HUMA Committee Report

Supplementary Report of the New Democratic Party

Employment Insurance is a key component of the Canadian social safety net. Created in 1940, it is intended to support Canadians through difficult times – unemployment, training for a new career, new parenthood, illness, or caring for a sick parent or child. But after years of Liberal and Conservative attacks, the Employment Insurance (EI) system is broken.

That is why the New Democratic Party introduced a motion calling on the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities to review the harmful changes made by the Conservatives in 2013 and to consider ways to fix EI so that it works for Canadians in times of need.

The committee received input from many stakeholders, in person and in written briefs. Many of them advocated passionately for major reforms to be made to our EI system to increase access, to raise benefit levels, to improve service delivery, and to ensure fair and timely appeals.

Unfortunately, we do not believe the final committee report reflects the testimony that was heard, and the recommendations do not go nearly far enough to address the concerns raised by witnesses. That is why we offer this supplementary opinion.

CREATING A UNIVERSAL THRESHOLD

Fewer than 4 in 10 unemployed Canadians currently receive EI benefits. One of the reasons for this unacceptably low rate of coverage is the number of hours required to access EI, which varies considerably across the country. The regional variation is unfair. It fails to reflect the chances of finding new employment, and it results in a scenario where two workers who work side-by-side receive different benefits when they are laid off, based on their home addresses.

A majority of the witnesses and stakeholders who submitted briefs called for a universal threshold of 360 hours – something for which the NDP has advocated for a long time.

As David Grey of the University of Ottawa noted, “most economists are opposed to regionally based benefits, because they discourage regional geographic labour mobility and undermine the efficiency of the labour market.” He noted that Canada is nearly unique in using regional criteria to determine access to unemployment benefits.[1]

The high thresholds also discriminate against precarious and part-time workers, many of whom are women, racialized people, people with disabilities and new immigrants. In fact, considerably fewer women receive EI benefits than men. This is of significant concern given the rising importance of precarious work in the Canadian economy. As John Lewis of the International Alliance of Theatrical Stage Employees told the committee, “EI is just one of many areas where we have to come to grips with the precarious work where our members literally have seven different employers in one week.”[2]

The regional variation has also left some residents in Canada’s biggest cities with very low EI coverage. As Laurell Ritchie of the Inter-Provincial EI Working Group testified, “In my city [Toronto], it's 21%. In Vancouver and Montreal, the largest cities in this country, the largest labour markets, it's below 30%.”[3]

The consensus around the need to address this aspect of the EI system is overwhelming. The Liberals themselves voted in favour of a motion calling on the government to create a single universal threshold while they were in opposition. It’s time to act.

Therefore, the NDP recommends that the government create a single, universal threshold of 360 hours for accessing EI benefits.

PROTECTING THE EI ACCOUNT

Committee witnesses also offered a broad consensus that immediate action needs to be taken to protect the EI Account and to ensure that EI premiums can only be used for EI benefits and training.  Over the past two decades, Liberal and Conservative governments have used the EI Account to pad government balances, paying for other priorities such as tax cuts for corporations and wealthy Canadians. In all, more than $57 million collected from workers and employers to provide benefits to Canadians in times of need has been diverted to other causes.

In their input to the committee, witnesses were very clear: they want to see the EI Account protected so that premiums can only be spent on EI benefits and training.

In this regard, the Committee’s recommendation that the government “explore mechanisms to see that the funds collected for the purpose of Employment Insurance serve the needs of the Employment Insurance program” does not go nearly far enough. The mechanism is simple and needs no further exploration: the Account needs to be independent and it needs to be protected in legislation.

The Liberals promised during the campaign to “make the appropriate legislative and policy changes to ensure that Employment Insurance contributions are only used to fund Employment Insurance benefits and programs, and are not used by the government to fund other programs.”[4] The government needs to make good on its promise to Canadians.

Therefore, the NDP recommends that the government immediately introduce legislation to protect the EI Account.

EXTRA FIVE WEEKS

One of the most damaging reforms the Conservatives implemented in government was to cancel the Extra Five Weeks pilot project which provided an extra five weeks to workers in areas of high unemployment in order to close the seasonal gap, the so-called “black hole” for workers.

Many witnesses told the committee of the devastating impact the cancellation of this program has had. Hans Marotte, representing the Mouvement Action-Chômage de Montréal under the umbrella of the Interprovincial EI Working Group, explained to the committee the importance of having a set of eligibility criteria that would allow for workers from seasonal industries to have access to a year-long revenue stream. This sentiment was echoed by the Marie-Hélène Arruda, from the Mouvement autonome et solidaire des sans-emploi (MASSE):

Another consequence of the EI reforms was the non-renewal of the pilot project to extend the employment insurance benefits by five weeks in certain economically disadvantaged regions. We are calling on the government to reinstate the pilot project, which was not renewed, thus restoring the additional five weeks of EI benefits provided to unemployed workers in economically disadvantaged regions. This recommendation applies to regions where the extended coverage was previously in effect, as well as the new regions identified in the budget.

