EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, March 26, 1996

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[English]

The Chairman: I call the meeting to order. We have the pleasure now to hear from the Communications, Energy and Paperworkers Union of Canada, represented by Mr. Hunter and Madame Goulet.

First of all, welcome. As you know, we are presently reviewing Bill C-12, an act respecting employment insurance in Canada, and we'd like to hear your point of view on this particular piece of legislation and ways and means by which we may in fact improve this piece of legislation.

You have half an hour. It's really up to you how you use that half hour, but I would like to tell you that members of Parliament on both sides enjoy the question and answer session to perhaps focus on some of the key points you raise during your presentation. So you may begin.

Mr. Gordon Hunter (Vice-President, Media, Communication, Energy and Paperworkers Union of Canada): Thank you very much, Mr. Chairman and members. Thank you very much for inviting us here today. We will be reasonably brief, and I'm sure there will be time for questions and answers.

I'd like to apologize first for the fact that the brief has been provided only in English. We had fairly short notice and unfortunately didn't have the ability to get it translated in time for today. I apologize for that before starting.

Created in 1992 following a merger of three smaller trade unions, CEP represents 150,000 working men and women across Canada who contribute to the UI fund through employee premiums. This makes CEP an important stakeholder in the unemployment insurance program.

The Communications, Energy and Paperworkers Union of Canada, CEP, has but one recommendation concerning Bill C-12, and it's that this piece of legislation be withdrawn. The proposed unemployment insurance legislation should be withdrawn because in our view there is no redeeming quality in the legislation. Therefore, we believe it shouldn't be amended but simply withdrawn.

Bill C-12 is a totally misdirected attack on the unemployed and is an abdication, in our view, of the federal government of its responsibility for job creation. This bill is also a structural readjustment strategy of the Canadian labour market aimed at the implementation of a low-wage economy and as such is totally unacceptable.

Given the structural nature of the proposed changes to the program, CEP members are concerned about the impact on the labour market and the consequences this will have for them. In particular, CEP is concerned about the impact this legislation will have on the more than 3,000 seasonal workers it represents in the forest industry in Quebec and in the Atlantic region.

These CEP members who do not have the luxury of full-time, year-round employment are one of the main groups targeted by Bill C-12. CEP believes seasonal workers make an important contribution to national economic growth and to the creation of full-time work for other Canadians. The resource industries in which they work help make Canada a desired trading partner in the global marketplace, and the viability of these industries depends on the presence of a workforce in the regions in which the resources are.

Finally, CEP believes that labour has a responsibility to promote Canada's social programs, not just for its membership but for the common good of all Canadians. This belief was reaffirmed at our last convention when the delegates launched a campaign to predict our social programs. Following this convention, a survey of our membership demonstrated a very high level of support for UI programs, for example. Nearly 96% of the members who participated in the survey were of the opinion that it is important or very important to have a good, reliable UI system. CEP believes the proposed changes represent just the opposite.

When former Human Resources Development Minister Lloyd Axworthy presented his discussion paper, Improving Social Security in Canada, a number of reasons were given for undertaking yet another reform of the unemployment insurance program. The main justification for the proposed changes to UI was that the program needs modernization because it's being abused and because it costs too much.

On the question of abuse, the government is once again blaming the victims in the past government-justified cuts to UI by making scapegoats of those who voluntarily left their employment. Changes were introduced that completely disqualified employed persons who were deemed to be voluntary quitters from benefits.

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Today the government is justifying cuts to UI by making scapegoats of repeat claimants. The government would like Canadians to believe, when they are condemned to short-term employment and therefore obligated to go on UI, that they're abusing the system. This is not true. If repeat claimants were working only long enough to collect UI, they would not be collecting benefits. They would be considered voluntary quitters and disqualified. They are repeaters because of the temporary nature of the only work they can find - not by choice.

As for the question of cost, it appears the government has forgotten that the best way to generate savings is through job creation. Past cuts to UI have already reduced the number of unemployed or eligible-for-benefits to less than 50%. Moreover, it's estimated that the UI fund will show a surplus of $5 billion at the end of the current fiscal year.

Central to the UI reform proposals, therefore, is the idea that unemployment is caused by the unemployed and particularly that the UI program is being undermined by repeaters. The government has given up fighting unemployment and has decided to attack the unemployed.

CEP members reject this approach. Consequently, we cannot subscribe to the very premise of Bill C-12. It follows that the mechanisms proposed would put into effect this new attack on the victims of job loss and are totally unacceptable.

In 1990, when the federal government withdrew from financing of the UI program, more was at stake than the burial of the sacred trust and compliance with the free trade agreement. The federal government's contribution to the UI fund had two important functions that were put into question through the withdrawal. Bill C-12 is in effect the completion of these changes through Bill C-21 six years ago. It's sad and ironic that the opponents of the introduction of these changes are completing them today.

The first of the functions referred to is the funding of regionally extended benefits. The federal government's contribution to the UI fund was based on the principle that the cost of extending benefits in the areas of high unemployment should not be borne by the premium payers but funded through general revenue. This ensured that adherence to the program would be maintained in all regions, regardless of the rate of unemployment. It was also an equitable manner of responding to the particular needs of a region where jobs are scarce.

Bill C-21 comprised the principle of regionally extended benefits by withdrawing federal funding. Today, through the targeting of seasonal workers for cutbacks, Bill C-12 is the practical application of this change in principles. The various provisions of Bill C-12 that target repeat claimants are the proposed means to achieve this.

This was made very explicit in the provincial and industrial sector comparisons provided by HRDC. CEP is deeply disturbed by the government's decision to target seasonal workers and to play regions of low unemployment against regions of high unemployment. It was most regrettable to learn, through a leak to The Ottawa Citizen, that the federal government is planning to organize a managed public debate opposing western and eastern Canadians.

The other function of government funding of the unemployment insurance program has to do with the federal role and responsibility in the area of job creation. Through its funding of the UI-funded areas of high unemployment, the federal government had an incentive to work towards job creation. By withdrawing its funding, the federal government no longer has a stake in the system.

The increase in the qualification period and the reduction of benefits will affect a growing number of workers who are victims of changes in the labour market. Bill C-12 demonstrates that the federal government accepts as a given a high rate of unemployment and a precarious labour market. The solution put forward by Bill C-12 is to provide a less generous system to diminish the cost of long-term structural unemployment, which is no longer perceived as bad to the extent that there is a cost containment.

The unemployment insurance reform is being presented by the government as inevitable because of the debt and the deficit. According to the Liberal government and the business community, cuts to UI and other social programs are necessary if we are to protect them in the long term. We do not agree with this logic. Bill C-12 is not a reform or a modernization of Canada's unemployment insurance program. Rather, it's an aggressive policy aimed at a structural readjustment of the Canadian labour market. For Canadian workers this means less benefits from a less successful system and increased pressure to accept lower wages.

This low-wage strategy is most apparent in the proposed employment benefits program, which includes wage subsidies to employers and earning supplements to the top wage earners. Under the umbrella of training and assistance to workers looking for jobs, part of this program is planned to give grants to companies so they can hire workers at a cheaper wage rate. There is a danger that some employers would fire better paid, experienced workers and replace them by subsidized workers, leading to lower wages and more government programs to support low-income families, worsening the problems the government wanted to solve in the first place.

