HUMA Committee Report

Dissenting Opinion of the Official Opposition

As Members of the Official Opposition, we would like to thank the many witnesses who appeared before the Committee, as well as those who submitted briefs as part of the study on the Employment Insurance (EI) program.

We participated in the study on the EI program with open minds. During the consideration of the report, we supported the recommendations that promoted the evaluation of EI program measures, that protected the most vulnerable, and that encouraged greater transparency and efficiency.

Our concerns

However, we rejected recommendations that did away with measures implemented by the previous government as part of its major EI reform in 2013. In our opinion, these measures should be kept, as they have had a positive impact on employment as well as on how citizens treat EI benefits. The primary objective of this reform was to make it easier for unemployed individuals to return to work by helping them find a job. The reform was designed to increase accountability for unemployed workers receiving benefits and we believe it was a step in the right direction. In fact, the Canadian Taxpayers Federation told the Committee that “We believe that a system that is too generous can create disincentives for people to seek or accept work when they otherwise might do so,”[1] and we support their position.

Furthermore, we believe that the report adopted by the Committee was not objective in terms of the differing views about EI reform. Of the 80 quotes from witnesses included in the report, 42 were very critical of the measures implemented by the previous Conservative government, and only 15 were in favour of these measures. Of the 27 witnesses citied, a mere 7 witnesses made positive comments about measures implemented by the former government. Some witnesses who expressed opinions that differed from the majority of witnesses heard were not citied in the report at all, despite the relevance of their arguments. For example, the Canadian Taxpayers Federation appeared before the Committee in person, and yet it was not quoted in the report at all, while six briefs were citied whose authors did not appear before the Committee.

Little effect on EI

One of the major failings of the report, in our opinion, is that it does not reflect the fact that “witnesses acknowledge that in practice, few individuals lost their EI benefits due to these new definitions.”[2]

The following citations show that this statement is true:

According to Hans Marotte, representative of the Inter-Provincial EI Working Group, “it is true that I didn’t handle a great many cases stemming from the Conservative reform.”[3]

According to Marie-Hélène Arruda, a coordinator with the Mouvement autonome et solidaire des sans-emploi, “on the subject of suitable employment, there have […] been few cases reported in Quebec of claimants being disqualified for refusing suitable employment.”[4]

According to Judith Andrew, the Canada Employment Insurance Commission’s Commissioner for Employers, “despite the quite vocally expressed concerns, the CCAJ [Connecting Canadians to Available Jobs] changes actually had very little impact in terms of disqualifying claimants for benefits,”[5]

According to Paul Thompson, the Senior Assistant Deputy Minister for the Skills and Employment Branch of the Department of Employment and Social Development, “We don’t have a specific indication of the total impact, other than that a very modest number of disqualifications came out of those regulations.”[6]

These statements speak volumes, confirming that changes made to the EI program in 2013 were the right changes, and that Canadian society has benefitted from them. And yet, the report failed to include this important point. If the vast majority of the witnesses agreed that the reform had virtually no effect on preventing Canadian residents from obtaining benefits, that proves that it fulfilled its objective. The Committee’s report should have reflected this fact.

Claimant accountability, the sound management of public funds, and cutting red tape are all ongoing concerns for our Official Opposition caucus.

As members of this Committee, we would like to share our position on some of this report’s recommendations that we disagree with.

Claimant accountability

Recommendation 1 calls on the federal government review the eligibility requirement for “valid job separation” to allow EI claimants who find a new job during the benefits period to retain their benefits should the employment not be suitable.

The very core of the previous government’s reform was to increase claimant accountability and encourage them to find a job over all other forms of benefits. If the government implements this recommendation, claimants could “shop around” for jobs while they are still collecting benefits.

We recognize that not every job suits every person. However, this recommendation opens the door to claimants refusing suitable jobs on the pretext that it does not suit them. In our opinion, a job should be refused only for serious or exceptional reasons. We believe that a job that “does not suit” is not a valid job separation.

Out-of-control spending

Recommendation 2 calls on the federal government to take immediate action to eliminate the eligibility requirement of 910 hours of insurable employment for new entrants and re-entrants to the labour market.

The eligibility requirement to have 910 hours of insurable employment seems reasonable to us because it applies to people who had not accumulated 490 hours of work before the qualifying period. It seems fair to us that they would have to accumulate more hours of insurable employment during the qualifying period to be eligible for EI benefits.

