The Hon. the Speaker pro tempore: The vote will take place at 4:41 p.m. Call in the senators.

Motion agreed to and bill read second time on the following division:

On the Order:

Resuming debate on the motion of the Honourable Senator Duncan, seconded by the Honourable Senator Clement, for the third reading of Bill S-236, An Act to amend the Employment Insurance Act and the Employment Insurance Regulations (Prince Edward Island), as amended.

And on the motion in amendment of the Honourable Senator Ringuette, seconded by the Honourable Senator Petitclerc:

That Bill S-236, an Act to amend the Employment Insurance Act and the Employment Insurance Regulations (Prince Edward Island), as amended, be not read a third time, but that it be referred back to the Standing Senate Committee on Agriculture and Forestry to hear from the Parliamentary Budget Officer concerning his office’s fiscal analysis on the bill; and

That the committee report to the Senate no later than November 15, 2022.

Hon. Diane Bellemare: Honourable senators, I rise today to lend my support to this amendment. I will be brief. I had prepared a speech like Senator Ringuette’s, but I found hers very compelling.

I would first like to say that I fully understand the purpose of Bill S-236 and why several senators supported it. The fact that Prince Edward Island has two zones is an anomaly that dates back to 2014. Prior to that, the province had only one zone. In the context of the work surrounding this bill, many have said that these two zones were created as a result of steps taken by certain individuals in the other place. That explains why Prince Edward Island was divided into two zones.

A number of people have talked about this anomaly. Apparently, according to the Commissioner for Workers, four zones were created at that time, quite spontaneously and arbitrarily. I can understand why several senators want to put an end to this two-zone anomaly.

Why? Because it causes all sorts of inconsistencies and inequalities. As you know, given that unemployed workers receive benefits based on their place of residence, two unemployed workers who worked at the same business but who live in different areas would receive different amounts for different weeks. We must think about that and change it.

However, I rather agree with what Senator Simons told the committee. She said that it is not really the Senate’s role to micromanage. To some extent, amending the schedule to the Employment Insurance Act is micromanaging, and that is not our job. We can point out anomalies, but it is not up to us to fix them. It is really the government’s job to make those changes.

I am also very sympathetic to Senator Ringuette’s remarks. She eloquently stated, following the release of the Office of the Parliamentary Budget Officer’s report, that it had calculated that merging the two regions would result in a $76.6-million loss between fiscal years 2021-22 and 2025-26. This represents a lot of money that the people of Prince Edward Island would not receive, according to the Office of the Parliamentary Budget Officer. I appreciate this argument.

Third, the government wants to reform Employment Insurance. The work is under way and the changes should be substantial. I believe that that would be the right time to correct this anomaly and review the complexity of the current system. We must not bury our heads in the sand. The current EI system is incredibly complex.

There are 66 zones in Canada and, depending on the zone and its unemployment rate, each person requires a different number of weeks to qualify for EI. Once you qualify, the duration of benefits is also different. There are tables that contain 29 rows and 11 columns. This means that there are over 400 possible boxes that can apply to a Canadian in terms of EI. That needs to be fixed.

I am not aware of any country that uses zoning as an eligibility criterion. In some countries, a person’s age and income can be used as eligibility criteria for Employment Insurance benefits, but never the zone they live in.

It is important to remember that our entire system is the result of the 1976 reform, the Axworthy reform, which had some positive and some less positive results. It needs to be said that, at the time, the main purpose of Employment Insurance was to manage unemployment. There was a period in the 1990s where the monetary policy was having a major impact on the participation rate in Canada. I am reminding senators of this because I think it is important. The monetary policy worked like it does today, with agreements, and it targeted a range of interest rates. However, its target at the time was the natural rate of unemployment.

We were so afraid of inflation and inflation expectations that the Bank of Canada’s focus was the non-accelerating inflation rate of unemployment, which was assessed at 8% for Canada as a whole. That was the rate at which interest rates would increase. When the rate approached the natural rate of 8%, the Bank of Canada tightened its monetary policy. It is also important to remember that mortgage rates were very high at that time.

