Proceedings of the Standing Senate Committee on
Social Affairs, Science and Technology
Issue No. 12 - Evidence - November 30, 2016
OTTAWA, Wednesday, November 30, 2016
The Standing Senate Committee on Social Affairs, Science and Technology met this day at 4:18 p.m. to examine the subject matter of those elements contained in Division 1 and 2 of Part 4 of Bill C-29, A second Act to implement certain provisions of the budget tabled in Parliament on March 22, 2016 and other measures.
Senator Art Eggleton (Deputy Chair) in the chair.
[English]
The Deputy Chair: Welcome to the Standing Senate Committee on Social Affairs, Science and Technology.
My name is Art Eggleton, a senator from Toronto. I'm the deputy chair of the committee, filling in for the chair who is delayed and will be with us a little bit later.
I would like to ask, as is our tradition, each senator to introduce themselves.
Senator Raine: Nancy Greene Raine, British Columbia.
Senator Seidman: Judith Seidman, Montreal, Quebec.
Senator Stewart Olsen: Carolyn Stewart Olsen, New Brunswick.
Senator Bovey: Senator Bovey, from Manitoba.
Senator Frum: Linda Frum, Ontario.
Senator Merchant: Pana Merchant, Saskatchewan.
The Deputy Chair: Bill C-29 is the second act to implement certain provisions of the budget tabled March 22 of this year. It was introduced in the House of Commons, of course, on October 25 by the Honourable Bill Morneau, the Minister of Finance.
On November 22, the Standing Senate Committee on Social Affairs, Science and Technology was authorized to examine the subject matter of those elements contained in divisions 1 and 2 of part 4 of Bill C-29. They deal with the amendment to the Employment Insurance Act and to the Old Age Security Act.
This is all being done in advance of the bill coming into the Senate, so this is a pre-study.
I want to welcome Senator Bovey for the first time. It's good to have you with us. Two meetings have been allotted for this study and today we will hold two panels, each up to one hour in length. We had anticipated having more people coming to speak on this, so we may not need all of that time. We do hope the other panelist might be here, just in case we do finish the first part of the program; he is speaking on different divisions.
Let me call upon David Gray, Associate Professor, Department of Economics, University of Ottawa. He will speak on the amendment to the Employment Insurance Act.
David Gray, Professor, Department of Economics, University of Ottawa, as an individual: Thank you very much, Mr. Deputy Chair.
Just a minor correction: I'm a full professor. I used to be an associate professor but I was promoted eight years ago and haven't been demoted yet.
The Deputy Chair: These must be old notes.
Mr. Gray: I have been to the Senate and to the House of Commons a number of times over the years.
Okay, so I think I do understand the background here and what the situation is.
[Translation]
By the way, I am happy to answer questions in French.
[English]
I am able and willing to take questions in French and answer in French as well.
First, I'm going to follow this outline here. It also became apparent in this overview that I received just a couple of hours ago, that we're talking about a fairly major change which was applied to the Employment Insurance Act in 2012 by the Conservative government, called Connecting Canadians with Available Jobs. My understanding now is that in Budget 2016, four years later, those regulations regarding the obligation for a claimant to search assiduously for another job were repealed.
I guess, first and foremost, my comment is that going back four years, while I certainly agreed strongly with the title, the imperative of connecting Canadians with available jobs, I disapproved of this specific measure regarding job search for the reasons that I give here. Basically its application relied very heavily on administrative discretion, which makes the program more costly to administer than what would otherwise be the case. But perhaps more importantly than that, it leaves the federal government and the EI commission open to a wide range of judicious objective and ambiguous determination, which in turn leaves the Employment Insurance Commission vulnerable to lengthy and costly appeals.
As I have indicated here, I extracted the following phrases from the current document, emphasis added by me, I might add.
Earnings and conditions recognized by good employers: What happens if the program administrator says that enterprise A is a good employer but the job claimant says, "Oh no, I don't think so. I don't want to work there for the pay that is on offer.''
Another phrase I picked up was, ". . . conditions less favourable than the claimant might reasonably expect to obtain . . .'' Once again, this is very subjective. It can mean different things to different people.
I remember almost 40 years back when I bussed tables at a restaurant for sub-minimum wage and complained about the lousy pay and my father said it was very good, generous pay. Two people had two different opinions on what my expectations were and whether or not they were reasonable.
Moving down: "After a lapse of a reasonable interval from the date on which an insured person becomes unemployed . . .'' I think what "reasonable'' means is that the administrator in the field office can say, "Well, you're halfway through your benefit entitlement and it doesn't seem to me you're really searching hard enough for a job. I'm going to start applying the stick as well as the carrot and I'm going to cut off your benefits.''
