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EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, April 18, 1996

.1901

[English]

The Chairman: Before we begin with this final presentation from the Department of Human Resources Development officials, I would like to take this opportunity to thank all members of the committee for their contribution throughout the hearings, their flexibility, and of course the hard work that took place in this committee.

As you remember, I set up certain parameters for this committee right at the offset, right at the very first meeting, and they have been followed. One of them was that throughout the hearings I would be looking to members for ideas, ways and amendments to improve this piece of legislation. Some members, namely Mr. Scott, Ms Augustine and Mr. Regan, have forwarded amendments.

At the beginning of the hearings, I also stated that bringing forth amendments early on would allow me, as chair, to bring those amendments to Human Resources Development Canada so that they may in fact analyse the various amendment proposals. The benefit of doing that, of course, is that we would be in a position to in fact analyse the amendments prior to clause by clause. To those member who took up the offer, I express to you my sincerest and warmest gratitude because today we have received from Human Resources Development Canada the analysis of the amendments that I just cited, namely the amendments dealing with gaps in the averaging period, the divisor and the intensity rule, as outlined by the three members I mentioned earlier.

This particular document has been distributed, and now we have Ms Diane Carroll, Ms Karen Jackson and Ms Norine Smith here from Human Resources Development Canada to answer any questions you may have about it.

I would gather that you probably want to give a quick overview, and then we'll engage in a question-and-answer session. Welcome.

Ms Norine Smith (Acting Executive Director, Insurance, Department of Human Resources Development): Thank you, Mr. Chairman. We know you've had a very long day and we appreciate that this opportunity has been tacked onto the end of your hearings in order that we may to go through this document. So perhaps with no further introduction than that, I'll pass the microphone to my colleagues, who can give you a quick overview.

Ms Karen Jackson (Director General, Labour Market Policy, Department of Human Resources Development): Mr. Chairman, what we've brought are the results of our analysis of the three sets of proposals that you referred to us about three weeks ago. This document is divided into two sections. In the first section we've provided a description and analysis of the three amendments: that dealing with gaps in earnings; that dealing with the divisor; that dealing with the intensity rule.

In the second section of the document, we've replicated some key tables that indeed we first provided to the committee for their benefit in January. They will compare the impacts of Bill C-12 if these amendments are made to the impacts of Bill C-12 as it stands alone. We'll give you some information about impacts by province, by gender, by age, by industry.

.1905

I wouldn't intend to take you through each and every one of those tables, but we'll be happy to answer any questions you might have.

To turn quickly to section one, page one, you'll find what our analysis has shown us about the proposal to change the fixed period for earnings averaging. That is to allow people to count back from the day of lay-off to find the last weeks of work within the 26-week period preceding the filing of their claim.

We looked at that. We find that it's even. As when we spoke to the committee previously, we find that under Bill C-12 about 35% of all claimants do have gaps in earnings during that fixed period, which would indeed then have an impact on their benefits. Indeed, 10% of claimants have gaps of four weeks or longer during that fixed period.

When we analyse this proposal, what we find is that those percentages fall to 10% and to 6.5% respectively. As we have explained in the past, we find that claimants with gaps in their earnings are found in all regions of the country. Consequently, it's not surprising that when we model and we analyse what would happen if you did accept this amendment we find that we have a fairly even distribution across provinces.

Indeed, in all provinces, the percentage impact drops by one or two percentage points. If this proposal were accepted, it would mean that insurance benefits paid out would increase compared to Bill C-12 by $246 million by the year 2001-02.

The second set of proposals we analysed was a matter of establishing a divisor, which is two weeks above the minimum entrance requirement in all weeks. That is indeed a divisor that would range from 14 weeks to 22 weeks.

Our analysis indicates that this proposal would have a positive impact on benefit payments for workers in high unemployment regions. It indeed does have a differential impact. You will find that with this amendment introduced and accepted, the overall impact of reform will fall by about three percentage points in Newfoundland, whereas the impact would only fall by a small fraction in Quebec, Ontario and provinces west of there.

When we model this, if we put this on top of the change in the reference period, we find that benefit pay-outs will increase by approximately $95 million.

The third set of proposals were those to deal with the intensity rule. That is, exempting claimants from the family income supplement, from the intensity rule, and providing a credit to those who receive a reduced benefit as a result of working on claim.

If somebody while receiving insurance benefits for 24 weeks is, because they're working on claim, only actually receiving 50% of what they're entitled to in those 24 weeks, then we will assume in future calculations that they've really only received benefits for 12 weeks. That's what we would take into account in making a judgment about whether the intensity rule would apply to this person.

