Bill C-280 (Historical)

Yves Lessard Chambly—Borduas, QC

Mr. Chair, I would like to use my time as follows: I will speak for three or four minutes, then I will ask some questions.

I plan to use my first three or four minutes to bring another perspective to the debate. The minister painted a rosy and sentimental picture of what is actually a dramatic situation. It is deplorable that a person in her position, with enormous responsibilities—as she stated earlier—takes those responsibilities so lightly.

I would remind the members that in the matter of employment insurance, fewer than 40% of people who lose their jobs are eligible for employment insurance benefits.

I would remind the members that older workers find themselves in a terrible predicament as the job losses add up, especially in the softwood lumber and textile industries, to name just two. The minister has not yet responded to this situation by providing income support to older workers.

Poverty has escalated dramatically. The Canadian Association of Food Banks says that over the past year, child poverty has increased and in Canada, 880,000 people—including 314,000 children—regularly rely on food banks.

If so many of the poor go to food banks for their food, it is not because they have decided to change restaurants. It is because poverty is a reality and one of its causes is that the social safety net for individuals who have the misfortune of losing their jobs, among other things, is falling apart. The last two parties in power played a major role in this.

Even more serious is the fact that the money to support these individuals was available. The employment insurance account, funded by employee and employer contributions, generates surpluses year after year. This year they will total more than $2.15 billion. Over the past 12 years, more than $50 billion has been diverted from the employment insurance account and used for other purposes. It is a reality that the minister is ignoring and which she does not wish to address here.

I will appeal to the compassion and a certain sensitivity of the minister so that she gives the real answers to our questions.

One of the ways to solve this problem is to give back control over their money—money that belongs to them, the employment insurance account—to workers and employers.

I am getting to my questions.

The rules of the House state that the answer must be no longer than the question. My questions will be brief and explicit and I hope that the minister's answers will be brief, explicit and clear. And now for my questions

Last year, the Conservative Party voted in favour of the Bloc Québécois' Bill C-280, to establish an independent employment insurance fund. The minister voted for the bill last year. This year, does she approve of the bill that we tabled in order to establish an independent fund?

Yves Lessard Chambly—Borduas, QC

Mr. Speaker, the bill before us, I will recall for the benefit of the people watching us today, increases from 15 to 50 the maximum number of weeks during which benefits may be paid for illness, injury or quarantine. Actually part of the title of this employment insurance bill is “benefits for illness, injury or quarantine.”

I indicated a while ago that we are delighted that a Liberal member of Parliament has tabled this bill. This shows some progress concerning the understanding of the issue and probably the degree of compassion we may feel for people who are victims of illness, a work accident or quarantine for contamination or some other reason.

The Bloc has worked constantly with a view to improving the employment insurance program, as our colleague indicated awhile ago. Since 2005, many measures have been proposed in the House, most of which have been rejected, particularly by the government then in place. We were hoping for progress of course with this new government in order to improve the situation of people who have the misfortune of being away from work because of illness, accident or quarantine.

One of the proposed measures appears in the recommendations of the Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities, namely recommendation 27. It reads as follows:

The Committee recommends that the government study the possibility of extending sickness benefits by 35 weeks for those who suffer from a prolonged and serious illness.

In other words, with an extension of 35 weeks beyond the 15, we get the 50 weeks proposed by our colleague in his bill.

It is interesting to note, however, that the Liberals are suddenly becoming concerned about unemployment. I do not particularly wish to attack the member, because he took this initiative, but my earlier question was to this effect: how is it that once a party in government is defeated it suddenly becomes sensitive to such situations? Actually the context, that is, the workers’ situation, was the same barely a year ago, when we submitted this recommendation to the Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities.

The Bloc Québécois has always been in favour of a substantial improvement to the entire employment insurance program, which of course includes amendments to the number of weeks of sick leave for absences caused by illness, accidents and quarantine.

The following is a history of the last two years. I want to remind the House briefly to provide some context.

On November 15, 2004, our colleague, the hon. member for Trois-Rivières, introduced Bill C-278 proposing those improvements to the system. The party in power at the time, the Liberals, opposed royal assent.

On December 13, 2004, Senator Pierrette Ringuette, a member of the Task Force on Seasonal Work appointed by the Prime Minister of the time, issued her dissenting report entitled “Dissent and Distress”, a very meaningful title in view of the situation facing the unemployed.

On December 16, 2004, the Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities issued the first part of its report with the recommendations I just mentioned. This report was completed on February 15, 2005 and contained 28 recommendations.

On February 23 of the same year, the then Minister of Human Resources announced three minimal new measures to try to mitigate the problems facing regions that suffer from what is commonly called the seasonal gap or black hole.