That might well lead to an appeal. What I expected to happen at the time, and I'm not sure whether this materialized, was that the administration would typically shy away from applying the stick and disentitling people. I don't think they really cherish having that power to begin with which, in turn, would undermine the objective of the reform.
I think I can speak for most members of my profession who analyze the EI system in that we thought this was an unduly complicated reform that relied heavily on administration. Assuming the objective is really to sharpen incentives for job search, what I would prefer would be to reduce the length of benefit periods in some circumstances.
This will allow claimants a lot of autonomy to search for alternative work without any hassles and without intervention from the EI administration and perhaps give them all the more incentive to avail themselves EI part II benefits: job counselling and the like.
As I say below, most but not all labour market policy analysts are concerned about the incentives and the disincentives which are inherent in the system as far as job search is concerned. Scientific literature in Canada and the United States has shown that changing the benefit period — the maximum duration of entitlement — has an enormous impact on people finding new jobs. That is the most direct suitable policy instrument if you're trying to light a fire under certain claimants' feet in order to try to find alternative work.
But remember that the EI system is designed to indemnify people who have lost work for no reason of their own. We want to indemnify people and give them adequate compensation to raise their well-being and welfare on one hand, but we also want very much, in most cases, to facilitate a job search. We do have to pay attention to disincentives that are inherent in the system. So there is always this trade-off between indemnifying people so that their living standard doesn't collapse and giving them the resources they need to have a successful, productive job search without — the literature would say — subsidizing leisure in an unduly "high'' fashion. So there is a trade-off that is inherent in any EI system.
I definitely think this bill is moving in the right direction, and I approve of what was done, but I don't think the government should ignore the system from now on. It is in need of other reforms that can hopefully meet these two objectives of facilitating job searching and for workers who are permanently laid off, as I say, near the end. Workers who have been permanently laid off are in desperate need of readjustment assistance.
When we tell them that they are on their own, "Oh well, you're not trained in programming video games. You don't have that skill set that is really valued in the year 2016, and so tough luck.'' We saw what happened on November 8 in the United States when the government does not pay sufficient attention to workers whose skill set is not currently in demand in today's rapidly changing, turbulent and inegalitarian labour market.
Those are my sentiments. How long did I go over?
The Deputy Chair: You didn't; you're fine. I'm not offering you more time, but you're fine. Let's see where we go from there in terms of the questions and any dialogue that ensues.
[Translation]
Senator Bellemare: Welcome, Professor Gray. My question relates to what you said at the end of your opening statement in reference to active measures for the unemployed to improve their employability. You teach at the University of Ottawa, but I don't know whether you are familiar with all of the mechanisms and services in Canada.
Mr. Gray: Yes, occasionally, I do consulting work for Employment and Social Development Canada.
Senator Bellemare: Do you think current investments are sufficient to help unemployed people adapt in today's labour market? I am referring to investments in employment insurance, employment assistance services, active measures and the labour agreements between the federal government and the provinces.
I realize my question is somewhat off-topic.
Mr. Gray: What a wonderfully meaty question! Yes, in fact, I am aware of the research the federal government is conducting through the Department of Employment and Social Development. It has dedicated quite a few resources to examining the effectiveness of those measures. The research thus far has shown that the measures are positive but not extraordinarily helpful. It's a bit disappointing.
It is virtually the only avenue available. It is out of the question for Canada to pursue the kind of protectionism Donald Trump is advocating. The manufacturing jobs of the good old days are never coming back. We have to adjust our labour market. How? No one knows. Some measures are effective, but the situation overall is a bit disappointing. When someone my age, for example, is laid off permanently, it is incredibly difficult to find a job that pays the same.
It's impossible to help everyone, but I think we can do better. One measure I think is effective is investing in continuing professional education at the college level, for example. Quebec's CEGEP system is world-class. Given the objectives of its clientele, Quebec's system is absolutely tremendous, so too are the college networks of British Columbia and Ontario. Therefore, I think that strengthening reading, writing, math and interpretation skills could prove very beneficial for those 40 and under. Despite having a lot of potential, it is not a solution that will help everyone. I fear there will be some who are permanently left behind.
Senator Bellemare: More and more people who are temporarily unemployed regularly come back into the system, either because they do seasonal work or because the business practice of some employers is to lay people off for a certain period of time and then rehire them a few months later, even if the work is not inherently seasonal.
Can you suggest any specific employment insurance measures to address that phenomenon, where employment insurance is used more so as an income support?
