40th PARLIAMENT, 2nd SESSION
EDITED HANSARD • NUMBER 082
CONTENTS
Wednesday, September 16, 2009
Income Support Program for Older Workers

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

Madam Speaker, I am pleased to respond to Motion No. 285. The sponsor of the motion would like to see this government implement an income support motion and a support program specifically for older workers who have lost their jobs to bridge them from active employment to receiving pension benefits.

I cannot encourage support for the motion. It would be against both the letter and the spirit of our policy with regard to older workers. Our government's approach to older workers has always been to create initiatives that encourage and support their retraining and participation in the labour market. If the initiative proposed in the motion were implemented, it would weaken the attachment of older people to the workforce and it would cost Canadian taxpayers billions of dollars.

Allow me to go over a bit of the history and give an historical perspective to the motion.

Motion No. 285 essentially calls for the establishment of a passive income support program, very much like the defunct program for older worker adjustment, or POWA.

POWA was a federal-provincial cost-shared program that existed from 1987 to 1996. It served 12,000 people and cost nearly half a billion dollars over the program's existence, and 70% of that was paid for by the Government of Canada. There were many problems with the program.

Let me cite the most important one. It discouraged people from returning to work. The figures tell the story. Only 19% of the participants in the program found work again after being laid off, as compared to 39% of the people who were not in the program. In addition, although both groups experienced a substantial loss of earnings after job loss, this loss was more pronounced for those in the program, with average earnings decreasing each year following layoff.

That program was abolished because of its negative impact on older workers and on the job market and because of its prohibitive cost.

In part because of these reasons, the government has decided to move away from passive income support toward a more effective intervention to help vulnerable workers.

We are currently dealing with an economic downturn and one of its effects is a rise in unemployment. It is distressing to see older people lose jobs that they may have held for many years. However, government-funded early retirement is not the answer. Why? Because as the economy picks up, we will need every worker we can get, and that is a fact. Every older worker has something to contribute and we want to be sure they are part of the labour market.

In a few years we could again face significant labour shortages. That is why we need to keep older workers in the labour market. Older workers are key to Canada's long-term prosperity, especially in the context of a rapidly aging population. They represent a large pool of experienced and skilled labour. Retaining them and retraining them is essential for ensuring a strong labour force in Canada.

The government's concern for older workers predates the current recession. In 2006 we introduced the targeted initiative for older workers. It provided active employment services to unemployed older workers in vulnerable communities affected by high unemployment or significant downsizing.

In 2007 we also appointed an expert panel on older workers, with a mandate to examine the longer-term issues facing this group. The panel confirmed that our government was on the right track with the employability approach that would remove systemic barriers and disincentives to work. The panel did not endorse a passive program like POWA.

Our aim is to give older workers more flexibility and choice so they can continue to participate in the workforce if they want to. The advent of the recession has only intensified our efforts to help older workers.

Canada's economic action plan is providing significant support to Canadian workers, including older workers affected by the global economic downturn. Through Canada's economic action plan, the government is creating more and better opportunities for Canadian workers through skills development. When older workers lose their jobs, they can get temporary income support through employment insurance income support. Many older workers are also receiving employment insurance-funded programming and training. We have invested significant sums of dollars toward training and retraining for the jobs that exist now and into the future.

Through Canada's economic action plan, our government is investing an additional $60 million nationally over three years in the targeted initiative for older workers, which we extended for additional years and have made available to workers in cities with populations of less than 250,000. This increased funding will enable even more older workers to make the transition to new jobs.

There is even more. Our economic action plan also provides about $500 million over two years for the career transition assistance program. This program offers extended income benefits to long-tenured workers who are paying for their own long-term training. We estimate that the career transition assistance program will benefit about 40,000 people.

All of these programs are aimed at helping people acquire new skills, training them and retraining them for a job market. These new initiatives are in addition to the increased support that we are providing to the provinces and territories for skills training through the labour market and labour market development agreements. Over two years, we are putting a total of $1.5 billion into these agreements, and that is on top of the programming support we already have in place. These agreements provide training support for the unemployed people.

In budget 2008, we increased the guaranteed income supplement earnings exemption from $500 to $3,500 and we made it easier to apply for and get the guaranteed income supplement. This is another significant improvement. Just recently, the Minister of Finance announced changes to the Canada pension plan rules, something that has been very well accepted, to better reward older workers who participate in the labour force and to improve the options for older workers who choose to combine pension and salary.

As one can see, these programs, although popular, may not be popular with the members of the opposition, but they are popular with the group that are benefited by them. As one can see, our government is committed to helping older workers remain in the labour market. This commitment is shown in our concrete actions to help older workers.

I should note that we are not the only ones who think that this is the best way to go. The Organisation for Economic Co-operation and Development, or OECD, has strongly advised against publicly funded early retirement schemes. At the March 2009 meeting of the G8 employment and labour ministers, the OECD presented a paper that called early retirement schemes a policy mistake because they reduce the long-term labour supply and increase dependency on benefits. That is just not good for anyone and it is not good for our country.

Canada's prosperity now and into the future depends on a strong labour force. Older workers have accumulated the kind of wisdom and experience that we cannot afford to throw away. A passive income support scheme for unemployed older workers would be a waste of our human and financial resources and would cause great long-term damage to our economy.

This government is not going to make that kind of mistake. That is why I oppose Motion No. 285. I encourage my hon. colleagues to join me in voting against this sort of policy mistake and support our government's active measure for older workers.

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