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CEP is of the view that the government should stop blaming the unemployed for the lack of jobs created mainly by its own fiscal and monetary policies and should focus on creating real, stable, well-paid jobs. It is a question of dignity and the only fair way to redistribute wealth created in Canada.

Thank you.

The Chairman: Do you have anything to add, or is this your presentation? Fine.

We'll now have a ten-minute round, five each. Mr. Crête, followed by Mr. Scott.

[Translation]

Mr. Crête (Kamouraska - Rivière-du-Loup): Thank you for your presentation. Later I will be asking you to give us a more detailed description of the geographical area you represent so as to give us a better idea of your involvement in that community.

Your brief highlights a number of important points. I would like you to focus particularly on the statement you make toward the end of your brief. You say that all these measures seem to be designed to create downward pressure on wages. You seem to think that in this way people will agree to work for less and this will enable us to become competitive with the US and countries in the southern hemisphere. So I would like you to go into more detail on this point.

You could perhaps tell us as well whether you see any other alternatives or whether you would like the government to take any steps to go along with this unemployment insurance reform.

[English]

Mr. Hunter: I'd like to respond briefly about the membership, how it's distributed across the country. Ms Goulet will talk more specifically about the second issue you raised.

CEP is quite a new trade union, as you see in our brief. It was really formed by the merger of the Canadian Paperworkers Union, the Communication Workers of Canada, and the Energy and Chemical Workers Union. They came together and formed this new organization, which has since grown by several other smaller groups joining the union.

The broadcast workers, the NABET, which is a broadcast trade union, merged with the CEP after its first two years. A significant proportion of the newspaper guild locals across the country merged with CEP, as did the communication workers.

So we represent a very broad section of workers across the country. I believe we're the fifth or sixth largest trade union in the country. I think perhaps we're the third largest private sector trade union. We often say the group of people we represent is so diverse that we represent people from the people who plant the trees, the people who cut them, the people who make the paper and the writers who write the copy that appears in those newspapers. We make the gasoline to drive the trucks. You name it; we represent those people. It's a very broad, diverse group of people across the country.

[Translation]

Ms Diane Goulet (National Representative, Communications, Energy Paperworkers Union of Canada): It's important to take a broader view of the UI reform being proposed at this time. An OECD study mentions that there is an international strategy designed to establish a labour market with very low salaries.

Apparently there are two main reasons why the wealthy countries are having trouble adapting to the new labour market. The first is that their social programs are too generous. People with easy access to health care, unemployment insurance and the generous welfare program do not immediately accept any job they are offered, particularly less well-paid jobs or jobs that might be dangerous to their health because of poor working conditions.

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Mr. Crête: Do you agree with that?

Ms Goulet: No, of course we don't agree, but I'm trying to explain why the unemployed, particularly those in the Atlantic region are being called lazy individuals who cheat the system. The fact is that these people are not lazy. The fact is that this is part of an international strategy which claims that existing social programs are too generous, because the workers in the wealthy countries will not accept just any job. As a result, the strategy also seeks to mitigate some of the labour market restraints, such as the minimum wage legislation. This is how governments plan to adapt to the new labour market and to globalization.

We can see this approach in the current reform in a number of ways. It states clearly that the objective of the reform is to get rid of those who cheat the system. But we must look at who these people are. We know that there are four seasons in Canada. When we think of seasonal work, we think about the fishery and forestry sectors. There are certain times of the year during which it is impossible to fish, to cut down trees or to replant trees. So these people are not cheating the system. The fact is their job only lasts a certain part of the year.

In general terms, I think the objective of the reform is geared to reduce the number of unemployed. The government is attempting to do this by attacking the unemployed directly in order to reduce the unemployment rates rather than to achieve the objective by creating jobs. I think that is one of the main problems with the proposed reform, and that is why we are asking that this bill be completely withdrawn.

Mr. Crête: I have a more technical question to ask you now. You represent people who work in the forest, and we've asked the department on a number of occasions how these individuals should calculate their hours and weeks of work under the new UI rules? We have not really had a specific answer, because these workers are paid on a piece work basis most of the time. What do you think could be done to insure that these people are not penalized and that they can continue to support themselves?

Ms Goulet: We are simply asking that the bill be withdrawn. We have to go back to the former system, because there is no problem with the unemployment insurance fund, or with the current unemployment program. The federal government wants to change it solely because it needs $5 billion to reduce its deficit.

[English]

The Chairman: Mr. Scott.

Mr. Scott (Fredericton - York - Sunbury): Thank you, Mr. Chairman.

Thank you for your presentation. Given who you represent, do you not see the advantage of calculating the value of work, relative to this program, in hours rather than weeks?

[Translation]

Ms Goulet: We really fail to see how reducing access to the UI program, which is done by reducing the amount and duration of the benefits, will help job creation. We are actually in the process of starving the unemployed rather than getting down to the task of economic renewal and job creation.

[English]

Mr. Scott: But I still ask the question, do you not see the value of valuing hours of work rather than weeks of work in the context of this program?

[Translation]

Ms Goulet: The problem is not the number of hours worked on the basis of weeks. If we look at the bill, we realize people will have to work much longer in order to be entitled to benefits. Individuals who work 15 hours a week or new entrants to the labour market will have to work 60 weeks before they are entitled to benefits. Unfortunately, there are only 52 weeks. That is where the problem lies. Thus, for many people it will be much harder to get on the unemployment insurance program.

[English]

Mr. Scott: I would assume that in your industry at least the paperworker part would be seasonal. The seasonal industries for the most part welcome the shift from weeks to hours, generally speaking, because in seasonal industries you can work long hours, long weeks, but only for a period of time, whether it's the fishery, forestry or mining. Basically there are certain climate problems that restrict the period of the year in which you can work, but during the period when you can work - construction is another of those industries - you work very long hours. It's long been the desire of those industries to see this program based on working hours rather than weeks.

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I'm speaking specifically to the fact that you say there's no redeeming quality in the bill. I'm sure there are people in your industry who would challenge that. Certainly in our part of the country people have been requesting a shift from weeks to hours for a long time. In terms of access, generally speaking, if you work a 70-hour week this means you've just gained 2 weeks because of the fact that you're valuing hours.

Now, I accept the fact that you have criticisms, but I'm speaking to the statement you've made that there are absolutely no redeeming qualities in this. I wonder why you wouldn't recognize that, not withstanding everything else in the bill, as an improvement.

[Translation]

Ms Goulet: In specific terms, there are three major problems of concern to forestry workers.

First of all, they will be repeat claimants and thus will be penalized under the intensity rule. You must understand that these people will get only 50% of the benefits rather than 55%. That's the first penalty.

Second, the point must be made that there are fewer and fewer jobs. There is a restructuring under way in the labour market, and being able to work an unlimited number of hours in a week run somewhat counter to union movement efforts to reduce the number of hours worked. Clearly, if we manage to shorten the work week, workers will have more opportunities to find jobs because work will be shared.

[English]

Mr. Scott: I accept that. In fact, I'm a strong proponent of an annual work-week reduction myself. However, not withstanding what you might anticipate, the fact of the matter is, in those seasonal industries these people work those long hours. They do it now. They wouldn't be doing it as a result of this bill. They do it now. They work 70 hours and they're given the same credit for that week in terms of the UI bill as someone who works 15.

A voice: Make hay while the sun shines.

Mr. Scott: Basically, they've been asking for this shift for a very long time. In my own province, for the current labour pool, notwithstanding the restrictions on new entrants, it's estimated that 3,000 people who have not had access to unemployment insurance before will now have access. It's more accessible.

