THE STANDING SENATE COMMITTEE ON AGRICULTURE AND FORESTRY
EVIDENCE
OTTAWA, Thursday, November 17, 2022
The Standing Senate Committee on Agriculture and Forestry met with videoconference this day at 9:03 a.m. [ET] to examine Bill S-236, An Act to amend the Employment Insurance Act and the Employment Insurance Regulations (Prince Edward Island).
Senator Robert Black (Chair) in the chair.
[English]
The Chair: Good morning, everyone. I would like to begin by welcoming members of the committee, our witnesses as well as those watching this meeting on the web.
My name is Rob Black, senator from Ontario and chair of the committee. I would like to start by asking my colleague senators around the table to introduce themselves.
Senator Simons: Senator Paula Simons, from Alberta, Treaty 6 territory.
[Translation]
Senator Mockler: Percy Mockler, senator from New Brunswick.
[English]
Senator Klyne: Good morning and welcome. Marty Klein, senator from Saskatchewan.
[Translation]
Senator Petitclerc: Senator Chantal Petitclerc, from Quebec.
[English]
Senator Duncan: Good morning and welcome. Senator Pat Duncan, from the Yukon.
The Chair: Today, the committee is meeting on Bill S-236, an act to amend the Employment Insurance Act and the Employment Insurance Regulations (Prince Edward Island).
This bill was previously referred to the committee on June 7. At that time, the committee heard from witnesses and reported back to the Senate with an amendment to the bill, which was adopted. Senators will have received a copy of the bill, along with the fifth report of the committee which features the amendment regarding the new clause on coming into force that was adopted at that time. Both documents are also available publicly online.
More recently, on November 3, the Senate adopted a motion that Bill S-236, as amended, be not read a third time, but that it be referred back to the Standing Senate Committee on Agriculture and Forestry to hear from additional witnesses, including the Parliamentary Budget Officer, or PBO, concerning his office’s fiscal . of the bill.
Today, we will be doing just that. I would like to welcome Yves Giroux, Parliamentary Budget Officer, who is accompanied by Diarra Sourang, Director, Economic Analysis.
Joining us online from Employment and Social Development Canada, we have Mona Nandy, Director General, Employment Insurance Policy Directorate, and George Rae, Director, Policy Analysis Initiative.
Also joining us online, from the P.E.I. Federation of Labour, is Carl Pursey, President.
We will hear opening remarks from the Parliamentary Budget Officer, Mr. Giroux, followed by Ms. Mona Nandy on behalf of Employment and Social Development Canada. Finally, we will hear from Mr. Carl Pursey on behalf of the P.E.I. Federation of Labour.
Each of you will have five minutes for your opening remarks. At four minutes, when you have one minute left, I will raise my hand. Hopefully, you’ll catch that. When you see two hands up, it’s about time to wrap it up. Thank you for that.
I would also ask that you speak slowly so that our translators and interpreters can make sure they get everything they need to hear from you. Thank you in advance for speaking clearly and slowly.
With that, the floor is yours, Mr. Giroux.
[Translation]
Yves Giroux, Parliamentary Budget Officer, Office of the Parliamentary Budget Officer: Honourable senators, thank you for the invitation to appear before you today. We are pleased to be here to discuss our analysis of Bill C-236, An Act to Amend the Employment Insurance Act and the Employment Insurance Regulations (Prince Edward Island), which was published on September 7, 2022.
With me today, I have Diarra Sourang, Director, Economic Analysis.
[English]
The Employment Insurance, or EI, program divides the province of Prince Edward Island into two economic regions: the census agglomeration of Charlottetown, and the region of P.E.I. excluding the area of Charlottetown.
Bill S-236 proposes the elimination of economic regions in P.E.I. for the EI program. If adopted, a single unemployment rate will be used to assess the claims of P.E.I. residents instead of the two distinct unemployment rates currently used for each of the economic regions.
The PBO estimates this measure will generate around $76.6 million in savings for the federal government between 2021-22 and 2025-26, or over a five-year period.
The measure will affect both regular and fishing benefits for the residents of P.E.I.
Ms. Sourang and I will be pleased to respond to any questions you may have regarding our analysis of Bill S-236 or other PBO work.
Thank you.
Mona Nandy, Director General, Employment Insurance Policy Directorate, Employment and Social Development Canada: Good morning, everyone. It’s a pleasure to be with you today. My name is Mona Nandy, and I am the Director General of the Employment Insurance Policy Directorate at the Department of Employment and Social Development Canada. Joining me is George Rae, Director in the Employment Insurance Policy Directorate. We are both here today to speak to you about Bill S-236, an act to amend the Employment Insurance Act and the Employment Insurance Regulations.
As has been discussed, this bill proposes amendments to the Employment Insurance Act that would amalgamate Prince Edward Island as a single economic region from the present two EI economic regions.
Since 2014, there have been two EI economic regions in the province of P.E.I., one that includes the capital of Charlottetown and the other that covers the rest of P.E.I.
The purpose of the current 62 EI economic regions is to enable the program to adjust automatically to changes in economic conditions that affect local labour markets. The regions ensure that people living in areas with similar labour market conditions are treated similarly in terms of benefits eligibility, benefit rate and length of benefit entitlement.
The monthly EI unemployment rate specific to each EI economic region is used to determine how many insurable hours eligible workers need to qualify for EI regular benefits. The unemployment rate also affects the duration of their regular benefits and the calculation of their weekly benefit rate.
The Employment Insurance Regulations require that the Canada Employment Insurance Commission reviews the boundaries of EI economic regions at least once every five years. The purpose of these reviews is to determine whether it is appropriate to make changes to those boundaries. The last boundary review was completed in June 2021, and the next one is expected to commence in 2023.
Changes to the EI boundaries are usually implemented through regulatory amendments with the approval of the Governor-in-Council.
Prior to the 2014 division of P.E.I. into two EI economic regions, a Regulatory Impact Analysis Statement, or RIAS, was published in the Canada Gazette. The cost-benefit statement done at the time and included in the RIAS estimated that, on an annual basis, the division of P.E.I. into two EI regions would result in program costs of approximately $1 million annually for the province, with an overall net number of 3,700 EI claimants with increased benefits.
Economic and demographic conditions have evolved significantly since 2014 in P.E.I. The percentage of claimants in the province who reside in the rural, non-capital EI region in P.E.I. has increased from the estimate of about 70% in the analysis done in 2014 for the RIAS to 78% in the 2019-20 fiscal year.
In addition, the gap in the unemployment rates between the two EI regions in P.E.I. has fluctuated widely since 2014, ranging between 0.1 percentage points at times to as high as 8.6 percentage points in other periods.
According to the latest estimates from the department, the financial impact of combining the two EI regions in P.E.I. into a single region would be a net loss to claimants in the province of approximately $13 million annually in EI benefits. That would amount to a reduction of approximately $15.3 million in rural P.E.I., with an additional $2.7 million in benefits paid in Charlottetown. This analysis assumes the amalgamation would lead to a two percentage point decrease in the unemployment rate in the rural, non-capital area of P.E.I. and a two percentage point increase in Charlottetown.
