Honourable senators, the Canada Recovery Sickness Benefit was created to provide Canadians with the possibility of taking job-protected paid sick leave when they cannot do so through their employer. As Minister Qualtrough said on January 2, 2021:
The Canada Recovery Sickness Benefit was never intended to incentivize or encourage Canadians to not follow public health or international travel guidelines.
As such, Bill C-24 amends the Canada Recovery Benefits Act by adding a new eligibility requirement to all three of the recovery benefits. That requires that individuals attest that they have not, for any time during the benefit period they are applying, been required to quarantine or isolate themselves as the result of international travel, as defined by any order made under the Quarantine Act.
The bill provides limited exemptions to this new eligibility requirement. Individuals who would normally be exempt from mandatory quarantine requirements under the Quarantine Act, such as health care workers or truck drivers who need to cross the border for work, would still be eligible to apply following their return to the country if they are unable to work due to COVID-19. In addition, people who are returning from international travel — if their reason for travel was to receive necessary medical treatment or if their purpose was to accompany someone who was required to receive a necessary medical treatment — are exempt from this new eligibility requirement.
In order to facilitate the verification measures related to this new eligibility requirement, Bill C-24 authorizes the Minister of Health to assist the Minister of Employment and Social Development in the verification of whether a person meets the eligibility conditions as prescribed in the Canada Recovery Benefits Act, and to disclose select personal information obtained under the Quarantine Act to the Minister of Employment and Social Development for that purpose. The bill also amends the Customs Act to authorize the disclosure of information for the purposes of administering or enforcing the Canada Recovery Benefits Act.
At the end of the day, these amendments will ensure that the Canadian recovery benefits remain targeted to those Canadians who truly need them. These eligibility rules will be applied retroactively to October 2, 2020; the date that the Canada Recovery Benefits Act received Royal Assent.
In conclusion, honourable senators, this proposed legislation is not only simple and straightforward, it is necessary. Tens of thousands of people across our country will soon exhaust their EI regular benefits in the midst of a pandemic. This bill will ensure they have the support they need during an unprecedented time in our nation’s history. It is vital that Canadians have the financial support they need during what is undoubtedly one of the biggest challenges of their lives. Honourable senators, I encourage everyone to join me in supporting the passage of Bill C-24. Thank you.
Honourable senators, I rise today as the official critic of Bill C-24, An Act to amend the Employment Insurance Act (additional regular benefits), the Canada Recovery Benefits Act (restriction on eligibility) and another Act in response to COVID-19.
I will not go into much detail of the bill since the sponsor, Senator LaBoucane-Benson, has explained it thoroughly. Basically, Bill C-24 facilitates access to Employment Insurance by adding a temporary increase in the maximum number of weeks for which EI can and may be paid — to 50 weeks — for claimants whose benefit period starts during the period beginning on September 27, 2020, and ending on September 25, 2021. It also facilitates access for self-employed Canadians who are in need of EI benefits.
The second part of the bill is essentially there to correct a mistake made by the government. As has been the custom for this government during the COVID pandemic, too often benefit packages have been rushed through Parliament without proper oversight. I understand the need for urgency in certain situations, and our caucus understands that as well when we collaborate to ensure swift passage to get help to those in need as quickly as possible. For the bill currently in front of us, I feel it was different, since it was rushed in the fall following a prorogation of Parliament. It’s mind-boggling that the government did not prorogue once during its first mandate, but during the pandemic it saw it as a good time to prorogue for a month.
Honourable senators will recall that Bill C-4 was introduced in the House of Commons on September 29 and received swift passage in both houses, receiving Royal Assent on October 2. It started in the House of Commons on Tuesday and was signed into law by the then-Governor General before dinner on Friday, but it took the government until the end of February to introduce Bill C-24 to correct that mistake. Furthermore, second reading only happened more than a month after, on March 8, 2021. It’s disappointing that the government waited months before fixing their loophole in the Canada Recovery Sickness Benefit and to provide extra benefits through EI. Seeing them drag their feet on issues that are essential for Canadians in a time of socio-economic crisis is a case of failed leadership.