In my own constituency, the fact is, they'll probably get in with two, maybe two and a half, fewer weeks than they have in the past because of the shift from weeks to hours. That makes it more accessible, not less accessible.

Now, I understand that for new entrants and re-entrants it's harder. I accept that. I understand that there are other things we're trying to change in the bill. But I'm still curious as to how you wouldn't recognize that there will be, for many people, more access as a result of the shift from weeks to hours.

[Translation]

Ms Goulet: While some workers may have easier access, we must acknowledge that those who earn more than $2 000 and do not work enough throughout the year will not be eligible for benefits. So there are two sides to the coin. And we cannot put weeks of work in opposition to hours of work. We have to look at the whole proposal, because in some cases there will be a problem getting access to the program. Some individuals will have to work much longer to qualify, because now many more hours are required to qualify for benefits.

[English]

Mr. Hunter: If I could add to that, the interesting thing as well is that within our own membership, in terms of concern about the bill, and certainly from our members in Atlantic Canada, there has been an incredible amount of fear in terms of what's in this bill. That's really where much of the focus within our trade union is coming from.

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Mr. Scott: I think most of the concern has been around the question of the calculation of dead weeks in the gap. We've committed to fix that. How onerous the divisor is has been a debate for almost a year now. We've committed to fix that. We've also committed to deal with the intensity rules.

Consequently, if you accept the fact that the shift from weeks to hours is an improvement - there are negatives in the bill we need to attend to, and we've committed to attend to those - then I think to some extent we should recognize that there are some aspects of the bill that will in fact create an improvement, particularly when you follow the analysis you do in terms of what's happened to UI over recent years. This is the first time we've not simply dealt with reform by making unemployment insurance fundamentally harder to get. In fact, we're making it, for the current labour pool in the part of the country I know best, easier to get.

[Translation]

Ms Goulet: We are also concerned because we know that there will changes regarding the intensity rule, that is the way in which insurable earnings are calculated. However, Mr. Martin and Mr. Young have said that they will keep the same financial parameters regarding the unemployment insurance fund. Consequently, we will have to expect deeper cuts elsewhere. We're wondering where these cuts will be made.

[English]

The Chairman: Thank you, Mr. Scott.

Mr. Scott has used up all the time for your side. There are no further questions.

I personally would like to thank you very much for your presentation. On behalf of the committee, I would like to thank you and also the people who appeared before you. As a result of your input, at least three members of Parliament, perhaps four, have been inspired to the point of bringing forth changes to the legislation, particularly as it relates to the gap and intensity rules and the divisor. I think it speaks to the issue of the public policy process, where we as members of Parliament are drawing ideas from a presentation such as yours, with the ultimate goal, of course, to improve this piece of legislation.

So on their behalf I would like to express to you our warmest gratitude.

Mr. Crête.

[Translation]

Mr. Crête: Mr. Chairman, while a member of Parliament may move an amendment to improve the bill, I would like to point out that the witnesses have asked that the bill be completely withdrawn. I suggest that we note their request, because it's important to realize that most of the groups we have heard from have not accepted any of the suggested amendments. These groups maintain that the amendments would in no way make the bill acceptable.

[English]

Mr. Nault (Kenora - Rainy River): Mr. Chairman, I have a point of order. Maybe it's time we mentioned to the people who come before the committee, and to Mr. Crête, who doesn't seem to understand the rules of the House, that this committee would be the first in history ever to pull a bill out of the committee process and come back to the House and recommend its complete withdrawal. That's not the work of the committee. The work of the committee - and it should be mentioned to the people who come before the committee - is to improve this bill. If they come with recommendations to withdraw it, then really we should make this thing short and sweet, because quite frankly that's not what this is all about.

We would like to ask questions, as Mr. Scott put it, as to how to improve the bill, and we ask the unions who come before us to make those particular forays into the committee. If it's just telling us that they're not happy with it.... I was in charge of a major union. If I had come and done this today, I quite frankly would have had difficulty picking up my pay cheque.

The whole objective here is to give government some ideas and recommendations on how to improve the bill. Throwing it out, when we have no authority to do that as a committee, is quite counterproductive. I think it's time Mr. Crête and every other member and committee and group that comes before us realized that.

The Chairman: Mr. Nault, I'm just going to allow a very brief, quick remark by Mr. Crête. I don't want this to become a point of debate at this point. That's not to say you and Mr. Crête are not interesting people, but I do have people waiting in Toronto to express their point of view.

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[Translation]

Mr. Crête: I'd like to make a brief comment. I would just point out again that the reason we are getting briefs and recommendations of this type is that we never had a debate on second reading. The government simply arrange things to preclude the debate. As a result, I think all our witnesses are entitled to come and tell us that the bill is not acceptable unless it is reworked from start to finish.

[English]

The Chairman: The point is well taken, but it's also fair that members of Parliament in this committee who feel that they can improve the bill do the work and forward ideas. I've received three ideas that I think are worthy for this committee to pursue.

This was a station break we had to take between Mr. Nault and Mr. Crête, but thanks again.

Mr. Hunter: Thank you.

[Translation]

Mr. Crête: While we're waiting for the other witnesses, I would like to talk about the translation of briefs.

We raised the issue last week, but the situation does not seem to have improved. Last week I had a list made of the briefs we got in one language only, but this did not produce any results and the percentages are still the same. I'm not asking for an extension of debate, but I would like serious thought to be given this matter and efforts be made to find a solution.

[English]

The Chairman: On that point, I think we will honour the routine motion that was approved in the founding organization meeting of the committee. I've instructed the clerk to do all that is possible to make sure the briefs are available within a reasonable time period, and that's what I stand behind. If there's going to be any further debate on this issue, I'd rather take it at the steering committee. Right now, we have people waiting for us in Toronto.

Mr. Worgan, first of all, I'd like to welcome you to our hearing. As you know, we are listening to many ideas from across the country on ways in which to improve Bill C-12, an act respecting employment insurance in Canada. We have drawn from many of the ideas heard thus far, and we of course look forward to hearing your insight into the bill.

As you know, you have half an hour, and we basically divide it into two sections. We'd like to hear first an overview of the major points of your presentation, followed by a question and answer session.

Mr. Kerry Worgan (Individual Presentation): Thank you, Mr. Chairman.

Although I was a member of the Canadian Institute of Actuaries task force on unemployment insurance, I'm not here representing the institute in any official capacity but only as a concerned actuary.

My role on the task force was to examine the design aspects of the UI program, looking at the current program and deciding what changes could be introduced to balance the needs of the unemployed with an equitable funding policy. While a number of our recommendations were in the main body of our report, we also considered an alternative program design in appendix E of that report. It is this alternative plan design, known as a registered unemployment savings trust, or RUST, that I would like to discuss with you today. In keeping with the change in the name of the program from unemployment to employment, I will refer to this new design as registered employment savings trust, or REST.

So what is REST? In simple terms, REST is a tax-sheltered savings account that you would accumulate while you were working to provide you with funds to draw on in the event of job loss. It is what a prudent individual would do in the absence of any government program. Basically, the program would take all the current premiums paid by the employee and employer and transfer them to a savings account where they would accumulate with interest.

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Before I proceed with a more detailed review of the proposed REST program, I would like to discuss briefly what I feel are the major shortcomings of the current employment insurance program.

