Bill C-357 (Historical)

An Act to amend the Employment Insurance Act (Employment Insurance Account and premium rate setting) and another Act in consequence

This enactment amends the method for setting the premium rate in the Employment Insurance Act. It also amends a number of provisions in that Act with respect to the Employment Insurance Account.
This enactment provides that every year the Canada Employment Insurance Commission will set the premium rate and cause a report to be sent to the Minister of Human Resources and Skills Development who will cause a copy of the report to be laid before each House of Parliament.
This enactment provides also that the Employment Insurance Account will no longer form part of the accounts of Canada. The amounts paid into the Employment Insurance Account will become part of the assets of the Canada Employment Insurance Commission, and the Commission will manage them in the best interests of the contributors and beneficiaries under the employment insurance system.
At the request of the Minister of Finance, the Canada Employment Insurance Commission may extend a loan to Her Majesty in right of Canada and establish the interest rate and other terms and conditions for its repayment. Conversely, that Minister must extend a loan to the Commission if the Commission is unable to pay the amounts that it is liable to pay.
Under the enactment, the Canada Employment Insurance Commission is composed of 17 commissioners, including a Chairperson, two Vice-Chairpersons, seven representatives of employees and seven representatives of employers. The representatives of employees and employers are appointed by the Governor in Council from lists of nominees provided by representative associations. The Chairperson is appointed by the House of Commons and the Vice-Chairpersons are selected from among the Deputy Ministers or the Associate Deputy Ministers of the Department of Human Resources Development.

Opposition Motion--The Economy

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

Mr. Speaker, I am very pleased to speak today to the NDP opposition motion. As members certainly know, the subjects mentioned in this motion have always been very important to the Bloc Québécois. I am referring to the problems related to employment insurance, poverty and training. We cannot sit by and say nothing about the Conservative government's obvious incompetence in these areas.

I would like to start with the issue of employment insurance, and more specifically, the people who depend on this plan. As its name suggests, employment insurance is supposed to be an insurance than enables contributors to receive an income when they lose their job. That sounds good. The problem is that the plan has been completely distorted and diverted from its original goal.

For example, the claimant-contributor ratio went from nearly 80% in 1990 to 46.1% today. This means that less than half of those who contribute to employment insurance qualify to receive benefits. Did this Conservative government do anything for the unemployed or for these people who are losing their jobs? Absolutely not.

At the weekly meetings of the Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities, on which I sit, I have even heard Conservatives say that people who lose their jobs in Quebec or elsewhere can simply move to Alberta. I understand the principle of labour mobility, but it is not as simple as that. People cannot be uprooted that easily.

I would like to remind the members opposite that with Bills C-269 and C-357, we in the Bloc Québécois came up with real solutions to help people who lose their jobs. The first bill proposed to improve the employment insurance system, while the second called for the creation of the independent employment insurance fund. The government chose to reject these bills out of hand. What did it do instead? It proposed in the most recent budget to create a crown corporation, the employment insurance financing board.

We have asked questions about this board, and our understanding is that the board's only role will be to adjust the employment insurance contribution rate. The minister himself has confirmed the board's minimal role. This morning, at the Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities, one witness mentioned that a 15¢ decrease in contributions would mean approximately $30 more for workers at the end of the year. What a nice gift. This is not exactly what you would call a big help.

The crux of the problem remains. The government has made no provision to improve the employment insurance system and ensure that people who lose their jobs have some income while they are going through a rough time. The Conservative government should have acted. If they do not want to help the unemployed, the Conservatives deserve to be unemployed themselves.

Industries are still in crisis in Quebec. Lumber producers and manufacturers have been affected, even in the ridings represented by Conservative members. Yet the government has not lifted a finger, preferring to help Alberta and cozy up to its friends to the south, the Americans, Mr. Bush's friends.

The manufacturing crisis has had a devastating effect on the Eastern Townships, and it is not over yet. This week, we found out that one of our region's finest, Shermag, has placed itself under the protection of the Companies' Creditors Arrangement Act. Shermag was hit hard by Asian competition and the rising dollar. Between 2005 and 2007, the company closed three plants in my riding, one in Scotstown, one in Cookshire-Eaton and one in Dudswell, which cost our small communities hundreds of jobs.

I mentioned Shermag, but I could just as easily have talked about other Quebec plants and factories that have closed. I do not want to go on and on about the manufacturing crisis, because that is not the purpose of today's motion. I want to get to the point, which is the human side of things.

In 2003, there were about 42,000 industrial jobs in the Eastern Townships. Now there are only about 25,000 left. The manufacturing crisis cost us 17,000 good jobs in a region with a population of 300,000. Those jobs paid at least $20 or $22 per hour. Quebec workers—should they even qualify—are too proud to sit at home, happily taking advantage of the employment insurance program. Workers in the Eastern Townships rolled up their sleeves and found other jobs—jobs that most often paid less than half of what they had been earning before.

This has been a huge loss for these people and for the economy of the Eastern Townships. In four years, we lost 35% of our industrial jobs. This is a real catastrophe. Workers who lose their jobs have to deal with an employment insurance program that does not insure them. Whether they want to or not, they have to take whatever job they can get, even if it is a part-time job for low pay.

It is easy to see what I am getting at. When people's wages drop by $5, $10 or $15 per hour, buying power goes down and poverty goes up. Yet, with its laissez-faire ideology, this government has made it clear that it is not really interested in helping people who really need help.

To refresh our memories, I could mention that the Conservatives cut the women’s program. They also slashed programs for minorities and they are still refusing to refund money owed to seniors for the guaranteed income supplement. On the other hand, however, they did not hesitate to give tax credits of almost $1 billion a year to the oil companies and corporations, which, as we all know in this House, are “living in the most appalling misery and destitution.”