The issue with these loopholes being fixed and who is eligible for which benefit, how to apply, how long, et cetera, is that it sends mixed messages to Canadians in need. Allow me, honourable senators, to put into context what I have experienced in my office, and I assume has been experienced in other offices as well. We have received so many requests and questions from concerned Canadians on the benefits. The lack of clarity, the flip-flops, the misdirection and mixed messages from the government were difficult to grasp and confusing for Canadians.
Allow me to list the programs: the Canada Recovery Benefit, the CRB; the Canada Recovery Caregiving Benefit, the CRCB; the Canada Recovery Sickness Benefit, the CRSB; the Canada Emergency Recovery Benefit, the CERB; and the Canada Emergency Student Benefit, the CESB. On top of that, you have the CEWS and the CERS for businesses in need of assistance. Finally, you have the EI program.
Looking at these programs — the CRB, CRCB, CRSB, CERB, CESB, CEWS and CERS — where would a person go to begin to apply for help? The eligibility criteria change every day. One day you’re on EI, the next one carries you to the CERB, and then back to EI. For a lot of Canadians, it was their first time turning to government programs for support, and it must have been an even more difficult experience to get the answers and support they needed.
Not only were they bombarded with messages from the federal government, they had to follow provincial norms and programs as well. Each province had their respective emergency act in place, with different colour-coded levels of restriction. It also offered its own benefit programs to businesses and individuals. So when a Canadian was looking for help to make ends meet, he might have had over half a dozen programs to look at and figure out which one to qualify for. I hope a review will be done on the government’s response to COVID-19 with special attention given to the importance of government messaging being clear, direct and having simpler benefit programs for Canadians looking for assistance in future emergency situations.
At the end of the day, what we have done here in Parliament over the last year has had a direct impact on millions of Canadians who lost their income entirely or partially. As we see the number of cases and deaths finally starting to fall across the country, it’s important not to forget about the millions of Canadians who are still feeling the consequences of COVID-19.
According to the Labour Force Survey for January 2021, unemployment rose to 9.4% in January 2021, with 18,272,000 Canadians employed, compared to January 2020, when the unemployment rate was 5.5%, with 19,159,000 Canadians employed. It accounts for the roughly 1 million Canadians whose ability to put food on the table for their families has been greatly hindered by COVID-19. Moreover, according to the Labour Force Survey from January 2021:
The number of long-term unemployed (people who have been looking for work or who have been on temporary layoff for 27 weeks or more) remained at a record high (512,000).
That is roughly half of the unemployed force from last year who have been looking for work or who have been temporarily laid off over 27 weeks. Let’s not forget that this doesn’t take into account the people who have seen a reduction in their income due to work shortage, fewer hours, or a business having to lower salaries to make ends meet. It goes beyond the numbers.
Our youth need to play a big role in our economic rebound and the government needs to be proactive in helping them out before it’s too late. An RBC study found that across every province and major city in Canada, youth aged 14 to 29 are significantly less confident when it comes to their job prospects and how prepared they are to find work. The government will need to act fast and swiftly to boost the economy, the confidence and the job opportunities for our youth.
As I was getting ready for my speech, the Labour Force Survey for February was released. It’s only fair to share that the new unemployment rate for that month is 8.2%, which is down from 9.4%. It’s good news to see the numbers go down, but Statistics Canada offers a warning that we are not out of the woods yet. The 1.2% shift was mainly attributed to Quebec and Ontario, who reopened their economy last month in retail and restaurant services. Compared to 12 months ago, there is still a 599,000-job gap where fewer people were employed and 406,000 more people working less than half their usual hours.
The new Labour Force Survey for February offered an update for youth:
The unemployment rate for youth fell 2.6 percentage points to 17.1% in February, similar to the recent low in November 2020 but still higher than a year earlier (10.4%). The unemployment rate fell both among young men (-3.2 percentage points to 16.1%) and young women (-2.0 percentage points to 18.1%). The unemployment rate is typically higher for young men than young women; however, this trend was reversed as a result of the March/April 2020 and January/February 2021 lockdowns, as half of young women are employed in accommodation and food services, and retail trade—industries among the most affected by pandemic restrictions.