First is what I call moral hazard or anti-selection. The current program still makes it possible for an individual to maximize their income by working for the required number of weeks each year, thereby collecting full UI entitlements or EI entitlements, and then working on a cash basis at another job. Most of the data we reviewed noted the phenomenon of this repeat claimant, i.e., the individual who claims from the program on a regular basis, year after year.

Second is the incentives for job search. A further effect of the benefit structure is to delay the job search. Since the money is paid for a set period of time, many people will cool their heels for a period of time before actively pursuing a job search or will in fact turn down a job in hopes of finding a better job before their benefit period expires. Again, the data supports this practice since only 20% of all claims have a duration of less than three months.

The third problem is claims adjudication. A continual problem with the existing program is the definition of ``acceptable job loss'' and the ongoing review of whether individuals are actively looking for work. A great deal of effort and dollars are spent on these unproductive activities.

Fourth, a number of employers make it a practice to shut down their operations on a regular basis and they use the EI program to subsidize their employees during the shutdown. While they argue that they are paying for these benefits with their premiums, a true insurance program should not be supplementing these industries in this manner.

Fifth, benefits are too generous for young short-service employees. In my opinion, working for one year should not make one eligible for a year of benefits. At this point, a real attachment to a specific career has not been created and these individuals should be aggressively pursuing job opportunities with a current set of job skills.

On the other hand, someone who is 45, who has spent 20 to 25 years with the same employer, will have a much more difficult time finding a new job or adjusting to a new career. It might require two or three years to retrain this individual for the current job market. Again, the data from Statistics Canada supports the fact that individuals over age 45 have twice the incidence of long-term unemployment compared with those in the 25 to 44 age group.

That's where we come to with REST. By changing the onus from the government providing benefits to the individual maintaining a responsibility for their own financial affairs, a lot of the deficiencies of the current program would be alleviated. Under REST it would no longer be possible to be a regular claimant, year after year. There would be a positive reinforcement to looking for the best job available, since delaying a job search would only serve to reduce one's assets.

Similarly, much of the work spent adjudicating claims would no longer be necessary as the decision to draw down one's assets is best left up to the individual.

Finally, REST does a much better job of providing the right level of benefits for individuals facing job loss at different points in their careers. Those who have maintained a long attachment to the workforce would be entitled to much better benefits than currently provided, while those who only work the minimum qualification period would receive lower benefits.

I'll now touch on some of the administration of REST and how it would operate. The actual administration of the program is quite simple. Each employee would get a registered account that would be credited with contributions from their employer and the employee. Individuals would chose the institution that would hold their account. These accounts could be invested in government bonds or a full range of investment options could be made available.

Individuals who lose their job would then take their record of employment, or ROE forms, as they currently do, to the institution holding their accounts and then be able to make taxable withdrawals from their accounts up to a legislated weekly or monthly maximum. Once the money in the account is exhausted, the individual would be required to reduce other personal assets or turn to welfare, as is done with the current program. If there are assets in the account at retirement, these could be used to provide for retirement security.

There is serious concern for how this program would be implemented in the transition period because there will be people who will lose their job before sufficient assets are accumulated to provide them with current benefit levels. A number of approaches could be taken, ranging from increasing initial contribution levels to providing subsidies from an employment pool that could be reduced over a period of three to five years.

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In terms of a financial evaluation of REST, I looked at the current level of contributions being 4.2% employer and 3% employee at an assumed investment return of 7% to know that it would take three to five years to replace the current benefit levels, but beyond that period, the new benefit levels would be higher. The REST program will support claims every four to five years; however, it will not support claims every year. Due to the large build-up of funds over time for non-claimants, the actual contribution level for the program could be set at current levels with a transition to lower amounts into the future.

Another option could see a portion of the employer contribution directed into job creation programs or put into this social pool, or employment pool, that could be used to support employees who've exhausted their own accounts.

When I looked at this program I was looking at it sort of in isolation. What I did was to link this thing into the Canada Pension Plan. As we are all aware, the CPP is in for tough times in the future. Due to its set-up as a pay-as-you-go pension plan, its continued existence relies on the willingness of active members and companies to contribute significantly increasing amounts into the plan. I believe we are headed toward a CPP set-up similar to the REST concept, an idea that has already transpired in Australia.

It would be beneficial to link these programs using the same methodology. The only difference between employment insurance and pensions is the period of transition. With unemployment insurance, you have a maximum transition of only one to three years as the current benefit period and current level of benefits expire. However, with a pension plan the transition period could be a minimum of 10 to 20 years, or it could be as long as 80 years.

By joining these two programs, you could combine the assets built up under the REST program with similar assets built up under a new CPP program to provide for future retirement benefits and to gradually eliminate the old CPP program.

A second change we all hear about is this mobile workforce. We hear about and are starting to see a change in the work patterns for the future. We expect that the career employee who spent 30 or more years with the same organization will become the exception rather than the norm. Companies are changing their benefits program and the level of paternalism to reflect this new corporate culture. I believe it's up to the government to do the same thing with the employment insurance program so that it is equipped to cope with and encourage a more dynamic workforce.

In terms of individual responsibility and flexibility, again, I believe it's no longer possible or desirable for the government to be 100% responsible for the social security of all Canadians. More people are requesting a say in how their dollars are being spent and whether they are being spent wisely. The accumulation of assets under a REST-type program will contribute to greater individual security. In addition, it has built-in flexibility so that the assets could be used for upgrading job skills or to fund post-secondary education for mid-career changes.

Finally, on capital assets and globalization, the pool of money that would be created by REST would be available for government funding, which indirectly lowers our debt charges, and could be used for fuelling economic growth, which again leads to further job creation.

This is only a brief review of the REST concept. As with any new program, there are going to be specific issues and transition details that need to be addressed. For example, how do you look after fishermen's benefits, and how much flexibility do you provide for maternity leaves? But there are answers available in keeping within the objectives of an unemployment insurance program.

Being an actuary, I've also ground the numbers for a variety of scenarios and then projections under REST and a similar type of plan for CPP. If you're interested, I could provide you with some of these projections.

I thank you for the opportunity to present this REST concept. I look forward to answering any questions you may have.

The Chairman: Thank you very much.

We will now move to questions and answers. We'll start with members of the Reform Party.

Mrs. Jennings.

Mrs. Jennings (Mission - Coquitlam): Thank you very much, Mr. Chairman. I must apologize to the members of the committee for being late.

Ms Augustine (Etobicoke - Lakeshore): It's great to have you here.

Mrs. Jennings: Oh, thank you.

I'm concerned about one particular issue in this - how we select the institutions. I must compliment you on the package. It's not dissimilar to one that we also are looking at. But I am concerned about how we are going to select the institutions that a person may put their funds into.

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We all know the sad story of Confederation Life. I think prior to its demise just about everyone at this table would have said it was a very sound, reliable institution. Have you any thoughts on this, please?

Mr. Worgan: Yes. Having looked into this issue of the investments of the fund, my initial feelings were that it would be best if these were invested in government bonds, T-bills, things of a liquid nature. Then it could be set up that initially it's the way the investments could be run.

Now, over time I'm sure people will be keener on diversifying some of their assets as well. It may be that a more sophisticated individual will pick and choose a broader range of investment vehicles. I think you leave some of that decision up to the individual. Those who have an interest in investing will be able to set up their own accounts and invest as they see fit. Those who are not comfortable with it may just choose to invest that in a government bond.

