THE STANDING SENATE COMMITTEE ON AGRICULTURE AND FORESTRY
EVIDENCE
OTTAWA, Thursday, November 24, 2022
The Standing Senate Committee on Agriculture and Forestry met with videoconference this day at 9:04 a.m. [ET] to study Bill S-236, An Act to amend the Employment Insurance Act and the Employment Insurance Regulations (Prince Edward Island); and, in camera, on future business.
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 witness who is in the room today, as well as those watching this meeting on the web.
My name is Robert Black. I’m a senator from Ontario and I am the chair of this committee. I would like to ask our senators to introduce themselves.
Senator Simons: Paula Simons, a senator from Alberta, Treaty 6 territory.
Senator Klyne: Good morning and welcome. Marty Klyne, a senator from Saskatchewan, Treaty 4 territory.
[Translation]
Senator Petitclerc: Chantal Petitclerc from the Grandville Senate division in Quebec.
[English]
Senator Cotter: Brent Cotter, a senator Saskatchewan.
Senator Duncan: Good morning. Pat Duncan, senator from the Yukon.
The Chair: Thank you.
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).
Our witness today is from the Prince Edward Island Fishermen’s Association. Joining us in person is Mr. Ian MacPherson, senior advisor. We welcome you here. We will hear your opening remarks, and we will give you about five minutes to do so. I will signal when you have one minute left, and then we will move into questions. The floor is yours, Mr. MacPherson.
Ian MacPherson, Senior Advisor, Prince Edward Island Fishermen’s Association: Thank you, chair, and my thanks to the other committee members for the opportunity to present today on the proposed changes for Prince Edward Island under Bill S-236 and the Employment Insurance Act.
Our position today is clear. The fisher Employment Insurance program is a well-run, effective program that provides needed support for our sector when required.
I meant to lead off by saying that Captain Jenkins sends his regrets. As many of you know, the hurricane we experienced was not too long ago. He had to meet an insurer adjuster today, and they are pretty special people to get a hold of.
We represent over 1,260 captains that primarily participate in the lobster, bluefin tuna, halibut, snow crab, herring and mackerel fisheries. Our members are independent owner operators and small business owners that contribute greatly to the economies of their local areas. In the past several years, we have seen these contributions increase significantly with the rise in the value of seafood. This increase has been related to a number of factors but also can shift quickly depending on world markets and natural disasters. Recently, post-tropical storm Fiona hit the island with force and damage that has been unprecedented. After a weather event of this magnitude, there is visual damage and uncertainty on how our fish resources will rebound given the undetermined impact to the ecosystem.
Senators and Members of Parliament in coastal communities will know there is a separate program for fishers under the Employment Insurance Act. This is a unique program that meets the needs of the fishing community when required and has been supported by numerous federal governments to address the challenges of the fishery. Conditions and catches can vary greatly from year to year, and this program provides support when required. Many people are not aware that within the fisher EI program, there is a clawback provision that exists if the annual income of a fisher exceeds the income parameters of the program.
For the membership that the PEIFA represents, we are here today to confirm that the existing fisher EI program meets the unique needs of our present-day fishery. This program is well run, and we want to ensure that no changes are planned for this separate Employment Insurance program.
The current-day fishery is challenging, as the resource is heavily regulated by the Department of Fisheries and Oceans. Our association and members spend hundreds of hours a year working with DFO to set harvest points that will keep our resources sustainable. However, some species are rebuilding, which means revenues are limited in these species. In some species, all licence holders do not participate in a fishery so that the stock may rebound more quickly and so that it is more financially viable for those who do fish. In addition, this has led to a heavy dependency on one species: lobster. This is not a preferred situation for any fisher. For fishers, these are not ideal scenarios, but ones that are a reality. With incomes that can vary greatly from year to year, we need support mechanisms such as the fisher EI to exist as a backstop.