It is important to bear in mind that it is impossible to predict what the unemployment rates will be in the two regions in the coming years. Again, the difference in the monthly unemployment rates has been higher and lower than that in the past. Therefore, this two percentage point estimated change to the unemployment rates in P.E.I. in an amalgamation scenario represents a mid-range based on the average observed unemployment rates in 2021.
Currently, the Charlottetown region has an unemployment rate of 5%, while the P.E.I. rural region has an unemployment rate of 10%. That is a total difference of five percentage points. Since the creation of the two regions in 2014, the monthly unemployment rate has always been higher in the rural, non-capital region of P.E.I. than in Charlottetown.
Our analysis shows that there are over 20,000 EI regular benefits claimants annually in P.E.I. Given what we know and have observed about the differences between the labour market in Charlottetown as compared to the rest of P.E.I., amalgamating the two EI economic regions would result in significantly less EI benefits paid to claimants residing outside of Charlottetown, while minimal gain would be made for claimants residing in Charlottetown, again resulting in an estimated net loss of EI benefits paid in P.E.I.
Along with continuing to work with the EI Commissioner for Workers and the EI Commissioner for Employers on this important issue of the boundaries for EI regions, including in P.E.I., the EI program will continue to monitor and analyze labour market trends as they arise throughout the country. The next boundary review is expected to start in 2023. The analysis done on EI boundary reviews will be used to inform any future changes to EI economic regions across the country to ensure that the program remains responsive to the current and future needs of workers and employers.
Thank you.
Carl Pursey, President, P.E.I. Federation of Labour: On behalf of the P.E.I. Federation of Labour, I would like to thank you for the opportunity to speak on Bill S-236 to restore P.E.I. to one EI zone.
The P.E.I. Federation of Labour represents 16 unions and over 15,000 workers and their families who come from all areas of P.E.I.
The Ottawa reports do not consider the unseen working poor on P.E.I. who are hurting from the end of the special Employment Insurance COVID rules. Since 2014, Prince Edward Island has been divided into two EI zones: the Employment Insurance Economic Region of Charlottetown and the Employment Insurance Economic Region of Prince Edward Island.
This division has created unseen working poor, as many workers in the Charlottetown zone cannot qualify for Employment Insurance due to the increased number of hours. Workers in the Charlottetown zone require 700 hours. By contrast, workers in the rural P.E.I. EI zone only have to work 560 hours and draw benefits for a shorter amount of time.
The zone issue needs to be fixed here in P.E.I. because small communities of 50 people are now divided in the centre of the road, with one side in one zone and the other side in another. This unfairness impacts seasonal workers. Individuals who have job insecurity, such as gig workers, migrant workers and independent contractors, also need to be considered as they are ineligible for Employment Insurance.
The working poor live in both EI zones in P.E.I.
The Charlottetown zone includes both the city and also rural areas. P.E.I. is one economic area and should have only one EI zone, as some workers in the Charlottetown zone drive to work through a rural area to get back into their zone.
It is true that restoring P.E.I. to one EI zone will result in slightly fewer benefits for those who live in the rural P.E.I. zone. However, it will increase the eligibility of the unseen working poor who live in the Charlottetown zone by reducing the number of qualifying hours to be eligible for Employment Insurance and draw benefits for a shorter amount of time. Qualifying for EI also allows individuals to receive specialized job retraining programs by SkillsPEI. This creates a problem where if two neighbours live across the road from each other, one needs 560 hours to qualify for a retraining program where the one on the other side of the road needs 700 hours of work to qualify for the same program.
The Eighth Annual Report on Child and Family Poverty on Prince Edward Island by MacKillop Centre for Social Justice and P.E.I. Coalition for a Poverty Eradication Strategy notes that the city of Charlottetown has the highest occurrence of child poverty and also poverty of individuals of a working age, totalling a combined 7,360 Islanders. This does not include those who live outside of the city.
The report notes that prior to the pandemic, only 40% of unemployed individuals are eligible for EI benefits. The authors recommend:
That the federal government end immediately the division of EI on PEI into 2 zones thereby ending the disparity that currently exists among EI recipients in this province. . . .
Comments in the Senate suggesting that P.E.I. members of Parliament have done nothing regarding the P.E.I. EI zones are disrespectful to the hard work of Wayne Easter, former MP for Malpeque, and Charlottetown MP Sean Casey have put into this file.
In the last Parliament, MP Casey chaired the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities, which adopted a report recommending that Employment and Social Development Canada, “. . . reinstate a single Employment Insurance Economic Region for Prince Edward Island within 12 months.” It is now 16 months later, and nothing has been done.
We can also put in a three-year pilot project to bring this in. The federal government made an election promise in 2015 to restore P.E.I. to one zone. This has not taken place.
I have worked for eight years on this, and I haven’t heard one complaint from a worker or employer who is against P.E.I. going to one zone. Everyone I have talked to is in favour of the one zone.
We ask that the committee be fair to all Islanders, and that senators vote yes to this bill and increase access to EI benefits to all Islanders so that working poor and their families are treated fairly and have the same opportunity to succeed.
P.E.I. is one small area where workers use the whole island as their workplace, with neighbours working at the same place not entitled to the same benefit. The Senate has a role to play to give a voice to the vulnerable, as we are asking you to do now. There is a sense of urgency to quickly pass this bill, and the Senate should not add any more stress for the working poor in both rural and urban parts of the Charlottetown zone by defeating this bill.
Thank you for your time. I invite you to Prince Edward Island should you wish to better inform yourselves on this matter.
The Chair: Thank you very much, Mr. Pursey. We’ll proceed with questions from senators. We’ll have five minutes for questions and answers. I would ask that your questions be short and to the point, and answers equally so.
Senator Simons: Ms. Nandy, it seems to me that you were with us in June, but didn’t have the chance to speak, which perhaps was an oversight. You’ll remember that at that time I expressed my concern to Mr. Laliberté about the prospect of senators micromanaging EI zones. He said to me that even though there had been a review in 2021, nothing had come of it, and he was concerned that the review in 2023 would be similarly non-productive. I asked him if he had confidence that the 2023 review would change things in a timely fashion, and he said to me, “. . . I have no such confidence. That’s the simple answer. . . .”
I am confused. What confidence do we have that if you do the review in 2023, it might actually regularize this without the Senate having to muddle in where, frankly, it doesn’t belong?
Ms. Nandy: Thank you, Senator Simons. Let me explain the process for an EI boundary review. As I mentioned earlier, the EI regulations require that the boundaries for EI economic regions be reviewed at least once every five years to ensure they continue to reflect regional labour market characteristics.
The government provides its analysis to the Canada Employment Insurance Commission — so the EI Commissioner for Workers, Mr. Pierre Laliberté — as well as the EI Commissioner for Employers and the other members of the commission. Together, the commission is responsible for reviewing the EI boundaries to determine if changes are needed. The commission may make recommendations to the minister responsible for Employment Insurance regarding the changes that could be made. Based on that, action could be taken.
