Bill C-357 (Historical)

Yves Lessard Chambly—Borduas, QC

Mr. Speaker, the Canadian Institute of Actuaries is calling on the federal government to immediately establish an independent employment insurance commission. The Institute's recommendation is almost identical to the Bloc Québécois' Bill C-357 defeated by the Conservatives and the Liberals last week.

Will the Prime Minister finally use part of the surplus and respect the wishes of employers and workers and establish an independent employment insurance fund, which his own party supported when in opposition?

Yves Lessard Chambly—Borduas, QC

That at least is clear.

Minister, during the election campaign, the Prime Minister made a commitment to establish an independent employment insurance fund. To a question asked by the Bloc's leader in the House of Commons this past June, the Prime Minister answered that he had the same philosophy as the Bloc leader concerning the employment insurance fund and that his government was going to take a position on it soon.

You didn't support Bill C-205 or C-357, whereas you had voted for Bill C-280.

What is your position today on that?

Richard Nadeau Gatineau, QC

Mr. Speaker, the House is well aware that the Bloc Québécois supports this bill, since we introduced it. I am referring, of course, to Bill C-269, An Act to amend the Employment Insurance Act (improvement of the employment insurance system).

This bill makes the following changes to the Employment Insurance Act. One, it reduces each qualifying period by 70 hours. Two, it increases the benefit period. Three, it increases the rate of weekly benefits to 60%. Four, it repeals the waiting period. Five, it eliminates the presumption that persons related to each other do not deal with other at arm's length. Six, it increases the maximum yearly insurable earnings to $41,500 and introduces an indexing formula. Lastly, the bill enables self-employed persons to receive employment insurance.

In rejecting Bill C-269, the Conservatives are defying the will of this House, of workers, of Quebeckers and of all Canadians.

However, this is typical of how they do things. We are talking about the Conservative government that decided not to include opposition members in the Canadian delegation to the upcoming Bali conference. We are talking about the Conservative government that decided not so long ago to block the work of the Standing Committee on Official Languages, which was working on something the government was not happy with. We are talking about the government that abolished the court challenges program, saying that it will not fund people who challenge its laws. We are talking about the Conservative government that changed the criteria of the women's program to prevent groups that defend women's rights from receiving funding. We are talking about the minority Conservative government—and I stress the word “minority”— that is doing everything it can to silence any form of opposition.

These Conservatives are not concerned about the living conditions of the unemployed, minorities and those who need help the most. They are only interested in the Americans, oil companies and big business. They do not care about the difficulties of older workers in the manufacturing and forestry sectors or the problems of women's groups. This is very sad. The Bloc Québécois will denounce this situation in order to bring this government back in line. This Conservative government lacks humanity. It is cold and heartless and the idea of it becoming a majority government one day is very frightening. We are going to do everything we can to make sure that does not happen.

Before the Conservatives formed the government, they supported the idea of an independent fund and wanted, as we do, to put an end to the plundering of the employment insurance fund. That money belongs to the unemployed and it is not to be used at the discretion of Canada's federal government to do whatever it wants. Those who contribute to it are not able to touch 100% of it, which is outrageous. The Conservatives agreed with us on this issue when they were in the opposition. Now that they are in power, there is no difference between a Conservative government and a Liberal government. It is six of one and a half dozen of the other.

Once in power, as I was saying, the Conservatives went back on their word, rejected our Bill C-357 on an independent fund and preferred to let the money that belongs to the unemployed accumulate in the coffers of the big banks. They are taking from the poor and giving to the rich. That is a very familiar story from medieval times: what we have here is the Sheriff of Nottingham's gang.

They are right here. Here they are, doing absolutely nothing to respond to this very scandalous situation.

Employment insurance is no longer an assistance program, but rather a hidden tax.

Under the Liberals, the employment insurance fund was used to balance the budget. Although the Conservatives voted in favour of an independent fund, the surpluses generated remain in the consolidated fund and are used for other purposes besides providing help to those who need it when they find themselves in the vulnerable position of having lost their jobs. They are most definitely entitled, since they paid into it.

