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SOCI - Standing Committee

Social Affairs, Science and Technology

 

Proceedings of the Standing Senate Committee on
Social Affairs, Science and Technology

Issue No. 24 - Evidence - May 18, 2017 (afternoon)


OTTAWA, Thursday, May 18, 2017

The Standing Senate Committee on Social Affairs, Science and Technology, to which Bill C-44, An Act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures, was referred, met this day, at 2:14 p.m., to study the subject matter of those elements contained in Divisions 5, 9, 11, 13, 14 and 16 of Part 4 of the bill.

Senator Kelvin Kenneth Ogilvie (Chair) in the chair.

[Translation]

Welcome to the Standing Senate Committee on Social Affairs, Science and Technology.

[English]

I'm Kelvin Ogilvie from Nova Scotia, chair of the committee. I'm going to ask my colleagues to introduce themselves, starting on my right.

Senator Stewart Olsen: Carolyn Stewart Olsen, New Brunswick.

Senator McIntyre: Paul McIntyre, New Brunswick.

Senator Woo: Yuen Pau Woo, British Columbia, substituting for Nancy Hartling from New Brunswick.

The Chair: Thank you very much. We are continuing our study of the divisions of the budget bill, and right now we will be looking at Division 11.

We have with us, from the Canadian Labour Congress, Barbara Byers, Secretary-Treasurer; and Chris Roberts, Director, Social and Economic Policy. I understand Ms. Byers will be making the presentation.

Barbara Byers, Secretary-Treasurer, Canadian Labour Congress: Thank you. As pointed out, my name is Barbara Byers, and I am secretary-treasurer of the largest labour central in Canada, the Canadian Labour Congress. As has already been pointed out, with me is Chris Roberts, our Director of Social and Economic Policy.On behalf of our 3.3 million members, I'm pleased to appear before you today on the issues addressed in Division 11 of the Budget Implementation Act.

The budget announced the government's intention of introducing several changes to maternity and parental leave to increase flexibility and choice for parents. I want to state that the CLC strongly supports the objective of increasing flexibility and choice for working families. We've argued consistently that the best way of expanding real options for working families, and women in particular, is for the federal government to commit to long-term, stable funding for universal, affordable, high-quality child care across Canada.

I want to emphasize that the changes to EI parental benefits proposed in this bill are really no substitute for concerted action to address the child-care crisis in Canada. We look at many of these changes as boutique changes to EI.

In our view, the proposal to allow EI-eligible parents to choose to receive EI parental benefits over an extended period of up to 18 months at a lower benefit rate of 33 per cent of average weekly earnings is misguided and it sets a bad precedent.

The low EI maternity and parental benefit rate is already a significant deterrent to taking leave. Employees without union protections and who have been unable to bargain a top-up supplementary employment benefit are especially disadvantaged. What we do know is that mothers in unionized workplaces are more likely to take the maternity leave that they need.

In our view, the base benefit should not be lower than the minimum wage and should, in any event, be raised above the current 55 per cent. Certainly, there should be no option of a benefit rate that is lower than that.

In fact, the proposed lower benefit rate would constitute a significant cut in EI benefits if, for example, a parent choosing the longer benefit duration manages to find child care after, say, 14 months and opts to return to work early.

Under the government's proposal, some higher-income households may opt for the 18 months of parental leave, but lower- and modest-income households will have great difficulty accessing the extended benefit duration at the lower benefit level.

In any case, we're concerned about the consequences of extending parental leave for labour market attachment, especially for women, even if the only proposal in front you was extended unpaid leave under the Canada Labour Code. Research suggests that a woman leaving paid work for any purpose for 14 months or more significantly and permanently lowers the odds of regaining the same level of income, pension benefits and work opportunities that she would otherwise have attained.

In general, the federal government has offered little evidence that this proposal would actually benefit parents. On the other hand, there is significant academic research available on family leave, in particular on the relative achievements of Quebec's Parental Insurance Plan. We therefore recommend that the government abandon this initiative and instead take steps to study and adopt the superior features of the Quebec Parental Insurance Plan.

According to one widely cited study, 36 per cent of all mothers who live off reserve and outside Quebec do not qualify for EI maternity and parental benefits. In contrast, only 11 per cent of Quebec mothers fail to qualify for the Quebec Parental Insurance Plan.

EI's 600-hour requirement, equivalent to over four months of full-time work, is too onerous in a labour market rife with unstable and precarious employment. It is significantly above the $2,000 hurdle in Quebec, equivalent to 177 hours at minimum wage of $11.25. We therefore recommend that the eligibility requirements for EI special benefits be reduced to the lesser of 300 hours of insurable earnings or $2,000, which is the minimum earnings for the Quebec plan.

The CLC also supports the introduction of a second dedicated parental leave to foster a more equitable distribution of caring duties between parents. International research confirms the positive impact on gender equity where countries provide dedicated leave for the second parent.

The Budget Implementation Act also allows maternity leave benefits as early as 12 weeks prior to the expected week of birth. In our view, this flexibility does not replace the need for paid leave for protective reassignment for expectant mothers. Pregnant women may wish to remain at work, but if an employer is unable to modify work assignments or reassign the employee in order to ensure a safe work environment for the expectant mother, the employer should be required to pay the cost of the employee's leave.

We do want to express our support for the new EI caregiving benefit for up to 15 weeks. This will provide leave for a family member to care for a critically ill or injured adult. There will also be additional flexibility to share benefits and allow leave related to the critical illness of a child to be taken by a family member. The CLC seeks assurances from the government that the regulatory interpretation of "family member'' will follow the precedent established for compassionate care benefits in 2006 and include individuals considered like family, including a close family friend.

Finally, because of the complexity of EI special benefits, the CLC urges the government to ensure that an expanded number of public liaison officers be made available to help parents and their advocates to negotiate the complex rules surrounding EI special benefits. As I said earlier, there is more likelihood that a mother will take leave in a unionized environment, and that's because she has resources available to her in terms of staff and elected people.

We would say in this area that you're looking at today, but also in other areas that you're looking at in terms of education and training, that one of the things we find most lacking is consultation with the stakeholders, which includes employers, workers and the worker commissioner and the employer commissioner, because we strongly believe that must be done.

With that, I'd like to end my remarks. I'm hoping for a lot of questions from the people gathered here. Thank you.

The Chair: Thank you very much.

Senator Stewart Olsen: Thank you for being here. It's very interesting to hear from you. Can you elaborate on the lower benefit payout but extended? Does that actually work out to less than they get now? What does that mean?

Ms. Byers: What it means is people have to indicate that they're either going to take the 12 or 18 months. If you opt to take the longer benefit time, you're not getting your 55 per cent over 18 months; you're getting 33 per cent over 18 months. You're getting a lower benefit over a longer period of time, which means that people who are already having difficulty with the 55 per cent level are much less likely to be taking the 18 months. By the way, they're still not going to have the child care they need.

Senator Stewart Olsen: You mentioned the lack of consultation, so no stakeholders were consulted about this proposal or this change, to your knowledge?

Ms. Byers: Well, certainly when announcements were made, there were some discussions and occasional meetings after. Our concern with EI, as anybody who's dealt with it knows, is it is a complex system. Many of you, I'm sure, have been dealing with it in your offices, in your calls, and it's a complex system. It's like there are all these announcements that we're going to go to 18 months, we're going to do this, we're going to do that, and there hasn't been a fulsome discussion about what needs to be done to modernize EI and make it work for the current workforce.

There are these changes being made, but for what end, for how many people, when we also know that there are some big changes that are needed? We need better access for people. One of our major issues for a long time in the labour movement is to have a uniform 360 hours access across the country.

Could I say we've not been talked to at all? No, I wouldn't say that. What I would say is this requires more extensive consultation or you're going to get what I call boutique changes. Somebody notices a problem, and they make a change. Somebody else notices another problem, and there's another change. And you haven't dealt with the overall.

Senator Stewart Olsen: Thank you very much.

Senator McIntyre: Thank you for your presentation. The Employment Insurance Act is to be amended, as you indicated, specifically for those provisions dealing with four different types of special benefits: maternity, parental, compassionate care and critically ill child. I note it also proposes the creation of a new special benefit — critically ill adult. This is something new. Could you elaborate on that, please?

Chris Roberts, Director, Social and Economic Policy, Canadian Labour Congress: This leave is a new 15-week benefit, which is to provide leave to a family member to care for a critically ill or injured adult. There's also some flexibility introduced to share benefits and leave when it's the critical illness of a child. It can be taken by a family member.

The point made in our introductory remarks is that what hasn't been discussed, to our knowledge, is whether the expanded definition of family, to include like family or close relations, a close friend, even a sick neighbour, will apply to this new benefit as well. We see that as a definite improvement in the regulatory interpretation of "family member,'' and we would like to see that applied to the new 15-week benefit as well.

Ms. Byers: There's also a concern we have that because of the problems with people accessing EI, you may end up with someone who is a caregiver who can access EI that the person who is ill or injured cannot access. We're concerned about how those start to work together.

Senator McIntyre: I note that with respect to some of the special benefits, not only is the doctor involved but the nurse practitioner as well. Are you pleased and satisfied with her involvement?

