Canada. Committee of Inquiry into the Unemployment Insurance Act : The Committee of Inquiry into the Unemployment Insurance Act was established under Order in Council 1040, 17 July 1961, under Part I of the Inquiries Act (R.S.C., c.154, 1952) and on the recommendation of the Prime Minister. The Committee was mandated to inquire into and report on the scope, basic principles and provisions of the Unemployment Insurance Act and the regulations thereunder, including: (a) the necessary provisions for dealing with seasonal unemployment; (b) the means of correcting any abuses or deficiencies that may be found to exist; and (c) the relationship between programmes of support for the unemployed and other social security measures. The Commissioners were Ernest Clark Gill, Chairman; Etienne Crevier, John James Deutsch and Joseph Richards Petrie. The Secretary was Richard Humphrys.
At the beginning of the parliamentary session of 1960-61, the federal government announced plans to amend the Unemployment Insurance Act. It wanted to replenish the dwindling unemployment insurance fund, and to correct abuses caused by claims procedures. But by the adjournment of the House of Commons in July 1961, no amendments had been introduced despite urgent recommendations by the Advisory Committee to the Unemployment Insurance Commission for government action to replenish the fund. By 31 May 1961 the fund had fallen to about 10 million from its peak of over 26 million in 31 December 1956. In another report, early in September 1961, the advisory committee warned that the fund would be virtually exhausted early in 1962. The Public Accounts Committee of the House of Commons in a report of 1 July 1960 also expressed alarm at the "sharp reduction" in the fund and recommended "immediate and careful study" of the problem and action "to re-establish and maintain the fund on a basis consistent with insurance principles." The report of the Senate Committee on Manpower and Employment made a similar suggestion.
Critics believed that the insurance principle basic to the soundness of the fund had been ignored. For example, major amendments, which changed the benefit provisions of the Unemployment Insurance Act, were made when the balance was high. The government had increased the maximum benefit and extended the benefit period from 36 to 52 weeks. Premiums had been raised, and coverage extended to fishermen and married women -- groups whose employment was often irregular. For example, from April 1957 to 31 March 1960, fishermen, their employers, and the government had contributed some .9 million to the fund, but benefits drawn totalled 6.7 million. These were really seasonal benefits and not insurance in any sense. Dr. W. James, in a study for a Senate Committee, estimated that almost 100,000 people (roughly half married women) who registered as jobless with the National Employment Service in September 1959, could not be considered full-fledged members of the labour force or unemployed by any meaningful definition of the term. Nonetheless, they drew benefits. The fund's investment policy also received heavy criticism, particularly from Professor Walter Gordon of Carleton University. He argued that the fund's investment policy had been unwise: all the fund's victory bonds had been converted into longer term and illiquid conversion bonds despite evidence that unemployment would be high and drains on the fund large. Also, many of the newly acquired securities had been sold at a heavy loss. Gordon charged that either the fund had been used to facilitate government debt management operations and to help the government achieve a good conversion performance, or the managers of the fund, including James E. Coyne, Governor of the Bank of Canada, had made a serious error in assuming that the bond market would remain fairly strong over the winter of 1958-59.
On a non-confidence motion dealing with unemployment insurance, debated in the House of Commons on 8-9 May 1961, the Liberal opposition blamed the government with mismanagement of the fund but did not make specific suggestions for dealing with it. Hédard J. Robichaud and Jack W. Pickersgill, however, expressed shock at the suggestion that fishermen and other seasonal workers be removed from the scheme. Michael Starr, the Minister of Labour, denied that the fund had been mismanaged. He defended the government's "humanitarian instincts" in extending the fund's coverage and again promised amendments, which never came.
Finally on 17 July, Prime Minister Diefenbaker announced the appointment of a commission to study the Unemployment Insurance Act before the government committed itself to any legislative changes. (See Canadian Annual Review, 1962, p. 167 and pp. 190-193).
Hearings of the Commission were held in Ottawa from 14 November to 18 December 1961. There were 51 submissions filed with the Commission. RG33-48 general inventory