On Prince Edward Island, we have two lobster seasons. One commences in early May for two months and the other in August until early October. Our spring season involves over 1,000 captains and boats and our fall fishery 250 vessels. The secondary species are fished during these months until the end of October. In a typical Prince Edward Island winter, we are surrounded by thick ice, which makes our fishery more seasonal than others. This is another primary reason the fisher EI programs help to sustain households during the times when fishing income is not sufficient due to the variables I have mentioned.
Our fisheries are vital to the economy of Prince Edward Island. As one of the top three economic drivers of the provincial economy, the island fisheries contribute one of the highest percentages to the provincial gross domestic product in Canada.
Our members take great pride in fishing, and we are seeing generation after generation continue. There is great interest from younger people to continue in the fishery despite these many challenges. The preference of our members is to be on the water, doing what we love and earning all their income from the fishery. When challenges exist, the continuance of the fisher Employment Insurance program in its current form, requirements and structure provides a vital support mechanism when and if needed.
Thank you.
The Chair: Thank you, Mr. MacPherson.
We’ll proceed with questions from senators. I would like to ask members and witnesses to please refrain from leaning in too close to the microphone or remove your earpiece when doing so. This will avoid any sound feedback that could negatively impact the committee staff in the room. As has been our previous practice, I would like to remind senators that you have seven minutes for your questions, and that includes the answer.
Senator Simons: Thank you, Mr. MacPherson. I found that very interesting as I’m from Alberta where the fishery is a very different industry.
The bill we are studying is a bill that would collapse P.E.I.’s two EI zones into one. For the special fishery employment insurance program, is there a two-zone formula for that as well, or is it already one zone?
Mr. MacPherson: My understanding is that it is two zones. I was hoping Captain Jenkins could answer those specifics. We did have members who were impacted when the two zones were enacted.
Senator Simons: This is the question we are charged with answering: Should there be one zone or two? That’s the question I have to ask of you. Do you think it’s a better plan to have one zone on the island that treats everyone equally, or would having one zone be a disproportionate burden on people who live outside of Charlottetown?
Mr. MacPherson: Certainly, most of our membership lives in coastal communities outside of Charlottetown. We do have members who are in Charlottetown and Charlottetown proper. Out in the rural areas, it is more challenging to earn income other than fishing. With gas prices and things like that, sometimes it is not feasible to commute from one end of the island to Charlottetown, for example.
Senator Simons: Obviously, for fishing, you want to be close to the water.
Mr. MacPherson: To answer your question, senator, the two zones is what we would like to see maintained.
Senator Simons: It has been challenging for us on this committee. None of us is from Prince Edward Island. I’m from the opposite end of the country and in a very different kind of economy.
Mr. MacPherson: I married an Alberta girl, so you must be okay.
Senator Simons: You have excellent taste. So did my husband.
We have heard from people who have argued very passionately that having two zones is unfair, that Prince Edward Island is very small, that buddy over here gets his cheque and his neighbour right next door doesn’t, and it creates hard feelings.
It is not typically the role of the Senate to be setting regional EI rates. I want to understand to what extent this is a source of tension or frustration amongst islanders that you know. Are the differences in benefits small enough that people are not really bothered?
Mr. MacPherson: I can’t really speak to what I guess we would say is traditional EI and the fisher EI, because it is a very differently structured program. I can’t speak to all the intricacies of it, but at the end of the day, it is a program that works well for our members. As I alluded to in my opening remarks, the preference of our membership is to earn all of their income from fishing, but we are up against a lot of challenges in terms of some resources and some species.
Senator Simons: As I say, different witnesses have come before us and told us different things. From what I understand by reading between the lines of what you are saying, this is not a big crisis point for your community, but you would prefer the status quo to collapsing into one region.
Mr. MacPherson: Correct, and the qualifying hours staying the same in the rural areas.
Senator Simons: Thank you very much.
Mr. MacPherson: You are very welcome.