I offer these quick thoughts, honourable senators, because I’m concerned the government is starting to take its eye off the ball. It sees the potential ending of a pandemic approaching with a slow vaccine rollout, and quite frankly, our economic recovery must be done with more vigour and proactivity.
With Bill C-24, it shows the government is taking its foot off the gas a little at a time, where it needs to be focussed on what matters right now, which is protecting Canadians from COVID-19 and ensuring the confinement Canadians have done in the last year doesn’t impact their job opportunities longer than needed.
Our businesses are ready to help and play a role in reducing the spread of COVID-19. Business groups such as the Canadian Chamber of Commerce delivered a message to the Prime Minister with a letter saying they want to be part of the broader solution to manage the pandemic and to return to normal conditions more quickly.
Bill C-24 also amends the Employment Insurance Act — the EI — to facilitate its access for self-employed Canadians who have seen a reduction in their income. The pandemic has also shown us how a safety net such as EI needs to be adapted to the 21st-century economy. The current EI parameters are made for an economy in a time where having the same full-time, nine-to-five job at the same company for 25 years was the norm. But nowadays, with the new gig economy, gig workers are not employed on a long-term basis by a single firm. According to a Statistics Canada study based on tax data, the share of gig workers among all workers rose from 5.5% in 2005 to 8.2% in 2016 just on the digital economy; that is, for example, Uber drivers, renting out your home through Airbnb, et cetera, into the 5.5% total Canadian economic activity.
All along, while the Canadian people were adapting to the new realities, the EI program was still stuck in the middle of the 20th century. Too many people were falling between the cracks of the EI safety net.
The major flaws of the EI programs were exposed with the pandemic. It showed us it was not suited to adapt to take on an important number of Canadians who were in need and it’s not easily adaptable. The government had to constantly change the eligibility requirement and the number of weeks paid to help Canadians in need. It had to do so again with Bill C-24 with self-employed Canadians, like it did for seasonal workers in May, and like it did for mothers on maternity leave in the fall through regulations.
During the pandemic, time was of the essence, and the out-of-date EI system made it slower for Canadians to get the money they needed. Once the other programs were put in place, they were not streamlined between departments, causing delays and grief for Canadians.
We had an example of this with an Ontario resident who had a hard time navigating changes to emergency benefits throughout COVID-19. A mother of two, she had been working in retail and lost her job last spring due to the pandemic. She was first put on CERB, then switched to EI in September, and since she is a part-time worker, half of her salary is clawed back. In January, she was the only one available to care for her five-year-old daughter when schools closed in London, so therefore she declared on her EI statement that she was not available for work. That meant she was no longer eligible for EI because it requires applicants to be available to work.
She then turned to the new CRSB, but was told she did not qualify due to having an open EI claim. We are in March, and she still hasn’t received money for those two weeks in January. I would quote the mother from the news story.
There’s so many people that fall into these situations where, like myself, to go two weeks and not have any (money) come in. That’s scary. And for a lot of people, that could be their rent, their mortgage and food on the table.
I am aware that the government has promised to reform the EI system, but as a past member of the Standing Senate Committee on Official Languages, I have learned that despite what this government promises, it doesn’t mean it will deliver. We have heard them repeat often how they would modernize the Official Languages Act, and two years after the Senate committee published its report on the reform, we’re still waiting for the bill.
To conclude, honourable senators, we support Bill C-24 as a great reminder of the best way to avoid mistakes and loopholes and allow Parliament the right amount of time to do the proper oversight of its spending. We have great committees who do great work on behalf of Canadians. Let them do the proper oversight of the government bill, because with proper oversight, we wouldn’t be here fixing mistakes months later.
That’s why I end with a plead to the government to read the great report released last summer from the Standing Senate Committee on National Finance, COVID- 19: Relief in times of crisis, chaired by Senator Mockler, and to give particular attention and consideration to recommendation No. 16:
That it is time to return to traditional procedures for approval by Parliament of government spending in order to provide appropriate oversight of government expenditures.