Mr. Gray: The flip side to seasonal employment is seasonal unemployment. The two always go hand in hand. The rates have fallen considerably over the past 30 years. Compared with the 1970s, for example, the seasonal unemployment rate and the number of seasonally unemployed workers are much lower. Conversely, I think the part- time employment and temporary employment rates are going up, but not necessarily in a seasonal context.
In my view, yes, most of the people in my profession have long favoured the creation of a distinct fund and specific policies for these individuals, so that they can break the cycle of dependence and access employment, not necessarily on a full-time basis, but year-round. Furthermore, for those who do not have that choice whatsoever, including certain workers over the age of 40, an indemnity fund should be considered.
Senator Bellemare: For those over the age of 40, okay.
Mr. Gray: Yes, for those over the age of 40. I don't think Canada's job market or economy benefits from encouraging 20-year-olds to aspire to have 45-year careers of seasonal employment, for example.
Senator Bellemare: No.
Mr. Gray: That would leave our human resources underutilized, and, in many cases, they would be doing jobs that don't require training. We are practically the only country in the developed world steering its employment insurance regime in that direction.
France's system focuses more on older people and does not have a regional dimension. Neither does Germany's. My preference is for a system that takes into account two types of unemployed workers, those who are laid off permanently and those who are seasonally or temporarily unemployed because of a highly unstable employment environment.
We do not want to see people in jobs that are not stable. We want people to have stable employment, sometimes on a full-time basis and sometimes on a part-time basis. We don't necessarily want full-time jobs, but we do want stable employment for everyone.
[English]
The Deputy Chair: Maybe I could follow up on that for a minute while others are getting ready to ask questions.
Professor Gray, along with Colin Busby, wrote a piece for the C.D. Howe Institute titled Unequal Access: Making Sense of EI Eligibility Rules and How to Improve Them. Obviously, you have thought a lot about the whole system.
Do you think these changes we are looking at now take enough consideration for something that hasn't been mentioned yet, namely, precarious employment? We have a substantial number of people all the time who are becoming precariously employed. In other words, they're getting part-time jobs. That was more or less what you were getting at, all right. Do these particular amendments take account of that sufficiently?
Mr. Gray: These particular amendments are pretty narrow in their scope so, no, I don't think they address that issue one way or another to make an improvement or deterioration. I don't think they have much to do with that problem. When it comes to precarious employment, I'm in favour of subsidized training and re-training. I mentioned the colleges and vocational training.
The Deputy Chair: Yes, you did.
Mr. Gray: The United States and other countries are dealing with the same challenge — maybe worse; maybe even graver. We haven't discovered any magic bullet yet that I'm aware of. People's situations are incredibly heterogeneous. I'm talking about the unemployed population or people who are at the periphery of the labour market and who are at the periphery for many, many different reasons. There's just no way we could ever come up with a one-size-fits-all intervention, nor should we try. With one-size-fits-all, there is no way.
The Deputy Chair: Thank you.
Senator Stewart Olsen: Thank you for that. You may have gotten to this and I missed it, but I'm a bit concerned about the "employment not suitable'' portion of this and the attempt to provide a definition of "not suitable.'' Is it your opinion that the only criteria for suitability would be that it wouldn't be suitable if the job is at a lower rate or the conditions — I can understand the conditions being less favourable, but I'm not sure that we can say, "Well, you should get the same pay as you were getting.'' I think that's going to cost a lot of money. I'm not sure we should say that. Do you have any other way, any suggestions for employment not suitable that perhaps wouldn't look at that so intently?
Mr. Gray: I really sympathize with what you're saying, but I guess what I was arguing is this is not necessarily a good rule for administrators to enforce. We are concerned about unemployment insurance benefits subsidizing leisure. Yes, someone from the Canadian Labour Congress would strongly disagree with what I just said, but we really are concerned about disincentives.
Scientific research has shown that these disincentives are real and that they bite, but my sentiment is that the best way to try to limit the disincentives and to have people collect benefits for longer than is what's really warranted might be to reduce the length of the benefit period. For repeat users, those are the cases where I think an intervention on the part of job counsellors and the like should best be focused.
You can limit the disincentive effects sometimes, just like my health insurance company does. Okay, here's your limit. They are not going to cover more than $400 for me per year for my physiotherapy, period. They said use it as much as you like within that limit.
Perhaps the most efficient way of trying to discourage the type of behaviour that I think you're referring to is by tinkering with the program parameters, particularly the maximum length of the benefit period. This is much dicier, but the length of the qualification period is much more difficult to deal with than the benefit period.
