Proceedings of the Standing Senate Committee on
National Finance
Issue 4 - Evidence - Meeting of March 25, 2009
OTTAWA, Wednesday, March 25, 2009
The Standing Senate Committee on National Finance met this day at 6:34 p.m. to examine the following elements contained in Bill C-10, the Budget Implementation Act, 2009: Parts 1-6, Parts 8-10 and Parts 13-15, and in particular those dealing with Employment Insurance; and to examine the Estimates laid before Parliament for the fiscal year ending March 31, 2010.
Senator Joseph A. Day (Chair) in the chair.
[English]
The Chair: Honourable senators, this is another meeting of the Senate National Finance Committee, and we are dealing with Bill C-10 as well as the Main Estimates, so you can ask our witnesses questions in relation to the two of these items.
[Translation]
On March 5, the Senate sent us Bill C-10, the Budget Implementation Act 2009-2010. After holding intensive hearings with the minister and officials from a number of departments, the committee passed the bill without amendment and reported back to the Senate on March 12.
The bill received royal assent that same day.
[English]
Despite this rapid consideration of Bill C-10, many questions remain concerning the impact of the provisions in Bill C-10. Consequently, in adopting the bill, the Senate also asked a number of its committees to continue to study the provisions of this act and to make any recommendations that the committees may have before June 11, 2009.
Part 7, which deals with the Navigable Waters Protection Act, has been referred to the Energy Committee; Part 11, which deals with the Public Sector Equitable Compensation Act, has been referred to the Human Rights Committee; and Part 12, which deals with the Competition Act, has been referred to the Senate Banking Committee. This National Finance Committee has been asked to consider all other elements of Bill C-10 with a particular emphasis on the elements concerning Employment Insurance. We are conducting this study concurrently with our consideration of the Main Estimates 2009-10 with a focus on those aspects dealing with Employment Insurance.
We are pleased to welcome from Finance Canada Mr. Mark Hodgson, Senior Policy Analyst, Labour Markets/ Employment/Learning. Mr. Hodgson is joined by Louis Beauséjour, Director General, Employment Insurance Policy, Skills and Employment Branch of Human Resources and Skills Development Canada.
[Translation]
Louis Beauséjour, Director General, Employment Insurance Policy, Skills and Employment Branch, Human Resources and Skills Development Canada: Mr. Chair, I thank you for your invitation. My name is Louis Beauséjour, and I am the Director General for Employment Insurance Policy at Human Resources and Skills Development Canada. Before I begin, I would like to introduce you to Mark Hodgson, who works for the Social Policy Division of the Department of Finance.
As you know, I am here to discuss the elements of the budget and Budget Implementation Act relating to the EI program. While I am not in a position to comment on the policy decisions around these measures, I will do my best to provide information on the nature of the measures and how they will provide assistance to Canadians during these hard economic times.
As I am sure you heard from Minister Flaherty, the government's economic action plan, in Budget 2009, announced the Canada Skills and Transition Strategy, which targets those workers impacted by the economic downturn. More specifically, the Canada Skills and Transition Strategy provides $8.3 billion in various initiatives to help Canadians. The strategy aims to assist Canadians through a three-pronged approach: enhancements to the EI program designed to address short-term challenges, providing Canadian workers with the necessary training to equip them for the longer term, and keeping employment insurance premium rates frozen.
[English]
The strategy aims to assist Canadians through a three-pronged approach that includes strengthening benefits for Canadian workers, enhancing the availability of training and keeping Employment Insurance premium rates frozen.
As you know, particularly during an economic downturn, EI is the first line of defence — an insurance system for the loss of employment income where access is determined by individual work patterns of contributors.
[Translation]
Currently, the EI program divides the country into regions based on their similar labour market conditions. As the unemployment rate increases in a given region, the number of insured hours required to access the EI program is reduced and the duration of benefits is increased. These requirements are adjusted on a monthly basis to reflect the latest regional unemployment rates. This allows for a certain measure of automatic stabilization and responsiveness to the local job market.
However, given the current economic downturn, the government decided to do more in terms of income support.
Through the Budget Implementation Act, the government has implemented a measure to temporarily provide nationally the advantages of an extra five weeks of EI benefits previously offered as part of a pilot project in specific regions with high unemployment.
In addition, the maximum duration of benefits available under the EI program in areas of high unemployment has been increased from 45 to 50 weeks.
[English]
One part of Canada's Economic Action Plan is aimed at strengthening benefits for Canadian workers. Other improvements to the EI program in include providing an estimated $500 million over two years to extend income benefits for long-tenured workers participating in longer-term training. Another improvement allows earlier access to EI regular income benefit for eligible individuals investing in their own training using all or part of their severance package.
[Translation]
In order to improve the benefits for Canadian workers, we intend to extend the duration of work-sharing agreements to a maximum of 52 weeks for the next 2 years, and increase access to the work-sharing program through greater flexibility in the qualifying criteria, so more Canadians can continue working while companies experience a temporary slowdown and recover. This measure is estimated to cost $200 million.
A third measure will be to establish an expert panel to consult Canadians on how to best provide maternity and parental benefits for the self-employed.
The Canada Skills and Transition Strategy also seeks to enhance the availability of training for Canadian workers through increased funding of $1 billion over two years for training delivered by provinces and territories, and through labour market development agreements, funded by the EI program.
[English]
There are also a number of initiatives outside of the EI program such as a new Strategic Training and Transition Fund, and there are additional investments for the Targeted Initiative for Older Workers and support for Aboriginal skills development and training.
[Translation]
The Budget Implementation Act also included the government's decision to freeze the EI premium rate for 2010 at $1.73 per $100 of insurable earnings — the same rate as 2009 and its lowest level since 1982 — which amounts to a projected $4.5 billion in stimulus relative to break-even rates.
[English]
The Canada employment insurance financing board will set premium rates on a break-even basis beginning in 2011.
[Translation]
In order to deliver on the Budget 2009 commitments, we are guided by the following four key principles:
Timeliness: as the majority of these measures are temporary, i.e., for two years, we are building on existing mechanisms to get the money flowing quickly.
[English]
These initiatives are targeted to those workers most impacted by the economic downturn, such as a person who has worked in an industry for a long time who may need skill upgrading. Other workers might require support to transition into new employment or others may be lower-skilled workers with limited labour market attachments.
[Translation]
Temporary implementation: the majority of Budget 2009 commitments are time-limited and build on existing initiatives, both federal and provincial/territorial. Provinces and territories design and deliver many labour market programs, and we will work with them to ensure that the investments flow to Canadians quickly.
Finally, smart risk management: we fully recognize the importance of effective reporting and accountability. This will involve regular ongoing monitoring of progress and outcomes, and we will align our program reporting with the government-wide reporting plans.
[English]
While several of the measures I have outlined for you today have already been implemented through the Budget Implementation Act, work continues toward putting in place the remaining initiatives as quickly as possible, most likely before the end of the spring.
[Translation]
In conclusion, I hope this summary of the key EI elements of the Canada Skills and Transition Strategy gives you an overview of the EI enhancements being implemented to provide the support needed to Canadian workers during the economic downturn.
We would be happy to take any questions committee members may have on the EI-related measures implemented through the Budget Implementation Act.