Senator Cotter: Thank you, Mr. MacPherson, for joining us. It’s much appreciated. I don’t live on Prince Edward Island, but I go there every summer and eat some of the lobster that your colleagues fish, and I appreciate it.
Do you have a rough idea of the number of fishers on P.E.I. that would benefit from the EI program for fishers? How many, roughly, have to rely on it in the course of an average year?
Mr. MacPherson: I don’t have access to those types of statistics. One thing that I wanted to point out that quite a few people are not aware of is that there is a clawback provision in EI. It doesn’t kick in until the next season. I’m pleased to see there has been, in the last five or six years, much better financial years, so I would suggest that number has gone down significantly the last few years because people are earning a good income from fishing, which is what they want to do.
Senator Cotter: In that respect, you mentioned the vulnerability of such heavy reliance on lobster, and a factor in the financial good years of the last while has probably been the ability to fish a fair amount of lobster when the prices have been good.
Mr. MacPherson: Lobster and snow crab have been lucrative. We have a very limited halibut and groundfish fishery. For bluefin tuna, generally a member may be able to fish one or possibly two in a year. They are the main drivers.
There is a new story out there in that redfish, which we had a very substantial industry in about 20 years ago, is making a comeback in the Gulf. Although we are still a few years away from the fish being of sufficient size for a food fishery, we are hoping that that creates another species that a number of provinces can fish once again. We hear so many negative things about the fishery, but there are some stocks that are rebounding.
Like anything, senator, I would suggest that diversification is always better. We got through COVID, but supply chains were disrupted. We were just starting our fishery when COVID hit. That was a very challenging year, but we got through it, and there have been some good ones since.
Senator Cotter: Senator Black and I went out and distributed potatoes when the wart issue was alive.
What alternative lines of work are available when the fishing season is closed? What kind of work do they look for? What kind of work do they do? How much of that is available in the non-fishing window?
Mr. MacPherson: It would depend on the season. This is not a well-known fact, but during the summer season, Prince Edward Island has one of the highest employment rates in all of Canada. That highlights how seasonal the economy is. We do have fishers who fish in that fall season. It starts in August. They may assist, for example, in driving the potato trucks and things like that, because agriculture is a huge industry on the island. We have members who operate businesses, fish shop or do carpentry work or things like that, if they are not preparing for the season. But the spring season is, for the majority of our members, a very critical time.
Senator Cotter: Thank you.
Senator Klyne: Welcome.
In your last one or two sentences in response to Senator Simons, you mentioned that there is a preference amongst your association to want to leave the economic region as is and not merge them. The last few words were about keeping the weeks required to be eligible for collecting benefits the same.
Mr. MacPherson: Hours.
Senator Klyne: I’m sorry, yes, hours. That suggests to me that you understand the impact of merging the two into one, which would result in the hours required to be eligible for Charlottetown to go down and for P.E.I. to go up. Interestingly enough, you would collect fewer benefits and P.E.I. would collect more because they will move from that 6% or less area of unemployment and this would change it more to 7% for them. They would benefit from that while, in the P.E.I. economic region, it would have the opposite effect.
Mr. MacPherson: Correct. That’s how I understand it.
Senator Klyne: It’s interesting. I think you are the first one I have heard who understands that. Many have the thought that this bill is going to do more than that, and it really isn’t, unless the Employment Insurance program gets rewritten, which is not part of this bill.
Mr. MacPherson: That’s why I want to be really careful to stay in our wheel house, so to speak, on the fisher EI. As I alluded to earlier, the challenge is that everyone is busy at the same time, be it tourism, farming or fishing, because even though the fall fishers don’t start their season until August, they are doing all of their preparatory work that the others are doing in March, April and May. I can see that being an issue in that when a person is available, the economy is slowed down because of the seasonality of it.
Senator Klyne: Pretty much many of the sectors, then.
Mr. MacPherson: Correct.
Senator Petitclerc: Thank you very much for being here, it’s very helpful.
