Bill C-279 (Historical)

An Act to amend the Employment Insurance Act (amounts not included in earnings)

This enactment provides that pension benefits, vacation pay and severance payments are not to be included in earnings under the Employment Insurance Act and therefore will not reduce benefits under the Act.

Employment Insurance Act

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Madam Speaker, I do not think the government member is on very solid ground when he tries to lecture the Liberals about deficits and debt. At the end of the Mulroney period, when there was a huge increase in the debt, it was followed by the Mulroney years, which put us into as big a debt as was there under the Liberal years. He is not on good ground there.

The government member has certainly come a long way when it comes to the issue of EI, from the days of the old Reform Party, when it basically operated on the basis of a pull-yourself-up-by-your-bootstraps mentality, to the point where we now have a party looking at bringing in a $1 billion improvement to the EI program. I think we should be applauding that. Rather than complaining, the Liberal Party should be coming up with some amendments for the committee to try to make the bill even better than what it is right now.

Could the government member tell the House why his party voted against the New Democratic bill, Bill C-279, which would have removed severance pay from the calculation of EI benefits, especially since the Conservatives' own report recommended that severance pay should not be treated as earnings?

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Mr. Speaker, I am very happy to have the opportunity to debate, for the second time this week, a bill about employment insurance.

We have heard from the government a bit about the bill. We will hear from the opposition parties how they feel about it, but the sad, overarching fact about all of this which overrides the content, or the lack of content, of this bill is that this is not really about employment insurance at all. It is about politics and about political games.

The Conservative government does not particularly care much about the social infrastructure of this country. We know that and we knew that from the beginning. When it inherited the Liberal surplus, it still cut literacy, the court challenges program, women's groups and many other pieces of the social infrastructure of this country. That is when it was living off our surpluses.

No, this is not a bill about EI. This is about politics and using EI as a tool. To the Conservatives, this is all a parliamentary chess game with politics first and people second.

Let us take a moment to see how we got to this today.

Last year at about this time, the Prime Minister was denying that there was any recession coming down on Canadians. We then had the economic update, which ignored the problem, and a finance minister who referred to the recession as a technical recession.

In January we saw a flawed budget, but there were some investments in things such as EI, extension for benefits and money for training. We said that we did not think the budget was enough but that it was a start. We supported it. The other parties did not. It was qualified support. The day we announced we would support the budget, we said that we needed to see more to continue our support of the government.

Last spring, employment insurance was a big issue. It was needed across the country. Jobs were being shed in many parts of Canada, including many parts of this country that had not suffered job losses in previous recessions.

The Leader of the Opposition indicated the Liberal position, which was regional fairness and a national standard of 360 hours to qualify. He was not alone on that.

The premier of B.C., Gordon Campbell, said Canadian workers, whether they lived in the Maritimes, the north, or Ontario, should be treated the same way.

The premier of Saskatchewan said that instead of 50-plus different treatments for the number of qualifying hours, we needed to dramatically reduce that.

The premier of Alberta said that unemployed families, whether they lived in Nova Scotia, Quebec or Alberta were equally unemployed.

The TD bank said that the truth of the matter was that during an economic downturn, it was no easier to find a job in a region with a lower prevailing unemployment rate than in one with a higher unemployment rate.

Pierre Fortin from Quebec said of the Leader of the Opposition's proposal that 360 hours was no problem, that it was just and fair.

A number of organizations such as the Chamber of Commerce said that a measure to improve the equity of the EI system that would be consistent with longer-term, smart policy would be to immediately and permanently make the duration of and access to benefits the same.

Perhaps my favourite was from the Reform Party of Canada platform's statement of principles which said: “An unemployed worker is an unemployed worker and deserves to be treated the same, regardless of region of residence. We will urge the immediate elimination of discriminatory EI elements such as regional entrance requirements”. The author of that is now the Prime Minister of this country. That is what he said then. We see where he is now.

In the spring, EI was a big issue, a huge issue in this Parliament. There were a number of private members' bills brought forward which Liberals supported as a way of sending a message to the government that this was a serious issue, that we would not agree with everything that was in all these bills that our colleagues from other parties had put forward, but that we supported the principle of investing in people and in the social infrastructure of this country.

Bill C-241, from my friend from Brome—Missisquoi, called for the removal of the two-week waiting period.

Bill C-279, from the member for Welland, called for an enactment providing that pension benefits, vacation pay and severance were not to be included in earnings.

Bill C-280, from my NDP colleague from Algoma—Manitoulin—Kapuskasing, called for a lowering of the threshold for becoming a major attachment to 360 hours, the national standard, setting the weekly payable to 55% of the best 12 weeks and reducing the qualifying period for receiving benefits.

We had an opposition day motion brought forward by the member for Hamilton Mountain, and I am going to read the whole thing because it is interesting to juxtapose the view of the NDP on March 5 and the view of the NDP here in September. This motion said:

That, in the opinion of this House, the government must address the alarming growth in the number of unemployed Canadians and the increasing number of Employment Insurance claimants; confirm its commitment to a social safety net to help regular Canadians through tough times and bring forward reforms to Employment Insurance rules to expand eligibility and improve benefits, including: (a) eliminate the two-week waiting period; (b) reduce the qualifying period to a minimum of 360 hours of work, regardless of the regional rate of unemployment; (c) allow self-employed workers to participate in the plan; (d) raise the rate of benefits to 60% and base benefits on the best 12 weeks in the qualifying period; and (e) encourage training and re-training.

There is nothing in there about extending benefits further.

That was the discussion back in the spring. It was a very long discussion in the House that dominated many question periods. It was called for in private members' bills and in opposition day motions.

Outside of the House, we heard the premiers, economists and labour unions. We heard everyone saying that we had to do something. The first thing they always mentioned was the unfairness of the system, particularly in a difficult economic time, for people who simply were unable to qualify.

As recently as Monday, my colleague on the human resources committee, the member for Chambly—Borduas, brought forward a bill that called for many of those same things.

In June Parliament was paralyzed and the country was on the verge of having an election until the Leader of the Opposition and the Prime Minister said, “Let us try to make an effort. Let us try to take this out of question period and put it into a room where people can discuss ideas”. The two things that were going to be discussed were regional fairness, from the Liberals, and extending EI to the self-employed, from the Conservatives. Those were the two issues.

What happened? On June 17 this EI working group, called a blue ribbon panel, was formed to look at those two issues. I was announced, my colleague, the member for Notre-Dame-de-Grâce—Lachine was the other member along with Kevin Chan, a very distinguished member of the office of the Leader of the Opposition. We were the three members. The minister was announced by the Prime Minister.

Two weeks later the other two members of the Conservative Party were announced. That was two weeks after June 17, so we were already into the summer.

We had a tele-conference. The minister said, “I cannot meet for two weeks. I have a vacation”. We were going to meet the next week and the other member of the Conservative Party said, “I've got a vacation too”, so we had to delay it again.

We had our first full briefing on July 14 which was a technical briefing. The minister in the House just said that we only had one position and she had all kinds. The minister presented nothing. There still is not a Conservative proposal to that group. If there is, she knows where my office is. She can send it. We still have not seen a proposal from the Conservatives.

On that day, July 14, in Ottawa we asked a series of questions of the working group. We asked it to cost 360 hours on a temporary basis. We also said, “Give us the cost of going to 390 hours, give us the cost of going to 420 hours, give us the cost of eliminating the three month regional rate system which penalizes people who lose their jobs on the front end of an economic downturn”.

My colleague from Montreal said, “Maybe we should look at the extension of benefits. We could at least look at it. Look at what they are doing in the United States”. That was a Liberal idea on July 14. We have it in writing, Mr. Speaker. I would be happy to send it to your office because I know you are a learned man.

We also asked, “Where is the position on the self-employed, which is your position?”. The Conservatives even promised it in the last election. They said that the Conservative government would extend EI benefits for maternal parental benefits for self-employed people.

The Conservatives said that they could not give us that information. We asked, “You can't tell us what it will cost, you must have cost it for your platform”. They said they could not give us that because it belongs to the Conservative Party of Canada.

I said, “You've got a department and you've got all kinds of people”. Whenever the minister would come to the human resources committee, she would bring a whole boatload of good people in whom we have faith when they are properly directed. The Conservatives said that they cannot give us that information.

We still do not know what that would have cost, concerning the self-employed. That was the Conservative proposal. They said to the Leader of the Opposition, “We want to look at the self-employed based on what we promised in the last election”. We got nothing.

On July 23 we had our first full meeting of the EI working group. We had agreed before that there would be certain protocols followed. The Conservatives would give us documents in advance, we would look at them, and we would all come prepared to discuss them. They would table drafts and we got them at the meeting.

I talked to the minister four or five days before. She was king enough to call when she got back from vacation. She said, “Why don't we present on the self-employed and you present on regional fairness”.