Our analysis of this is that of the 350,000 claimants who would receive the family supplement, we estimate that about 188,000 of them would be affected by the intensity rule. Our analysis shows that if they indeed would be exempted from this rule they would see on average their benefits increased by $128. Overall, compared to Bill C-12 pay-outs of benefits would increase by $24 million if this proposal were to be accepted.

.1910

What we then have for you on page four is a table that is going to show you the impacts of these three proposals by province, by gender, by age.

I'll just take a little bit of time on this table. In the first column what you have is the reductions in insurance benefits under Bill C-12. Then, moving right, in the next column we have shown you what will happen to the reduction of benefit pay-outs if you put in the 26-week reference period.

For instance, you can see that in Newfoundland benefits would have been reduced by $138 million in the year 2001-2002. If this amendment were to be incorporated into the bill, pay-outs would be reduced by $130 million. That's the way to read this table.

Actually, what you can see therefore if you compare the percentages between Bill C-12 and Bill C-12 with the 26-week reference period is my earlier comment about it having a fairly even impact across the country, reducing the impact by one to two percentage points.

Moving further right across this table, the next column shows you the impacts of Bill C-12 with the 26-week reference period added, and then on top of that the change to the divisor.

Again, simply following across the top line - that is, Newfoundland - now with those two amendments you have the benefits being reduced by $107 million compared to that of $138 million under Bill C-12.

If you compare the second and the third columns it will show you the point I made earlier about how adding the change in the reference period does have somewhat of a disproportionate impact. For instance, you can look at Ontario and you can see that this indeed only amounts to $2 million, $384 million to $382 million. Benefit pay-outs are only increasing by that amount with this change.

The final column on the right has all three of the proposals in it and shows you then the combination of the impact of them.

Reading across the total on the bottom -

[Translation]

Mrs. Lalonde (Mercier): Excuse me, Mr. Chairman, but my day began very early. I was in the House all day and I only had a short break. I must say that I usually have a good ability to understand and absorb facts, but now, I can't make head or tails of this.

Since we have the documents, we could bring them with us to read them, and these ladies could come back Tuesday. They could make a short presentation now, but without getting into the details of the tables.

Mr. Chairman, I would also like you to assure us that we will obtain answers regarding maternity leave. On many occasions, women's groups who appeared before us described the serious problems affecting pregnant women and it seems to me that you had made a commitment to getting us answers. My colleagues and I checked, and we have not received these answers. We hope to have them if possible.

With regard to this estimate of $365 million, if possible, I would like to know where those $365 million will come from, given that the minister had committed himself to respecting the fiscal parameters. I have other questions, but quite frankly, I've had it now. You know I am usually pretty resilient, but this evening...

.1915

[English]

The Chairman: I know you have very good resistance.

Mrs. Lalonde: I will still have it, but tonight I think we don't have to insist on it.

The Chairman: So you would like to have the officials perhaps go on for another 10 to 15 minutes and give an overview of the paper. Then you would like to go back to your office or home and review the paper -

Mrs. Lalonde: Exactly.

The Chairman: - and then come back, but this will be done in conjunction with clause-by-clause. When these particular issues arise you will get your response, and I've also noted the other requests.

Mr. Nault (Kenora - Rainy River): Just for the record, the paper on the effects related to maternity leave has been tabled with the committee. I don't know where the Bloc was when that was tabled, but we all have a copy of it. I don't know how it slipped by the three members across the way, but we all have a copy. I'm surprised they would make the statement that they weren't given a copy of the rationale for the maternity leave. That paper was handed out a number of days ago. We'll certainly make it available to them if they didn't get it, but that paper is available for them. A number of other papers were made available over a number of weeks as people asked questions.

Quite frankly, I think we should get on with the presentation; otherwise we'll be here even longer. I don't want Madam Lalonde to collapse on us, so we should get this over with and get on with it. When we get into clause-by-clause we can certainly have the opportunity then to deal with individual issues -

[Translation]

Mrs. Lalonde: No, I will not...

[English]

Mr. Nault: But I don't understand what paper she's talking about because the paper was presented to each member about two weeks ago, practically when we first started. I'm going to get a copy of it for them, but it was presented to everyone here.

The Chairman: Mr. Nault, if as members of the committee, Madam Lalonde, Mr. Crête and Mr. Dubé in fact did not receive it, I would like to make sure that they do receive it, that they do analyse that particular paper, and we'll move forward on that.

I think there is a general consensus here that we get an overview from the HRD officials for another 10 to 15 minutes, and then we can all go back and study the paper. The material we have now will only come back into this committee when we're doing clause-by-clause. Is that fair? Is that fair to everyone?