Finally, on April 15, 2005, the Bloc Québécois introduced Bill C-280, An Act to amend the Employment Insurance Act (Employment Insurance Account and premium rate setting) and another Act in consequence, which my colleague from the Basse-Côte-Nord sponsored. The purpose of this bill was to create an independent employment insurance fund.

I remember the Conservatives promising during the last election campaign to create this independent fund, but they still have not done it.

In May of this year, the Bloc introduced Bill C-269, An Act to amend the Employment Insurance Act (improvement of the employment insurance system), to change employment insurance. I hope that our colleagues will vote in favour of this bill, and I hope that the Conservatives will not invoke royal assent this time.

More recently in October, this week in fact, we introduced Bill C-344, An Act to amend the Employment Insurance Act (Employment Insurance Account and premium rate setting) and another Act in consequence to create and establish an independent fund.

As can be seen, the Bloc has never stopped demanding improvements to the independent employment insurance fund. But all we have ever received are systematic refusals from each succeeding government.

I would like to return to how much we need the bill we are discussing and describe the situation in which people find themselves when they must be absent for the reasons covered by the bill.

In 2004 and 2005, the number of applications for sickness benefits increased by 0.1% to reach 294,350. Total sickness benefit payments increased by 4.5% to reach $813 million, while average weekly sickness benefits were $285. Hon. members talked about the costs earlier, although they have not changed very much.

People do not live very comfortably and do not go to restaurants very often on this amount of money. There was a 1.7% increase in comparison with 2003 and 2004. The average number of weeks over which sickness benefits are paid has remained relatively stable over the last few years.

During the years I mentioned, claims for sickness benefits have decreased among men. This is interesting to note because it allows us to see who ends up in certain situations and who has to stop working because of an illness or an accident. Those who are most vulnerable—either in terms of the insecurity of their employment or their working conditions—are women and older workers. During that time frame, this decreased by 1.2% in men and increased by 1.1% in women, even though the proportion of women who filed claims for sickness benefits remained relatively stable in 2004-05.

Women continued to file the majority of the claims for this type of benefit, at 59%. Claims for sickness benefits decreased by 2.8% among young people 15 to 24 and by 2.9% among workers 25 to 44, whereas they increased by 3.5% among workers 45 to 54 and by 7.1% among workers over 55. This confirms what I just said: certain categories of workers are more vulnerable than others because they are put in more precarious situations to do their work.

In closing, since I have just two minutes remaining, I want to reiterate that the bill currently before us is important. I am calling on the Conservative Party, which is now in power and whose attitude toward workers has been consistently insensitive, to take the next step.

This time, at least let the House vote on this bill without demanding a royal recommendation.

Jim Karygiannis Parliamentary Secretary to the Minister of Human Resources and Skills Development and Minister responsible for Democratic Renewal

Mr. Speaker, the employment insurance program is one of Canada's largest and most visible programs. It matters to Canadians. Everyone wants to ensure that this program is one that Canadians can continue to count on.

Bill C-280 proposes amendments to the Employment Insurance Act and recommends key actions by Parliament.

It calls for the Employment Insurance Commission to explain the rationale for the premium rate and to present that rationale on an annual basis in a report that the Minister of Human Resources and Skills Development would table in Parliament.

It recommends that the employment insurance account be reconstituted as an independent account under the control of a new tripartite commission.

It also proposes that a new independent EI account begin with a balance equal to the current accumulated surplus that has been credited to the EI account over a period of 10 years through contributions from the consolidated revenue fund.

Having read and considered Bill C-280, I must say that I have strong reservations about the proposed legislation. This bill raises some very important issues.

Budget 2005 responded to many of the points raised in Bill C-280. My concern is whether the proposed amendments will help to improve this program. Canadians expect their government to run programs as efficiently as possible. EI is no exception. The bill would be costly to taxpayers, employees and employers.

The proposed legislation would require the government to contribute a cash amount equivalent to the current accumulated surplus credited to the EI account, in equal amounts, over 10 years, as soon as the bill becomes law. This change would present itself on the Government of Canada's ledger as a new and very substantial fiscal liability.

The existing federal fiscal framework would be affected and would require new money to fund it. An immediate consequence of Bill C-280 would be that the Government of Canada could lose a significant measure of control over the way employment insurance is managed and EI programs are maintained. Many aspects of EI would become the purview of an independent commission, as proposed in the bill, which would raise questions about accountability.

Changes in these areas ultimately limit the government's ability to deliver important benefits to Canadians. This would limit the significant progress that Canada has been making over the past decade.

