Proceedings of the Standing Senate Committee on
National Finance
Issue 16 - Evidence - Meeting of November 5, 2009
OTTAWA, Thursday, November 5, 2009
The Standing Senate Committee on National Finance, to which was referred the subject-matter of Bill C-50, An Act to amend the Employment Insurance Act and to increase benefits, met this day at 9 a.m. to give consideration to the bill.
Senator Joseph A. Day (Chair) in the chair.
[English]
The Chair: Honourable senators and witnesses, we meet to consider Bill C-50. You will recall that we did a partial pre-study of this bill. Knowing the importance of the legislation to the public, we wanted to be ready when it was received in the Senate, which it was yesterday.
Honourable senators will know that the bill was amended in the House of Commons. Today, of course, you can talk about any aspect of bill you want, but we want to ensure we understand the amendments that were made to the bill because we had not studied them.
We are pleased to have before us this morning officials from Human Resources and Skills Development Canada to help us understand those amendments and their impact.
[Translation]
This morning, the department is represented by Louis Beauséjour, Director General, Employment Insurance Policy, Skills and Employment Branch, from Human Resources and Skills Development Canada, and Carol McLean, Senior Counsel and Group Head, Legal Services, Skills and Employment and Learning Branch, also from Human Resources and Skills Development Canada.
[English]
They are accompanied by a colleague of theirs who is becoming our colleague as well, from Service Canada, Philip Clarke, Director General, Benefits Processing. I had asked Mr. Beauséjour to explain the amendments, so perhaps we could begin with his comments.
Louis Beauséjour, Director General, Employment Insurance Policy, Skills and Employment Branch, Human Resources and Skills Development Canada: Two of the three amendments are similar in nature and relate to the date that individuals will be covered by the new measure. You will remember that initially the access was people who applied for benefits either after January 4, 2009 or nine months prior to the coming into force. The reference to the nine months coming into force has been taken out of the act.
This refers to clauses 2 and 2.1. Basically, three lines have been eliminated and they referred the nine months prior to the coming into force.
The Chair: Did you say clause 2.1?
Mr. Beauséjour: Yes, clause 2, and subclause 2.1 calls for a higher number of weeks.
Carol McLean, Senior Counsel and Group Head, Legal Services, Skills and Employment and Learning Branch, Human Resources and Skills Development Canada: It is clause 2.1 of the bill on page 3.
The Chair: I have it.
Ms. McLean: These are amendments to subsection 12(2) of the Employment Insurance Act. The first amendment is to subsection 2, and then you will see a second amendment creating a new subsection 2.1.
Senator Ringuette: You are saying that, on page 3, one of the three amendments is the inclusion of clause 2.1.
Ms. McLean: No, clause 2.1 was amended to remove the reference to this floating nine months back from the date of coming into force. The way the bill was originally drafted, claimants who would benefit from these additional weeks of benefits were those whose benefit periods were established or those who applied for benefits on or after January 4, 2009. However, the provision was drafted with a floating date, so that it was either January 4, 2009 or nine months previous from the day the bill comes into force. The longer it took for the bill to come into force, the more people would be excluded, because it would only go back nine months from the date of coming into force instead of all the way back to January 4, 2009. That floating nine month provision has been removed so all claimants who qualify for benefits under these amendments, whose benefit periods are established on or after January 4, will qualify for the extended weeks.
The Chair: Could you direct us to the line in clause 2.1?
Ms. McLean: Looking at the line references to the far right-hand side, the amendment was to line 21. You will now see the bill says ``during the benefit period that begins January 4 and ends on June 5'', rather than ``begins on the later of January 4 or the Sunday that is nine months preceding the date that the bill comes into force.''
The Chair: Does everyone understand where that is and the effect of it? That is clarified. Go on to the next one, please.
Mr. Beauséjour: Basically, we made a similar change to clause 3, which deals with claimants not in Canada. We removed the same reference to the nine months prior to the coming into force.
The Chair: Page and line, please?
Ms. McLean: It is on page 7, line 9.
The Chair: Thank you.
Mr. Beauséjour: The next amendment amends the first section of the act, clause 1.1. It is a bit more complicated. Before, we had clause 2(a) and (b), and for each (a) and (b), we have (i) and (ii). This is on the first page.
The Chair: I am at (i) and (ii), which have been added, or one of them has been added?
Mr. Beauséjour: In fact, basically we are just extending the benefit period by the amount of weeks needed to collect the full benefit to which claimants are entitled. For example, the benefit period is now set at 52 weeks. If they were to receive 70 weeks in total with the 20 extra weeks, we extended the benefit period to 72 weeks exactly.