Mrs. Jennings: Do you have a question, Dale?

Mr. Johnston (Wetaskiwin): Yes. I noted in here that you suggested it would take three to five years to replace current benefit levels. That is at current contribution levels as well, right? This would be a government-supervised but privately directed RRSP type of account. Do I have that concept right?

Mr. Worgan: That's correct.

Mr. Johnston: Do you have figures to back these claims up as well?

Mr. Worgan: Yes, I do. I've run some projections even for people who have gotten into regular claim patterns. The assets do accumulate over time, and as I said, I could provide some of those numbers to the committee if they are interested in seeing them.

Mr. Johnston: I would be interested in seeing those figures, Mr. Worgan. It seems to me that under a program like this, it would do away with a lot of the bureaucracy and administration that we have at the moment. Do you see that as a benefit?

Mr. Worgan: I see that as a definite advantage. I think that in the last few years we've had a number of changes from what is considered appropriate job loss and just cause. Anything we can do to minimize the adjudication process helps people to understand the benefits.

They could think that they're entitled when in fact they're not or vice versa, so anywhere we can minimize the technicalities of the program, I think, helps everyone along.

The Chairman: Ms Augustine followed by Mr. Regan.

Ms Augustine: Thank you very much, Mr. Chairman.

I'm very pleased to be talking with you, Mr. Worgan, and to hear a bit about your proposal. It's an intriguing one, but at the same time it presents some difficulty in trying to put together the elements that we took from your task force report, which we took very seriously and considered well because consultation and task force recommendations are given serious commendations.

In that report some of the elements came forward of the reform that we have before us. Do you think this government should really look to a system that sets up two categories of workers: those workers in stable jobs who can afford a savings account for whatever might happen in the future in terms of their employment and those workers who cannot afford to have their own personal unemployment insurance - control over their own personal situation?

It also seems to me that the hours-based system, the first-dollar coverage, and the protection for low-income workers that we see in this present reform are all examples of how we propose to ensure that we meet the needs of Canadian workers.

So maybe I could ask you to speak around those two parameters.

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Mr. Worgan: I guess your question is directed at the stable employee who works 20 or 25 years at a career, and typically under the programs today he's fairly well off until he loses his job, in which case he may have a hard time adjusting back into the workforce.

The other individual is one who maybe only spends six months at a job, and then has some job loss, and then spends another six months, and is bouncing from job to job. The issue is how much benefit we provide. We really want to provide people with a safety net and a level of insurance as opposed to subsidizing and having them expect that they can lose this job and have benefits for a period of time, then they can go and look for another job.

My feeling is that if we have these people who are not comfortable with their current jobs looking for a new job while working, if they don't have that safety net they would change their work pattern. Maybe they would consider other employment or make sure they have future employment before giving up their existing jobs.

Ms Augustine: What incentives would there be for workers in seasonal industries or short-term jobs or low-income individuals, and what assistance would be provided to them in your system?

Mr. Worgan: What we're hoping is that maybe there's room for a social pool or an employment pool, where we can take some of the employer contributions and direct them into these funds for job creation or apprenticeship-type programs. People with a low income are still going to get an accrual; they will still build up an account if they're working.

I don't see that this program really distinguishes by income. What it does is distinguish by job pattern so that the individual who is spending three months working and six months off and three months working and six months off is not going to be able to keep up that pattern. Maybe the current program contributed a little bit towards that type of work pattern, but the new program wouldn't support that.

The Chairman: Thank you, Mr. Worgan.

We're going to move to Mr. Regan.

Mr. Regan (Halifax West): Mr. Worgan, first of all, I appreciate the fact that you've come forward and brought this proposal, and I know you sincerely have brought this forward and taken time. I want to say that, first, because I'm not too favourable toward the proposal. It seems to me that this proposal does not bring any sense of shared risk and benefit that I think most Canadians believe in having in a program.

People in my riding, for example, believe you should have a reasonable sharing of the risk and benefit of employment through the unemployment insurance program. They certainly want to see changes; there is no question about that. They aren't satisfied with the program as it is, but they also feel it's important to have this kind of a shared program to deal with the economic ups and downs people deal with.

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I'm reminded that I was talking last week with an individual from my riding, a constituent who is in the construction industry and has worked in the industry for 25 years, and he explained how he travels all over the country in order to get work. He'll go wherever he can to get employment, and he's had periods when he's been on UI for a full year, lost his UI, gone for three months with no income at all, and had to spend his savings, sell his house, and lose his home because of that. He says he would far sooner have a job that would give him a regular income and regular working hours if he could.

In fact, he was telling me that he spoke to his father recently - his father worked for 35 years with no period at all of unemployment insurance and recently retired - and his father was complaining about this fellow and his brother and how they often went on UI. The son said to the father, ``Well, you know, Dad, you think about this. If I could trade with you and have a steady job and make a much lower wage than I make per hour, I'd do it right now in a second.'' His father thought about that, and I think he changed his mind.

In light of that, I'd like to know what experience you have in dealing with people who have been through this kind of problem and have dealt with the UI system. Maybe you have lots, but I'd like to hear about that.

Mr. Worgan: Thanks for your question.

I haven't spent a lot of time directly with people out there. I have done a fair bit of retirement and separation program counselling in dealing with people who have lost jobs. The same thing that keeps coming back to me is that even in that case you presented - that individual who had spent 20 to 25 years with periods of unemployment, even periods of up to one year - this kind of program would support all that. In fact, he would probably do better under this program with that kind of work pattern.

But the feeling I get is that the individual who has spent 20 to 25 years and finds at the end of the day that he's now 45 or 50 - too early to retire - just doesn't feel like he can go back and get retrained. He doesn't have the assets to go back to university and get a new education or go to college and pick up a new trade. He's got to go out there and pick up whatever job he can find at whatever he can get.

Those are the individuals that I've.... I guess because of where I've encountered them, I feel sorry for them, because they have spent a lot of time in the workforce and really don't have a lot to make a transition into a new type of career.

The Chairman: Thank you. I certainly appreciate your thoughts on this issue.

Our next presentation will also be through video teleconferencing from the Advocates of Community-Based Training and Education for Women, the Ontario Council of Agencies Serving Immigrants, and the Ontario Network of Employment Skills Training Projects.

We'll take a two- to five-minute break so people in Toronto can get settled, and then we will commence our hearings once again.

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The Chairman: I'd like to call the meeting to order once again.

As I said earlier, we have representatives in Toronto from Advocates for Community-Based Training and Education for Women, the Ontario Council of Agencies Serving Immigrants, and the Ontario Network of Employment Skills Training Projects. The representatives are Karen Lior, Kay Blair and Sandra Dobrowolsky.

Welcome. I'm sure you know how committees work. We would like to hear from you for approximately 10 to 15 minutes, and that will be followed by the question and answer session, something the members of Parliament really want to engage in so that we can focus on some of the major and key points you will raise, I'm sure, during your presentation.

You may begin.

Ms Karen Lior (Coordinator, Advocates for Community-Based Training and Education for Women): Thank you and good afternoon. We appreciate the opportunity to speak to you on behalf of our three constituencies.

A Canadian fable: Once there lived a people who wanted to build a huge monument to proclaim themselves a nation. The name of their country was Adanac. The national government gathered together the best artisans, craftspeople, bricklayers, designers, carpenters and workers from each of the four corners of the country. The group of builders convened to start work on the monument, which was to stand with one corner in each of the territories of the nation: Bergerac, Hannali, Driftwood and Nakomis.