When you have an unemployment rate of 8% and that is the rate you want to achieve, imagine the unemployment rate in certain regions. It could be very high in the Maritimes and lower elsewhere. There were and still are very big regional disparities.

Nowadays, the problem is different for a number of reasons, including the inevitable aging of the population. Even if we do have a recession, the unemployment rate will rise, but probably not as much as it would have in the past because the population is aging. A recession will lead to earlier retirements, and the total unemployment rate will rise, but it will not rise as much as it would have in the past.

Now, because of the rapid pace of technological change and people moving from job to job often, along with the aging population I mentioned, we have a labour shortage. We need to reform Employment Insurance to deal with the labour shortage.

I invite the committee to consider this, if the amendment is agreed to, and to take another look at Bill S-236. I also invite the committee to take another look at it in light of the upcoming reform and consider what else the committee might suggest with respect to Employment Insurance reform.

That’s all I wanted to say. Thank you.

[English]

Senator Patterson: Thank you for the answer, Senator Bellemare. I’m not sure about the accuracy of the statistics from the Office of the Parliamentary Budget Officer, or PBO, because in 2021, the Eighth Annual Report on Child and Family Poverty on Prince Edward Island highlighted that the federal riding of Charlottetown, which is smaller than the EI zone of Charlottetown, has the highest rate of both child poverty, at 25%, and poverty of people of working age, at 24.4%.

By contrast, the westernmost riding of Egmont, which is entirely in the P.E.I. EI zone, has a 19.4% rate of child poverty and a poverty rate of persons of working age of 14.7%. This is the discrepancy you spoke about in ensuring access to benefits to the working poor in Charlottetown due to requiring 700 qualifying hours compared to 560 hours in the P.E.I. zone.

The authors of that report recommended that the federal government immediately end the division of EI on P.E.I. into two zones, thereby ending that disparity that currently exists among EI recipients in this province.

In light of this information from the annual report on child and family poverty, 2021, would you not conclude that passing Bill S-236 actually benefits the working poor in Prince Edward Island, given that the highest rates of poverty are in the Charlottetown EI zone? Should we not listen to the subject matter experts on Prince Edward Island?

[Translation]

Senator Bellemare: I knew you were going to ask me a question about poverty rates. I didn’t have enough time to study the matter in detail. But it’s not for me to study it. That is why there is an amendment that proposes that the Parliamentary Budget Officer’s report be reviewed. Then it will be possible to examine the problem of poverty more thoroughly and determine whether it is truly linked to the number of weeks of benefits and the duration of benefits.

We know, in fact, that unemployment rates change. In September 2022, the unemployment rate in Prince Edward Island as a whole was 8.3%, while it was 7.3% in the Charlottetown zone and 8.7% in Prince Edward Island excluding Charlottetown. With a rate of 8.3%, this is a slight improvement. I am not really sure that the difference between the rates of 7.3%, 8.3% and 8.7% is considerable. All that will be for you to judge and to report to us after the committee does its work.

[English]

Hon. Dennis Glen Patterson: Senator Bellemare, since 2014, the House of Commons committees have twice recommended a restoration to one EI zone for P.E.I., and you’ve talked about reforming the EI system. Out of respect for Prince Edward Islanders, let’s not confuse their specific issue with the larger matter of EI reform that you’ve advocated.

Is it not the role of the Senate to work on behalf of our regions and address issues of regional interest first?

[Translation]

Senator Bellemare: Thank you for the question, Senator Omidvar. The advisory council that I am proposing will help the current commission do its job, which is to comment, reflect, make proposals and receive testimony. The commission would also be able to act on its own initiative. It could therefore receive requests from outside parties, conduct its own analyses and present them to the commissioners.

In my bill, the commissioners would be members of the advisory council, this broader commission, if you will, so they could offer an objective view and help develop common solutions for problems that are identified.

Dear colleagues, I hope that we can discuss this more fully when you participate in the debates on my bill.