We presented on regional fairness. We had a long discussion and all six members of the working group agreed that we should get information on a number of areas. I will come to the exciting part about that later, which is that we never got that information either. We agreed on protocols and we did not get it.

We had a full discussion. There was no proposal from the Conservatives on the self-employed. We agreed to have three meetings in August. That is what our group did.

The meeting on August 6 was a beauty. We arrived at the meeting. The Conservatives provided their costing of 360 hours. They brought it to the meeting, but they gave it to reporters beforehand. I can show members. I have it here. It indicates on the bottom that it is not for distribution. Maybe they meant they were not going to distribute it to wholesalers across the country or something like that, but they gave it to the media who did not take it seriously. The Conservatives said that the 360 hour costing would be four billion and some dollars. Everybody else said it would be $1.5 billion.

The Conservatives said it would be $4 billion. How did they get to that number? They would not show us the work. When I was in school, I was not great at math and I was always told to show the work. I was not very good at that. It made it harder for me to guess. The Conservatives did not show their work. It was not the department that did not want to show it. It was the minister who did not want to show it. No answers were given to our questions. They leaked a document that was not for distribution. We responded to that.

On August 13 there was another table drop of documents. They brought in new costing for the 360 hours, which again was inflated. They refused to separate the hard, static cost from what they referred to as the estimated potential labour market impact. They said that if EI was changed, there would be an impact on the labour market. There are a couple of problems with that. The Parliamentary Budget Officer picked that one out fairly easily.

The Conservatives said that back in the 1970s the changes made to liberalize EI increased the unemployment rate by 2%. They are saying it will happen again. Let us picture that. Somebody out there who has a job is just itching to leave that job in order to get, for a maximum of 36 weeks, 55% of what he or she was making. It is an insult to Canadians to suggest that is what Canadians would want to do. It is on a temporary basis, not something that goes on forever. In the 1970s people could quit a job and get EI, but that cannot be done now. There is a whole host of differences.

Again, there was nothing on the self-employed.

On August 20 we arrived at the meeting. Again, we were given documents. There was no information in advance. We said that we would have to go away and look at them. That was probably another time the Conservatives suggested to themselves that we would not come back. The Conservatives did not give us information. They were not treating us seriously. There were no proposals. We kept going back, and going back, and going back.

We looked at some points at issue. That meeting, very significantly, was when the minister confirmed that in spite of the protocols of the EI working group which was that we would all submit our questions, the questions would go to the department through a secretariat and the answers would come back, she said that she had told the department not to answer those questions. Why would she tell the department that? Well, we are not going there anyway. We all agreed, including the minister, that we would get questions answered. The minister decided by herself that she did not like that.

That is the EI working group. In 10 weeks there were no serious proposals. Protocols were overridden.

On many occasions we offered to meet more often. It was not just for the joy of the company of the member for Nepean—Carleton and the minister. We felt that this was something serious and we should meet.

We suggested that we meet all day on August 19 and 20, or at least meet in the morning starting at 9 o'clock on the Thursday so we could seriously get at this stuff. We did not meet.

On August 20 we said that if we were not going to get information, we wanted to know to whom we could go for an independent analysis of what is going on.

The Parliamentary Budget Officer is an independent officer of this Parliament. We sent him the information about our proposals. He sent a letter to the department asking if it could back up the information by a certain date. The department could not do that. He did his analysis, and I will quote from that now:

The Government's total cost estimate, including static and dynamic costs, presented to the EIWG on August 14 of $2.425 billion overstates the cost of the proposed 360-hour national standard of EI eligibility as--

The Parliamentary Budget Officer went on to say that he believes that the government's dynamic cost estimate is flawed. He said that only the static cost should be considered because the proposed change to the EI system is in effect for only one year and not longer. In the opinion of the Parliamentary Budget Officer, the $1.148 billion static cost estimate is a reasonable estimate of the costs of the proposed 360 hour national standard of eligibility. I repeat that the $1.148 billion static cost is a reasonable estimate.

[The Deputy Speaker, Conservative, Andrew Scheer]

The House will now proceed to the taking of the deferred recorded division on the motion at second reading stage of Bill C-279, under private members' business.

The House resumed from June 9 consideration of the motion that Bill C-279, An Act to amend the Employment Insurance Act (amounts not included in earnings), be read the second time and referred to a committee.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Mr. Speaker, I am delighted to rise in support of Bill C-279, An Act to amend the Employment Insurance Act (amounts not included in earnings).

As members will recall, I had the privilege of tabling a motion on behalf of the NDP caucus which called for immediate and comprehensive EI reform. That happened on March 5 of this year, and the motion was voted on and passed by the House on March 10.

When he was in opposition, the Prime Minister was fond of pointing out that a government has a moral obligation to respect the vote of the House and to enact initiatives that are passed by a parliamentary majority. I guess that was then and this is now, because shamefully, it has now been three long months since my motion was passed and not a single one of its reforms has been acted on. The Conservative government fiddles while the workers get burned.

Just last week the unemployment figures were released for May. Since the last election, 363,000 jobs have been lost in Canada. That is just since last October, 363,000 jobs lost in seven months.

As the headline in my hometown newspaper, the Hamilton Spectator, pointed out, Ontario is ground zero for job losses. Ontario was walloped by a net loss of an additional 60,000 positions in May, bringing our province's tally of employment losses to 234,000 since October. In that time, according to Statistics Canada, jobs in manufacturing plummetted by 14% and jobs in construction by 9.3%. These were well-paying jobs, family-sustaining jobs, jobs that every laid-off worker wants back. They need those jobs to keep a roof over their heads, to feed their children and to keep up with their bills. When they lose their jobs, their only hope of staying afloat is collecting on the insurance that they have paid into all of their working lives, and that is EI.

EI is a worker's way of building up a rainy day fund. As the above statistics show, it is not just raining; the monsoon season has arrived in Ontario.

At the very time that workers need the money that they have put away for just such an occasion, they are being told that the cupboard is bare. How could that possibly be? It is certainly not because workers have excessively drawn on the fund. Rather, it is because the government absconded with their money.

Under successive Liberal and Conservative governments, the $57 billion EI surplus has been put into the consolidated revenue fund, which is the government's wallet, and been used to pay down the debt and deficit. It is that money that allowed Paul Martin to claim that he had successfully tamed the Canadian deficit. It was not him; it was workers. It was the money that workers had put away for a rainy day that was stolen from them and used for purposes other than for what it was intended.

If their money went into the consolidated revenue fund, then the government owes it to workers to now pay for EI out of that same fund. Workers deserve nothing less. They have a $57 billion IOU, and it is time to help these innocent victims of the recession weather this economic storm through comprehensive EI reform. To say we cannot afford it just does not cut it.

One part of the much needed comprehensive reform is the NDP bill before us today. It simply says that when someone files a claim for EI, the start of that claim will not be delayed because he or she is in receipt of a pension, superannuation, a retiring allowance, vacation pay, or severance. These are all monies that are owed due to past service and in no way should be deemed as current earnings that the government can claw back from EI.

I want to commend my colleague, the member for Welland, for bringing this important bill forward. He clearly understands the financial hardship that so many Canadians are confronting each and every day after losing their jobs. Unfortunately, all too many Conservative members in the House still do not get it. Their interventions in this debate have made that crystal clear. Let me share with them, and with all members in the House, a heart-rending story that was shared at a public meeting in Hamilton earlier this spring.

Our leader, the member for Toronto—Danforth, and our provincial leader, Andrea Horwath, co-hosted a meeting with Ken Neumann, the national director of the United Steelworkers. The room was packed with people worried about their jobs, and many had already received their pink slips. One courageous woman in particular made an impassioned plea for job protection and improved EI. It is her story that I want to share with members in the House today:

My name is Shannon Horner-Shepherd and today I will be going into US Steel to receive my notice that my services will no longer be required. I began my employment with US Steel (Stelco) almost exactly 11 years ago, May 24, 1998. How do I know the exact date...it was the day that I breathed a sigh of relief that I had found stable employment and it was one week after I learned that my newborn daughter, Gabrielle, would probably not live to see her first birthday. You see, at the time I was a single mom of two children, Sumer, 4 years old, and Gabby, 5 weeks old. I felt blessed that in the turmoil of learning that my newborn daughter had been born with Trisomy 13, a rare genetic disorder that at best, would see her being severely physically and developmentally disabled and at worst, cause her premature death, I had a “good job”.

It was my job at the steel mill that gave me a feeling of safety and hope. A feeling of security, that I would be able to look after both my children and be able to provide the care that would be required to help Gabby live her life to its fullest potential. I had health benefits, something I had never had before for my children. I had job security for the rest of my life. I wouldn't need to worry about how I would pay for the medications, the therapies or all the added necessities that come along with having a child with a severe disability. I had hope.