The Chair: Thank you, Mr. Beauséjour. Mr. Hodgson, do you have any comments before we move to our round of questions?
[English]
I have a list of senators who would like to make comments or ask questions. If the senator makes a comment, we encourage you to comment on the comments as well. That makes it helpful for all of us.
Could you tell us, first of all, so that we are all looking at the right book here, where is the budget to administer the Employment Insurance regime? Where do we find that in the Main Estimates?
Mr. Beauséjour: In the Main Estimates?
The Chair: Well, it may not be there. Maybe it is statutory. We understand that there is an Employment Insurance regime run in Canada by public servants who must be paid. We authorize payments here, and we would like to know where it is hidden in all of this documentation.
Mr. Beauséjour: Any expenditure related to an implementing instrument will not be part of the part that is voted. It is a statutory program.
I have not seen the Main Estimates recently for EI. I was not planning to talk about the Main Estimates. If I remember, sometimes it is put in the Main Estimates as information, but I am not sure exactly what information it is in this year on EI.
Mark Hodgson, Senior Policy Analyst, Labour Markets/Employment/Learning, Social Policy, Federal-Provincial Relations and Social Policy Branch, Department of Finance Canada: I have no familiarity with the Main Estimates; I am afraid.
The Chair: Are you telling this committee that, under Human Resources and Skills Development, the operating expenditures includes no expenditures for anyone involved in the Employment Insurance regime?
Mr. Hodgson: The operating expenditures for the Employment Insurance program are charged to the EI account. They are a statutory expenditure.
The Chair: Thank you. You obviously do not have it with you, but could you provide for us the costs of administering the EI account under that statutory authority?
Mr. Hodgson: I do not have the precise number in front of me, but going by my memory, it runs approximately $1.5 billion per year.
The Chair: Has that increased or decreased significantly over the past two or three years?
Mr. Hodgson: It has remained within $20 million to $30 million of that figure for the last several years.
The Chair: Could you provide us with the precise figures?
Mr. Hodgson: Certainly, I will.
The Chair: Provide them to our clerk, and then we will circulate that information to all our members. That gives us a place to start.
Mr. Beauséjour: They are part of the public accounts. That is where I saw these numbers in the past.
The Chair: Yes; we used to like to look at them in the front, and public accounts was what was spent a year and a half afterwards. We tend to focus on the front-end, projected estimates of expenditures.
Mr. Hodgson: Certainly, we will provide that information.
Senator Nancy Ruth: Welcome. This morning on CBC's ``The Current,'' Anna Maria Tremonti reminded us that in 1976, 84 per cent of Canadians received EI and last year only 43 per received got EI. I am always surprised when officials say Canadians who need it most will have access to it because, in my opinion, there are many people missing who are not eligible for EI.
Apart from that, I am interested in the modeling you used to develop the plan for the five weeks for the extra training.
When you were doing your modeling and looking at how you would top up EI or make it easier for Canadians to access it, did you look at changing the number of hours that were required to get it? I am aware that in Canada, in different places of Canada, you need a different number of hours.
Given that the downturn in the economy is across the whole country, did you ever look at a number like 360 hours as a uniform basis on which people would be eligible for EI?
Mr. Beauséjour: Different options have been looked at as part of the budget development.
I do not remember looking at that specific option, but many different options were looked at to analyze the potential impact of a change to the EI program.
Senator Nancy Ruth: Can you tell me why the number of hours was not changed?
Mr. Hodgson: I am afraid we could not comment on the basis for political decisions for what might or might not have been considered. We can provide factual information about the decisions that were presented in the budget.
Senator Nancy Ruth: It was hinted on the CBC this morning that the $2 billion in the EI fund that was set aside in the last budget into a separate corporation, might already have been spent, given the huge demands on EI. Could you confirm that or tell us what has happened to it? How are you paying for the inordinate number of people who are unemployed right now?
Mr. Hodgson: Because the EI program is a statutory program, it costs whatever it costs, and benefits are paid to everyone who qualifies to the maximum of their entitlement if they need it.
The $2 billion that you are referring to from last year's budget was in the Budget Implementation Act giving the Minister of Finance the authority to transfer that amount to the bank account of the Canada employment insurance financing board, which will be the new body that will be responsible for setting premium rates beginning with the year 2011.
The board is not in existence yet, so there is no bank account to transfer the funds to, but there is the authority for the Minister of Finance to make that transfer.
Senator Nancy Ruth: Will those funds be drawn on to pay the demand on the EI system?
Mr. Hodgson: The board will not be in place.
Senator Nancy Ruth: If the funds have not been transferred, where are they?
Mr. Hodgson: It is an authority to transfer the money when there is an entity to transfer it to. Since the government has frozen the premium rate for 2010, the board will not be required to set the rate until the fall of 2010 for the year 2011.
Senator Nancy Ruth: You have not said that the $2 billion could or could not be spent. You have not said anything about it. Could you give me some idea of where it is and what is happening to it?
Mr. Hodgson: It is waiting to be transferred, in a sense. The authority is to transfer the funds from the Consolidated Revenue Fund, CRF, to the Canada employment insurance financing board bank account.
Senator Nancy Ruth: You are pretty sure that that money will not be drawn upon?
Mr. Hodgson: It cannot be. The authority is to transfer it.
The Chair: I would like to confirm Senator Nancy Ruth's question with respect to the board that has yet to be created to fix the EI rate. You are confirming that the board has not been created, that no individuals have been appointed to a board as of yet?
Mr. Beauséjour: No, not yet. We are in the process of creating that board.
Senator Callbeck: I have questions on wait times, because that is something that has been in the media a lot, and certainly, I have had people mention it to me. There is a 28-day processing period, but there have been many people who have been waiting much longer than 28 days.
It was in the press in Atlantic Canada that of 30,000 people who had applied for EI 8,000 waited over the 28-day period. This insurance means a lot to many of those people. It is a matter of putting food on the table and paying the rent and so on. At what time did you realize there were significant problems with this wait period?
Mr. Beauséjour: Basically the waiting period is monitored on a weekly basis by Service Canada. I am not aware of all their processes because I do not work on the operations side. I do not know exactly when that occurs.
They have targets to have 80 per cent of the claimants receiving their cheque 28 days after the claim is completed. It is important to emphasise that it is the day they complete the claim. We try to have 80 per cent in that time on an annual basis. We know there is an annual, standard peak load in December and January. During these months, we do not meet the target. It is not necessarily a monthly target but an annual target. As they were going through January and December, they did identify that the workload was much more than they expected.
Senator Callbeck: It was not until January and February that you realized there was a problem.
Mr. Beauséjour: That it could be a problem. That is my understanding. Again, I do not work there, but that is my understanding.
Senator Callbeck: I know Mike Savage, who is the opposition critic for human resources and skills development, wrote the minister about this issue back in December and did not receive a reply until the end of February. He outlined the concern that people were waiting for EI for more than 40 days.
Why did it take the government so long to act? Yesterday, the minister announced that there would be $60 million spent on hiring more people. This is a serious problem. For people waiting for that cheque, it means an awful lot, yet the wait times are getting longer.
How many people have been hired to help with this problem?
Mr. Beauséjour: I do not have that number.
Senator Callbeck: Could you get that number for the committee?
Mr. Beauséjour: I could ask the department to try and figure that out and get it to you.
