June 1st, 2022 - The subject matter of elements contained in Divisions 23, 24, 26, 27, 29 and 32 of Part 5 of Bill C-19, Budget Implementation Act, 2022, No. 1 - Various Witnesses
Senator Poirier: Thank you to all the witnesses for being with us today.
My question is also for Ms. Nandy. It’s along the same lines as that of my colleague Senator Kutcher, but with more detail. My question is with the budget document. On page 146, it says that Budget 2022 proposes to extend these rules for up to five additional weeks for eligible seasonal workers
. . . until October 2023 as the government considers a long-term solution. . . The cost of this measure is estimated at $110.4 million over three years, starting in 2022-23.
On page 148, the table breaks it down. There’s $3 million for 2022-23, $56 million for 2023-24 and $51 million for 2024-25. Why is the government earmarking $51 million in 2024-25 for a measure that is meant to end in October 2023?
Ms. Nandy: Thank you for the question.
The cost of this measure is related to operating costs to support these five additional weeks for claimants, with the majority being in the second year. Given that EI benefits can be provided for a benefit period, in this case for 45 weeks with an additional up to five weeks for these eligible seasonal claimants, that could run into future years. Hence, the additional costs.
Senator Poirier: The mandate letter of Minister Qualtrough gives a vague date of summer 2022 to bring forward and begin implementing a plan to modernize the EI system. If the government is earmarking funds for 2024-25 for the measure for EI for seasonal workers, is this a signal of this becoming permanent? When can we expect more details on this EI reform?
Ms. Nandy: The government’s plan on modernizing the EI program, which is a priority, will be considered after the consultations conclude to allow for the fact that we are currently engaging with employer groups, labour groups and other stakeholders, including those in the seasonal industries, to ensure that that input, as well as lessons learned from pilot project 2021, can inform the way forward on modernization.
Senator Poirier: Can you clarify again for me? I’m having a hard time catching why a program that ends in 2023 — I know you explained it, but it seems hard to register. Why do you need $51 million for 2024-25 when the program is finished in 2023? Can you clarify a little bit more on that?
Ms. Nandy: The additional five weeks, or up to additional five weeks, are paid at the end of a benefit period. That could be in a period that is longer than 52 weeks, so that can go into future years.
Senator Poirier: It is not ending in October of 2023?
Ms. Nandy: In terms of eligibility, it is, but when benefits are paid, somebody may be eligible as of October 2023, and then they would be paid for the 52 weeks following.
Senator Poirier: Thank you.
Senator Poirier: Thank you to all the witnesses for being here.
I’m going to follow on the question with Ms. Symonds. I know you’re a voice for the EI region for seasonal workers, especially with the black hole problem. Being from the east coast of New Brunswick, where there are a lot of coastal areas and fish plants, I absolutely understand the concerns and the problems that the black hole can create for our families. I know you said you have met and you have other meetings coming. When you said they offered five weeks, is this five weeks over and above what you’ve had before, or is this the same five weeks that’s been repeated for the last while?
Ms. Symonds: This is the same five weeks that has been repeated time after time.
Senator Poirier: In all the consultation that you’ve had or the meetings that you’ve had, at this point there has never been an increase to make them understand that the five weeks is not sufficient to meet that gap?
Ms. Symonds: No.
Senator Poirier: I have another question for Mr. Guénette. I’m going to read in English first, and then I’ll try to translate my notes in French for you after. Your organization shared a press release following the budget being made official. It said:
At a time when many small firms are struggling to make payroll, the budget confirms workers and employers will see another significant increase in both Employment Insurance (EI) and CPP/QPP premiums. And with potentially costly changes planned for the EI system, small firms are rightly worried about many years of payroll tax hikes ahead.
Part of that statement came to mind. It is the potential cost of employment insurance plans to small firms that are concerned about their future impact. Could you please tell us more about the impacts on the companies that are aware of it and on the future of SMEs?
Mr. Guénette: The last two years have of course been very difficult financially for many SMEs, whether they are federally or provincially regulated. A great many firms have had difficulties. CPP contributions continued to increase despite the pandemic. In some provinces, the carbon tax continued to increase despite the pandemic. The excise tax on alcohol continued to increase despite the pandemic. The government froze employment insurance contributions, but they will start increasing again next year. Now we are talking about saddling employers with 10 days of paid leave that they will likely be responsible for.
So the tax burden on SMEs keeps increasing, at a time when they are having a lot of trouble generating the revenues they need to be profitable. The Canadian Federation of Independent Business is very worried about the future for a large number of firms. One in six firms is presently at risk of closing. So the best thing to do now and in the months ahead is to ensure the recovery of our SMEs that have been affected by the pandemic, and to have discussions about other public policies. Right now, the extra days to be covered by firms are coming at the worst time possible.
Senator Poirier: Was your organization consulted? Were you consulted to share your concerns about the impact of these measures on SMEs and about the future of employment insurance programs?
Mr. Guénette: Yes.
Senator Poirier: Thank you.