Today, as I stand before you, my hope has been replaced with worry, my heart has been filled with dread and my shoulders are burdened with stress. I am still the mom to Sumer who is now 15, Gabby, who has just had her 11th birthday and also Justin and Nicholas my twin sons who are five years old. Gabby is still alive and yes the best case scenario was true...she is severely physically and developmentally delayed, but she is alive. I will be filing for my Unemployment Insurance on Monday, but I know that with the severe backlog of EI claims it will be weeks before I see my first payment. As I have been honest with you in baring my heart, I will be honest now. I, just like thousands of other steelworkers who are now out of work don't have weeks to wait. I have done my best to minimize the collateral damage that will be done once I lose my job. I have tried to explain to my boys that right now “mommy doesn't have the money” to buy the Hot Wheels set that my sons so badly want...how do I make them understand that the simple toys that they want are enough money to buy milk and bread and diapers for their 11 year old sister? How is it that I have gone from being envied by others for having a stable job and health benefits to being pitied for being a Steelworker and that I will now be living below poverty level?

Have I lived past my means? I don't think so. Did I buy a wheelchair accessible house last year so that I didn't have to worry about Gabby falling down the stairs and fracturing her spine again? Yes. Have I purchased a van that can be wheelchair accessible if and when Gabby has a stroke and becomes permanently wheelchair bound? Yes. [Have I] tried to get through the last 11 years with being the least amount of burden on the system because I could...[theoretically] “afford” to have a disabled child? Yes. Have I put money aside so that my other children will be able to attend college or university in the future? Yes. Have I lived beyond me means? No. I've just simply “lived”.

Now. I am praying to the same person I prayed to eleven years ago, but this time I am not praying that my baby girl lives just one more day...Makes it to one more Christmas or sees one more birthday...No, this time I'm praying that I'll be able to keep my house, feed my kids and find a job that will help cover the medical expenses. I need a job that provides security and stability. I know that EI cannot cover the expenses that I have in a month, that I will have to choose between Easter presents for my kids or gas in my van to take Gabby to doctors appointments. I will try to accept the fact that I am no longer employed in a sector that has job stability and was once, along with the autoworkers, the pride of Ontario. I will accept the fact that I just like so many others will have gone from being able to provide the little extras that we all long for to not being able to provide basics. I will wake up each day as I did starting eleven years ago and pray that we make it through just one more day, week and month and maybe, just maybe, someone will hear me, and my [prayers] will be answered.

Thank you for your time and your ears.

Shannon Horner-Shepherd

Mother of 4 and a proud Steelworker Local 8782

I hope that every member in this House has heard Shannon's story, not just listened to it but really heard it. We need to understand that the decisions we make here in this House have very real consequences. It is time to stop treating workers on EI as mere statistics. It is time that we saw their faces, really understood their hardship, and responded in a way that allows the unwitting victims of this recession to survive these uncertain times with dignity and respect.

Bill C-279 is an important step in the right direction. I urge all members to give it their unequivocal support and to commit today to fight for further comprehensive EI reform. Shannon and thousands of Canadians like her deserve nothing less.

[Josée Beaudin, Bloc, Saint-Lambert, QC]

Mr. Speaker, once again I have the privilege of taking the floor and speaking on a bill to amend the Employment Insurance Act.

It is common knowledge that the Bloc never lets up on its efforts to make substantial improvements to the employment insurance program, which has become no more than a shadow of its former self. As a result, it unfairly penalizes workers who have faithfully contributed to it their whole working lives.

While definitely necessary, reducing eligibility to 360 hours regardless of region of residence is only the first step, and in no way sufficient on its own. The reform the Bloc Québécois has been urging for ages, along with the NDP, goes a great deal further. Excluding severance pay, retirement pensions and allowances, as well as vacation pay is, in our opinion, an integral part of the reform that should be enacted urgently.

In 1984, during the Progressive Conservative government, then Minister of Finance Hon. Michael Wilson announced as part of his economic update that, in future, benefit calculations would include payments made on termination of employment.

Three years later, in 1987, that same government announced that no benefits would be paid until potential recipients had used up their severance pay, this period being calculated by dividing the amount of severance pay by the salary earned in the last week worked.

For example, a person who earned $500 a week and received $5,000 in severance pay would have no benefits and no income for 10 weeks. Then there would be another two weeks added for the waiting period.

We believe this situation is unfair to workers who have been dismissed, since it their severance was not the result of poor work performance and still less of voluntary separation.

It is obvious that employment insurance is a public insurance program and it must not by compared with private insurance in any way. If we do that, there is a danger of falling into an approach that is contrary to governmental logic, which should focus on the common good and not on supporting mercantile or commercial interests.

Yet that is exactly how one government after another has behaved for the past 15 years.

I would even go further than that: not only have they subverted the social mission of the program, but they have replaced it with a focus on profit, a change in direction that has made it possible for them to stash away $57 billion in profits, at the expense of the unemployed.

The worst, ultimately, was that not only did this system become a government pseudo-corporation operating like the private insurers, but it did worse things that any private insurer would do.

What kind of private insurer would ask its clients who had had a fire, for example, to exhaust their own savings before it would provide the amounts still needed for them to restore their property?

It would be unworthy of a company that is the least bit serious and it is simply shameful of a government. It is indecent when we know that the tiny savings which flow from these measures but have such devastating effects on the unemployed would have been made up a hundred times if the government had not dipped so copiously into what should have been a cumulative reserve employment insurance fund.

Fifty-seven billion dollars: that is an awful lot of money that would have been very useful now that the unemployment rate has reached its highest point in 11 years. More than 400,000 full-time workers have lost their jobs and more than half of them will probably not get any employment insurance.

Fifty-seven billion dollars: that is enough money to eliminate the waiting period for 63 years.

Over the last 20 years, the coverage of the employment insurance system has fallen by half. The beneficiaries to unemployed ratio has fallen from 84% to 44% because the eligibility criteria were considerably tightened, though unjustly so, in the 1990s.

It is high time for the government to finally acknowledge this injustice and do everything in its power to fix it.

The Bloc Québécois and the NDP are not the only ones denouncing it. All labour unions and groups that defend the rights of working people have also been denouncing this injustice, which has led to the perversity of an employment insurance system that does not cover even half of those who are unemployed.

In 2005, the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities adopted a report with 28 recommendations that were almost all ignored by the Liberal and Conservative governments. One of these recommendations expressly addressed the issue of excluding from the calculation of people’s benefits all forms of remuneration they receive upon leaving their jobs.

I quote the report.

The Committee recommends that the government amend the Employment Insurance Regulations so as to not consider pension, severance and vacation income in the determination of earnings for benefit purposes.

It must be noted once again that the committee's work was totally ignored. That is wholly deplorable. Nothing justifies this sort of attitude, which reveals the government's alarming indifference to its social mission. The Bloc will remain critical of this indifference so long as it leaves the unemployed in their current, untenable situation.

This is why we have introduced no fewer than four separate bills to make substantial amendments to the employment insurance plan. Thus, we hope to have the program that became a labour tax at the end of the 1990s and in the early 2000s once again become a program that really protects workers by providing them with financial security between jobs, that is, while they are unemployed.

The creation of the Canada employment insurance financing board in February 2008 seemed like a first step in this direction. But the 2009 budget has frozen contribution levels for the next two years. It seems that the Conservatives' sole concern is to have big business make economies of scale on the few cents per $100 that would be needed to improve the rate of coverage of the plan significantly.

They made a choice, that of big business over workers. They chose to drop the thousands of workers who, rather than benefiting from the support of a plan they pay into day in, day out, without skipping the two week waiting period, find themselves penalized because they receive whatever their employer owes them.

It seems, however, that penalization is the leitmotif of the Conservatives—penalization more severe than the crimes, minimum sentences, the two week waiting period penalty before employment insurance benefits are paid and, now, a penalty for workers who are less badly off than others.

If an employer gave laid-off employees a watch in gratitude, I think the Conservative government would take it into account in calculating benefits. By making sure the unemployed face serious economic difficulties, the government hopes they will return to work more quickly. This cynicism is not in keeping with the role of government. This is why my colleagues in the Bloc and I will vote in support of Bill C-279.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Mr. Speaker, I am grateful for the chance to debate this issue. We are now obviously focusing on second reading and no longer on third reading, as dictated by your recent decision.

Nonetheless, I am glad to have the opportunity to debate this issue because it is a big issue for me personally in my riding of Bonavista—Gander—Grand Falls—Windsor, and particularly so for the area of the Exploits Valley in my riding, which had a mill that was owned and operated by AbitibiBowater in the town of Grand Falls-Windsor. It shut its doors last month or two months ago and now many employees are living in poverty. It is not only affecting them but also the people who work externally to the mill, which would be loggers in this particular situation.