Mr. Roberts: We think an expanded definition to meet the complexities and realities of families struggling with a critically ill or injured friend or family member is best. So, yes, we want an encompassing and expanded definition.

Senator McIntyre: In the final paragraph of your presentation, Ms. Byers, you're urging the government to ensure that an expanded number of public liaison officers be made available to help parents negotiate the complex rules around the EI special benefits. Could you elaborate on what you mean by "public liaison officers''? What difference would they bring to the system?

Ms. Byers: As I indicated earlier, all of you know that EI is a very complex system. People go and apply for it, but they don't understand it.It's not something that occurs in your daily lives or you hope doesn't occur a lot.

Public liaison officers would be bridges for people to work out some of those difficulties. We've certainly had them in the past. We've had them for particular work sites or kinds of work. This is going to be difficult for parents to figure out, "Okay, I have to indicate ahead of time how many months of EI I'm going to take and that's going to affect what my level is,'' and all sorts of things. What we do know is because of many years of cutbacks of the staff doing the work, there isn't that same ability to do that.

In some locations, we have the advantage, I guess you could say, of having unemployed workers help centres and so on. They're not government institutions or always well known. We need people to help others maneuver their way through a very difficult and complex system. I think a lot of people just give up. They just say, "I don't even know that I can appeal or how I can appeal or what I can do.''

So we need public liaison officers that can actually help the public with a program that they've paid into. It's their money, yet there's not the help there for them to be able to access their benefits.

Senator Dean: The liaison officer idea is an interesting one, similar to the system navigators we have in the health care system.

You've mentioned the issue of the 12 and 18-month periods and that if I elect an 18-month leave, I get pretty much the same benefit spread out over 18 months at a lower level. What happens in a situation in which I elect to take 18 months and drop to the 33 per cent level and, in month 11, I get to worry about the employability drop-off you mentioned at the 18 or 17-month mark? Can I switch back to the 12-month model?

Ms. Byers: My understanding with the way it is structured is that you elect before you start your EI benefits. You're electing for either the 12 months or the 18 months. If somehow you find child care, for example, and you decide you want to go back, well, you've elected to be on EI for 18 months at the lower level. To my knowledge, there's not a recovery.

Senator Dean: So it's inflexible?

Ms. Byers: Yes.

Mr. Roberts: The language in the bill is the election is "irrevocable.''

Senator Dean: Thanks.

Ms. Byers: Again, I don't want to miss this point. Part of the reason I think people were promoting 18 months of leave is really connected to the child-care issue. There was a group of Toronto mothers that had a website promoting this 18 months, but consistently they said there, "The reason we're doing this is because we can't find child care for infants. We can't find it, so we need something else.'' This may look like it's a solution, but it's not going to be a solution for most people.

The Chair: Ms. Byers, do you have any figures on the degree to which the current leave is used? And if so, would you have a sense of what the change might look like, whether there will be considerably fewer people taking up the 18- month option?

Ms. Byers: Chris is the numbers guy.

Mr. Roberts: There is good research in the context of comparisons between the Quebec parental plan and EI parental benefits outside of Quebec with respect to take-up. That breaks down by income, by educational attainment, by landed status and year of arrival for newcomers, et cetera. So there is good evidence with respect to differing levels of take-up generally with respect to maternity and parental benefits.

Regarding the 18-month extension, I'm not sure there is a good evidence base justifying this innovation. I have not seen good evidence that suggests that this will increase the take-up of parental benefits. In fact, what we know from the research is that a significant deterrent is the low income replacement level that currently exists. By reducing that further, it's likely to have the opposite effect. It's also likely, based on what we know thus far, to appeal to higher- income households that can already access parental benefits at a higher rate than modest- and low-income households. So the evidence I don't think is well established by any stretch that this is going to improve take-up.

Ms. Byers: If I could, there are a couple of other things that we might add. I think people make changes perhaps with the best of intent but it doesn't work out in terms of support. The previous government made a change that the self-employed could access a maternity leave, which looked great for people initially, and then they discovered that it really wasn't going to address their needs. They weren't going to keep paying into it, which was a requirement. The commissioners are here so they'll have the stats on that, but I don't think the take-up has been terribly huge in that area.

There is another piece that I think we still need some clarity on. In my previous life, I was the president of the Federation of Labour in Saskatchewan. When the 12-month change was brought in, all the labour and employment standards had to change to meet that in order that people had that right. I haven't seen a big groundswell of provinces saying, "We're changing our labour standards to allow 18 months.'' You may have somebody who has the right to take EI for 18 months, but they do not have the right under their labour standards to be gone that long.

The Chair: I sense the committee members have explored the issue and understand the points that you have made. They have read the document itself, so —

Ms. Byers: I'll just jump in because I have one thing that I thought I'd get to squeeze in.

The Chair: Well, you squeeze it in.

Ms. Byers: The whole question of leaves, particularly parental leaves, is very complex. People often don't know the rights that they have. There are two Supreme Court decisions from 1989. This only applies for women who have a sick leave plan with their employer. This again gets to this protective reassignment issue, which you haven't asked further about. In those cases, women have access to sick leave plans, and this is a decision between them and their physician, not anyone else. It was left with the College of Physicians and Surgeons in every province. The take-up of that has been very small because people don't know that's a right they have, an access they have. I think we're going to run into the same thing with EI.

The question is, do we want to make EI changes that are going to be useful for a large number of people, or are we going to do it just for those who might have knowledge and use it?

The Chair: I think you've made those points, and we understand the point you're making with regard to what it would take to do that and the reference to the Quebec situation.

Colleagues, I understand the commissioners would be prepared to join us to deal with Division 11 now and give us responses on this. I thank the commissioners for being willing to come to the table quickly. We'll hear your input on Division 11 now and then wait for your appearance on Division 14. Thank you very much for being willing to do so.

Basically, you heard the testimony. The reason I'm glad to get this stuff is that you just heard the testimony. I wonder if you would like to make some comments to us before our colleagues pursue some of the questions. You know what the questions are. Could you give us a brief summary from your point of view?

Judith Andrew, Commissioner for Employers, Canada Employment Insurance Commission (CEIC): Mr. Chair, members of the committee, good afternoon. I appreciate the opportunity to appear here today.

The commission counts over 75 years of tripartite oversight of the Employment Insurance system, and I'm happy to serve as a non-partisan representative of the employer interests on the commission. My counterpart serves as the Labour Commissioner.

A synopsis of the mandate of the commission and the commissioners' role in it is in your kits, as are some guiding principles on EI from employers, my office's budget bulletin as well as a study of maternity and parental top-ups.

On Division 11, my comments surround the EI parental benefits. Amid the many quite complicated amendments in Division 11 are the new flexibilities in EI parental benefits. The legislation now allows parents an irrevocable choice of two options: as currently provided, 35 weeks paid at 55 per cent, or 61 weeks paid at 33 per cent. Together with maternity leave, the options sum to one year and 18 months.

Many firms have trouble coping with 12-month leaves currently. They say that covering the work and finding a replacement for 18 months would be an even greater challenge. Business people are family people themselves, and while no one begrudges new parents having necessary time with their families, the job of covering off-work imperatives will be challenging for all but particularly difficult for small firms, the predominant size of enterprise in the country.

It should also be noted that the 18-month option means employers will shoulder additional and sometimes substantial direct costs, for example, for benefit continuation, vacations, pensions and EI top-ups. A key issue is the effect of the change on top-ups to the EI benefits, either negotiated or by policy. Topping up from 33 per cent for 18 months is quite a different proposition from toppling up 55 per cent for 12 months.

The information on maternity/parental top-ups that's available is now somewhat dated, but you would find this in your kit: a study entitled Employer Top-ups. It's from Statistics Canada from 2010. It shows that, in 2008, one in five beneficiaries received an employer top-up for an average of 19 weeks, but the study itself doesn't get into details of the agreed top-up calculations.

One would certainly hope that this amendment that's intended to offer flexibility to new parents, if passed, doesn't discourage employers from newly offering top-ups to EI benefits, and for those that do, that they be accorded sufficient time to reconsider or renegotiate based on the changed circumstances.

I would say that Division 11, together with the Division 14 amendment, has implications on the financing side for EI rate payers. Chair, would you like me to address this aspect now?

The Chair: I would like you to hold that until we have done 14.

Ms. Andrew: I've chosen to talk about parental benefits. There are many other enhancements in Division 11, and I would stand ready to attempt to answer your questions on them.

The Chair: Thank you very much. I know you heard the earlier testimony. One question that was specific is the question of whether an individual can switch out — let's suppose they've opted for the 18 months, but 11 months in, they decided they would rather change. The question was: Can they change? I think I know the answer, but we want to have it on the record.

Ms. Andrew: The officials are better placed to answer this, but they have given me a briefing note that says it's an irrevocable choice made at the outset. A person can choose, but once their claim is in pay, they cannot change after that.

The Chair: Thank you. That's the way I read the issue too, but since you're here, I wanted to have that confirmed in testimony.