The EI boundary review uses a variety of methods to examine and compare the labour markets within an EI regional boundary. That includes Statistics Canada data and other labour market information, which is analyzed and compared to the labour market conditions across the country. This rigorous analysis assesses whether or not current EI economic regions continue to reflect regional labour market characteristics.
Senator Simons: That didn’t answer my question in the slightest. Mr. Laliberté expressed his great frustration that these reviews were happening and there was no result from them, which is one of the reasons I voted — perhaps against my better judgment — to support this bill. I’m left with this feeling of frustration that we’re being told there is a problem and that the review process is there to fix it without any consideration of whether that is actually going to come to pass.
Ms. Sourang, you and Ms. Nandy had different figures about the economic implications of passing this bill. In your report, you say that the numbers are predicated on assumptions about unemployment rates. And you say — I’m sorry, I don’t have the report in front of me — something to the effect of that you don’t expect there to be action taken as a result of the report.
I’m wondering what you mean by that. I’ll pull up the report. It was on my screen, and then it went away.
Mr. Giroux: I don’t think we assume or not that decisions will be made in response to our report. Of course, it’s up to parliamentarians to decide to proceed or not with the bill.
That being said, our numbers are not that different from those that Ms. Nandy indicated in her opening remarks. There is a small difference, but given that these are estimates going into the future, I think that’s within the margin of error compared to our own numbers. I would say Employment and Social Development Canada’s numbers that were provided in the opening remarks are broadly similar to ours in terms of estimates.
Senator Simons: Here is the exact line here: “The cost estimate produced is highly sensitive to the PBO’s labour market outlook. . . .” which I take it means it’s an estimate of what that will be.
The next sentence says: “. . . A behavioural response is not expected.” What does that mean, then?
Mr. Giroux: A behavioural response not being expected means we don’t expect people to move from one region to another to take advantage of the differential in benefits, or to stop moving as a result of P.E.I. being one region. We don’t expect that people will base their housing decision or where they live in response to changes to the EI program.
Senator Simons: But if it were all one zone, they would have no reason to move. I don’t understand.
Mr. Giroux: Exactly. What we mean by that is that it should not affect the behaviour of people one way or the other. It probably means that, right now, people are not moving to take advantage of the lower qualification requirements in one region versus the other.
Senator Klyne: I’m going to ask a similar line of questioning as my colleague Senator Simons. My first questions are for Ms. Nandy and Mr. Rae, and then I’ll follow that up with a question for Mr. Pursey.
I think the sentiments we have were similar to the way it was presented by Mr. Pursey — and I will come back to that later — in terms of our decision factors and where we are trying to be in the end.
For Ms. Nandy and Mr. Rae, you had mentioned in your remarks — and we just alluded to this — the boundary reviews, the last one having been completed in June 2021 and the next one expected to commence in 2023. In a recent speech in the Senate, Senator Ringuette, who has paid close attention to this bill, noted that a major review of the Employment Insurance program is under way. For clarity’s sake, my first question is — and it just requires a “yes” or “no” answer — is this major review more than the boundary reviews that you have referenced?
Ms. Nandy: Yes.
Senator Klyne: Okay.
During your last appearance before this committee, you did not make mention of a major review, which I believe is nearing completion if it is not completed, and a report will follow in the first quarter of 2023. As I understand it, it will reform the EI program as we know it today.
I find that a little odd that this was not brought to our attention given the subject matter of the bill we are studying. Could you tell us why you didn’t mention this review in your testimony?
Ms. Nandy: Thank you for the question. During our last appearance before the Senate on this particular bill — I’ll have to go back to the particular remarks that were made — but my understanding is that we did speak about the government’s commitment to modernize the EI program and that consultations were under way at that point. They had been phased. There were two sets of consultations. The first phase was run from August 2021 to February of this year, and the second phase started in April and was completed in July 2022. During both phases, we had national and regional round tables, including a focus on a number of themes, such as and including improvements to access to the EI program, improvements for access for seasonal workers that are part of the EI program as well as many other issues.
So you are correct to say that the government is in the process of reviewing all of the extensive input —
Senator Klyne: In the interest of time, I understand the process and the program. I’m just wondering why, from your perspective maybe at the time, you didn’t think this would have a bearing or an impact on what we were studying. If we had known that, maybe we would have determined that we should put this off until that review comes in. It is a major review, I take it, and I understand that it will likely have some significant reforms in it and will change the EI program as it is today. Is that correct?
Ms. Nandy: It is the government’s decision —
Senator Klyne: Okay, okay. That’s fine.
Just to come back to the comment about our decision here, we were aiming at some sense of equality within the two economic regions — to merge them — thinking that would be a good thing to do. We were kind of thinking along the lines of Mr. Pursey.
The one thing that struck us when we asked about the cost of this, it was relayed to us that it would be around $1 million, which is a rounding error in the grand scheme of things, pardon the phrase. So we thought it would be meritorious to combine the two, eliminate the inequality between the two regions and all would be happy.
Then we later found out — and this was brought to my attention through the work of the PBO — there were significant amounts of differences here. It is going to be like a $76-million issue, not $1 million. So I don’t know why we were given the 2014 information from the regulatory impact analysis of that time. It was outdated and had nothing to do with it.
I quickly looked at what would happen with this merger to realize that, currently, P.E.I. is at somewhere around 9.2% unemployment while the Charlottetown economic zone was somewhere around 5%. If you combine the two, you are at 7.3%. This all works on EI. The next thing you know, it means — and this is all for Mr. Pursey, and he can reply to this as a question — that the impact is that now those in the P.E.I. economic region will have to collect more hours to be eligible only to collect fewer dollars because their status has now changed. It is now at 7.3% and not the 9.2%. Those in Charlottetown benefit from that because now they have to collect fewer hours than they would have had to when they were at 5%, and they will garner more than they were getting.
That is a huge inequality, and it measures out to be about $76 million. That’s not to mention that we were trying to get the P.E.I. economic region on an equal footing with the economic region of Charlottetown, and it went the other way for us because we didn’t know about the significant impact that would happen by merging them into one unemployment rate.
The Chair: Senator Klyne, we’ve given you extra time —
Senator Klyne: I appreciate that.
The Chair: You carry on with this line of questioning, acknowledging that you are doing your round two.
Senator Klyne: I would like to hear Mr. Pursey’s thoughts on that.
Mr. Pursey: Thank you, senator.
I think the figures being used are probably not accurate to come up with this new number. There are a lot of people here who, in order to live and survive, have changed their addresses without moving. They have driver’s licences from the rural area and everything else. There are quite a number of those, and I wonder if that number was taken into consideration when the figures were made up.
This has been going on since the changes came in. It is just not fair in terms of what has taken place because this is what people do. They still live in the same place, but it looks like they moved. However, they haven’t moved at all, they have just moved their address. There is quite a bit of this going on here.
These people are not doing it fraudulently; they are doing it to survive. They have to survive because most of them are minimum wage seasonal workers making next to nothing, and then when they get only a fraction of that on EI, they don’t have the money to get by. So they say they are living at their parents’ place, their grandmother’s place or their aunt’s place, but they still live in the same area where they have lived all along.