The Auditor General's report of November 23, 2004, reported that the government continued to plunder the employment insurance fund, despite the will of parliamentarians—we keep doing the same thing—and that the powers of the Employment Insurance Commission, whose membership includes contributors, would apparently be suspended for yet another year—and that is still the case. How is it that a government, a political party, once in power, could become such a bully towards those who pay into a fund that should be theirs—it should belong to the workers—and that should not be used to serve the ideological ends of the party in power?

The Conservatives voted at second reading against the idea of improving the employment insurance system through Bill C-269 proposed by the Bloc Québécois, and that shows the true colours of this government.

The 2006 Employment Insurance Monitoring and Assessment Report indicates that 44.8% of the unemployed have access to the system even though 100% of them paid premiums. Not only did they pay into the fund, but so did the employers. The federal government did not contribute a single nickel and it does what it wants with this money. That is outrageous.

The Bloc Québécois tried to have the Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities adopt a report in February 2005 on the reform of employment insurance and continues to call for its implementation.

The Bloc Québécois is speaking out again against the looting of the fund and proposes concrete action such as: creating an independent fund and employment insurance commission, making the government repay the misused funds, having the Employment Insurance Commission set the premiums, and improving the system's coverage for workers in vulnerable situations.

Over the past two years, the Bloc Québécois has worked tirelessly to improve the system.

Employment insurance contributions are currently being used as a tax, not a contribution. That is unacceptable. The Bloc Québécois believes that we must clear up this misunderstanding and return the system to its original purpose, which was to insure workers who lose their jobs, not to tax work.

We have to think of the different kinds of people who collect employment insurance. I am thinking of the workers in my riding, in the Gatineau region, in the greater Outaouais region. Right now, jobs are being lost in paper mills and in forestry. The Minister of Labour, who is from the Pontiac region, should understand these sectors. I understand the paper mill workers who suddenly find themselves jobless because of downsizing.

We do not have adequate programs to help older workers from these mills, especially if they live in the city, as is the case in my riding. We do not have specific programs to help them bridge the gap between their years of seniority and retirement, when retirement is just a few years away.

Right now, the government could not care less about workers in vulnerable sectors, such as manufacturing and forestry, not to mention Ontarians working in the auto sector and the economic slump they are about to face.

The government says that there are more jobs today and less unemployment. But look at how poorly the new jobs are paid compared to those that have been lost.

The Deputy Speaker Bill Blaikie

The House will now proceed to the taking of the deferred recorded division on the motion at the second reading stage of Bill C-357 under private members' business.

Cheryl Gallant Renfrew—Nipissing—Pembroke, ON

Mr. Speaker, on behalf of the people of the riding of Renfrew—Nipissing—Pembroke, I am pleased to speak today to this private member's bill, Bill C-357, An Act to amend the Employment Insurance Act.

The bill calls for the creation of a separate EI account, an expanded EI Commission and changes to the rate setting mechanism.

I want to state from the outset that this government supports the principle of a separate EI account that has been put forward in the bill. The people in my riding of Renfrew—Nipissing—Pembroke have much in common with the people of the Gaspé, which is the area represented by the separatist member who has proposed Bill C-357.

I can tell the member that many of the challenges facing the forestry industry and the workers who rely on the working forest for a livelihood in his riding are the same challenges facing the workers in my riding. This is particularly true in the seasonal nature of this type of employment. The same can be said for the tourism industry.

Those facts alone make me very attentive any time I hear of possible changes to employment insurance and how this program is administered. Our challenge as a national government is to bring forward programs that will benefit all Canadians, that take into consideration all differences and to administer such programs in a way that all Canadians are treated equally, regardless of where they live.

I know members of my party, for example, have raised the issue of older workers, an issue that is not confined to one province but to many regions of the country, including the province of Ontario. I am pleased to confirm that, in response to our concern for older workers, the new Conservative government responded by announcing a targeted initiative for older workers, a national program intended to benefit all Canadians.

I mention the targeted initiative for older workers as this $70 million program is directed to individuals who are either not eligible or have exhausted employment benefits or other support measures that would be available through EI. It is targeted to smaller communities like Gaspésie—Îles-de-la-Madeleine, Roberval—Lac-Saint-Jean and my riding of Renfrew—Nipissing—Pembroke, if it were available.