Let us consider what EI has been able to achieve over the last 10 years.

Canadians called for a better balance of work and family responsibilities. Our government responded through EI by extending maternity and parental benefits for one full year.

We also introduced a new six week compassionate care benefit so that eligible workers can take a temporary leave of absence from work to provide care or support to a gravely ill or dying close relative.

Canadians wanted more support for acquiring skills and experience. We have eliminated multiple waiting periods for apprenticeship training programs.

In addition, the Speech from the Throne contained a commitment to review the EI program and ensure that it remains well suited to the needs of Canada's workforce. To this end, on February 23 of this year the government announced enhancements to the EI program that take into account the many recommendations put forward concerning changes to EI.

To give some examples of the action we are taking, I would like to describe the three new pilot projects announced for areas of high unemployment.

Through these projects, we are testing the labour market impact of: enabling access to EI benefits after 840 hours of work rather than the present 910 when linked with EI employment programs for new or returning entrants to the labour markets; calculating EI benefits based on the best 14 weeks of earnings over the 52 weeks preceding a claim for benefits; and increasing the working while on claim threshold to allow individuals to earn the greater of $75 or 40% of benefits to encourage individuals to take work without a reduction in their benefits.

The enhancements we are putting in place are possible thanks in part to the Government of Canada's ability to ensure that EI's policy and program framework remains responsive to the labour market needs of Canadians.

I am further concerned that Bill C-280 may not be effective in achieving positive changes in the way EI operates.

The legislation calls for the creation of a separate EI account that is not consolidated with the government's budgetary revenues and expenditures.

To do this, careful consideration would be required to change the elements of appropriate comptrollership and financial responsibility that exist, in particular, how they would correlate with measures put in place to respond to concerns expressed by the Auditor General of Canada. Since 1986 the EI account has been consolidated with the accounts of government.

Under our current system, EI program revenues and costs are tracked in the EI account and paid out of the consolidated revenue fund. The accumulated EI surplus is notional and not supported by any other assets--

Yves Lessard Chambly—Borduas, QC

Mr. Speaker, I want to begin by congratulating the hon. member for Manicouagan for the bill he introduced and for his speech, which sums up the situation quite well. Today, we can debate it while receiving the amendment for concordance with the legislation that was passed in June.

I also want to add that I share the opinion of the hon. member who just spoke with great ardour. He made it quite clear that workers are outraged at the injustice against them. It is totally unacceptable to leave these people in misery when they paid for insurance to avoid being in such a situation, if ever they had the misfortune of losing their job.

The basic reason for Bill C-280 is indeed to take away a fund that does not belong to the government and hand over its administration and management to its rightful owners. That way, we will be sure that its original purpose is being met.

This is not unlike what is happening with investment management companies. Over the past two years, we have seen scandals at Norbourg and Enron in the United States. Now that we know that collective assets belonging to the average citizen, to the workers, are mismanaged and misappropriated, we make sure that a regulatory body is in place to protect this fund. What do we do with people who were responsible for administering the fund, but misappropriated the money? First, we take the fund away from them. If it turns out that they misused it, they can end up in prison.

That is what is happening here with the employment insurance fund. We certainly cannot put the government in prison for its management as such, but we can at least question the legitimacy and honesty of what the government does. That is what we are doing now.

This has been going on since 1994, when the current Prime Minister took his post as finance minister. Is that a coincidence? Since 1994, in good years and bad, the fund has been generating surpluses of over $3 billion, which have been used for other purposes.

In her annual report last year, the Auditor General indicated that, in the past eight years, the government had accumulated a $46 billion surplus, by misappropriating funds. That was the amount as of March 31 of last year. By now, this figure is several billion dollars higher. We now estimate it to be $48 billion in funds that belong to the workers and employers who contributed to the EI fund.

How have these surpluses been generated and misappropriated? By slashing EI benefits to the unemployed and tightening up the eligibility rules so that people no longer have access to employment insurance. In 1994-95, 88% of those contributing to EI were entitled to receive benefits. Today, the Canadian Labour Congress estimates that only 38% of contributors qualify. The fund's chief actuary sets that number at 46%. Even it was 46%, that would mean that 54% of all workers contributing to EI are excluded, due to unacceptable rules.

This money is being used to generate these surpluses and is the reason why the government is patting itself on the back and saying that it is dedicated to sound fiscal management and able to pay down the debt.

Last year, of the $9.1 billion surplus in the general fund, the Consolidated Revenue Fund, $3.3 billion came from the EI fund. That is more than one-third.

In the meantime, the unemployed no longer have any income. My colleague said it perfectly earlier, it is making families poor. It is causing family crises. Some people are even committing suicide.