Senator Callbeck: I would like to know how many employees have been rehired — because the minister did talk about rehiring some people — or new employees that have been hired to address the backlog. Where have these employees been assigned to in terms of regions? How many thousands of claims are being delayed and in what province are most of the delays occurring?
Mr. Beauséjour: It is important to understand that claims are not necessarily treated in the region where they are initiated. Many claims are initiated in Ontario where we saw a large peak in unemployment. Many of these claims are being processed in Quebec or in the eastern provinces. We allocate the workload between the provinces because much is done electronically, and the workload can move from one province to another. The issue about where the increase in the workload is and where the individual is working is not directly related. That is information we can try to figure out, and we can get the information on where the individuals are located.
Senator Callbeck: How long will it be before the employees are trained and working on these claims?
Statistics Canada reported yesterday that there were 1.5 million people unemployed in Canada, which brings the rate to 8.1 per cent. There are 744,000 in receipt of EI. That means that there is roughly another 750,000 who are not getting EI. Could you explain to me why? Who is not getting EI?
Mr. Hodgson: There are two different numbers that are being reported: people who are unemployed who may or may not have paid EI premiums and people who are receiving EI benefits who did pay EI premiums.
For a number of reasons, a person can be counted as unemployed and not paid EI premiums. They may not have worked recently; they may have been self-employed; they may be newly graduated from school. They are looking for work and are counted as unemployed, but they have not paid premiums so they have no entitlement to EI benefits.
Senator Callbeck: Can you tell us the difference in those numbers for the last month or so?
Mr. Beauséjour: The source of information is a Statistics Canada survey. Each month Statistics Canada does a labour force survey, and through that survey, they obtain information about the number of unemployed persons in Canada.
Four times a year, when they deliver the survey, for those individuals that identify themselves as being unemployed they have a special survey for them, and they ask additional questions about whether they collect EI, and if not, why not. That is the source of information. Statistics Canada takes the information from the four surveys and they publish the numbers once a year. They published the last set of numbers last July. We do not have that information on a monthly basis. The most recent information is for 2007. In July 2008, they reported the number for 2007.
The numbers I have show that from the list of unemployed persons, 17.6 per cent have not worked in the last 12 months and therefore did not pay EI. A further 5.2 per cent is without recent insurable employment; these are the self- employed. Another 7.2 per cent includes individuals who have never worked. Approximately 30 per cent of all the unemployed did not contribute to EI in the previous year. Out of the 70 per cent, another 5.8 per cent quit working to go back to school and because they quit their job, Employment Insurance does not cover them. They contributed to EI but are not eligible to receive EI. Another 9.9 per cent quit without just cause.
Senator Ringuette: Can you give us a copy of those statistics?
Mr. Beauséjour: I can get you a version of them.
Senator Ringuette: Why not that version?
Mr. Beauséjour: I have an extract that I can share with you.
Senator Nancy Ruth: What is the sum of people? I understand the percentages, but how many millions?
Senator Eggleton: I want to hear the percentage of people who get EI.
Mr. Beauséjour: Forty-four point three per cent have contributed to EI or quit with just cause or have been laid off. Employment Insurance exists to cover that percentage of the population. That is 44 per cent of the people who said they were unemployed and looking for jobs. It could include students who have just graduated.
Senator Ringuette: That is why it is important to get a copy of that sheet.
The Chair: Senator Callbeck has the floor and you are trying to answer the question Mr. Beauséjour. We will talk about the schedule you have in front of you at the end of the meeting.
[Translation]
Mr. Beauséjour: For the sake of convenience, I will round the numbers to the closest thousand. There were 1,030,000 unemployed workers in 2007. Of that number, there were 181,000 unemployed who had not worked in the previous 12 months, 54,000 unemployed who were self-employed workers, i.e., who worked but did not contribute to the program, and 74,000 unemployed who have never worked — which is how they define themselves. Some 720,000 unemployed workers contributed to the EI program. Out of that number, 59,000 quit their jobs to go back to school in 2007. Those people are not eligible for employment insurance. Some 102,000 workers left their jobs without just cause. As a result, there were 559,000 unemployed workers who contributed to the program and who quit with just cause or who were laid off. Of that number, 99,000 did not qualify, that is to say that they did not have a sufficient number of hours to qualify. Therefore, there were a total of 460,000 people who were eligible for employment insurance.
When you consider that number, 82.3 per cent of those people will receive employment insurance because they contributed to the program and were laid off or quit with just cause. Therefore, 82.3 per cent of unemployed workers are covered by the employment insurance program.
[English]
Senator Callbeck: Those figures are what date? You said 2007.
Mr. Beauséjour: Yes, these figures are for the year 2007.
Senator Callbeck: Are they for the end of the year?
Mr. Beauséjour: It is for all the year. It is an average of the four surveys. They publish it as a number for the year. It is to present what was estimated from the survey for 2007.
Senator Callbeck: Will you get a copy of those figures for us?
Mr. Beauséjour: I can get a copy of that table.
Senator Callbeck: This 80 per cent that we hear the minister talking about, that is the people who qualify. What is this 80 per cent?
Mr. Beauséjour: That is what I am talking about. The 82.3 per cent of 2007 is the number of individuals who did contribute to the EI program, or the proportion of the unemployed who contributed to the EI program and quit with just cause or were laid off.
Mr. Hodgson: Statistics Canada carries out the Employment Insurance Coverage Survey, which is a better measure of coverage of the program for those it is intended to cover. Of those who paid premiums and were either laid off or quit with just cause, 82 per cent were receiving benefits or eligible to receive benefits, and if memory serves accurately, that number has moved between 80 per cent and 84 per cent over the last four to five years. It has remained fairly steady and there is not a lot of variation between provincial numbers and the national average.
Senator Callbeck: Are you saying that 80 per cent who contribute get EI?
Mr. Beauséjour: No, that is not what we are saying. Eighty per cent of those who contribute and quit with just cause or have been laid off receive benefits. It is different. The proportion of individuals who contribute and who quit without cause or return to school are automatically ineligible to receive EI.
Mr. Hodgson: They are not available for work.
Senator Callbeck: I want to ask about maternity benefits for the self-employed.
Where does that stand right now? A panel will be set up, correct?
Mr. Beauséjour: Correct, but it has not been set up yet. We are working on identifying a potential term of reference.
Senator Callbeck: You have no idea when that will be set up.
Mr. Beauséjour: No, not yet.
Senator Callbeck: Will that panel travel across Canada to get input to determine how it will work?
Mr. Beauséjour: The idea is that the panel will seek the views of Canadians. I am not yet sure how it will work. That is part of the decision that needs to be taken. How exactly the input from Canadians will be taken has to be identified.
Senator Mitchell: It is interesting how the government rushed us so intensely to get Bill C-10 passed so that EI benefits could be implemented, and yet they have taken two years on EI benefits for the self-employed. There does not seem to be any sense of urgency at all even though we are in the worst financial crisis we have known since the depression. Just to point to my colleagues across the way, it seems to me to be a bit of a contradiction.
I would like to ask about women and their access to benefits because it is an issue. I think it is broadly known that eligibility requirements do not meet the particular employment differences for women.
Could you tell me, the percentage of women who pay into EI and end up being unemployed compared to the percentage of men who pay into EI and end up being unemployed?