Honourable senators, the extended weeks of access to Employment Insurance proposed in Bill C-24 are vital. So too are the regulatory measures that the government is taking to add weeks to the Canada Recovery Benefit and other programs that have continued to provide direct income support to individuals.
I want to commend all who have worked and supported this approach to economic response and recovery. We have seen throughout the pandemic that these cash transfers have supported those who could access them, thereby aiding efforts to slow the spread of COVID-19. The speed, motivation, boldness and urgency with which measures like the CERB were implemented were justified as necessary to prevent catastrophe for millions of people, families and communities.
Let’s take a moment to consider what this catastrophe is: It is poverty. As we mobilize mountains of resources, ingenuity and infrastructure to keep more well-off people from falling into poverty, I remain extremely concerned that we have done almost nothing for the more than 1 in 10 Canadians who struggle below the poverty line, who daily face the risks and dangers that measures like Bill C-24 so clearly understand and recognize.
Of the government’s $407 billion in COVID-19 spending reported in the Fall Economic Statement, working-age Canadians most in need — that is those with incoming below $5,000 — have received perhaps $400, and that was only if they were registered for the GST credit.
One in five Canadians, primarily those with income over $100,000, have seen their financial situations improve during COVID-19. Meanwhile, twice as many — those with the least, those living in poverty — have been left further behind, facing the realities of the spectre of hunger, housing insecurity, homelessness, the street, stress and illness.
The policy choices made about economic supports for marginalized Canadians, both during and long before this pandemic, are, quite frankly, deadly. Rates of COVID-19 deaths and infections have been higher in low-income and racialized neighbourhoods. In Ontario, rates of hospitalization were recorded as four times higher in these communities and rates of death two times higher.
This is concerning to all of us, honourable colleagues, from the fifty of us, representing different groups and diverse regions who signed an open letter to the Prime Minister at the beginning of this pandemic calling for the expansion of CERB into a program accessible to all in need, to the National Finance Committee and the call to examine a national guaranteed liveable income as part of COVID-19 recovery — a call echoed in recent weeks by the Finance Committee in the other place — to our longest-serving colleagues in this place who have taken part in the work led by our former colleagues Senator Eggleton and Senator Segal to seek to eradicate poverty.
All of us carry with us the legacy of the Special Senate Committee on Poverty, which made clear the role that this place can play in addressing poverty and the responsibility that we have to act. Fifty years ago, under the leadership of Senator Croll, our predecessors called for a national guaranteed liveable income, telling us, “Poverty is the great social issue of our time.” “The poor do not choose poverty. It is at once their affliction and our national shame.”
No nation can achieve true greatness if it lacks the courage and determination to undertake the surgery necessary to remove the cancer of poverty from its body politic.
A half-century later, honourable colleagues, what has changed? Tonight, mere steps from the chamber here in Ottawa, some long-term care workers, mostly women, mostly racialized and mostly newcomers to Canada, will end their grueling front-line shifts caring for some of the most at risk in this pandemic, but they won’t be going home. They will sleep tonight in homeless shelters in the shadow of Parliament Hill because, in return for their essential work, they are clapped for and heralded as heroes, but they are not paid enough to afford a place to stay.
How far removed their reality is from the stereotypes that persist about poverty: the harmful and dehumanizing assumptions that if people are poor, it must be because they haven’t worked or saved hard enough; if we are not supporting them adequately, it must be because they do not deserve it.
For years, the assistance programs that Canada, the provinces and territories offer have been criminally inadequate. They have provided too little to live on, apparently informed by perspectives that induce us to distrust and deem lazy those who are economically disadvantaged and justify the imposition of complex webs of inadequate assistance programs.
They have subjected people to complex and often humiliating scrutiny, arbitrary judgment and moralistic standards to which few others have to answer. A child’s field trip, new clothes for a job interview, taking a personal day off work, all of these are daily life for many of us and yet are construed as wasteful luxuries for those on social assistance, if — and this is a big “if” — they even dare to seek or beg for them.