Senator Stewart Olsen: I understand where you're coming from. I believe that it is an insurance policy: You pay into it and you have a right to claim it back. I'm just not sure what will happen. I haven't seen the rest of the bill — I've just seen these bits that we're studying — but we have in the provisions the working while on claim, and I'm wondering how that's going to affect this or if it would affect this "employment not suitable'' provision. Right now, we can —
Mr. Gray: That is a good point.
Senator Stewart Olsen: I'm just kind of wondering about that.
Mr. Gray: I have researched working while on claim, which is actually kind of difficult to analyze for methodological reasons because only a certain type of unemployed worker ever takes up working while on claim.
My sentiment is that it's both good and bad. It's very popular, by the way. The good part of working while on claim is that it allows firms who just love to have great flexibility in their hiring and their firing practices. It gives them a margin of flexibility that I can tell you the University of Ottawa would love to have as an employer.
So on one hand, any policy that allows a willing worker to match up with a willing employer, to shake hands and make a deal, it improves production in the short term.
But in the long term, it sort of aggravates this issue of repeat use of Employment Insurance. It allows people who depend on the system year after year after year to have significantly higher levels of total income than what would otherwise be the case. So I do think that it's a break on long-term labour force adjustment.
As far as what's suitable work, my guess is that, usually, the workers are pretty keen to work while on claim. When they do, they do give up their entitlement for that week, but they can bank that week, so it prolongs their expiration date regarding when they lose benefits.
So I don't think that when it comes to these "mini offers'' that are involved in working while on claim — they are typically two weeks here, three weeks there, the weather is better this July than we thought and so we have more guests coming — I don't think that workers are too picky. I think that usually they're pretty willing. I guess someone in the field could confirm that.
The people who are in the field that we have working for ESDC, they do know the local labour market. They know more than I do how the labour market works and how it doesn't work. My guess is that these positions are filled by eager beavers. They only last two or three weeks.
Senator Raine: I must confess I'm not an expert in EI, having always been self-employed. But you mentioned that you think if we're going to tinker with it, it would be better to look at adjusting the length of the period —
Mr. Gray: Based on that premise, yes.
Senator Raine: — rather than being too flexible in how you have it defined.
Mr. Gray: Too much administrative discretion that can be appealed easily, and the government took a lot of bad publicity in 2012 regarding that. All you need is just one horror story of someone being disentitled and, yes, the news media would pick it up. When that happened, I just shook my head and I said, "Well, I could have told ESDC that this would bring grief and bad publicity.''
Senator Raine: I remember reading a paper several years ago that clearly outlined that the more generous the unemployment or the employment benefits were, the higher the unemployment rate would be. I said to myself after I read this, "That just makes good sense. If the benefits are very generous, why would you work longer or more?''
If we look at that as a reality, and if we are concerned at all about the cost of unemployment support programs, then should we not be looking at making sure that workers understand that this is a bridging program?
Mr. Gray: Yes. That's how I view it. I view it as such for most of the Canadian labour force. In fact, that's indeed what it is.
Senator Raine: Yes.
Mr. Gray: For seasonal, I think there's something like 300,000 or so really frequent users of Employment Insurance. We've got 36 million people, and I think our labour force is something like 19 million. So for the vast, vast majority of our labour force, employed as well as unemployed, this is a bridging program.
Senator Raine: Having sort of set the stage a little bit, I look at the industry I'm most familiar with, which is the ski industry, which generally ends when the snow melts. We have seasonal workers who, when the snow melts and they are laid off, feel entitled to going and getting their cheque so they can have a nice break.
Now I would say we should in those kinds of scenarios offer them an option not to have EI taken off their cheque —
Mr. Gray: They wouldn't take it up.
Senator Raine: You would be surprised.
Mr. Gray: Really?
Senator Raine: Because they are people who are coming and going, and they are young and they are travelling. They would rather have more money in each paycheque than save up to be unemployed because they are planning on it.
Mr. Gray: First of all, all other factors held constant, the theoretical research as well as the empirical research do indeed indicate that the more generous the Employment Insurance benefits, the higher the unemployment rate is. But there are a number of different channels through which that effect actually occurs.
Having said that, it's not realistic or desirable to expect zero effect on the unemployment rate because we do have Employment Insurance for a reason; namely, to provide temporary income support for those who lose their job for no reason of their own.
Here I am talking like an economist, but I guess that's what I'm supposed to do.
Regardless, that force raises welfare of that person in his or her family temporarily. Ideally, we really wanted to subsidize job searching rather than leisure. But we don't want people taking new jobs instantly for which they might be very overqualified, for example. We do want people to search for one month, and anywhere up to maybe six, seven or eight months in some cases, to try to find a suitable match, as we labour economists would put it.