This week, we learned that the individual purchasing power of Quebeckers has increased by $53 in 25 years. That is another proof of the inaction of governments, both Conservative and Liberal, we must insist. Fifty-three dollars amounts to one dollar a week this year, but in this case it was spread over 25 years.

From the same set of statistics, we learned that the salaries of low income workers decreased by 20% during the same period. Meanwhile, the incomes of the richest people increased by 16%, and the number of rich people also grew. Moreover, despite the efforts made over 25 years, it appears that poverty has not been reduced.

Here are some examples of the sad state of affairs. Nearly 900,000 Canadian children still live in low income families. We always say that the reason children are poor is because their parents are poor. The number of mothers in single-parent families who are trying to make ends meet is just as high as ever. Indeed, there is no shortage of examples and all communities are affected.

Before concluding, I would like to sum up the situation. It is very clear to me that the government has done nothing to save jobs in Quebec, to help our workers who are in trouble, to improve the employment insurance plan or to combat poverty. The results are negative. The gap between rich and poor is growing wider. Disposable income is stagnating. In other words, we are going nowhere and this government has no vision to offer; it has no plans or ideas to submit. It has only an outdated, backward, regressive and rigid ideology.

The Bloc has given the government an opportunity to act: to reform employment insurance, to help the most needy, to ensure that our industries remain open, and that our workers maintain their dignity and their income. The Conservatives have chosen to fold their arms and do nothing. They had the chance to govern on behalf of workers but they did not act on it.

I must say that I have never had a great deal of confidence in this government, but today it has really lost the confidence of this House. I am convinced it will also lose the confidence of the voters.

Employment Insurance

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

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

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

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

That at least is clear.

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

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

What is your position today on that?

Employment Insurance Act

[Richard Nadeau, Bloc, Gatineau, QC]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[The Deputy Speaker, NDP, Bill Blaikie]

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

The House resumed from November 22 consideration of the motion that Bill C-357, An Act to amend the Employment Insurance Act (Employment Insurance Account and premium rate setting) and another Act in consequence, be read the second time and referred to a committee.

Speaker's Ruling

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Paul Szabo, Liberal, Mississauga South, ON]

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

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

Back in the years of--

[Laurie Hawn, Conservative, Parliamentary Secretary to the Minister of National Defence]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[The Deputy Speaker, NDP, Bill Blaikie]

I am now prepared to rule on the point of order raised by the hon. Parliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform concerning the requirement for a royal recommendation for Bill C-357, An Act to amend the Employment Insurance Act (Employment Insurance Account and premium rate setting) and another Act in consequence, standing in the name of the hon. member for Gaspésie—Îles-de-la-Madeleine.

I would like to thank the hon. Parliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform for having raised this issue as well as the hon. Gaspésie—Îles-de-la-Madeleine for his comments.

In his presentation, the hon. parliamentary secretary argued that clause 2 of the bill would create an employment insurance account that is outside the consolidated revenue fund, thus transferring money out of the consolidated revenue fund into the employment insurance account where money would no longer be available for any appropriations Parliament may make. He further argued that Bill C-357 would change the duties of the Employment Insurance Commission by allowing it to deposit assets for the financial institution and to invest assets to achieve a maximum rate of return. Finally, he expressed concern that clause 5 would increase the number of commissioners on the Employment Insurance Commission from its current four to seventeen.

The hon. parliamentary secretary claimed that these arguments were supported by a ruling delivered by the Speaker on June 13, 2005, concerning Bill C-280, also entitled An Act to amend the Employment Insurance Act (Employment Insurance Account and premium rate setting) and another Act in consequence, and nearly identical to Bill C-357.

The hon. member for Gaspésie—Îles-de-la-Madeleine countered that there is no basis for the claim that this bill would bring about “additional” or “new” expenditures and that the transfer of revenue to an independent fund would not change the circumstances, manner and purposes by which Canada's Employment Insurance Commission will set the premiums and manage its revenue. Although he acknowledged that a royal recommendation would be necessary if the bill were seeking to withdraw revenue from the government's consolidated revenue fund to be used for purposes other than those described in the act, he claimed that this was not the case since the purpose of the bill would not alter anything in the current legislation.

He further argued that having Canada's Employment Insurance Commission invest assets to achieve a maximum rate of return did not constitute a new purpose for the fund since the federal government was “investing” these public monies to pay down the Canadian debt.

He concluded by saying that adding 13 new commissioners will be financed by a small increase in expenses, which will no longer appear as an expenditure from the consolidated revenue fund given that the employment insurance fund will no longer be a part of the consolidated revenue fund.

After examining Bill C-357, the Chair was struck, as was the hon. Parliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform, by its similarity to Bill C-280. Indeed, the proposed amendments to sections 71 and 72 of the Employment Insurance Act included in Bill C-357 are in many respects virtually identical to those in Bill C-280.

For instance, like in Bill C-280, the proposed section 72 in Bill C-357 would credit moneys from the consolidated revenue fund to the commission, which would then place it into a new and separate account, one that would be outside the consolidated revenue fund.

Today, moneys in the consolidated revenue fund are available for eventual expenditure for purposes of claims under the Employment Insurance Act. With the passage of Bill C-357, these funds would no longer be available because, in effect, they have been spent, that is, transferred out of the consolidated revenue fund to a separate and independent account outside the consolidated revenue fund.

When the Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities sought clarification regarding the provisions of Bill C-280 as it related to the royal recommendation, the Chair ruled, on June 13, 2005, that:

Such a transfer, in my view, constitutes an appropriation within the meaning of section 54 of the Constitution Act, 1867 and for this reason a royal recommendation is required in respect of clause 2 of the Bill.

