House of Commons Hansard #38 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was insurance.

Topics

Employment Insurance Act
Government Orders

11:45 a.m.

Liberal

Jean Augustine Etobicoke—Lakeshore, ON

Madam Speaker, I am pleased to speak on the report stage of Bill C-12, an act to amend the employment insurance act.

I want to speak on the intensity rule. The government believes steps had to be taken to protect the integrity of the employment insurance system, to ensure the millions of workers who contribute premiums continue to have confidence in a system which is both equitable and sustainable.

In seeking a solution which is fair and balanced I have proposed two very necessary amendments to Bill C-12. I am pleased to stand before the House today to report on these two amendments and to encourage opposition support for these two necessary amendments. These amendments will increase fairness and will help those people most in need. Those are the people the opposition members also should care about.

The first amendment I proposed would exempt claimants in receipt of the family income supplement from the intensity rule. This would affect claimants and families with annual earnings of $26,000 or less.

The second complementary amendment would see the provision of a credit to those who receive a reduced benefit as a result of working while on claim. An example of this would be if individuals claimed benefits for 24 weeks but due to working while collecting benefits their actual benefits are reduced by 50 per cent. These individuals would then be assumed to have accumulated only 12 weeks of benefits for the purpose of the intensity rule. Therefore the next time they file for employment insurance benefits they would not be affected by the intensity rule.

When considering this legislation we examined carefully ways to introduce reforms that are fair to people facing hardships. We tried to maintain incentives that would encourage people to take work when it is available, while at the same time ensuring all regions in the country are treated fairly and equitably.

It is worthy to note that to achieve this balance and fairness minimal cost is involved. We sought a way to ensure this legislation would help those people most in need. Other amendments to Bill C-12 will bring changes to the gaps in earnings, to the divisor, which will mean people with low incomes and in high unemployment regions are not punished for circumstances often beyond their control.

As a part of this package of amendments, my colleagues agreed with me the intensity rule change was necessary. I believe that rule was treating too harshly low income families, particularly those living in high unemployment regions. Under the original proposal the intensity rule would reduce the benefit rate by 1 per cent for every 20 weeks of regular benefits collected in the past five years up to a maximum of 5 per cent.

The family income supplement will benefit 350,000 Canadians. I consider this supplement to be one of the many positive features of this legislation. It will ensure that claimants most in need of assistance will have the means to fulfil their family responsibilities. It will mean that low income claimants, perhaps with young families, will be able to obtain employment insurance benefits worth up to 80 per cent of their work income instead of the 55 per cent normal benefit rate.

Having fought for and won the inclusion of this basic income benefit level for low income families, I did not want to see this value undermined. We did not want to subject vulnerable members of our workforce to an intensity rule that would erode the value of their benefits by as much as five percentage points.

Studies show that 188,000 claimants, ,or 54 per cent, receiving the family supplement would be affected by the intensity rule.

While accepting the importance of maintaining the integrity of our employment system, it is important that we exempt family supplement recipients from the intensity rule, therefore protecting those Canadians most in need. To my mind, any family living on an income of under $26,000, which is the threshold for the family income supplement, has because of its difficult circumstances, sufficient incentive to take whatever work is available.

The object of this reform is to help Canadians find and keep work. By exempting them from this rule, these claimants would on average see their total benefits increase by $128. Overall benefit payouts would increase by $24 million.

The family supplement, by providing a somewhat larger benefit to low income claimants with children, will mean a bit of extra money available for those individuals to spend on such things as child care, in order to participate in employment benefits or to take additional training that would lead to a good job.

We have also recognized the intensity rule is meant to provide an extra incentive for people to work as much as they can. It is a reality that many people work while they are collecting insurance benefits. Over a period of time claimants on EI may collect half of what they are entitled to because they may have earnings from part time work or small jobs.

Under the initial bill, if a claimant collects 50 per cent of what the claimant is entitled to collect while on EI for 24 weeks, the entire 24 weeks would count when the intensity rule is applied to this person's future claim. We have agreed this part of the intensity rule is not only unfair but is an unintended disincentive to work. My Liberal colleagues have agreed with me on this.

My second amendment to Bill C-12 would give people credit for work while on claim. By changing the intensity rule to account for work while on claim, we are encouraging claimants to accept whatever work is available, whenever it is available. This recognizes the principle that no matter how little or how much work is actually available, it has to pay people to work.

The vast majority of people would rather be working than receiving benefits. I see this change to the intensity rule as a positive and fair measure. Claimants subject to the intensity rule who work while on claim will earn work credits which will be prorated to reduce the impact of the intensity rule on future claims.

This amendment will encourage a trend toward a greater work effort creating more jobs for Canadians.

These amendments agreed to by my Liberal colleagues show that if we fix the gap, if we adjust the divisor, if we change the intensity rule, we will have a better bill. We will do something for Canadians.

I am encouraging support from my opposition colleagues. We will come a long way to increase fairness in the employment insurance system both to individuals and to regions, to provide additional incentives to work, recognizing the lack of work opportunities in high unemployment regions.

An amended Bill C-12 with the gap, the divisor, the intensity rule all amended will create a system that will help create more jobs, that will help get more people back to work, that will support the federal job strategy. An amendment to the intensity rule will, most of all, create a system that is fairer for those in the workforce and for those who are not.

I urge my colleagues to please support these amendments, which will make this a fair and equitable bill for all Canadians in the workplace.

Employment Insurance Act
Government Orders

11:55 a.m.

Reform

Dale Johnston Wetaskiwin, AB

Madam Speaker, here we are again discussing Bill C-12, a bill which in committee was subjected to time allocation, or at least limited debate. I would not be very surprised if we came up with another time allocation motion some time today to speed this bill along.

The name has changed. I suppose that was thrown in as a sort of an appeasement to the Reform Party. We kept saying unemployment insurance should be more like employment insurance. It should be more like insurance.

The Liberals said "maybe we will just change the name and that will give the illusion that we have actually made an insurance policy out of this, that the emphasis now will be on employment rather than on unemployment".

Insurance means insurance whether it is called unemployment or employment insurance. That is perhaps the reason the bill should go back to the drawing board. Maybe we can get it right. In its present form it does not really resemble insurance in any way.

Let us talk about insurance in the manner with which most Canadians are familiar. If you operate a motor vehicle, for instance, provincial law requires automobile insurance be purchased and maintained. If you have accidents regularly or if your car is stolen and you have to utilize insurance, you will find your rates will be increased according to the compensation paid by the insurance company.

If it were a true insurance policy, why would it include training programs and make work programs that really are not make work programs at all? Anybody who benefits from the make work programs as they stand now are the bureaucracies.

As far as training, we have heard from our colleagues in the Bloc they are most anxious to take over the manpower training provincially. If the government were to seek this, it would find the provinces agree that job training would be an area in which all provinces would be interested.

When I asked the minister of HRD last December about changes to the delivery of the training programs, he said we really should be transferring resources to the people, to the private sector, to communities.

If the minister agrees with that philosophy, if the provinces are willing to take on the training, if the private sector is willing to get involved, what is the stumbling block? The opposition certainly is not holding the government up on this. Why does it not go ahead and transfer these properties to the provinces where they would readily be accepted?

How does the minister reconcile the department's continued involvement in training programs when the Prime Minister announced that labour training programs would be the sole responsibility of the provinces? This is very difficult for me to understand.

A group of people in the fast food industry in my constituency wrote to me. They were very concerned about some of the provisions in this bill. One constituent basically said his costs will increase significantly if Bill C-12 becomes law. It is well on its way to becoming law.

This operator employs around 90 people, many of whom are students, part time workers. They are still going to school. Part of the idea is that they earn enough money to defray part of their university tuition. He said: "My customers are very price sensitive. I will have no choice but to cut back on employee hours and reduce the number of new hires in my business". He went on to say that implementing this payroll tax runs counter to the government's job creation objectives and is inconsistent with its position that payroll taxes kill jobs. As a matter of fact the government's position is that by reducing the premiums by five cents per $100 of wages earned that thousands of jobs would be created.

In light of the fact that the fund is predicted to increase to an $8 billion surplus this year, why will the government not reduce the premiums by $1 per $100 and create millions of jobs? I am using the government's map here. If one reduction of five cents per $100 will create so many jobs, why not create 20 times as many jobs? Why not go that route?