We believe that we're willing to pay a slight price for that in terms of a slightly higher unemployment rate than would exist if we had no system whatsoever, because if we had no system whatsoever, then we would have an awful lot of mismatches. People would lose their job and feel compelled to start working immediately at a job that pays really low wages and/or doesn't utilize their skills.
However, it is thought that we do generally want to keep a lid on the generosity of benefits, and the program is indeed much less generous than it was. It was in the late 1980s when it reached the pinnacle of EI program generosity, and we're way, way back from those days. If time remains, I'd be glad to talk about what I favour for reform, but right now my priority is to answer your questions.
The Deputy Chair: We are happy to take a paper from you on further reforms.
Senator Seidman: Thank you very much. This committee did deal with some of the amendments to the Employment Insurance Act that came out of that 2012 budget that we speak about.
Mr. Gray: Yes.
Senator Seidman: I do remember that one of the issues of greatest concern then was long-term workers who would need extended benefits.
Mr. Gray: Yes.
Senator Seidman: A formula was developed at the time to determine the hardest-hit regions as far as unemployment was concerned. One of the largest challenges then included issues of regions who were left out of that calculation, if you remember that.
Mr. Gray: Oh, yes.
Senator Seidman: The calculations were based on where people resided and not necessarily where people worked.
It became a real complicating factor. I'd like to know what you might have to say about that and if any of that huge challenge is reflected in these changes or if the government should be revisiting that formula for determining the hardest hit regions?
Mr. Gray: Are you referring to that I guess it was almost a debacle in Alberta?
Senator Seidman: Yes.
Mr. Gray: That was another instance when in front of the TV screen I was saying "Told you so, told you so!''
We think we should just do away with this regional basis altogether and benefits should be modulated according to I'd say two criteria. First, how long has the person contributed? Just like with your pension, the longer you contribute, the higher your pension. Second, what your own attributes are. You would have to develop a formula sheet of some kind — but at least it wouldn't be based on region — of the person's skill level, the person's education level, their physical abilities, and grant longer perhaps more generous benefits for whom the adjustment costs are the highest, absolutely. He or she who has the highest adjustment costs should receive more generous benefits.
However, the flip side of that is they would have to be laid off permanently. They cannot hang around hoping for recall, that the cod will come back some day. They really would have to renounce not their former occupation but their former specific employment situation. They should have to renounce that in order to get adjustment assistance, otherwise they are not adjusting.
Senator Seidman: Thank you.
The Deputy Chair: There are no other questions, so that means I say thank you to you, Professor Gray, for your comments on this and answering all the questions we have had today. If you do want to submit something else, send it in writing and we'd be happy to have a look at it.
Mr. Gray: I really do wish I had the answer to this maybe $100 billion question, how do we deal with today's incredibly rapidly evolving labour market. There really aren't very many people who have total job security any more, and how do we train and retrain?
I tell my own students that they are probably going to have to train and retrain any number of times by the time they retire. We know a little bit about what works but not nearly as much as we would like to know.
The Deputy Chair: Thank you very much.
We will now bring in another witness and the real chair of the committee will take over.
Senator Kelvin Kenneth Ogilvie (Chair) in the chair.
The Chair: We are dealing today with the subject matter of those elements contained in Division 1 and 2 of Part 4 of Bill C-29, A second Act to implement certain provisions of the budget tabled in Parliament on March 22, 2016 and other measures.
In this session we will be dealing with Division 2, which is an amendment to the Old Age Security Act. I'm very pleased to welcome Megan Hooft, Deputy Director of Canada Without Poverty. We would welcome your presentation and then we'll open the floor up to questions from senators.
Megan Hooft, Deputy Director, Canada Without Poverty: Thank you for having me and, just to clarify, my comments will go into OAS but also some elements of EI because that's what I had been told I could reference. You will notice that in my comments and also in the notes provided.
Good evening, honourable senators. I'm pleased to be here and speak on behalf of Canada Without Poverty. Thank you so much for the opportunity to present today.
There are some important issues before us on Employment Insurance and Old Age Security and we are pleased to offer our comments.
My name is Megan Hooft. I'm the Deputy Director of Canada Without Poverty. I will focus my comments today on the proposed amendments suggested but as I mentioned will reference some Employment Insurance points that we feel would be important, especially in the discussion, if I could also reference, the upcoming Canadian Poverty Reduction Strategy. We believe it's important to see this as a holistic issue.
I would like to tell you about Canada Without Poverty, or as we like to affectionately call it, CWP. It is a federally incorporated, charitable organization dedicated to the elimination of poverty. We were established in 1971 as the National Anti-Poverty Organization so many people will know us as NAPO. We have been governed on our board by people with a direct or lived experienced of poverty, whether in childhood or adults, and their experience very much informs our work, and it gives us a scope of what's happening across the country in terms of poverty.