Senator Klyne mentioned that we have in front of us and are studying a bill that is doing something very specific, but this is also happening in the EI modernization process that is going to materialize at some point. I’m wondering if this is something that you are thinking about in terms of what you would expect would be better for your region. Do you have any expectation from that modernization process, or is it something that is just happening?
Mr. MacPherson: I think a lot of times when we are in a government setting, we are generally quite critical of a particular department or program, and I come here today to say this is a program that has been in place and is unique. Not every person that deals in EI in Canada would know how to manipulate this program. Not manipulate, that was a poor choice of words, but to function within that program and various things. That’s why we want to keep the uniqueness of it.
I want to stress that, again, our preference is to hopefully be able to keep on with these productive years where fewer and fewer of our members are requiring Employment Insurance. We just seemed to get over the COVID hump and now we have got the war in Ukraine and some other things that are making people nervous. That’s why we are suggesting that this net and the qualifying parameters for it stay the same.
Senator Petitclerc: Thank you.
Senator Duncan: Mr. MacPherson, when you refer to the program, you are referring specifically to the fishery program. Am I understanding that correctly? This bill, which was brought forward by Senator Griffin originally, speaks to zone 1 and zone 2 for Employment Insurance as a whole and doesn’t specifically address the fishery program. I hear in your comments about leaving the fisheries program alone, don’t touch it, it is working. That is what I believe is the message you have given us.
This change to the zones was made in 2014. Do you have a comment on how the fishery program worked before 2014 when this change was made and since 2014? Did it change at all?
Mr. MacPherson: My understanding is that it did not. We had members who lived in urban centres, but it was a very small percentage of our overall membership. My recollection is that it was brought in by Minister Shae when she was the minister of fisheries. I forget her portfolio, but she went back to fisheries.
Your comments, senator, are bang on. I know you want to talk about the Employment Insurance program and this proposed change from Senator Griffin, and we’re talking about something specific. The fisher EI has not been identified in any of the texts I have seen in terms of the revision, but one does not want to assume. That’s why I thought it was important that we present here today and share our thoughts. Quite frankly, in other parts of Canada, many people have no idea that there is a separate program for fisheries.
Senator Duncan: Right. To be clear, your message to us, very clearly, is, “Don’t touch the fisheries program because it works.” I’m disheartened, quite honestly, to hear about the clawback, because in some of the other government initiatives to assist people during COVID, the clawback was quite significant and difficult. I would hope that somewhere along the line, with modernization, perhaps that clawback issue will be addressed. Overall, what I have heard you say is that this bill does not address the fishery program, it is a separate program, and you would want it to stay that way.
Mr. MacPherson: Yes. You are clarifying it for me, so that’s great.
Clawback is an interesting one because, like anything else, it comes up after the fact. One hopes that people have sufficient resources, but sometimes, after some tough years, you have to play financial catch-up. You are absolutely right that it can create a difficult position, because you may have a good year, but it doesn’t necessarily mean that there is a big chunk of money sitting in the bank come next tax season.
Senator Duncan: Did I also hear you say that the change in 2014 didn’t impact the fisheries program, the change in these boundaries?
Mr. MacPherson: My understanding is that if you live in that zone, you would have those qualifying hours. We did raise that, but my understanding is that, because you can still have an operation out on the coast and live in Charlottetown, and if you were in that zone, you would have to have those qualifying hours. It impacted a fairly low number of our members at the time. I don’t have a sense right now. This one caught us, I wouldn’t say off-guard, but it wasn’t on our radar. We are dealing with a lot of issues these days. Our position, supported by our board, is to come here today, clarify that there is a separate entity for the program under EI and that it is working well. As you said, we’d like to see that maintained with the qualifying hours. I want to be very careful about speaking to regular EI, so to speak, because I think you’ve had other witnesses who have addressed that. I’ll just leave it at that.