The Minister of Finance and other members of the government have admitted that the real killer of jobs is high taxes. Taxation is the killer of jobs. This gentleman who runs a fast food business in my constituency agrees with that statement but he cannot understand why the minister, the committee and the government does not see fit to reduce payroll taxes even more, bearing in mind that there will a huge surplus in this fund.

What possible reason could the government have to maintain such a high surplus? It says that times are not going to stay as good as they are. Perhaps the government is just creating a cushion for the downturn in the economy and the resulting jobs that may be lost. I do not know about that. Perhaps some creative bookkeeping is going on there. It seems to me that there never is a time when there is a surplus that one can actually put one's finger on. These surpluses seem to flow back and forth, and mostly forth into general revenue.

We are confronted today with over 200 amendments. If we debate those amendments one at a time, it is certainly going to take a lot of time. However, it will be time well spent. We should be able to debate this bill so that we actually dissect it. Eventually we will wind up putting it back together in a form that will be acceptable to Canadians, not only to the people who have to use UI from time to time but to those people who are employing the workforce of Canada.

Employment Insurance Act
Government Orders

Noon

Bloc

Maurice Godin Châteauguay, QC

Mr. Speaker, I rise to speak today with great regret and sadness at the direction being taken by Bill C-12, an act respecting employment insurance in Canada.

First of all, I would like to speak about this government. The federal government has brought in time allocation, allowing only 10 hours to study these numerous amendments to a regressive, anti-employment, poverty creating bill whose effects are complex.

This government wants to rush its reforms through on the backs of workers and the poor, while relieving the more fortunate members of our society of the social and financial burden. Its often arbitrary measures, which do not respect the democratic right of opposition members, make it more difficult for us to do the job for which we were elected.

I would also like to draw attention to an excellent article that appeared today in Le Devoir , that is a very good analysis of the situation that Bill C-12 will create. This article says that the reform is part of a policy that consists in using the unemployment insurance fund to finance a growing number of activities other than the payment of benefits.

I invite the public to take the time to read it. It will give them a very good idea of what Bill C-12 is going to mean for us.

The article can be broken down into eight sections: 1) constitutionality; 2) federal jurisdiction; 3) federal disengagement; 4) the federal government's financial participation; 5) the disadvantaged; 6) a regressive tax; 7) the provinces' responsibility; and 8) the conclusion.

I will read parts of the article to give members an idea of what it is about. First of all, this article was written by lawyers specializing in social law, meaning that we can easily use it as a reference. On constitutionality, the article says: "The employment insurance bill is part of a policy which consists in dipping into the unemployment insurance fund to finance a growing number of activities other than payment of benefits. Not only is this injurious to a growing number of contributors' right to benefits, but its constitutionality is far from certain as well".

In the second part of the article, to which I would give the title "federal jurisdiction", we can read the following: "In 1940 when the provinces consented to having this social insurance scheme placed under federal jurisdiction, as an exception, the constitutional amendment was to be precisely worded so as to turn over to the federal level only the creation and administration of an unemployment insurance plan".

The third part deals with federal disengagement. It speaks of "disengagement of state responsibility with respect to the unemployed, coupled with a growing use of the unemployment insurance account for purposes other than payment of benefits".

The fourth part deals with financial participation: "In 1977, various measures relating to job sharing, job creation and training were introduced into the legislation, and these were funded from the financial contributions of the federal government to the UI fund for the purpose of paying for those measures in future".

Succinctly, what the article tells us is that the federal government sloughed off its responsibility at some point. Initially, it was paying for the measures it imposed upon us, while now it no longer contributes to the UI fund. Only the employers and employees do.

On the subject of the disadvantaged, we can read as follows: "Moreover, a 1990 study commissioned by the Quebec department of manpower and income security concluded that female single parents were particularly affected by these legislative changes to the unemployment insurance program. A large number of these women would have to go on welfare".

Regarding the regressive tax, they write: "By using UI premiums to pay for things other than benefits, the federal legislation turns them into a regressive tax due to the fact that the maximum pensionable income is $29,000 a year. With regard to provincial responsibilities, not only does the federal government interfere in

areas of exclusive provincial jurisdiction, such as manpower and social assistance, but it does it with money collected as UI premiums, and not through its spending power. When it comes to unemployment insurance, Parliament's responsibility is to collect premiums in order to compensate insured workers should they be become unemployed. It cannot use this money for other things, thus depriving contributors of the protection they are entitled to".

The conclusion reads as follows: "This new direction taken by the plan is more harmful to certain members of society. From now on, some will be excluded from the plan, among them a majority of women and young people. Because of their precarious position at the bottom of the labour market scale, women and young people are especially affected by the current restructuring of the labour market, which has resulted in higher unemployment. Any decrease in basic UI coverage, especially tightening the eligibility criteria, is particularly harmful to these groups".

In short, these experts, these lawyers specialized in social law, give a very good summary of all the elements, all the cases brought to your attention. The bottom line is that Bill C-12 will do much more harm than good.

This sums up the many hours the Bloc Quebecois spent questioning the government. Why? Why introduce a bill aimed at cutting benefits, a punitive bill that does not take the new labour market into consideration? Why reduce the insurable maximum earnings from $42,380 to $39,000, at a cost of $900 million to the fund? Why? Why should workers earning $39,000 or less and their employers be the only ones sharing costs between them, especially since the surplus is being used to reduce the deficit?

Why introduce this fixed period mechanism to determine earnings, if not to cut benefits? Why introduce the intensity rule, if not to penalize workers whose jobs are not permanent and who are having a hard time making ends meet by working on contract or taking temporary, part time or, again, seasonal jobs? Why cut insurable weekly earnings and annualize premiums?

This unfair, regressive, anti-employment bill creates poverty and discriminates against women and young people. It creates a strong tendency to increase overtime and cut wages at a time when the social and economic impact will be devastating. It completely overlooks the strong growth in self-employment. If the bill changes the system's name from unemployment to employment insurance, why is the $5 billion surplus being used for something else than job creation?

In conclusion, this bill is a faithful reflection of this government. It touches on everything yet solves nothing.

Employment Insurance Act
Government Orders

12:15 p.m.

Liberal

Wayne Easter Malpeque, PE

Mr. Speaker, I rise at this time because of what I see are points raised by members opposite which are off the mark especially relative to manpower training. I want to set the record straight as it relates to Bill C-12.

The Government of Canada does recognize that labour market training is a responsibility of provincial governments, linked to their responsibility for education.

The proposed employment insurance act, Bill C-12, provides for a range of employment measures which opposition members well know are to help unemployed Canadians find and keep work. These measures could include: wage subsidies, income supplements, support for self-employment, partnerships for job creation and skill loans and grants. In line with the government's commitment to training, skill loans and grants will only be implemented with the consent of the province concerned, including Quebec.

This bill is a major step beyond the path of the UI program of the past. It focuses on jobs in providing unemployed workers with the tools they need to get back to work. One of the great strengths of the bill is that it clarifies more than ever before federal responsibilities in this area. It commits the federal government to work in concert with the provinces and territories to help people find jobs.

With employment insurance, the federal government will phase out training purchases, apprenticeship programs, co-operative education and workplace based training. Any employment measure that involves training such as skill loans and grants to individuals will only be used in a province with the province's consent.

The Government of Canada will seek formal agreements with each province on the design and delivery of the new employment benefits to harmonize these with provincial programs and eliminate overlap and duplication. These agreements might take many different forms depending on the priority of each province. If a province wants more control, the bill allows the federal government to delegate administration of federal employment measures to a province or even to fund provincial programs in place of federal ones if they achieve the same results.

Results are what really matter to Canadians, no matter who delivers the employment benefits. Flexibility, co-operation and partnerships are the key to getting results.

Employment insurance through Bill C-12 allows new partnerships to develop and evolve for the future. It will lead to a more effective labour market development better matched to local market realities. It will get rid of wasteful overlap and duplication. It will focus all our resources and energies on the real challenge at hand, helping Canadians find and keep jobs. That is the important purpose of manpower training. It is to give people the skills so they can have the skills in place to attract business to their province and

regions, and then have the opportunity to take on those new jobs in the marketplace of the future.