Today, we heard from five groups representing workers who were laid off when their plant closed in the past two years. They had been working in the textile, softwood lumber and electric stove manufacturing industries. There were five different groups.

These people said that the older workers have been unable to find other employment. In 1997, to save money, the government passed a motion eliminating POWA, the Program for Older Worker Adjustment. It did this to save money. As a result, once these people reach the age of 55, they can no longer receive EI, but have no income until they are eligible for the Quebec pension plan. In 1986, a program serving that purpose was created, but the current government abolished it in 1997.

What happened to all the workers who have been unable to find other employment since? The government did not bother finding out.

Today, we have heard testimonies. In one plant, there has been five suicides over the past year. In the last 30 months, 15 suicides were reported in another plant. That kind of information is not publicized. There is a sense of decency among people. Workers are embarrassed to find themselves without an income after working in a plant for 30, 35 or 40 years and contributing to the EI fund during all those years. They bought insurance for themselves, figuring that it would at least enable them to have a decent income to support their families with, should they be so unlucky as to lose their jobs. Let me qualify this notion of decent income. At present, it represents 55% of insurable earnings. That is not much. That is what was taken away from them.

Workers who are laid off find themselves with nothing. They have no choice but to eventually go on welfare, but they first have to use up whatever they had saved. When you have worked all your life and end up in such a predicament, you are not only insecure, you are also embarrassed, afraid of what tomorrow may bring, and you feel excluded from the labour market and cheated from recognition for a lifetime of work. This is all very serious, and that is what drives people to commit desperate acts like the ones I mentioned earlier.

On the other side of this House, they are insensitive to such a situation. Remarks like the ones we heard earlier are unacceptable. All they care about is lowering premiums. As my hon. colleague pointed out, that is not what the people who pay the premiums are asking for. The government has not invested a cent in that fund since 1990.

The word theft was used. I know that the word is unparliamentary, but there are ways around it. In the private sector or anywhere outside this House, that is how the actions of anyone with a similar behaviour would be described.

That is why Bill C-280 has to be passed. We must put an end to this injustice.

Yvon Godin Acadie—Bathurst, NB

Mr. Speaker, I am pleased to speak on Bill C-280, introduced by a Bloc Québécois colleague, the member for Manicouagan.

This is a very important bill for the simple reason that it deprives the Liberals of the possibility of stealing the workers' money to pay their debts and reduce the deficit to zero at the expense of people who have lost their jobs. It is as simple as that. This minority government then wants to hide behind royal assent. This is regrettable.

I have listened to the parliamentary secretary's praise of the member for Madawaska—Restigouche and the great work he did on the Standing Committee on Human Resources, Skills Development, Social Development and the Status of Persons with Disabilities. It must be kept in mind that the member had recommended that the EI fund become independent and out of the Liberals' hands.

Another thing that is regrettable is that the member for Madawaska—Restigouche was not the only one in committee calling for an independent EI fund. The Liberal member for Beauséjour did as well, Those same two made a recommendation to the Standing Committee on Human Resources, Skills Development, Social Development and the Status of Persons with Disabilities that the 12 best earning weeks should be used for calculations

It is, however, no surprise that these same people are contradicting themselves in the House of Commons. In early June, I moved to consider the 12 best weeks, and they voted against it. Now they are contradicting themselves, which is regrettable.

It is a fact, the Conservatives want to have an independent EI fund. I agree. That is not all, however. They also want that independent fund to reduce EI premiums and do nothing else for workers, whom they consider to be a gang of abusers of the system. That is regrettable. It is to be hoped that those watching us this evening will remember that. That is exactly what the Conservatives are saying.

What is more, the Liberals support them in this, which is even more of a pity. They started with EI premiums of $3.04. This dropped to $1.98, then $1.93 , and they want to reduce them another 8¢. They claim that is what workers and employers want, which is absolutely false.

I have often said in the House of Commons that no worker has ever contacted me to complain that he was paying too much in EI premiums. What I have heard from workers is that they were even prepared to pay more if they had to, provided they could qualify for EI.

Employment insurance is a misnomer. It should be called unemployment insurance. It is the Liberals, in 1996, who changed the name to be able to steal the EI fund to pay for the national debt and reach the zero deficit. They did this on the backs of people who lost their job as well as on the backs of women in fish plants who have difficulty working for 12 weeks.

The Liberals then come bragging. The member for Madawaska—Restigouche rose in the House yesterday to congratulate the minister for the best 14 weeks changes. Yet, this same member, in committee, with the member for Beauséjour, recommended the best 12 weeks. I do not understand how they can be so uncaring. They cause suffering to families and children. Some people do not even receive $150 a week in employment insurance during winter periods. They have seasonal jobs.