Senator Simons: I just want to clarify, following on from Senator Duncan. When the Parliamentary Budget Officer costed out the impact of this bill, their office definitely included the fisheries benefit. This is from the chart: In terms of the fishing benefits costs, benefits were estimated to go up in 2022-23 by $400,000. That’s spread amongst all the fishers who qualify, so it’s not a huge boost, but it would go up. Then in 2023-24, it would go down by $800,000, and ditto in the next years. The total calculation for the impact on the fishing EI benefit over five years is a net decease of $2.6 million, but that’s spread out over five years. I wanted to read that into the record because I think we have come across another area of confusion, which is that the PBO report clearly includes the fishing EI benefit program. From Senator Duncan’s question, her assumption seems to be that the fisheries benefits are not captured by the bill, but I’m not certain that that is the case. Certainly, the PBO didn’t think it was the case.
I’m sorry, I was supposed to ask a question here. When one of your members applies, do they get regular EI and then the fishing benefit on top of that?
Mr. MacPherson: To my understanding, it’s a separate program.
Senator Simons: What if they are working in two different fields? What if some of the time they’re fishing and some of the time they’re working in the tourism sector? I imagine there are people who cobble together a couple of jobs over the year to get their hours up. Is it possible that people are pulling from both funds? Or is the fishing benefit only for people whose income is exclusively from the fishery?
Mr. MacPherson: My understanding is that it’s specifically for fishers. I think one of the fundamental differences in the program is that a claim can remain open. With regular EI, generally, if employment starts, then the claim closes. But in the fisher scenario, it can be left open and then calculations are done. Fishing may come in between, and then someone may do something else, and it’s all calculated on that.
Senator Simons: Is there a disincentive built into the program that dissuades people from taking other seasonal employment in shoulder seasons, because if they do so, they lose the fishery benefit?
Mr. MacPherson: I don’t think so. The reason being, especially with some of the youngest harvesters, they have fairly significant debt loads. They’re doing everything, be it for many years, maybe a little less so the last few years, going to Western Canada to work in order to carry those debt loads. Then, as I said, we run into the seasonality of our Prince Edward Island economy. That is a bit of a problem. At the end of the day, I can unequivocally say that harvesters, fishers, want to fish. That’s what they do. That’s what they love. That’s their passion. That’s where they want to earn their income.
Again, senator, I apologize that the conflict came up with Captain Jenkins. Maybe there is a follow-up session you want to have for some of these specifics. I think it’s really important for all of us. Nothing that I’ve pulled about the changes has mentioned fishery EI, but the PBO does, so we need to be clear on that. Our position doesn’t change, but it’s important that you folks understand it too.
Senator Simons: Yes. I feel like, to borrow a metaphor from your profession, you’re sailing into very deep waters and you don’t know where the rocks are.
Senator Cotter: I have no metaphors.
Mr. MacPherson, do you know what position, if any, your organization took back in 2014, I think it was, when this two-zone situation arose in terms of being supportive or opposed or not consulted? Do you have any information on that?
Mr. MacPherson: Initially, when it was rolled out, it was portrayed as something a little different, so I know we did have some correspondence with the appropriate minister in terms of, again, clarifying what that means to our members. I apologize because I’m not crystal clear. I believe the members living within that perimeter of Charlottetown did have to meet the higher hours.
Senator Cotter: Thank you.
The Chair: Are there any other questions, colleagues? Seeing none, Mr. MacPherson, thank you very much for joining us today. Your assistance, as we continue to examine this bill, has been appreciated. I note you’ve raised some questions for us.
I also want to say thank you to our committee members for your active participation and thoughtful questions, and as I always do, I would like to thank the staff who support us around this room and outside the room as well. The work that everyone does is much appreciated.
Senator Simons: Might I suggest, Mr. Chair, that we consider moving in camera briefly for 5 to 10 minutes?
The Chair: That was going to be my last comment.
Senator Simons: This is why we work so well together.
The Chair: As we suspend this meeting, I’d propose that we meet for 10 minutes in camera.
(The committee continued in camera.)