With this recommendation, the Committee is giving the government the latitude to establish its own eligibility criteria without having to carry out any study to determine the advantages and disadvantages of the various options. In addition, witnesses seemed to think that the threshold should be 360 hours of insurable income. We cannot support this measure because it is not sound management of public funds. As Paul Thompson said, “If we look at regular benefits alone for 360 hours, it’s in the range of $1 billion. That’s consistent with some past estimates that were provided within the last few years, adjusted for volumes for the current size of the labour force.”[7] We believe that Canadian taxpayers cannot bear this burden.

We also agree with Colin Busby, an assistant director of research at the C.D. Howe Institute, who said that “What’s nice about the 360-hour proposal is that it refers to part-time workers. It would be a nice thing to capture part-time workers, but if we go that low, then the problem is that you get an extreme risk of creating a large level of dependency and encouragement of seasonal work.”[8] We need to be very conscious of the consequences of establishing the threshold at 360 hours of insurable employment.

A step in the wrong direction

Recommendation 3 calls on the federal government to take immediate steps to reinstate the job search responsibilities requirements and the obligation to accept suitable employment that were in effect prior to 2013.

In our opinion, this recommendation goes against what the vast majority of confirmed when they said that there was virtually no negative impact as a result of the 2013 reform, as cited above.

Better reflection of reality

Recommendation 6 calls on the federal government to reconsider the new EI economic regions created in 2014, and that previous boundaries.

We believe that the changes made in 2014 addressed certain gaps regarding the economic realities in various regions across Canada. For example, separating Prince Edward Island into two economic regions reflected the fact that job opportunities for Island residents are significantly different between the capital region (Charlottetown) and the rural regions that form the rest of the province. Since employment opportunities are better in Charlottetown than in rural areas, it made sense for the government to make this change. By requiring people who live within the Charlottetown region to accumulate more hours of work to be eligible for EI than other Island residents, the previous government was addressing the inequalities on Prince Edward Island with regards to EI.

More red tape

Recommendation 10 asks Employment and Social Development Canada to take immediate steps to ensure that:

• during the extension period announced in Budget 2016, the choice between the current and previous versions of the Working While on Claim pilot project is completely free and not governed by specific eligibility criteria;
• the Government of Canada website and Service Canada agents provide the necessary information claimants need to choose the better of the two versions of the pilot project for their situation; and
• at the end of the extension period for the current pilot project in August 2018, a complete assessment of the pilot project be undertaken, the results shared with the Committee by February 2019, and made public.

In our opinion, this recommendation is flawed, as it will skew the results of the pilot project. We believe that EI claimants must participate fully in the current version of the pilot project until August 2018 so that the government can evaluate all the advantages. By giving claimants the choice between the current version and the previous version of the pilot project, the government will have insufficient reliable data to determine whether the pilot project was a success or a failure. We also believe that overseeing two versions of the pilot project creates an unnecessary administrative burden.

Recommendation 12 calls on the federal government to reinstate the system of regional EI liaison agents to improve support for unemployed individuals who wish to apply or have applied for benefits.

In our opinion, this recommendation adds an extra layer of red tape. We believe that it would be better to improve how existing resources are distributed and to increase efficiency rather than adding to the already heavy administrative burden.

Promoting employment

We believe that the recommendations made by the Committee do not clearly express the fact that creating a dependency on EI benefits and promoting routine reliance on seasonal work are to be avoided at all costs. As David Gray, an economics professor at University of Ottawa, said “I would want to see safeguards so that we don’t take new entrants into the Canadian labour force and have these new entrants or re-entrants develop dependency patterns on the EI regime.”[9] 

By failing to include these fundamental principles in its recommendations, the Committee is sending the wrong message to workers and EI recipients. The Committee’s report should have emphasized the fact that EI benefits are a last resort and should never replace a real job.

Conclusion

In closing, we believe that the EI program reform carried out by the previous government in 2013 was a step in the right direction. We would have liked to have seen Committee recommendations that focused more on ways to improve the system in its current form. As the reform has been in place for barely three years, we believe that Canadian society would benefit from taking the time to measure all the effects.

We strongly encourage the government to take into account the thoughts, concerns and recommendations expressed herein.