The Chair sees no reason to reach a different conclusion on this provision of Bill C-357 than the one that was reached at that time on Bill C-280.

In relation to the argument that the proposed change to subsection 72(6) of the Employment Insurance Act found in Bill C-357 creates new duties for the commission in terms of managing and investing amounts paid into the employment insurance account, the Chair does not accept the argument put forward by the hon. member for Gaspésie—Îles-de-la-Madeleine that the federal government's use of moneys in the consolidated revenue fund to pay down the Canadian debt constitutes an authority to spend funds for a new purpose.

In addition, the Chair is of the view that the bill's proposed alteration of the duties of the EI Commission to enable the spending of public funds by the commission, namely, the investment of public funds to achieve a maximum rate of return, is a new purpose and requires a royal recommendation.

Finally, the increase in the number of commissioners on the Employment Insurance Commission from its current four to seventeen also clearly requires a royal recommendation. Although the hon. member for Gaspésie—Îles-de-la-Madeleine contended that these expenses would not come from the consolidated revenue fund but rather from the newly created employment insurance fund, clause 5 of the bill clearly calls on the governor in council to appoint these new commissioners. Given that the current commissioners are remunerated, it follows that the proposed new commissioners would also be paid. As such, the addition of these new commissioners would involve an additional appropriation of a part of the public revenue.

Consequently, I will decline to put the question on third reading of this bill in its present form unless a royal recommendation is received.

However, the debate is currently on the motion for second reading, and this motion shall be put to a vote at the close of the second reading debate.

The House resumed from October 19 consideration of the motion that Bill C-357, An Act to amend the Employment Insurance Act (Employment Insurance Account and premium rate setting) and another Act in consequence, be read the second time and referred to a committee.

Bill C-357—Employment Insurance Act

[Raynald Blais, Bloc, Gaspésie—Îles-de-la-Madeleine, QC]

Mr. Speaker, thank you for giving me the floor. As I am sure you recall, a few days ago, I informed you that the Bloc Québécois intended to respond to the Conservatives' request concerning Bill C-357. They called for a royal recommendation concerning the creation of an independent employment insurance fund. I will now raise a few points that will surely enable you to make an informed decision about this issue.

I would like to bring to your attention our argument against requiring a royal recommendation to pass Bill C-357, to create an independent employment insurance fund. That is why I am addressing you today.

At the outset, we recognize that the content of Bill C-357 is very similar to Bill C-280, as introduced in the 38th Parliament. It is clear that the Speaker's ruling on June 13, 2005, included a number of elements that were open to interpretation. The Conservatives are referring to those very elements to support their assertion that the bill now before us requires a royal recommendation. That is why we must take the time to review the Conservatives' arguments point by point.

First, the Conservatives claim that passing this bill would lead to additional expenses. That is totally false, because the current legislation already provides for fluctuations with respect to premiums and conditions of eligibility, which determine the fund's revenues and expenditures that go through the government's consolidated revenue fund. This bill is not designed to change these provisions, so it is not true that the bill would engender additional costs. Therefore, there is no basis for the claim that this bill would bring about “additional” or “new” expenditures.

The Conservatives are saying that the appropriation of public revenue will be altered depending on the circumstances and the way it is managed. The current legislation provides for a contribution to be deducted from every pay cheque and it is understood that this money will be used to ensure supplementary income to contributors who need it because of their own economic circumstances. The eligibility criteria for employment insurance and the premium rates that determine the revenue and expenses of the fund, will serve the same purpose and use the same mechanisms when this bill is enacted. I would add that a change to the eligibility criteria would still require a legislative change. Let us be clear, not only does this bill not require additional expenditures, but what is more, the purpose of and reason for these public funds will not change in any way.

We acknowledge, as the Speaker said on June 13, 2005, that it does involve transferring public funds to an independent employment insurance fund, but royal recommendation is not needed for two reasons. The Speaker himself said, on May 9, 2005, that:

The royal recommendation is also required where a bill alters the appropriation of public revenue “under the circumstances, in the manner and for the purposes set out” in the bill.

Although there will indeed be a transfer of revenue to an independent fund, the circumstances, manner and purposes by which the commission will set the premiums and manage the revenue will not change at all. Furthermore, the spirit of the current act will be better protected since the revenue generated by the premiums will no longer be used to serve interests other than those defined by the act, namely those of the workers. Using revenues that should go into the fund, but instead are taken into the consolidated revenue fund for purposes not listed in the act, will no longer be possible.

A royal recommendation would be necessary if the bill were seeking to withdraw revenue from the government's consolidated revenue fund to be used for purposes other than those described in the act. In this case, it is clear that the purpose of the bill will not alter anything in the current legislation. On the contrary, it will allow the spirit of the act to be respected and prevent the misappropriation of funds that the Liberals and Conservatives are known for.

Fourth, the argument cited on June 13, 2005, that the investment of public monies by the Commission represents new or different expenditures, must have workers seeing red.

The federal government continued to invest—or, in other words, spend—the public monies from the fund to pay down the Canadian debt, which violated the spirit of the law. It clearly did not act in the interests of workers, who watched these monies—that they, with their employers, had paid to ensure themselves against economic downturns—disappear. It was the government, not this bill, that invented a new purpose for the fund and its surpluses.

Finally, adding 13 commissioners will be financed by a small increase in expenses, which will no longer appear as an expenditure from the consolidated revenue fund, given that the Conservatives recognize that the employment insurance fund will no longer be a part of the consolidated revenue fund. Since the Conservatives no longer know how to oppose an idea that they supported in the past for purely populist considerations, today they are attempting to use procedural arguments to avoid openly declaring themselves against a bill that is necessary and that contributors have demanded for many years. Only their neo-conservative ideology, hidden behind a populist facade, can justify such deplorable actions.