Ms. Andrew: If I could say something else about that, I think one of the concerns employers had before seeing the legislation was that it would be entirely flexible at the option of the employee to decide to move in and out of the workforce, depending on their family circumstances. That kind of thing would be even more problematic for firms, from a payroll administration standpoint and from an operations standpoint covering the work. So the notion of people making a solid choice at the beginning was intended, I think, to respond to employers, but ultimately, it's challenging.

The Chair: I got that. Mr. Laliberté, is there anything you would like to add to this? We'd certainly like to hear from you.

Pierre Laliberté, Commissioner for Workers, Canada Employment Insurance Commission (CEIC): On that, there was a consensus that exaggerated flexibilities would create unfortunate situations in the workplace. That was heard by the government when they held their consultations. In that sense, the decision to go with the irrevocable choice and for a 12- or 18-month benefit is, I think, actually better.

But I would like to reiterate a little bit what was said earlier. In essence, this is really no gift to parents. It's basically just reshuffling what they already have.

Typically, when there are top-ups in collective bargaining agreements, they are usually fairly well specified. I cannot imagine that only but a small minority of people who have these top-ups would have a top-up from 33 to whatever. In that sense, I have a different sense of that possibility than my colleague here.

More generally, though, the issue at the bottom here is child care. Can someone who wants to go back to work after a maternity or parental leave find decent, affordable child care? This is a very weak answer to that problem.

Quite frankly, it would be very surprising; I think less than 10 per cent of parents will avail themselves of that option because, as was mentioned before, it brings your level of expected earnings so low that you really have to be rich enough to afford it, so to speak. The same goes for the other benefit.

Now, allowing mothers to leave the workplace, if they feel, as a preventive measure, this is a well-inspired notion. The way it's being done, it gives at least some power and entitlement to the expecting mother to make the decision that she thinks is best for herself and her baby. However, this is a health and safety issue. Dealing with it through Employment Insurance is a bit odd. She is entitled to 15 weeks. If she has to leave at 12 weeks before birth because she feels like her workplace puts her health and the health of her baby at risk, then she loses those weeks after birth, so it's not much of a benefit. Quite frankly, it would be better addressed through health and safety laws. Of course, if the federal government wants to do this across country, it can only address the 10 per cent of employees it has under the federal labour code. This is a very inadequate answer to a genuine concern.

On a more positive note, there is compassionate leave. The problem with the benefits that existed already was the poor take-up. Statistics show very few people avail themselves of the benefits for parents with critically ill children, so this goes some way to fixing some of the problems. In this case, there is flexibility, so the people you tend to need to be close to you, but they don't need to necessarily be family and they don't need to be certified to die tomorrow. The mechanics of just accessing the benefit have been improved. So we're hoping this is a benefit that will serve people well and will not be too difficult to access.

The Chair: What I sense from your contributions here, and the previous testimony, is that this was perhaps a well- intentioned situation to try to address an identifiable issue in society, but that there are some issues for both the employee and the employer. This involves challenges for employers with additional time and looking for replacements, that sort of thing. I can certainly understand why you can't switch in and out of it for those kinds of reasons. It's not that easy to deal with the workplace environment there. But I also understand the comments you made with regard to the likelihood of take-up under this consideration.

There was reference to the Quebec situation. Is it your observation, or from your knowledge of the Quebec legislation in this regard, do you feel it is clearly superior to what is being proposed here?

Mr. Laliberté: Depending on the point of view you have on the matter, I would say absolutely.

The Chair: From the employee's point of view? You would be less certain with regard to the employer?

Ms. Andrew: Yes, from the employer's standpoint, that wouldn't be the model to follow except perhaps the administration.

Mr. Laliberté: The Quebec model is also funded through payroll taxes and through the tax system. Self-employed people pay when they file their taxes. Part of my point is it borrowed from what we know from EI and it covers a greater range of the income stream, not stopping at $51,000 and going to over $80,000. Right there, it has the makings of a more generous system to start with, and then because it covers the self-employed through the tax system, it's more equitable that way and it doesn't penalize people just by virtue of being an employee or self-employed.

Ms. Andrew: But it doesn't extend to 18 months.

The Chair: You will get a chance to update us if you think of anything else because you'll be coming back. I really appreciate you being willing to come forward with this and help us.

We welcome our next witnesses. We have in the committee room with us, from the Canadian Federation of Independent Business, Monique Moreau, Vice President, National Affairs, and by video conference, all the way from Newfoundland, we have Nora Spinks, Chief Executive Officer, Vanier Institute of the Family. By tradition, we invite our video conference witness to present first to make sure that the electronics hold long enough to at least get the testimony in place. Ms. Spinks, I will invite you to present to us.

Nora Spinks, Chief Executive Officer, Vanier Institute of the Family: Thank you so much. It is a pleasure to be here and I apologize for not being able to be with you in person today.

My name is Nora Spinks, and I am the CEO of the Vanier Institute of the Family. We are a research and education organization. We are a national resource serving Canada for over 50 years. We seek to understand how families interact with, have an impact on and are affected by social, economic, environmental and cultural factors.

I'm very pleased to appear before you today on the issues addressed in Division 11 of the Budget Implementation Act.

Regarding the recent budget entitled Building a Strong Middle Class, from our perspective, it really was a families- in-Canada budget. There are many provisions in this budget related to families, including what we will be talking about here today, namely, new and expectant parents. There have been other statutes within the budget related to individuals and couples accessing reproductive technologies, families seeking to hire foreign caregivers, families experiencing separation and divorce, family caregivers, families requiring home care and mental health services, military and veteran families, including those experiencing PTSD, medically released veterans and their families, First Nations and Inuit families and families affected by incarceration, just to name a few. I could comfortably speak to this budget for seven hours, let alone seven minutes, so I will focus specifically on Canada's family-related benefits under the Employment Insurance program.

There are three main benefits to this program: income security, labour force attachment and the parent-child relationship, parent-child attachment and healthy child development. I will focus on three things specifically: flexibility and choice, duration of benefits period and accessibility. I will provide you a bit of context so as you go through your deliberations there is a sense of where this all fits in the grand scheme of things. I will be sharing with you some numbers out of our recently released "A Snapshot of Women, Work and Family in Canada'' and our "Fifty Years of Women, Work and Family in Canada.''

To put some context here, 82 per cent of core work-age families aged 25 to 54 are in the paid labour force. That is up from 35 per cent in 1965. That's also the core childbearing age or parenting age. Interestingly enough, we are seeing first-time new moms over the age of 40. Don't forget those as you're thinking about new and expectant moms. The employment rates of this group vary based on immigrant status, or Aboriginal identity, or those living with disabilities, all of which have a lower employment or labour force participation race.

On average, women without children earn 12 per cent more per hour than those with children, so there is a mommy "tax'' that needs to be considered when we look at income security measures. Nearly one third of women aged 25 to 44 are employed part-time and they're saying they are part-time in order to care for their children. Seventy per cent of mothers with children aged 5 or under were employed in 2015, and that's up from 32 per cent in the 1970s. Eleven per cent of all new mothers inside of Quebec and 36 per cent of new mothers outside of Quebec do not receive maternity or parental benefits at all. They're not eligible. Seventy-five per cent of working mothers with a flexible work schedule report that they're satisfied with their work/life balance.

Now, when we're talking about caring for a new baby, it's not just a women's issue and it's not just about mothers. It's also about fathers, partners and grandparents. In our soon-to-be released snapshot of men, work and family, we're reporting that the labour force participation of core working-age men is down slightly since 1976, but those living with a disability are higher and those with immigrant status, our recent immigrants, are also higher. The employment rate of this same age group reporting an Aboriginal identity was 72 per cent recently, compared with 85 per cent of non- Aboriginal counterparts. When we're looking at these new provisions, we need to consider these groups that aren't necessarily being served.

One interesting study showed that 4 in 10 surveyed men say they would prefer to be a stay-at-home parent and more fathers are taking time off to care for their newborn children — 3 in 10 across Canada, when you look at the aggregate numbers. However, when you look at Quebec, the share of Quebec dads who reported that they claimed or intended to claim parental benefits in Quebec are up from 28 per cent in 2005 to an astonishing 86 per cent in 2015. Outside of Quebec, those numbers drop dramatically, to about 12 per cent. Half of recently surveyed fathers in Canada said they would consider making a job change if they had more family-friendly benefits with a different employer.

I now want to focus on three things quickly: flexibility, duration and access. Regarding flexibility, certainly the introduction of more flexibility as to when you can start your leave will be of value to families in Canada, but there's already confusion about the special benefits and this may increase confusion. Careful communication is needed with respect to how families learn about any changes that are taking place and to be clear that it's not an additional 12 weeks but it is part of the envelope. The other thing that's important about families who may choose to accelerate the start date is that they need to understand how that could possibly impact their child care options when they return prior to their child's first birthday.

The second thing I want to talk about is duration. When we look at the benefits envelope, currently it's 12 months; in future it will be 12 months or 18 months. There are two groups of particularly women who are disadvantaged by both of those options. What they're looking for is actually a compressed benefits period where they would get, say, 75 per cent over six months so that they would be able to have income security and income stability during those first six months. That appeals to two groups. First, it benefits those from low-income, who tend to return to work very quickly. It's tough enough to live on 55 per cent of your earnings if you have a middle income, but if you have a low income it's virtually impossible. Second, it benefits high-income women, who also tend to return sooner because of their career choices.

