $10 an hour provide him with $140 a week, which is excluded from the insurable earnings until December 31st, 1996.
Even if this person has been working full-time for 25 years and that over the past 16 weeks he has only worked 14 hours at $10 an hour, his benefit rate or the benefits he will receive are nil. Because we are using the rate calculation period as of the most recent interruption in earnings and because the calculations are made over the past 16 calendar weeks and that these 16 weeks are not insurable under the legislation, he will receive no benefits.
This is the first example of the rate calculation period which yields completely ridiculous results.
The second example: Because of her work, a child care worker must take preventative leave as soon as she learns that she is pregnant. After 35 weeks, she applies for benefits. She applies for special maternity benefits and parental benefits. The interruption in earnings as interpreted by the Commission only occurs when the benefits for preventative leave cease.
So we'll have to go back 16 weeks, and for those 16 weeks, the person will not have any insurable earnings, because the money received from the CSST (Quebec occupational health and safety board), are not considered insurable. As a result, the special benefits, would be zero.
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This is a second example of the impact of this clause on an interruption of earnings.
Third, for employees on call, the reform suggests that people work more regularly in order to accumulate hours. That is the apparent logic that is being put forward.
Let's take the example of an individual on call, who had a long replacement of 12 weeks, for example. Let's assume the employer calls this employee for three hours' work eight or ten weeks later, when he or she is on their benefit period. Once the person works these three hours, beginning January 1st, 1997, the rate calculation period will come into play, because each hour worked is insurable. When we move backwards from these three hours of work, we come up with three hours, plus one or two weeks of full-time work, and the sum of these will be used to establish the person's benefits. This is based on the provision regarding the rate calculation period.
There's another change that is completely at odds with the position of the Liberal Party when it was in opposition. I'm referring specifically to the amendment to clause 29(a) of the bill. The explanatory notes provided by the Commission on clause 29(a) state that the purpose of the clause is to offset the effects of the recent court decision whereby disqualification for voluntary termination of employment or for dismissal for misconduct cannot apply during a benefit period.
Since the passage of Bill-113, the rule has been full disqualification. I had the honour to read some letters signed by the current Minister, Mr. Martin, and by Prime Minister Chrétien. They said that full disqualification made no sense in this context. Contrary to a very recent court decision, this amendment will allow the Commission to apply full disqualification during a benefit period.
Let me give you the example of a worker who leaves his or her job because their children are having difficulty adapting or are offenders in Alberta. This example is taken from a recent court decision. The person leaves Alberta to come back to Quebec, and the decision is that he or she may have had valid personal grounds for leaving the job, but that this was not a ground under the legislation. This person was totally disqualified. During the period of unemployment, this individual would be disqualified until the end of the period, and subsequently would be disqualified again, because the job he or she left could not be used for another benefit claim. So the effects of a total disqualification have been increased, and this lies in the face of the position taken by the Liberal Party when Bill C-113 was passed.
At the time, the party that is now in power, and which was then the opposition, said that it made no sense to maintain this total disqualification. This amendment enables the Commission to impose the total disqualification over both a current period and another period. Furthermore, the reform proposes no other measures. We see this as a vacuum, because we would have expected the Liberal Party to come forward with an explanation for this total disqualification.
There was reference to harmonization with the United States, but in a number of states, the situation is less radical than it is in Canada. In a number of American states provisions regarding disqualification for voluntary terminations without good cause and dismissals for misconduct are less stringent than those in effect in Canada at the moment. And now the government is attempting to broaden them through clause 29(a).
Finally, close to 15% of the unemployment insurance fund is to be used for active measures. There's a reference to unreservedness. The proposals seem to suggest that close to 20% of the fund would be used for these so-called ``active'' measures. We think that people who pay premiums should be entitled to appeal if they are turned down.
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If 20% of the fund is used according to administrative directives, why is it that there is no appeal process? The courts could hold that this is unconstitutional.
I would like to point out that in many respects the amendments, specifically those on the rate calculation, and on the idea of an interruption of earnings that begins during the rate calculation period, lead to a ridiculous situation in a number of cases. We think this runs counter to the objectives set out in the material released by Mr. Axworthy at the time.
Thank you very much.
[English]
The Vice-Chair (Ms Augustine): Merci beaucoup.
We have used up most of the time. Therefore, our questioning is limited to one small question from each side.
[Translation]
Mrs. Lalonde: Thank you very much. Your presentation was extremely interesting. I will ask a general question.