With that, I conclude my presentation.

Employment Insurance Act

[Guy André, Bloc, Berthier—Maskinongé, QC]

Mr. Speaker, I am very pleased to rise here today to speak to Bill C-357, An Act to amend the Employment Insurance Act. First of all, I would like to congratulate and thank my colleague, the hon. member for Gaspésie—Îles-de-la-Madeleine, for having introduced and so rigorously defended this bill. He can always be counted on to defend the citizens of his riding. The Bloc Québécois is equally committed to defending the interests of all Quebeckers.

With this bill, we are defending those citizens who are struggling with employment insurance problems. People need employment insurance for all kinds of reasons: because they are facing company closures, because they work in seasonal jobs or because a factory might eliminate certain jobs, for example. People can thus turn to employment insurance. However, for the past several years, this assistance has been reduced. Access to the program has been limited for many men and women in Quebec and throughout Canada. It is shameful. As we all know, the employment insurance fund has accumulated more than $50 billion. Today, we hear it might be as high as $55 billion. This bill is important, because it aims to establish two fundamental principles to meet the needs of workers who must receive employment insurance.

Since I was elected in 2004, the subject of creating an independent employment insurance fund has come up regularly in this House. We have also talked about an independent commission made up of workers to oversee it.

In their speech, the Conservatives said that they supported the idea of an independent employment insurance fund. A short time ago, when they were in opposition, they not only supported the idea of implementing an employment insurance fund, they wanted to create such a fund. Now they support the idea, but nothing is for sure. The Speech from the Throne mentioned a few things about this, but only one thing is clear: the surplus in the employment insurance fund has grown since the Conservatives came to power. They are doing exactly what the former Liberal government did. They should be ashamed.

Even though the employment insurance fund now has a $55 billion surplus, the government is restricting access to it and reducing the eligibility of citizens who work very hard and sometimes under difficult conditions. These people are under a lot of pressure, just as we all are. We are under pressure because of our families, our financial obligations, responsibility for our children's education, and obligations with respect to access to health services that, like it or not, cost money. But we are not helping these workers. We strangle them and bleed them dry, and then we tell them that we cannot help them, we can no longer support them despite the $55 billion surplus made up of their own contributions and those of their employers. That is shameful.

I have been here since 2004, and I have always found it surprising to observe the political games that go on here between the Liberals and the Conservatives. Now that the Conservatives are in power, we are seeing their true colours. They are doing the same thing. They do not care about the less fortunate or people in need in our society.

I listened to the Conservative members talk. The Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities made 22 recommendations to improve the employment insurance system. A number of measures were recommended. My Conservative colleague said that all these measures would cost about $1 billion. Still, investing in people is better than investing in the military. We are talking about a program of military spending. The government plans to invest $17 billion in the military, in arms and submarines, over the next five years. But it has difficulty investing in people in need.

Not only does the federal government have a $55 billion surplus in the employment insurance fund, but it also has a $14 billion budget surplus.

This $14 billion surplus is tax revenue from individuals and companies. What is the government doing? It is saying that it cannot help the unemployed, it is slashing funding for literacy groups and women's programs, it is cutting the court challenges program and it is making it more difficult for people to qualify for employment insurance. Sometimes, seasonal workers need only a few more weeks to qualify for employment insurance, and they have to go on welfare to make ends meet at month-end and year-end. It is shameful. These governments seem insensitive.

What is the purpose of government? To redistribute the taxes and other moneys it collects. The government must be fairer and more just. It must invest in economic sectors that need help. It must invest in people and support their professional development. It must support workers. But that is not happening. We wonder what this government is supporting, exactly. People do not seem to matter to the government. The independent employment insurance fund is proof of that. I hope that this bill will pass at first reading, second reading and third reading and that it will come into law once and for all. If this government has any self-respect at all, it will pass this bill. The Conservatives promised this in their election campaign. They promised to resolve the independent employment insurance fund issue.

It is outrageous that some workers who do not have access to the independent employment insurance fund are also paying too much into it.

It does not make sense that working people who suddenly fall ill—with cancer, for example—can collect only 15 weeks of employment insurance benefits. When people get sick, they have to apply for social assistance because the system cannot meet their needs. That does not make sense.

It does not make sense that someone who works for 10 consecutive months and leaves their job is not entitled to employment insurance, even if they have found a new job and work there for one month. That person is not entitled to employment insurance, even though they have paid into it for a full year. Instead of staying home and relying on employment insurance, they go out and find another job, but the system penalizes them.

There are all kinds of glitches and problems within the employment insurance system. Creating an independent employment insurance fund is crucial, and so is improving the employment insurance system. It is our duty, as elected representatives, to support our workers, especially when the independent employment insurance fund has a surplus of some $50 billion or $55 billion and when the government is predicting a surplus of $14 billion this year. The less fortunate in our society deserve fairness and equality.

[Denise Savoie, NDP, Victoria, BC]

Mr. Speaker, I am pleased to speak to Bill C-357, which is aimed at preventing the government from stealing money from this account that should be reserved for workers. This is a fundamental element of our social safety net that is wearing thin. Yet with important transformations in our economy and with the emergence of new technologies, it is increasingly important to have this safety net, which can help workers move towards better-paying jobs.

It is true that right now, in this country, there seem to be fewer unemployed workers. The figures come from Statistics Canada and other organizations. However, there is much more poverty. It is obviously more difficult to make a decent living in Canada today.