Lastly, I want to talk about accessibility. As Barb Byers mentioned earlier, defining family member broadly as "like family'' would be important for both the maternity benefits — or the parental benefits in this case — and the family care benefit. If you consider multi-generational households or single-parent households, if you are a new mom and can't take advantage of the full parental benefits because there isn't a dad to share that with, opening that up to a grandparent or another adult would also assist in that third benefit, which is the attachment and healthy child development of the child.

In closing, I want to mention the significance of the special benefits that we're talking about today and the importance of aligning those with flexible work arrangements, not only within the federal labour code, which is already in motion, but also, as others have mentioned, employment standards across the country, and to harmonize the benefits with the workplace — work and family or work/life programs such as top-up, or phased return, or gradual going off on a leave — and to encourage employers to look at employees who take family-related leave, whether it's caregiving, or maternity and parental, or paternity. This is really an opportunity for employers to enhance their workforce capability and expand opportunities for development, for learning and for cross-training, and it's not all negative for employers as well.

The Chair: Thank you very much.

Monique Moreau, Vice President, National Affairs, Canadian Federation of Independent Business: Thank you for the opportunity to be here today to share CFIB's perspective on EI parental leave benefits and compassionate care benefits. You should have a slide presentation in front of you that I'd like to walk you through for the next few minutes.

CFIB is a not-for-profit, non-partisan organization representing more than 109,000 small- and medium-sized businesses across Canada that collectively employ more than 1.25 million Canadians and accounts for $75 billion or nearly half of Canada's GDP. Our members represent all sectors of the economy and are found in every region of the country.

Collectively, Canada's SMEs employ 70 per cent of Canadians working in the private sector and are responsible for the bulk of new job creation. Addressing issues of importance to them can have a widespread impact on job creation and the economy.

As you see on slide 3, one of the surveys CFIB conducts is our monthly business barometer. Our latest barometer from the month of April shows that small business confidence has gained a point and a half to finish the month at 64.4, its best level since November 2014. Ideally we want to see this index between 65 and 70 when the economy is growing at its full potential. Senators should have the fulsome barometer with them as well.

We also survey our members to get a sense of what their high-priority issues are. On slide 4, you'll see that they have identified the total tax burden, followed by government debt and deficit and government regulation and paper burden or red tape as their top three priority issues. Employment Insurance is on the minds of 46 per cent, or nearly half, of small business owners surveyed.

Before getting into a discussion on maternity, parental and compassionate care benefits, we thought it would be helpful to set the stage on SME perspectives related to EI more generally. Small business owners generally support the EI system and the concept of helping Canadians during periods of unemployment. However, EI is a significant payroll tax that small business owners must pay regardless of their business's profitability.

Canada's employers contribute 1.4 times the EI rate compared to employees, making them the major contributors to the EI system. SMEs are also more labour intensive when compared to larger businesses, and payroll taxes tend to have larger impacts on the smaller businesses.

Overall, small businesses are supportive of some of the special benefits that are financed through the EI fund, as you can see on slide 5. Nearly two thirds of respondents to our survey on EI and service quality support maternity and parental leave benefits. Support for compassion care and sickness benefits is not far behind, with 58 per cent of our members in support.

As I said, small business owners tend to be supportive of EI and they are generally also compassionate in the EI system's assistance to employees and their families during times of critical illness. Many small business owners already accommodate employees requiring extra time or flexibility to manage a critical illness in the family. As you can see on slide 6, 58 per cent either strongly or somewhat support improving the flexibility and accessibility of compassionate care benefits.

Where we would like to advise caution is when it comes to the eligibility requirements of these compassionate care benefits. We want to ensure that while making the benefits more flexible and accessible to those with a legitimate need, we do not open the floodgates to all types of requests that would potentially place a severe strain on the system and make it difficult for employers to accommodate.

I'm going to turn now to the EI system as it pertains to maternity and parental leave. It is imperative that, as policy- makers and legislative decision-makers, you recall that employers pay nearly 60 per cent, or 7/12th, of the EI benefits. As you can see on slide 7, while EI rates for 2017 came down for the largest of businesses and employees, they actually rose by four cents per $100 of EI assessable payroll for the smallest employers. This is because the small business job credit was not renewed beyond 2016.

Further increases are on the horizon. Budget 2017 has predicted that EI rates will increase by 7 cents for employers, bringing the rate to $2.35 for 2018. Unlike CPP, where the cost is split equally between employers and employees, the majority of EI remains squarely on the shoulders of employers, many of them small.

When polled in our survey in 2016, as you can see on slide 8, only 28 per cent or just over one in five small business owners were in favour of extending EI parental leave from 12 to 18 months. There are many reasons why the absence of an employee who is on maternity leave may be difficult and costly for small businesses to manage.

The average number of employees our business owner members have is 11. Many of them have even less. In a small business, the limited number of staff makes cross-training and coverage difficult. Being off work for 18 months may mean the employee needs retraining when they return. The cost to employers to retrain these employees can be very significant. Our research shows that small businesses already spend nearly $14 billion a year on training, approximately $9 billion of which is informal, on-the-job training that goes unrecognized by government.

You will be receiving a brief from the Canadian Payroll Association with very detailed information as to the costs involved in making these changes to payroll providers. As they point out and we support, we strongly encourage the government to consider whether there will be sufficient take-up of this plan to justify the administration, processing and system costs to employers, payroll service providers, software developers and Service Canada, especially at a time when government is reviewing the service quality of the EI program.

To this end, CFIB strongly recommends that the federal government maintain the current 12-month benefit period.

We can give you reams of data and research, but we thought it might be most helpful to you to hear from our members directly. You'll see on slides 9 and 10 that we've included comments from our members who voiced their concerns about the difficulties they are currently having with managing the 12-month leave period, as well as their thoughts on the extension to 18 months. I won't read them all, but I thought I would highlight the story of one retail member who has 16 employees in a small town in southern Ontario. He writes:

I have two employees that have worked for me for over 10 years and one employee did two back-to-back maternity leaves and the other did three maternity leaves over a four-year period. I'm a small business and this hurt my business very much and caused a lot of stress and issues for the other employees. I even had three employees quit because of these issues. One had a breakdown and had to take six months off due to stress leave and then quit. A one-year maternity leave may be very good for those on maternity leave but for small business owners it's hard and extremely stressful to manage.

As expressed through the comments above, small business owners understand the importance of accommodating new parents as they care for their children; however, they also find that the EI parental benefits are already quite generous. It is challenging for a small business to accommodate a leave of 12 months. Prolonging the benefit period would be even more onerous to manage. In areas where shortages of labour are acute and employers are already struggling to fill open vacancies, an 18-month leave may make it next to impossible to fill the position during the employee's absence.

CFIB does not support the extension of parental leave benefits to 18 months but, should the government proceed with this policy, we recommend a number of changes to bring some fairness to the EI system. Some of these suggestions and the support our members have for them are highlighted on slide 11. The top three initiatives include refunding over- contributions paid by employers, supported by 94 per cent of small businesses; setting equal EI premium rates between employers and employees, supported by 87 per cent; and reintroducing the small business job credit, supported by 78 per cent, or some variation of a credit to recognize the efforts the small businesses go through to train employees.

I should note they were very supportive of the EI credit to hire youth that was introduced in the Liberal platform just after the election, which we've seen disappear since that time.

We conclude on slide 12 with our summary of recommendations. When it comes to compassionate care benefits, we advise caution, although business owners are generally supportive. With respect to maternity and parental leave, we ask the government to reconsider the proposal to extend the length to 18 months. We note that proposed changes will have a severe strain on business owners trying to accommodate the generous leave system that exists in Canada.

In the event the government moves forward with these increases, we ask for compensating measures to small business owners, including a permanent lower rate for small business, moving to a 50-50 split in premiums and some kind of training or hiring credit for employers hiring youth.

Thank you for the opportunity to be here today. I look forward to answering your questions.

[Translation]

I would also be glad to answer any questions you have in French. Thank you.

[English]

The Chair: Thank you very much.

Colleagues, we have one witness by video conference. When you ask a question, please don't just throw it out and say, "Which of you wants to respond?'' Please direct it. In the event you direct it to the present witness, I will always ask the witness by video conference if she wishes to come in, and vice versa.

Senator Stewart Olsen: Thank you both for your presentations. Ms. Moreau, you suggested that uptake may not be sufficient to justify the changes to the system already existing. Can you elaborate on that for me because I'm not sure what would be involved for small businesses?

Ms. Moreau: The small businesses that rely on Canadian payroll providers will be waiting for those payroll providers to do the technical adjustments needed for their software and then pass that on. If they're doing it by hand, there's going to be a learning curve for them in order to accommodate any changes that will be made. That's the sort of small rocks, if you will.

For people paying into the EI system and are seeing EI rates increase over the next year, starting in 2018, and have been feeling increases this year as well, they do have questions about whether there's more need from a government- wide perspective to administer costs that would be involved in creating and adjusting their own internal payroll systems and accounting software, et cetera, that would be involved in making sure Canadians receive the benefits if they so choose to use them.