We need something fair here in P.E.I. Looking forward to another review and putting it off to another review is not the answer either. They seem to never get completed or nothing ever gets done in a review. Nothing has changed. I have been fighting this down here and all over the island. I’ve heard from people who live in the rural zone who work next to someone who lives in the city zone saying that this isn’t fair. Why is it the other person has to work longer to draw less money than them? They are both doing the same job and both working in the same place.
The Chair: Thank you very much. Senator Klyne, we will add you to the next round if you have further questions.
[Translation]
Senator Petitclerc: Ms. Sourang and Mr. Giroux, my question is for both of you.
My question is in connection with Mr. Pursey’s comments. Thank you so much, Mr. Pursey, for your comments. What I was thinking was that we have someone like Mr. Pursey here, who is aware of what’s going on, with things like address changes that are fictitious, and people who do whatever they can get away with.
How confident are you about the accuracy of the data collected, the different addresses, and so on? You collected all kinds of information to come up with that number. We might ask whether there’s a difference between the data collected and the reality on the ground. I’m trying to get some idea of the level of accuracy you were talking about.
Mr. Giroux: That’s a very good point, senator. We use the data made available to us by Employment and Social Development Canada, administrative and employment insurance data, and Statistics Canada data. So we rely on its accuracy. We make use of what we have.
Clearly, Mr. Pursey’s experience, given that he associates with and represents workers, is probably much more accurate than what we have in our databases. It clearly reflects the accuracy of the data. If people can find different ways of maximizing the benefits to which they are entitled, then Mr. Pursey’s experience and the anecdotes he reported are probably more accurate, because he’s on the ground, he discusses things with people, and he gets information directly from them.
Those then are the limitations on our data. We don’t have the ability to go to Prince Edward Island and question people who receive employment insurance to determine whether they are really in one region or another. It’s an estimate based on the data we have been supplied with.
Senator Petitclerc: Thank you. Is it difficult to quantify the significance of these differences in the field compared to the data gathered from official sources? Could you do an estimate of that?
Mr. Giroux: No. It’s difficult to determine the exact figures. On the other hand, if Mr. Pursey, who represents workers, sees that the proposed amendment is a useful change, because it’s him, his colleagues and the people he represents who will be affected by it, then I would tend to place a high level of trust in his affirmations and comments.
Senator Petitclerc: Thank you.
[English]
The Chair: I have a question for my benefit and the benefit of the viewers. Who recommended that P.E.I. be split into two zones in the first place, and why? I will maybe direct that question to Employment and Social Development Canada.
Ms. Nandy: Thank you. The changes were made in 2014 as per some regulatory changes. When the changes were made to the regions in P.E.I., the difference in the unemployment rate between the new Charlottetown economic region was 8% and the new P.E.I. economic region was 11.7%, a difference of almost 4 percentage points between those two new regions. As a result, a similarly placed EI claimant in the new P.E.I. zone was entitled to more EI than a claimant in the new Charlottetown region. For those reasons, a decision was made to make a change to the EI economic regions in P.E.I.
The Chair: Thank you. We’ve heard various numbers being bandied around, but do we know how many areas would be classified as “rural” in the Charlottetown area if things were changed? Do we know how many seasonal workers are in each EI zone when are you dealing with the models that you’ve each put forward? I will direct it at both of you. We will start with the PBO.
Diarra Sourang, Director, Economic Analysis, Office of the Parliamentary Budget Officer: Can you repeat the question?
The Chair: Do we use current numbers in the models being developed by you folks? How many areas would be classified as “rural” in the Charlottetown zone, and how many seasonal workers are there in each EI zone? Are those actually included in your models?
Ms. Sourang: Thank you.
On the first question regarding the reclassification of zones, we do not have that in our model because the analysis was just about amalgamating the two regions, so we don’t have that level of detail.
Regarding the number of seasonal workers, it became obvious to us that what Statistics Canada considers to be a “seasonal worker,” which is based on the industry they work in, is different than what the EI program considers to be a “seasonal worker.” There is no reference to seasonal work based on the industry. Rather, it is based on the frequency of claims of regular benefits. If you claim two or more regular benefits when you live in a region, then, along with some other characteristics, you are considered a seasonal worker under the EI program.
The Chair: What about our colleagues from Employment and Social Development Canada? Do you have any further comments?
Mr. Rae: I will jump in. Thank you for the question, senator.
Which areas of a particular EI region that are considered to be urban or rural is really a determination made by Statistics Canada. In the case of Prince Edward Island, the 2011 census agglomeration of Charlottetown was determined by Statistics Canada to be that agglomeration. It would have within it the properties that suggest commuting patterns to the urban core. I understand that Statistics Canada is providing written responses on precisely how they add those census subdivisions to the census agglomeration, so they will be able to more fully respond to your question in that respect.
With respect to your question around seasonal workers, my colleague from Office of the Parliamentary Budget Officer is absolutely correct: We define seasonal claimants differently than the Labour Force Survey does. We look at the pattern at which claimants establish claims and see if they are establishing those claims at the same time of year. The numbers roughly correspond to one another in terms of seasonal claimants and seasonal workers identified by the Labour Force Survey, but there is a slight difference.
The Chair: Thank you very much.
Senator Duncan: I would like to thank the witnesses who have come before us today. I took on the sponsorship of this bill from Senator Griffin.
I was alarmed at the unfairness of the situation that has been outlined. I appreciate Mr. Giroux’s comments regarding the presentation from the workers themselves and from the people on the ground in P.E.I.
In 2014, these zone changes were made, and Senator Klyne has asked the question about how and why that came about. I am well aware of the differences between the zone 1 and zone 2. In the Yukon, for example, that doesn’t make a difference. We are a big territory. P.E.I. is incredibly small, and we’ve heard situations of people changing addresses.
Is there anywhere else in the country where this unfair situation with a division of a zone 1 and zone 2 in a very small area occurs? Perhaps I could have Ms. Nandy answer that question: Is there anywhere else where we have such an exacerbation of the situation of collecting EI benefits with a division of a zone 1 and zone 2?
Ms. Nandy: Thank you for that question.
EI boundary regions, as we have described, are based on Statistics Canada geographic units and labour market conditions. In 2014, regarding the analysis that was done with the data available at that time, the territories were also split into capital and non-capital regions. That was made effective October 12, 2014, recognizing that if Charlottetown was left within a single EI P.E.I. region, it would have been the only provincial or territorial capital without EI economic region status. Given that, at that time, Charlottetown had a significantly lower unemployment rate than the rest of the province, Prince Edward Island was also divided into a capital and non-capital region on October 12, 2014.
Senator Duncan: Thank you, Ms. Nandy. I appreciate your reference to Charlottetown as a capital, but there is a big difference between Whitehorse as a capital in the Yukon and trying to obtain employment hundreds of kilometres away in Dawson City, the former capital. Charlottetown is small. Prince Edward Island, as we are all aware, is a very small province. My specific question was this: Is there anywhere else where such a situation is so exacerbated? What I heard you say is “No, there isn’t anywhere else in the country with the same situation.”
The Chair: Do you wish to respond, Ms. Nandy?