Canadians want their governments to work together. Employment insurance reflects the commitment of the Government of Canada to work with the provinces, a commitment to a federalism that will work for all Canadians.

Employment Insurance Act
Government Orders

12:20 p.m.

Bloc

Gilbert Fillion Chicoutimi, QC

Mr. Speaker, I listened to the hon. member for Malpeque, but I did not understand the allusion he made to the bill at the beginning of his comments. I will simply remind him that, when his government formed the opposition and the former Conservative government proposed an unemployment insurance reform, Liberal members made a big fuss to show that they could not support the Conservative government.

Today, this bill includes just about the same measures. Today, the Liberals feel that these changes are appropriate, while before they fought them tooth and nail. This is a case of double standard; the Liberals' outlook changes depending on where they sit in this House. Such is the true face of this government.

When legislation is introduced, it should apply to all concerned. However, this bill will not apply to all jobless people in this country, since more than half of them will not be eligible for unemployment benefits. More than half are excluded. What will happen to these people?

These 50 per cent will find themselves in pretty dire straits, and will include people from all groups, including young people, women and single parent families. Again, what will happen to these 50 per cent of unemployed people who will not be eligible for unemployment benefits? They will end up on the welfare rolls, of course.

And who will have to pay for this reform? The taxpayers in every province concerned. Consequently, in Quebec and elsewhere in Canada, governments will have to increase social assistance budgets to deal with this new problem.

If the bill is passed, it will be disastrous for the country as a whole. Year after year, my region and my riding win the prize for the highest unemployment rate in the country. On behalf of my constituents, I have to say that enough is enough. We can no longer tolerate this situation.

The unemployment insurance issue has much more to do with the current lack of jobs. Did the members opposite propose programs, initiatives or ways to create jobs? No. The government prefers to introduce measures such as this one, which, incidentally, will not cost it anything, since employers and employees are the ones making direct contributions to the unemployment insurance fund.

Of course, all the money collected does not necessarily go to those to whom it belongs, the people who contributed. A fair proportion of it is even used to reduce the deficit and the debt of our country. That is something the people in my riding will not put up with. What the people want most is a bill or programs that will create jobs. The bill before us does not deal with the real challenge we face concerning our social programs. The real challenge is, of course, to create jobs.

How do you expect our young people to complete their education in a decent fashion if we do not make it possible for them to find a good job when they graduate, not a precarious and low paid job like we see too many of these days, but a worthwhile job? They should be able to get jobs that will allow them to work enough hours to earn a decent salary, enough to pay back their student loans and live normally. By that I mean being able to take on new responsibilities, such as having a family of their own and being able to provide for their children's education. I do not mean having children just for the sake of having children and not giving them anything, or just leaving them with a debt and deficit; I mean giving them the collective tools they need to grow and prosper.

In my region, this bill has been criticized by community, humanitarian and social groups, by workers, by unions, by less organized people, by everyone. Does the government not hear all these people? Despite what the government would like the public to believe, these people are not all extremists, they are not all militants and they are not all lazy. They are not all separatists either. There are federalists who have opposed this legislation.

Why are we unable to reach those people across the way? Why do they not listen to their hearts instead of engaging in a reform that will involve so many technicalities that the most experienced officials will have difficulty finding their way through them? They will have difficulty solving problems that are submitted to us on a regular basis. We are the ones who deal with people who have problems and who do not know where to go to be treated fairly.

In closing, I would like to share with you an experience from the Saguenay-Lac-Saint-Jean region. Alcan workers there have implemented a formula that creates jobs, and I urge the government to take advantage of that experience. It is a job sharing formula that will create, in the short term, close to 110 jobs and, of course, many indirect jobs.

If the job sharing formula initiated by Alcan workers was applied to all businesses of 20 employees or more in Quebec, it could create 120,000 direct jobs.

The government could follow this example and implement a job sharing formula without dipping into the unemployment insurance fund. We could then spend the unemployment insurance fund surplus. I am sure all Canadians would support such measures which would help us create jobs.

Employment Insurance Act
Government Orders

12:30 p.m.

Bloc

Yvan Loubier Saint-Hyacinthe—Bagot, QC

Mr. Speaker, I am pleased to speak at report stage of Bill C-12 concerning unemployment insurance, or, if you prefer, to use the government's misleading terminology, the bill concerning employment insurance.

At this stage, I would like to remind you of the Bloc's position concerning unemployment insurance reform and its transformation, as if by magic, into an employment insurance program. Like the majority of Quebecers, like the majority of Canadians who have already demonstrated their dissatisfaction with the planned reform throughout the country, like the witnesses who appeared before the human resources development committee, 75 per cent of the witnesses, 75 per cent of the briefs submitted to the committee, we are strongly opposed to Bill C-12.

We are asking, and we will continue to ask until the last possible minute, because that is what Quebecers and Canadians want, that this bill be withdrawn, scrapped, and that there be a real unemployment insurance program, a real program concerning the job market, a real comprehensive policy combining the income security needed by men and women who may find themselves unemployed, which can happen anytime to anyone, with job training and active employment measures.

In other words, it is important to come up with a real unemployment insurance reform corresponding to the present job market, and to ensure that people who find themselves in this unfortunate situation are able in the short or medium term to re-enter the job market with lasting results.

What the reform presents us with is not really that. We are faced with an unfair bill. A regressive bill. An anti-employment bill. We are faced with a bill with the potential to create more poverty than it alleviates.

Changing a bill's name from unemployment insurance to employment insurance is easily done, but the reality is that employment has never been a concern of this government. The precarious job situation has never been the focus in any way of this government's concerns, nor has the unemployment situation been the object of any really serious efforts by this government.

How can this government have any real credibility, when even the Prime Minister stated some months ago to a select audience in Toronto that he considered Canada's unemployed to be lazy beer-drinkers?

How can we think that this government can focus in any way whatsoever on the situation of the least advantaged in society, when only a few weeks ago the Minister of Human Resources Development told us that those demonstrating their displeasure with the government were extremists, separatists? I would remind you that such displeasure was being shown even in his own riding, that there were demonstrations in his riding, unless of course his constituents include sovereignists and separatists, or were supported by them.

But for him it boiled down to that: people were extremists because they would not stand still to have their legs chopped off, as Bill C-12 proposes, or separatists, or what the Prime Minister called lazy people who ought to be out working instead of demonstrating. So that is the vision of this government as far as the most disadvantaged members of society are concerned.

This bill which, among other things, raises the number of hours worked required in order to collect UI, while decreasing the amount of benefits considerably, ought to simply be withdrawn. The government must admit that it has made a mistake with this. It needs to get back to the drawing board, to rework a real employment insurance plan, one which suits the work force's needs.

The other day, I was listening to the Minister of Economic Development for PEI, Robert Morrissey. He said that for Prince Edward Island alone, the loss of revenue for the 1996-97 fiscal year would be $15 million. This is a disaster for such a small province.

I was discussing this issue with my colleague from Kamouraska-Rivière-du-Loup and, according to him, the Lower St. Lawrence area, where under-employment is most serious, will lose $20 million this year if the minister's bill is implemented.

I remind the House that last year this government had already deprived Quebecers and Canadians of about $2,4 billion by shamefully slashing UI funds, benefits paid to the most needy in our society.

Bill C-17 we considered last year was less harmful than the reform proposed today, so you can imagine the results if it is implemented. I remind members that, in Quebec alone, some 46,000 people were totally excluded from the labour market last year because of the policy of restraint already announced in the finance minister's budget.

I find unacceptable that a government which ran on the promise of job creation and supposedly on the basis of a social vision for the most disadvantaged, could take 46,000 people out of the labour

force with the stroke of a pen, by adopting brutal measures that did not meet the needs of the most needy of our society.

Meanwhile, this government prides itself on having built up surpluses in the UI fund. It boasts about accumulating a minimum of $5 billion annually from employers' and employees' contributions. What is this government doing with this $5 billion, when it has dipped into Canadians' and Quebecers' pockets, literally robbed them of more than $2 billion since last year along with another several hundred million dollars this year with new measures? During this time, it takes an accumulated surplus of $5 billion annually to reduce its deficit so that the Minister of Finance appears to be a good manager by controlling the course of the deficit. This way of operating is unacceptable.