Mr. Beauséjour: I do not have that number. I had it 10 days ago. In fact, we did talk about that topic but I did not bring it with me. It is a bit lower, if I remember, for regular benefits, but when you look at including all the special benefits, which include maternity and parental and sickness benefits, the access to these benefits is higher than the access for men; and in total, they did receive a larger proportion of what they contributed to EI when you take all the benefits.
Senator Mitchell: Overall, we all know that women generally do not get as high a payout because they do not earn as much and it is more difficult for them to qualify. It takes 910 hours to qualify. It takes about two years when you work part-time. Seventy per cent of all part-time workers are women and two-thirds of all people earning minimum wage are women, so it is much more difficult.
I hope it is only an unfortunate coincidence that you do not have the figures on women because that is an important issue in EI. Could you phone my office with them? I would like to receive those numbers quickly.
Have you done any costing of changes in eligibility requirement? Rather than establishing the payments based on the last 12 weeks, what if it were the best 12 weeks in the last 52 weeks. What if it were 60 per cent of salary instead of 55 per cent, and what if it required lower hours of some reasonable amounts to help women or people working part time. Do you have any ideas? Have you done any assessments of the cost of changing certain criteria that might be more geared to women?
Mr. Beauséjour: We did the costs for different options. I am not sure exactly if we have the costs for the options that you are looking for.
Coming back to your comments about qualifying — qualifying is gender neutral. It is not linked to the gender. It is linked with the work pattern of each individual.
The minimum hours required to work, the 910 hours that you refer to is only for new entrants and re-entrants. The people who have been in the work force for more than a year face the same entry requirements as any Canadian, and it does depend on the region.
In terms of part-time workers, if you look at the requirements in each of the regions, an individual working between eight to fourteen hours a week can qualify for EI if they were to work full time for the year. If they work for a full year, depending on the region because the minimum hour requirements vary by region, in some regions they can qualify with eight hours a week and other regions with fourteen hours a week.
Senator Mitchell: What is the difference, roughly, for eligibility requirements between Alberta and New Brunswick?
Mr. Beauséjour: I cannot tell you for Alberta or New Brunswick because there are multiple regions in each of the two provinces.
Senator Mitchell: Let us say Edmonton and Fredericton, the two capitals.
Mr. Beauséjour: Let me find that information. It changes every month.
Senator Mitchell: You can send it to us if you cannot find it.
Mr. Beauséjour: The number of hours to qualify in Edmonton is 700 hours, which is the maximum because their unemployment rate was 4.6 per cent.
Fredericton, Moncton and Saint John are in the same region. It is the same, 700 hours, because the unemployment rate 5.6 per cent. There are more regions in New Brunswick where the unemployment rate is higher. Another region would be Restigouche-Albert. In Restigouche-Albert the unemployment was 14.9 per cent in March. In that case, the number of hours required to qualify is 420. These numbers adjust every month to the economic situations of each region.
Senator Mitchell: It became clear in the latter part of the Bill C-10 debate, in the couple of days we had to review Bill C-10, that the government had finally stumbled upon the fact that it would add the five weeks not in the future but right now if someone was on EI two weeks prior to the passing of the bill.
However, then it was clear, if you looked at the budget, that there was no money in the budget, in the estimates, to cover that until April 1. It seemed as if they put it in here but had not thought it through because there was no money for it. Do you understand why that happened, who would have been responsible for the right hand not knowing what the left hand was doing?
Mr. Hodgson: EI is a statutory program and it will cost whatever it costs. Funds are not appropriated for the EI program itself. It is not voted on like other departmental expenditures.
It is difficult to know in advance what the take-up of the extra five weeks will be. It depends how many people would have otherwise exhausted their claims. It is only after the fact, when you know how many people made use of the five weeks of benefits that you could estimate the cost. However much the program costs is funded from the Consolidated Revenue Fund.
Senator Mitchell: In this case, you know within two weeks of the passing of that bill exactly how many people are on it.
Mr. Hodgson: You know how many people have a claim, but you do not know how many of them will make use of the additional five weeks who would have otherwise exhausted their benefits. It gives everyone an additional five weeks should they need it and you do not know exactly how many people will need those five weeks.
Mr. Beauséjour: In order to get an estimate of the cost for a given year, it will take at least another six months to collect all of the information and to be sure that all of the claims are finished.
Senator Mitchell: How close do you generally estimate it at the beginning of the year when you ask for money?
Mr. Beauséjour: I did not look at how well we did in our past estimates. We have data about completed claims. The most recent complete year is 2006. We will use a base year and we make some estimates with that information. After that, we will have to make some adjustments to take into account the fact that we know that, in the future year, the unemployment rate will be higher than 2006. There are all kinds of estimation technologies.
The Chair: There is no money — no payout — coming from the financing fund. The $2 billion that was to be transferred into a particular fund to fund all of this has not occurred. None of that is happening yet, is that correct?
Mr. Hodgson: That is not in force. The Canada employment insurance financing board will be a Crown corporation with its own bank account, which, when in existence, will have transferred to it a $2 billion reserve. In addition, should the EI program run surpluses in future years, the amount of that surplus would be transferred from the Consolidated Revenue Fund to the financing board's bank account to be invested until it is either used to reduce future premiums or pay benefits. However, that part of the Budget Implementation Act has not come into force yet.
The Chair: Therefore, the Consolidated Revenue Fund will be used to draw financing from even after this separate fund is in place. Is that what you are saying?
Mr. Hodgson: That is correct. The new board and its bank account will essentially manage the $2 billion reserve, set premium rates and invest any future surpluses that might occur from premium revenue exceeding program expenditures. However, the funding nature of the EI program remains unchanged. Premium revenue is deposited into the CRF like any other government revenue and whatever the program costs, the CRF funds the benefits.
The Chair: What is that $2 billion reserve used for?
Mr. Hodgson: That $2 billion will function as a reserve in the event of an unanticipated slow-down in a year where the forecast for the break-even premium rate is made in the fall of the preceding year.
If the economy slows down halfway through the year, the unemployment rate is higher than was forecast, then the break-even premium rate is no longer sufficient to fund the program. The $2 billion could be drawn down against as a reserve to fund the shortfall of the program in that year.
The Chair: Therefore, it is to back up the Consolidated Revenue Fund.
Mr. Hodgson: That is one way of putting it.
The Chair: Is that what will be happening?
Mr. Hodgson: In a sense, yes.
The Chair: Honourable senators will recall that we made a comment that the $2 billion was insufficient — significantly so. We made that comment last year in a report. We had actuaries here who told us that to do the function properly, the fund should be around $12 billion to $14 billion rather than $2 billion. That was a comment we made last year but there has been no change. In fact, nothing has happened with respect to even the $2 billion at this stage.
Mr. Hodgson: The $2 billion at this point would not serve a function since the government has frozen the rate and will be absorbing all the premium shortfalls this year and next year.
Senator Ringuette: It would be very helpful to understand the system if you could provide us with a province-by- province division of your employment divisions. For instance, New Brunswick has different divisions and a different unemployment rate base. This base implies the number of hours to be eligible and the number of benefit weeks. Therefore, it would be helpful if you could provide it geographically.
Mr. Beauséjour: I have the unemployment rate by region, which is used to determine the requirements and minimum and maximum entitlements.