Ms. Nandy: I was just going to add something, and perhaps my colleague George Rae will have more to add. Perhaps I could share some of the results of the most recent boundary review results for P.E.I.
When we analyze the homogeneity of unemployment rates and labour market conditions in all EI regions, the results of that analysis showed that an amalgamation of the two regions in P.E.I. would result in a significant reduction in unemployment rate and a reduction in the labour market condition homogeneity compared to current boundaries.
Senator Duncan: The issue of being able to collect Employment Insurance and having a fair system for Canadian workers is what is really at issue here. I appreciate your analysis and your comment. However, I stand by the response that there is nowhere else in the country where we’re having this difficulty with the changing of the zones.
The unemployment rate was equalized during the pandemic. Everyone was able to receive benefits. That has ended. Is it possible that Employment and Social Development Canada could set a rate outside of the recommendation of the commissioner and ensuing legislative amendment? Outside of this bill and the legislation, is there an ability for Employment and Social Development Canada to set a rate that would provide Islanders with a reasonable benefit, as was done during the pandemic?
The Chair: We will let you answer that question, and then Senator Klyne has a follow-up.
Ms. Nandy: Employment and Social Development Canada does not have the authority to set rates. The regional rates of unemployment that are used by the EI program are produced by Statistics Canada using data from their monthly Labour Force Survey. The monthly regional unemployment rates for EI purposes, except for the territories, are seasonally adjusted, three-month moving averages, and the monthly unemployment rates for EI purposes in the territories are subject to the greater of the seasonally adjusted, 3-month moving average or a 12-month moving average.
Again, the unemployment rates are not set by Employment and Social Development Canada. The rates that are used by the program are produced by Statistics Canada using data from their monthly Labour Force Survey.
Senator Duncan: Except they were able to set a reasonable rate during the pandemic.
The Chair: Senator Klyne, you may go ahead if you can just follow this. We do have a couple more in this round.
Senator Klyne: I will be very quick.
To follow up on Senator Duncan’s line of questioning, this question would be for Employment and Social Development Canada. In the Yukon, there are two economic regions. One is the capital, which has an unemployment rate of 3.4%, and then the other is the Yukon region, which is 7.3%. There are totally distinct unemployment rates going on there. If you were to merge the two, you would end up with the same situation that happened with P.E.I. It would be unjust to those who are in the 7.3% region because it would better them.
In other situations, every province has different economic regions. I will talk about my home province, Saskatchewan. There are four economic regions: Regina, the capital; Saskatoon, the larger corporate centre; northern Saskatchewan; and southern Saskatchewan. There are very stark differences in those unemployment rates. In Saskatoon, the unemployment rate today is 4%. In Regina, it’s 5%. In southern Saskatchewan, which has a little bit more concentration, running along Highway 1, mostly, it is 6.9%. Northern Saskatchewan is 14.9%.
Those are the kinds of answers that I think Senator Duncan was looking for. Namely, are there other provinces or jurisdictions with different economic regions? They are all over the country. Is that correct?
Ms. Nandy: Yes, it is correct. There are 62 EI economic regions. Each province and territory has a number of EI economic regions within its boundaries.
Senator Klyne: And if somehow we were to do something here in P.E.I., that would probably set a precedent that nobody would like to deal with anywhere else in the country, I imagine. You don’t have to answer that. It is kind of a political question.
Senator Mockler: Thank you to the witnesses for your comments.
I want to say at the outset where I stand vis-à-vis EI. With the 62 regions across Canada, it is very important for all of those regions to see what this review will do and bring to the table in order to help the working poor and most vulnerable, and in order to help what Senator Duncan has highlighted many times in relation to what has happened, and is happening today, during the pandemic and post-pandemic so we can secure and help put food on the table for the most vulnerable.
When it comes to Prince Edward Island, I notice that you, Mr. Pursey, said that you have consulted. Have you consulted regions other than Prince Edward Island?
[Translation]
Have you consulted New Brunswick, meaning the New Brunswick Federation of Labour? Have you consulted Nova Scotia and the Quebec region, in eastern Quebec?
[English]
Mr. Pursey: Yes, I have consulted with those other regions, and yes, there are problems in those areas too — the Acadian Peninsula and northern New Brunswick. We met on this problem there with seasonal workers, the black hole and everything else as they call it up there.
Yes, it is an issue in that part of the province. The Gaspé Peninsula, the Magdalen Islands, parts of northern Quebec and parts of all of the northern provinces have problems.
But with P.E.I., we’re different. We’re under 200 kilometres tip to tip, with Charlottetown in the centre. Everybody is competing for the same jobs. They are driving back and forth. The island is only two miles wide at one place. When these zones were put in, it was put in for solely political reasons and nothing else.
There are four ridings in P.E.I. — four seats. One seat is a safe seat. That was Gail Shea’s. The whole region, her whole seat, is in the rural area, and all of the other three seats have parts of them in the Charlottetown area. They go around them, past them and further away.
It was solely for political reasons, we believe, and all Islanders think that. I have had meetings on this all over the province ever since it was brought in. It was seen as an awful slap in the face to Islanders. It was called the “Gail Shea protection thing” to keep her seat for the Conservatives. It was brought in overnight. There was no consultation.
We want things put in for the small workplace. We would like to have it where everybody is treated fairly and equally when we are all working at the same workplaces, side by side, travelling to work and coming from all areas. Thank you.
Senator Mockler: I want to tell you where I come from. I come from northwestern New Brunswick, and I sat in the Legislative Assembly of New Brunswick for 24 years, Mr. Pursey. That issue has always been boiling; it is always there. Thank God, at least, that we have successive governments, federally speaking, that are trying to find the best way forward, not for only one region of Canada but for all of Canada. When I see that we have four senators — two vacancies in P.E.I. right now — have you consulted with the two senators who are there? Where do Senators Downe and Francis stand?
Mr. Pursey: I haven’t consulted them personally, but I have heard they are in favour of what is going on here.
Senator Mockler: Thank you.
We have four MPs. You were promised in 2015, as parliamentarians and being the chamber of sober second thought — when I look at the facts, you have two MPs supporting it and two MPs not supporting it — or they are silent on it. Have you consulted the other two MPs? What did they say to you? Because one is a minister.
Mr. Pursey: Yes, I have consulted all of the MPs on this on more than one occasion. The minister who stays quiet on it, part of his area is affected, and I think he is really in favour of it too. From talks with him, he is not against it.
Robert Morrisey, the MP from up west — I have consulted with him numerous times. It’s his riding because he defeated Gail Shea who made it the way it is. He is against it, but he said he would be for it if the Prime Minister promised to do what he said he was going to do and reverse all the negative changes of the previous government. The reason he is in favour of keeping things the way they are is because his whole constituency is all rural, and his constituents will lose some money.
At one time when this was brought into the Prince County area, which is where it is, it wasn’t as well off. Now, a lot of them work in Summerside. We have government offices in Summerside — the HST, the GST or whatever you call it that employs hundreds of people. A lot of people from up there work in Charlottetown. When the area is so small — when you’re talking capital city areas in other provinces, that area is bigger than the whole province here. We got to relate things to reality and fairness.