Bill C-24, like the majority of COVID-19 income supports so far, reinforces a line between workers who are eligible for support and others in poverty, for whatever reason, who are not. Good intentions, working hard, seeking to do the best for one’s family and wanting to contribute to the community do not, unfortunately, guarantee that suitable paid work will be provided or available as a guard rail against poverty. Yet, for decades we have relied on social assistance programs that punish people and keep them stuck in poverty.
Bill C-24 is putting us on a path to come out of this pandemic and get back to a normal where half of those below the poverty line work but aren’t paid enough to get by, where others are left to struggle on social assistance and disability benefits that provide as little as $600 per month in some provinces, where a one-bedroom apartment is unaffordable in 9 out of 10 neighbourhoods in Canada to someone who is working full-time at a minimum wage job, where 31% of shelter users are Indigenous and where almost half of people in Canada live paycheque to paycheque, going further into debt to pay regular living and family expenses.
Senators have known for at least 50 years that we can and must do better, that no one chooses and no one deserves, in a country as wealthy as Canada, to be poor, starving, homeless or in danger. For the sake of all our economic health and social well-being, people need to be able to rebound out of poverty. In the name of all of those who have suffered and sacrificed during COVID-19, we need to emerge with something better.
Many are urging us forward. In the other place, a bill and a motion on guaranteed liveable basic income are picking up momentum. The Government of P.E.I., supported by the tenacious work of P.E.I. senators and members of Parliament, is seeking federal support to launch a basic income program.
What income support measures are needed to ensure this country lives up to the values of substantive equality and human rights that it promotes? The government is asking us to pass Bill C-24. In doing so, we must simultaneously fulfill our duty to ensure that the conversations do not continue to leave millions of Canadians behind.
Honourable colleagues, as we pass this bill, I hope you will also commit to urge the government to not stop here. Meegwetch. Thank you.
Hon. Donald Neil Plett (Leader of the Opposition)
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Honourable senators, I rise today to speak briefly to Bill C-24, An Act to amend the Employment Insurance Act (additional regular benefits), the Canada Recovery Benefits Act (restriction on eligibility) and another Act in response to COVID-19.
I would like to thank Senator LaBoucane-Benson and my colleague Senator Poirier for their work, both as the sponsor and the critic of this bill. As Senator Poirier pointed out in her speech, we will be supporting this legislation. We have to support this legislation. It is needed by Canadians.
We have always supported getting help to those who have been hit hard by the pandemic. What we do not support, however, is this government’s incompetence. It was pointed out to us very clearly in my colleague Senator Housakos’s speech on Bill C-18 about some of the mishandling of legislation, and we have seen it here again with Bill C-24. We have seen time and time again how bills are introduced at the eleventh hour and then rushed through the legislative process as parliamentarians scramble to make up for precious time that the government lost with unnecessary delays, legislative rewrites and procedural fumbles.
Consider, for example, the portion of this bill that amends the Canada Recovery Benefits Act. These amendments close a loophole that stems from a policy announced over seven months ago.
It was August 20 when the government announced last year that they would be creating the Canada Recovery Sickness Benefit. The only problem was that the Prime Minister had already prorogued Parliament two days before the announcement, and it was not scheduled to be recalled for another five weeks.
Even though the government knew for a month that the CERB program was winding down on September 26, they took no legislative action to fill the gap that would be left until September 24 — two days before the deadline when they introduced Bill C-2, An Act relating to economic recovery in response to COVID-19.
Honourable senators will recall that this bill was going to implement the Canada Recovery Benefit and the Canada Recovery Sickness Benefit. Knowing that the timetable was tight, the Conservative opposition offered to work through the weekend to get the bill passed. Similarly with Bill C-7, they offered to work through the weekend. They were turned down and then accused of filibustering when they hadn’t even started debate.
The government refused here and instead decided to go home. Then, four days later, on September 28, the government abandoned Bill C-2 entirely and started the legislative process over with Bill C-4, An Act relating to certain measures in response to COVID-19. Now it was Bill C-4 that would implement the new programs, including the flawed Canada Recovery Sickness Benefit, and the government proceeded to push the bill through every stage in the House of Commons in one single day.