I would like to begin my speech by referring to a conversation I had today with a former employee of the mill. He is the Communications, Energy and Paperworkers Union national representative in the mill. His name is Gary Healey. His situation is one that stands up as an example for all the rest and I would like to share it with the House at this time.

He says that in his situation he is expecting a fairly-negotiated early pension plan. Because of the negotiations that had taken place prior to this moment, he was eligible for an early pension plan. However, because he was laid off with the closure of the mill, he now cannot claim any of these major benefits until he reaches the age of 65, partly because of the legislation but mostly because of the fact that the mill has ceased its operations.

There are also issues pertaining to AbitibiBowater and bankruptcy, but this is a situation where he has now lost 10 years of his life for planning over the next little while, a detrimental situation, only to be taken from him just a few short months ago. That example persists for all of the employees, the vast majority of them certainly for early pensions. Think about those between the ages of 45 and 55 in that area who find themselves in this situation.

The employment opportunities in this particular area are fairly low and the unemployment rate is fairly high. For the most part, a lot of people have to move outside of this area and, indeed, in many cases, outside of the province. I am sure everyone can appreciate the gravity of this situation, as my hon. colleagues from the NDP certainly would because they have put this bill forward.

Here we have it. Bill C-279 hopes to make amendments to the EI Act pertaining to severance, certain pension benefits and also vacation pay.

In the particular mill that I spoke of, the situation people are in is this. When the mill was closed, the company declared bankruptcy. Therefore, it was unable to pay these major severance payments, totalling $40 million. The reason was because, of course, being in bankruptcy, it had to get permission from the courts and the judge in this particular matter. Therefore, people were not paid.

People applied for EI and went through the process. Some of them could not get EI because they had not exhausted their vacation time. The money they received for their vacation was apportioned over a period of time based on their average earnings and they were, therefore, unable to claim these benefits. That certainly suppressed their income at that point. Those who did exhaust their vacation time received the benefits.

Recently, however, the province of Newfoundland and Labrador made the decision, which I congratulate it for doing, to pay the severance payments from the province to the union to be disbursed. That included the loggers who were not originally part of this program. That is $40 million from the government of Newfoundland and Labrador. However, that now puts them in a situation where a lot of questions need to be asked and answered in this area. There are a lot of people like Gary Healey in this situation. There are people, like George Macdonald, in that situation right now who find themselves struggling to stay above the poverty line. I will return briefly at the end to the situation with the mill, but I would like to touch on some other aspects in my riding.

The economies of a vast number of rural communities represented in my riding are seasonal in nature. They are seasonal because they rely on things such as the fishery and forestry. As a stark example, it is impossible to fish off the coast of Newfoundland in a 35-foot boat in the winter months. It is also impossible to fish 200 miles off the coast of Newfoundland in a 65-foot boat during the winter months. One sees that the seasonal nature of this particular program is one that is very important. I press upon the government to realize the seasonal aspect, which is why we, and certainly I, support the 360-hour qualification period.

Employment insurance offers nothing more than a meagre income in this particular situation. With only 55% of the income, they certainly struggle through many of these months. That is the part that we have to focus on here. It is a question of poverty and it is now a question of compassion built back into the EI system. That is what the people of Grand Falls-Windsor, the Exploits Valley and the coastal communities want in this EI system: more compassion built into it. That is what we struggle for here in the House. Certainly I and my colleagues from the east coast, particularly from Newfoundland and Labrador, feel the same way.

Relying on EI is not their preferred way of life. All those who rely on EI would much prefer to be working, but there are no other employment opportunities, as I have touched on before. That is the component of this, because that is the compassion. I have heard the government say on many occasions recently that one cannot work 45 days and then expect to make a living beyond that. However, that is the very essence of seasonal employment.

This is where we lack compassion on this issue. There are certain industries that are anchored, including fishing, farming, forestry and tourism. These are the industries that rely on these short seasons, and this is where the compassion has to come in, in this particular system. They are asking for a living. They are asking for compassion.

The sad response from the government is to basically go to where the jobs are. On the surface one might think, is that not the way it has been all along and the way it is supposed to be? It is not particularly easy for someone who has worked in a particular mill or has worked on the coast for so many years. They cannot just turn to the next industry down the street when it is primarily a one-industry town with a higher income.

In many cases, these people are forced to re-educate themselves. They brag about the fact that there are education programs out there, but the education programs also require a payment of 20%, 40% or 50%. A lot of these people have to backtrack and complete the tail end of a high school education to get there. That takes a long time. That is a hard thing to do for someone with little education who is just a shade over 50 years old and ineligible for regular pension benefits such as the CPP.

Recently, in the election of 2008, there was a comment by Mr. Coles, the president of the Communications, Energy and Paperworkers Union, who said that he had a conversation with the current Prime Minister. At that point, the current Prime Minister said maybe they should think about moving to Alberta. That is where the compassion does not come in. That is the problem here. There is no compassion for someone who has just recently been laid off.

That is why we have to fix the EI system. The five weeks at the end is one issue among many. The EI system needs a cocktail of solutions and it needs solutions beyond just the five weeks at the end. It is also a question of eligibility. For people who work in seasonal employment, 360 hours counts a lot. Compassion in the EI system is the big reason we are here today.

I have only a minute left, but I do wish to conclude that over the past little while I have seen poverty face to face in many industries, particularly so with the AbitibiBowater situation in Grand Falls-Windsor. That is why, in principle, I would like to congratulate my colleague for bringing this to the House. I also want to say that I will be supporting this, because we do need compassion back in the system. This bill goes a long way in doing that. I hope that we will have a fruitful debate. Despite the fact that it did not receive the royal recommendation, I hope that the House will give this a lot of consideration before just writing it off.

[The Deputy Speaker, Conservative, Andrew Scheer]

Order. I wish to make the following statement before moving on to the next speaker.

I am now prepared to rule on the point of order raised on April 28, 2009 by the Hon. Parliamentary Secretary to the Leader of the Government in the House of Commons concerning the need for a royal recommendation to accompany Bill C-279, An Act to amend the Employment Insurance Act (amounts not included in earnings) standing in the name of the hon. member for Welland.

I would like to thank the parliamentary secretary for having raised this matter, as well as the member for Mississauga South for his comments.

In his remarks, the parliamentary secretary pointed out that Bill C-279 seeks to exclude pension benefits, vacation pay and severance payments from earnings under the Employment Insurance Act. He stated that the effect of such an exclusion would be to make individuals eligible for benefits who would otherwise not be eligible or to increase the benefits to individuals currently eligible.

He noted that there is ample precedent indicating that legislation proposing new spending not currently authorized under the Employment Insurance Act requires a royal recommendation. In support of his claim, he cited earlier rulings from the first session of the 39th Parliament on this topic.

I have examined Bill C-279 and found that the proposed exclusion of amounts from the earnings under the EI Act would have the effect of altering the terms and conditions of this program in a manner which would infringe on the financial prerogative of the Crown. Simply put, the proposal put forward by Bill C-279 is such that more individuals would be eligible to receive EI benefits and those currently eligible would receive increased benefits.

With regards to a similar bill, I stated in a decision on March 23, 2007, at page 7845 of Debates:

—those provisions of the bill which relate to increasing employment insurance benefits and easing the qualifications required to obtain them would require a royal recommendation.

In my view, the same conditions apply to the bill now before us.

For these reasons, I must conclude that Bill C-279 requires a royal recommendation. Consequently, I will decline to put the question on third reading of the bill in its present form unless such a recommendation is received.

Today’s debate, however, is on the motion for second reading and this motion shall be put to a vote at the close of the second reading debate.

Resuming debate, the hon. member for Bonavista—Gander—Grand Falls—Windsor.

The House resumed from April 28 consideration of the motion that Bill C-279, An Act to amend the Employment Insurance Act (amounts not included in earnings), be read the second time and referred to a committee.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Mr. Speaker, I too want to congratulate the member for Welland for bringing forward Bill C-279. I am going to touch on some specifics in a moment.

However, I also want to acknowledge the good work that the member for Acadie—Bathurst has done. Over a number of years he has been a champion for EI reform in the House. I believe in previous sessions of the House he had brought this bill forward for approval of the House.

The member for Welland has raised a number of very good points, but I want to touch briefly on what Bill C-279 actually does. It is trying to rectify an inherent unfairness in the employment insurance system. It is attempting to have the following categories no longer considered as earnings, so that when someone files a claim for employment insurance, the start of that claim is not delayed because he or she has been in receipt of a pension, superannuation, a retiring allowance, vacation pay, or severance.

I am going to put it in context in terms of what is happening in our economic climate. It is important because in effect when workers receive these payments it is actually money as a result of past service. This is money that is received as a result of the years they have worked or vacation pay for the year that they worked. Really, it is retroactive.

