Bill C-278 (Historical)

An Act to amend the Employment Insurance Act (improvement of the employment insurance system)

Employment Insurance Act

[France Bonsant, Bloc, Compton—Stanstead, QC]

Mr. Speaker, I wish to thank the hon. member for Acadie—Bathurst for his colourful speech, which was a great motivation to me.

The purpose of Bill C-278, before us today, is to make a number of efficient and necessary amendments to the Employment Insurance Act.

As the hon. members know, employment insurance is a reality for thousands of people on the labour market in Quebec. With any luck, you will never have to collect benefits in your life. But that is not true for all workers.

This bill, introduced by my hon. colleague from Trois-Rivières, is geared toward those workers who currently need or will need employment insurance. These workers contribute to the plan and, as such, should be able to use it when necessary. This bill contributes to that, by making it easier to have access to employment insurance for those who really need it. I will explain in a moment why this bill is good for all workers.

First, this bill reduces the minimum qualifying period to 360 hours of work, regardless of the regional rate of unemployment. At present, the qualifying period for employment insurance benefits varies between 420 and 910 hours of work, depending on the place of residence and whether the claimant is a new entrant or re-entrant.

We are asking that this period be reduced to 360 hours, regardless of where the claimant lives. This rules, unanimously approved by the central labour bodies in Quebec, would provide more appropriate coverage for workers in seasonal businesses, and also for all workers in unstable jobs.

Currently, the benefit period is determined based on the regional rate of unemployment. To qualify for employment insurance, a worker must have worked 420 hours in regions with an unemployment rate over 13%, and 700 hours in regions where the unemployment rate is 6% or less.

We can understand that such measures may not be appropriate for seasonal workers in a region where the unemployment rate is low. They are also not appropriate for workers in marginal areas. The same is true for workers in cities where the rate of employment is different from the regional rate.

I want to point out that, while this bill sets the eligibility threshold at 360 hours, regardless of where the workers live, the benefit period will continue to vary from region to region.

Speaking of the benefit period, the cut-off point is now set at 45 weeks. In 2000, a study by Human Resources Development Canada showed that 35% of EI recipients use up their entire benefit period. Many of them were victims of the infamous seasonal gap. In other words, for a period of several weeks, sometimes up to 10 weeks, unemployed people had no income. This gap would be compensated for by the proposal in this bill to raise the benefit period from 45 weeks to 50. Adding those five weeks would, depending on the number of hours worked and the regional unemployment rate, entitle a contributor to receive between 30 and 50 weeks of benefits.

Another change contained in this bill is the increase in the weekly contribution rate, from its present 55% to 60% of insurable income.

In Quebec, the minimum wage is $7.45. So a person working a 35-hour week has a net weekly income of $260.75. This entitles an unemployed worker to an EI cheque of $287 every two weeks, before taxes, or $574 a month.

This is about what it would cost to rent a small apartment in many cities in Quebec, what we call a “four-and-a-half” —oh, but I forget that EI recipients also have to eat and clothe themselves. Where will they get the money for that, if most of their cheque goes to keep a roof over their head?

Statistics show that in Quebec low wage earners are the ones who make use of EI most often. They are earning the minimum wage, as I have already mentioned. In 2002, 66.6% of the 192,000 workers earning minimum wage in Quebec were women, and women also made up two-thirds of low wage earners.

Instead of lowering premiums in a ridiculous way—such as the government's announcement this week that it would save every worker 3¢ a week—the Liberal government should instead look closely at what is in this bill. Increasing the rate of weekly EI benefits from 55% to 60% is a practical measure that would make it possible to give better support to people who really need it.

I would like to go back now to the minimum qualifying period in hours making workers eligible for employment insurance benefits. This time, I would like to point out the ridiculous distinction between people who enter the labour force and those who re-enter it. Fortunately, the bill before us proposes to put an end to this distinction.

At present, a person who enters the work force, or comes back after two years of absence from the work force, must accumulate 910 hours of work to be eligible for EI benefits. For other workers, as I mentioned earlier, the number of hours ranges from 420 to 700. The primary victims of this discrimination are, once again, women and younger workers.

With regard to women, the distinction can be clearly seen when they leave the labour market to start a family. If they prefer to look after their own children, the EI system penalizes them when they return to work.