I would like to thank Senator Duncan for all the great work she has been doing on this bill and taking over. Thank you, Senator Duncan, for this. We’re just asking that you be fair to Islanders.
Like I had, I haven’t seen one business or heard from one person that is against making it the same and fair for everybody. Have you?
Senator Mockler: There is no doubt that the minister in Prince Edward Island has other ways to bring to the attention of the government such a subject matter.
But my question now will be for Ms. Nandy.
[Translation]
Ms. Nandy, is a separate instrument like Bill S-236 necessary to provide long-term measures that would simplify the employment insurance regime everywhere in Canada, and make it more flexible?
[English]
Ms. Nandy: Thank you for the question, senator.
As previously mentioned, the government has committed to modernizing the EI program to make it more responsive to the current and future needs of workers and employers. It has conducted two years of consultations that were recently completed, and it is in the process of reviewing that extensive input for the purposes of developing an EI program that is simpler, more inclusive and more flexible for workers.
In that regard, work is ongoing by the government to modernize the EI program.
Senator Mockler: I’ll ask you a question that I’m pretty sure you can’t answer: When do you expect to get that report so that we can all have a view of it?
Ms. Nandy: The report of the government’s plan on EI modernization, is that what you’re referring to, senator?
Senator Mockler: Right.
Ms. Nandy: You’re right. I cannot confirm a timeline for that. We are in the process of analyzing the input.
Senator Mockler: Thank you.
The Chair: Nice try, Senator Mockler. We now move into round two.
Senator Simons: Mr. Rae, I’m glad you are back here with us today, even though you did not provide testimony at the beginning.
I think I speak for a lot of other members of this committee that we feel we were put in something of a false position because it wasn’t until Ms. Sourang’s report that we were alerted to the fact that there was a possibility that this change could have a rather dramatic economic impact on people outside the Charlottetown capital region.
Yet when Ms. Nandy spoke just now, she listed off a series of economic results that, as Mr. Giroux said, were not dissimilar to what the Parliamentary Budget Officer presented to the country in September, months after we did our initial review.
So, Mr. Rae, did you know at the time you spoke to us on June 16 how dramatic the economic consequences of this could be? Were you aware of the numbers that Ms. Nandy read to us this morning? If you were aware that this could cost tens of millions of dollars to people in rural Prince Edward Island, why did you not tell us that when you spoke to us in June?
Mr. Rae: Thank you for the question.
First off, when I spoke in June, the Parliamentary Budget Officer’s report came out in September, I think, so I can confidently say I was not aware in June of the report that came out in September.
Senator Simons: That was not my question. My question was this: Were you aware of the numbers — the independent numbers, which are different — that Ms. Nandy presented this morning?
Mr. Rae: The numbers Ms. Nandy presented this morning were from analysis we had done internally. I am not sure of the timing when we did those numbers. I can tell you that at the time I testified, the unemployment rate between Charlottetown and rural P.E.I. was 0.1 of a percentage point. As those numbers continually move around, of course, the financial impacts change. So we would have updated our estimates subsequent to that.
It’s a bit of a moving target, senator, in terms of what the projections would be as the Fall Economic Statement, et cetera, updated the projections on the unemployment rates.
What I can say is that we have known — and we have been consistent in saying this — that, all things being equal, this change would result in higher qualification requirements in the rural parts of Prince Edward Island and lower qualification requirements in Charlottetown compared to now.
Senator Simons: At the time you spoke — I have your testimony before me — you said that the rate differential was 7.3% unemployment in Charlottetown proper and 8.7% in the P.E.I. economic region, so that’s considerably more than 0.01%.
I will put this to you again because I feel like the integrity of this committee has been called into question. You spoke to us as a witness on June 16. You knew that we were investigating the question of whether this was the correct public policy decision. Don’t you think it might have been useful if you had told us the amount of money that this change would extract from P.E.I.’s economy? Because I feel that we were not given all the information we needed to make an appropriate decision.
I appreciate that the Parliamentary Budget Officer’s work was not completed until September 7 — well after we had passed this bill in committee — but you and Ms. Nandy were here before us together in June. Why did you not tell us at that time what the economic impact of this switch would be?
Mr. Rae: Senator, again, we conducted an analysis. I’m not sure if the numbers that Ms. Nandy provided today were available at that time, as I said. We have looked at those numbers subsequent to the PBO projections. As I mentioned, and as the PBO mentioned, those numbers are consistent with our internal analysis. I’m afraid that is all I can say on that.
Senator Simons: But don’t you think it might have been useful, even if you didn’t have these numbers, when a panel of senators asks you on June 16, 2022, about the proposed impacts of consolidating Prince Edward Island into one EI region — do you not think it might have been pertinent, when we were putting those questions to you, to tell us the information that you had, even if it wasn’t at this granular level, about the potential dramatic economic impacts this could have on Prince Edward Island?
Mr. Rae: Senator, in my testimony, I can go back and check, but I think I made it clear that this would result in fewer benefits being paid in the portion of P.E.I. excluding Charlottetown and potentially more benefits in Charlottetown. If particular figures were not available at that time, I apologize. I can go back and double-check my testimony, but I think that was made apparent.
Senator Simons: I have your testimony right before me. We certainly were not given to understand that there would be anything like a $15 million or $20 million loss to the province every year.
The Chair: Thank you, Senator Simons. If needed, we’ll put you on a third round.
Senator Klyne: I have a quick question for Ms. Nandy, and then a follow-up quickly for our other witness here.
This major review that is under way is national in scope. Generally, you might refer to the terms of reference as to modernize the EI program. I am wondering, specifically, if you can provide us with the terms of reference that were provided for this review, and if there were any prescribed aims or objectives that went along with that.
I’m pretty sure we could find that if you’re unable to do that, or if you don’t know off the top of your head, you can share that with the clerk. That would be appreciated.
Ms. Nandy: Senator, thank you for the question.
The scope of the EI consultations that have been conducted over two years was guided by the commitment made in Budget 2021 to modernize the EI program to make it more responsive to the current and future need of workers and employers. That would include ensuring that we have a simplified, more flexible and more inclusive EI program.
As part of those consultations, national and regional round tables were conducted in the last two years. There was an online survey and written submissions received on a number of thematics. As I previously mentioned, those include discussions with stakeholders from across the country on topics such as access to EI, the adequacy of EI benefits, improvements for seasonal workers, improvements to the premium reduction program and improvements for access to workers experiencing life events.
Those are only some of the topics that were covered over the course of the two years of the EI consultations to modernize the EI program.
Senator Klyne: Okay. That sounds like an admirable and valuable study that is being done, given the way you have described it.
Knowing that and as familiar as you would be with the subject matter, do you think that this will offer something that is going to make it something more responsive with the EI program and its modernization? Might it somehow find a solution, remedy or resolution for what is going on in P.E.I., particularly through the lens of Mr. Pursey?
Ms. Nandy: Thank you for the question.