The Chair: Please provide that information to our clerk.
Mr. Beauséjour: We can also provide a table that shows the entitlements for the region. Depending on the employment rate in the region, the table tells you how many weeks of entitlement you could qualify for depending on how many hours that you worked. That varies. We can have both tables. One table is on the regions.
Senator Ringuette: The divisions.
Mr. Hodgson: I would suggest the map, which shows the geographical conditions.
Senator Ringuette: I saw the list of communities. If we could have the geographic divisions, it would be great because sometimes the way they are designed is bizarre.
Mr. Hodgson: HRSDC's website is useful in providing both a national and a provincial map, which shows the EI regions in each province. It will also provide Canadians with information on whether their municipality falls within a particular EI region so people can find exactly where they are.
Senator Ringuette: That will be very helpful.
Mr. Beauséjour: A very good website shows it by municipality. You can input your postal code and you will know where your unemployment economic regions are.
Senator Ringuette: It is comforting that you have that on a website. It is not very comforting that we are now in March 2009 and you are giving us data from 2007.
The current experience in the labour market is completely different from the 2007 experience, so we cannot rely on the numbers that you were citing. It is impossible.
I will give you an example. The beneficiary of unemployment was in the vicinity of 25 per cent of seasonal workers and 87, 86 for that period of time. However, the current ratio with the number of unemployed in the manufacturing sector will change that drastically.
That is why I am saying I am dismayed. The reality is that the numbers you are giving us are the numbers of 2007 and we cannot rely on those numbers today to understand what is happening.
I cannot believe that you do not have the technology to put that in your database and know the age and sex of the applicant. All of that information should automatically be in your system when an applicant puts in an application.
Mr. Beauséjour: There is more up-to-date information. Statistics Canada just reports data on the number of claimants.
Senator Ringuette: No, but your data.
Mr. Beauséjour: That is the same. The data that Statistics Canada reported yesterday is common demonstration data. They ask us to provide them with our data and we do so in a report. We have data. The current coverage data that we have to rely on is 2007. It is from that data that I answer questions those people covered by EI. We have other information.
Senator Ringuette: Can you provide us with the latest data that you have for 2009 concerning the regions, gender, age group, kills, so that we can have a picture of what is happening in the marketplace?
As an example, Mr. Hodgson, you look into federal-provincial relations and social policy branch and I imagine you are in discussions with the provinces concerning training programs. How can we assess the kind of training that is needed if we do not have the picture of the unemployed, the employable, the age groups and the current skills?
This data is necessarily on your day-to-day policy analysis and objectives to make the most efficient programming available to help Canadians.
Mr. Hodgson: The information that you have outlined is largely administrative data on the characteristics of the clients, which is available both to HRSDC and the provincial governments.
With respect to training programs, as you mentioned, there are two federal streams of programming. There is training programming funded by the EI program for EI-eligible clients governed by labour market development agreements with provinces. The responsibility for the design and delivery of the programs and the client selection has been fully devolved to all of the provinces. The provinces choose the clients; they choose their priorities; they select their programming and design the programs for their clients.
For non-EI-eligible clients, there is a second set of agreements, labour market agreements, which provide $500 million a year to the provinces. Again, the responsibility for design, delivery, and client selection is entirely transferred to the provinces. They have access to the information on their local labour market conditions and their local unemployed population and they make the decisions.
Senator Ringuette: However, you make the decisions concerning the amount of money you agree upon with the provinces to provide that training. In order to do that, you need to look at the data concerning local requirements, sex, skill, employability and age. If a person is 64 years of age, the only and most efficient way that you can help that person is to have that older person access a community program project to help him reach 65 years. You would not efficiently provide that person with a two-year training program.
I am saying that the information I am requesting for this committee includes that because not only do I want us to look at EI, I want to look at how EI can serve Canadians and the training portion of it is a vital portion of it.
Mr. Hodgson: With respect to older workers, there is the Targeted Initiative for Older Workers, which is a cost- shared federal-provincial program.
Senator Ringuette: Yes, I saw that initiative. There was a major reduction to that program. Actually, I have it right here.
Mr. Hodgson: In fact, Budget 2009 added $60 million to the budget for the program to bring the annual amount to $50 million per year.
Senator Ringuette: I have it right here in the Main Estimates 2009-10 on page 14-8. It says, ``Contribution to assist unemployed older workers in communities with ongoing high unemployment and/or affected by downsizing.'' In the Main Estimates, it went in 2008-09, from $37,250,000 to $7,839,000. It is right here, in black and white.
Mr. Hodgson: I am afraid I do not have that document in front of me, but Budget 2009 provided $60 million additional funding for that program.
Senator Ringuette: I call that ``re-gifting.'' It was taken out of the estimates and put into what you call the budget stimulation plan, but it is still the same money.
Mr. Hodgson: That is the difference between the money that has been allocated to it and provincial take-up. Not all provinces are interested or have signed agreements so only some of the funding is flowing to those provinces who have signed agreements. It is distributed on the basis of a province's share of unemployed older workers to specifically allocate the money to that target population.
Similarly, for the training provided under EI, Budget 2009 provided an additional $1 billion over two years, the amount of which is to be allocated amongst provinces based on the share of unemployed, not the normal complicated formula that allocates the base $1.95 billion in annual Part II training funding. Budget 2009 also provided an additional $500 million over two years to the labour market agreements, also to be allocated amongst the provinces.
Senator Ringuette: There is another item that was cut into the estimates. It was cut from the Main Estimates from one year and put into what you say is additional but it is not additional.
The Chair: I think we should clarify the record. You are saying ``Budget 2009.''
Senator Ringuette: No, I mean the estimates.
The Chair: Mr. Hodgson, in his answer, is saying the Budget 2009. That is not authority for the government to spend. It is the government's hope and wish of things they are going to do. Senator Ringuette is interpreting your Budget 2009 to be the budget implementation Bill C-10.
Mr. Hodgson: I am sorry.
The Chair: You are just talking about the budget, which is not authority at all. The authority comes either through budget implementation or the Main Estimates in the supply bill.
Mr. Hodgson: I should correct myself.
The Chair: Senator Ringuette was talking about the Main Estimates supply bill and pointing out that there was $30 million less authority this year than last, whereas you were talking about the government's budget that came before that saying this is what they are going to do during the year.
Mr. Hodgson: I should have said that the budget announced the government's intention.
Senator Ringuette: That is why I was saying that it was re-gifting.
Mr. Hodgson: Over and beyond that, as far as some of the programming goes, the labour market agreements, some provinces have requested re-profiling. It is not necessarily that the money is gone but the provinces may have asked that it be shifted from one year to another.
Senator Ringuette: It would be useful for the members of the committee to know where those federal-provincial training agreements stand. It is an important component of how we will be able to help Canadians re-access the workforce.
With regard to the waiting time, I was informed last week, and I believe you confirmed this earlier, that there was a switch in the way that requests for benefits are being processed. The initial request is brought in to the local office, but that is the extent of the involvement of the local office.
As an example, my family name is Ringuette. In my region, there are many Ringuettes. We are not all kissing cousins. Some of us are five or six generations removed, but we have the same name. Some in the Ringuette family are very entrepreneurial. One Ringuette could be employed by an entrepreneurial Ringuette who is removed by five generations, but when that Ringuette is laid off, it is questioned. The application is sent to a special inspector's unit in a central agency just because the business name is the same as the employee name. The local community is small and people know each other. That is the reality in small communities. By changing the way you process applications, you have increased the response time.