The argument when this was changed in the 1980s was that this should be considered as income arising out of employment. What that failed to take into account is that for many workers, particularly in the current economic climate, it is a buffer. It is a safety net for them.

What we are hearing in many of our communities is, for workers who manage to qualify, there is no guarantee that at the end of their employment insurance claim they are actually going to have a job.

I have heard from workers in Nanaimo who have talked about the fact that they are in their late 40s, or early or late 50s, they have worked all their lives in forestry, and their EI has run out. They have been sent for training as long distance truck drivers and there is simply no work for them.

For those workers who actually got severance pay, that money would have been a safety net for them when their EI claims ran out. Instead, they are forced to look at having to sell their homes or go on welfare. There is not much dignity for workers who have spent their entire lives in the workforce to be forced into those kinds of circumstances.

I want to touch on those circumstances. First of all, it has been mentioned in the House but I think it is worth repeating that the Minister of Human Resources and Skills Development, on January 30, 2009, said, “We do not want to make it lucrative for them to stay home and get paid”.

The member for Welland raised the point that the average weekly benefits rate now is $335 a week. That is before one pays one's tax.

I do not know where the minister lives, but where I live I would challenge anyone to live on $335 a week. People have to pay rent and are lucky to get anything under $1,000 if they have a family. They have to buy groceries and might actually have to pay for clothing or education for their children. It is hardly lucrative.

I have not met workers who say they would rather stay at home and collect their $335 a week than go out there and have a good-paying job.

In this current economic climate, I want to speak to why these reforms for employment insurance are so important. Other members have referred to the fact that the NDP had proposed a motion that was going to see some significant changes to the Employment Insurance Act. It was going to look at reducing the number of hours to qualify, expanding the number of weeks that people could get paid, and increasing the benefit rate. All of these are very important in this economic climate.

I come from a community that suffers from the recession because of what is happening in the forestry industry. A couple articles have come up and I want to reference them.

Today, in the Nanaimo Daily News, the headline is:

Province's once-mighty forestry industry is now faltering badly. An estimated 22,000 forestry workers are off the job in B.C.

That is nearly half of all the forestry workers in British Columbia, out of roughly a 55,000-person workforce. This includes thousands in the mid-island region where my riding is. They remain idle as mills continue to close or cut back and logging operations are shut down as the ailing industry continues to struggle. Analysts see no light at the end of the tunnel.

In a report released last month PricewaterhouseCoopers reported that the nation's largest forest, paper and packaging companies hemorrhaged red ink in the last quarter of 2008 and the forestry analyst company does not paint a very rosy picture for the near future in this industry.

We recently had a representation from the CEP, formerly Canadian Paperworkers Union, about the fact that pulp mills are in desperate straits in this country because of a loophole in a tax in the United States. They are talking about the Canadian pulp and paper industry facing mill closures and the loss of its global markets over a massive United States green energy subsidy that could provide a $6 billion taxpayer handout to American pulp producers. This could cut as much as 60% of the cost of chemical pulp in the United States. It goes on to talk about the fact that it is going to crush the pulp industry in Canada if there is not something done about that subsidy, that tax loophole in the United States.

In the Times Colonist today there was an article that says: “Lumber industry bottoms out” and goes on to quote the president of West Fraser Timber who said he is seeing a bottom, not because markets are rebounding but because things cannot keep getting worse. Lumber prices are below the cost of production, forcing massive curtailments both here and in the U.S.

In that grim background, if we do not fix the employment insurance system, we are going to see workers having to walk away from their houses and many of them will end up on welfare. We are already seeing the welfare rolls rise in many provinces including British Columbia.

I want to talk about some of the companies in my riding and why severance and vacation pay are so important. These are the ones that have already collapsed. We do not know how many more are going to go down that road. We had a company called Munns Lumber which was a contract logging company based in a little community called Mesachie Lake. It is gone. It laid off all its workers.

There was a company called Ted LeRoy Trucking based in Chemainus. It was a full phase logging contractor handling all of the harvesting operations that grew in response to the move by major companies to get out of the business. This is part of the transition that has been happening in British Columbia. Leroy logs primarily for Timberwest Forest. Now Leroy Logging is also gone. We have seen a company that had a very proud history of providing heavy equipment to the forestry sector, so we are not only seeing forestry companies close down and workers lose their jobs, but also the companies that supplied them.

A company called Madill had 190 employees in its Nanaimo operation. That company had been in business as a heavy equipment manufacturer for the logging industry since 1911. It is gone. One of the saddest sights I have ever seen was the equipment from Leroy and Madill in a huge acreage filled with logging equipment. I drove by thinking that maybe there are some good things happening, only to realize that they were auctioning off the remains of what was once very proud forestry operations on Vancouver Island in the riding of Nanaimo—Cowichan. This has happened all over the province of B.C. and the rest of Canada.

It is absolutely essential that we make the changes to the employment insurance system to ensure that workers have the wherewithal to continue to provide livelihoods for themselves and their families. That is an important economic stimulus for our communities as well. We hear the other side talking about economic stimulus. If we want to provide economic stimulus in our local economies, we should make sure the workers have some income. They have to be able to pay their rent. They have to be able to buy food. They have to be able to pay for their kids to go to school whether it is supplies or clothing. One of the ways to make sure that economic stimulus happens at the local level is to give those workers some income.

I would urge the House to look at the very sensible bill that the member for Welland proposed. I would hope that all members in the House will support the bill, so that this is one step in that process of reforming the employment insurance system. With any kind of democratic process, we will see the government implement the NDP motion that proposed substantial reforms to EI to make sure that those workers and their communities can continue to have the kind of access to a safety net that we would all expect as reasonable Canadians.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Mr. Speaker, in order to put those listening to us in the right context, it would be wise to remind them that we are discussing Bill C-279, which provides that pension benefits, vacation pay and severance payments are not to be included in earnings in order to give people access to employment insurance benefits immediately. This strikes us as totally fair under the circumstances.

What we feel is unfair is the present situation. Like my colleague who spoke before me, I wish to congratulate the member for Welland for bringing this bill before the House, a bill that I feel will result in a little more humanity in our employment insurance program.

It is also a good time to remind hon. members that the Bloc Québécois has intervened in a number of ways over many years in order to correct this program which has, over time, been gradually destroyed by the two parties each in turn. With respect to benefits when there is money owed to the worker after he leaves, the Conservatives are the ones who imposed that limitation on benefits in 1985. From the 1990s on, the Liberals in turn adopted various measures to limit as much as possible any access to EI. This is one such measure.

Fortunately, as we have just heard from our colleague from Dartmouth—Cole Harbour, the Liberal Party has rethought its position. That member has brought in some slightly more equitable thinking in order to remedy this situation, which is absolutely unfair to the unemployed. One of the measures in which our colleagues have participated, particularly those in the Liberal Party and the NDP, were discussed at the time of the 2005 examination of employment insurance reform.

Recommendation 23 was focused specifically on correcting that shortcoming. The committee wanted to see the EI regulations not include in calculations of income for benefit purposes any pension income, severance payments or vacation pay. This measure has therefore been in existence since 2005 and two successive governments have not acted on it. I must also indicate, as the preceding speakers have done, that this is only one of the measures that needs to be put in place in order to restore the employment insurance program.

There are currently a number of bills before the House of Commons about this issue. The Bloc introduced four of those bills, and I myself introduced one on behalf of the party. Bill C-308 calls for the following amendments. It would change the qualifying period to 360 hours of work. People would have to work 30 hours per week for a period of 12 weeks to accumulate 360 hours. This measure would eliminate the existing disparity that excludes unemployed workers based on unemployment rates in each region.

The bill would also increase the rate of benefits, which is currently 55%, to 60%. Unemployment organizations, anti-poverty organizations, unions, and even the three opposition parties, if their participation in the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities is any indication, are unanimous in their support of this initiative.

This bill, Bill C-308, eliminates the distinctions between a new entrant and a re-entrant to the labour force. That distinction discriminates against women because they are often in unstable jobs and are more likely to be laid off. Also, many women work in so-called atypical part-time jobs. This bill also eliminates the presumption that persons related to each other do not deal with each other at arm’s length; the department must prove it. The bill also increases the maximum yearly insurable earnings to $42,500. That is all in Bill C-308. It is useful to bear these bills in mind.

Then there is Bill C-241, introduced by my Bloc colleague from Brome—Missisquoi, which eliminates the waiting period. I am not the first member to have raised this issue. Tomorrow, in the late afternoon, we will be voting on this bill at second reading. I would urge my colleagues in the House to vote to refer Bill C-241 to committee so that we can eliminate the waiting period, which is yet another measure to prevent as many people as possible from collecting benefits.

