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

Issue 9 - Report of the Committee

Thursday, June 13, 1996

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

SIXTH REPORT

Your committee, to which was referred the Bill C-12, An Act respecting employment insurance in Canada, has, in obedience to the Order of Reference of Thursday, May 30, 1996, examined the said Bill and now reports the same without amendment, but with the following observations and recommendations:

During its hearings on Bill C-12, the committee heard a broad range of views on the government's proposals to reform Canada's unemployment insurance system. Proponents of the bill stressed the need to reform unemployment insurance so as to address structural changes in today's labour market. Clearly, worktime arrangements are changing and the extension of coverage to the first hour of work was welcomed by many of those who expressed general support for the bill. Some of these witnesses also noted the need for an unemployment insurance system that encourages more self-sufficiency and therefore supported aspects of the bill that purport to strengthen incentives to work. It was also expressed that many unemployed individuals need new skills to avail themselves of existing and emerging employment opportunities and, in this context, the main thrust of Part II of the bill received guarded support from business groups and some policy analysts. Other witnesses, notably labour unions and social activists, insisted that this bill be withdrawn and emphasized their view that the reduced benefits proposed in Part I are in no way offset by the proposed employment benefits and the "redirection" of $800 million in Part II.

Virtually all of the bill's opponents indicated that there was no need to tighten the existing program; that the unemployment insurance system does not create disincentives to work and it is not experiencing financing problems. Opposition was also expressed to the design, if not the concept of, an hours-based entrance requirement, particularly in terms of the higher qualification requirement for new entrants and re-entrants; to maintain a surplus in the proposed Employment Insurance Account; and, to use the program for purposes other than income support. While some of the bill's opponents indicated that improvements were made when the government amended provisions governing the rate calculation period and the divisor, and introduced the intensity rule exemption for claimants receiving the family income supplement, the bill remains unacceptable to them.

Although the committee is reporting the bill unamended, this does not mean that all members of the committee endorse the bill nor does it mean that some members do not have reservations about certain aspects of the bill. In fact, the committee feels that there are four additional areas that the Commission should monitor in relation to clause 3 of the bill. Under this clause, the Commission would monitor and assess how individuals, communities and the economy are adjusting to the bill; determine if intended savings are being realized; and, examine how benefits are being utilized by firms and workers, particularly in relation to work incentives and employers' use of the program. In addition to these, the committee recommends that the Minister of Human Resources Development instruct the Commission to monitor and assess:

(1) the impact of the hours-based entrance requirement on young workers, especially in relation to their ability to qualify for benefits and the degree to which students claim a premium refund, and the impact of first hour coverage on job opportunities among this group;

(2) the impact of the hours-based entrance requirement on part-time workers, particularly women;

(3) the impact of the bill's provisions on workers in the arts and cultural sector and on seasonal workers, especially those residing in rural communities where unemployment is high and job opportunities scarce; and

(4) the implementation of Part II of the bill, particularly in terms of monitoring the impact on designated equity groups and community colleges, assessing the effectiveness of employment benefits and determining the degree of input among labour market partners at the local level.

The committee recognizes that the guidelines (i.e. clause 57(1)) governing the establishment of employment benefits and support measures under Part II of the bill do not address national occupational and skill standards. Nevertheless, this issue was considered extremely important by many of our witnesses. The committee agrees with this view and suggests that the federal government give this issue the recognition that it deserves, particularly in view of the recent federal proposal which allows the provinces to take responsibility for active measures funded through the proposed Employment Insurance Account. The committee therefore recommends that, pursuant to clause 57(2) of the bill, the Minister of Human Resources Development instruct the Commission to work with the provinces and sectoral councils to develop national occupational certification standards as a component in any Part II agreement entered into with a province.

The committee also recommends that the government consider amending section 153(3) to include a reference to both Houses of Parliament.

Respectfully submitted,

MABEL M. DeWARE

Chair