Both of you have more or less said that it is difficult to amend this bill because it is not in keeping with the expected focus or with the coverage people need.
Do you think we should revise some of the aspects of the current bill, given that at the moment there is a $5,8 billion surplus, and that the purpose of UI reform should not be more cuts?
[English]
The Vice-Chair (Ms Augustine): A brief answer, please.
[Translation]
Mr. Campeau: Since many questions have been raised about fairness, one useful amendment might be to make the contribution scheme more equitable.
Let me explain what I mean. Bill C-12 lowers the premium scheme. This means that higher income earners will pay lower premiums. Income level has been dropped to $39 000, but I don't know what sort of savings this could lead to for the government.
However, people are going to have to start contributing from the very beginning. In addition, as was already mentioned, in many cases, these people will not be entitled to benefits under the program.
So I think that at the very least there should be an upward revision of the premiums.
I said earlier that the premium provisions of the plan are unfair, and that someone earning $100 000. does not pay higher premiums. Canadians with high incomes should at least contribute more to the plan. Consequently, the upper income limit should clearly be raised.
Mr. Ouellet: I will just mention in this respect that the unemployment insurance fund will have an accumulated surplus of $5.8 billion. Personally, I agree with what's been said and I think the program must be made more accessible. However, I think the proposed measures have the opposite effect.
I fail to see how we can help out part-time workers by making them poorer. We think the hour-based system which comes into effect with the first hour of work, must be eliminated. These are people who work fewer than 15 hours. If benefits are calculated in this way, we are clearly not helping these workers. They are required to contribute to the fund without having any access to it, or such a ridiculously unfavourable access that they have to contribute a dollar in order to get .25¢.
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[English]
The Vice-Chair (Ms Augustine): Mr. McCormick, very quickly, please.
Mr. McCormick: Thank you very much, gentlemen, for your presentation, especially for your historical capsule of UI. Certainly times change. In the 1930s, 1940s, 1950s and into the 1960s, income support was considered sufficient, but today with the job losses, most people realize there's a real need for re-employment assistance. A bit of historical data also from me is that seasonal workers weren't even covered by UI until the 1970s.
I want to take this opportunity to encourage each of my colleagues to wholeheartedly support the direct employment assistance measures contained in this bill, because the ability of the employment insurance to provide unemployed Canadians with a better bridge to re-employment is essential, and if we don't do this, who will today? What provinces, what part of the government has the money to help these people assist themselves?
If we're truly going to see the behaviour change on the part of people who use EI, with less reliance on benefits and a chance to return to work, then certainly active re-employment assistance will be a crucial factor. So my question is, do you not agree with the move towards more active re-employment measures, given the nature of today's labour market, in 1996?
[Translation]
Mr. Campeau: I would like to clarify one point, even though I thought I had been clear enough. I don't agree with you on the issue of seasonal workers. The message we hear in the media at the moment about UI contains a number of inaccuracies.
This has always been a concern. It is true that the UI system was very stringent when it was implemented in 1940. This was because it was introduced on an experimental basis to deal with a unique situation - we were in the midst of a war. However, very quickly, the program endeavoured to taking into account the fact that in Canada we have a seasonal economy with seasonal work. And that did not happen in 1970. As early as 1955, amendments to the legislation were introduced to take this fact into account. Does that mean that the unemployment insurance system will be reserved for people in urban centres where there are many jobs and where the system will apply as well? Will there be solidarity on the issue of unemployment? This has always been an essential characteristic of the unemployment insurance program.
As I said at the beginning, all these issues regarding active benefits must be linked to the issue of responsibility regarding jobs, particularly in the case of seasonal workers. That's an important point.
The message you are putting forward to the effect that unemployment insurance creates unemployment is hardly new. That's what some people were saying before the Unemployment Insurance Act was passed in 1940.
It is important to have an employment policy and one that provides adequate protection.
As far as the training measures go, I have nothing against them, nor has my colleague, to the extent that they are funded from the Consolidated Revenue Fund and not from the Unemployment Insurance Fund. That is a significant change, and that must be realized. I do not agree with the idea of funding these measures by making part of the population poorer.
[English]
The Vice-Chair (Ms Augustine): Thank you very much for your presentation and for bringing to the committee a perspective that I'm sure will go into deliberation.
I'm sorry we had to say no to you, Mr. Regan.
Thank you very much. The committee breaks until 3:30 this afternoon.