Bill C-336, introduced by my colleague from Berthier—Maskinongé, changes the way in which the qualifying period is calculated in the case of a labour dispute. I am thinking about the dispute that took place in Lebel-sur-Quévillon. The employer claimed that it was not a plant closure. He put off closing the plant as long as possible by locking out the employees. When he finally announced that the plant was closing, the employees had been locked out for more than 200 weeks and therefore did not qualify for employment insurance benefits. This is another serious injustice that must be corrected. We will correct it with Bill C-336, another Bloc bill that will soon be studied at second reading.

Bill C-339, introduced by my colleague from Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, extends the maximum period for which special benefits for illness, injury or quarantine may be paid from 15 weeks to 50 weeks.

These are the Bloc Québécois bills that are being examined and that are designed to correct what has been done to the employment insurance system in recent years. As a result of the changes that have been made, close to 60% of unemployed people are currently excluded from the employment insurance system.

The employment insurance program is a measure supposed to prevent people from growing poor or even living in misery as they lose their job. However, it is not what is happening right now. In committee, with my colleagues who spoke earlier, we are studying the question of poverty. Different witnesses give us their opinions on this subject.

For example, this morning, we heard the following national and pan-Canadian groups: the group for the abolition of poverty, the Canadian Centre for Policy Alternatives, Citizens for Public Justice. These are the most important groups. They have a lot of expertise on the state of poverty. And, as far as measures to fight poverty are concerned, employment insurance is at the top on their list.

Poverty exists because there are impoverishment factors, and one of the factors which makes it now more difficult to get out of poverty is the fact that close to 60% of the workers who lose their job are being excluded and are not entitled to EI benefits.

I will conclude by reminding the House that we will vote in favour of Bill C-279 because delaying employment insurance because the employee is still owed some last amounts is simply unfair.

I encourage my colleagues to vote in favour of Bill C-279.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Mr. Speaker, again I would like to congratulate my colleague, the member for Welland, for bringing this bill forward. Clearly, he understands the issue, cares about it passionately and has given a great deal of thought to it.

I want to start by talking about how big an issue employment insurance is in Canada right now. Today we got word that according to Statistics Canada a staggering 325,700 EI claims were received in February. That is up 51,000, some 18%, from January. That is the largest number of EI claims since the tracking of EI data began. The total number of regular EI beneficiaries has climbed 22% since October 2008. Today there are well over 600,000 Canadians collecting benefits.

This issue is gripping Canadians. I would say it is an issue that is gripping Canadians who for many years probably thought, not in an arrogant way but because of history, that they would not be touched by a faltering economy. However, now they are, through no fault of their own.

The government's response has been very weak. When the economy started to dip a bit last year, instead of dealing with it, the Prime Minister decided to call an election. In the fall when Barack Obama was already talking about a stimulus package, the Conservative government came out with an economic update that did nothing to stimulate the economy but did a lot to stimulate politics in Canada. Then in January when we finally came back here, yes, there had been an improvement.

The parliamentary secretary, from his briefing notes that we just heard him read, spoke about the additional five weeks. That was helpful to a small percentage of Canadians, the less than half of Canadians who can claim EI. There was some money for training. There is so much more to be done. It is not just what people sometimes refer to as the usual suspects, the social policy groups, the anti-poverty organizations and organized labour, but even organizations like the C.D. Howe Institute have said that they were surprised the government did not do more on EI.

Today at the human resources committee, we were doing an anti-poverty study. My colleague from the Sault who is in the House tonight is well aware of this. Armine Yalnizyan from the CCPA, Dennis Howlett from Make Poverty History, and Canada Without Poverty, formerly NAPO, the National Anti-Poverty Organization all spoke about how important EI is as part of the country's social infrastructure.

The simple fact is our EI system, as we know it today, is not recession tested. So how do we fix that? Our colleague has brought forward his idea. There are other things we could do, obviously. We have a regional rate system, and maybe we could go to a national standard. That has been called for. We could increase the percentage of earnings that an individual could qualify for, a maximum of 55% of $42,000. It is still not exactly as my colleague said, it is not 55% of replacement earnings for somebody who maybe had been working in the auto sector or had another job. Maybe we could look at that. Maybe we could go to the best 12 weeks.

Maybe it is time we seriously looked at the structural issues of EI, as to how they affect women and part-time workers who are not well treated in the EI system. We know that.

My colleague from Cape Breton—Canso is in the House tonight. He was on the human rights committee, along with others, when it looked at this issue. Up until 1984, I think, severance was dealt with separately. People did not lose EI because they had received a severance payment. I think Michael Wilson was the finance minister when that was changed. It was the way things were done. The human resources committee has looked at it before and has done some work on this.

How do we prioritize what we are going to do on EI, and where does this bill fit in with that? I do not think it is right to say that there is not a cost. There is a cost to the system, but it may well be a justifiable cost.

With respect to the EI fund, as people know, there has been a surplus each year for the last number of years of what has been paid in and what has been paid out. Some money is there, even in normal times, that we could look at when it comes to the need of the country for a stronger social infrastructure.

There was a point in time when the percentage of replacement earnings was about 75% to 77% in Canada. We have to look at those things. We have to determine in each case what is the cost and what is the benefit.

We also have to remember that this recession is an opportunity to focus on the needs of our social infrastructure, but issues existed before, things like regional rates, how women, largely part-time workers, are affected. We need to do some things.

Vacation pay is for work that was provided in the year directly previous to somebody being severed from his or her employment. That should not affect EI.

The question on severance is a little more complicated. There are many arguments in favour. Some workers have worked for the same company for many years. They put their heart and soul into that company. They should be treated well for their service when they are let go. Those workers paid into EI for years. Why should they not draw some kind of full benefit from the employment insurance system?

Maybe there are other possibilities. Maybe there should be lump sum protection in the EI system. Maybe there should be a specific percentage clawback. These are things that we could look at. It may be that more evaluation is required.

This is an indication of the kinds of problems we have with the EI system. At their time of hardship, people are not getting the financial support that this country is well known for and the kind of financial support they expect.

Some anti-poverty groups say that if issues on EI are going to be prioritized, this would not be in the top five. They think we should get rid of regional rates, look at the two-week waiting period, and maybe even add more than five weeks to the employment insurance system, as is being done in the United States.

I get emails, as do all MPs. I received an email from somebody the other day who had been laid off without any severance package at all. It took her more than a year to get fairness from her company. She eventually won her case and the company had to pay her a lump sum, but employment insurance clawed back the money.

These people are not rich. EI is not a lucrative system, contrary to what the minister has indicated. The minister said she was concerned about making employment insurance too lucrative. She did not want to pay people not to work. That is a throwback to Reform Party days. At $440 maximum earnings a week, and an average of $335 a week, employment insurance is not too lucrative. We could afford to do a lot more for Canadians than what we are doing for them right now. The Conservative government has to act.

There was the other spectacle regarding the two-week waiting period. That is really a misnomer. It is not a waiting period; it is a period during which the individual does not receive benefits. The waiting period is how long an individual has to wait to get a claim processed. We have seen ample evidence in this country of people waiting a long time. The standard, according to Service Canada, is that 80% of claims are dealt with in 28 days or less. That has slipped dramatically.

On November 27 I stood in the House and asked a question of the Minister of Human Resources and Skills Development about this. On December 19 I sent her a letter. Two months later I received a letter from her apologizing for the delay in getting back to me about my concern about delays.

The government has not made employment insurance adjustment a priority. It has not put a priority on building that social infrastructure that makes Canada strong. As a result, people are hurting severely.

Bill C-279 brings up the issue of severance. It brings up the issue of pensions in some cases. It brings up the issue of vacation pay in some cases.

I want to congratulate my colleague for bringing this bill forward. I want to congratulate many colleagues in the House. I see my colleague from the Bloc, who has brought forward measures on EI that have come to our committee for consideration.

We need to make sure the government understands that the EI system needs to be more robust, especially during a recession.

Somebody back home said to me that a recession is too important a thing to waste. In other words, let us do something about poverty in this country. Let us do something about the social infrastructure, including employment insurance.

I congratulate the member for Welland for bringing this issue up. I look forward to the further debate on it and seeing how things turn out.

[Ed Komarnicki, Conservative, Parliamentary Secretary to the Minister of Human Resources and Skills Development and to the Minister of Labour]

Mr. Speaker, I welcome the opportunity to join in the discussion of Bill C-279.

Our economic action plan commitments to improve the EI program clearly indicate the employment insurance program is very important to our government. It is important to Canadians.

The bill put forward by the hon. member for Welland proposes that pension benefits, vacation pay and severance payments, collectively called separation payments, not be included in earnings under the Employment Insurance Act and therefore will not reduce benefits under the act. While this government appreciates the sentiment behind the bill, it is important that we look at the central premise of employment insurance and that this debate be put in context.