In fact, it does not matter what kind of difficulty people are in, but the government's approach is that people should pull themselves up by the bootstraps. I am thinking of the difficulties in the manufacturing sector and the difficulties in the Maritimes for seasonal workers where hard-working people are having difficulties making the transition to other employment. There need to be other initiatives to help them. Certainly, employment insurance was one of them. It was a fund used by the current and previous governments.

This government, just like its predecessor, has been helping itself to the EI account, and this must stop. According to the new figures from the Department of Finance, there is currently $54 billion in that account, and there is every indication that the Conservative government continues to use the contributions paid by workers to increase its surplus.

Of course we know that it was the Liberals who designed this plan when they were doing their budget cuts in the 1990s. They changed the eligibility criteria in such a way that, currently, only 38% of men and 32% of women qualify for benefits. It is a shame.

First of all, these cuts made to the EI program were not aimed solely at achieving a balanced budget. The government wanted to create a flexible labour market and eliminate uncertainty among workers through a strategy favouring low-cost labour. Many workers were shortchanged by these cuts.

Of course, because of these cuts in the 1990s, several social programs--and this one in particular--became weaker. These programs were of national importance not only for those affected--and that is what concerns me the most--but also because they were an essential part of what binds us together as Canadians.

Perhaps we should take another look at the definition of insurance. When a worker is having major difficulties, when he loses his job, what happens? The government should be there for him, but it is not. There is a group of people in the government right now who do not believe in government. They prefer to go to the private sector for everything. Privatization reigns and according to those people, the market will solve all our problems.

We have to take another look at what insurance is. I just renewed my home insurance and the terms of it are clear. I read that if I pay my premiums and my house burns down, I will be reimbursed. With employment insurance, it is different. Employees contribute for years and when they need it, the funds are not there. They cannot get the help they should in these difficult times. Employment insurance should make it easier to get back to work, to get back to a good job, but that is not so.

In the Speech from the Throne, we see that the government intends to take measures to improve the governance and management of the employment insurance fund. This morning I heard the Minister of Human Resources and Social Development during oral question period say that he did not really intend to meet the needs of the workers. That is worrisome.

The government seems to be in a hurry to devolve responsibilities for workforce training and funding to provinces with no strings attached. In my area we have seen training contracts given to private American companies at the expense of well established effective community agencies that did that work.

I would like to talk for a few minutes about employability, since the Conservative government has launched a study on employability, and my comments are particularly related to the topic of employment insurance. However, I have only a faint hope of seeing the government recognize the Canadian workforce as people rather than as commodities.

The primary objective of all policies surrounding the labour market and employability, indeed the primary objective of our economy, is how the government seems to see the worker. It is time that the labour market worked for the benefit of workers rather than just for profit as it does now.

The key to our success as a democratic society is to treat hardworking people decently and to give them the opportunity to improve their lives. They need a guarantee that employment insurance will be there for them. They need a guarantee that they will be able to access it in times of need as opposed to having doors shut on them.

As we do this study on employability we should look at employment insurance and the role that it could play. We feel strongly that the government should end the clawback of EI for recipients pursuing training and education.

My last words will deal with education and literacy issues. Nine million Canadians do not have functional levels of literacy and yet the government cut literacy programs last year by $18 million. This is an example of where EI could be used for training to improve those skills. I hope that the government will review its position in this important area.

[Lynne Yelich, Conservative, Parliamentary Secretary to the Minister of Human Resources and Social Development]

Mr. Speaker, in May I rose to speak to important issues put forward in Bill C-357, An Act to amend the Employment Insurance Act, but unfortunately we ran out of time. I would now like to take the opportunity to finish what I have to say on the bill.

From the outset, let me state that the government supports the principles behind the creation of a separate EI account, but there are many aspects of the bill that we cannot support.

On Tuesday, the Speech from the Throne outlined the government's priorities going forward. Rest assured, the changes to the EI program to make it more responsive to the needs of Canadians is one of those priorities.

I note the opposition has proposed several changes to the EI program during the course of this Parliament, often without supporting evidence or clear objectives on what the proposed changes were supposed to address. This is not something in which the government will engage. We will only put forward measured changes backed up by evidence and supported by Canadians who pay for this program with their hard-earned money.

It is important to get these things right. Canadians depend on us to ensure that the EI system remains a system, one that is effective, sustainable and reflects the needs of all who need it. The proposals put forward here put the future of the EI system at risk.

There is a reason we need to have a debate on a separate EI account today, and it is simple. It was mismanagement by the previous Liberal government and it was allowed by the Liberal government over a period of 10 years, a $51 billion surplus to accumulate in what many in the House have called the EI account.

The $51 billion was not government revenue. It was the wages of workers and the contribution of employers. We have always maintained that these were supposed to be used for benefits or premium reductions. Instead it was used for program spending in countless other areas and some of it was lost to fiscal mismanagement.

During study of the previous incarnation of this bill, Bill C-280, during the last Parliament, my colleague from Haliburton—Kawartha Lakes—Brock stated during committee study, “the Auditor General surely did not foresee that the government could continuously and deliberately overcharge employers and workers and allow this massive surplus to build up”, but they did. The Liberals allowed the surplus to grow and they became addicted to it.

Liberal mismanagement comes as no surprise to anyone in the House. We have seen the billion dollar HRSDC boondoggle under the Liberals watch. We have seen a $2 million gun registry turn into a $2 billion gun registry. We have seen $51 billion in workers' and employers' money spent in other areas with no explanation and certainly with no apologies.

As important as the principle of a separate account is to our government, it is nevertheless important that we not look at the EI program in isolation, that the opposition's vision for employment insurance must be examined in its entirety. We must get a picture of what the opposition expects from this program and if it is a realistic vision.