Earlier, my Conservative colleague said that some employers were laying off workers on purpose because they could then receive EI benefits. He does not understand that, in the winter, Chaleur Bay, in the Atlantic, is frozen and that we cannot fish. He does not understand that lobster cannot be caught on the ice, as opposed to Lake Ontario, where people fish for fun. This is not how the industry works.

It is the same for the forest industry. When there are five feet of snow in New Brunswick, loggers cannot go and cut trees.

In Toronto, when there are two inches of snow, the army is called in to clear it up. This is not the same in my region. I can guarantee you that these people cannot go to work.

The bill before us today would have prevented the Liberals from trying to take the money from workers.

I am certain that in 1986, when the Auditor General proposed that the money be put into the consolidated revenue fund it was not to allow the government to use workers' money as it saw fit.

It is ironic to see that the Minister of Human Resources and Skills Development voted for the bill at first reading, when she was Conservative, but votes against it now that she is Liberal. It is as if you caught a sickness simply by crossing the floor.

It is disgraceful. The minister who voted for the bill and believed in its objective changed her mind. She now believes that royal recommendations cannot be given, that we cannot help workers.

It is sad to see how the Liberals operate. When there were problems in the eastern part of New Brunswick, the hon. member for Beauséjour—Petitcodiac asked me personally to come to the assistance of people in the southeast of the province who were having problems. Everybody agreed that they should be helped.

However, when comes the time to vote in the House, they do not respect their own name and they are not courageous enough to vote for what they believe in. They even lied to us. Shame.

Back home, the unemployment rate tops 20%, because people have never received any help from the Liberals, who were elected for 100 years. If people in our ridings threw the Liberals out, there must be a reason. There has to be a reason, also, why the Conservatives would stand no chance of getting elected in our ridings, given their mindset. They are unable to acknowledge the fact that work is seasonal in some regions.

When I was in Forestville, in Quebec, on the North Shore, 2,500 people took to the streets and they were not just workers. There were also store owners. There were even priests, and I thought it was great when they said that it was no longer a political story, but a human story, and that it was about time that people rallied in the streets and marched to protest decisions by the federal government.

Today, in my opinion, the Liberals should be ashamed to grab $48 billion—that belongs to folks who have lost their job—when today in Canada, there are 800,000 people who do not qualify for employment insurance benefits, but pay the premiums.

Only 32% of the women who contribute to employment insurance qualify for benefits. They are the ones who were most affected. How can the government not recognize that?

Yes, this is insurance for when a person loses his job. This is insurance that lets people in today's labour force take parental leave, for example. Forty or fifty years ago, only five percent of Canadian women were working. That is no longer the case. We have to recognize the reality of today's labour market, and we have to adjust to this market, not do what the Liberals did.

In 1986, when the Auditor General, under Brian Mulroney's Conservative government, suggested that the employment insurance account be part of general revenues, the Liberals were in the opposition and they opposed the idea.

In 1989, my predecessor himself told New Brunswickers to fight against any change to employment insurance, because it would spell disaster for New Brunswick.

Jean Chrétien himself wrote a letter to the people of Rivière-du-Loup, to a group of people receiving employment insurance,and told them, “It is the Conservatives' fault, because they do not look after economic development, they are targeting the wrong people, they are targeting workers”.

When this same government boasted about using the money in the employment insurance account to pay down the debt and achieve zero deficits, it showed that did not care about those who no longer had access to employment insurance.

The Liberals did the same thing as the Conservatives and that is shameful. But I think people will remember. However the idea is not just to remember. The Liberals should know that there are 1.4 million children in Canada who are hungry. It is their fault, because when they cut employment insurance benefits for working men and women who lose their jobs, they worsened poverty in this country. They had better not boast about being a good government because of today's surpluses.

I am asking in all sincerity that changes be made to the employment insurance program for the well-being of workers, families and children in this country.

Peter Adams Parliamentary Secretary to the Minister of Human Resources and Skills Development and Minister responsible for Democratic Renewal

Mr. Speaker, I am pleased to join in the debate on Bill C-280 concerning the Employment Insurance Act. I genuinely thank the member for Manicouagan for raising these important issues. It is important that we debate such things publicly from time to time.

I also thank the standing committee for its fine work on its ninth report in consideration of this bill. While the Government of Canada cannot agree with the key directions of the bill, we greatly appreciate the work of the committee. I personally thank the member for Madawaska--Restigouche for his passionate support of the unemployed and for unemployment programs, and for the advice which he has given me and other members of the committee during this process.