Because the government decided to take five weeks off and prorogue Parliament for no good reason — well, the Prime Minister thought there was a good reason: He wanted to avoid some scandal issues — the Senate was left with little choice but to expedite the process as well.
We received the bill the following day, Wednesday, September 30, and had it out the door two days later, on Friday, October 2. It would be another three months, before Minister Qualtrough finally acknowledged that there was a serious problem with the legislation. It allowed people quarantining after a holiday to apply for the benefit, but by this time the government had already processed 450,000 applications for the CRSB.
Three weeks later, on January 20, the government circulated draft legislation to fix the loophole, but that legislation was never tabled. Instead, they waited five weeks, until February 25, and then tabled Bill C-24 before us today, which would finally close the loophole, along with increasing EI coverage for those impacted by COVID-19. Since February 25 was a Thursday before a break week, Bill C-24 wouldn’t see second reading until 11 days later, on March 8, 2021.
March 8 was 201 days since the government had first announced the CSRB program, and on March 8, after taking 201 days to address their mistake, Minister Qualtrough released an open letter to Conservative leader Erin O’Toole, urging him to support the government’s plan to rush the bill through all of its legislative hoops. It was a crass political move by the government, designed to try and shift attention away from their disastrous handling of the legislative agenda and paint the opposition as responsible for delays.
Later that day, the bill was debated for a total of two and a half hours. Three days later, on March 11, it was debated for another three hours. It then went to the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities, which reported back to the House, without amendment, the same day.
The following day, on March 12, the bill was passed by the House of Commons. This means that from the day the new programs were announced by the government to the day they realized they had created a gaping hole, 136 days had passed. It then took another 55 days for them to table legislation to fix the problem. That’s 191 days from when the government created the problem until Parliament was presented with the plan to fix it.
It then took only three sitting days for the House of Commons to pass the bill, and we plan to pass it here in this house in the same amount of time. Of course, the government spread those three sitting days over more than two weeks, but given how poorly they manage a legislative agenda that shouldn’t surprise anyone.
Honourable senators, in the midst of the greatest health and economic crisis to hit this country in over 100 years, this government has exhibited a disturbing pattern of incompetence. With a few variations, the pattern usually unfolds along these lines:
One, the government dawdles until the eleventh hour and then rushes to introduce legislation;
Two, they breathlessly note that time is short and demand that the bill be hurried through Parliament without allowing time for proper examination and debate;
Three, when the opposition tries to point out that proper scrutiny of the legislation will help ensure we don’t experience further delays and surprises, the government blames the opposition for holding things up;
Four, after the bill is passed, the government reluctantly admits that it contains errors and must now be fixed;
Five, they take more time to draft the amendments to fix the errors than they took to write the original legislation;
Six, they eventually get around to introducing the amending legislation and make the changes retroactive to mop up the mess they created;
Seven, they insist that Parliament rush this amending legislation through because the clock is once again running down.
And eight, they return to step one and repeat the process for any additional legislation required.
Honourable senators, not all of this can be chalked up to incompetence. Some of it appears to be the government’s willingness to put its political interests ahead of the people of Canada, even in the midst of a pandemic. Rather than admitting to and fixing its mistakes in a timely manner, this government chooses to wait until it can bury its amendments in a larger bill.
Consider that with the Canada Recovery Sickness Benefit they had legislation ready to go on January 20, yet they chose to wait until they could distract the public from their error in packaging it in a bill that would include additional COVID support measures.
Furthermore, I would remind you that we are still waiting for the promised fix to the Canada Emergency Rent Subsidy. You may recall that Bill C-9 was written in a way that it required business owners to pay their rent before they would qualify for the rent subsidy. If a business cannot pay their rent because of COVID-19 they can apply for the rent subsidy, but only after they pay their rent.
The government promised to correct this problem, but as of today the law remains as it was passed by Parliament on November 19 of last year. Instead of doing their job properly, the minister shrugged and instructed the Canada Revenue Agency to ignore the law because they would eventually get around to correcting it — and eventually they did. The fix is now buried in clause 4 of Bill C-14. It is a total of 160 words.
