The federal government’s plan to extend employment insurance parental benefits to 18 months is “misguided” and “sets a bad precedent,” according to a number of employer and employee representatives discussing the changes on Thursday in front of the Senate committee on social affairs, science and technology.

“The low EI maternity and parental benefit rate is already a significant deterrent to taking leave,” said Barbara Byers, secretary-treasurer of the Canadian Labour Congress, who referred to the extension as “boutique changes” to employment insurance. “Employees without union protection and who have been unable to bargain a top-up are especially disadvantaged.”

Read: Budget boosts parental leave to 18 months, introduces caregiving benefit

The labour group is concerned about the consequences extended parental benefits could have on the labour market and especially on women, said Byers, who noted the federal government has offered little evidence the proposal would actually benefit working parents. “On the other hand, there is significant academic research available on family leave, in particular on the relative achievements of Quebec’s parental insurance plan,” she said. “We therefore recommend that the government abandon this initiative and instead take steps to study and adopt the superior features of the Quebec parental insurance plan.”

One of upsides of the Quebec program noted during the committee hearings is the amount of hours an employee must work to become eligible. For instance, the current federal employment insurance parental benefits program requires 600 hours of full-time work before an employee becomes eligible, which is significantly higher than the 177 hours required under the Quebec system.

The labour congress also suggested the government make an expanded number of staff available to help parents negotiate the complex rules around employment insurance benefits. “People apply for it, they don’t understand it, it’s not something that occurs in their daily lives,” said Byers. “Officers would be bridges for people to work out some of those difficulties.”

Read: Will 18-month parental leave reduce pressures on working families?

“I’m not sure there is a good evidence base . . . for this innovation,” said Chris Roberts, director of social and economic policy at the labour congress. “What we know from the research is a significant deterrent is the low income-replacement level that currently exists; by reducing it further, it’s likely to have the opposite effect. The evidence, I don’t think, is well established by any stretch that this is going to improve take-up.”

Pierre Laliberté, the commissioner for workers at the Canada Employment Insurance Commission, added that the enhancements are “no gift to parents. It’s basically just reshuffling what they already have.” He estimated fewer than 10 per cent of working parents will take advantage of the 18-month option, noting the basic issue at stake is childcare. “Can someone who wants to go back to work after maternity or parental leave find decent, affordable childcare? This is a very weak answer to that problem.”

The employer perspective also came up during the meeting. Judith Andrew, the commissioner for employers at the commission, noted many employers, particularly smaller firms, already have trouble coping with the provision of 12 months’ leave and that covering 18 months would be even more challenging. “Employers will shoulder substantial and additional costs,” she said, referring to issues like top-up programs and the provision of other workplace benefits.

Read: How to bridge the parental leave divide

Where the government’s plan has favoured employers, according to both Andrew and Laliberté, is in the wording of the new option as an “irrevocable” choice by the employee. The incoming legislation sets out that the employee must choose either the 12 or 18 months at the outset and “once their claim is in pay, they cannot change after that,” says Andrew. “The notion of people making a solid choice at the beginning was intended to respond to employers but, ultimately, it is challenging.”

Monique Moreau, vice-president of national affairs at the Canadian Federation of Independent Business, also shared her organization’s view during the meeting, noting that a recent survey among its members showed employment insurance is on the minds of 46 per cent of them.

“Small-business owners generally support the EI system,” she said. “However, it’s a significant employment tax they have to pay, regardless of their businesses’ profitability.”

She said the CFIB strongly encourages the government to maintain the 12-month parental benefit. “It is challenging for a small business to accommodate a leave of 12 months and prolonging it to 18 months would make it even more onerous.”

While the organization doesn’t support the enhancement, if it does proceed, the CFPIB has two main recommendations: that the government refund excess contributions paid by employers and that it equalize employment insurance premiums at 50 per cent each for employers and employees.

Read: Government launches consultation on parental, caregiving benefits

Staff of the Department of Employment and Social Development Canada were also on hand to answer questions about the changes and their inclusion in the Canada Labour Code. Margaret Hill, senior director of strategic policy and legislative reform, said the overall cost to the government will be minimal at about $400,000, which would cover things like training. “The cost to employers is also expected to be minimal, with the amount depending on the leave taken and whether they pay overtime or hire replacement workers,” she added.

Andrew Brown, senior director of employment insurance policy at the department, acknowledged the change has elicited mixed reactions from both employees and employers. Some believe it does what the government intended, which is offer more flexibility. But others believe the 33 per cent replacement rate isn’t enough for most Canadians.

“We’ve also heard the employer community has noted a longer duration of 18 months will be more difficult on them,” he said. “The costs associated with a long leave would be increased.”

Read: Firms urged to accommodate workers engaged in family care

Copyright © 2017 Transcontinental Media G.P. Originally published on benefitscanada.com

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