[Translation]

Mrs. Lalonde: Mr. Chairman, I just want to say one thing. We're about to undertake some very important work together. This evening, according to the rules we had adopted, we could have refused to sit. We had agreed on the time frame during which we would sit. Let's just say that I don't really accept Mr. Nault's remark, but I will put it down to fatigue. As far as his fear that I might collapse is concerned, have no fear. Above all, I want to be able to understand everything. Given the number of people we represent and the importance of this issue, we feel we have a responsibility and you have not heard the last of it.

Thank you.

[English]

Mr. Nault: I'm worried about your health. When you get to a certain age, you have to get your sleep. I know.

[Translation]

Mrs. Lalonde: Mr. Chairman, quite frankly, I find that remark inappropriate. I could take that in jest and say that I hope that he's in as good shape as I am when he gets to be my age, but I won't do that, because that could be described as ageism.

[English]

The Chairman: I'd like to go back to the original reason why we are here, which is to listen to HRD officials give us an overview of this particular paper for the next 10 to 15 minutes. It's a very, very important paper because it deals with the lives of thousands of Canadians who are looking to us to improve the bill.

Can you please proceed? Thank you very much, Ms Jackson.

Ms Jackson: Just to finish, I would draw your attention to the very bottom line of this table, which does show you the difference between Bill C-12 and Bill C-12 with this package of proposals incorporated into it. You see that rather than an 11% reduction in insurance benefits, you would have a 9% reduction. That is indeed the $365 million.

To go on, I will not speak to every table in the second part of this document. I will draw your attention to a few and then if you have further questions, we'll answer them.

.1920

In table 1, I'll draw your attention to the year 2001-02. You can see the comparison of the overall reductions in the insurance benefits. Under Bill C-12, benefits would have been reduced in Newfoundland by 19%. That is 15% in a package that incorporates the changes. By comparison, in Ontario benefits would have been reduced by 9%. That's 7% with the package of amendments incorporated into it.

The main message in this table is that the impacts fall by three to four percentage points in Atlantic Canada and by about two percentage points elsewhere in the country.

Mr. Allmand (Notre-Dame-de-Grâce): Is the sole difference between the table on page 4 and table 1 the fact that the page 4 table is for the year 2001-02 and table 1 is for 1997-98 and 2001-02?

Ms Jackson: Yes. Sir, there is really no difference. We've simply added another column. On page 4, if you look at just the first column and compare it to the last column, we've replicated that here on the bottom of this first table in the second section.

Mr. Easter (Malpeque): And converted it into dollars.

Ms Jackson: Yes. Is that okay?

Mr. Allmand: Yes.

Ms Jackson: The next table deals with the issue of benefit-to-contribution ratios. Again, I'll just speak briefly to what the picture would look like in the year 2001-02. To summarize, the benefit-to-contribution ratios will increase somewhat for the Atlantic provinces, the net beneficiary provinces. It will fall very slightly or remain essentially the same as it was under Bill C-12 in those provinces who are net contributors to the program.

Again, I'll use Newfoundland to illustrate. In 2001-02 under Bill C-12 you would have had $366 million more in benefits being paid out than in contributions through premiums. That number in Bill C-12 with all of the adjustments put into it rises to $393 million. That's the way you should read it.

Conversely, if you look at Ontario, you have $1.502 billion more being paid into the program by way of contributions than is being received in that province's benefits. You compare that with the package that incorporates all the adjustments and that number rises to $1.559 billion.

Mr. Allmand: Excuse me, could I repeat the question?

Is the assumption that the rate of unemployment remains the same? I haven't had a chance to read all of this. These things could change depending on the rates of unemployment.

Ms Diane Carroll (Acting Director, Unemployment Insurance Analysis, Department of Human Resources Development): No. It does take into account the forecast of the unemployment rate as it moves out. That is taken into account.

Mr. Allmand: So what do you forecast the unemployment rate to be in the year 2001?

Ms Carroll: I can't remember offhand. I'm sorry.

Mr. Allmand: So it's based on predictions -

Ms Carroll: Yes. It's based on forecasts.

Ms Jackson: Yes. And it's consistent with the government-wide forecast.

Mr. Allmand: It's still bad. It's too high.

Ms Jackson: They're moving very quickly on.... Table 3 gives you a picture of the changes in the impacts by industry. The very simple message of this table is that there is slightly more change in seasonal industries than there is non-seasonal industries with the package which incorporates the adjustments.

It's not really a black and white picture, but, for instance, you can see that the impacts fall by three percentage points in the agricultural industry. On the other hand, if you look at real estate or business services, the impacts are falling by only one percentage point.

.1925

I'd skip over the next table. That's simply to do with benefit-to-contribution ratios by industry. I would pause for a moment at table 5. Again, I simply direct your attention to the year 2001-02. The adjustments, if accepted, would increase benefit pay-outs to older workers somewhat more than they would to younger workers.