As for young people, we are aware that first jobs are often seasonal, short-term or part-time. But when that job is over, if the young worker does not have 910 hours, there is no income. This discrimination toward those who enter or re-enter the labour force must be eliminated.

I would like to address another point. This bill will—at last—require the Canada Employment Insurance Commission to pay out, as workforce support measures, at least 0.8% of the insurable earnings—as estimated by the Commission—of all insured persons. In concrete terms, that amount would be used to help the unemployed upgrade their skills, learn new ones, or become self-employed.

I hope that the hon. members from all parties will support this bill and, finally, improve the employment insurance system for the people who are its real stakeholders.

A motion to adjourn the House under Standing Order 38 deemed to have been moved.

[Peter Adams, Liberal, Parliamentary Secretary to the Minister of Human Resources and Skills Development]

Mr. Speaker, I am pleased to join in this debate on Bill C-278, which proposes changes to employment insurance.

This is a particularly important debate, because EI plays a key role in providing temporary income support for people coping with job loss and for employed people who cannot work for reasons of sickness, childbirth, parental responsibilities, or the need to care for a dying family member. Also, for those Canadians who have lost a job, EI provides skills development opportunities, that is, training so that they can return to work quickly.

To illustrate the importance of EI, let me outline how it helped Canadians during the period 2002-03. During that time, Canadians filed 1.87 million new EI claims and $12.3 billion was paid out in benefits. In addition, 638,000 people participated in active re-employment measures, an investment of $2.1 billion in training and in the labour market success of the people concerned.

Clearly EI is there for people when they need it most, but this was not always the case. Before the introduction of EI in 1996, aspects of the old unemployment insurance system caused some to question the very sustainability of this vital program, a program which is vital for social reasons, for reasons of humanity and, by the way, for reasons of keeping our economy going. Those features included the encouragement of people to become dependent on program benefits, and it emphasized unemployment rather than employment, in some cases actually acting as a disincentive to work.

Unfortunately, this bill threatens to return us to the situation that confronted us in the past. Let us take, for instance, the bill's proposal to relax entrance requirements.

Four successive monitoring and assessment reports, the reports which review the program regularly, have stated that overall access to EI benefits is strong: 88% of employees would be potentially eligible for EI if they lost their jobs. Among those working full time, 96% would be potentially eligible for EI if they lost their jobs. Among part time employees, 57% of women and 41% of men would be potentially eligible for EI if they lost their jobs.

Bill C-278 would also increase the benefit duration, which could have the effect of making unemployment more attractive than work. Such a suggestion contradicts successive EI monitoring and assessment reports which have said that the current duration of benefits is in fact appropriate.

For example, on average, regular beneficiaries receive benefits for less than two-thirds of the weeks for which they are eligible, which means that the benefit duration is already more than enough for most clients. Even people living in areas of high unemployment typically do not use more than 70% of their entitlement. Add to this the fact that benefit exhaustion rates have steadily declined since EI's introduction, from approximately 37% in 1995-96 to about 31% in 2001-02. All of this suggests that the benefit duration is appropriate.

What about the bill's call for the government to raise the replacement rate and maximum insurable earnings? In my opinion, this also is unwise given that the current 55% replacement rate serves as a balance between income adequacy and ensuring that work incentives are maintained. In addition, individuals in low income families with children can get additional support through the family supplement, which allows these individuals to receive as much as 80% of their insured earnings.

I might add that at the time of EI reform concerns were raised about the fact that the level of maximum insurable earnings at that time was substantially higher than the average industrial wage and so was acting as a disincentive to work. To address this, the level was reduced to $39,000 a year with the understanding that it would be reviewed at some later date when the average industrial wage increased to the equivalent of that level.

Such a review has not occurred because the maximum insurable earnings figure is still 10% higher than the average industrial wage. It is important to note that 70% of all paid employees have earnings below the $39,000 level, which means that the majority of claimants have their employment income fully insured by the EI program at its current level. This level seems to be set properly as well.

Finally, there is the proposal to increase the premium refund threshold from $2,000 to $3,000, while also lowering entrance requirements to 360 hours. This recommendation is also ill-advised since it would effectively result in some workers being in a position to qualify for and receive EI benefits without having paid premiums, something none of us would wish to see happen.