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When they began to work they discovered that the territory of Bergerac did not recognize the credentials of the workers from Driftwood. Hannali had a different school system from the others. The training of those from Nakomis was different from those of Driftwood. Each group used different tools that only they knew how to operate. All needed special training and upgrading so they could work in the various territories. Many had immigrated to this country, so although they had the appropriate skills, they needed language training.

After much arguing, squabbling and posturing from the different territories, the national government said, Enough! Not only will we will develop a unified approach that will recognize the skills, training, talent and experience of those people from the various territories, but we will create a national system that ensures the portability and transferability of skills and credentials. We will do it because, although each of you understands well what is needed and important in your area, we are the only ones with the whole picture. We understand how to bring together what is valuable, treasured and cherished from each and every state to create a monument. Together we will build a monument to protect the rights and privileges of all our people from shore to shore and across all borders.

So the national government, in all their wisdom and sensitivity to territorial, cultural and historical difference, imposed a system to honour and protect all citizens and all workers in the land. They were able to build a strong and lasting monument that pleased some and that everyone was able to enjoy.

ACTEW, OCASI and ONESTeP are provincial associations in Ontario with a shared commitment to the achievement of common goals: equality, fairness, community prosperity, economic development and healthy communities. Our interest in the employment insurance legislation stems from our common commitment to developing opportunities for all Ontarians to contribute to the Canadian economy. We are making this submission in support of federally funded community-based training as a successful, effective model of service delivery.

You have our written submission before you. Given our short time with you today, we will be focusing on the following key areas: a review of the standing committee's report, Security, Opportunities and Fairness; a discussion of the role of the federal government; and our comments on the impact of Bill C-12 on training. At the end, we will share with you our complete list of recommendations.

In Security, Opportunities and Fairness, the 1995 report of the Standing Committee on Human Resources Development, the committee expressed its commitment to equity principles. The standing committee called for gender analysis of reform initiatives and for measures to meet specific needs of racial minorities, people with disabilities and other groups disadvantaged in relation to the labour market.

ACTEW, OCASI and ONESTeP supported, and continue to support, the views expressed in Security, Opportunities and Fairness. We believe Bill C-12 contains many elements that represent a step backwards from the Standing Committee on Human Resource Development's 1995 report. Following our review of Bill C-12, we can only see one limited principle that underlies the document, devolution of authority to the provincial government.

ACTEW, OCASI and ONESTeP support federal legislation firmly based in principles of fairness, economic opportunity, justice and employment equity. We support a framework for Canada's labour force development policies based on the following components: a coherent, integrated training system, funded through general government revenues; the development and implementation of national training standards applicable to all publicly funded programs; provision of supports that facilitate access to training ending in employment, such as bridging programs, child care, wages or allowances for training programs and prior learning assessment and recognition; and a clear separation of funding for income support.

Ms Sandra Dobrowolsky (Executive Director, Ontario Network of Employment Skills Training Programs): Good afternoon. My name is Sandra Dobrowolsky.

We would like to quickly review some of the key themes of the standing committee's report, Security, Opportunities and Fairness. The standing committee affirms the critical role of the federal government in relation to human resource development, and specifically with respect to labour market training.

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The standing committee made particular reference to the particular access and accommodation needs of equity-seeking groups. The standing committee strongly rejected the workfare/learnfare concept.

Equity issues were taken into account and the committee recognized the danger of adverse impact discrimination arising unintentionally from program reform, such as the planned reform of the unemployment insurance system and the repeal of the National Training Act.

The standing committee made several observations and suggestions regarding discrimination in employment and emphasized the important role of the federal government in promoting access to training for women. The standing committee recognized the need to incorporate the specific concerns of ethnocultural and visible minorities into reforms of the social security system. The standing committee called upon the federal government to take a leading role in eliminating barriers to employment and achieving a workforce that reflects the diverse composition of Canadian society.

Our organization strongly suggests the Standing Committee on Human Resources Development revisit its 1995 report and use its findings as a benchmark for assessment of Bill C-12. In our view, the equity principles outlined in Security, Opportunities and Fairness are not reflected in Bill C-12.

The role of the federal government is in assisting the unemployed in developing labour market opportunities. It's clearly indicated in Canada's Constitution. Section 36 of the Constitution Act of 1982 commits the federal as well as the provincial governments to:

(a) promoting equal opportunities for the well-being of Canadians;

(b) furthering economic development to reduce disparities in opportunities; and

(c) providing essential public services of reasonable quality to all Canadians.

The British North America Act was amended in 1940, determining unemployment insurance as a federal jurisdiction. This constitutional amendment established a clear federal mandate, thus ensuring support and assistance to unemployed Canadians.

The summary contained in Bill C-12 provides an overview of the contents of the legislation and states that assistance for the provision of labour market training in a province would be provided only with the agreement of the provincial government. We are concerned that Bill C-12 would severely restrict the ability of the federal government to play a leadership role in the Canadian labour market.

We acknowledge the federal government's attempt to respond to the aspirations of the Quebec government by restricting federal involvement in labour force development. However, we see a danger in responding to these aspirations by devolving crucial federal government roles to all other provinces.

In the consultation process surrounding the social security reform, more than 80% of those polled supported national principles, as well as national standards, principles and criteria for the use of public funds.

Bill C-12 is predicated on the provincial government's taking over authority for labour force development policy. We agree the federal-provincial agreements can be excellent mechanisms for ensuring that national standards and local needs are met in program design and delivery. However, such agreements of course require the consent of two parties.

We are aware that reaching such agreements can be a very difficult process and that outcomes cannot be predicted. However, we have been unable to confirm the interests of the Government of Ontario in taking on added responsibilities relating to labour market training.

Our organizations urge the Standing Committee on Human Resources Development to amend Bill C-12. Instead of prohibiting federal programming and labour market training, we recommend the bill be amended to encourage and permit the federal government to enter into federal-provincial agreements regarding labour force development. We cannot support legislation that prohibits the Canadian government from developing and implementing labour market programs to respond to the country's needs.

Ms Kay Blair (President, Ontario Council of Agencies Serving Immigrants): Good afternoon. My name is Kay Blair. I'm actually representing OCASI as part of the three consortiums here today.

Primarily what I would like to talk about is the impact of Bill C-12 on training. Community-based training serves individuals who are experiencing barriers to employment. Last year the Minister of Human Resources Development made a commitment to ensure continuing support to those groups that face barriers to participation in the labour force and in society at large.

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The individuals and groups mentioned by the minister are those that today are being threatened by Bill C-12. The changes outlined in the bill would exclude from training eligibility those who have not established an employment insurance claim within the past 36 months. This would affect many individuals on social assistance who now access employment training through community-based services.

With Bill C-12, the changes to unemployment insurance and the move from purchasing training to employment benefits to individual clients will have two major impacts, and particularly in Ontario. I'll share the two significant impacts with you now.

The first impact of Bill C-12 is the elimination of skills development and employment opportunities. The severest impact will be on the most in-need clients, individuals who are unable to be part of the labour market by virtue of disability, personal circumstances, or stage of life and who are not eligible for unemployment insurance benefits, which means they cannot access benefits paid by the UIDU under its program funds.