There's a slightly greater benefit being provided to men with the package that incorporates the changes than there is to women. However, it's only very slight.

I would pause perhaps for a moment at table 6 as well. Here we have been able to show you where you find the 188,000 recipients of the family income supplement, by province, who would also be affected by the intensity rule. For instance, 33,000 are found in Ontario, 14,000 are in New Brunswick, 70,000 are in Quebec.

To move on, I'll skip over table 7 and move to number 8. Table 7 is simply giving you the same information as table 8 for 1997-98. I'll just stop briefly at the information that applies to 2001-02. This replicates an analysis we provided in January. It shows you what is happening to benefits paid to recipients in low income families with children.

You may recall that we spoke of benefits to that category of claimants increasing by 7% under Bill C-12. The package that incorporates the adjustments would indeed see that rise further to a 12% increase in benefits. It means that group of claimants would receive 12% more in benefits than they receive under the current system.

Indeed, a subset of that population, single parents and low-income families, is the second part of this table. We spoke about benefits to that group of people increasing by 10% under Bill C-12. Indeed, with the changes that would increase by 13%.

This incorporates the impact of all of the changes, not just the exemption from the intensity rule, but also the change in the divisor and the change in the reference period and how it's affecting this group of people.

Very briefly, on table 9, you will remember that we have explained previously that our analysis shows us that about 90,000 people who cannot qualify for benefits today under the new system would be able to qualify and vice versa. Our analysis shows that about 90,000 who can qualify today may possibly not be able to qualify in future.

This set of proposals does nothing to change those numbers. If you take those people and set them aside this table is addressing the population of claimants who are able to collect benefits today and who we would see being able to collect benefits in future.

In a nutshell, today we're showing you that the the impact on benefits paid out to that group of people who will continue to collect benefits falls from 8% to 6%.

The reduction in their benefits of approximately $1.477 billion would indeed with the package with the adjustments total $1.1 billion. That's the decline in their benefits.

.1930

The next set of tables, which I won't go through, actually takes the impacts of Bill C-12 and of Bill C-12 with the proposed adjustments and shows them to you by industry, by region of the country. Unfortunately we can't provide you with reliable data by industry by individual province in all instances. We've grouped this as industry in Atlantic Canada, in Quebec, in Ontario, in the prairie provinces, and in British Columbia.

The Chairman: Thank you for your presentation.

First of all, let me take this opportunity to thank you as officials. I'm sure this represents many hundreds of hours of hard work, and we're certainly going to benefit from them because we'll be able to really analyse the impact these changes will have on people. On behalf of the committee I'd certainly like to express our warmest and sincerest gratitude.

Now we're going to move on to some questions.

[Translation]

Mrs. Lalonde: My question is for the government. I would like to know where those $365 million will come from.

[English]

The Chairman: Ms Smith.

[Translation]

Mrs. Lalonde: They are speaking on behalf of the government?

[English]

Ms Smith: When the minister last appeared before the committee he spoke of two areas where he would like to see increased emphasis within the UI program and within the department. These are two areas that we're hoping will make the intended contribution, and we'll be tracking very carefully the types of reductions in benefit pay-outs that can be achieved.

The first of these areas is the fraud provisions that he described briefly at the committee. The second area is increased work with all of our claimant population to provide them with improved and more personal employment services to help them get back to work more quickly.

You'll recall that he spoke about the fact that if every claimant took as little as two or three days off the length of their claim, that would be sufficient to find the level of savings that would be required to pay for these types of amendments.

The Chairman: Thank you, Ms Smith.

Madame Lalonde, that answers your question, right?

[Translation]

Mrs. Lalonde: I will set aside my comment. Thank you.

[English]

The Chairman: It is your right, of course.

Mr. Dubé.

[Translation]

Mr. Dubé (Lévis): I don't want to do the whole exercise again here, but on the first table, for Quebec, we see a figure of $400 million. The figure in the second column is $316 million. Normally, the last figure should correspond to the difference between those two figures, but I see $180 here. Is this an error or am I misunderstanding the mechanics of this? Why isn't the calculation accurate?

Mrs. Lalonde: What page is that?

Mr. Dubé: On table 1. I looked at Quebec first, I don't know why.

Mrs. Lalonde: And yet, he's not old!

Mr. Dubé: I'm younger than Mrs. Lalonde.

Mrs. Lalonde: Quite a bit younger!

[English]

Ms Jackson: You're absolutely right; that's an error. It should be $84 million.

[Translation]

Mrs. Lalonde: How can we rely on this kind of work?