Senator Stewart Olsen: Do you have an estimate of roughly how much the software would cost? I know that's a hard question, but just so I can grasp what it would be.

Ms. Moreau: That piece I don't have, but I would turn you to the Canadian Payroll Association. This is what they do. They have a submission in to your committee, and they would be the best ones to answer those kinds of technical details.

Senator Stewart Olsen: Thank you.

Senator Woo: Thank you, witnesses, for your testimony. I have a question for Ms. Moreau on the trade-off between, on the one hand, reducing, perhaps, the extension of maternity and parental benefits from the maximum of 18 months now proposed in legislation versus the other measure, which you have highlighted in your recommendations from your membership, which is to increase the share of employees contributing to EI benefits. They both work in the same direction, broadly speaking. Could you give us a sense of the relative importance of one over the other, the length of parental benefit leave versus giving a higher weight of contributions to employees?

Ms. Moreau: On a variety of benefits that come through the EI system, employers would like to see a shared cost. In the 1980s, I believe it was, the government actually played a role in this. It used to be that employers paid 40 per cent, employees paid 40 per cent and the government paid 20 per cent. When they removed themselves from that equation, they put the bulk of that onto employers.

There are a variety of reasons for that, and we could get into a whole other session on that, but the point is that for many small business owners, when they see rates go up, and some of the other pieces I spoke to, including over- contributions, they don't get any of the money back, whereas employees do if they over-contribute. Employees do benefit from parental leave, compassionate care and sickness benefits; the list is quite lengthy.

Employers pay into that, and they don't necessarily receive the funding that could come back to them. Training is one piece that's often touted, but much of the training that's offered by government either goes unknown by business owners or, as I mentioned, they don't qualify because the training they're doing is on the job. When they're taking someone experienced off the line to train a new person, that doesn't get you a certificate from a college or something that you can then take back to government and say, "Can you please recognize the efforts?'' That's why we've had various credits over the years and a lowering of the overall EI rate for small businesses, to recognize that attachment to the labour force and the effort they play in it.

Senator Woo: Maybe it's an unfair question, but if you were to choose between shortening the benefits period versus increasing the contribution rate of employees, would there be a choice you're willing to vote on?

Ms. Moreau: I'd have to go back to my members, but if I had to guess, I suspect the vast majority of them would prefer to share the costs of the contributions equally between employees and employers. There is support for that already through the way the CPP system is managed.

Senator Woo: That could be a solution going forward.

The Chair: Senator Dean, do you wish to come in on this? You're good? Well, I think, speaking to both of you, we understood you very clearly. Ms. Spinks, you gave us a bit of an overview of the context, as you put it, of this in the larger framework, but in the end it still comes down to the specific issue we're wrestling with here. Ms. Moreau, you made those things very clear.

A couple of things that I thought were interesting in your comments, Ms. Spinks, include the necessity of a clear explanation to potential beneficiaries of any changes. Certainly in this area it's going to be critical. I certainly understand where that is coming from. I think that's something that is really important. I'm going to come back to you on that in a second.

I thought your suggestion that a third alternative be presented was interesting, and that is the idea of 75 per cent over a six-month period as opposed to the 12- or 18-month kinds of situations. On that particular one, Ms. Moreau, would you have an opinion on the idea of reducing the length of time to six months and having a higher benefit rate to the employee?

Ms. Moreau: We're survey research-based, so I'd have to get a mandate from my members on that position.

The Chair: I totally understand that. We're not asking for you to speak on behalf, but just to give an opinion from your point of view, with regard to that issue.

Ms. Moreau: I think if it were an option that employees were willing and interested in taking to return to work more quickly, that would still leave the employer with a gap in terms of trying to find someone for a short contract, but on the other hand, it may facilitate a return to work for an employee who won't lose touch with the training they have. I suspect there might be some support for that. Again, we'd have to test it.

The Chair: I'm glad you answered that way, because what you indicated is that it is not a clear-cut situation, because finding a replacement is one of the big issues for the employer, and perhaps a shorter time frame is more difficult to find a replacement for. That adds a balance to the overall issue.

In your remarks, Ms. Moreau, I sense that overall, as Senator Woo asked you specifically, the increase of employee share of the EI is a big issue for the employers and SMEs. We clearly got that message from you.

I'd like now to go back and give each of you opportunity for a final comment. I'll go to Ms. Spinks first.

Ms. Spinks: Thank you. In my experience, when maternity/parental benefits extended from the old six months to the twelve months, there was a lot of confusion and it took a while to get everybody back on track. It was critically important to hear the communications. Clearly, the benefits and payroll people need to be involved right away, then human resource professionals, then owners, operators, managers and team leaders. It really needs to be staged, as well as communicating to new and expectant parents.

When we introduced the compassionate care benefit for the first time, there was a tonne of confusion. There wasn't a really comprehensive rollout in the new information, and it contributed dramatically to the original low uptake of the program. People aren't going to take it up if they are not even aware that it exists.

I think what's really important here, particularly with the new caregiver benefit, is that we take some time to really be careful, thoughtful and strategic about the communications associated with this and that government partner with the appropriate groups and stakeholders that can help get the message out clearly, consistently and comprehensively.

I think in terms of replacement, it really depends on the job and the industry whether filling a one-year contract is easier than shorter contracts. It really depends on the job, the work and the career. Having said that, there are a lot of people in this country who have built a career around doing one-year maternity leaves, going from one employer to another covering maternity leaves, and it gives some people a really great opportunity for diversity and work experience, to be able to use their skills and talents and to have flexibility in their own career path.

We have to be careful that we don't superimpose our unconscious biases on what we might be thinking, so relying on real evidence, research and stories will be important as we begin to roll out the next phase of this conversation, whether it's implementation as we've been talking about or some modifications associated with that. The communication is going to be absolutely essential.

As somebody said earlier, linking this with the early learning and child-care strategy will be vital to ensure success for families, but also to ensure that when an employee does return to the workforce, regardless of whether that is 6, 10, 12 or 18 months, that the child-care is stable, consistent and reliable and in alignment with the work hours. I think instead of looking at this as just another silo but looking more holistically with a family lens will be important to ensure success.

The Chair: I think we've got it in terms of your points there. We're not going to go into the uncertainty areas on this; we're going to stick to the division before us, but your point is well taken. Ms. Moreau, may we have your final comments?

Ms. Moreau: Thank you, Mr. Chair. Just to reiterate what I mentioned earlier, small business owners find the current program difficult. They do find it costly to manage; there are costs involved with retraining people when they come back. If they're in an area of economic difficulty, where the shortage of labour is acute, that presents additional challenges to filling positions to replace those individuals.That's if one person leaves at a time. When they're the owner- operator of a small business and people leave two, three or four at a time or within a short period of time, that can present acute problems for the business owner in terms of management, especially if those individuals are highly trained and difficult to replace.

I did highlight our recommendations. I don't think I'll beat that dead horse again, so to speak, but at this point I think it's important for small business owners to see their needs and experiences reflected in government decision- making, which at this point, with an extension to 18 months, I don't think they do.

The Chair: Thank you very much. I want to thank the witnesses for agreeing to appear before us.

For our next panel, we welcome back our two earlier witnesses. This time we'll ask them to comment for us on Division 14, and, of course, you could start by adding any additional comment with regard to No. 11. We will reverse the order of speaking and go to Mr. Laliberté.

[Translation]

Mr. Laliberté: Thank you. I would like to begin by commenting on the support measures, overall, given that we talked a little bit about Division 11 and are now discussing Division 14. Broadly speaking, I want to point out that only 3 per cent of the new money being invested, funded by EI contributions, is allocated to regular benefits, in other words, the benefits workers receive when they become unemployed. In the current context, many workers who have paid, or are paying, into the EI system do not have access to EI benefits when they lose their jobs. It is important to keep in mind that 40 per cent of workers who have paid into the EI fund do not qualify for benefits when they lose their jobs. In our view, the priority should be on helping workers in those situations, because that is the primary function of the EI regime, in contrast with so-called complementary functions, which have been incorporated into the system over the years.

Although the government is making a commendable investment, through this budget, in a range of benefits, it is unfortunately neglecting the first mission of the EI regime. While I did say that only 3 per cent of the money was going to regular benefits, please don't quote me on that, given how difficult it is to reconcile the numbers in the budget with the various support measures and benefits. Regardless, we are certainly talking about a very low percentage. I wanted to make that clear from the outset to draw your attention to the fact that a major problem still exists in terms of Part 1 and regular benefits, and that problem was not addressed. That is the missing element today.

Division 14 does, nevertheless, set out a significant investment: a commitment tied to EI contributions of $1.2 billion over a number of years. That ultimately accounts for the bulk of the EI increase sought. It is worth noting that, despite being significant, the sums invested are not huge; the consensus is that substantial investments are necessary to address the training needs of the workforce. The main problem in Canada as regards the federal government is that much of the funding invested in workforce training and training programs is actually money transferred to the provinces and territories under the guise of training agreements. The lion's share of that money comes from EI contributions, two thirds, in fact. The problem for the provinces is that they have to reconcile the source of that money — insured individuals who have made contributions in the form of premiums — and the desire to use the money to support those who are most vulnerable and most in need of job training. The money comes from a fund that has stated objectives and principles to be followed, and is to be received by provinces wanting to use it very liberally, and rightfully so, because the needs are not necessarily tied to recipients of EI. My question, therefore, is this. If the idea is to give the provinces maximum flexibility, would it not be a better idea for the government to use the consolidated revenue fund for these transfers, rather than EI contributions? Would that not be the better option if the objective is really to give the provinces and territories maximum flexibility in granting this funding? I will let you answer that.