And when things start to heat up, and the lid on the pot is lifting, the government has three courses of action. It tries to buy people, just as the Minister of Finance did recently with the three maritime provinces when he offered $961 million for a pseudo reform of the GST, which has really left his government squirming of late.

When buying people does not work-I hope the people of the maritimes will not be foolish enough to swallow the GST reform, take $961 million in compensation and permit a reform that will spell catastrophe for their community in the coming years-this government becomes cynical, gets carried away and tries to trick people as to its intentions or its actions.

We heard all that was said by the Minister of National Defence in response to questioning on the many scandals in his department and by the Prime Minister in an attempt to convince us, Quebecers and Canadians, that he had resolved the problem of the GST, when the problem remains intact, even with the resignation of the Deputy Prime Minister. And when that does not work either, the government has a third approach to getting or trying to get people to swallow what it is pushing and that is by gagging the opposition and this Parliament.

Since last week, we have been gagged three times and thus prevented from debating, until basic issues like Bill C-12 die.

The first gag was applied to this bill, and the time for members' debate in the House of Commons was limited. This time serves to help Quebecers and Canadians, who are being had by this government, understand that it says one thing and does another. The second was applied to Bill C-31, which included a section on the scandalous agreement between the federal government and the three maritime provinces on the GST. The third was applied to human rights, and a gag was also imposed on that debate yesterday.

This way of operating is unacceptable and we are voicing, through this analysis at report stage of Bill C-12, our dissatisfaction with the intentions of the government in its shameful reform of the unemployment insurance system.

Employment Insurance Act
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12:40 p.m.

Liberal

Paddy Torsney Burlington, ON

Mr. Speaker, I am pleased to speak on this bill and have an opportunity to correct the record. I feel it necessary also to reflect on the comments of my colleague opposite. At some point all discussion has taken place. Canadians expect government to get on with the business of doing business. I do not think closure in this case is an unacceptable measure.

Some questions have been raised about why the government is funding employment measures through the employment insurance fund. It is important that people recognize that these are active measures that help Canadians prepare for, find and keep jobs. These measures are a long term investment in the reduction of unemployment which I believe are a legitimate way to spend contributions collected from employers and employees.

The federal government is mindful of the responsibility it has to safeguard the EI fund. Therefore there are some legitimate eligibility requirements. There is access to the fund. Ceilings to the fund will be put in place, and checks and balances to make sure there is an accountability framework to ensure monitoring of the results. Some of the consolidated revenue fund moneys will be available for groups or individuals who may not be eligible for EI funded measures such as youth and aboriginals.

There are two other areas I will speak on, the issues that have been raised with regard to the new employment insurance system, and how it will impact on women and low income parents. A great deal of misinformation has been spread on this issue.

Let us set the record straight and get some facts on the table. Mothers and low income people will benefit from the employment insurance system the government is proposing to put in place. Employment insurance is much more inclusive than the old system. Under EI, all part time work will now be insured, which is a major boost to women who comprise nearly 70 per cent of the part time workforce.

For the first time about 270,000 women who hold down part time jobs of fewer than 15 hours each will have their work insured. Under EI all the hours count toward a claim. Consider women who work at several jobs, perhaps three jobs of 13 hours a week each. Their take home pay would be based on 39 to 40 hours. They will be fully insured if they suddenly become sick or they take parental leave or should they lose one or two of those jobs. For those women who just work 13 or 14 hours a week that income is critical to the

success and the livelihood of their family. They too if they lose that job will have EI benefits. That family will continue to have a source of income while she goes out and looks for a second job.

EI provides opportunities for women to increase their work by lifting that 15 hour glass ceiling. Some people want to work more than the 15 hours but some employers restrict part time workers to fewer than 15 hours to avoid having to pay premiums. That is not acceptable.

EI provides special help for mothers and low income parents. It recognizes the importance of providing income protection to women who are raising families. The family income supplement for low income families with children will raise weekly benefits up to 80 per cent of average earnings. By the year 2001 when EI is fully implemented, they will receive 12 per cent more than they do today.

The changes which I am going to discuss next are as a result of one of the backbenchers who has made a difference here in the House, the member for Etobicoke-Lakeshore. She brought in several worthwhile amendments at the committee stage and she should be commended for her work on that front.

Because of the amendments of the member for Etobicoke-Lakeshore the intensity rule will not apply to 108,000 women who receive the family income supplement and have a history of past use. The intensity rule reduces the benefit rate by 1 per cent for every 20 weeks of regular benefits claimed over the past five years.

Because of the amendment of the member for Etobicoke-Lakeshore single parent families, most of whom are headed by women, with incomes below $26,000 will receive an average of 13 per cent more benefits under EI. More women will be able to continue working while on claim. All claimants will be able to take temporary work and earn at least $50 a week without reducing their benefits. We provide that encouragement to people to add to their family income.

Women who earn $2,000 or less a year will have any premiums they pay refunded through the income tax system which is another important change.

EI will mean that more mothers and low income families will be eligible for employment benefits to help get them back into the workforce. I am constantly faced with cases in my riding where people cannot get back in. They do not have access to those opportunities because they were not receiving in the past.

Women who return to work after caring for children will have access to EI special employment benefits if they have collected parental benefits or maternity leave in the past five years. Under EI women who have exhausted an EI claim within the past three years will be eligible for help through these active employment benefits. About 45 per cent of social assistance recipients currently in Canada will meet these eligibility requirements. These will make a difference for people. EI's employment benefits will help low income Canadians and women re-entering the workforce to acquire the skills that they need to find work.

Jobs for Canadians is the fundamental objective of our federal job strategy. We campaigned on jobs and growth. We are trying to create an environment where businesses can go out and create jobs, where people can get themselves skilled so they can be the best employees and they can find meaningful work.

These employment benefit measures that we are talking about have been field tested with great success. They are proven to help women who have been unemployed for long periods to get back into the workforce and increase their earnings. The best social security system we have in this country is a job. These tools will help women to boost their earnings. They will contribute to their job stability and blaze new trails in non-traditional occupations.

For example, the targeted wage subsidies to employers can help level the playing field for people facing disadvantages in the workforce, like women. Studies show that this approach does work. It can mean an increase of $5,000 a year on average in earnings. Of course child care support will be available for women receiving employment benefits. That is something I welcome as great news.

One of the things we talked about was the employment benefits and how this new system will help people get jobs. About 400,000 unemployed workers each year may qualify for new employment insurance benefits, things like these wage subsidies or self-employment assistance, things that have been tested and proven to help people get back to work.

Part II of Bill C-12 sets out the basic principles for these employment benefits and measures but they will be highly flexible. They will be easy to use. They will be easy to adapt to an individual's needs and circumstances. They will focus first and last on getting results no matter how they are delivered.

That is something all members of Parliament face every day in their constituencies. Some remarks from people are: "I am just falling through this system. I just missed this eligibility requirement. If only I had this, then I could take this program. I am taking a program that is completely unspecific to what I want to do in the future but it is the only thing I am qualified for and my family needs this income".

These EI changes will make a difference to them. The old programs as I have implied are rigid, inefficient or just do not work. They will be eliminated. Instead, we will have a simpler set of tools designed to work at a grassroots level.

Importantly, and I think constituents are looking for this kind of co-operation, we are putting the old turf wars behind us and concentrating together with the provincial governments on getting Canadians back to work. Bill C-12 commits the Government of Canada to work in concert with provincial and territorial governments in delivering employment benefits to Canadians.

New partnerships in delivery arrangements will match employment measures to local labour market needs and will eliminate the overlap and confusion over delivery by different levels of government. That will mean more effective help for unemployed Canadians. Is that not what we are here for?

Bill C-12 also sets the foundation for a better, more effective national employment service, the information and advisory service that currently helps about two million Canadians a year. A stronger, automated job information and labour exchange will tell people where the jobs are. More effective job search services will help insurance claimants return to work as quickly as possible.

This is the kind of employment insurance system Canadians want and it is the kind of system they need. It is more active. It will get results. It is what Canadians have been asking us for. It is an affordable, stronger, modernized system that focuses on jobs. It will do a better job of helping Canadians. It will help to keep Canadians working. Surely that is the fundamental objective of the federal government's jobs strategy and something all of us should be committed to.