Mr. Dubé: Are there any other errors like that? Could this be reviewed Tuesday to make sure there are no other errors?

[English]

The Chairman: Mr. Dubé, have you made your point?

[Translation]

Mr. Dubé: So it is an error. I'm glad to know I did understand the mechanics. Thank you.

[English]

The Chairman: Okay. This is a really serious matter we're dealing with here; it's nothing to laugh at.

Mr. Nault.

.1935

Mr. Nault: I think it's important to realize that these particular amendments we've asked for analysis on are important to the extent of the numbers that are shown in front of us for a large portion of the population that rely on unemployment insurance.

First of all, before I ask the officials a couple of questions, just keep in mind that the Liberal members have spent a lot of time looking at changes, as has been signalled by the new Minister of Human Resources and Development and the improvements that are necessary to make the program as effective as possible.

I want to commend the members on their fine work and the analysis the officials have done and just to say to the opposition that we're going to have plenty of time in clause-by-clause, with all the officials there day in and day out. I suspect it will take more than a couple of hours to do the amendments, and when we do that, of course, we can get right into every single detail. I'm sure they'll be very interested in the responses they get from the officials.

If I could, I'd like to have the officials explain the one issue that seems to me to be one that may not be as clear as it should be. In the intensity rule benefits collected over the past five years and the particular amendment and suggestion of Mrs. Augustine, the second part of that, which is a second amendment really, is working while on claim to provide a credit to those who receive a reduced benefit cheque, the result of working while on claim. Could you give us an explanation of what that really means to people? For example, my impression of the amendment itself means that if you go to work and you get a credit and you end up, because of that credit, working fewer than 20 weeks, then you're not part of the intensity rule. What happens if you're still on claim and then go back on claim? Does that break it up and therefore then they don't fall under the intensity rule? How would you do that as an administrator?

Ms Jackson: Maybe I could start and explain the rule and then perhaps Norine can talk a little bit about how we would administer it.

What it means is that anyone who, while collecting unemployment insurance benefits, is working for some part of that time.... We were reducing their unemployment insurance benefit to take into account the earnings from work during the period of the benefit. So if somebody is actually collecting benefits for 24 weeks, but because they're working part of the time over that 24 weeks, we will be able to show that they didn't collect their full entitlement of 24 weeks worth of benefits.

A simple way to think of it is if our records show us that they only really collected 12 weeks worth of benefits over the 24, that's all we would take into account in applying an intensity rule, 12 weeks as opposed to 24 weeks.

Ms Smith: Administratively, it would be a very simple calculation to do. We would simply, at the end of a claim, add up all the amounts an individual has received and compare that to the amount they might have received if they had been drawing their full benefits in each week and take the ratio of the two. If they only drew 30% or 70% of their benefits because they'd been working on and off - and I should say that many claimants do work while they're on claim, about a quarter of claimants participate in the labour force while they're on claim - that would then reduce the number of weeks of benefits that would be kept in the sort of rolling count of their benefit history. How that would then affect their benefit rate under the intensity rule, or the rate under which their benefits would be clawed back under the clawback rule, would be just reducing the number of weeks of benefits taken.

Mr. Nault: Don't misinterpret this question, but on the issue of the number of individuals who will benefit, some 188,000 individuals, as relates to the impact that totals some $24 million in benefits. I'm surprised. It seems so little. Does it suggest, then, that a very small number of individuals are collecting UI now? I mean, $24 million seems awfully small when you think about 350,000 claimants and the fact that almost 54% would be exempt from the intensity rule. I guess I'm a little bit surprised it's not a heck of a lot more than $24 million.

.1940

Ms Carroll: It's primarily because the $24 million only relates to the 188,000 of those people who get the family supplement who would have been affected by the intensity rule. So it's only for that group of people. You also have to remember that in terms of the intensity rule itself, at its most, for somebody who is making the maximum cheque, the reduction for that person is around $38. So you have to remember that these are also low-income individuals.

Their cheque, on average, would be substantially lower than somebody who was making a fairly high income. So for somebody, for example, who might have a benefit cheque of $200, if they were being hit by the intensity rule before, at the maximum level of 5%, that would be a reduction of only $10 for that individual.

So it was certainly impacting on those individuals, but because not all of them would certainly get hit by the 5% drop, and also because typically their benefit cheques were lower, it didn't have a major impact on them. But it would affect them by $24 million. If you take that $24 million and apply it back to the 188,000, it returns about $128 on average to those individuals. So it's just a reflection of the size of their cheques.

Mr. Nault: Can you give me an explanation of where you got that number - 350,000 claimants who would receive the family supplement? For some reason, I seem to think a lot more people than 350,000 would be in this particular category to collect UI in a given year. That's a pretty small number when you look at the total number of people who collect unemployment in a year. When you look at the percentage, it's probably less than 10%. Would that be right, about 10%?