With these two subclauses, for all new claimants who start after the date of coming into force, we will do the same thing. That is paragraph (ii) of both subclauses (a) and (b). With paragraph (i), we ensured that for everyone who already is receiving benefits, their benefit period will be the total of the initial benefit periods, which is 52 weeks plus the new weeks that they will get with the legislation. The intent behind these amendments is to ensure that claimants who are exhausting their benefits at the date of coming into force would still collect the full portion of the new benefits.
The Chair: If I understand you correctly, once this act comes into force, those who already have an established benefit period will have it extended so they can collect all of the extra weeks that are provided for?
Mr. Beauséjour: Exactly, yes.
The Chair: This is paragraph (i).
Mr. Beauséjour: Both subclauses (a) and (b) do the same thing, but subclause (a) deals with regular clients in Canada and (b) with clients not in Canada.
The Chair: And previously?
Mr. Beauséjour: Previously we had subclauses (a) and (b), (a) dealing with clients in Canada and (b) dealing with clients outside Canada, but since we are treating them exactly the same when they applied during the period between January 4 and next September, we did not need paragraphs (i) and (ii) to differentiate the two groups.
Ms. McLean: Previously, the bill had only extended the benefit period for claimants whose claims are established after the coming into force of the bill. By making this amendment, claimants who have claims or are receiving benefits when the bill comes into force will also have their benefit period extended.
The Chair: It is good we caught that. Otherwise, those people who already had established their benefit period might not have been able to all the weeks that they were entitled to. Is that correct?
Mr. Beauséjour: Yes.
Senator Di Nino: Was this amendment introduced in the committee by officials and the minister or by members of the committee?
Mr. Beauséjour: The amendment was introduced in the House at the report stage by the government.
Senator Di Nino: By the government?
Mr. Beauséjour: Yes.
Senator Di Nino: The question really was —
The Chair: Who was smart enough to catch this?
Senator Di Nino: I am trying to put this diplomatically. Do not make me say things I do not want to.
Senator Neufeld: We are trying to see whether we can take credit for it.
Senator Di Nino: I agree with the chair. Both of these amendments improve the bill. I applaud them.
I wanted to ensure that I understood the genesis of the amendment and whether it was from officials of the ministry or some of our colleagues from whichever party in the other place. You told us that it came after the bill was reported. The amendments were introduced in the House by the minister, is that correct?
Mr. Beauséjour: Yes.
The Chair: Could you refresh our memory on the January 4 date? Was that when this initiative was first announced?
Mr. Beauséjour: The initiative was first announced was, in fact, when we tabled the bill in mid-September. At the time, the January 4 date was already part of the bill. People who applied for EI starting January 4 until next September will be potentially eligible for these additional weeks of benefit.
The Chair: Give me some logic for why it was not January 3 or January 1, which is a nice round figure?
Mr. Beauséjour: The rationale was that we observed a big spike in both the unemployment rate and the number of claimants applying for benefits in January.
The Chair: Did everyone understand the reason for January 4?
Mr. Beauséjour: The other reason January 4 was chosen is that benefits weeks for EI always start on a Sunday. Sunday is key in determining when we start the new benefit. We never start new benefits in the middle of the week. The specific date of January 4 was chosen because it was a Sunday.
The Chair: I understand now.
Senator Di Nino: I understand the thinking was that when this bill was being discussed, a number of people were already unemployed. You wanted to ensure that you did not start arbitrarily with a date that cause this large group of unemployed persons — as you said, January was a particularly large spike — to miss out on the extension of benefits. Is that correct?
Mr. Beauséjour: One consideration was to ensure we were capturing these individuals from the big spike in January. Consideration was also given to the fact that usually when we introduce measures, the measure applies to new claims. In this case, we were trying to capture what was already an extraordinary situation.
Senator Di Nino: To be able to capture those who were already in the unemployment system so the benefit would extend to the large number of people unemployed at this time?
Mr. Beauséjour: Yes, exactly.
Senator Callbeck: The last time you were here, the question came up of how many people this legislation will affect. I recall that newspapers were saying it would be approximately 60,000. Did the government indicate 190,000? Do you have any figures on this?
Mr. Beauséjour: Yes, the number of 190,000 came from the department based on our estimates.
Senator Callbeck: Do you have a cost associated with that?
Mr. Beauséjour: The estimate is $935 million.
The Chair: Does the department still anticipate 190,000 claims?
Mr. Beauséjour: It is still our estimate.
Senator Ringuette: With the five additional weeks passed in early spring, what is the maximum possible number of benefit weeks?
Mr. Beauséjour: It depends in which region we are, but the maximum is 50 weeks.
Senator Ringuette: Fifty weeks?
Mr. Beauséjour: Yes.
Senator Ringuette: Does that include the five weeks?
Mr. Beauséjour: Yes, including the five weeks.
Senator Ringuette: Explain these amendments that put a maximum of two weeks?