The other aspect I would like to draw your attention to is the fact that the money comes from the contributions of employers and workers, as was said. The money is then transferred; the money under Part 2 of the employment insurance program is transferred through agreements with the provinces, but without any accountability to stakeholders. In other words, none of the provinces, except for one, has any sort of accountability to employers, workers or other stakeholders. Every government has some form of accountability, but it is our view that, because of where the money comes from, stakeholders should benefit from mandatory consultation and accountability on the part of all provinces and territories. In short, the EI transfers to the provinces and territories should be subject to these criteria.

I would now be happy to answer your questions. Thank you.

[English]

The Chair: Thank you very much.

Ms. Andrew: Thank you, Mr. Chair. I will speak about Division 14 a little more specifically but probably somewhat along the same lines as my colleague.

I'm looking at the much enlarged definition of "insured participant'' under section 58 in the division. This definition gives access to provincial- and territorial-delivered programming funded by EI premiums at some $1.95 billion base funding plus increments that came through the 2016 and now announced in the 2017 budget.

The definition for the access to training and other support measures has actually been expanded in recent years, going from strictly EI eligible to allowing reach-backs to previously eligible claimants, and at first this was three years and five years for someone who had been on maternity and parental and subsequently five years for all. So someone who had been previously EI-eligible within the last five years could avail themselves of the LMDA-funded programming at the provincial-territorial level.

In this amendment, the eligibility definition is being changed to a contribution basis with the entitlement standard set at minimum contributions to EI in 5 of the last 10 years. So someone who has contributed at least the minimum in 5 of the last 10 years, who wouldn't be eligible to receive EI benefits, can in fact avail themselves of EI-funded programs delivered by the provinces and territories.

It's my understanding that when so-called developmental uses of EI were first introduced, the policy idea was to shift EI claimants from being passive benefit recipients to participating in active measures, for example, training, that would permit them to reorient their careers and get back to work, thereby contributing to rather than drawing from EI. The proposed eligibility definition expansion further strays into the territory of training initiatives for individuals who do not have a strong attachment to work, which arguably has a stronger rationale for taxpayer funding, not EI ratepayer support.

So between the Division 11 and Division 14 changes, there are some significant implications for EI ratepayers, and this does echo some of what Ms. Moreau said for the CFIB. The EI special benefits changes as well as increments to the EI-funded Labour Market Development Agreement transfers to provinces and territories are reckoned by the actuary into EI rate setting.

The Department of Finance has projected a rate increment of 5 cents per $100 of payroll for employees to $1.68 per hundred, and that's a 7-cent increment for employers to $2.35 per hundred. Employers pay, of course, 1.4 times what employees pay. That's in the finance department's EI operating account projections in the 2017 budget. If you would like to look at this, it's on the last page of the commissioner bulletin that you have in your kits. The total premium levy on a job to the annual maximum when you add the two pieces together means it amounts to over 4 per cent, so it's a substantial levy.

It should be noted that payroll taxes draw down the resources employers have to hire and to develop their employees. Accordingly, I am hearing more calls from employers for relief on their share of the load, sometimes combined with a call for government to return to funding EI in respect of special benefits. I think the government withdrew entirely from funding anything in EI in about 1990, so that has been a long time that this system has been fully funded by employers and employees.

The Standing Committee on Human Resources and Skills Development, the HUMA Committee, in their June 2016 report to Parliament entitledExploring the Impact of Recent Changes to Employment Insurance and Ways to Improve Access to the Programinclude what I regard as solid recommendations:

. . . that Employment and Social Development Canada hold consultations with relevant stakeholders to determine whether all special benefits should remain part of the Employment Insurance program or be administered separately.

And:

. . . that the federal government explore mechanisms to see that funds collected for the purpose of employment insurance serve the needs of the Employment Insurance program.

My colleague and I are talking about the margins of the program and who finances it.

I appreciate your consideration of these submissions and again stand ready to attempt to answer your questions.

The Chair: Well, it's clear that this is a very simple issue. One thinks one understands it at first read through, the general aspects of it, and then when you begin to see the interlocking issues here, it's interesting. Fortunately, in the end, we're going to be required only to make comments on the specific request, but we're getting a fairly full context here.

Senator Woo: You have spent a lot of time and energy coming here, and my question may be ignorant, but I want to understand better this idea of targeting EI premiums and payments for EI purposes. You talked about moving away from the passive philosophy of EI payments as simply compensating them for being unemployed to more active measures that help unemployed people get back to the workforce.

I take it you see that as a desirable or positive direction? If so, I don't understand why you would say that the extension of benefits to a larger pool of eligible claimants having contributed a minimum amount, 5 out of 10 years, would not fall under the category of promoting more active participation in seeking work? Did you understand my question? I didn't word it very well, I don't think.

Ms. Andrew: I do. I'm distinguishing here between people who are EI eligible, who have worked the requisite number of hours under the variable entrance requirements and contributed to the system to a great degree so that if they fall unemployed they would be entitled to benefits, versus a second category who has made a minimum contribution but they're unemployed and they're not entitled to benefits. The notion of developmental uses of EI was to try to get people who were on EI benefits retrained, back into the workforce. We're talking about a different category of people. Potentially they might not have worked in the last five years, for example. They might have worked in years 5 to 10. Do you see what I mean?

Senator Woo: I understand.

Ms. Andrew: It's a question of how much of the overall unemployment EI ratepayers should shoulder, and that's why the recommendation to devote EI monies to the needs of the EI program comes to the fore.

Senator Woo: Mr. Laliberté, do you have a comment?

Mr. Laliberté: Ms. Andrew just laid it out quite well. Everyone agrees that these needs need to be addressed. For historical reasons, the federal government has chosen to use EI as the way to finance most of these things.

EI is regressive taxation, so that's one thing we need to take into account when we think of it. The other is what I mentioned earlier: In the universe of all things that are financed through EI, the core item is really income support when you lose your job, and that has been inadequate for now two decades. So you would think that you would want to tend to that situation in an urgent manner.

Ms. Byers earlier was referring to boutique benefits. Yes, there is a little bit of that going on, and it's a little unnerving. Just seeing that we address the core mission, first and adequately, would be a very good idea. When it comes to funding broad training and all this, we're for it. But is financing it through EI the best way?

Senator Woo: Thank you very much.

The Chair: We're going to bring in the additional support we have for information on this division.

Colleagues, this first group of officials is going to deal with Division 11 only. That's my understanding. We have two more officials in the wings who will come up afterwards and deal with Division 14. That's my understanding. It's further my understanding that Mr. Brown will be speaking, and his colleagues are available to assist with questions.

To you as a group, based on the testimony we've had to this point, we've had a lot of discussion of the entire programs of EI and its wide ramifications and so on. I want to encourage you to speak directly to the issues in this particular division. We have been saturated with the wider issues of the total programs, and it's going to be helpful to us now to come directly to Division 11 and your views in that regard.

I will turn it over to you, Mr. Brown. After you complete your remarks, my colleagues will put any questions they have for you.

Andrew Brown, Executive Director, Employment Insurance Policy, Employment and Social Development Canada (ESDC): Thank you, chair. Good afternoon. I'm the acting director general for Employment Insurance Policy. Joining me is Rutha Astravas, Director for EI Special Benefits Policy.

[Translation]

I am going to talk about the proposed amendments to the Employment Insurance Act intended to give greater flexibility to parents and more inclusive benefits to caregivers.

[English]

As you've heard, I'm sure, Employment Insurance is Canada's largest labour market program, providing support to workers when they lose their job through no fault of their own. Those are known as the regular benefits. In specific situations that occur over the course of one's working career, the EI program provides supports known as EI special benefits. That's where the focus is today.

First introduced in 1971, special benefits have evolved and expanded over time. They play an important role in helping individuals to balance their work-life responsibilities, and they include maternity, parental, caregiving benefits and sickness benefits. In terms of the maternity, parental and caregiving benefits being touched by these budget changes, in 2015-16, 379,000 Canadians received these benefits, representing a total of $3.8 billion.

Last fall, the government launched online consultations on the prospect of providing more flexible maternity and parental benefits as well as more inclusive caregiving supports for Canadians. Minister Duclos also held a round table in November with key stakeholders, including members of the business and labour communities; academics; caregiving groups; as well as health charities such as the Canadian Cancer Society and the Multiple Sclerosis Society, to help inform the way forward on these particular commitments.

The budget implementation act introduces a number of changes to provide additional flexibility and supports for families that I'll briefly outline.

First, the bill introduces a new 15-week EI caregiving benefit. Eligible caregivers would be family members who are away from work to provide care for a critically ill adult, such as someone recovering from a serious accident or illness. In the unfortunate event that a family member's condition deteriorates to an end-of-life situation, caregivers would still be able to access the existing compassionate care benefit.