Why do you not return to the system whereby local operators in your offices deal with most of the requests rather than playing Russian roulette with applicants from Ontario being processed in New Brunswick and applicants from New Brunswick being processed in Manitoba and so forth? Why do you not go back to the simple and efficient way of dealing with those applications?
[Translation]
Mr. Beauséjour: Fewer and fewer applications are processed manually. Increasingly, claimants are filling out their forms online without having to go to the offices. They can also use the Internet to fill out their cards every two weeks. These days, much of this is done electronically. It is difficult to say which system is more effective.
Senator Ringuette: Yes, but one does not preclude the other.
Mr. Beauséjour: The workload is shared automatically between available employees, and this significantly increases the effectiveness of how claims are processed. This procedure has been in place for a number of years, and an increasing number of program components is automated.
Senator Ringuette: Program automation is a good thing. However, there are probably a greater percentage of claimants who show up in person and do not use the electronic system. I think that the fact that some people today have to wait 90 days before receiving their first cheques should be a clear indication that the current process is not as effective as when claims were processed locally.
You have said so yourself, the operating procedure was modified four or five years ago.
[English]
Who processes what? That should give you a first indication, because the delay in providing the first week of benefits, as you just said, started from there. That should be the first indication for you, which is why I am asking that you review that for the sake of efficiency. It is not a costing policy; it is a question of efficiency and helping Canadians as much as you can. That is a suggestion.
Senator Di Nino: Do these people have the choice to apply directly?
Mr. Beauséjour: Yes, they still have the choice to apply on-line or by telephone.
Senator Di Nino: The choice of how to apply is given to the applicant?
Mr. Beauséjour: Yes.
Senator Eggleton: I have a four-part question, and I will ask all the parts at once.
The government has put in place a five-week EI extension, which is very good. However, what about the two-week waiting period up front? What is the rationale for keeping that in place?
My second question is on regional qualification variants. There are varying levels of unemployment in different areas, but in the current economy, where there are rapid increases in unemployment, does that make sense? I never thought it made much sense in the first place because if you are unemployed it does not matter where you are in the country. Being unemployed is painful anywhere in the country. The circumstances have changed, and I wonder whether the rationale is changing. What is the rationale for keeping that regional variance?
Third, was consideration given to the fact that benefits are based on 55 per cent of average earnings over the previous 26 weeks to a maximum of $447? In this day and age people would have a very difficult time supporting a family on that amount of money. People who are currently unemployed are experiencing a lot of pain, and it seems to me that amount requires further attention.
Fourth, what is the criteria for ``just cause'' for people not qualifying?
I could ask more questions, but I will quit there.
Mr. Beauséjour: Quitting your job to move with your spouse is considered just cause.
[Translation]
If you are a victim of harassment in the workplace, that would constitute just cause. There are a number of criteria that determine whether people have just cause to quit their jobs.
[English]
Senator Eggleton: Do they have to prove the harassment? Do they have to go through a lengthy process to prove it?
Mr. Beauséjour: I am not sure of all that is involved to demonstrate that.
[Translation]
The next question I would like to address concerns the VER.
[English]
The rationale for keeping the variable entrance requirement is the same rationale. When the unemployment rate is lower, it is easier to find a job and to keep it longer than when the unemployment is higher. That was the reason it was put in place and it remains the case that if the unemployment rate is lower in one region compared to another region, it is easier to maintain a job longer and it is also easier to find a new job. That rationale does not change and the system automatically reacts to the unemployment rates. If the unemployment rate goes up, access would be facilitated and applicants would have benefits longer.
Mr. Hodgson: There is evidence to support the effectiveness of the variable entrance requirement by looking at comparisons across provinces of the average proportion of benefit entitlement that is used by the claimant. There is not much variation across provinces indicating that in regions with lower unemployment rates and shorter benefit entitlements, people are using roughly the same proportion of that shorter benefit entitlement as claimants in higher unemployment regions who have longer benefit entitlements. It looks like it works reasonably well.
Similarly, the portion of claimants that exhaust their benefits does not vary across provinces, even though unemployment rates do.
Mr. Beauséjour: When you compare the five weeks and the two-week waiting period, one key difference is that the two-week waiting period for many claimants will not add anything. For those who exhaust their benefits, waiving the two-week waiting period would net them the same amount of benefits, which is the maximum. There would not be additional support for those who exhaust the benefits. The five weeks added to extend the claim is additional benefit to those who exhaust their benefits. That would be the key difference between the two when compared.
Mr. Hodgson: There is another way of looking at the two-week waiting period. The co-insurance feature that you find in all insurance policies has a deductible involved. There has been a waiting period in the EI program since it has existed. There has always been co-insurance period for claimants where, for a number of reasons, it functions as a deductible. It avoids people who would file a claim and find a job in very short order and arguably did not need benefits. It would be difficult to sort out that kind of short transaction.
On the employer side, they control whether people are laid off and become unemployed. The employer is paying 1.4 times the employee premium. The two roughly correspond with control over risks and a deductible on an insurance policy.
Senator Eggleton: What about the 55 per cent?
Mr. Beauséjour: The 55 per cent is a balance in providing benefit that is not too costly. The level of benefit at 55 per cent is not related to the current economic situation, per se. The level of benefit is not linked to the economy.
Mr. Hodgson: The rate of benefit has been 55 per cent since 1997. The maximum insurable earnings have changed and grown at the same rate as the average industrial wage growth. Each year, the maximum amount that can be insured and the maximum weekly benefit grows at the same rate that the average Canadian wage grows.
Senator Eggleton: I do not think we are doing enough.
Senator Di Nino: What was the rate of benefit before 1997?
Mr. Hodgson: I believe it was at its highest in 1972 at 66.6 per cent.
Senator Di Nino: I am talking about 1997. I will refresh your memory. It was 57 per cent. In 1997, it was reduced from 57 per cent to 55 per cent.
The Chair: Do you accept that?
Mr. Hodgson: I believe that is correct.
Senator Di Nino: I suggest that it might have been when Mr. Eggleton was the President of Treasury Board.
Senator Eggleton: No, I was not.
Senator Di Nino: I understand you were in the House of Commons at that time.
Budget 2009, in particular Bill C-10, has a number of enhancements to the EI program including freezing the premiums for 2010; an additional five weeks' benefit, which had been reduced during the previous government's tenure from 45 weeks to 50 weeks and now reinstated; and financial support for unemployed long-term workers training.
For clarity, what is the extended work sharing benefit for all recipients?
Mr. Beauséjour: As part of the recently announced budget, one provision of the Employment Insurance Act is work sharing. It affirms that a slowdown in activity might reduce the number of hours for an employee and part of the week could be paid by EI. Until the change, these agreements could be up to 38 weeks and now these work-sharing agreements could be up to 52 weeks.
The Chair: When you say ``now,'' is this a government promise? Does it appear in Bill C-10?
Mr. Beauséjour: No.
The Chair: I do not see that change.
Mr. Beauséjour: It is not part of the act because we do not need legislative change to be able to implement that policy change.