It is clear that the bill contains a number of serious flaws. That brings me to the heart of the matter, namely, that given the vital importance that EI plays in our social safety net, it is critically important that any changes we make to it be well thought out in advance to avoid unintended negative consequences that could damage the whole program and its ability to help workers.

Of course, this is not to say that EI is cast in stone, never to change. Some fine tuning is required from time to time, and when evidence indicates that such changes are necessary, the government has acted. For example, this happened when we removed the intensity rule, when we adjusted the clawback, and when we made the small weeks provision a permanent and national element of the program and subsequently increased the threshold.

We have also commenced a pilot project to test labour market impacts in areas of high unemployment by adding five weeks of entitlement to address the needs of those who go without income for a period of time prior to the resumption of their work.

However, rather than make rash, badly thought out changes as this bill would have us do, we instead need to pursue a balanced approach that takes into account larger issues such as the likely impact of changes on the labour market as a whole, on the financial sustainability of EI in the future and on the EI program as a whole. Because EI is such a complex program, involving employed as well as unemployed people, that impacts many aspects of our economy and the lives of millions of workers and their families, we need to get it right for their sake and for the sake of future generations who will need to call on this program for assistance. It is for this reason that I cannot support the bill.

That being said, I do want to commend the member for her commitment to helping workers cope with job losses and the difficult task of balancing workplace and family demands, a commitment which I share and which the government shares. I particularly share her concern about balancing work and family and particularly about the return of women to the workplace. Those are two areas in which I personally would be glad to work with her to maximize the benefits of this program.

I would urge her and other members to work with the government as it seeks to pursue a balanced and thoughtful approach to fine tuning the EI program so it can continue to help Canadian workers for generations to come. It is only by getting the full range of ideas and insights, such as some of those the member has put forward this evening, that we can make this important program even better than it is.

I regret to say that I cannot support the bill.

[The Acting Speaker (Mr. Marcel Proulx)]

I now have a ruling to share with the House concerning Bill C-278.

The Chair has examined Bill C-278, an act to amend the Employment Insurance Act (improvement of the employment insurance system) to determine whether its provisions would require a royal recommendation and thus prevent the Chair from putting the question at third reading.

The improvements to the employment insurance program envisioned by this bill include the required minimum number of hours worked in order to qualify, lengthening the period that one can receive benefits, and, as well, increasing those benefits.

It is clear that such changes to the employment insurance program would have the effect of authorizing increased expenditures of public revenue. Inasmuch as section 54 of the Constitution, 1867, and Standing Order 79 prohibit the adoption of any bill appropriating public revenues without a royal recommendation, the same must apply to bills authorizing increased spending of public revenues. Bills mandating new or additional public spending must be seen as the equivalent of bills effecting an appropriation.

Accordingly, I must require that Bill C-278 be accompanied by a royal recommendation. Therefore, in its present form, I will not put the question on third reading unless a royal recommendation is received for this bill.

Today, the debate on the motion for second reading will continue as scheduled, and the motion shall be put to a vote at the close of this second reading debate.

Accordingly, the House will now proceed to the consideration of private members' business as listed on today's Order Paper. The hon. member for Trois-Rivières.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

moved that Bill C-278, an act to amend the Employment Insurance Act (improvement of the employment insurance system), be read the second time and referred to a committee.

Department of Human Resources and Skills Development Act

[France Bonsant, Bloc, Compton—Stanstead, QC]

Mr. Speaker, with your permission, I will be sharing my time with the hon. member for Beauport—Limoilou.

This bill gives a definition of the Department of Human Resources and Skills Development. Early in the bill, we read the following:

The powers, duties and functions of the Minister extend to and include all matters...over which Parliament has jurisdiction and which are not by law assigned to another Minister, department, board or agency of the Government of Canada.

Unfortunately, it is not specified that all these jurisdictions are provincial. In other words, this bill further entrenches the federal invasion of the areas of manpower development and education.

In the next few minutes, I will not come back to the employment insurance aspect, even though it is an important part of the new department. I believe that my colleague for Chambly—Borduas has very clearly explained the position of the Bloc Québecois in this respect.

Let me just recall a few facts. The employment insurance program became a federal jurisdiction when it was handed over by the provinces in the hard times of the second world war. Since then, the federal government, here as in a number of jurisdictions, has done as it pleased, completely ignoring Quebec and the provinces.