Second, the changes would provide more flexibility for families by allowing any family member who is eligible for EI, as opposed to only parents, to receive the existing 35 weeks of benefits to provide care for a critically ill child.

Third, in order to enhance access to all EI caregiving benefits, medical doctors and nurse practitioners will be allowed to issue the required medical certificates. This measure will enhance access for Canadians, especially those living in rural or remote regions.

These enhancements to the caregiving benefits are expected to benefit up to 24,000 families annually.

Fourth, the bill also introduces changes to EI parental and maternity benefits in order to offer biological or adoptive parents more choice and flexibility according to their family needs. The bill proposes new flexibility for parents welcoming a newborn or newly adopted child to have a choice to receive the standard duration of parental benefits as currently provided over 35 weeks paid at 55 per cent of their average weekly insurable income over a 12-month period or to opt for an extended duration of 61 weeks of benefits paid at a lower 33 per cent replacement rate over a period of 18 months.

Fifth, pregnant women in the workforce will also have more flexibility to access maternity benefits, as early as 12 weeks before the expected week of birth as opposed to the current eight weeks. Providing earlier access to maternity benefits will allow pregnant workers to better take into account their particular health and workplace circumstances.

Taken together, these changes are expected to have a positive impact on women in particular. Indeed, in 2015, among recent mothers with insurable employment, 87 per cent received maternity or parental benefits across Canada.

The bill ensures that the same changes that apply to insured workers will also apply to self-employed workers who opt into the EI program for special benefits, and it also adapts existing EI rules to clarify when and how EI special benefits may be combined.

[Translation]

The proposed changes will have no direct impact on Quebec residents, given that the province currently provides maternity, parental and adoption benefits through its parental insurance plan.

[English]

The changes to the caregiving benefits would apply to Canadians across the country.

The proposed amendments for more flexible EI parental and more inclusive EI caregiving benefits represent an incremental cost of $886 million over five years and $205 million per year ongoing.

As per the Employment Insurance Act, these costs will be charged to the EI operating account and recovered through the EI premiums.

All of these amendments would come into effect on the same day later in the 2017-18 fiscal year. The exact timing is to be confirmed and will be fixed by order of the Governor-in-Council.

[Translation]

I will now turn the floor over to my colleague, Margaret Hill, to discuss related changes to the Canada Labour Code.

[English]

Margaret Hill, Senior Director, Strategic Policy and Legislative Reform, Labour Program, Employment and Social Development Canada (ESDC): As Andrew reminded us, Division 11 proposes changes to both EI special benefits, as well as the Canada Labour Code, in particular, Part III of the Canada Labour Code. I'm here today to tell you a little bit about that.

I work in strategic policy and legislative reform at the Labour Program, and I'm here with my colleague Charles Philippe Rochon.

As you may know, Part III of the Canada Labour Code establishes minimum working conditions in federally regulated sectors. Those working conditions, the labour standards, are things like maximum hours of work, annual vacation and statutory leaves.

Federally regulated sectors include about 6 per cent of all Canadian workers, and they are people employed in industries such as banking, interprovincial and international transportation, as well as people who work in federal Crown corporations and in certain First Nations activities. In total, it's about 904,000 Canadians. Part III of the code does not apply to the federal public service.

In general, as Andrew said, when amendments are made to EI special benefits, corresponding changes are made to Part III of the code and the leaves that are provided under it: maternity leave and caregiving leave, as Andrew suggested. The reason this is done is to ensure that federally regulated employees can access EI special benefits and also access similar leaves under the code so their jobs are protected when they're taking the EI special benefits.

The essential idea is that federally regulated employees can take, say, maternity leave and that when they return to work, their job is there and they don't have to fear losing their job.

Amendments are therefore being proposed to the code to ensure that the existing leave provisions, specifically those related to maternity leave, parental leave, compassionate care leave and leave related to critical illness, are fully aligned with the proposed changes that Andrew has outlined.

The overall cost of implementing these changes in the code to the Labour Program is expected to be modest, about $400,000, most of which would cover training of labour program inspectors and producing educational materials to ensure that employees and employers are aware of the changes to the leave provisions.

The cost to employers is expected to be minimal, with the amount depending on the duration of leave that employees take and whether or not employers choose to pay overtime or to hire replacement workers.

Based on our analysis, stakeholder reaction is expected to be very minimal to these changes, and to date that remains the case.

Senator Stewart Olsen: Based on witness testimony before you all came in, there doesn't seem to be a lot of enthusiasm for the two-tiered EI benefit, the 35 weeks at 55 per cent or 61 weeks at 33 per cent for 18 months. Can I just get some reaction from you on that? Why would you do it if it doesn't seem anyone wants that?

Mr. Brown: We've certainly heard from a number of different stakeholders, and we've heard mixed reactions with respect to this flexibility for parents.

To the positive, we've heard from groups who have talked about the challenge in terms of finding affordable child care. Many are, in fact, also pushing for more affordable child care and for more to be done at the national level. Those same groups have indicated, though, that for some people, this will help them in terms of giving them an option to be providing care themselves for an 18-month period before more affordable child care tends to be available.

We've also heard, on the negative side, that the 33 per cent replacement rate is just not enough for many families, that it's not truly seen as an option. Some have felt that that could only benefit sufficiently well-off families.

I think it is also worth me pointing out that for low-income families that are currently able to benefit from the family supplement in the EI program, they will be able to receive that additional payment over a longer period of time, the full 18 months, if they fall into that group. So there is a little bit of assistance in terms of people choosing the longer-duration option, but I would say that's been the area of these proposals that's had the most mixed reaction.

I think, to speak to other stakeholders more broadly, there have been two other issues. Gender equality, some have said that the prospect of a woman being out of the workforce for a longer period of time is not desirable and so have flagged that that may not be the best route forward. We've also heard, I think, through those stakeholder roundtables that the employer community has noted that a longer duration of 18 months will be more difficult on them. They're used to the combined maternity-parental period of 12 months, but, over 18 months, those costs associated with a long leave would be increased.

There has been mixed reaction. I would note that, in terms of caregiving supports, we've had very positive reaction in terms of differing groups — caregiving groups, the health charities and so forth — that have praised the proposals in terms of providing additional supports for families.

Senator Stewart Olsen: Thank you. Some witnesses stated that they thought these are mostly boutique changes. I don't include the caregiver changes in that.

I have one more question on the 12-week access for women before they give birth. Along with the changes to EI, the ability to choose a longer period of time, have you considered that it may very well eliminate job opportunities for women? I would place that a bit high on my hiring ability if I were looking at hiring workers. I probably would hire a man over a woman of childbearing years. Have you considered that at all for small employers and businesses?

Mr. Brown: We certainly have heard from small businesses. We heard very specifically from the Canadian Federation of Independent Business, flagging concerns with an 18-month period of leave. You've only got a few employees in the situation. Perhaps you've got two employees off at the same time, and one of these leaves would be a very difficult-to-manage situation.

I think it's also worth noting that one of the things that had been talked about earlier and was part of the consultations was the idea of allowing workers to come in and out of leave over that 18-month period. That was one of the things that is not part of the budget proposal. It's more speaking about a block period of time. It's difficult to gauge, I would say, the impact it would have on employers in terms of their hiring decisions.

Senator Stewart Olsen: Thank you very much for that. I appreciate your responses.

Senator Dean: Thank you. We've been learning this afternoon how complex a field this is, so thanks for working on this. I have two quick questions.

One, we've heard, going back to the 12 and 18 months, of the hard election. It does sound like a tough choice, in particular the person who elects for 18 months, and then, around month 10 or 11, decides that maybe they're ready to go back. They've made their choice and chosen a lower benefit. There seems to be some risk of loss there. Did you consider that to be a more flexible choice? Is that administratively difficult? Why did you end up with the hard choice there?

The other one, very quickly, on unpaid leaves for caregivers, in some workplaces that is going to be easier than others to make that election. Can I take it that some of the Division 17 enhancements to Part 3 enforcement are related to that? Is that a reasonable assumption?

Mr. Brown: Do you want to start with the choice element?

Rutha Astravas, Director, Special Benefits, Employment Insurance Policy, Employment and Social Development Canada (ESDC): I'd be happy to answer part of your question. In terms of the hard decision, as part of the design, we looked at what other jurisdictions do when there is a choice. To note Quebec in particular, it was mentioned earlier by some of the witnesses that they do offer a choice of plan, and you must make a choice at the beginning. The choice is irrevocable.

In our case, we're looking at the same thing for several reasons. Because, in our plan, you may share your benefit across two parents, you have to be on the same plan. So, for the parent who makes the choice first and starts to be paid, in order to make sure that you're sharing the same number of weeks and that you don't get overpaid, you have to remain on the same plan.

In terms of other implications of having a hard choice, we heard earlier from other testimony that it's easier on employers to know exactly how long you'll be off. We did hear during our consultations that having a known and predictable block of how long the employee is off — because there is a statutory leave element — was important to them in order to administer other employees' leaves.

The bottom line here is that, yes, it is a hard choice, and once one dollar is payable of that benefit, you're locked in.

The Chair: Ms. Hill or Mr. Rochon, are you going to comment briefly on the other division?