The commission was able to change how they do business because the commission signs the agreement with the employer. Until two or three weeks ago when the change was implemented, the agreement between EI and an employer was up to 38 weeks. Now, the agreement could be up to 52 weeks. They have simplified the process required for eligibility for work-sharing agreements.
Senator Di Nino: What does that mean to an average employee?
Mr. Beauséjour: One area making use of the agreement is the B.C. forest industry. They had a slowdown for many months and this has allowed people to keep their jobs longer to carry them through until the expected return of activity. These individuals remain attached to the labour force rather than become unemployed. They are paid in part by the employer and in part by EI.
Senator Di Nino: The extension is new.
Mr. Beauséjour: Yes, the extension is new.
The Chair: This program is in neither the Main Estimates nor Bill C-10, both of which we are discussing here this evening.
Mr. Beauséjour: Exactly.
Senator Di Nino: The other enhancement deals with the Wage Earner Protection Program. I do not understand that one. Could you tell me what it is?
Mr. Beauséjour: I cannot talk about that because it is not related to EI. That is a program under the Labour Department. I do not know a lot about that program.
Senator Di Nino: All of these expenses will likely result in some deficits. I think you stated this before, but just for clarification, my understanding is that the EI pool of funds will not be charged with the deficits.
Mr. Beauséjour: The $2.9 billion enhancement to the program will not be taken into account by the CEIFB when they determine the rate in 2010.
Senator Di Nino: In effect, this will come out directly from the CRF as opposed to touching that $2 billion that our chair was talking about as a reserve fund. It will not impact on that or any other funds that have been set aside for the commission's use.
Mr. Hodgson: That is correct. That was part of Bill C-10 that gave the government and the Minister of Finance the authority to ensure the cost of the benefit enhancements in Budget 2009 are not recovered from premiums.
Senator Di Nino: The chair asked about the $2 billion reserve fund. Is it true that when the government instituted this, it made it very clear that any additional funds required would be the responsibility of the federal government, the CRF, or am I incorrect? If you need more than $2 billion, do we stop paying?
Mr. Hodgson: No, because EI is a statutory program. If $2 billion were insufficient in a given year, the CRF continues to pay benefits to all EI claimants.
In future, the CEIFB would set the premium rate to recover that $2 billion, subject to a cap on how much they can change rates per year. However, the EI program pays benefits to anybody entitled to receive them.
Senator Di Nino: The point is it does not impact on the EI benefits of those who qualify.
Mr. Hodgson: Not at all.
Senator Neufeld: Senator Di Nino must have read my notes. That was the question I was going to ask and expand on a bit more, but I am comfortable with what he has put on the record.
Senator Chaput: My first question is a comment in regard to a question asked by Senator Di Nino when speak of EI benefits, asking if people still had the choice to apply personally if they chose to do so.
That is true, but we have to realize that for people who live in smaller regions — let us take, for example, Nova Scotia and New Brunswick — the local offices have been closed for years. If those people want to apply personally, they now have to drive in person to apply in a farther region.
I remember one of our Senate committees was touring Nova Scotia and some people had to drive for a good two hours to apply personally if they chose not to do it electronically. I wanted to say that it is not really a choice.
[Translation]
My question is concerning the training provided to the unemployed. If I understand correctly, the federal government will develop contribution agreements to channel the funds to the provinces? Provinces are responsible for delivering training services. The federal government will provide funds for the delivery of training services, is that correct?
Mr. Beauséjour: That is done through the existing labour market development agreements with the provinces. The amounts will be transferred through the existing agreements.
Senator Chaput: Do those agreements already contain commitments to ensure that the funds be spent on training alone? In those agreements, has the training offered already been identified or is that done subsequently?
Mr. Beauséjour: The provinces are in charge of those programs. There is a framework, and a certain number of things can be done, including needs assessments. We can also help people draft their resumes and encourage them to take part in seminars. This is not always about training; however, the goal is to facilitate their re-entry into the labour market. The provinces determine which individuals will receive training and, together with claimants, define their training needs and appropriate sectors. We believe that the provinces are best suited to target people's training and support needs.
Senator Chaput: Do you make use of existing agreements?
Mr. Beauséjour: The agreements are already in place to transfer the funds.
Senator Chaput: Do you have such agreements with all provinces and territories?
Mr. Beauséjour: As part of the EI program, we have agreements with all provinces.
Some provinces have full responsibility while others co-manage. If I am not mistaken, three other provinces will take full charge within three or four months. We are still discussing the agreements, but in the provinces where there is co- management, the federal government continues to be the service provider, following discussions with the provinces.
Senator Chaput: In the case of a decentralization, does the province become wholly responsible? You do not do any follow-up?
Mr. Beauséjour: Accountability must be ensured.
[English]
The Chair: You will appreciate, Mr. Hodgson and Mr. Beauséjour that we are dealing in an area that we do not normally deal in so there are many terms that you use with which we might not be familiar.
[Translation]
Mr. Beauséjour: Absolutely. I have been in charge of the labour investment program for the past year, and it has taken me some time to understand all the standard terms that are used in both official languages. I sometimes try to speak in both languages, and I am not always able to do so because I use some terms more often in one language than the other.
[English]
The Chair: With respect to the $2.9 billion, as I understand it, the figure of $1.73 was the premium rate, which is now fixed by Bill C-10 for the next two years. The $1.73 premium rate was fixed with a view to being a break-even figure and the government is saying now, we do not want that to be increased during this difficult economic time. However, if there is a shortfall, and we do anticipate that there will be one, it will not balance, and the difference is likely to be $2.9 billion. Do I understand that correctly?
[Translation]
Mr. Beauséjour: That is not so. Allow me to clarify. The Budget Implementation Act sets rate for a single year. The 2009 rates were set by the Employment Insurance Commission in the fall. The government simply agreed to that rate when it was informed.
When the actuary completed the report in early September, when the decision was taken with all the available information, it was thought that $1.73 would be the rate to balance revenues and expenditures.
If we were to maintain that rate, and Mr. Hodgson may correct me, there would be $4.5 billion in stimulus for the economy. That is where I am unsure whether that is in excess of the $2.9 billion or not.
[English]
Mr. Hodgson: In total, over the two years relative to the current estimate of the break-even premium rate for 2009- 10, a premium rate of $1.73 over those two years will run a shortfall of $4.5 billion, so $2.9 billion in 2010, but a total of $4.5 billion over the two years.
The Chair: Explain to me why, at page 224 of Bill C-10, the government provides for a repayment of $2.9 billion.
Mr. Hodgson: That relates to Senator Di Nino's question. That is the estimated cost of the benefit enhancements introduced in Budget 2009, which will not be recovered through premium rates. Unfortunately, it is an identical number, but $2.9 billion is the estimated cost of the long-tenured workers initiative, the extended work sharing agreements. All these other things total $2.9 billion.
The Chair: I misunderstood that, and I am glad for the clarification. I was wondering why that particular fund would be reimbursed with that amount of money, having heard your discussion earlier that the funds came out of the Consolidated Revenue Fund.
Mr. Hodgson: Coincidentally, they are the same number, unfortunately.
The Chair: Do you have figures for how many people would be coming unemployed or people that have been on Employment Insurance coming up to the end of their term? How do you break that down? Is it on a weekly basis that there will be 2,000 people that will be falling off the benefits? How do you have those records broken down? Are they broken down by province or by region?