The current government can now demonstrate its good will by supporting Bills C-278 and C-280 as tabled by the Bloc Québécois. These two bills would implement necessary and efficient amendments to the Employment Insurance Act, the first in terms of procedure and benefits, the second concerning the EI Commission and its related fund.

Unfortunately, in my riding, EI is taking on growing importance, while the government does nothing to keep businesses in business. EI is and will continue to be very important for a great number of citizens in my riding. However, the current criteria are inadequate on both counts. Workers need a decent income to meet their needs. With all the federal programs that have been slashed for all age groups and for all workers, my riding is looking at a annual shortfall of $23 million, which is an unbelievably large amount.

That being said, let me return to the current bill which, as I was saying, highlights the federal government's interference in provincial jurisdictions.

The mandate of the future Minister of Human Resources and Skills Development will be, among other duties, to strengthen the social foundations of Canada. However—I repeat—these social foundations, as it is clearly said, come under provincial jurisdiction.

The skills development portion of the new department is nothing less than an education department in disguise. The learning bonds are a case in point. The federal government must transfer the money to Quebec and the provinces, rather than establish programs in jurisdictions that do not belong to it. With the transfer to the provinces, the Government of Quebec could help students by limiting debts incurred due to their studies and by providing achievable dreams to our young people.

Bill C-23 stipulates that the new “Minister may enter into agreements with a province or a provincial public body...or bodies that the Minister considers appropriate”. I should hope so; this is obvious. The sectors of labour development and education come under provincial jurisdiction. Provinces and provincial bodies should be consulted, unless, again, the Liberal government acts in bad faith.

In the area of labour development, I will again refer to the bill. It says that the Minister contributes to the achievement of these objectives by supporting the development of human capital, by improving access to post-secondary education, by supporting skills improvement in the workplace and by encouraging Canadians to embark on a path of lifelong learning.

I will provide examples from my riding to demonstrate that the Liberal government has difficulty in managing programs and that it would be well-advised to leave them, with their funds, to Quebec and the provinces.

In the Compton—Stanstead riding, after the closure of the CookshireTex and Cordelli plants, which fell victim to Asian competition, several employees took steps to retrain themselves. They sought to find their way back onto the labour market by becoming specialists.

Instead of encouraging them, the staff at the local employment insurance office thoroughly demoralized them. The federal employees there were saying that the newly unemployed people had more than enough qualifications to get retrained. Those who did not have all the qualifications were told that employment insurance would not pay for seasonal or long-term training.

Is that a show of goodwill? Is that what we call support for the development of human capital, for professional training and for continuous learning? I think the liberal government is laughing in the face of our fellow citizens. Instead of giving such absurd answers, the federal government should address the fiscal imbalance so that Quebec would have the necessary resources to take care of workforce development by itself, without having to go to Ottawa cap in hand.

I am asking my colleagues in this House to stand against Bill C-23, but to be in favour of Bill C-278 and Bill C-280, which, as I said, modify the Employment Insurance Act in an efficient manner. The Bloc Québécois also thinks that the Minister of Labour's mandate, as described in Part II of Bill C-23, is consistent with Bill C-263 on replacement workers. The federal government should support the initiative put forward by the Bloc Québécois by voting in favour of said bill, and thus modify the Labour Code without shaking up the entire Human Resources Department.

Employment Insurance Act

[Paule Brunelle, Bloc, Trois-Rivières, QC]

moved for leave to introduce C-278, An Act to amend the Employment Insurance Act (improvement of the employment insurance system).

Mr. Speaker, I am pleased to introduce, seconded by my colleague from Chambly—Borduas, Bill C-278, an act to amend the Employment Insurance Act (improvement of the employment insurance system).

Through this bill, I would like to change the law to make it a fair instrument to help all workers faced with the hardships of unemployment. We all know that the present EI plan has reduced access to benefits for an ever greater number of workers.

The reduction in the length of the benefit period and in the rate of benefits has contributed to making low and medium income wage earners poorer. We have to recognize that women and the young are those most affected by the restrictions in the Employment Insurance Act.

The intent behind this bill is to give the term “insurance” its broadest meaning for those who lose their job. I urge all members to support this bill.

(Motions deemed adopted, bill read the first time and printed)