Ms Carroll: Yes. It comes out of our administrative data files, and combining those with tax files it shows that when you link those two together, the number of UI claimants who are in families that have $26,000 or less in total family income is 350,000. You have to remember it's family income, too, not the individual's income. So certainly a very high proportion of individuals are making less than $26,000, but not when you look at family income itself.

Mr. Nault: Thank you, Mr. Chairman.

The Chairman: I guess we'll go to Madam Lalonde for a brief question before we go to Mr. Scott, Mr. Easter and Mr. Allmand.

[Translation]

Mrs. Lalonde: Yes, I have a short question.

I would like to have the opinion of the witness on a quote by Mr. Van Audenrode of Laval University, who conducted research for the Department of Human Resource Development. Towards the end of his brief to the committee, Professor Van Audenrode states:

.1945

[English]

Ms Smith: The unemployment insurance program is a very large and complex program in which the entirety of the evaluation studies that looked at the program reflected the magnitude and complexity of the issues. I think therefore that the magnitude and complexity of the response is a good match with the challenge that this type of study of the program laid out very clearly.

As for the issue of the ability to analyse and foretell how these types of changes will affect Canadians and affect claimants, I'd like to answer that in two ways. One is to say that within the department we have a very extensive database. We have a 25-year longitudinal file that we use to model the impacts of these claims. We have worked very hard at developing as refined a modelling technique as we can to give you our best judgment about what these changes will mean. That being said, it is a model. That has been recognized very clearly in the bill itself by clause 3, which indicates the intention of the government to track this very carefully.

I think we all have a lot to learn. We all have a lot to decide about where to go next in this program from taking a very close look on almost a daily basis, once this comes into place, to see how Canadians are being affected.

The Chairman: Mr. Dubé, a short question.

[Translation]

Mr. Dubé: I would like to make a short observation. I continued my calculations, and on the same table on page 1, you find the same thing for British Columbia in the second series. The first column gives the figure of 278, and the second column 240; the difference stated is 28, but from my calculations it should be 38.

[English]

Ms Smith: Our apologies to the committee. I guess we're getting tired too.

We will go through this document with a fine-tooth comb to ensure that if there are any other arithmetic errors in it, the committee will be advised. We'll provide revisions to the clerk.

The Chairman: We would appreciate that.

We'll move to the final questioners: Mr. Allmand, Mr. Easter and Mr. Scott.

Mr. Allmand: I'll be very brief. It's with respect to table 2, which deals with benefit-to-contribution ratios.

Am I understanding this correctly? Look at the 1997-98 table, where it says Newfoundland, $442 million, which is in brackets. That means that there's a net inflow into Newfoundland of $442 million. You count what their projected contributions are, you calculate what the benefits would be, and it comes out for Newfoundland that there's a net inflow of $442 million. Is that what it is?

Ms Jackson: That's correct. That's what it is.

Mr. Allmand: All right.

Ms Jackson: That's the number that applies under the current program.

Mr. Allmand: That's current.

Ms Jackson: Yes.

Mr. Allmand: I just wanted to make sure.

Ms Jackson: A projection.

Mr. Allmand: You project all the contributions that were paid and all the benefits that were paid.

Ms Jackson: Yes, that's correct, sir.

Mr. Allmand: All right.

The Chairman: Mr. Easter.

Mr. Easter: I just want to say something in the beginning with reference to Mrs. Lalonde's point on the economist she quoted. The economist who was here this afternoon, Alice Nakamura.... The opposite point of view is in that particular document. I'd ask you to try to go through it. She said that she sees these provisions as very forward-looking and dealing with structural unemployment in a very decent way.

.1950

One area I'm having some difficulty explaining is the intensity rule credit. When I go talk to my people this weekend, I know they're going to ask me how we came to the calculations here for the benefit to the people the intensity rule credit will apply to. What do you base your assumptions on with that point? I want to be able to explain it.

Mr. Allmand: What table are you looking at?

Ms Jackson: The table you're looking at is probably table 6. All we have there, sir, is that the $24 million applies only to the exemption of family income supplement recipients from the intensity rule. We do not have estimates on the credit.

Mr. Easter: That's fine. That would be very hard to do given what's available. So the intensity rule credit would really be a bonus to those people who are in the system, above this.

Ms Jackson: That's right.

Mr. Easter: My last question relates to something I wanted to think about on the weekend as well, and I think I may have been wrong on this earlier this afternoon. It is in relation to the consolidated revenue fund. I think I told the economist who was here that under the current bill, I felt that the clawback would go to the consolidated revenue fund. I understand that's not the case. Could you clarify this so that we're all clear in terms of how that works?