[English]

Hon. Colin Deacon: Honourable senators, I think it’s wonderful to hear this focus in the Senate of Canada on those who are marginalized and disadvantaged in Prince Edward Island. It shows we’re focused on a very important part of our job, which is to represent regions and to represent issues that are not being as well debated sometimes as they need to be and where Parliament may not be acting in a way that serves every issue.

I would like to speak in support of the subamendment because the issue of Bill S-236 gets to the core of a very important national problem that we have, and it’s a business crisis in terms of labour shortage.

I want to speak to a bit of history I have on the Island. When I first worked there in the 1990s, I worked in a job where I had a board that I reported to, and sometimes I would come forward with issues that were concerning to employees and where employees were really hoping to have certain advancement so they could do their job better. I would often hear a response that was: Well, they’re just lucky to have a job in the first place.

At a certain point in time in this country, that was very much a perspective: that there was a line around the block for people to replace you in a position, and if you didn’t want to do the job as you were told, you could see yourself being replaced and you were lucky to have that job.

Things are different today. Twenty-five years later, Prince Edward Island actually has the youngest population in Atlantic Canada — it’s the fastest-growing population in all of Canada — and it has seen a tremendous change since the 1990s. I remember when former premier Wade MacLauchlan was president of the University of Prince Edward Island, or UPEI, and the crisis was so dire with an aging population and a lack of a vibrant working environment that he said, “Would the last person to leave P.E.I. please turn off the lights as they head out the door?” It was a really tough time on the Island.

Just to give you an example, between September 2021 and September 2022 there were 2,300 net new jobs, relatively speaking, created in the month of September on Prince Edward Island, mainly in manufacturing and construction, that were not there a year ago. There are a lot of people moving to Prince Edward Island. Last year 4,800 people moved to P.E.I., the fastest ever in 50 years in terms of population growth on the Island, but the trouble is that population growth is exacerbating a housing shortage that is also being exacerbated by a labour shortage. There are 1,000 unfilled construction jobs in P.E.I. right now.

The P.E.I. tourism sector, which has worked so hard to build a shoulder season so that you’re not just making money as a tourist business in July and August but building your business from April right through to November — and that shoulder season has always been affected by a drop in the number of student workers as they head back to school — but now it’s being absolutely negatively impacted by a lack of workers to replace that labour in the shoulder season. This has been a hard-fought win on the part of the Island to expand the length of the tourist season.

Small businesses post-COVID are not able to hire the staff to meet market demands today on the Island. The labour shortages have never been bigger. We have moved in Atlantic Canada — and this is true for Nova Scotia and the tour that I did of different businesses across Nova Scotia, labour shortages were crucial, especially in rural communities. You couldn’t get people to move to those communities in many cases, and the businesses are really struggling. We’re no longer in a world of job shortages. We’re in a world of pervasive and growing labour shortages. But our federal-provincial labour market agreements are based on a world of job shortages; they are based on the assumption and the paradigm of job shortages. From my perspective, that revisiting that Senator Bellemare and many of us have spoken about is really important.

I want to give you a sense of the risks facing businesses nationally for sure and in Nova Scotia and Prince Edward Island absolutely. In my home province, one anchor employer in a rural area — a profitable, very well-respected business — 30% of their workforce is over 55 years of age. They do not have replacement workers coming along. We have to fix this issue of labour shortages in this country. To me, the challenge that I have is that the current situation on P.E.I. I think is indicative of some of the challenges that we have in this country, on the basis that we’re really supporting a job shortage market, not a labour shortage market. We’re incentivizing people in the second zone to stay home and work less. That’s the net result of that.

I really respect the concerns that have been raised by my honourable colleagues. I absolutely think we need to address them vigorously, but I like the fact that Senator Black has proposed a subamendment that allows us to look at the issue because in agricultural and rural communities it is especially challenging. The larger question of how we have to revisit our programs supporting those who are unemployed is crucial.