Bill C-280 proposes fundamental amendments to the EI Act. It is important to revisit the reasons for the present structure of that act. This historical context will, I believe, illustrate the importance, complexity and challenges presented by the proposals contained in Bill C-280.

Let me begin with the employment insurance account.

Both Bill C-280 and the committee's ninth report suggest alternative methods of accounting but I believe it is important to appreciate why the EI account is reported within the consolidated revenue fund and not, as the bill proposes, separate from the accounts of Canada.

In the 1980s the auditor general of that time expressed concerns about fragmented reporting of government activities. To rectify this situation, the auditor general was of the opinion that EI premiums paid by employers and employees were federal revenues and that given the government's control over EI policy and programs, they should be included in reported Government of Canada revenues, not in a separate account. On the advice of the auditor general, in 1986 the EI account was fully integrated into the government's general finances. This practice follows appropriate accounting methods consistent with the standards of the Canadian Institute of Chartered Accountants. This reasoning still holds true.

It is important to note, however, that because the EI account has been consolidated with the other accounts of Canada, in reality it is not an actual account containing cash but rather an accounting method that keeps track of both premiums and benefits.

Bill C-280 would have significant financial and policy implications for the way in which the federal government finances and governs the EI program. A cash-based account, outside of the control of the government, would represent a significant fiscal liability to the government and the taxpayers of Canada, and potentially the first step in loss of policy control.

The government realizes the importance of keeping EI in tune with Canadians. That is precisely why in budget 2003 we committed to undertake a review of the premium setting process and launched public consultations. We promised that the new process would be based on the following principles: first, that premium rates should be set transparently; second, premium rates should be set on the basis of independent advice; third, expected premium revenues should correspond to expected program costs; fourth, premium rate setting should mitigate the impact on business cycles; and lastly, that premium rates should be relatively stable over time.

Consultations were held with a variety of stakeholders. We heard from business, labour, economists, technical experts, the EI commissioners for workers and employers, and individual members of the public. In budget 2005, the Government of Canada introduced a new permanent rate setting mechanism that meets all the five principles that I have outlined and takes into consideration the views of stakeholders and the views of the standing committee which studied this. By the way, this new regime already exists.

Beginning with the 2006 rate, the EI Commission has the legislative authority to set the rate itself. It will be able to obtain, as needed, the services of those with specialized knowledge in rate setting matters. In other words, it can go outside a government. And it will hold consultations on the premium rate prior to setting it. Gone will be the requirement for the Government of Canada to approve this rate.

This new approach to rate setting is based on the principle that the premium rate for a year should generate just enough revenue to cover expected payments during that year.

I think it is important to raise this here and speak to the motion proposed by the member for Manicouagan. The motion outlines a premium rate setting process that is identical to the one originally proposed. The only difference is that it removes the role of the Chief Actuary from the rate setting process. The motion in no way has a substantive effect on the problematic aspects of the bill ruled upon, Mr. Speaker, by you, and your ruling on the fact that the a royal recommendation was needed for the original bill as it was phrased.

Perhaps, given the ramifications suggested in the motion, it is important at this time to clearly articulate the key function played by the Chief Actuary in the new rate setting mechanism this government introduced in the budget 2005.

Under the new mechanism, the EI Chief Actuary annually calculates on a forward looking basis the estimated break-even rate for the coming year based on economic variables supplied by the Minister of Finance. The Chief Actuary then provides a report of this break-even rate calculation to the EI Commission by October 14 each year.

Clearly, the role of the Chief Actuary is a critical component of the new rate setting process, as he provides independent expert advice to the commission concerning the break-even premium rate. The Chief Actuary's report is a key factor the commission must consider in its decision on the rate. It is the only mechanism that factors in important economic variables. Further, the Chief Actuary's report provides the basis to ensure that the premium rate will generate just enough revenue to cover expected payments during the year.

It is important to recognize the important function the Chief Actuary adds to the transparency of the rate setting process. It is his report, providing details of the calculation of the break-even rate, that is made public and provides the basis for the commission's consultations with all stakeholders.

I appreciate the House taking the time to listen to this description of the role of the Chief Actuary. It is important because it explains why this government would not support a rate setting process that does not provide for sound actuarial advice as a fundamental component of the EI rate setting.

These new measures that I have outlined address issues both in Bill C-280 and the standing committee's reports by increasing the independence of the EI Commission in the EI rate setting and strengthening, and this is most important, the transparency of the entire process.