At the core of the employment insurance program is the insured-based objective that EI benefits are available to those individuals who are facing a loss of employment income. To be consistent with this objective, it naturally follows that, under the EI program, separation payments be considered as income arising from employment, and that is what they are.

The rationale behind the current system is that benefits are not paid simultaneously as, in reality, there is no loss of employment income. Once the time allocated to separation money expires, EI benefits can be collected. People are not losing EI benefits, it is saying they must use up the earnings from employment, or the income, first. When that is used up, then they go on EI. Severance payments are there to replace lost income. It is something that happens by negotiation between employer and employee. It is something that is paid out through legal action. That is meant to replace employment loss and it should be used up.

As things currently stand, the EI program makes provision for workers who receive separation payments to have their benefit periods extended by each week for which separation moneys are paid up to a maximum of 104 weeks. This means that EI claimants are eligible to collect EI benefits over that period of time. EI can continue up to a maximum of 104 weeks.

For example, if claimants qualify for 45 weeks of benefits and receives separation pay that equals 6 months of regular salary, they may receive their benefits provided they are still unemployed, once this initial 6 month period has elapsed. Therefore, claimants use up the six months, then go on EI and they are entitled to the full benefits.

If we use this example, while these individuals may not be able to receive EI benefits for a six month period, they, through their separation pay, already have employment income to live off for six months. Given that these individuals have income to live off for six months, the current system assumes they have not suffered the loss of employment income for this period of employment.

While the obvious effect of the bill would be to remove separation payments from amounts that may be deducted from benefits payable, it is important to note that the full implications of this proposal are difficult to determine.

For example, as the bill proposes to change the definition of earnings throughout the EI Act, it is not clear how the amendment may affect what would be considered to be insurable earnings and how it would affect premiums collected. Premiums have to be paid. As benefits are extended, premiums have to be increased. The ramifications could be quite substantial and would require considerable effort to clarify.

It is therefore difficult to estimate the full cost of implementing the changes proposed in the bill. Looking solely at exempting separation moneys for determination of EI benefits, the cost would be approximately $130 million annually.

Our government is always concerned when Canadians lose their job. We understand the pressures faced by Canadian families during these challenging times. That is why, through our economic action plan, we will help over 400,000 people benefit from an additional five weeks of EI benefits. We will help 190,000 people, including long-tenured and older workers, get retrained to find a new job and put food on the table for their families.

Our government has heard the needs of Canadians and will continue to deliver the protection they need to get through these difficult times. We recognize that during these challenging economic times, more and more people are unfortunately losing their jobs.

People who have lost or are at risk of losing their jobs need to know that their government is working hard for them to get them the assistance they need. That is why, as part of our action plan, we are investing an unprecedented $8.3 billion in Canada skills and training transition. Looking at that, it is a huge amount of dollars. With this strategy, we are making use of employment insurance to bolster benefits and invest in skills training.

Our government remains committed to having a highly skilled, globally competitive workforce. Helping Canadians receive training is essential to meeting this goal. That is why important changes to EI also include supporting long-term training for those workers who have been in the labour force for many years and have not made significant use of EI. For these workers, we are extending EI income support for the duration of training up to two years. These are moneys well spent, positioning people for the time when this economy changes.

I would also like to highlight that in our economic action plan, we committed to allowing earlier access to EI regular income benefits for eligible individuals investing in their own training, using all or part of their separation package. If they use all or part of that, EI would then kick in. Training and skills development are key to helping permanently laid off workers who need to change occupations or sectors, preparing our nation for the jobs of tomorrow.

Our proposal will help unemployed Canadians invest in the training they need for the jobs of the future, while allowing them to receive their EI benefits sooner.

Our government is also assisting laid off workers by providing nationally the advantage of an extra five weeks of EI benefits previously offered as part of a pilot project that was only provided in specific regions with high unemployment. Additionally, the maximum duration of benefits available under the EI program has been increased from 45 weeks to 50 weeks. These changes mean that unemployed Canadians, who otherwise would have exhausted their benefits, will receive financial support for a longer period of time. These new measures became available on March 1.

These are some of the measures that the Government of Canada is taking to temporarily provide additional income support to unemployed workers facing transitions in tough economic times.

Our government has also taken steps to provide assistance to unemployed individuals who are unable to qualify for EI benefits at all. By establishing a new strategic training and transition fund, we are investing $500 million over two years to help these individuals obtain training and other support measures. In the event they do not qualify for EI, this program and fund is available for them. We understand that the provinces and territories know local needs best, so these funds will be delivered through existing labour market agreements.

Our plan also takes into account that, in economic downturns, it would often be older workers who would be most severely affected. To provide them with greater assistance, we are investing an additional $60 million over three years in the targeted initiative for older workers program. We are also expanding its reach so communities with a population fewer than 250,000 will now be eligible for funding. It makes no difference if these communities are located in larger metropolitan areas. They are still eligible. Our plan provides additional support to unemployed Canadians over the short term and is designed to meet the needs of the current economy while helping Canadians get the skills they need for the jobs of tomorrow.

We believe that while the intent of this legislation is laudable, the wording of it is unclear. If passed, it could have considerable impacts on the fiscal framework and significant implications on other aspects of the EI program that are unclear at this time.

As I mentioned earlier, our government is already proposing a measure that will allow earlier access to EI benefits if individuals use some or all of their separation payments to purchase skills upgrading or training for themselves.

These initiatives, when taken as a package, are meant to address the needs of Canadians. It is unfortunate that the member and members of his party oppose each and every one of these proposals, such as extending the EI program by five weeks. It matters very much to those Canadians who are still looking for a job and have not found one. That five weeks is very significant. It matters to those who want to job share to ensure that all of them have an opportunity to work, while the economy recovers. There are 190,000 people who want to get their skills upgraded and want to have training so they are prepared to enter the job market of the future.

That party has opposed and voted against very important measures. In fact, it said that it was going to vote against them before it had an opportunity to read and understand what these measures were. One has to look at this whole picture as a package.

[Malcolm Allen, NDP, Welland, ON]

moved that Bill C-279, An Act to amend the Employment Insurance Act (amounts not included in earnings), be read the second time and referred to a committee.

Mr. Speaker, it gives me great pleasure to debate my private member's bill today on the issue of severance and vacation pay for those who may receive it for pension income.

The EI act looks at moneys in certain ways. It sometimes takes it into income and sometimes it does not. Sometimes it treats it in a different manner. In the case of severance pay, which is due employees upon their termination of employment, it treats that income differently, as if they were actually collecting employment insurance and out in the workforce.

At this moment in time, the gross up provision, which is an anomaly in the act, says that individuals can earn 40% of a claim up to $179 while on a claim. The act takes severance and deducts that dollar for dollar from their claim and leaves those individuals with less because they have severance rather than if they had actually taken on part-time work and deducted that in a different manner. This is really an inequitable system.

The nub of all this is that severance pay is really about pay for time that has gone before. In other words, in some situations individuals would get paid a week for every year that they may have been employed.

There are two parts of the act that talk about earnings as paid and payable. I would suggest that we ought to look at severance pay the way we did some 20 years ago when it was not used as a calculation for unemployment insurance. It was deemed to have been paid because it really was for the time that individuals spent prior to their termination because that is how it was generated in the first place. Severance pay is not paid on a go forward basis in the sense that individuals would be paid for what they might have worked. They are actually being paid for the time they did work.

At some point the act was changed to have those moneys deducted. Severance was seen to be as if someone was working but clearly they were not. That is why they were given severance pay. The reason it is called severance pay is because the individual was severed from employment.

What happened? What transpired that changed the system? We have to go back some 20 years and look at the changes that started to come into effect during the latter part of the eighties and well into the nineties under the leadership of two previous governments. The Conservatives enacted some changes in the 1980s. During the nineties, the Liberal government made a wholesale change of the system, reducing the number of people who qualified from a high of nearly 86% back in 1990 to the lows we see today, which is less than one in two, just slightly under 50%.

Why did that occur? What situation was so dramatic that the unemployment system needed to be changed wholesale?

The first question we need to ask is whether or not the system had enough money. The obvious answer to that is, no, because we know the surplus in the EI system during the nineties and into the early 2000s was approximately $54 billion. That money rightfully belonged to workers who had paid into the system, who were rightfully entitled to receive benefits from that system, and who saw the system actually become denigrated to the point where they were no longer able to collect from that system.

The obvious question to ask is, what happened to the $54 billion? Some of us are still asking that question today. It seems as if that money has vanished. In fact, some say it has been absconded. Some say it went to the surpluses of the Liberal government that preceded this Conservative government. Liberals wracked up those great surpluses talking about economic management. What the Liberal government actually did was take it from those who paid into the system and then denied them entry into the system. One has to wonder, what if we had left the $54 billion in there, would we need to drawback the severance pay of those who, at this point in their lives, need it?