For reasons that I have not been made aware, the province of Ontario, unlike nearly every other province in Canada, including Quebec, has refused to commit that it will participate. This leaves constituents in my riding of Renfrew—Nipissing—Pembroke, who would benefit from this initiative, to assume that Ontario does not care.

This two year program was announced last October. It is a year later and still no action. The Liberals in Toronto are indifferent to the plight of older workers. To date, 40 projects have been approved, including 13 in Nova Scotia and 20 in Quebec, projects that are expected to assist over 1,400 unemployed workers. The benefit of programs developed by the federal government is that they are national in scope. This benefit is lost when sometimes other agendas are put forward ahead of the Canadian workers.

Canada's current employment situation is relevant to any discussion of the EI program. So far in 2007, employment grew by more than 200,000 jobs. In addition, the average hourly wage rose by 2.4% in the first quarter of this year alone and the unemployment rate has dropped to the lowest point in 33 years at 5.8%.

We have a labour market where more Canadians are working than ever before and the demand for labour is strong. Opportunities for work are abundant, especially among the skilled trades which are currently experiencing labour shortages across the country. The economy is booming.

This government and the Minister of Finance have created the winning conditions so that more jobs, better wages and a brighter future can be delivered to all Canadians.

Yves Lessard Chambly—Borduas, QC

Mr. Speaker, I would first like to congratulate my hon. colleague from Vancouver Island North for the quality of her speech and the soundness of her remarks. Bill C-357 aims to amend the Employment Insurance Act regarding the employment insurance account and premium rate setting. The bill's provisions aim to correct not merely a mistake, but what is practically a serious misappropriation.

People who should be protected by the government regarding the management of their employment insurance fund are not being protected. Not only are they not being protected, but they are the victims of what I would call reprehensible management of their own assets. Indeed, it is workers and employers who pay into the employment insurance fund. This should not be considered a hidden tax. The employment insurance fund should be used exclusively for its intended purpose, that is, to ensure benefits, and therefore an income, for people who have the misfortune of losing their jobs.

There are four parts to this bill. As for the employment insurance account itself, it should no longer form part of the accounts of the Canadian government. It should be withdrawn and should become a specific account to be used for that purpose, managed and administered by those who pay into it, that is, employers and workers.

Most members of the commission should come from these two groups that pay into it, along with the participation of the Canadian government, of course. The bill recommends the following ratio: seven representatives of employees, seven representatives of employers and three representatives of the federal government. These administrators would be appointed based on recommendations from the groups involved, and the recommendations would be submitted to the minister.

It also deals with premium rate setting. At present, under the auspices of the government, three administrators who are advised by a chief actuary set the contribution rate, which has been steadily reduced. Nevertheless, surpluses continue to be recorded. Why? For the reasons indicated earlier by my colleague from Vancouver Island North: because access to employment insurance is limited to the utmost and as many unemployed as possible are excluded from coverage. In fact, more than 60% of the unemployed are excluded. That is very serious. They pay premiums to ensure they will have some income if they are unfortunate and lose their jobs. As my colleague pointed out, women and youth are even worse off. Only 32% of women and 17% of youth have any hope of receiving employment insurance benefits. This is quite tragic and things must change.

I am surprised to see that very few parliamentarians, other than Bloc and NDP members, are concerned enough to oppose this situation. If this is how any other program in support of individuals were managed—whether a home insurance policy or any other group program—the administrators would be quickly condemned, because it is literally tantamount to a misappropriation of funds.

My colleague touched on the misappropriation of funds. In the last 12 years, $54 million has been withdrawn from the employment insurance fund, resulting in significant cuts to the EI program.

This deprives families, workers and communities. For the provinces concerned, such as Quebec, it is a huge loss for the regional economy, families and so on.

The fourth measure in this bill is therefore to gradually restore all the amounts that have been misappropriated, at the rate of $1.5 billion a year. Who set this amount? It was set on the advice of an assistant deputy minister. The Standing Committee on Human Resources, Social Development and the Status of Disabled Persons asked to see all the studies. It determined that, without compromising Canada's budget, the misappropriated amounts could be restored to the fund at the rate of $1.5 billion a year, as a loan that had been made to the Canadian government over 32 years.