It is important to add that over the past 11 years premium rates have steadily gone down while benefits to Canadians have been enriched. With the 2005 rate for employees at $1.95 and $2.73 for employers per $100 of insurable earnings, consecutive rate reductions mean that employers and employees will pay $10 billion less in premiums than they did under the 1994 regime.

I appreciate the contributions of the hon. members and of the standing committee to the debates on the EI Act. I also welcome this opportunity to share ideas but for the reasons that I have outlined, the government cannot support Bill C-280.

Gérard Asselin Manicouagan, QC

moved:

That Bill C-280, in Clause 1, be amended by replacing lines 4 to 26 on page 1 and lines 1 to 38 on page 2 with the following:

“1. Section 65.3 of the Employment Insurance Act is repealed.

1.1 Sections 66 to 67 of the Act are replaced by the following:

1. (1) Not later than November 30 in each year, the Commission shall set the premium rate that the Commission considers will, to the extent possible, over a business cycle,

(a) serve the best interests of the contributors and beneficiaries under the employment insurance system;

(b) ensure that there is enough revenue to pay the expenses authorized to be charged to the Employment Insurance Account;

(c) maintain stable rate levels; and

(d) ensure that the difference between the assets of the Employment Insurance Account and its liabilities does not exceed fifteen billion dollars.

(2) On the first day of October in each year, the Commission shall cause a report to be sent to the Minister containing

(a) the reasons for setting the premium rate for the year;

(b) any change to the amount of benefits that the Commission considers will, to the extent possible, over a business cycle,

(i) ensure that there is enough revenue to pay the expenses authorized to be charged to the Employment Insurance Account, and

(ii) maintain stable rate levels;

(c) a detailed description of the assets of the Commission on the first day of September in each year;

(d) a detailed description of the amounts that have been paid into or paid out of the Employment Insurance Account since the previous report;

(e) an estimate of the amounts to be paid into the Employment Insurance Account under this Act for the following year, calculated on the basis of the premium rate set by the Commission in the report;

(f) an estimate of the amounts to be paid out of the Employment Insurance Account under this Act for the following year, calculated on the basis of the amount of benefits to be paid set by the Commission in the report;

(g) any recommendations that the Commission considers necessary for the improvement of the employment insurance system, including amendments to Acts, regulations and policies with respect to employment insurance; and

(h) any other information that the Commission considers necessary.

(3) The Minister shall cause a copy of the report to be laid before each House of Parliament on any of the first five days on which that House is sitting after the Minister receives it.

66.1 Notwithstanding section 66, the premium rate for the year 2004 is 1.98%.

66.2 Notwithstanding section 66, the premium rate for the year 2005 is the rate set for the year by the Governor in Council on the recommendation of the Minister and the Minister of Finance.

1. Subject to section 70, a person employed in insurable employment shall pay, by deduction as provided in subsection 82(1), a premium equal to their insurable earnings multiplied by the premium rate set under section 66, 66.1 or 66.2, as the case may be.”

Mr. Speaker, I am pleased to take the floor as sponsor of Bill C-280, which is concerned with the creation of an autonomous fund.

To begin, I would like to say to all those listening to us that employment insurance is primarily insurance that is paid for by workers while they are working, in case they lose their jobs or stop working. The problem is that workers pay premiums thinking that they are insured, yet they are not. Since the 1994 Axworthy reform, under the Liberal government, insured persons who have paid premiums in order to be insured in case of job loss or separation have not in fact been insured.

The objective of the Liberal Party is to generate surpluses and deposit them in the Consolidated Revenue Fund. The former finance minister, now the Prime Minister, used to crow that he was realizing annual surpluses of $9 billion, $10 billion or $12 billion. Again this year, revenues surplus to premiums and benefits have been generated in the order of $4 billion to $6 billion.

This motivated the Bloc Québécois, immediately upon its arrival in the House of Commons, to work on behalf of workers, the unemployed and the groups such as the Sans-chemise, and to defend their interests. This is not the first bill on the subject we are discussing in this House. The Bloc Québécois has felt itself obliged to make certain commitments to workers, the unemployed and the Sans-chemise. In the last federal election campaign, the Bloc Québécois promised to table in this House the bill we are debating today at the report stage, namely Bill C-280, which would create an independent fund.

In my riding of Manicouagan, I also have workers, unemployed people and students who pay EI premiums, yet unfortunately are not insured under the present employment insurance system.

I had the opportunity to speak at first reading, that is, when the bill was tabled, at second reading, as well as in committee, when this bill was studied. I was able to intervene, as did the hon. member for Chambly-Borduas and the hon. member for Québec, at the amendment stage. We agreed to huge reductions so that this measure would not be expensive for the government.