I urge my colleagues to pass this bill with great speed.

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May 2nd, 1996 / 12:50 p.m.

Bloc

Michel Daviault Ahuntsic, QC

Mr. Speaker, I am pleased to take part in the debate on this bill at report stage and also to join forces with the Bloc members who worked so courageously on the Standing Committee on Human Resources Development.

This appears to be "forget about past promises week" for the government. After the GST and after a free vote on such a fundamental piece of legislation as the one adding sexual orientation as a prohibited ground of discrimination, when the government had promised a party vote and instead let its members vote freely on the bill, now we are asked to swallow hard and let this unemployment insurance reform be rammed through the House.

I am pleased to join in the debate because, on April 9, I held a special information day in my riding on UI reform. About fifteen organizations took part in this review of the reform, based on government material. Most groups told us that this reform could in no way be considered a possible basis for changes to the plan.

As usual, the government would have us believe that it is driven by the determination to reform social programs. However, this was not part of its election platform. Sometimes, you have to read between the lines instead of only looking at broken promises such as the scrapping of the GST; the Prime Minister does not seem to know that scrapping does not mean harmonizing, he remains the only one to believe he is right when his own finance minister and deputy prime minister, under public pressure, have made amends.

Besides, a very interesting statement of the Minister of Human Resources Development was quoted in La Presse of March 16, 1996. The article said: The Minister of Human Resources Development is willing to consider all the women's groups' concerns about the unemployment insurance reform, but he warned everyone that any amendment to the plan would have to be implemented within the existing financial framework''. There you have it: what counts is the financial framework and not the reform. The article went on to say:The government intends to fully respect the financial parameters set for the unemployment insurance reform''.

Before I talk about unemployment insurance as such, I would like to say a few words about the five proposed measures which will replace the 39 back to work programs.

All the organizations I have consulted reminded me that there is a certain amount of cynicism, if not hypocrisy, in this amendment. In the throne speech, it was said that the federal government was committed to transferring the responsibility for vocational training back to the provinces.

We reminded the government about the consensus in Quebec and about the minister who, at the Quebec conference on economic development, tried to call the Quebec organizations to order, even saying that the Conseil du patronat du Québec was not part of the consensus. The consensus is very real and it applies not only to all vocational training measures but also to all active unemployment insurance measures.

Therefore, it must be said again that, first of all, the official opposition and all interested parties in Quebec want Quebec to have exclusive jurisdiction over all vocational training and manpower training policies.

All the organizations consulted said it is clear that the purpose of the reform is to cut a further $2 billion, and that this government is behaving exactly like the previous Tory government: it is cutting social programs in order to reduce the deficit.

When he announced $300 million worth of changes in the amendments, he said that would be offset by stronger re-entry measures. If he had so much confidence in his measures for re-entry into the labour force, why would he cut unemployment insurance? The number of unemployed would go down by itself and so would program costs. But no. He has so little confidence in his measures that he will cut the program anyway, to be sure to

save $2 billion. These measures are not fair and should be condemned.

As to the insurance program, it is clear to us that it is a social program reform done at the expense of the neediest in our society, that is the unemployed, welfare recipients, the young, women and new entrants. On the whole, the unemployment insurance reform, as proposed, is unfair, regressive, job-killing and poverty-inducing. Eligibility requirements have been tightened. In order to be eligible to the program, people now have to work 420 and 700 hours, instead of 180 and 300 hours, more than double what it was.

For their part, new entrants to the labour market will need three times as many hours of work, that is to say 910 hours, to be eligible for the program. There are therefore two categories of unemployed: ordinary unemployed and frequent unemployed. And it no only applies to the regions; it also applies to people in Montreal, to self employed workers and part time workers.

I started in the labour force in a weekend corner store job to pay for my studies, and I feel affected by that. We are not talking only about workers in the regions, Montreal will also be affected by these measures.

Those who received payments in the past will see their benefits reduced from 55 to 50 per cent, in negative increments of 1 per cent for each 20-week period of benefits previously received. On the one hand, we are told that every hour of work will count, even the first 15, to allow these workers to have access to unemployment insurance but, on the other hand, we are making eligibility rules so tough they will not have access to the program.

It says that the first $2,000, those who earn $2,000 and less during the year will be able to receive a tax refund. The weakest, the neediest in our society will have to finance the federal government for one year. How nice. People will have to work longer to receive less benefits and for a shorter period. It is the low income people who will suffer the most from the implementation of these measures.

As for setting maximum insurable earnings at $39,000, that is another nice measure. The workers who earn the most will be given a tax cut because they will no longer have to pay premiums above the $39,000 threshold, but the people who work 15 hours or less will be taxed. Strangely, the premium cut for some people is roughly equivalent to the new premium for others. That is strange. And to top it all off, this measure is being called a job creation measure.

The hon. member for Kamouraska-Rivière-du-Loup has said it well; business people would do well to have employees earning more than $39,000 work overtime, because they will no longer have to pay premiums, rather than hiring a part time worker for whom they would have to pay premiums. That is regressive and anti-employment. The more the worker will earn money, the more his premium rate will decrease, because he will no longer pay any premiums after reaching $39,000. That is a gift from workers who earn more than $2,000, but who are unable to qualify because of the number of hours and of the other measures, to workers who earn more than $39,000. A real nice gift.

The cap of $39,000 on maximum insurable earnings is also a gift to capital intensive businesses, at the expense of labour intensive businesses. It is more interesting to have fewer employees than to have more. Finally, small businesses are being penalized.

The reform encourages people to do overtime. The idea is to reduce the work week to reinforce job creation. This bill goes totally against the current. The unemployment insurance reform will put undue pressure on the reform of employment, which is already precarious. Jobs, jobs, jobs, a lot of jobs will be cut. Nice program.

The new measures, by reducing the benefit rate, by taxing workers starting from the first hour, by establishing more stringent eligibility criteria while making certain people ineligible, are also contributing to an increased transfer of the unemployment insurance clientele toward social welfare. And the government is dumping its responsibility in the provinces' backyard, as it did for transfer programs. The Liberal government is not taking its responsibilities. This is "forget about past promises week", the week of consummate hypocrisy. Good show.

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1 p.m.

Bloc

Yves Rocheleau Trois-Rivières, QC

Mr. Speaker, I am pleased to take part in this debate on the amendments to the former Unemployment Insurance Act which, ironically, as everyone knows, will now be called the Employment Insurance Act. This in itself is indicative of the government's cynicism, a government with a long experience in that area. This is a textbook illustration of how supposedly serious and responsible commitments made by this government during the 1993 election campaign were never fulfilled. Indeed, this is another perfect example of the Liberals modus operandi.

Before going any further, I want to congratulate my fellow Bloc colleagues who worked very hard on this issue, particularly the hon. member for Mercier, the hon. member for Kamouraska-Rivière-du-Loup, as well as my friend and colleague, the hon. member for Lévis, who worked literally day and night to fight this cynical bill, which goes against public interest.

Several members have already said, and so will others, that this is an unfair, regressive and anti-employment measure. It has

nothing to do with employment insurance. It does not promote job creation: it promotes poverty.

This measure is quite simply patterned on what the Conservatives intended to do, had they remained in office. It is based on the most petty neo-Liberal movement, a movement that targets the poor and excludes an increasing number of people, not only in Quebec, in Canada and in America, but all over the world, a movement that must be scrutinized, analyzed and criticized, because a measure such as this one, given what is involved, will be followed by others, even though it goes against public interest, or the interest of humankind, as Victor Hugo said.

We can never overemphasize the fact that this is a cynical change. My comments will deal more specifically with one aspect of this major overhaul that is not only of local interest, in fact it is more of a technical nature. I am referring to the restructuring of the employment centres network, more specifically the UI and employment offices in my own region of Mauricie. My speech is for my constituents in the riding of Trois-Rivières who are the victims of an arbitrary, irresponsible and indefensible measure, all this because of the fluke election of the Liberal candidate in the riding of Saint-Maurice, who is now the Prime Minister of Canada and who was before the member for Beauséjour.