The facts will show that the opposition's vision is anything but realistic. There is currently an incoherent array of 19 opposition private members' bills related to EI on the order paper, with a combined cost of just 10 of these at well over $11 billion annually. This glut of opposition bills exemplifies the ad hoc and inefficient approach to EI reform being proposed by all opposition parties. The sheer magnitude of the changes being proposed to this valuable program leads one to believe that these changes have been proposed for political reasons because all these changes together do not make any sense. Yet the opposition has so far supported them all.

The opposition ad hoc approach to EI reform is telling of a larger problem.

Let us just examine a few of the other bills that the opposition has put forward in this Parliament.

Bill C-269 sought to drastically alter the administration and objectives of the EI system. It proposed a flat entrance requirement, a requirement designed to maximize labour market participation at a time when we had more jobs than people. It proposed vastly expanded benefit terms that were designed to provide a balance between adequate temporary income support and incentives to return to work.

These proposed changes would cost the EI system billions of dollars a year and have not been supported by a stitch of evidence.

Bill C-278 proposed a wide-sweeping change to the EI program by raising the sickness benefits from the current 15 weeks to a maximum of 50 weeks, all this despite the fact that all the available evidence indicates that the current system meets and even exceeds the needs of the vast majority of people who use the system.

There has been no study for either of these bills, which would $4.8 billion annually in new spending on benefits.

We know the people who pay premiums, both employers and employees, have asked for some consideration, especially given this hot job market. They would not get it with either of these bills.

Why does the opposition insist on proposing changes to the program when the evidence does not support these changes? Could it be particularly for political purpose?

I believe that Canadians rejected this type of governance. Almost two years ago, Canadians elected a Conservative government, a government that would restore some accountability to the way things worked in Ottawa.

We cannot and will not make wide-sweeping changes to programs without proper evidence. Without understanding the full implications of these changes, we certainly will not enact these types of changes unless they are in the best interest of all Canadians.

The government will not act like the last government. We have a broad based labour market approach to the EI program. We have aimed our changes at providing opportunities for all Canadians to participate in our healthy and growing economy. This approach is outlined in our economic plan called “Advantage Canada”.

The government has already taken action to address the quantity and quality challenges laid out in “Advantage Canada” by creating the apprenticeship incentives grant as a follow-up to the 2006 budget, working to improve foreign credential recognition and launching the targeted initiative for older workers and an expert panel to conduct a feasibility study on older workers.

We will continue to monitor and assess the EI program. We have made changes to the EI in the past year and we will consider further changes when it is justified.

One of the main reasons we initially advocated for a separate EI account was the previous government's inability to keep premiums in line with benefits.

The EI commission has set the 2007 rate at $1.80. This will save employers and employees $420 million a year. When combined with the increase in the maximum insurable earnings, this is the lowest rate in 14 years, all the while we have acted to maintain and in many instances increase benefits for unemployed Canadians.

We believe this new rate setting mechanism is important. That is why we supported it when we were in opposition.

Canada's new government has shown that we are responsible when it comes to making informed changes to the EI system. The opposition has shown that it is not. I think all Canadians will understand if the government shows a little caution when such broad changes are proposed to a program as important as the employment insurance.

[Raynald Blais, Bloc, Gaspésie—Îles-de-la-Madeleine, QC]

moved that Bill C-357, An Act to amend the Employment Insurance Act (Employment Insurance Account and premium rate setting) and another Act in consequence, be read the second time and referred to a committee.

Mr. Speaker, I have to say that I feel as though I am in Back to the Future.

In a way, it is as if I were going back in time. I have already had the opportunity to speak to this bill, but the House was prorogued. We had to wait another month for work to resume in this House. That meant that the Conservative minority government did not have to answer certain questions about certain pressing issues that still urgently require attention. I am thinking in particular about the crisis in the forest industry.

I am also thinking about issues that affect my riding, Gaspésie—Îles-de-la-Madeleine, issues such as transportation. All the members took advantage of the extra month off to stay in their ridings. But in terms of the work of Parliament, we lost a month. It is not exactly clear why. It was not necessary to prorogue the House. There was already a legislative agenda. Parliament was already scheduled to resume, and the government had had the opportunity to give its first throne speech. Why give a second one? The people who are watching can form their own opinions. Personally, I have the feeling that the government wanted to buy time and create a diversion. I would even go so far as to say that the Conservative minority government took pleasure in making use of parliamentary procedure.

Now, it is my turn to take pleasure in procedure. For a number of reasons, it gives me pleasure to again raise the issue of creating an independent employment insurance fund.

There is a history to this issue. I also have a history when it comes to this issue, because in another life I was a reporter for CHNC New Carlisle, a local radio station. I was also involved in organized labour.

Indeed I had the opportunity to work in the labour movement for the Conseil central CSN Gaspésie-Îles-de-la-Madeleine. My radio career lasted about 23 years, and I also worked for a few years in the labour movement.

Socio-economic development was one of the issues that was of particular interest to us. If you look for it, you will find it in certain places. I am thinking, for example, of the recent visit of my colleague from Beauharnois—Salaberry to Murdochville. We saw what is happening with wind energy, but it is not the be all and end all. Wind energy is just one element of what can be developed. And there has to be a maximization of these elements with regard to wind energy.

Members probably know that, over the next few years, that is by 2013 or 2014, several billion dollars will be invested in the Lower St. Lawrence and Gaspé regions.

In fact, there is a question as to the kind of real benefits this will bring in terms of job creation and so on.