For example, we reduced the number of administrators. We would have liked to have seven representatives on the union side, as many on the management side, and three on the government side. As long as this fund is not administered by those who contribute to it, we will be faced with the problem we have today. The government takes the money in the fund and uses it for purposes other than those for which people contributed. It then becomes a disguised tax that is collected on the backs of seasonal workers and the unemployed.

I am now pleased to speak at the report stage. As I was saying, we have tabled some amendments. Our amendment that permits concordance with the budget has been accepted tonight. At the time we intervened in committee, the budget had not yet been passed and we were not able to make the necessary amendments. This evening, at the report stage, the Chair has deemed admissible an amendment we had tabled. This is simply an amendment to align Bill C-280 with Bill C-43, the Budget Implementation Act.

We do hope that cabinet, which has the authority to give royal assent, will give workers and the unemployed the money that belongs to them. For far too long, the government has been using that money for its own purposes and spending it on various programs. One might even wonder if this money from the EI fund—we are talking about $5 billion or $6 billion a year—was not involved in instances of waste of public funds. Put simply, I am referring to the sponsorship scandal. It would be disastrous if the government had taken money that belongs to workers and the unemployed to fund the sponsorship program in an attempt to pad the coffers of the Liberal Party. We are asking cabinet to give a royal recommendation with respect to this bill.

In addition, I hope that the House will get to vote on this bill at third reading stage, so as to show the true face of the Liberals. They keep promising to improve the employment insurance program, but no sooner do they get elected than they do the exact opposite.

The Bloc Québécois promised to introduce legislation. That is what we are doing today. That is what we have been doing ever since coming to Ottawa. If it is not passed and a majority of parliamentarians vote against it, the Liberals will pay the price.

Why is legislation necessary? It is necessary to stop the government from tapping into the surplus, these billions of dollars that belong to the workers, those who have contributed to an insurance fund they do not get to use because the government decided to undertake a much too stringent reform, which is increasingly preventing people from qualifying for EI benefits.

The independent employment insurance account management committee had the power to set premium rates and to pay out benefits, to administer and report to the House. It was also to recommend improvements to the employment insurance program. That is very important. It has the power to recommend improvements to the EI program.

Six women out of ten contribute to the EI fund, but are not eligible for benefits. That is disastrous. We are talking about 60% of women on the labour market, women and young people who are contributing to the fund. Six people out of ten do not qualify.

Why? Because the reforms are too strict. We are talking about new people on employment insurance. They need 910 hours of work. That is 910 hours in seasonal jobs. These are different kinds of jobs, and I find that everywhere in Quebec and Canada.

There are different kinds of jobs in which, as I was saying, six women out of ten did not qualify for employment insurance. These are women and young people. It is all the people who are on call, casual employees, replacements for workers on holidays, contract workers and even students.

I will be told that the act requires all workers to pay employment insurance premiums. However, the government knows very well that although everyone is obliged to pay premiums when they work because that is the law, the government is not obliged to pay out benefits to everyone.

We in the Bloc Québécois are proposing an independent fund, with administrators who would manage the premium and benefit rates. They would make recommendations and submit reports to the House. We also say that the 910 hours required to qualify for employment insurance should be reduced to 360.

We demand as well that the benefits be increased from 50% to 60%. We want to increase the number of insurable weeks to 50 in order to eliminate the gap.

Between the period when people receive employment insurance and the period when they return to work, there are workers in seasonal jobs in some regions who go as long as two months, two and a half months, often ten weeks, without any income.

There is also the abolition of the two-week waiting period. With a total surplus of $48 billion and annual surpluses of $4 billion to $6 billion, it is impossible to understand why the famous two-week waiting period cannot be eliminated. It really does take two weeks of waiting, two to three weeks if there is no investigation and all goes well. It takes about five or six weeks before people get their first employment insurance cheque.

In some families, when the employment insurance cheque arrives, it is certainly due. The banks do not wait, and neither do mortgages or grocery stores. Everybody needs it.

We also need a POWA program and a program for independent workers. I will let my hon. friend from Chambly—Borduas speak about that.

This bill is supported by unions and employers. Why employers? Because they are having difficulty recruiting employees. There is also the high cost of training employees.

On behalf of working people, on behalf of the unemployed, and on behalf of the Comité des Sans-Chemise, we ask the House to vote in favour of Bill C-280.

Yves Lessard Chambly—Borduas, QC

Mr. Speaker, the Sans-chemise ask the new minister to honour her previous stand and vote for Bill C-280, which was introduced by the Bloc Québécois to create an independent fund.

Is the minister going to persist in taking the direction she has chosen since becoming a Liberal and will she too betray these people who need her to defend them instead?