On page three of the original bill, we see five weeks, eight weeks, 11 weeks, 14 weeks, 17 weeks and 20 weeks extra. These were in addition to the maximum 50 weeks you indicated. We were looking at a possibility of someone having 50 weeks plus up to 20 weeks.
Mr. Beauséjour: Yes.
Senator Ringuette: For a total of 70 weeks.
Mr. Beauséjour: They can be entitled to a maximum of 70 weeks of benefits.
Senator Ringuette: That is where I am getting to. We are following the same logic.
However, amendment 2(a)(ii) says:
. . . ends on September 11, 2010, if the maximum number of weeks during which benefits may be paid to the claimant under subsection 12(2) is equal to or greater than 51 weeks as a result of the application of any of subsections 12(2.1) to (2.4), the length of the claimant's benefit period is that maximum number of weeks increased by two weeks.
Mr. Beauséjour: Yes. That is basically it.
Senator Ringuette: This restricts the number of benefit weeks.
Mr. Beauséjour: No. In fact, that restriction was already there. We did not change that. The intent of the bill has always been to have some restriction on the benefit period. Currently, without the bill, a claimant who applied for 50 weeks of benefits has a benefit period established to 52 weeks. Right now, that is the rule.
The 1 year/52 weeks takes into account the two-week waiting period to be insured.
Senator Ringuette: Do you include that in the 50 weeks?
Mr. Beauséjour: No. It is included in the benefit period. The benefit period is the period under which you can collect your entitlement. Claimants are entitled to up to 50 weeks. To take into account the two-week waiting period to ensure they can collect the 50 weeks to which they are entitled, we have a benefit period of 52 weeks. That was there initially, and has not changed.
With this bill, we were saying that, for individuals where their maximum entitlement is greater than 50, we will use the new maximum. Let us take the example of 70. We will take this 70 benefit entitlement and add two to take into account the two weeks waiting period and that will be their benefit period.
The intent here was to treat these individuals who will access additional entitlements in the same as people who were already getting 50. We would ensure that the benefit period is long enough to be able to collect those benefits.
The amendment is not for new claimants. The new claimants will be treated under the Bill C-50 exactly the same way as was the initial intent of the bill. When we tabled the bill, we realized it would take more time to pass it, given all the work in committee. We took into consideration the impact on individuals who had already exhausted their benefits. We realized that individuals entitled to the maximum — let us say 20 weeks — faced the possibility that their benefit period, as set out in the initial bill, would not be long enough to collect all 20 weeks.
We then adjusted how the benefit period will be calculated for those individuals. We said the benefit period will be the full 52 weeks plus the additional weeks of benefit that they will gain.
Senator Ringuette: When I first started my questioning, we said there is a maximum of 50 weeks plus what this bill can provide, which, depending on the number of weeks claimed in the past 15 years and the contribution, is an additional 20 weeks. In a region where the current maximum of 50 benefit weeks —
Are you are following me?
Mr. Beauséjour: Yes.
Senator Ringuette: Currently, without this bill, there is a possibility for 50 weeks of benefits from the EI program. Additionally, this bill could provide another 20. Therefore, we are up to 70 weeks. That is more than 52.
Mr. Beauséjour: Yes.
Senator Ringuette: What is happening here? Are you limiting all the long-tenured workers in the high unemployment regions to a maximum of 52 instead of 70?
Ms. McLean: No. The bill also extends the benefit period for those claimants.
Senator Ringuette: To a maximum of 52.
Ms. McLean: To a maximum of the number of weeks of benefits to which they now are entitled. That is 70, plus two weeks, which allows them a benefit period of 72 weeks. That is a two-week waiting period and then 70 weeks in which to collect all of their benefits.
Senator Ringuette: So why are we saying it is equal to or greater than 51?
Ms. McLean: To clarify, are you looking at subclause 1.1 of the bill and the amendment to 2(a)(ii)?
Senator Ringuette: Yes.
Ms. McLean: If you are entitled to 50 weeks as a result of the application of this bill, your benefit period is 52 weeks. You have enough time in your benefit period to collect all of the benefits to which you are entitled as a result of the application of the bill.
However, for people who are, because of the application of the bill, now entitled to 51 weeks or more, it is necessary then to extend their benefit period by the number of additional weeks they are getting plus two weeks, so that they can have enough time to collect all the benefits to which they are entitled.
Senator Ringuette: That is clear.
The Chair: The drafter has two very similar expressions here. One is ``weeks of benefits'' and the other is ``benefit period.'' For ``benefit period,'' you have to draw your weeks of benefits within that benefit period.
I do not know why it is drafted that way, but it is the same in French. It is ``semaine de prestations'' and ``période de prestations.'' The same confusion exists in both languages, so whoever did it had this in mind. That is the difficulty we were having in ensuring we understood the difference between these two. If you called it ``weeks of entitlement'' perhaps that would be easier than ``weeks of benefit.''