The member for Beauséjour, who was Leader of the Opposition at the time, back in March 1993, wrote to a movement for the defence of the poor in the Montreal region, regarding the attitude of the Conservative government, whose example he now follows. The letter, dated March 26, 1993, had the official letterhead of the office of the Leader of the Official Opposition:

Liberals are dismayed by these measures. By reducing benefits and penalizing even more those who voluntarily quit their job, it is obvious that the government cares little about the victims of the economic crisis. Instead of going to the root of the problem, it targets the unemployed. Moreover these measures will have disturbing consequences.

This is what the former member for Beauséjour and Leader of the Opposition, who has since become the member for Saint-Maurice, the riding next to mine, wrote in March 1993. This is totally beneath contempt. The proposed measure is unfair to residents of the Mauricie, since it targets people who are already in trouble. Those who are unemployed, who are on welfare and who want to improve their lot must work at it, they must go the employment centre. However, in the case of the Mauricie region, it was decided that the regional centre, which was formerly in Trois-Rivières, would be moved to Shawinigan. This is unacceptable.

If you look at the Notice Paper, you will see that I asked four questions on this issue. I will read these questions, regarding which I hope to get an answer soon.

The first one is: "Can the Minister of Human Resources Development indicate what recommendations were made, by the

committee analysing the restructuring of service points in Quebec, on the advisability of locating the regional Canada Human Resources Centre in Shawinigan or in Trois-Rivières?"

Here is the second, No. 21 in the Order Paper of March 12, 1996: "Can the Minister of Human Resources Development tell me whether representations or interventions were made by officers, employees or other persons from the Privy Council or the Office of the Prime Minister to officers, employees or officials from Human Resources Development Canada, in order to ensure that the regional Canada Human Resources Centre would be located in a municipality in the constituency of Saint-Maurice rather than in Trois-Rivières?"

Question No. 22: "Can the Minister of Human Resources Development tell me whether, as part of its restructuring of service points in Quebec, Human Resources Development Canada carried out comparative studies on the advisability of locating the regional Canada Human Resources Centre in Shawinigan or in Trois-Rivières and, if so, what where the findings of those studies?"

And fourth and last, Question No. 23: "Can the Minister of Public Works and the Minister of Human Resources Development tell me the rent and rent-related costs of the Human Resources Development Canada premises in the Bourg-du-Fleuve building on rue des Forges in Trois-Rivières, as compared with the anticipated costs of the Department's moving to, arranging, and settling into new premises to be located in the Shawinigan area according to the government's plan?"

According to what I have been told, the government will be answering these questions in the next few days. We would hope that, upon receiving these questions, both political and administrative staff understood that the government's proposal to locate the human resources centre in Shawinigan rather than in Trois-Rivières is contrary to the public interest, that this decision is unfair and shameful, and that this project is cynical and shameful.

Not only was it made without consultation, but also it is contrary to the opinion of every group that reacted to it in our area. The mayor of Trois-Rivières has fought a good fight, followed by the Chamber of Commerce, the Federation of Senior Citizens and the regional federation of caisses populaires. Moreover, some 25,000 citizens indicated their disapproval of that project in writing. Based on the information at its disposal, the public service union also decried this project. It does not make any sense, it goes against the best interests of the public, it is a disgrace, and we will continue to condemn this project.

Particularly as the hon. member for Saint-Maurice was kind enough to tell his voters last week, in his latest householder, that

the new regional centre will open its doors in his riding, but more precisely in Shawinigan-Sud. Those of you who are familiar with the area will know that it will also serve residents of the Saint-Maurice riding. Because the focal point in that riding is Shawinigan and not Shawinigan-Sud, constituents of the hon. member for Saint-Maurice will have to go from Shawinigan to Shawinigan-Sud without adequate public services to get them there.

We believe, and the minister responsible for regional development in Quebec also knows it full well, that this decision is unjustifiable. The minister also knows this is a totally arbitrary decision that does not take into consideration the history of the area or the travel pattern of residents. We will never stop decrying what we believe is still only a project, because we still hope the final decision has not be taken yet.

According to the information we have, officials are not aware that a decision has been taken. Everyone believes this is still only at the planning stage and we hope the government, and the Prime Minister who is behind all of this, it is pointless to try to deny it, will see reason and make a sensible and wise decision. Given his age and his vast experience, he should be able to set things straight and see to it that the people of the Mauricie region have access to all the services they are entitled to.

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1:15 p.m.

Reform

Margaret Bridgman Surrey North, BC

Mr. Speaker, I have a procedural concern. The bill has gone to committee and yet it still comes back to the House with a horrendous number of amendments. I believe there 220 amendments, which gives one cause to wonder when a bill is not a bill and whether the House of Commons is actually rewriting the bill. It makes one wonder what actually happened in committee to resolve some of these difficulties which would have provided a more streamlined bill for the House.

I am also concerned with the name change of the bill. I have two concerns. The first is about changing the name from unemployment to employment. I also question the term insurance. If changes were to be made, why was the term insurance not included?

With regard to the contents of the bill, we have started in practice to move away from the concept of insurance. The insurance policies of today are sophisticated tontines, things from our past. This does not seem to be a true insurance policy as was originally conceived to address the needs of the unemployed. It was originally intended to get us over that period of time until we could get back into the world of employment. I question whether we are actually discussing an insurance concept.

The change in terms from unemployment to employment reminds me of the health care realm in which we have a health care insurance policy. I am very pleased to see it is still addressing the concept of illness. When I am ill I know I have a health insurance policy that will allow me to get the kind of treatment I need. When the concept was changed in health care from an illness to a wellness approach, it was specifically applied to the department, not necessarily the actual insurance component of the health care regime.

The same principle is being used here, but it is not being applied to the department; it is actually encroaching on the insurance program or a program of the department. By changing the term from unemployment to employment we are expanding the parameters of this jurisdiction. We are getting more officially into things like education and health care. We have already tended to move that way with training programs.

We may be going further down the road toward duplicating services that should be provided by other jurisdictions. The health component involved when a person is unemployed should be under the health care organization.

I have some difficulties in changing the term unemployment to employment. It could be interpreted in ways that lead to a great expansion of services under this insurance act. This would take us further away from a true insurance policy.

Another concern I have is with premiums. We tend to establish categories based on geographic location or income, and we address those in need, which takes me one step further. Regardless of financial position, when we are suddenly employed there develops a need. When we work we develop a lifestyle our income will support. When that income is gone it has an effect on our lifestyle. We become in need to maintain it. I do not think that is what we are talking about here.

We should maybe look at Maslov to identify what needy means. I tend to think of needy as the basic principles which come out from Maslov such as food, shelter and clothing. These are essential to all people. When it comes to looking at benefits, this is the classification that should be front and centre. When we speak of needy, what is immediately conjured in one's mind is that somebody is needy in one of those three area, versus just saying needs. Whatever our income, we develop an appropriate lifestyle and when the income is no longer there, we are in need to maintain that lifestyle. That is a totally different issue than what we are talking about here.

It is becoming extremely technical. I am still struggling with my income tax. It is at a point now where I am not capable of doing it myself and I have to shop around for the best deal in town. We are beginning to get a similar process here by coming up with various categories, conditions in various areas of the country, income and so on. There are all these different categories. We should be

looking at the elimination of some of these categories, not the creation of more, while addressing the basic needs of the unemployed.

One category that jumps to mind immediately is the regional category. Obviously there is a financial difference, depending on the area of the country, for example north-south. It is more much more expensive to meet the basic needs of food, shelter and clothing in the north than it is in the south. I am sure if we address that in relation to the benefits, obviously there would be a monetary difference.

We can look at maternity benefits before and after birth. I do not see the rationale of differentiating between a natural parent and an adoptive parent. A baby is a baby, and it does not matter whether a baby is adopted or born of natural parents. That child still has the same needs. I was under the impression that these maternity benefits were originally applied to address those needs of the child because the mother is in the working world. That does not change if it is an adopted child. The baby still needs the adoptive mother just as the natural mother would be needed.

I would like to get back to the insurance component. I looked at the auditor general's report of 1994. He quotes from a study the Department of Finance. He refers to unemployment insurance as a disincentive to employment.

I do not see anything in this act which would really discourage people from going on unemployment insurance. I agree with the auditor general and I would like to see some of the amendments pass. Some definitely address this issue. We could stand here all night and illustrate various examples where the unemployment insurance act has been taken advantage of.