Why did the government not introduce a simple 160-word bill to correct this problem rather than choosing to wait more than four months to bury it in a bill of over 2,500 words, which has nothing to do with the rent subsidy?
It is difficult to know whether the answer to that question is political opportunism or incompetence. Either way, it does not serve the people of Canada well.
Colleagues, this last year has been a very difficult one for most Canadians. As I said earlier, Conservatives strongly support getting help to those who have been hit hard by the pandemic and the government’s mishandling of it, but we do not support this government’s incompetence and blatant self-interest in the midst of a global pandemic.
We will be supporting this legislation, but regret that the government has repeatedly failed to provide much-needed support to Canadians in a timely manner. Thank you, colleagues.
Honourable senators, I speak today on second reading of Bill C-24. I will vote in favour of Bill C-24. It is a complement to the temporary emergency measures taken so far by the federal government to cope with the pandemic.
I believe that health and economic security of Canadians comes first and, since the pandemic is not yet over, it is important to sustain the income of those most affected.
However, I have some concerns about policy issues related to Bill C-24. First, it is time to prepare for recovery and to use this period to invest in the basic skills of Canadians. I share the recommendation of the Organisation of Economic Co-operation and Development, OECD, expressed in its last Employment Outlook of December 2020:
In the short-term continued support for some sectors remains vital to protect jobs and wellbeing, but labour market mechanisms must re-start operating.
I interpret this recommendation as saying the time has come to prepare for recovery. It is time to start investing in the employability of Canadians who have been affected by the pandemic. This means more investment in active labour market measures, such as training in basic digital and literacy skills, wage subsidy programs to finance on-the-job training and measures that are part of Part II of EI. I do not think we are doing enough on that side of the equation.
The second point I want to raise; it is time for the federal government to directly participate in the financing of EI, since EI is the main program it uses to stabilize the economy in times of crisis and to sustain the adaptation of the labour market in times of structural changes. As you know, EI is financed entirely by employees’ and employers’ contributions and they just do not have the financial capacity on their own to support all these public responsibilities. It is not their role.
Third, it is time to have a public debate on EI reform. The government should mandate a special committee to inquire across the country, to exchange with provincial governments who deliver the public employment services, to engage with businesses and labour representatives to identify their needs and to establish consensus on EI reform.
Allow me to expand on these ideas.
I’m concerned that Bill C-24 does not include a recovery and investment strategy for skills development. Many people are not working or are underemployed, so now would be the time to use this forced hiatus to prepare for the future.
The latest employment outlook released by the Organisation for Economic Co-operation and Development, or OECD, in December, is very clear. The report encourages member countries to not only extend benefits for people who are involuntarily unemployed, but also rebuild their employment measures.
As Senator LaBoucane-Benson pointed out, Bill C-24 will no doubt give certain groups greater access to employment measures, but the government has not yet looked at extending funding for provincially managed employment measures.
As you know, nearly half of Canadians do not have the basic skills proficiency required to change jobs and easily adjust to a new good-quality job. A study I conducted in 2019 clearly indicated that Canadians recognize this but also acknowledge that, under normal circumstances, they do not have the time or the money to develop their skills. Why not take advantage of this time we have now?
The OECD is also calling on all economic actors to roll up their sleeves and take responsibility for rebuilding a better labour market. The principles of responsibility and reciprocity must be advanced to ensure a sustainable economic recovery. All economic actors, in particular those that are receiving or have received government assistance, must actively participate in rehiring and training their employees.
Employment insurance, as recognized by the law, plays an important role in ensuring the development and employability of Canadians. The EI system invests less in what are commonly known as “active labour market measures” than what OECD member countries invest on average.
It is time for the federal government to engage in dialogue on these issues with its provincial counterparts. If it does not, long-term unemployment will take hold. It will take a long time for youth, women, Indigenous people, racialized people and immigrants to return to or find a suitable job. Social, economic and political inclusion of vulnerable groups requires that they be employable and have the opportunity to have a quality job.