I understand from Mr. Pursey’s remarks that there is a keen interest in supporting the unseen and working poor in his province through his suggested change to return Prince Edward Island into one EI economic region. Through the review to modernize the EI program, one of the core objectives of modernization is to support access to the program. That would include for vulnerable and seasonal workers.
To that end and regarding the modernization of the program, it is to the government to determine what the elements of that modernization are. Certainly, we have heard from seasonal workers in Prince Edward Island, and from Mr. Pursey himself, through those consultations. They certainly would be captured as part of the government’s analysis on EI modernization.
Senator Klyne: Regarding your statement, again, I’m pleased to see this is happening, but had we known the extent of what you just said there, we probably would have taken a moment to reflect and maybe wait until this review was done.
My second question is for Mr. Rae. I want to reaffirm in my mind what you just said to Senator Simons as an answer. You have a pretty steep knowledge in the subject matter in terms of what you’re dealing with, but you would know intuitively that if you took two regions — one with a higher unemployment rate and one with a lower one — and you merged them, you’re going to get a situation where it’s going to be detrimental to the one that had the higher rate because now there will be in a better position. Hence, they will have to work more collectible hours to be eligible for the benefits and they will get a reduced amount. Is that correct, intuitively?
Mr. Rae: Yes. It would depend, of course, on the relative size of the labour force in the two regions and elements of that. The effect would be different based on the size of the labour force in the two regions, but, yes, intuitively, if you’re moving two regions with different unemployment rates and combining them together, it’s going to result in a rate that’s higher than one region and lower than the other.
Senator Klyne: I’m not talking about absolute dollars. I’m talking about a percentage rate which drives the EI program.
Mr. Rae: That is correct.
Senator Klyne: Thank you.
Senator Duncan: Overwhelmingly, I have heard the 62 regions — and what I have heard reinforced and not been stated — but nowhere else in the country are any of these regions’ situations as small as Prince Edward Island. I appreciate there are four regions in Saskatchewan and the unemployment rate is equalized, but Saskatchewan and P.E.I. are not the same size. That’s the real issue that we’re dealing with here, this unique anomaly of zone 1 and zone 2 in P.E.I. and people driving back and forth or claiming their residency.
Ms. Nandy has talked about analysis, all the data that has been reviewed and all the consultation process. How are we assured or can we be assured in the forthcoming analysis and review of the P.E.I. system that this unique situation will not be overlooked again?
Obviously, we know that one size does not fit all in these program designs. What might work in Saskatchewan or in the territories does not work in other areas.
Can we be assured that this unique situation — this unfair situation — will not be an unintended consequence of the review? Has that been taken into account in the analysis that is ongoing right now?
Ms. Nandy: Thank you for the question. The particular circumstances of the boundaries of EI economic regions is not a specific topic that has been covered in the EI modernization consultations. That being said, what has been covered are issues such as improving access to EI benefits for workers, including those in rural P.E.I., in Charlottetown and all across the country.
To Mr. Pursey’s comment about the importance of EI supporting the unseen, the working poor, workers across the country and employers, that issue has been extensively consulted on, and we have heard from a number of stakeholders on that particular point. That is part of the EI modernization consultations and review.
Senator Duncan: The zones are not. It’s access to the benefits. Again, my specific question was: Has the unintended consequences of unique situations across the country been examined? We’ll have to wait to see what the report and the analysis does.
The other thing that I have not heard or read in any of this testimony is the costs, before and after the division of the 2014 changes — an analysis of those costs and benefits paid to workers. I’m wondering, perhaps, Mr. Giroux, if that information might be available through your office?
Mr. Giroux: We would have to look at whether we can access and have the data. That would require having access to historical data, and it would depend on the quality of that data. But if the committee wished us to do so, it could pass a motion and ask us to undertake that analysis.
Senator Duncan: Thank you.
Senator Cotter: I have only just arrived at the committee meeting in the last few minutes. I apologize for not having been here to hear your presentations.
I want to ask a question of Mr. Rae. It’s a follow-up to some questions that have already been asked and that I have listened to the answers to. Let me formulate my sense of what the committee undertook with respect to this study, Mr. Rae, which was that there was believed to be an anomaly in the structure of the Prince Edward Island Employment Insurance regime. This was to try to address that — to create a greater degree of fairness — and implicitly to help workers in the context of Prince Edward Island. At least it wasn’t built in that it would be implicitly that we would hurt the financial circumstances of workers.
I know there is some debate about what you knew at the time when you were here in terms of the financial implications, but my sense is that you and your colleagues’ significant knowledge of the EI system would have enabled you, almost on the back of an envelope, to have done the kind of calculation that Senator Duncan was just talking about. We know how many workers, more or less, are in one region. We know the EI region on P.E.I. We know more or less how many workers are in the other region. If we merge them to one number and applied that, we could roughly calculate whether or not it would have some significant consequences overall.
It’s a mystery to me why you would not have, at least in some ballpark way, shared those consequences with us unless you thought that we had some initiative here that was going to make the circumstances of Prince Edward Islanders worse and that was our intention. Can you help me out about why you wouldn’t have just been able to say, “This could have some significant adverse consequences for people on Prince Edward Island collecting EI”?
I don’t want to say that I feel betrayed here, but I was certainly operating on an understanding that I was doing an exercise that would amount to if not a good thing, at least not a bad thing. Now it feels as if we have been recommending a bad thing.
I’ll stop now and invite you to respond.
Mr. Rae: Thank you, senator. When I was here in June, I think I mentioned that, of course, the merging of the two EI economic regions in Prince Edward Island would result in a lower rate outside of Charlottetown and a higher rate in Charlottetown, which would provide more access in Charlottetown and lower thresholds, I should say, in rural Prince Edward Island. You’re certainly right that I did not provide figures.
I should just mention, just to go back to the reason why Employment Insurance economic region boundaries exist, they exist to treat similarly situated individuals the same based on their labour market conditions. The primary thing that we are looking at when we are looking at Employment Insurance economic regions is the labour market homogeneity within those regions. The whole reason we have variable entrance requirements and other parameters of the Employment Insurance program that are variable is because they are driven by labour market conditions.
The secondary result of that is that benefits are paid based on that principle. So the analysis of the labour market conditions as primary, that drives the access to benefits. When we’re talking about changing Employment Insurance boundaries, the principle at stake is actually the relative difference in the labour market conditions between two regions or what a new amalgamated region would look like. The economic results flow from that because that’s how the EI program is designed.
Senator Cotter: It strikes me that you would have been able to know in general terms what those economic results would be. I don’t purport at all to be able to do the sophisticated work that you do, and this is a difficult and challenging program which you administer very well. But my sense is that if I had the numbers that are available to you, in 15 minutes, I could have figured out that we’re talking about some millions of dollars per year in total that will not go to Prince Edward Island residents on EI.
Given the kind of implicit goal of this initiative in this bill, that would have been helpful information for us to know back in June, even if it were not as precise as Mr. Giroux has produced in September. Maybe that’s more of a comment than a question.
Senator Simons: Mr. Rae, I have the privilege of having your testimony here before me. In your opening commentary back in June, you did not express any concerns or even raise this issue. In fact, the only time it comes up that I can see in the testimony is when I’d asked you a question about the difference in unemployment rates between the two zones.