I'm not sure whether you're familiar with the infamous black hole, the period of time between the end of benefits and the return to seasonal employment. In some cases, workers have no income whatsoever during this period.[5]

The Liberals themselves raised concerns about the cancellation of this program during the election campaign. Bobby Morrisey, then candidate and now the Member of Parliament for Egmont, told reporters “I’m meeting a lot of people who see their EI benefits exhaust weeks, if not months, before their regular jobs starts. But the bills don’t stop coming when your EI benefits expire and that has had a real negative impact on rural communities here on Prince Edward Island.”[6]  Wayne Easter, then candidate and now the Member of Parliament for Malpeque, added, “When you have people who come into your office two months before the work season begins and they’ve got no money and they’re wondering how are they going to put food on the table and they’re in tears – we see that human factor first hand.”[7]  

Yet the Liberal government’s decision to extend benefits by an extra five weeks for workers in some areas of the country while excluding  Atlantic Canada and Eastern Quebec leaves those workers suffering from the seasonal gap without any assistance at all from this government.

The Liberal government also adopted a convoluted formula for determining which regions would receive an extra five weeks of benefits resulting in the exclusion of Regina, a region which has been hard hit by recent spikes in unemployment.  

The NDP therefore recommends that the government abandon its convoluted formula, extend benefits for all Canadians as long as the economy is struggling, and reinstate the Extra Five Weeks program for seasonal workers.

FIXING THE BROKEN APPEALS PROCESS

The Conservative government took an appeal process that was working and completely broke it. Their understaffed Social Security Tribunal (SST) has been overwhelmed by huge backlogs and long wait times. It denies basic elements of justice, such as the publication of all decisions, the right to make one’s case in person, and the right to an advocate of one’s own choosing.

Stakeholders have noted that wait times for an EI appeal have quadrupled under the SST, even though the government promised it would be faster and more efficient.[8]

In addition, granting the power to Tribunal members to decide how to hold the hearing – in person, over the phone, by video conference, or in writing – has had a significant impact on the chances of success. In 2014, the chance of succeeding at an appeal was more double for an in-person appeal compared to a teleconference or videoconference appeal. Yet the applicant has no power over the method of conducting the hearing.[9]

The result has been universal dissatisfaction with the Social Security Tribunal. The MASSE stated that “[not] only does the mechanism give rise to inordinate delays, but the very way it operates causes miscarriages of justice.”[10] The CUHC also had harsh words for the Tribunal:

I would submit to you that few people appeal to the SST because dealing with Service Canada means encountering a succession of speed bumps, starting from the time one tries to call Service Canada and is unable to get through. Then, one encounters claim processing delays, which create another deterrent. Then one goes through the request for reconsideration stage—another deterrent. By that time, one is sufficiently discouraged from even pursuing their appeal rights to the social security tribunal.[11]

The Committee report recommends a review of the SST, but the problems have already been identified, many times, by stakeholders.

Therefore, New Democrats believe that swift action is required to address the shortcomings of the appeal system.  Therefore, the NDP recommends that the government immediately take steps to fix the Social Security Tribunal, including:

1. Hiring more Tribunal members.
2. Publishing all decisions on the Tribunal’s website.
3. Guaranteeing timelines for appeals.
4. Guaranteeing an in-person hearing to all appellants who ask for one.
5. Adopting legislation allowing an appellant to have the advocate of their choice.

SERVICE CANADA

Many of the stakeholders raised concerns about the long wait times to receive assistance from Service Canada. In fact, many unemployed workers who call Service Canada are stuck waiting for hours on end. Many more receive a busy message and cannot access the queue. Meanwhile, hundreds of thousands of Canadians are waiting more than 28 days to have their application for EI processed, even though bills and rent must be paid every month, whether Service Canada comes through or not.

This kind of service delivery is simply unacceptable, especially since workers are paying for this service with their premiums. Unemployed workers who have difficulty accessing their Employment Insurance benefits need to be able to reach out to a professional in order to get their files in order promptly. These are Canadians whose revenue stream is in peril, and EI has to be there for them in times of need. Service Canada is mandated to help unemployed workers out in these circumstances, and the government has to make sure that it is resourced sufficiently to do this.

Unfortunately, the money promised to Service Canada is only a drop in the bucket compared to the cuts inflicted on Service Canada by the previous Conservative government.

Therefore, the NDP recommends that the government provide adequate resources to Service Canada to ensure that no person needs to wait more than 10 minutes to speak to an agent on the phone and no more than 28 days to receive an EI cheque.