There are some major concerns. The name change is one. By going from unemployment to employment we are expanding the parameters of what is to be provided under that. A rose is a rose by any other name; I may be misquoting, but it is still unemployment insurance no matter what we call it.

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1:25 p.m.

Bloc

Philippe Paré Louis-Hébert, QC

Mr. Speaker, I am pleased to have the opportunity to rise today, not to say that this is a good bill but to give some support mainly to the three Bloc members. I am talking about the hon. members for Mercier, Kamouraska-Rivière-du-Loup and Lévis, who, for almost two years now, have been fighting long and hard on behalf not only of their constituents but also of all the people of Quebec and an important part of the people of Canada, for those who will fall victim to this unemployment insurance reform.

This is totally absurd. We are faced with a government that is not living up to its promises, as we have seen many times this week. Liberals had promised to scrap the GST, but they did not deliver. The Minister of Justice and the Prime Minister promised to vote as a party on the issue of sexual orientation as a prohibited ground of discrimination, but they did not keep their word.

On the one hand, they do not keep their promises and, on the other other, they do things they did not promise to do. Among other things, they are undertaking a reform of the unemployment insurance system even though, as mentioned by my colleague for Trois-Rivières, the Prime Minister, when in the opposition, fought against the unemployment insurance reform proposed by the Conservatives.

The Bloc Quebecois' fight goes back to the fall of 1994 when the Minister of Human Resources Development started a huge consultation process throughout the country on a reform proposal.

We could speak of reform then because we did not know yet what would come out of these consultations or what kind of a bill would finally be introduced in the House of Commons. So Canadians were consulted. Our three colleagues travelled across Canada with the Standing Committee on Human Resources Development. In the end, 80 per cent of the witnesses heard by the committee were against the reform proposal as it was then formulated. More eager to please the government than the people, the standing committee prepared a report, which, of course, was not in accordance with what the people consulted had said. That is why the Bloc Quebecois presented a dissenting report.

Since then, especially since the 1995 budget speech, we have seen a series of government measures aimed at pulling the government out of fields of activity where it had been present for many years. In many cases the Bloc Quebecois supported such measures, and I am thinking in particular of the privatization of airports and air traffic control. We agreed on the principle.

In the present case, the government is doing exactly the opposite. It has not contributed one cent to the unemployment insurance fund since 1991. So if there were one sector the government could privatize and where it could say to employers and employees: "Since you are the only contributing to it, we are asking you to manage the unemployment insurance program", it is this one.

Why is the government doing the opposite in other sectors, for example with navigation aids? The Coast Guard is trying to get users pay the bill. Why did the government not do the same with unemployment insurance? For a very simple reason, the government discovered, following the 1995 budget, in which there were important cuts to UI eligibility and benefit payment criteria, that

unemployment insurance has become an extremely productive cash cow. Therefore why privatize such a cost effective program?

It will even further reduce benefits so that claimants will receive lower payments, and make it more and more difficult to receive unemployment insurance by imposing stricter conditions. Furthermore, it will make sure that everybody pays into it, even those who do not have the slightest chance of receiving benefits one day.

Realizing this was an extremely important revenue source, the government would have us believe it is reforming the unemployment insurance program. But what is it truly doing? It is in fact draining the UI fund in order to reduce the deficit.

This bill will have extremely harmful results. Because it is afraid Canadians will discover more harmful features, the government decided to limit debate. A time limit was imposed on the Standing Committee on Human Resources Development so the government could steamroll passage of this bill.

The bill will have extremely negative consequences particularly because it is going after the people most in need, those who are most vulnerable. It is an attack against seasonal workers and part time workers, which necessarily means women because they represent a high percentage of that category. It is an attack against entrants and immigrants who have been here for a few years and who, for cultural or other reasons, obviously have more difficulty than others entering into the labour force.

The most vulnerable workers will be affected the most. They will be forced to contribute to unemployment insurance from their very first hour of work. This, in itself is not bad. We could even say it is a good measure had the government not already raised the eligibility criteria. These people are forced to contribute from their very first hour of work, but the eligibility notch is raised so high that we can be sure many contributing workers will never be eligible-some say one million of them.

Making part time workers, students and so on contribute will bring $900 million into the unemployment insurance fund, and what makes that measure so perverse is that it will allow the government to give that money to the richer workers. We must remember that maximum insurable earnings, which were set at $42,500, will be lowered to $39,000. That means that the government took $900 million in the pockets of the poorest workers in order to give it to the wealthiest, when it could have raised that maximum instead. It was at $42,000. Why not set it at $50,000 or $60,000? It chose not to. It preferred to take the money from the poorest workers, those most vulnerable. For that reason alone, this bill is a perverse and antisocial measure and, unfortunately, if it is passed, we will have to pay a social price for it in the years to come.

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1:35 p.m.

Liberal

Larry McCormick Hastings—Frontenac—Lennox And Addington, ON

Mr. Speaker, I am very pleased to speak on this bill which will help many Canadians help themselves. There are going to be very positive results.

When members speak about employment insurance, sometimes I do not think we tell enough. It is not just workers who will be affected by this new income support system. The business community will also be affected. From the testimony before the standing committee we know that for the most part business is quite supportive of employment insurance.

I would like to take a few minutes to explain to the hon. members some of the implications of EI for people in business. Employment insurance is one component of the government's job strategy. The government has made it abundantly clear that its number one priority is to create a positive economic climate in which the private sector can generate growth and create jobs.

There are a number of strategies to fulfil that commitment. Among them are some of the provisions in Bill C-12. Since it is the business community, especially small business, that creates jobs in this country, it is vital that EI measures enable business people to do just that.

The government has heard on more than one occasion that the effect of escalating UI premiums discourages job creation. Business has seen increased premiums as a tax on jobs, a tax the government imposes during a recession, which is obviously the worst time that this could happen. However, it has no choice. It is obligated by law to pay benefits when the UI account is running a deficit. That same obligation will apply with the passage of Bill C-12.

The answer is quite clear. When the economy is doing well a reserve will be built in the EI account. In that way funds will be available to pay for benefits during a downturn in the future and premiums will remain stable. Premiums will not have to rise when business can least afford them because there will be a cash reserve to draw on.

Some members opposite have criticized the government's plan to build a reserve in the EI account. They come up with bogus and misleading statements about how the government is going to use the reserve to pay down the deficit, which is not true because the reserve has no impact on the deficit over the long term. Insurance funds can only be used for purposes spelled out under the act: insurance benefits, employment benefits and their administration.

There are positive signs for the business community. When economic indicators are positive, business is better able to preserve jobs during tough economic times and create new jobs when there is an upswing in economic activity. In the future we must ensure that these fundamentals are always there.

I hope all members agree that we want a stable premium rate for the new EI program. Let us look at the implications of the proposed new rates which is down from $3 last year to $2.95 this year. With this rate, more than two-thirds of small firms will pay the same or less in premiums during 1996 compared to 1995.

While a decision is yet to be made, when EI brings in first dollar coverage in 1997, and premium rates are reduced further, the impact on small businesses will be even more beneficial.

While the Minister of Finance has assumed a $2.90 rate in 1997-I hope it is much less than that-for planning purposes in the last budget, the actual rate will be set at the end of this year.

As well, as stated by the Canadian Federation of Independent Business, about 30 per cent of their membership, small and medium sized businesses, will also benefit from the premium reductions associated with the reduction in the maximum insurable earnings.

The government has not forgotten these small business people who will experience some adverse affects because of this new legislation. These hard working men and women will be helped to adjust to EI through a two-year premium relief program. The program will begin in January 1997. It will coincide with the introduction of first dollar coverage and the calculation of MIE earnings on an annual basis. Here is how it will work.

An employer whose UI premiums in 1996 are less than $30,000 will be eligible for a premium rebate. Employers who face an increase of more than $500 can have up to 50 per cent of the increase rebated in 1997 and up to 25 per cent in 1998 to a maximum of $5,000 a year rebate. This measure will provide premium relief to about 30,000 small businesses. This year the reduced premium rate and the lower maximum insurable earnings will save business $730 million in premium payments.