Mr. Beauséjour: I do not know if I have that information. Assessing who will be exhausting their benefits is a difficult question because you never know if they will exhaust or if they will find a job, and it would be difficult to have that number. I am not sure if we would be able to provide an estimate. Maybe we can.
Mr. Hodgson: I think the question was how many people per week have exhausted their claim, not how many will.
The Chair: Would be exhausting their claim.
Mr. Beauséjour: If it is will be exhausting, that is more complicated.
The Chair: In the first week in March, how many people used up all their time? In the second week in March, how many people? In the third week in March, how many people? In there somewhere, some of these people will be able to go for five more weeks, and I would like to know that figure. How many people are receiving that benefit?
Mr. Hodgson: That is two questions rolled into one. Anyone who had a claim active on March 1 will be entitled to the five extra weeks of benefits. That gives you one number of how many people are potentially able to use the five extra weeks.
The Chair: That could come four months from now.
Mr. Hodgson: That is correct.
The Chair: I am more interested in the ones who would have fallen off if we had not had this legislation passed.
Mr. Hodgson: It may be a more difficult administrative question to come up with those numbers.
Mr. Beauséjour: We can run it and figure it out. It is not something that we report on a systematic basis. Years ago, as part of our routine of business, we collected information on a monthly basis the number of people who were exhausting their benefits. A few years ago, given the current economic situation, people thought that we would never return to an economic downturn and that number was not needed any more. They were using the data more in terms of workload. For them, the purpose of some of the data is to understand the workload, and people who were exhausting their benefits were not part of the need for this type of the data.
Mr. Hodgson: Perhaps it would be more accurate to say it was a relatively constant proportion of claimants, so it was not necessary to track the exact number because it was always around, say, 25 per cent or 26 per cent, without much variation, so was it is a good use of funds to track a number that appeared to be static.
The Chair: See what you can do for me and provide that to the clerk, and we will circulate that to everyone. I am interested in this period from March 1 to the end of March. I understand what you say about those people who are just in the middle of their benefit. They may or may not find a job, so they may or may not use that extra five weeks down the line, but there are some right on the end, and they needed that five weeks to stay on the Employment Insurance.
Mr. Beauséjour: There is also that other group of people, applying it to the individual who may have exhausted their benefit before March 1. They are still unemployed at March 1, and they may have access to the five weeks. That is another number that we can try to figure out.
The Chair: They had the access by virtue of the two-week retroactivity.
Mr. Beauséjour: It is by virtue of how we defined the claimants that would be covered. It is those who have a benefit period open. When a claimant initiates a claim, the benefit period is 52 weeks. They could be entitled for less than that, say for 25 weeks, but they could collect this benefit during what we call the benefit period. It could be up to 52 weeks. An individual could be working and not using a week of benefit, and that week it is still there and they can collect it after, but they have 52 weeks to collect their benefits, which is called the benefit period. Anybody who still has a benefit period open at the date of the implementation could be entitled for additional benefits if they are still unemployed.
Senator Ringuette: How do they know that they could receive another five weeks of benefits?
Mr. Beauséjour: We are able to identify these individuals, and a letter will be sent to them telling them that they could be potentially eligible for additional benefits because they still have a benefit period open. They will be informed of the process. It will be the same as a new claimant. They will receive a code to access the system and they will file their report the same way they were doing it before. It is conditional on being unemployed.
The Chair: Honourable senators will note that in section 229 at page 225 of Bill C-10, that term ``benefit period'' is used in describing the period during which the additional five week benefit entitlement exists, and it indicates here that the additional benefit that an individual can obtain goes up to the time when the benefit period does not begin after September 11, 2010. After that, if your benefit period started then, you do not have the benefit of the additional five weeks.
Mr. Beauséjour: That is when the measure stops being in effect.
The Chair: It is defined in terms of benefit period.
Mr. Beauséjour: Exactly, when the benefit period starts.
The Chair: One has to look at the two new schedules and say, this schedule applies for the next year and a half, and after that, it no longer applies. That is how this has been devised legally.
Senator Ringuette: It was reported this week that there is a dramatic increase year over year with regard to certain regions in the country. For example, in Ontario there is a 43 per cent increase in the unemployed; in Manitoba it is 20.2 per cent; in Alberta, it is 46.1 per cent; and in B.C., 46.7 per cent.
Looking at these numbers, I am thinking, for instance, if I am a person in Ontario and I was laid off in November, and in November, there was 6 per cent unemployment, I only get about 38 weeks of benefits. All of a sudden, because of this drastic 43 per cent increase, it changes the scale. If that person were to apply today, he or she would be on a different scale with regard to the number of hours required and the number of weeks of benefits.
I looked into this system in 2005. Can you tell me if the system has been corrected?
Mr. Beauséjour: The unemployment rate is revised on a monthly basis and we use a three-month average. You do not want to have a system where it fluctuates every month. That is one reason we have a three-month average. We use that average to have some stability.
Senator Ringuette: There will be a great adjustment but on a smaller scale.
If you adjust constantly on the three-month average, then the adjustment for benefits and the number of required hours should be faster. I guess you are saying that the three months is there.
Mr. Hodgson: It smoothes things out somewhat, both upwards and downwards.
Mr. Beauséjour: There is always a cost involved; there is no perfect system. We thought that the three-month average worked fairly well. In fact, if you look at last month, there are 17 regions where the unemployment rate increased by enough to have one change in their schedule in the scheme.
Senator Nancy Ruth: Mr. Beauséjour, at some point when you were talking to Senator Mitchell, you said it was not a matter of gender; it was a matter of who was eligible for EI. For me, it is always an issue of gender, because so many women are not eligible due to part-time work and low wages, and so on.
Was a gender-based analysis done before these new decisions and new shaping of EI? If so, what was the outcome of it?
Mr. Beauséjour: Basically, in our day-to-day work, we always look at the impact on men and women. We have the monetary assessment report for EI, where we look at the impacts of how EI works. That is part of our daily business.
Senator Nancy Ruth: Can you tell me what kinds of things you saw when you applied this lens to your work? What would be the impact on men and women, and at what age and at what stage?
Mr. Beauséjour: For these specific measures, we did not look specifically at these lenses. However, as you said, part- time workers usually qualify with fewer hours and they are entitled with fewer benefits. If you look at five weeks and proportionately what they are entitled to, the proportion of the five weeks would be larger for part-time workers than for someone who worked full time and qualified for the full benefit.
If you look at some of the schedules, even at the lower level, people will go from 14 weeks of benefit to 19 weeks and they gained five weeks over 14 weeks, whereas at the other end of the schedule, an individual may earn five weeks over 45 weeks. I think the gain is less for people working full-time than people working part time.
Senator Nancy Ruth: That is an interesting rationale. That is all I will say.
The Chair: Thank you, Mr. Hodgson and Mr. Beauséjour. We appreciate very much your attendance here in helping us through this maze of interesting changes. We will look forward to receiving the documentation and the research from you and the listing of the information that you are searching for us to help us understand the impact of this legislation.
[Translation]
Mr. Beauséjour: I hope that the information we provided you will allow you to do your work. It is important for us to ensure that you have the information you need.
The Chair: That was very useful. Thank you.
(The committee adjourned.)