We could study the greater Toronto area as an example of the impact on Ontario communities. In the greater Toronto area in the 1995-96 fiscal year, HRDC purchased program services and career counselling from community-based non-profit organizations for close to 10,000 people who were not eligible for UI. This was chiefly through project-based training and through 11 outreach projects in the greater Toronto area.

The profiles of the clients that have access to these programs range from people with disabilities, youth, people who receive social assistance, refugees, immigrants, women without recent attachment to the labour force, ex-offenders, racial and ethnic minorities, individuals who are not quite eligible for UI, and francophone Ontarians. So as you can see, what we're talking about here is that Bill C-12 does have a severe impact on groups of people who are currently marginalized and have limited access to labour market programs.

If we look at the second impact of Bill C-12, we see there's a complete erosion of the community-based infrastructure that is primarily established to provide services again to a group of people who are significantly marginalized. When we look at what's happening to us today, we can see that it dramatically reduces infrastructure for training of our clients in their local communities.

Most of the community-based training programs today funded by Human Resources Development Canada are not guaranteed continuity. We're told (Inaudible - Editor) of the implementation of HRIF, but we need to recognize that there needs to be a period of time during which there will be a need for operationalizing of that program, so we cannot blow up a structure that exists currently without having a replacement in place.

We need to also recognize that there are positive social and economic benefits of community-based employment training programs that have been proven to be successful time and time again, even based on the evaluations that have been done by HRDC itself, and that these programs contribute to local economies.

In Ontario, approximately 30,000 people per year are served by community-based training programs. After completing these programs, clients earn an average of $10 per hour, which translates into a little over $18,000 per year. These contributions are made by graduates of these programs and therefore over-compensate for the cost of the training they actually participate in.

Today we urge you to ensure that Canada continues to have a national standard and direct leadership for labour market training and that there's adherence to such standards, be it a requirement for the actual expenditures in government funding. As such, what we want to be able to share with you today is our collective recommendations and that as a committee you will consider them quite seriously, as we believe these are necessary in order to address the proposed changes to the current unemployment insurance legislation.

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These recommendations are in the full brief we sent to you, starting on the page that begins, ``Summary of Recommendations''. Perhaps you'd like to turn to the recommendations, which we have collectively put together, as I go through them with you:

- One, that the Standing Committee on Human Resources Development renews its commitment to equity and incorporates an equity analysis into the consideration of Bill C-12. We believe the new legislation has to be guided on the principles of equity. If that's not a major factor in terms of this new direction, then we're really not upholding the commitment made by the minister. When we speak to fairness, equity, economic opportunities and justice, unless equity becomes a paramount principle that guides this, then it will not be effective.

- Two, that the criteria be established to guide implementation of Bill C-12 that respect the principles of fairness, economic opportunities and justice, as well as the federal principle of employment equity.

- Three, that the receipt of employment insurance not be made conditional on attendance in a course or program or institution of training or any other educational activity.

- Four, that the federal government provide a strong and unified approach to developing and enforcing national principles in labour force development policies.

- Five, that the federal government develop a national strategy to provide employment skills development opportunities to socially and economically disadvantaged job seekers; that this strategy include an income support capacity; and that this strategy be separate and apart from Bill C-12.

- Six, that the bill should not preclude direct federal involvement in labour market training and adjustment. Instead, the bill should state that the federal government would endeavour to enter into federal and provincial agreements regarding labour market training and adjustment.

- Seven, that the federal government play a leadership role in increasing access to job opportunities, including developing support measures such as child care, literacy programs, language training, bridging programs and mechanisms for prior learning assessment.

- Eight, that the federal government support establishment of a national system to evaluate and recognize training and professional credentials obtained outside of Canada. We think this is critical. If we intend to be part of an international market, we have to be competitive as a society. If we continue to deny the use of the skills and talents immigrants and refugees bring to this country, we will be wasting a pool of talent, leaving it completely untapped.

- Nine, that objective criteria be applied to decisions about the future of training programs and the continued access as participants to labour market training.

- Ten, that there be social consideration for the training needs of immigrants and refugees, women, people with disabilities and others who may not qualify under the new eligibility guidelines. We're talking about real access and not increased barriers to participation.

- Eleven, that participants in training programs not be separated or categorized on the basis of the type of income support they receive.

- Twelve, that an additional employment measure be added that supports project-based training to address specific community needs and redefine high unemployment communities to include non-geographic communities with a high rate of unemployment.

- Thirteen, that a five-year eligibility window for participation in EI-funded programs be extended to persons with disability, for example, those with psychiatric and/or physical disabilities who may have established a sickness claim but are unable to come back to work, especially people who may have had some cyclical disorders such as MS or psychiatric illnesses.

- Fourteen, and finally, since self-employment often takes at least three to five years to determine its viability, that a five-year extension for eligibility for participation in the employment insurance funded programs be extended to people who have a claim and could not find work, or who have established businesses that have failed. There should be some recognition for that.

Again, we do thank the standing committee members for the opportunity to speak to you. We feel the information we have shared with you this afternoon is quite significant to the constituencies we represent. We urge you to take what we have said quite seriously in your recommendations that will be forwarded to government in terms of the final frame of what this new employment legislation would look like, and urge you to hold yourselves committed to the principles of equity, fairness, economic opportunities and justice for all.

Again, we thank you. We're now prepared to take your questions.

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The Chairman: Thank you very much for an excellent presentation, and thank you for telling us that it's really important to maximize the human resources potential of our country.

We're going to move to a question and answer session now. We'll begin with Monsieur Paré.

[Translation]

Mr. Paré: The speaker referred to the Standing Committee's report of last year. The witness said that the government should review Bill C-12 on the basis of the conclusions that appear in the 1995 Standing Committee's report. My first question is to ask you to kindly remind us what some of these conclusions were. Could you do that?

I would like to make a second comment as well. In your statement, you also refer to the 1982 legislation, in order to justify your argument, I assume. Later in your brief, you suggested that the government not comply with the 1867 Constitution Act and not withdraw from the area of training. I would like you to help me reconcile these two points.

[English]

Ms Dobrowolsky: I'm sorry, but I did not hear the English version of your first question.

The Chairman: Mr. Paré, can you repeat the first part of your question?

[Translation]

Mr. Paré: In the first part of my question, I asked the second speaker to kindly remind us of some of the conclusions made in the 1995 report of the Standing Committee because she suggested that the government assess Bill C-12 in the light of these major conclusions.

[English]

Ms Lior: I'm going to respond to that. There are comments in our written brief. It says that the standing committee affirmed the critical role of the federal government in relation to human resource development, specifically with respect to labour market training, stating - and this is from page 76 of the report - that: ``The federal government has a responsibility to ensure that effective training is occurring throughout the country.'' It goes on to talk about a natural role for the federal government in ensuring quality labour market information, which has also been reflected in other parts of Bill C-12 in terms of a national labour market information service.

The committee recommended that the particular access and accommodation needs of women, aboriginal people, persons with disabilities, ethno-cultural groups and visible minorities be considered in the design and delivery of employment development services.

The committee rejected the workfare/learnfare concept and said that the committee cannot support participation in training as a condition of income support, that most training programs are already oversubscribed, as numerous witnesses have pointed out.

The Chairman: Monsieur Paré, they asked you if she should go on with reading her brief or not on that particular section.

[Translation]

Mr. Paré: I only have a very brief question. In order to justify the fact that the federal government would continue to be involved in manpower training, you seem to be saying that manpower training can be effective only if it is offered by the federal government.