My question to you was:
Typically, when you see a difference that small, is that usually enough to justify two zones?
I will read you back your precise answer:
It’s a hard question to answer as we’re really looking at common labour market conditions as well as unemployment rates. Generally speaking, a difference of a percentage point, if it’s within the rates in the variable entitlement table — generally speaking, a difference of 1% will result in a differential treatment of benefits.
Now, I suppose that, to an economist, that might sound like you were telling us that there would be $15 million a year taken out of the P.E.I. economy, but I do not feel that that expression of concern is congruent with the numbers that Ms. Nandy read to us this morning. As Senator Cotter put it perhaps more eloquently than I am able, I do not feel that we were allowed as senators to do our jobs properly without access to pertinent information that would have helped us to weigh the costs and the benefits of this kind of change.
I would hope that in your future testimony before Senate committees — whether that’s ours, National Finance or to whomever else you may testify — that when you are asked such questions, it would be helpful if they were answered with more detail and perhaps more frankness than we were afforded back in June.
The Chair: Is there a question as well?
Senator Simons: Yes. So my question is for Mr. Giroux and Ms. Sourang. Thanks to your excellent work, we’ve now made public a potential outcome of this bill, but, of course, that is a potential outcome that assumes that no other rates or variables change in Prince Edward Island. Of course, you can only project based on the status quo. But could you, as the Parliamentary Budget Officer tell us — obviously, as senators, we are precluded from bringing forward bills that cost the government money, but would there be any apparatus that the government would have to hypothetically create one EI zone where people’s benefits went up rather than down?
Mr. Giroux: Senator, I’ve been told early in my career that the government can deem Mondays to be Fridays. So if the government wanted to make sure that the EI regions of P.E.I. are made as one and that nobody loses, I am convinced that it could find ways to do that, for example, by taking the highest of the two unemployment rates to assess eligibility and duration of benefits.
As one of the senators around the table alluded, the government determined that everybody was allowed to access the EI program with the minimum number of hours during the pandemic. When you ask questions like that to the witnesses collectively — is it possible to do this and that — I think the answer in most cases, based on the questions I heard today, is yes. The government could make it so depending on whether they want to go through legislation or regulations. It is possible to make many, many changes to the EI program, some of which can be easily made through regulation, others requiring legislation. That’s a long answer to say yes.
Senator Simons: Thank you.
Senator Mockler: I want to come back to issues that we have all been dealing with. Every parliamentarian, whether city, provincial or federal, when they live in those regions have faced questions on seasonal workers. Where I come from, Mr. Chair, you don’t plant trees in January. You cannot change a fishing season nor can you plant potatoes in January. That’s why we have, across Canada, what we call the working poor or seasonal workers. I think programs across Canada should reflect the needs of all Canadians.
We have 62 of those regions that are very important. I could go on and ask many questions. I will just use a term here that we’ve been using for the last 30 to 40 years, and that is “the black hole.” Let’s talk about the black hole. I’m going to ask Ms. Nandy or Mr. Rae about it. You’ve heard Mr. Pursey when he said he had consulted the Acadian Peninsula.
[Translation]
I’m also familiar with northwestern New Brunswick, where I live, and the importance of the black hole.
[English]
Ms. Nandy, are there any lessons or concerns from Canadian legislators? We’ve heard a witness saying that it’s political. Well, I don’t want to go on the political rink right now, but I can tell you it’s very important if we make changes and we don’t let the government show us the changes and recommendations that they are proposing in those regions, including Prince Edward Island.
That said, are there any lessons or concerns that Canadian legislators should consider based on the experience of the country’s other EI economic regions? Then I have a second question on that.
Ms. Nandy: Thank you, senator, for that question. In terms of lessons learned, maybe I will say more broadly that I think we are always learning lessons through the experience of workers, employers and their interactions with the EI program, including through the use of these 62 EI economic regions. It is actually for one of those reasons that the Employment Insurance Act legislates that there must be boundary reviews once every five years, so we can continue to make sure that the EI program is responsive to the needs of workers and employers in these regions and that these regions reflect the labour market conditions. That is the lesson learned that I would convey.
Senator Mockler: I know that, just recently, when I was in my little hometown of Saint-Léonard, when I walked into the Tim Hortons and the McDonald’s, the first thing I was asked was, “Percy, what will happen with the black hole?” We are waiting. So the black hole is there.
My question to you, Ms. Nandy — and due to your professionalism, both of you — has amalgamation of economic regions as proposed by Bill C-236 occurred in Canada before? What impact would Bill C-236 have on the “black hole” in the rest of the regions of Canada?
Ms. Nandy: Thank you for the question, Senator Mockler.
In terms of the impact that amalgamating the two regions would have on EI benefits for claimants, as has been described, it would replace the two current EI unemployment rates with one single rate. That would mean for, say, seasonal workers in the current rural P.E.I. region, this new unemployment rate would be lower than in the current rural P.E.I. region. As I think has been previously mentioned during this committee, the current regional rate in rural P.E.I. is 10%, effective November 6 of this year. If there were an amalgamation, it would result in a higher entrance requirement for seasonal workers who would then reside in the new amalgamated region. That may impact their access to EI benefits, it may exacerbate the issue with le trou noir for these workers and it may impact their weeks of EI entitlement.
Senator Mockler: Thank you. Can you explain to us what a black hole is for seasonal workers?
Ms. Nandy: The trou noir, or the black hole, as has been described, is for seasonal workers in the off-season when they don’t have access to EI benefits and do not have access to income support from work. There is a gap in the off-season until such time as they return to their seasonal work.
Senator Mockler: Mr. Chair, I have asked so many questions because those 62 regions are looking exactly what — hopefully, we will have the modernization report of EI. That will give us a picture not only of one province, but also the picture for all the provinces and territories.
My last question is this: When do you expect to receive the modernization report?
Ms. Nandy: Thank you for the question.
As was previously described, the government is in the process of analyzing the extensive input received through the consultations on EI modernization, and is reviewing lessons learned from the pandemic and longstanding issues that were known with the program. With all that input, the government’s plan for EI modernization will be determined. Following that determination, there will be steps taken to share.
Senator Mockler: You don’t have a date?
Ms. Nandy: I do not.
The Chair: Thank you very much. I want to thank our witnesses today: Ms. Nandy, Mr. Rae and Mr. Pursey via video conference, and here in person, Mr. Giroux and Ms. Sourang. We appreciate your comments, and your assistance to this committee as we move forward with this bill is very much appreciated. Thank you.
Also, I thank the committee members for their active participation and thoughtful questions. I want to take a moment to thank all the folks who support us behind the scenes here in this room and elsewhere: interpreters, the debates team transcribing this meeting, the committee room attendant, multimedia services technician, the broadcasting team, the recording centre, IT service desk and Emily, who is our page. Thank you very much to each of you for your support.
Honourable senators, I would like to move to in camera for a short time. Senators, is it agreed that we end the public portion of this meeting and proceed in camera?
Hon. Senators: Agreed.
The Chair: Carried.
(The committee continued in camera.)