As well, individual employers will pay $520 million less in premiums in 1996, enabling them to retain more of their income which also helps the business community. It gives people more spending power. Those are significant savings and members opposite should give them due consideration.

The business community is also pleased with the proposed employment insurance system because it goes a long way toward reducing the administrative burden of the current UI structure.

Beginning in 1997, premiums will be collected based on total earnings and total hours from the first dollar and the first hour. That means employers will no longer have to track weekly wages and hours and maintain very complex files in order to determine when, and how much, premiums are payable each week.

As well, business people describe the record of employment as an absolute nightmare to administer. I have spent many hours late at night filling out ROEs. I would probably make a small mistake on some line and whether I did or not, the government always seemed to be sending them back.

The present system has been a real nightmare. The one-page form comes with a 35-page instruction manual. The weekly reporting system often means that employers must report earnings differently than their own pay periods. It has been a jungle.

Under the EI, the record of employment will be more like an employer's payroll. Employers will only have to report an employee's first and last days of work, total earnings and total hours. As well, the ROE can be used for post-audit verification.

With the changes I have outlined, plus the other provisions of Bill C-12, it is estimated that once fully implemented, the new employment insurance system will reduce administrative costs for businesses by between $100 and $150 million annually. That is a lot of money that could be used to create sustainable employment.

I am absolutely certain that once people get through a period of adjustment, employment insurance will prove to be one of the most productive pieces of legislation that this House has ever passed. It will be good for business and, in turn, it will be good for Canadians who are striving to become self-reliant, contributing members of the community.

To close, I would like to quote Tim Reid, president of the Canadian Chamber of Commerce, during his appearance before the standing committee: "We are pleased to see that the government's overriding goal in revamping the unemployment insurance program is very much in line with the Canadian Chamber's business expansion and jobs for Canadians".

I encourage the opposition parties to quit misleading Canadians on the benefits of Bill C-12. I encourage them to get behind this progressive legislation.

Employment Insurance Act
Government Orders

1:40 p.m.

Bloc

Pierre De Savoye Portneuf, QC

Mr. Speaker, I am pleased to speak today to what the government is calling employment insurance, which I consider not only unemployment insurance, but, alas, an unemployment guarantee. Let me explain why.

One element of the bill before us proposes to lower maximum insurable earnings from $43,000 to $39,000.

This will have major macro economic effects, which I have never heard mentioned either in this House or in committee. You are no doubt aware that people earning more than $39,000 but less than $43,000 will have more disposable income, whereas at the other end of the spectrum, the low wage earners, who in the past were not insured, now will be. But, they will be because they will be contributing to unemployment insurance.

Their disposable income will shrink. When we look at individual cases, this seems insignificant. However, when we look at the big picture, at the figures as a whole, we realize we are talking about hundreds of millions of dollars, indeed billions of dollars coming out of the pockets of low wage earners and going into the pockets of high wage earners. This will mean macro economic consequences for retailers, businesses and industry. Let me explain.

The low wage earners, with less disposable income now, will spend less, not for luxuries, they never had the means anyway, but for life's basic necessities. The high wage earners, with more disposable income, generally, will be able to buy luxury items.

What does this mean? How will this flow of money affect Canada's economy? Very simply, the economies of provinces with more low wage earners will centre on immediate need products, whereas in the economies of the provinces with higher wage earners, business and industry will develop around luxury items. Regions will become polarized based on people's average salary.

What this bill is doing is shifting wealth, and we have to face the fact, because incomes are not equal coast to coast. There are regions in Canada, in Quebec, less well off than others, where there are more low wage earners than in other regions where there are high wage earners.

With this new plan, the government if transferring several billions of dollars from areas with only low income earners to areas with high income earners.

I ask you: What do you think this is going to lead to in three, five or ten years? Poor areas will become poorer and the rich ones will become richer. The laws of macro-economics are that simple and obvious. You cannot play with these numbers and believe that the results will be simple and easy to arrive at.

I have never seen in a committee, or in the House, someone showing us an econometric model of the consequences of the implementation of this system. One should not rush into such a decision. This is not the kind of decision you want to make hastily, and yet this is exactly what this House is going to do with this bill. There will be consequences.

The government is going to push some regions into poverty to the benefit of others which will get richer. When a country creates poor and rich regions, eventually it does not maximize its potential. It will eventually have to pay a price for it because rich areas will have to help keep poor areas economically active. The law of consumption, the great law which allows businesses to sell goods to consumers, will be faced with an impossible equation.

You see, if people can no longer afford to consume, how will businesses be able to produce goods and make a profit? Somebody forgot that businesses cannot afford to be only profitable, efficient and productive, they also need a market. Their market is made up of people like you and me, people who are listening to us and who have to earn a living day in and day out, and be left with enough money to be able to treat themselves to some of the niceties of life. And yet, what we are doing with this bill is transferring billions of dollars from the pockets of the poor into the pockets of those who are better off.

Let us imagine for a moment that the government is implementing one of the recommendations made by the Bloc Quebecois and that everybody contributes to the UI fund regardless of any maximum insurable earnings. We would then be able to keep the UI fund in the black and provide adequate benefits to those in need, while reducing premiums and correcting inequities between the haves and the have-nots, between prosperous regions and disadvantaged regions. This solution would not be nearly as harmful and may even have a positive impact, while those who introduced this bill clearly did not assess its potential negative consequences.

I would also like to talk about seasonal work. Seasonal industries represent an important component of the Canadian economy from coast to coast. If you attack the seasonal industry in a region or in all regions, you will weaken-not you personally, Mr. Speaker, but the government, which I am addressing through you-the country's economy as a whole.

The bill before us may well undermine seasonal work. Any weakening of seasonal work would have negative consequences for the regions affected. Preventing this essential component of our economy, which provides us with fruits and vegetables at certain times of the year and offers us winter sports, from running properly would hurt the Canadian economy as a whole.

As consumers, seasonal workers who can no longer support themselves throughout the year will have less to contribute to the Canadian economy. As a result of this reduced consumption, a business somewhere will be stuck with surplus inventory and forced to cut production and then to lay off non-seasonal workers.

We see what this could lead to. Sooner or later, attacks against seasonal work will become attacks against permanent jobs.

We are falling into a bottomless pit. It is not the first time this government and the previous one have committed basic errors in strategy. I will not talk about former minister Lalonde's national energy policy, a catastrophe for which we are still paying the price today. I will not talk about those policies which, year after year, have led us into a hole that is $560 billion deep.

I will talk about what we are doing here today, which is gambling with a sum of about $16 billion. In essence we are gambling because, until now, no other country in the world has dared take the measures we are about to take, that is to estimate insurability not based on the number of weeks worked, but based on the number of hours. What will be the consequences? I do not know, nobody here knows, and not only does it concern me, I find it totally unacceptable.

Before going any further with this bill, the government should have the decency to build a comprehensive econometric model to measure the consequences of this legislation. Then we could make the necessary adjustments or the necessary change of course, as the case may be, to achieve the desired results.

Only 40 per cent of unemployed Canadians are covered by the unemployment insurance plan, which is not much. It is not an employment policy. In a case like this, I can only wish the government not only withdraw its bill, but that it withdraw from the area of employability and transfer this responsibility to the provinces, especially Quebec which has been waiting for that for a long time. It is ready to assume this responsibility with policies that will be beneficial not only to Quebec, but to the rest of Canada as well.

Employment Insurance Act
Government Orders

1:55 p.m.

The Speaker

It being 2 p.m. we will now proceed to Statements by Members.

Martin Streef
Statements By Members

1:55 p.m.

Liberal

John Finlay Oxford, ON

Mr. Speaker, I take this opportunity to congratulate Martin Streef of my riding for being named the Ontario Region Outstanding Young Farmer for 1996.

While still in high school, Mr. Streef established in 1977 Streef Produce Ltd. with his four brothers as partners. Starting from scratch, the company is now one of the largest potato producers in Ontario and operates five farms on 1,500 acres in Oxford and Brant counties.

It is refreshing to see young farmers rising to meet the challenge of today's marketplace. Mr. Streef has shown that hard work does pay off and serves as example to other young farmers planning an agricultural career.

On behalf of the House I extend my congratulations to Mr. Streef and the other seven regional winners who will compete at the national event November 13 to 17 at the Royal Winter Fair in Toronto.