BENEFIT LEVELS

Many stakeholders spoke of the inadequacy of benefit levels and the inherent unfairness in the regional variation in the way in which benefits are calculated. As the Income Security Advocacy Centre (ISAC) told the Committee, “EI regular benefit rates are too low, and are calculated in a manner that perpetuates disadvantage for women and the precariously employed.”[12]

The government needs to implement a system that is fairer for unemployed workers by using a standard formula for averaging their best weeks in order to calculate their benefits. Labour organizations such as the Canadian Labour Congress (CLC), Unifor, the Fédération des travailleurs et des travailleuses du Québec (FTQ), and the Newfoundland and Labrador Federation of Labour, as well as by groups representing the interests of EI claimants, including MASSE and the Inter-provincial EI Working Group, have all recommended that the government should calculate benefits according to the best 12 weeks of earnings. Many of these stakeholders also recommend increasing benefits to 60% of insurable earnings.

Therefore, the NDP recommends that the government increase benefits to 60% of insurable earnings and base benefits on the best 12 weeks of a worker’s earnings.

COVERAGE

As indicated earlier, a majority of unemployed workers are not able to access EI given the challenging job market. MASSE pointed out that “[…] in 2014, the EI coverage rate reached a catastrophic level of 38%, which means that only 38% of unemployed people received benefits. […] By comparison, in 1989, 83% of unemployed people qualified for and received EI benefits.”[13] This sentiment was also echoed by the FTQ: “There are a number of problems with EI, but one of the most obvious ones – one that absolutely must be corrected – concerns coverage. Over the years, there have been tightened eligibility criteria, reduced duration of benefits and a lowered income replacement rate.”[14] The seriousness of this problem cannot be emphasized enough, especially given what it means for those who are most affected by the inadequate coverage of the Employment Insurance system. As was pointed out by the Income Security Advocacy Centre: “Many of these workers are from vulnerable groups who are overrepresented in low-income employment, such as women, racialized people, people with disabilities, and new immigrants.”[15]

As the job market changes and the incidence of precarious work rises, it is becoming more difficult for workers to meet the criteria needed to access EI. For part-time workers and for contractual or freelance workers, meeting the eligibility requirements is becoming increasingly difficult. As the CLC highlighted in their brief: “Workers in Canada are desperately in need of a sturdy social safety net, as more and more of us live with the realities of precarious employment.”[16] The Good Jobs For All Coalition also highlighted how the reliance on precarious and temporary jobs lead to fewer work hours, which makes it difficult to access the regime. For example, “Retail sector workers average less than 26 hours weekly and that’s our largest occupational group”.[17] Such workers must not be left behind and the government needs to tackle this issue in a multi-faceted way in order to effectively offer a social safety net for all workers.

The NDP therefore recommends that the government consider options to extend EI coverage for precarious workers.

Witnesses also testified that long-term unemployment is having a significant impact on EI coverage. According to Paul Thompson from the Department of Employment and Social Development, in 2014, 39% of the 1.3 million unemployed Canadians had not worked in the last 12 months.[18] This highlights the weakness of the Canadian economy and the need to invest in job creation so that Canadians do not need to exhaust their EI benefits without any hope of finding new work.

Finally, Justicia for Migrant Workers highlighted an important issue which the Committee report fails to address: Migrant workers are obliged to pay into the EI system but have been disqualified from receiving benefits. This is a profound injustice – workers should not be barred from benefitting from a program to which they are forced to contribute.

Therefore the NDP recommends that the government restore access to EI benefits for migrant workers.

SPECIAL BENEFITS

The EI program also provides maternity, parental, compassionate care, illness and critically ill child benefits. Access to these benefits is also unfairly restricted, leaving too many Canadians with no support in times of stress or transition for their families. While the Liberals promised to make changes to parental benefits, none of their proposed changes actually address the central problem, which is access.

The NDP recommends that the government implement a universal threshold of 360 hours to qualify for special benefits as well.

The Committee also heard that 15 weeks of sick leave are simply not enough when people are facing serious health problems. The Committee report suggests “exploring” the option of extending sickness benefits. However, the Liberals were not calling for exploration in the past, when they voted in favour of Bill C-291, which would have extended sickness benefits to 50 weeks.

We believe it is time for the government to provide sufficient support to Canadians dealing with serious illnesses by making good on that commitment.

Therefore, we recommend that the government immediately extend sickness benefits from 15 weeks to 50 weeks.

The Committee has suggested the government review special benefits to determine whether they should continue to be administered through the Employment Insurance system. We urge caution in this process, as many Canadians are concerned that any changes to how benefits are administered should not lead to benefit cuts or further deterioration of service delivery.

We urge the government to take this opportunity to listen to Canadians and make significant reforms that are needed to fix EI and to ensure that it is there for Canadians in times of need.

Respectfully submitted by the New Democratic Party

June 10^th, 2016