From what you've said, are we to conclude that a province could not train workers effectively?

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[English]

Ms Lior: I don't think that's what we're saying. I think what we said in the brief is that we understood there has to be respect for provincial interest and that, absolutely, the influence and the importance of local economies have been proven time and time again. Those things have to be taken into consideration in developing a national purview on labour market training.

What we were saying is that we hoped the federal government would not completely step aside and make a system where all provinces had to be the same when we know there are differences among provinces. We didn't want to see a system that responded.... Equity and equality are not the same thing. We didn't want to see a system that made sense in one area imposed on a whole country.

Ms Blair: In addition to what Karen has just stated, we're not suggesting that a province cannot solely provide training; what we're saying is that there has to be federal leadership in this process. As Canadians we should have the right to travel to any part of the country and be treated the same way. It would be expected to have the same kind of services. Without federal leadership in this process we are not going to be able to achieve that. But if you truly believe in the principles of equity, then that comes with the basis of national standards that speaks to leadership.

The Chairman: Now we'll move to Mrs. Terrana.

Mrs. Terrana (Vancouver East): Thank you very much for your excellent presentation. It covers many different areas.

On your recommendation one, it should be clarified that the government has produced a gender-based analysis on their reform, and that was to support the commitment that was made in Beijing at the World Conference on Women.

Also, I would like you to expand on recommendation three and five. On the last two lines of number five, I would like you to say a bit more about the strategy you're talking about. We are going towards a different system and we know it's changed, but there is one particular area...that is the payment by the hour instead of weeks, and the first dollar. I would like you to comment on that and see if you support this, if you feel it's going to do a better job for people such as disadvantaged people, women and also refugees and immigrants.

Ms Blair: What I would like to do first is to speak to the summary of recommendations. You highlighted recommendation three and recommendation five.

What number three speaks to is the fact that what we would not want to see happen is that a person's access to employment insurance be conditional on attending a training program. We're not looking to force sick people into training, because they may not require training, but they would still be eligible and would still be seen as having access to employment insurance benefits. It should not be conditional on participating in training programs or some educational activities. In fact, people should have a choice in determining whether they participate in training or not.

When we look at number five, what we're saying here is that regardless of the fact that the employment insurance is looking at supposedly these five tools with the labour market, the federal government still needs to have a national strategy in place that will provide some opportunities for people who are more economically disadvantaged.

I think we took the time to highlight particular individuals, people with disabilities, immigrants, refugees and women who do not currently experience any sense of equality within the labour force. There has to be some provision put in place to address these special, unique needs of people who are not currently experiencing fairness in the workforce. We're saying it has to be a separate strategy apart from Bill C-12, that stands on its own but supplements the implementation of this.

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Mrs. Terrana: Thank you, I understand.

I also would like to say that what you are asking for in the third recommendation is not included in the bill - the fact that unemployment insurance is made conditional on attendance in a course, etc. It's not in the bill right now.

My last question has to do with the way we are moving into making payments by the hour, instead of considering the week, for employment insurance. That would give some advantage to women, to disadvantaged people, because many people, especially in the area of refugees and immigrants, work 14 hours per week, and they don't get any employment insurance.

I would like you to comment on that, on whether you are receptive to that idea.

Ms Lior: We are very grateful for that part of the bill. We think the change from first day to first hour worked, and hours counted from the first day worked, is a very welcome change, especially since we understand that the conditions of work are changing rapidly and drastically. Part-time work is much more part of the labour market than it's ever been before. That absolutely impacts on women, and we're very happy to see that as part of the bill.

Mrs. Terrana: Thank you very much.

The Chairman: Are there any further questions?

Mr. McCormick.

Mr. McCormick (Hastings - Frontenac - Lennox and Addington): Thank you very much for your presentation and for your comments on the training and on part II of our employment insurance.... Of course, part II is certainly not just about training. It's also about getting people back to work. I realize that training is very much part of this.

We talk about people who are among the unfortunate people. As you are probably aware, 45% of people receiving social benefits have received unemployment insurance in the last three years. Now these people will be eligible for the five new employee benefits and the employment benefits.

I wonder whether you'd like to comment on the additional parts of part II: the targeted wage subsidies, the earning supplements and the self-employment part of the program. I'm sure it can be of great use to many of your people.

Ms Dobrowolsky: I'd like to comment on the first part, about the numbers of people on social assistance who have been on employment insurance, or had a benefit or a claim within the last three years that they would then be eligible for employment benefits. Yes, you're right, that's true. The only problem is, there isn't extra money in that employment insurance fund. There won't necessarily be extra training seats or employment benefits created. The same amount of money is projected for next year as there is this year in that EI fund, ``Developmental Uses'' - or whatever it's going to be called.

So even though more people, in fact, will be eligible because of the three- and five-year extension, because there's not extra money in the system it won't necessarily mean there will be spaces for them. They may be eligible, but being eligible doesn't mean one has access to those benefits. But it'll be interesting to see how that plays out.

I'm sorry, can you repeat the second part of the question you had?

Mr. McCormick: My comments were that certainly if we're going to see a behaviour change among people who use employment insurance, with less reliance on the benefits and a faster return to work, then I'm hoping that many people will be able to make use of the re-employment services that are available - the wage subsidies and the targeted income supplements and the self-employment assistance programs. I know you're mainly interested in training, but I'm sure these programs certainly will be very valuable for many of your people.

Ms Dobrowolsky: Yes, I agree with you. Those initiatives are very exceptional initiatives. The targeted wage subsidies may bear watching, though, because it's possible that could ratchet down the salaries of people. If employers think they can get wage subsidies for their employees, it's possible that they then will hire people at a low wage.

So I guess it bears watching to ensure that this doesn't happen, but overall those benefits all seem to be very good ideas, especially the self-employment one.

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The Chairman: Thank you, Mr. McCormick.

Thank you, Ms Blair and Ms Dobrowolsky. We certainly enjoyed your presentation. The points you've raised are, of course, very important to us as we prepare to improve Bill C-12. As always, our members would like to express our warmest and sincerest gratitude for your intervention. Thank you.

Ms Blair: Thank you.

Ms Dobrowolsky: Thank you.

The Chairman: Before we adjourn the meeting, I'd like to say that, as you know, tomorrow we will be hearing from the Minister of Human Resources Development. I would simply like to take this opportunity to thank the members of this committee, because tomorrow we will be in a position to at least relay to the Minister of Human Resources Development some of the work, some of the suggestions, and some of the possible amendments that members of this committee are looking at.

That was possible only because members of this committee have been working very hard and diligently to make sure that we in fact improve this bill above and beyond everyone who has been present here. I would like to particularly thank Mr. Regan, Mr. Scott, and Ms Augustine for bringing forth some possible amendments. I have received them, and they will be distributed to all members of the committee.

Tomorrow we will be hearing from the minister, and it will be in room 253-D. It will be at 3:30 p.m.

Also, for the benefit of those individuals, I think it's important to note that we have benefited a great deal from many research papers that have been made available to us. I have a list, which I've distributed to every member of the committee, that outlines the documents that have been provided to the standing committee. I'm sure the members who have proposed possible amendments have made use of the excellent research that has been provided to this committee by Human Resources Development Canada.

I look forward to this type of productivity by this committee from now until the end of clause-by-clause so we can report to the House of Commons an improved Bill C-12. Thank you.

The meeting is adjourned.

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