Tuesday, May 31, 2016

The Standing Senate Committee on Social Affairs, Science and Technology has the honour to table its

THIRD REPORT

Your committee, which was authorized to examine the subject matter of those elements contained in Division 12 of Part 4 of Bill C-15, An Act to implement certain provisions of the budget tabled in Parliament on March 22, 2016 and other measures, has, in obedience to the order of reference of Tuesday, May 3, 2016, examined the said subject matter and now reports as follows:

On May 19, 2016, your committee heard witnesses on the subject matter of Division 12 of Part 4 of Bill C-15: an Act to implement certain provisions of the budget tabled in Parliament on March 22, 2016, and other measures.

Your committee understands that Division 12 would amend the Employment Insurance Act by reducing the waiting period prior to the payment of employment insurance (EI) benefits from two weeks to one week; removing the provisions relating to new entrants and re-entrants to the labour force; and, extending the number of weeks of benefits for workers in regions affected by an economic downturn related to commodity prices.

Your committee supports the changes proposed in Bill C-15 to the Employment Insurance Act but makes the following observations:

Your committee is concerned that there is insufficient clarity and transparency with respect to the criteria used to determine the EI economic regions listed within the proposed provisions. While it recognizes that some description of the criteria was provided within the text of the federal budget tabled on March 22, 2016, it agrees with witnesses who indicated there was insufficient specificity provided in the description to replicate the regions identified in the provisions.

Your committee is also concerned about the potential negative impact on small businesses that could result from the decrease in waiting period for the payment of EI benefits from two weeks to one. While there is general support for the reduction in the waiting period, members are concerned about the effect this change may have on pay systems of small businesses. It notes the testimony it heard that any negative impact these changes may have on small business may be compounded by the elimination of the small business job credit (SMJC). The SMJC reduced EI premiums for employers, and your committee is concerned that the projection for EI rate reduction will not be sufficient to compensate for the loss of the SMJC. Your committee suggests that the cost impact of changing pays systems, as well as the need for additional negotiations with unions, should be taken into account when implementing the change to the waiting period from two weeks to one.

Finally, your committee would like to make a general observation that the current approach to EI with respect to applying region-specific criteria is outdated and results in unnecessary disparity from one region in Canada to another. It urges the federal government to assess this approach.

Respectfully submitted,