CWP has been encouraged by the government's actions to amend the Old Age Security Act to increase access to benefits for seniors who face an increased cost of living because they must live apart from their partners.
As Canada's senior population grows, concerns about retirement are persistent. According to the group CARP, in 2011, 36 per cent of people surveyed in Canada expressed a lack of confidence in their ability to save for retirement. As this committee has likely heard, the fact that seniors have made some important gains in their after-tax incomes has still left 600,000 seniors living in poverty; so not everyone is able to experience these gains.
Senior women in particular disproportionately experience poverty, with elderly women making up 73 per cent of all poor seniors in Canada. The UN is concerned, and on a number of occasions, particularly when Canada itself has been reviewed by the United Nations treaty bodies, has noted that inadequate access to social assistance benefits as well as housing for elderly women is a serious problem for this government to address.
It is unconscionable to think that in a country as wealthy as Canada a senior adult may be on the verge of eviction or even homelessness, or unable to pay for necessary medications because they simply couldn't afford it.
Seniors living in poverty rely on OAS and the guaranteed supplement to ensure they have an adequate standard of living. This includes food, housing, clothing and other needs. It is about basic needs; it is about human rights.
The proposed changes to Old Age Security represent an important step that this government is willing to move forward to meet Canada's international human rights obligations. And we are pleased to see that and we feel it would be positive for people living in poverty.
In terms of Old Age Security, we've also been encouraged by the changes in this bill, particularly Part 4. As many members of this committee are likely aware, employment sadly does not guarantee a life without poverty, homelessness or hunger. In fact, 70 per cent of people living in poverty are considered working poor, which as a term itself is challenging and suggests a problem. This not only means they are struggling to make ends meet while they are employed, but once they find themselves without a job they are facing considerably more challenges.
Another harsh reality with regard to Employment Insurance is that not all individuals can access benefits. Estimates suggest that only about 38 per cent of unemployed people can actually access EI. In some regions it has been even worse, with at one point we saw statistics pointing to about 26 per cent in Toronto. This does not bode well for a country where job precarity is increasing.
As stated in the Canadian Centre for Policy Alternatives Alternative Federal Budget, employment insurance is not keeping up with the realities of our current job market. Twenty per cent of jobs are part-time and approximately 14 per cent are contract or seasonal. Most jobs being created in Canada are low-paying, part-time, temporary or contract and without long-term benefits or a sense of security. Barely half of those working today are permanent, full-time positions that would provide a degree of employment security most people do not have. Precarious employment in particular has increased by nearly 50 per cent in the last 20 years. In the Maritime provinces the lack of stable, full-time employment is notably visible. Consider Prince Edward Island; only 45 per cent of workers have full-time jobs.
It is really important to think of these realities that people are facing, that they are experiencing as individuals, as family members, as community members when considering policy initiatives that are either going to alleviate or possibly increase stability for those without work.
At CWP we use a human rights approach in all of our work. Employment, poverty and adequate standard of living are human rights issues. Canada has international human rights obligations that it must uphold, including allocating the maximum of available resources to make sure human rights are fulfilled.
The proposed changes today represent important steps toward the fulfillment of Canada's human rights obligations and also respect for the rights and needs of individuals.
However, a gap remains between individual policies and a holistic rights-based strategy for poverty. Too many people are struggling in poverty, living in inadequate conditions or are on the verge of financial collapse due to a job loss. We need a stronger social safety net than the one we currently have.
Without a holistic anti-poverty plan that is based in human rights, the root causes of senior poverty or employment precarity will not be addressed adequately.
In summary, as you deliberate upon this bill, first, we commend the changes you have made, however, we would like to suggest that you consider recommending that Canada look at this from the perspective of a broader poverty reduction issue, that it target systemic causes and goes beyond piecemeal activity.
Thank you for your time and I look forward to answering all of your questions.
The Chair: Thank you very much. I will now open up the floor to my colleagues. We would like to get questions on the OAS portion certainly in this session and then perhaps additional questions with regard to EI, but we certainly want some input from questions from the senators with regard to the OAS, and we will start with Senator Eggleton.
Senator Eggleton: Thank you very much for your presentation. I'm quite familiar with your organization, as you know, and subscribe to everything you have said.
But let me ask you about this OAS provision because it is a very limited one and it has to do with how the calculations are going to be made for a couple if they have to separate under circumstances that are not of their own making, such as one of them having to go to a nursing home. It seems also to relate to cases where one of the partners might be on the GIS and the other is on the allowance provisions. This is the provision that you get between ages 60 and 64.