I believe it is high time to review the financing of employment insurance. The law must provide for the federal government’s direct participation in the financing of the program. As you know, this program plays a major economic role in providing income support, stabilizing the economy and ensuring skills development, not to mention creating social protections for health and maternity as well as other protections. For all these reasons and because EI must play a vital role in stabilizing and growing the economy, the federal government must inevitably participate in financing the plan.
Businesses and employees cannot bear the cost of stabilizing the economy. From its creation in 1940 until 1990, the Employment Insurance Act always implicitly acknowledged that stabilizing the economy was the financial responsibility of the federal government. From 1940 to 1970, the government contributed up to 20% of the cost. In 1971, it was decided that the federal government would cover all expenses associated with an unemployment rate greater than 4%. Government funding therefore climbed to 51% of expenses in 1975. The funding formula was changed in 1976 to reduce the federal government’s bill. Between 1976 and 1990, its contribution hovered around 22%. Unfortunately, in 1990, the government completely withdrew from financing EI. However, there were a few times when the federal government used the surplus in the EI fund to balance its budget.
Today, honourable colleagues, employees contribute $1.58 in premiums for every $100 of insurable earnings up to a maximum of $56,300. Employers contribute $2.21 per $100 of the same insurable earnings. The premium rate is set at a level that will fund the program’s expenditures for seven years. The premium rate is currently frozen for two years. However, as the Parliamentary Budget Officer noted, if the Employment Insurance Act remains unchanged, premiums will increase significantly in two years.
I would like to note that the program’s funding formula has a negative impact on income distribution. I would go so far as to bet that if we conducted a gender-based analysis of the impact of the funding formula, women would not fare as well as men.
Low-income earners and SMEs in low value-added sectors carry a greater share of the system’s tax burden than high-income earners and companies in high value-added sectors. Since a fixed rate applies up to the maximum insurable earnings of $56,300, workers with an income that is less than or equal to the maximum insurable earnings bear a higher burden than those with higher incomes. The same is true for companies in lower-paying sectors. This reality explains why small and medium-sized businesses are often opposed to any increase in payroll taxes.
To wrap up my second point, the system’s funding should be reviewed, and we should adopt a more progressive funding formula.
The third point that I want to make has to do with the employment insurance reform. Employer and labour organizations have been calling for a major reform for years. They want to keep the system, not replace it with a guaranteed minimum income. That is what their traditional positions tell us.
However, the time has come to review the system to make it inclusive and ensure that it takes into account the needs of the new labour market and new employment statuses. That is what the OECD is recommending, namely that we address structural problems in the labour market so that public institutions strengthen citizens’ resilience and inclusivity.
That kind of reform cannot happen without consultation and without buy-in from all Canadians and provincial governments, because EI changes will impact them.
The Senate is well positioned to accept an official mandate from the government to carry out major consultations about the EI system together with representatives of the businesses and employees who fund it. We have the time and the technology to undertake this process. The government could create a tripartite commission on which it would be represented by senators and allocate the human and financial resources for an undertaking that could take months but is of the utmost importance.
In closing, I believe that a contributory social insurance plan like employment insurance, modernized for the 21st century, is the mechanism that will promote the economic security of all Canadians as well as the principle of equal opportunity.
For months now, the EI program’s failure to meet the urgent, pandemic-driven need for income support has inspired some to advocate for replacing it with a universal basic income program. I think it would be a big mistake to go down that road.
A permanent universal basic income program would be extremely costly, as all the analyses have shown. Replacing EI with such a program would be inefficient because it would not target the issues facing the groups that need it most. It would also have a major negative impact on the labour market and the country’s economy. A country like Canada can fight poverty and promote the economic security of all Canadians using means other than a permanent universal basic income program.
Let’s not forget that a universal basic income program would make it impossible to fund many public services, including creating a network of child care centres across the country, or provide public funding for skills development and other public services. This would be harmful to the vulnerable groups it is supposedly intended to help, such as women, youth and Indigenous people, who could no longer benefit from the public services needed to enter the labour market. I would even say that a universal basic income program is a bit of an illusion.
I look forward to a white paper on EI reform and a special commission to consult Canadians on this issue. Thank you.