There is LM Glassfiber in Gaspé and another company in Matane, but the latter is not located in my riding; it is outside the administrative region of Gaspésie—Îles-de-la-Madeleine. Apart from that, what is there? Yes, there are wind farms like the one in Murdochville, where hundreds of millions of dollars have been committed, spent and invested. But how many jobs remain in the region? Not necessarily a whole lot. That is why one must be very careful when quoting numbers that may seem very big, especially if they are spread over several years. We have to look at what the real situation is.

We are talking here about unemployment insurance, and I am still using the term unemployment insurance because I feel that calling it employment insurance is just a diversion, a way to lead us to believe that employment is the ultimate remedy and that as long as there are jobs, unemployment will no longer exist.

The bad news is that full employment, in other words a 0% unemployment rate, does not exist; not even in the flourishing economy of certain cities in Canada or in Quebec. For that reason, we can still talk about unemployment insurance.

This leads us to another reality, that experienced by the people in regions like mine or other regions in Quebec. An unemployed person is not necessarily unemployed by choice. Sometimes it is mandatory. I am sure that many people know what I am talking about. Whether we like it or not, tourism, forestry, fisheries and agriculture all provide seasonal employment. It is not the unemployed person who is seasonal. It is the work that is seasonal. The person would like to work 12 months a year, in certain sectors of the economy in particular. Nonetheless, the fishery being what it is, it is a seasonal activity. The same is true for agriculture.

As far as tourism is concerned, people try to extend the tourism season. Unfortunately, in some situations, there is still a long way to go, a bridge to gap between the end of one job and the beginning of another. In other cases, people wait to get the same seasonal job back again and that is why unemployment insurance is so important.

Over the years we have seen two big waves of cuts that have seriously harmed the unemployed and regions like mine. The Brian Mulroney government triggered the first wave. I do not know if people remember it, but I believe the people in my riding remember it very well. This wave hurt everyone's wallets. It did not stop at this first wave of cuts. The arrival of the subsequent government, that of Jean Chrétien, led to a second wave of cuts that hurt just as bad.

During that time, they realized that there was a lot of money in the so-called employment insurance fund. The latest figures from February 2007, show a $51 billion surplus. This huge sum was misappropriated.

The creation of an independent employment insurance fund would prevent this theft from continuing. Because of the various cuts and measures, this theft has left people in regions like ours in extremely difficult situations.

I simply want to point out this sad reality. An unemployed person does not automatically receive hundreds of dollars in EI benefits a week in order to live a great life. It is not like that at all in most cases.

Take the case of a woman working in the hotel industry in Percé, or in another tourist area, where she works as a housekeeper in a motel. She works split shifts, for a total of 15 hours, 20 hours, 30 hours. Depending on the number of guests, the number of hours she works increases or decreases. This type of schedule means that from week to week, or day to day, she does not know exactly when she will start or finish. Obviously, it depends on the number of tourists.

Then, these workers find themselves in need of the much talked about unemployment benefits, which cover 55% of what they earn—we must not forget that it is minimum wage. It is not $17 or $20 an hour; it is minimum wage. At 55%, they find themselves straddling the poverty line.

In most cases, people must find another job or accumulate work hours in order to receive the so-called generous EI. This covers 55% of a relatively good wage, but leaves them struggling.

I will not go into what happens in the fisheries sector.

When people facing these situations see that more than $50 billion has been diverted, they understand. They see it happening, that the wealth is poorly distributed and their situation is not improving. This is why Bill C-357 is so important.

The employment insurance program must be improved. By the way, one of my Bloc Québécois colleagues already introduced such a bill that made it to third reading.

There is also the matter of the creation of an independent employment insurance fund. Why is it important to have an independent fund? At the very least, it could involve three components.

First, there is the whole history which I just spoke about, all the real life factors. We must ensure that the money is not misappropriated. It is understandable that a bit more money is needed here and there. However, we can find ourselves unemployed for one reason or another. It might be because a business has closed. That has happened often in my region. For example, there was a fire at Anse-aux Gascons and workers were faced with a forced closure. That happened in Îles-de-la-Madeleine, Grande-Entrée and in various other places, I imagine, in Quebec and Canada as well. All their lives, these people paid into the employment insurance fund. I feel it was unfair because they should have been helped and not gouged over the years, supposedly to fight the deficit. At whose expense was this done? You know very well what I mean. It was at the expense of the unemployed and regions such as ours. For this reason these people consider it a scandal just like the sponsorship scandal.

Who is pleased with the realization that the fund is doing all right financially, that the money is being used for other purposes and that the contribution rate is constantly being reduced? If we lower the premium rate for someone who works only 15 to 20 hours per week, a few weeks of the year, in the tourism sector, how much will they save? One, two, three, five or seven dollars? No more than that.

An owner of a large business might find the premium reduction interesting—and the employee as well, depending on his salary. That is why the money from the employment insurance fund should not be used for other purposes. That is why we should have an independent fund with a premium rate that would be established by independent individuals, not on the basis of political considerations but based on reality, with consideration for the situation of employers and employees. Three parties would have a say in the proposed independent fund. In other words, there would be representatives for the employers, the employees and the government.

I have the impression that today I represent the large numbers of unemployed in regions such as ours who believe that the unfairness must come to an end and that an independent employment insurance fund must be created.

Just recently, I heard the Conservative government—and I will get back to this later on—say that it will ask for a royal recommendation regarding this issue. This is a roundabout way to avoid creating the independent fund that we are proposing. It hurts me to hear these comments. Personally, given the situation, I would feel bad if I were in their shoes, because they represent regions, they represent unemployed people.

This is why it is important that, ideally, Bill C-357 should get the unanimous support of the House.