It's very limited in terms of who it applies to. Do you think it should be broadened into other conditions where people are separated and this becomes a challenge of getting sufficient income for them to survive on? Have you thought about that?
Ms. Hooft: I would like to think if there were individuals or families going through this experience they have a place to go to express these issues or claims. For example, let's say you have someone who doesn't quite fit the criteria you are talking about today, but they are noticing it is drastically affecting their income because they don't have the full payment of OAS or they lost the GIS supplement top-up, they need to be able to go somewhere to claim that.
I would like to think the government has a sense of flexibility to look at each circumstance to make sure. If their goal is to ensure seniors are not living in poverty, you need to look at this as cases come forward and make adjustments as they come forward.
Senator Stewart Olsen: Thank you for your presentation. I'm most interested in rural areas. I come from New Brunswick, so what you just said is quite impactful. You would like to think seniors have a place to go to, but in rural areas they don't. Have you done any work on this with your organization? What happens to people in the rural areas, many of whom probably don't even apply for OAS and GIS because of that?
Ms. Hooft: We haven't done specific work on rural areas or specifically who is accessing OAS and GIS.
Senator Stewart Olsen: Do you think the government should?
Ms. Hooft: Absolutely. Governments need to be creative, but not only hear from organizations or individuals at set periods of time — for example, when you are studying a bill — but there needs to be some reporting or monitoring mechanism that people can reach out, whether it's a phone line, in a rural area that's probably more likely than an office, because that can be expensive, but a way in which people can report on how they are being affected either by Old Age Security or if they need help to access Old Age Security.
Senator Stewart Olsen: I would like to see some kind of study from your organization. Nothing in this country should happen without addressing our rural areas. We have a few big cities and a lot of little areas, and I think concentrating on the big cities is a disservice to Canadians, so I'd love to see something on that.
Senator Seidman: Thank you very much for your presentation. There is no doubt that older women living alone are disproportionately poor. Your statistic here shows elderly women making up 73 per cent of all poor seniors in Canada living alone. Of course, living alone is one of the reasons they are so poor, because they have to finance themselves totally.
If I look at subsection 19.8, it says that in cases where the spouses or common law partners are living apart for reasons not attributable to either member of the couple, such as when one spouse must live in a nursing home, so that specifies one particular example, it doesn't specify others, so it leaves it open to interpretation.
Are you feeling secure enough with that language? Does it cover everything? Is it too diffuse? Is it too uncertain? Does it leave too much open without a fuller definition? I would like to know, from your perspective, does this work?
Ms. Hooft: At this point it seems quite specific. I can't predict the circumstance, and I assume at some point there will be a decision made as to whether that circumstance is justified.
I want to know what is the system where someone says that they need this, it's not working, I live apart from my spouse, I'm finding myself in poverty. I don't know yet, and I don't think this bill addresses how people will make these claims or report situations where you would then act on it as a government.
This leaves it for them to come to you, but in a way that is not entirely clear. As someone who has accessed government services in various ways, navigating the system is difficult. It needs to be clear that there is an open space for future consideration of cases, and that the goal is to alleviate poverty and lift seniors out of poverty. If your goal is to protect rights and to function from that place, you will approach this differently than simply a phrase in a budget implementation bill.
Senator Seidman: It's often the male in a marriage who might end up in a nursing home with the woman trying to deal with it, and you are saying there would be no place for them to go, there is no automatic reach-out. How would they trigger this?
Ms. Hooft: What is the process?
Senator Seidman: Exactly. What is the process? It is not defined.
Ms. Hooft: I'm not clear on that.
Senator Seidman: Do you think this should be applied retroactively? It comes into force on January 1, 2017.
Ms. Hooft: That's interesting. I didn't consider that, but because we come from the perspective of alleviating poverty, I would like to think that if people are in desperate circumstances that the government or a social safety net would be in place to say that, "Yes, we see that you've spent way more in medical bills because you didn't receive enough and we can help you.'' Perhaps that is a bigger conversation that needs to happen about what that would look like and the costs involved and working with various departments because it could be a health issue as well as an EI or finance issue. Yes, I would like to think that that would be considered.
The Chair: We are going to move now into a second round where we will look at EI questions. Just to be certain that we've gathered the key points you have made with regard to the OAS clause, I understand, from your responses, that one key issue is a process by which potential claimants can access this support, and another is the question that you can't predict what other circumstances should be reasonably considered for eligibility for this situation. That's a very rational answer, but do I have the two major points you have made, correct?