Ms Smith: It's a closed system within the UI account. While Revenue Canada collects those funds through the tax system on behalf of the UI program, those funds are returned to the UI account.

Mr. Easter: Is it so specified in the legislation?

Ms Smith: I would have to look that up for you.

Mr. Allmand: I looked for it and I couldn't find it.

Ms Smith: We'll find you the reference.

Mr. Allmand: There were two briefs that said we were wrong in not doing that. You say that the bill does -

Ms Smith: Yes, that has always been the case. It's not a new feature of this bill. That's the way it works now with the current clawback.

Mr. Allmand: All fines, all interest, everything goes back into the account?

Ms Smith: Yes, in the case of all administrative penalties that are charged under the act. Cases of court finds when people are prosecuted - those in most cases do not.

The Chairman: Thank you, Mr. Easter, for some very thoughtful questions.

Mr. Scott.

Mr. Scott (Fredericton - York - Sunbury): Going to table 9, I also have a copy of Alice Nakamura's documents. Ms Nakamura is a professor of business at the University of Alberta, although I think she may be a professor of unemployment insurance, she has appeared so many times. In any case, what I'd really like to do is establish what I think this tells. I want to make sure my understanding is correct.

In table 9, on the bottom, there is a qualifier that says this excludes the impact on 90,000 people who will potentially no longer qualify, and also the 90,000 people who do not qualify for unemployment insurance today but who will qualify under EI. Is this correct? Of the 90,000 people identified who will potentially no longer qualify, 98% of those people are new entrants or re-entrants. Is that correct?

Ms Jackson: Yes.

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Mr. Scott: Basically, of the 90,000 people who currently qualify and are in the UI system - as I know it where I live - only 2% are going to be affected and would no longer qualify as a result of this new bill.

Ms Jackson: Who are not re-entrants.

Mr. Scott: People are concerned. This is very important. A lot of people in our part of the country are worried about this. There are a lot of changes and I think it's important for that point to be made. Many of them are in Mr. Easter's riding, as he tells me. I think it's very important to understand that it's 2% of 90,000 people. On the other hand, of the people who are outside the system now who don't qualify and are on the margins, 90,000 will qualify as a result of this bill. I want to make sure I understand this from the way it reads.

Ms Carroll: Yes, you are correct.

Ms Jackson: Yes.

Mr. Scott: Thank you. That's very important for those people who are on the margins of the system worrying about what's going to happen.

When I saw these tables earlier around Christmas time there was another column, the re-investment column. There's a provision in this that says this does not include the re-investment. In earlier tables it was included when the final calculations were done. It isn't here. I'm sure somebody's going to compare those and draw just awful conclusions. I want to establish right here that it doesn't mean anything. The re-investment fund could be added to this and we would get different numbers again. Is that correct?

Ms Jackson: Yes, sir, that is correct. There will continue to be $800 million available for purposes of investment in employment measures under part II of the legislation.

The Chairman: Thank you very much. Is there another question you want to be right about?

Mr. Scott: No, that's enough. The next one is sure to go bad.

The Chairman: Ms Smith, do you have a question?

Ms Smith: I have the answer to Mr. Allmand's question. In section 73 it says ``There shall be credited to the Employment Insurance Account and charged to the Consolidated Revenue Fund'' and then it lists three things. The third, paragraph (c), is ``an amount equal to all benefit repayments receivable under Part VII''. That's where you would find the clawback.

[Translation]

Mrs. Lalonde: I am going to ask a short question, even if I do not receive an answer this evening. The cuts referred to clawbacks, money returned in taxes, people who have received too much...

Mr. Crête (Kamouraska - Rivière-du-Loup): It's the clawback.

Mrs. Lalonde: In your model, at what amount do you assess the annual value of the clawback?

[English]

Ms Jackson: The provisions in this bill that increase the clawback would total slightly over $300 million. That figure is from the changes in this, and is not the total.

[Translation]

Mrs. Lalonde: Will this amount of $300 million go to the Consolidated Revenue Fund?

[English]

Mr. Nault: Nothing goes to the Consolidated Revenue Fund. That's the point we're trying to make.

[Translation]

Mrs. Lalonde: Does the money not go to the Unemployment Insurance Account?

[English]

Mr. Nault: Yes, it does. It goes back in.

Ms Jackson: Yes.

[Translation]

Mrs. Lalonde: What is the number of the section?

Mr. Allmand: Seventy-three.

[English]

Mr. Nault: This isn't a question. I just want to let the opposition know, which is only fair, that the members of the committee on the Liberal side are going to be supporting these amendments. It's our hope and wish that they'll be implemented in the legislation in the final analysis when we're done.