However, it is too late to change that. We are not here today to change the wording.
Mr. Beauséjour: These phrases are already defined in the initial EI Act.
The Chair: Yes, it has been that way for a long period of time.
The discussion we had with the date of January 4, was there any magic in the nine months? Before this amendment, this bill had to come into force by October 4 in order to be effective back to January 4.
Mr. Beauséjour: Yes. We were using nine months because we knew that the period between the coming into force and when we begin to capture the individuals would present more and more problems in terms of the operation and delivery of benefits. Those people who have already exhausted their benefits face some issues in terms of treatment and adjustment of claims.
The Chair: Therefore, nine months seemed like an adequate period to avoid that problem, is that right?
Mr. Beauséjour: That was a good period in which to minimize that problem.
The Chair: However, now we have decided it is more important to just bring this bill into force back to January 4?
Mr. Beauséjour: That is it.
The Chair: That is being done to catch the number of people who Senator Di Nino has pointed out.
Mr. Beauséjour: Yes.
The Chair: I would like to confirm that the 190,000 that you anticipate would be impacted by this measure remains the same. You said yes.
Mr. Beauséjour: I said we have not changed our estimate.
The Chair: The anticipated cost to the public purse of $935 million remains the same?
Mr. Beauséjour: Yes, it remains the same.
Senator Ringuette: I have a question for Mr. Clarke that is outside the bill and the amendments.
The Chair: Is it to do with the bill?
Senator Ringuette: It is to do with the responsibility after this bill is approved.
The Chair: That is to do with the bill indirectly. That would be appropriate.
Senator Ringuette: Mr. Clarke, what is the current lag time between the time that an applicant submits his request and the delivery of his or her first benefit cheque?
Philip Clarke, Director General, Benefits Processing, Service Canada: It is currently, across Canada, averaging 22 days between the time the application is filed and the claimant receives either their first payment or notification on non-payment. Twenty-two days is the average right now.
Senator Ringuette: That is your average across Canada. For instance, in the Atlantic region, what is it?
Mr. Clarke: There are no significant regional or provincial variations. We work to ensure a balanced approach to delivering the service across the country. It is 22 days plus or minus one day.
Senator Ringuette: What is your anticipation of the increase in demand as a result of this bill for the current fall and winter periods? Do you have the proper human resources in place? The objective used to be 14 days, and now we are up to 22. What is your forecast?
Mr. Clarke: Thank you for the question. The traditional target that we use is to pay or give notification of non payment to 80 per cent within 28 days. I am not aware that there has ever been a target of 14 days. In terms of preparation for the winter peak, we are currently processing faster than we have ever processed before. We have increased our automation levels, increased the use of electronic Records of Employment, and we are ready for the winter peak, including the coming into force of this legislation.
The Chair: I would ask each of you, Ms. McLean, Mr. Beauséjour and Mr. Clarke, to remain in case something comes up as we proceed with the rest of the business of the committee. Thank you again for being here on such short notice.
Honourable senators, is it agreed that the committee move at this time to a clause-by-clause consideration of Bill C- 50?
Hon. Senators: Agreed.
The Chair: Typically, it is not my recommendation that we do so immediately following the hearing of evidence as I like to give people an opportunity to consider that evidence, but this is a special situation. We just had explained to us the amendments, and we have heard from these witnesses previously.
Shall the title stand?
Hon. Senators: Agreed.
The Chair: Agreed. Shall clause 1 of Bill C-50 carry?
Hon. Senators: Agreed.
The Chair: Carried. Shall clause 2 carry?
Hon. Senators: Agreed.
The Chair: Carried. Shall clause 3 of the bill carry?
Hon. Senators: Agreed.
The Chair: Carried. Shall clause 4 of the bill carry?
Hon. Senators: Agreed.
The Chair: Carried. Shall clause 5 of the bill carry?
Hon. Senators: Agreed.
The Chair: Carried. Shall clause 6 of the bill carry?
Hon. Senators: Agreed.
The Chair: Carried.
[Translation]
The Chair: Shall clause 7 of the bill carry?
Some Hon. Senators: Carried.
The Chair: Shall clause 8 of the bill carry?
Some Hon. Senators: Carried.
The Chair: Shall the title of the bill carry?
Some Hon. Senators: Carried.
[English]
The Chair: Adopted. Is it agreed that the bill be adopted without amendments or observations?
Some Hon. Senators: Agreed.
Some Hon. Senators: On division.
The Chair: On division. Is it agreed that I report this bill without amendments and without observations, on division, to the Senate?
Hon. Senators: Agreed.
The Chair: Honourable senators, that concludes the work on Bill C-50. I will report it this afternoon. Thank you all for you cooperation and understanding in this matter.
(The committee adjourned.)