Charles Philippe Rochon, Acting Manager, Labour Standards and Wage Earner Protection Program, Workplace Directorate, Labour Program, Employment and Social Development Canada (ESDC): On the question of Division 17, yes. Just to maybe give a quick overview, Division 17 in the Budget Implementation Act proposes a number of changes to the Canada Labour Code to improve compliance and enforcement tools. That includes a number of measures that will affect both Part 2, Occupational Health and Safety, and Part 3, Labour Standards.

Among these tools — and I'm not going to go through everything because I know your time is limited — basically, it will include a reprisal protection, allowing an employee to file a complaint if, by virtue of exercising a right under Part 3, they have been dismissed or demoted or faced other reprisals. So, from that perspective, yes, this measure certainly dovetails with protections around maternity, parental leave, leaves for caregivers. There are other measures in there, including the power to issue compliance orders, notices of violation and administrative monetary penalties in cases of violations. All of these measures, yes, will help to support and make it easier to enforce the new protections added to Part 3 of the code.

Senator Petitclerc: I have a question. I'm not sure that you will be able to answer it, but I'm interested in knowing a bit of the background for those changes. We've heard from different stakeholders. The one stakeholder we haven't heard specifically is women and mothers. They are the ones I kind of want to hear from, because, the way I see it, it is a choice. We hear about how maybe it's going to make the lives of employers, for example, a little more difficult, but, in the end, I feel it is also a big society choice in giving choices and flexibility.

I'm wondering if those decisions were made after consultation and how this came about. When I think about a lot of things we hear in terms of health and early childhood attachment, it seems in sync with a lot of that. I'm kind of interested and curious about the background.

Mr. Brown: I'll see what I can do in terms of responding there.

Senator Petitclerc: It was a large question.

Mr. Brown: If we think about the consultations that were held, they were really focused on the topic of flexibility more than anything else and looking at ways that we could help families in terms of flexibility.

The option of 18 months is something to help get closer to affordable child care. There are other things that it does. For example, if you have access to 18 months, there's a possibility that mom could take 12 months and that dad could take six months. It provides more time and allows different combinations and permutations for sharing.

I would say that overall it was focused on flexibility, which was a theme originating with the government. I think it was clear, though, through the consultations, we heard there were other things that needed to be addressed beyond flexibility. That's not what's here right now, but you may have heard some of the same earlier, people talking about access to the EI program more broadly or simply strengthening maternity and parental benefits, whether that is thinking about the amount that we provide in the benefit rate, or others who proposed a father-specific paternity benefit to encourage fathers or second parents more generally to be involved in the caregiving process to newborn or newly adopted children.

Other ideas emerged, but this is really focused on the subject of the consultations, which was flexibility. Flexibility responds to the fact that we see different compositions of families today from what we saw in the past. Work is changing as well, so people may have different work patterns in which more flexibility would help them to deal with that as well. Perhaps that helps give some background.

Senator Petitclerc: Yes, it does. Thank you.

Ms. Astravas: To add to the question of what mothers and women said, in the consultations we also heard specifically from the adoptive parents community, as well as the community of multiple births, those with twins and triplets. Both of those groups emphasized the need for access to more weeks of leave and more weeks of benefits. Within the consultation itself, we heard that while there was some concern about the replacement rate, some said having that time is more important because it was not accessible before.

The Chair: We're going to now change gears and bring in the next group. We want to thank you for clarifying this and being here today.

Colleagues, we have two witnesses. Mr. Shaw is going to make some opening comments. This will be focused entirely on Division 14.

Duncan Shaw, Director, Employment Insurance Part II Benefits and Measures, Employment Programs Policy and Design, Skills and Employment Branch, Employment and Social Development Canada (ESDC): The purpose of Employment Insurance Part II in the Employment Insurance Act is to help maintain a sustainable Employment Insurance system through the establishment of both employment benefits for insured participants and the maintenance of a national employment service. This is carried out through the establishment of employment programs, referred to as employment benefits and support measures, that help unemployed individuals in Canada prepare for, find and maintain sustainable employment. Back in the 1990s, that was more delivered by the federal government. Over the past 20 years, it's increasingly and then in 2010 fully delivered by provinces, territories and indigenous organizations.

Employment Insurance Part II allows for the support of similar employment benefits delivered both by provinces and territories through the labour market development agreements and indigenous organizations under the Aboriginal Skills and Employment Training Strategy. The Employment Insurance Act prescribes that only insured participants can have access to employment benefits — programs like skills development and wage subsidies. The current definition of an insured client under the act is someone who requests assistance under employment benefits and is an unemployed person for whom a benefit period is established or whose benefit period has ended within the previous 60 months. That's the existing definition of an insured participant.

Last summer we had major stakeholder consultations on this $2.1 billion worth of programming under the labour market development agreements, and in those consultations we heard very clearly from stakeholders, including provinces and territories, that we should be trying to expand the eligibility for the labour market development agreements and also expanding the funding, so in Budget 2017 there was $1.8 billion additional funding over the next six years announced for these programs. As well, to respond to the Council of the Federation, the premiers requesting extended eligibility under the LMDAs, we developed the policies for what became Division 14.

Division 14 of Part 4 amends the Employment Insurance Act to expand eligibility for employment benefits to include unemployed individuals who have made minimum Employment Insurance premium contributions — the minimum is above the premium refund threshold of $2,000 — in at least 5 of the last 10 years. It also expands eligibility for employment assistance services under support measures — services like employment counselling, job search assistance, job clubs, that sort of thing — which are currently available to all unemployed Canadians. Now it will also include employed Canadians, thereby getting at precarious workers and part-time workers, significantly expanding who can be helped by provinces and territories or indigenous organizations through EI.

Additionally, the third piece is that it increases flexibility to support employer-sponsored training by expanding eligibility under our existing labour market partnerships measure to include employers whose employees need training assistance in order to maintain their current employment. That's in cases where companies are adjusting to technological or structural changes in the economy, and the definitions of technological or structural changes will be developed over the next while with provinces and territories.

Within what we had heard from stakeholders, we feel this is a significant expansion of the eligibility under EI Part II. While we heard positive reaction from stakeholders to the additional funding for training, there hasn't been a lot of specific reactions to the eligibility piece, but certainly initial briefings with provinces and territories have been very positive.

The key last piece is that these amendments will come into effect April 1, 2018.

Thank you.

The Chair: Thank you very much.

Senator Stewart Olsen: I have a couple of questions on this one. How does this affect seasonal workers? Essentially, then, seasonal workers could work for a certain amount of time, take five years off and still claim benefits? Is that what you're saying?

Is this regression? We changed the name to "Employment Insurance Act.'' Is it not regressing to "unemployment insurance act''? I don't mean to put you on the spot, but this doesn't seem to be moving forward very much to me.

Mr. Shaw: In terms of the seasonal workers, I think yes, it probably increases the access of seasonal workers to training benefits.However, I think the key thing to know is that the $2.1 billion invested in the Labour Market Development Agreements is an allocation that is divided between the provinces and territories. Those jurisdictions are limited by that budget, so it's not like that's actually adequate for the training needs, and they have to make decisions on who they support. For the most part, seasonal workers don't get access to these training funds because they tend to have it for people who have a return-to-work action plan when they're displaced or going through a transition. I think, frankly, they don't see a lot of seasonal workers coming in for this sort of employment support, although Quebec and New Brunswick have both been looking at how to activate seasonal workers on a more year-round basis.

In terms of the title, Employment Insurance, the change with the 1996 act, I think that was to reflect the emphasis on employment, and because this does open it up to more people who actually contribute premiums to Employment Insurance, we see it as consistent with the overall program.

Senator Stewart Olsen: Are you not setting the provinces up for huge ramifications? They have a certain amount of money. When that money runs out, it is like first-come first-served. If they run out of money and this program is in place, they're going to have to come to the federal government. I can't imagine that they could make a decision that says: Okay, you've got the money, but you don't, because we ran out. Have you considered that?

Mr. Shaw: Absolutely. This was all based on major consultations done with the provinces and territories, but more importantly by the provinces and territories as well. We worked closely together for months to come up with a major consultation report, and provinces and territories were looking for additional funding, which, of course, that is part of the budget, but also much more flexibility in how they could use that funding. Currently, there are some constraints on how they can use the Labour Market Development Agreement allocation, which is much bigger than the allocation we have under the Consolidated Revenue Fund programs, like the Canada Job Fund, Labour Market Agreements for Persons with Disabilities and the Targeted Initiative for Older Workers.

This sort of changes the line so they can use more of the Labour Market Development Agreement funds for a bigger pool and put a little less pressure on what will become, after the next agreements are signed, a new workforce development agreement. The provinces were asking for more flexibility, and as the new funding comes to maturity, they will have 22 per cent additional funds in that program. We found so far that the combination of the 22 per cent additional funds and more flexibility is exactly what they were looking for.

The Chair: I think we've had a fairly fulsome exposure to these events, and I think you have been very clear in your answers. I want to thank you for having been here today.

Colleagues, I'm going ask you to stay. We will go in camera and get comments from you with regard to advice to the analyst with regard to our report.

(The committee continued in camera.)

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