I wanted to announce that to you because of course we have done some talking on our own, as good parties do, and we are prepared to support them. We are announcing to the world tonight that that's our intention as a committee. Thank you.

Mr. Regan (Halifax West): I'm certainly pleased to hear that. I want to table my wording of the amendment with the clerk, and I will do that.

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I want to mention, by the way, that I'm very pleased that during our sessions we've had with us associate members of the committee who aren't full members. Mr. Scott, in particular, has been a tremendous help and brought forward a very solid amendment. Even though he's not a member of the committee in full standing, he has certainly been an important member to our work, as has Mr. Easter.

The Chairman: Mr. Allmand.

Mr. Allmand: When will we get the texts of these amendments and any others the government has? When will we get the texts the opposition has?

[Translation]

Mrs. Lalonde: If I may, Mr. Allmand, I would like to ask a question about procedure. I have in front of me the press release by Mr. Nault which states that:

[English]

The Chairman: No, he's referring to the Liberal members of the committee.

[Translation]

Mrs. Lalonde: Thank you. That is not clear in the press release.

Mr. Crête: No, it gives the impression that it was the committee which adopted that.

[English]

Mr. Nault: They are the government committee members.

[Translation]

Mr. Crête: That's not was is written.

[English]

The Chairman: Order.

I'm going to deal with the question you asked earlier about the amendments.

We received some amendments from Mr. Regan. We received the amendments we talked about earlier. We haven't received anything from the Bloc. We received some technical amendments from the minister. We have received no amendments from the Reform Party.

We are going to enter that very important phase of clause-by-clause next week. I expect this committee and the members of this committee will cooperate as much as possible because we have work to do.

I know you can forward an amendment any time during clause-by-clause, but it is a tradition, when courtesy prevails, for members of the committee to bring amendments forward to the clerk so we can exchange them and figure out the various positions the parties may want to take on each particular amendment. I know you can bring it the same day if that's what you choose to do. However, I do expect that courtesy will prevail in this committee, as it has until today.

Mr. Allmand, you had a question of privilege.

Mr. Allmand: With respect to the statement just made by my friend, Mr. Nault, while I like the contents of the amendments made by my three colleagues, and if they are in that form when I examine the legal text I will support them, I would never say today that I'm going to support a legal text until I see a legal text. While I like what I've seen written in non-legal terms, I reserve the right to support or not support the amendments when I read them. I just want to make that clear.

The Chairman: Mr. Allmand, are you making this clear for me or for Mr. Nault?

Mr. Allmand: Mr. Nault was speaking on behalf of all of us and saying we're all going to support these amendments. I never said I was going to support them.

All we've had so far are prosaic descriptions of what the amendments will be, but I've been around long enough to know that until you actually examine the legal text of amendments.... Tonight a member of the committee has seen flaws in the statistics, so I want to see the legal texts and examine them. Then I will determine whether I support them.

We should each speak on our own behalf as to whether we're going to support amendments or not.

The Chairman: Thank you very much, Mr. Allmand, for your comments.

Mr. McCormick.

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Mr. McCormick (Hastings - Frontenac - Lennox and Addington): Mr. Chair, it's my honour to present two amendments by my colleague, Jean Augustine, who's not able to be here this evening. I'd like to file these. Thank you.

The Chairman: Thank you.

Mr. Scott: Mr. Chair, I've also tabled amendments. Not being a lawyer, I'm not sure whether they qualify as legal amendments or as prosaic....

Mr. Allmand: Well, are they amendments?

Mr. Scott: It's one amendment.

Thank you, Mr. Chair.

The Chairman: Mr. Crête.

[Translation]

Mr. Crête: The technical amendments, of which we received the list one or two weeks ago, were not written in legal terms either. We did not have a legal text.

[English]

The Chairman: That's a formal requisition? I'll take it under advisement.

Mr. Nault: Just so Mr. Crête knows, the amendments will be tabled tomorrow morning. We're just in the final stages of having them photocopied for everyone, so they will be tabled as soon as we can have that done.

The Chairman: Wonderful.

[Translation]

Mr. Dubé: Excuse me, but with whom was it filed?

An honourable member: With the clerk.

[English]

The Chairman: They'll be tabled to the clerk and the clerk will make sure you get copies of them.

Mr. Allmand: And he'll distribute them to all of us?

The Chairman: Yes, Mr. Allmand, he will do what a clerk is supposed to do, and that is to distribute to each and every member of the committee.

This concludes the hearings for today. Once again, thank you very much for your time. I know you've worked hard at this for months and maybe years, and I certainly appreciate all the work that's gone into it.

The meeting is adjourned.

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