Not only am I calling for this, but the Standing Committee on Human Resources, Social Development and the Status of Disabled Persons unanimously recommended it on December 5, 2004. On February 15, 2005, the committee again called for the money to be restored. The first eight of the 28 recommendations in the committee's report focused on the need to create an independent fund. This was a unanimous decision by the committee members, including Conservatives and Liberals, who had also literally stuck their hands in the fund for money they could use for other purposes. The members unanimously acknowledged that a grave injustice had been done to the unemployed and their families. The money must therefore be restored at this rate.

When the committee made this recommendation in 2004, $46 billion had been taken out of the fund. Today, the total has risen to $54 billion. The government is continuing to pump money from the fund while it deprives people of income in the form of benefits if they are unfortunate enough to lose their jobs.

Poverty does not come out of nowhere. It is often the result of bad economic policies and bad social safety nets. We have a secure social safety net but it may be the result of the government's misleading practices. It is bad to have to say that here, but I am saying it. It is a misleading practice because the purpose of this fund is not to reduce the deficits of the Canadian government or anything other than to meet the needs of employment insurance.

There is a problem now. The Speaker has ruled on the matter of a royal recommendation for this bill. It is a technical matter, but a highly important one. Legislation provides that when the bill has an impact on the Canadian budget, approval by cabinet, called the royal recommendation, must be given. Naturally, cabinet refuses to provide this recommendation.

With all due respect Mr. Speaker, we differ in opinion as far as the ruling is concerned. This fund should not be recognized as a source of revenue for the Canadian government. It must be set aside to be used to manage an employment insurance fund. The Speaker made his ruling and we will comply because we have no choice.

Nonetheless, I invite all our parliamentary colleagues to strongly encourage the Conservative government to provide this royal recommendation. It is the least we can do for the people we represent in every one of our ridings who are suffering because they are not receiving the income they are entitled to when they lose their employment. It is bad enough for them to lose their employment without being denied their own benefits, to which they have contributed their entire lives through their employment insurance contributions.

Paul Szabo Mississauga South, ON

Mr. Speaker, I am pleased to speak to Bill C-357. This is a subject matter that I think was part of the first bills I recall back in 1993 when I became a member of Parliament. The debate has always been around what was already referred to as the notional EI account. It is something that probably most members are not aware of or did not exactly understand.

Many Canadians would believe that the EI program is operated similar to the Canada pension plan, where it is a separate account with money, that it is managed by a separate group of people, and it is there to earn a return on its investments and be able to pay over the term of its obligations all the benefits which have been earned by Canadians. That is not the case with regard to the so-called EI fund or the notional EI account.

Back in the years of--

Laurie Hawn Parliamentary Secretary to the Minister of National Defence

Mr. Speaker, I am pleased to have the opportunity to join in the debate on Bill C-357, presented by the hon. member for Gaspésie—Îles-de-la-Madeleine. This bill proposes significant changes to the financing and governance of the employment insurance program.

Allow me to begin with a brief overview of Canada's current employment situation.

As the House has heard on many occasions recently, the Canadian labour market is continuing to perform exceptionally well. In fact, according to Statistics Canada data, the unemployment rate reached the lowest level in 33 years in October, hitting the 5.8% mark.

During the first quarter of 2007, employment grew by an estimated 158,000 and the good news is that these jobs are paying more than ever. The hourly wage rose by 6% between August 2006 and August 2007.

The economy is booming. The Prime Minister and the Minister of Finance have created winning conditions so that more jobs, better wages and a brighter future can be enjoyed by all Canadians, and we are beginning to see the results.

Even given our strong current labour market, Canada's EI program continues to help Canadian workers adjust to labour market changes, and balance work and family responsibilities. I can assure the House that this government is committed to ensuring that the EI program continues to serve Canadians in an effective and efficient manner.

We have clear evidence to this effect from the Employment Insurance Commission's 2006 EI monitoring and assessment report tabled in the House last April. That report demonstrated and confirmed that EI income support and employment assistance is there for Canadians who experience periods of temporary unemployment. It also demonstrated that the EI program is effective in meeting most claimants' needs in terms of both the amount and duration of benefits.

We recognize that the best solution to unemployment is economic growth, a priority that this government is dedicated to pursuing through our economic plan, “Advantage Canada”.

