40th PARLIAMENT, 2nd SESSION
EDITED HANSARD • NUMBER 047
CONTENTS
Tuesday, April 28, 2009
Employment Insurance Act

Mr. Ed Komarnicki (Parliamentary Secretary to the Minister of Human Resources and Skills Development and to the Minister of Labour, CPC):

Mr. Speaker, I welcome the opportunity to join in the discussion of Bill C-279.

Our economic action plan commitments to improve the EI program clearly indicate the employment insurance program is very important to our government. It is important to Canadians.

The bill put forward by the hon. member for Welland proposes that pension benefits, vacation pay and severance payments, collectively called separation payments, not be included in earnings under the Employment Insurance Act and therefore will not reduce benefits under the act. While this government appreciates the sentiment behind the bill, it is important that we look at the central premise of employment insurance and that this debate be put in context.

At the core of the employment insurance program is the insured-based objective that EI benefits are available to those individuals who are facing a loss of employment income. To be consistent with this objective, it naturally follows that, under the EI program, separation payments be considered as income arising from employment, and that is what they are.

The rationale behind the current system is that benefits are not paid simultaneously as, in reality, there is no loss of employment income. Once the time allocated to separation money expires, EI benefits can be collected. People are not losing EI benefits, what it is saying they must use up the earnings from employment, or the income, first. When that is used up, then they go on EI. Severance payments are there to replace lost income. It is something that happens by negotiation between employer and employee. It is something that can be paid out through legal action. That is meant to replace employment loss and it should be used up.

As things currently stand, the EI program makes provision for workers who receive separation payments to have their benefit periods extended by each week for which separation moneys are paid up to a maximum of 104 weeks. This means that EI claimants are eligible to collect EI benefits over that period of time. EI can continue up to a maximum of 104 weeks.

For example, if claimants qualify for 45 weeks of benefits and receives separation pay that equals 6 months of regular salary, they may receive their benefits provided they are still unemployed, once this initial 6 month period has elapsed. Therefore, claimants use up the six months, then go on EI and they are entitled to the full benefits.

If we use this example, while these individuals may not be able to receive EI benefits for a six month period, they, through their separation pay, already have employment income to live off for six months. Given that these individuals have income to live off for six months, the current system assumes they have not suffered the loss of employment income for this period of employment.

While the obvious effect of the bill would be to remove separation payments from amounts that may be deducted from benefits payable, it is important to note that the full implications of this proposal are difficult to determine.

For example, as the bill proposes to change the definition of earnings throughout the EI Act, it is not clear how the amendment may affect what would be considered to be insurable earnings and how it would affect premiums collected. Premiums have to be paid. As benefits are extended, premiums have to be increased. The ramifications could be quite substantial and would require considerable effort to clarify.

It is therefore difficult to estimate the full cost of implementing the changes proposed in the bill. Looking solely at exempting separation moneys for determination of EI benefits, the cost would be approximately $130 million annually.

Our government is always concerned when Canadians lose their job. We understand the pressures faced by Canadian families during these challenging times. That is why, through our economic action plan, we will help over 400,000 people benefit from an additional five weeks of EI benefits. We will help 190,000 people, including long-tenured and older workers, get retrained to find a new job and put food on the table for their families.

Our government has heard the needs of Canadians and will continue to deliver the protection they need to get through these difficult times. We recognize that during these challenging economic times, more and more people are unfortunately losing their jobs.

People who have lost or are at risk of losing their jobs need to know that their government is working hard for them to get them the assistance they need. That is why, as part of our action plan, we are investing an unprecedented $8.3 billion in Canada skills and training transition. Looking at that, it is a huge amount of dollars. With this strategy, we are making use of employment insurance to bolster benefits and invest in skills training.

Our government remains committed to having a highly skilled, globally competitive workforce. Helping Canadians receive training is essential to meeting this goal. That is why important changes to EI also include supporting long-term training for those workers who have been in the labour force for many years and have not made significant use of EI. For these workers, we are extending EI income support for the duration of training up to two years. These are moneys well spent, positioning people for the time when this economy changes.

I would also like to highlight that in our economic action plan, we committed to allowing earlier access to EI regular income benefits for eligible individuals investing in their own training, using all or part of their separation package. If they use all or part of that, EI would then kick in. Training and skills development are key to helping permanently laid off workers who need to change occupations or sectors, preparing our nation for the jobs of tomorrow.

Our proposal will help unemployed Canadians invest in the training they need for the jobs of the future, while allowing them to receive their EI benefits sooner.

Our government is also assisting laid off workers by providing nationally the advantage of an extra five weeks of EI benefits previously offered as part of a pilot project that was only provided in specific regions with high unemployment. Additionally, the maximum duration of benefits available under the EI program has been increased from 45 weeks to 50 weeks. These changes mean that unemployed Canadians, who otherwise would have exhausted their benefits, will receive financial support for a longer period of time. These new measures became available on March 1.

These are some of the measures that the Government of Canada is taking to temporarily provide additional income support to unemployed workers facing transitions in tough economic times.

Our government has also taken steps to provide assistance to unemployed individuals who are unable to qualify for EI benefits at all. By establishing a new strategic training and transition fund, we are investing $500 million over two years to help these individuals obtain training and other support measures. In the event they do not qualify for EI, this program and fund is available for them. We understand that the provinces and territories know local needs best, so these funds will be delivered through existing labour market agreements.

Our plan also takes into account that, in economic downturns, it would often be older workers who would be most severely affected. To provide them with greater assistance, we are investing an additional $60 million over three years in the targeted initiative for older workers program. We are also expanding its reach so communities with a population fewer than 250,000 will now be eligible for funding. It makes no difference if these communities are located in larger metropolitan areas. They are still eligible. Our plan provides additional support to unemployed Canadians over the short term and is designed to meet the needs of the current economy while helping Canadians get the skills they need for the jobs of tomorrow.

We believe that while the intent of this legislation is laudable, the wording of it is unclear. If passed, it could have considerable impacts on the fiscal framework and significant implications on other aspects of the EI program that are unclear at this time.

As I mentioned earlier, our government is already proposing a measure that will allow earlier access to EI benefits if individuals use some or all of their separation payments to purchase skills upgrading or training for themselves.

These initiatives, when taken as a package, are meant to address the needs of Canadians. It is unfortunate that the member and members of his party oppose each and every one of these proposals, such as extending the EI program by five weeks. It matters very much to those Canadians who are still looking for a job and have not found one. That five weeks is very significant. It matters to those who want to job share to ensure that all of them have an opportunity to work, while the economy recovers. There are 190,000 people who want to get their skills upgraded and want to have training so they are prepared to enter the job market of the future.

That party has opposed and voted against very important measures. In fact, it said that it was going to vote against them before it had an opportunity to read and understand what these measures were. One has to look at this whole picture as a package.

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