This reminds me of the story of a young woman in Oshawa who received a severance package when she was laid off. She no longer lived with her parents, who had been laid off before her. Her father asked if she could assist them because they were going to lose their house because they were going to default on their mortgage. He was still waiting for employment insurance. His severance pay was basically gone because he had to use it up before he qualified for EI. She agreed to turn over her severance pay to help them keep their house. That is what families in this country do for one another.

However, under this present system, she has signed herself into poverty. The fact that she gave the severance package to her parents does not negate the fact that she will have to wait an equal amount of time of that severance pay. It would be exhausted out before she is eligible to qualify for EI. And if she qualifies subsequent to that, she would then collect.

For ease of example, if she is entitled to eight weeks worth of severance and she gives it to her parents, she will have no income for the next eight weeks. Employment insurance will not pay her one thin dime because of that. She will wait out those eight weeks and the two week waiting period for a total of 10 weeks. She will fill out a report for the next two weeks, perhaps on the third week, which will now take her to week 15. If she is extremely lucky and the system works the way it is supposed to, she will receive her first cheque on week 16. In the meantime, she has no source of income because the severance pay that has been allocated for her has all but been exhausted because of her willingness to help her parents.

When we look at that, it tells us there is something wrong with the system. The system was never designed to take people's severance pay. Severance pay was never designed to be seen as earnings. It is for income tax purposes, but it was never designed to be a qualifier for EI. That is the way the act was initially.

This bill talks about the future, but it goes back to the past at the same time to recapture the days when the system actually worked for the unemployed. That is not the way it works now.

When it comes to the issue of why it should be changed, it begs the question of why it changed. We are still waiting for that answer. No one from either government, Liberal or Conservative, has been able to explain to us that it was changed out of necessity. One might posit the suggestion that it was changed to reduce the EI premium. I think if we went to workers and asked them if they really needed $2 or $3 off their EI premium every week, which is basically a cup of coffee and a doughnut, most would probably say, “No, thank you”. They would ask us to keep the premium the way it was and to keep that money in the system so that if they perchance get laid off, the system will be there to protect them.

Twenty years ago, individuals could collect more money on EI than they can today. Think about that. Twenty years ago, we could collect more dollar for dollar on EI, of course at that time we called it unemployment insurance, than we can today under the present employment insurance system because it used to be 66% of earnings. It as driven down to 60%. It has now been driven down to 55%. Unless we get changes, we are going to see more folks in poverty than we have ever seen in this country's history.

Because of the system that we pay into, those of us who work, those Canadians out there who toil every day, who are paying their premium on a regular basis in good faith expecting to qualify, are finding themselves thrown onto this heap. It becomes a maze for them and it becomes this whole system of inequity. For them, that is an injustice because it is their system. It does not belong to us. It does not belong to the House. It belongs to workers. Those are the folks who contributed. Those are the folks who built up the fund. Those are the folks who built up the surplus.

Those are the folks who expected to draw on a surplus in a time of need. Now, when they find an absolute time of need, what do they find? The surplus is not there. We are not sure where it went. There is some conjecture about where it went. They are not sure where it went. Their hard-earned money disappeared. They ask if they can get into the system. They want to be treated the same as others across this land and, indeed, they are not. We have workers in certain parts of this country who have to have more hours than others.

There is an easy fix to all of this. New Democrats proposed and received the majority approval of the House to make changes. We asked the government to do that. At this economic moment in time, Canadians who work hard every day, pay into the system, and play by the rules are telling the government to listen to what they are saying. They need change. They need the system to be modified the way it once was, when it protected them as workers when they were unemployed. That is all they are asking for. They are not asking for their taxes to be raised. They are not asking for a government handout. They are just asking for some of the money they put in back.

I do not think that is an unfair request. In fact, I would suggest that is a more than reasonable request because ultimately it was theirs in the first place. We collected for them as a government and as a Parliament and we administered it for them. They gave us their money in trust, not for us to do willy-nilly whatever the government wanted depending on the flavour of the day. Workers said to us, “Here is our hard-earned money, it is our insurance premium. We expect to collect our insurance when we need it”. What have they found now that they really need it? It is not there and now we have made all these rules to make sure they are excluded so we can push them aside, so we can tell them they just do not qualify in the system, sorry. Yes, they paid their premium, but we are sorry about the fact that they do not qualify.

Instead we can reverse the system. We could go back to what it once was. We could go back to a day when 86% of those who paid into the system qualified within the system. We could go back to a day where 66% of earnings were qualified as insurable earnings and were paid. As members of Parliament, who live on a salary which is very commendable and very lucrative, I defy any of us to wake up tomorrow and say we are going to work on 55 cent dollars. In our case, if we were unemployed tomorrow, we would be collecting $435 a week and I would have a hard time thinking that most of us in the House would actually manage to live on that. But again, that is the high end. That is not the average. The average is close to $340 a week. Living on $340 a week before deductions, because people still pay income tax on that, and raise a family is impossible.

We know all of those things and the government knows all of those things. It talks about statistics of who qualifies and who does not. It tells us every day that it understands the needs out there. Ministers stand in their place every day and tell us they understand. If the government truly understands, it should change the system. We are not asking to reinvent it. It does not have to because we basically told it how to do it. New Democrats, with our friends in the opposition benches who voted for it, put a plan in front of the government so it did not have to go to the department to get it rejigged and all those marvellous things. It simply has to enact it. It could go back to 1993 and bring that act forward and implement it again. I am sure the Parliamentary Library has a copy. It would be dead easy. It will not be hard or difficult.

Canadians who are unemployed will be forever grateful, not just to the government but to all of us in the House because it is about all of our constituents. There is no constituency in this land that does not have someone unemployed. Not one of us has full employment in our area, so we are dealing on behalf of all our constituents.

It is an absolute crime if we are not willing to raise the hand that we are fully capable of doing in the House, raising that hand to our fellow Canadians who find themselves in a time of need through no fault of their own. Unemployment is not a choice. The rules are clear, if people quit a job they do not qualify. We need the will of the House to have the government implement what has been spoken from this side.

As we look at the situation, it never was lucrative to be on employment insurance. For those who think it was, they are absolutely misleading folks. If anyone had been on employment insurance, they would know it is not lucrative.

For the government, now is the opportunity to make changes. The NDP motion has shown how to mend a system that is truly broken. I ask the government to do the right thing and accept the NDP changes and correct an EI system that the previous Liberal government destroyed. Now is the government's opportunity to say that it knew better than the Liberals when they were in government and it has fixed it for workers. Workers will forever be grateful. Conservatives should not lose that opportunity.

Bill C-279

[Tom Lukiwski, Conservative, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, on February 25, you made a statement with respect to the management of private members' business. In particular, you raised concerns about five bills, which, in your view, appeared to impinge on the financial prerogative of the Crown. One of the bills you mentioned was Bill C-279.

I am therefore rising, Mr. Speaker, on a point of order regarding Bill C-279, An Act to amend the Employment Insurance Act (amounts not included in earnings).

Without commenting on the merits of the bill, I submit that Bill C-279 contains provisions that would change the purposes of the Employment Insurance Act that would result in new spending and therefore would require a royal recommendation.

Bill C-279 would remove pension benefits, vacation pay and severance payments from the amounts that may be deducted from benefits payable under the Employment Insurance Act. The changes would allow individuals to receive employment insurance benefits when they otherwise would not have been eligible because pension, vacation or severance pay would have reduced their benefits or made them ineligible to receive employment insurance benefits.

The Department of Human Resources and Social Development Canada estimates that the changes proposed in Bill C-279 could cost as much as $130 million per year.

Precedents demonstrate the new spending for employment insurance benefits not currently authorized under the Employment Insurance Act require a royal recommendation.

On November 6, 2006, the Speaker ruled in the case of Bill C-269, An Act to amend the Employment Insurance Act (improvement of the employment insurance system), that:

Funds may only be appropriated by Parliament for purposes covered by a royal recommendation.... New purposes must be accompanied by a new royal recommendation.

On March 23, 2007, in the case of Bill C-265, An Act to amend the Employment Insurance Act (qualification for and entitlement to benefits), the Speaker ruled that the changes envisioned in this bill “would have the effect of authorizing increased expenditures...in a manner and for purposes not currently authorized”.

The Speaker goes on to state:

Therefore, it appears to the Chair that those provisions of the bill which relate to increasing employment insurance benefits and easing the qualifications required to obtain them would require a royal recommendation.

Mr. Speaker, I submit that these precedents apply equally to the provisions of Bill C-279 which would change the purposes of the Employment Insurance Act resulting in new spending and, therefore, must be accompanied by a royal recommendation.