That said, our government has not hesitated to take action on issues specific to the EI program by doing several things: further reducing the EI premium rate in this fall's economic update; expanding eligibility for compassionate care benefits; launching a pilot project to examine the effects of providing additional weeks of benefits to those in high unemployment regions; and extending EI transitional measures for two regions in New Brunswick and Quebec until the conclusion of the national review of EI boundaries.

The 2007 EI tracking survey, which asked Canadians across the country for their views on the EI program, indicates the majority of Canadians agree that the EI program is working well, which shows that Canadians support this government's approach to managing the EI program.

In addition to EI income support, our government continues to invest over $2 billion per year in active employment measures funded under part II of the Employment Insurance Act, and in partnership with provinces and territories to support the transition to skills training and new jobs for Canadian workers experiencing unemployment. What I have just highlighted is the overview of a program that is without doubt serving Canadians extremely well and responding to new and pressing issues as needed.

Bill C-357's proposals would result in a fundamental shift in how the EI program is managed. For example, the bill proposes significant modifications to the size, composition and mandate of the Employment Insurance Commission.

Under Bill C-357 the commission would increase from four members to 17. The expanded roles and responsibilities of these members, as proposed by the hon. member for Gaspésie—Îles-de-la-Madeleine, would not only become costly and unwieldy, they would also hinder the government's ability to manage and maintain the EI program and make the kinds of improvements that I listed a moment ago.

Moreover, Bill C-357 would result in a broad change to the balance of responsibilities for setting direction on changes to the EI program. Essentially, the bill would place decisions regarding a critical support program for Canadians in the hands of individuals outside government.

If the balance of decision making authority were in the hands of independently appointed commission members, the government's ability to make timely changes to the EI program as needed would be greatly reduced. This shift in the balance of decision making authority could have important consequences for a program that all evidence indicates serves Canadians quite well and, of course, matters would be made more complex given the difficulty of achieving consensus among as many as 17 individuals.

Allow me to remind the House that the current four member commission is composed of two senior public officials, along with one member representing employers and another who represents employees. I should add that only one of the two senior public officials gets a vote. This mechanism provides balanced representation among the EI Commission's members.

The two commissioners for employers and workers also establish and maintain consultations and working relationships with a variety of private sector organizations and individuals who are clients of, or affected by, HRSDC programs and services, particularly in regard to EI.

These relationships fulfill the representational responsibilities of the commissioners and enable them to reflect the concerns and positions of workers and employers regarding the administration, as well as program implementation and delivery.

Bill C-357 also proposes changes to how the EI premium rate is set. In essence, the hon. member's proposals would return the rate setting mechanism to a former process judged by a wide variety of stakeholders to be vague, unsustainable, and the cause of the EI surplus in the first place.

The current rate setting mechanism gives the commission full authority to set the rate and it incorporates a consultation process with employers and labour.

One of the main objectives of this government, when it called for the implementation of the new rate setting mechanism, was to ensure that revenues and expenditures are closely matched. I believe that it is important to give this new rate setting mechanism some time to see if it is working.

I want to emphasize that the EI commission has set the 2007 rate at $1.80, which will save employers and employees $420 million when combined with the increase in the maximum insurable earnings. This is the lowest rate in more than 14 years, while benefits have been maintained and even expanded in many areas.

In determining the rate under the new measure, the EI commission takes into account three factors: the principle that the premium rate should generate just enough premium revenue during the year to cover the payments expected to be made during the year; the chief actuary's report; and, any public input, including results of the consultation session with representatives of business and labour.

Any change to EI financing would of course need to take into account the impacts on employees and employers, beneficiaries, the economy and the EI program itself. These are obviously major considerations on which the health of our economy and our society depends.

That is why our government is committed to ensuring that all EI program changes are founded on sound analysis of evidence, with careful consideration of potential labour market impacts and the cost to individuals.

As I have demonstrated, the changes proposed by Bill C-357 could have very important consequences for our economy and the well-being of Canadians who expect the EI program to serve them in a timely and effective manner when they need it.

For all these reasons, the Government of Canada cannot support Bill C-357 at this time, but we look forward to meaningful study of this bill at the committee stage. Perhaps there are aspects of this bill that can be implemented when this government continues its improvements to the EI program that were committed to in the Speech from the Throne.