I will finish off by saying I hope we do vote in support of this subamendment and give the Agriculture and Forestry Committee the flexibility and time they need, and having the committee look at this issue makes an awful lot of sense in my mind. There is a profound challenge facing small businesses. They need the help to fill jobs and they don’t need people being incentivized to stay home.

The success of business is built — as we all know — on the quality and reliability of the workforce, but Bill S-236 is trying to get at this challenge of labour shortages on the Island. We heard it in committee when we did our study last May, and it is worse in rural communities and much harder for some of these businesses to get people to move into the communities and make sure they have the ability to create the value that they could deliver to their customers.

Colleagues, I hope you look at that part of the question seriously because it is a negative impact for those who have struggled to get through COVID and are trying to rebuild on the other side of it. Thank you very much, colleagues.

Senator Bellemare: I used to work at the Economic Council of Canada, in the late 1980s and early 1990s. We once did a major study, and I’m wondering whether you are aware of the results.

The study clearly showed that, because of the significant shortage of jobs and the way the EI program worked, in many regions, in both Quebec and the Maritimes, companies, not workers, were integrating the notion of job sharing into their human resource management practices. It wasn’t so much individuals, but rather businesses, that were really integrating job sharing into their own practices.

In other words, one aspect that needs to change is business practices, in order to provide greater job stability and improve workforce retention.

Were you aware of that study?

[English]

Senator C. Deacon: Of course, you were involved in something that innovative that long ago. Thank you for the question, Senator Bellemare. It goes to the core of what Senator Pate has been proposing. Let’s look at other ways of addressing the ability to provide everyone with more opportunities, be that through a guaranteed livable income pilot program, job sharing. There are many ways we can look at this issue, but the reality is we have to find a way to keep our businesses thriving in our communities, and that’s a really innovative idea that in this situation is not supported by having the second zone that is incentivizing people to stay home and claim EI or get only a full‑time job. Thank you.

Hon. Pierrette Ringuette: Senator, would you take another question?

Senator C. Deacon: Absolutely.

Hon. Percy E. Downe: Yes, I am.

Senator Gold: Thank you, I will add this to the inquiries I have to make with the government.

[English]

Senator Downe: As Senator Ringuette alluded to earlier, we have a very seasonal economy. A lot of our prosperity comes from that seasonal economy, but no one harvests potatoes in February, no one fishes lobsters in March and no one I know wants to visit me in April — because the weather is always nicer somewhere else. We have industries that are highly dependent on 14 to 16 weeks to contribute to the GDP of P.E.I.’s economy which, as you indicated in your remarks, has had tremendous growth in the last decade — not only in population but in prosperity.

Part of that is because we have EI, which is Employment Insurance. It’s an offset for people when they can’t work on farms, fisheries or tourism in the winter. I think — in addition to your suggestions of witnesses who should appear — I would add, to give balance, that we need to hear from some of the labour unions, the workers and the seasonal workers who are marginalized in their voices, in civil society, when it comes to employment, wages and so on.

Senator C. Deacon: Thank you. Absolutely, Senator Downe. I don’t think what we’re debating is whether EI should be available on the Island or not. We’re really debating whether the effect of having more hours to qualify is a problem for the Island or not. What you have suggested is important for your seatmate to consider right now, along with the steering committee of Agriculture, as they select witnesses. Those are very important points raised.

(On motion of Senator Cotter, debate adjourned.)

The Senate proceeded to consideration of the fourth report (interim) of the Standing Senate Committee on Banking, Commerce and the Economy, entitled Business investment in Canada, tabled in the Senate on June 20, 2022.

Hon. Senators: Agreed.

(Motion agreed to and report adopted.)

On the Order:

Resuming debate on the inquiry of the Honourable Senator Boniface, calling the attention of the Senate to intimate partner violence, especially in rural areas across Canada, in response to the coroner’s inquest conducted in Renfrew County, Ontario.

Hon. Pierre-Hugues Boisvenu: I would like to ask the senator a question, if I may.

[English]

The Hon. the Speaker: Is leave granted, honourable senators?