Ms. Hooft: The third piece is reporting. For example, if there has been a situation where someone believes it is unfair, or in this case there is a retroactive claim, what claims mechanism will support this process.
Senator Eggleton: Well, on Employment Insurance, what the government is proposing to do is undo a provision put in place in 2012 that concerned a lot of people that they might have to move away from their communities, take lower- paying jobs, or be willing to, in order to comply with EI regulations, and apparently those have already been reversed because they came out of regulations. They were reversed in the regulations effective July 3.
Apparently, why this provision is in here is to put into the legislation what is suitable or not suitable employment for purposes of EI payout. They want to get it into a legal form in this document, as opposed to just in the regulations, but it doesn't change any policy; the policy has already been changed.
I raised this question with Professor Gray, and you've talked about it in your submission, this whole matter of precarious employment and whether any of these provisions with respect to eligibility or non-suitable employment should consider the fact that there is a growing population that can only get precarious or part-time employment. A lot of people can get maybe long-term part-time but can't get benefits, and a lot of people can't get that much. We all understand what precarious employment means.
You say it's important to take these realities into account, but do you have any specific thoughts on how those realities might be taken into account, either in these amendments or in future amendments to the act?
Ms. Hooft: It is a great time to be having these discussions in light of the fact that next year a Canadian poverty reduction strategy is said to be in development. Obviously employment and income are questions that will also be on the table then, so the fact that this is happening is timely.
In terms of EI and the one that we raised here, employment is a two-way street. You have an individual and you have an employer, and there is a lot of discussion about EI and the employee. That is, what are they doing? How are they accessing this? That is a concern because the majority of people are not accessing this, or maybe the benefit rate is lower than people would like or it should be. What, then, are you doing on the employment side? We have incredibly low wages, so even if you are accessing EI and you're getting 55 per cent of your wages, it is a significant cut. With almost half of Canadians living paycheque to paycheque, what would happen if they lost half of their paycheque? That could be very detrimental to an economy, to a society, to a community.
My question is: What are you doing or what are the conversations that are starting to bubble, hopefully, about employers, about a living wage? What does it mean to earn a minimum wage? What is this minimum floor we're setting? Is it a poverty level? If, for some reason, there's a job loss, is there that social safety net? Is EI there to catch them? That's the question that it looks like the Budget Implementation Bill is trying to address.
Those are my thoughts and that of my colleagues when we were drafting this.
Senator Eggleton: Thank you.
The Chair: I have read through the bill. I understand it quite well. I have no fundamental question to ask you, but I was intrigued by Professor Gray's suggestion of an EI system based on the amount of earnings you've had over a period of time. I don't want to get into long detail, but do you have a quick comment for us with regard to that?
Ms. Hooft: It's very interesting, but it depends on how much you earn. If you're a low-income earner, your floor is set very low. How can we set a reasonable floor? This has been suggested by other organizations such as CCPA, which I quoted earlier, and the Canadian Labour Congress, which Professor Gray quoted. We need to make sure that there's a reasonable floor because the purpose of EI, as he said and as you know, is to catch people. It's to transition them between jobs. That's the main purpose of this. We're not asking them to take a real hit on their incomes or to dip into poverty during that time. What you would like to do is have a bit of stability — that should be the purpose — to help bring them through from one side to the other.
Having used the system myself, it was fine at the time. I didn't have children. I was a young single person, so it was pretty much less of an issue. But as a family, it's a critical issue, especially in a city like Vancouver where I live, where it's incredibly expensive. If you're not earning enough to save for the future, EI is a very important social safety net.
The Chair: It did occur to me that, depending on how it was implemented, there could be some unintended consequences, particularly for lower wage earners. One had to be very cautious, but I felt it was an interesting thought.
Ms. Hooft: Yes.
The Chair: We've looked at a lot of issues dealing with those in socially challenging conditions. In fact, the reason I was delayed is a consequence of our recent report on dementia, where we had the issue of families where when you get dementia, you have to give up your job immediately and be removed, in general, from employment. Then, of course, you have the issue of caregivers who are usually initially family members. They often have to give up their jobs in order to help completely. We've made recommendations with regard to these issues in terms of the tax system and to have refundable credits in those particular areas. I was dealing with that for a couple of hours on a national program just before coming here.
There are a lot of these issues that fit together in terms of helping people continue their lives in some reasonable way, based on the circumstances that they find themselves in on the economic conditions.
I want to thank you very much for appearing.
Ms. Hooft: Thank you.
The Chair: You've answered the questions clearly for us and have helped us with our examination of this bill. With that, honourable senators, I declare the meeting adjourned.
(The committee adjourned.)