Employment Insurance

[Raynald Blais, Bloc, Gaspésie—Îles-de-la-Madeleine, QC]

Mr. Speaker, when they were in the opposition, the Conservatives supported the principles of autonomy and independence for the EI account. Now that they are forming a minority government, they know that this could be achieved by passing Bill C-357 put forward by the Bloc Québécois, but are using the royal recommendation as a procedural tactic to informally oppose such a policy.

Could the minister tell this House whether he will support the principles of autonomy and independence for the EI account by seeing the passing of Bill C-357 through to completion?

Bill C-357--Employment Insurance Act and Bill C-362--Old Age Security Act

[Tom Lukiwski, Conservative, Parliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform]

Mr. Speaker, I rise on a point of order with regard to two private members' bills, Bill C-357 and Bill C-362. Without commenting on their merits, I submit that these two bills require royal recommendations.

First, I want to explain why Bill C-357, An Act to amend the Employment Insurance Act (Employment Insurance Account and premium rate setting), requires a royal recommendation.

As the Chair ruled on May 9, 2005:

--bills which involve new or additional spending for a distinct purpose must be recommended by the Crown. The royal recommendation is also required where a bill alters the appropriation of public revenue “under the circumstances, in the manner and for the purposes set out” in the bill. What this means is that a royal recommendation is required not only in the case where more money is being appropriated, but also in the case where the authorization to spend for a specific purpose is being significantly altered.

I would note that Bill C-357 is nearly identical to Bill C-280 in the 38th Parliament which the Speaker ruled required a royal recommendation.

On June 13, 2005, the Speaker stated:

--Bill C-280 infringes on the financial initiative of the Crown for three reasons: first, clause 2 effects an appropriation of public funds by its transfer of these funds from the consolidated revenue fund to an independent employment insurance account established outside the consolidated revenue fund.

Second, clause 2 significantly alters the duties of the EI Commission to enable new or different spending of public funds by the commission for a new purpose namely, the investment of public funds.

Third, as indicated in my ruling of February 8, clause 5 increases the number of commissioners from four to seventeen.

All three of these conditions apply to Bill C-357.

Clause 2 would create an employment insurance account that is outside the consolidated revenue fund. The bill would transfer money out of the consolidated revenue fund to the employment insurance account and that money would no longer be available for any appropriations Parliament may make. This would be an appropriation of funds and, therefore, requires a royal recommendation.

However, worthy some aspects of the bill may be, and some aspects of it are, this does not alter the need for the royal recommendation.

Clause 2 would also change the duties of the Employment Insurance Commission, including new requirements for the commission to deposit assets with a financial institution and to invest assets to achieve a maximum rate of return.

These are new and distinct purposes which have not been authorized and are additional reasons why clause 2 requires a royal recommendation.

Clause 5 of Bill C-357 would increase the number of commissioners on the Employment Insurance Commission from its current four to seventeen.

On February 8, 2005, the Speaker ruled that the appointment of 13 new commissioners to the Employment Insurance Commission in Bill C-280 required a royal recommendation. This is consistent with other rulings where the Speaker found that adding remunerated members to commissions requires a royal recommendation. Given these precedents, I submit that clause 5 requires a royal recommendation.

To sum up, Bill C-357 would require an appropriation, it would alter the purpose of funds covered by the act, and it would require new spending for an expanded commission; therefore, it must accompanied by a royal recommendation.

The second bill I want to draw to your attention is Bill C-362, An Act to amend the Old Age Security Act.

This bill would increase old age security and guaranteed income supplement benefits by lowering the threshold for eligibility from the current 10 years to 3. This change would result in significant new expenditures.

Under the Old Age Security Act, applicants must have at least 10 years of residence in Canada after age 18 in order to qualify for benefits.

I would further note that partial benefits are paid to applicants who have less than 10 years of residence if the applicant has credits from a country with which Canada has a pension agreement. Residence has been an eligibility criteria since this program's inception in 1952. Reducing the residence requirement from 10 years to 3 years would have significant costs.

Since eligibility for old age security pensions also qualifies for low income recipients to receive the guaranteed income supplement, the Department of Human Resources and Skills Development estimates that the total cost of reducing the qualifying period would be over $700 million annually.

Precedents clearly establish that bills which create new expenditures for benefits by modifying eligibility criteria or changing the terms of a program require a royal recommendation.

On December 8, 2004, the Speaker ruled in the case of Bill C-278, which extended employment insurance benefits, that:

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.

On November 6, 2006, the Speaker ruled with regard to Bill C-269, which extended employment insurance benefits, that:

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

On November 9, 2006, the Speaker ruled in the case of Bill C-284, the bill that enlarged the scope of the student grants program beyond that originally authorized by Parliament, that:

Any extension of the terms of an existing program must be accompanied by a new royal recommendation.

On November 10, 2006, the Speaker ruled in the case of Bill C-278, dealing with employment insurance benefits, that:

--by amending the Employment Insurance Act to extend sickness benefits from 15 weeks to 50 weeks, the bill would require the expenditure of additional funds in a manner and for a purpose not currently authorized.

On March 23, 2007, the Speaker ruled in the case of Bill C-265, dealing with employment insurance benefits, that it was abundantly clear:

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

I would also note that when Parliament adopted amendments to benefit criteria in the Old Age Security Act in Bill C-36 earlier this year, this legislation was accompanied by a royal recommendation.

In conclusion, Bill C-362 would increase expenditures for old age security and guaranteed income supplements in ways not already authorized and, therefore, should be accompanied by a royal recommendation.

Business of the House

[The Deputy Speaker, NDP, Bill Blaikie]

Before we begin private members' business today, I would like to remind the House that yesterday the Speaker made a statement in which he reminded the House that all items of private members' business originating in the House of Commons that were listed on the order paper during the previous session are reinstated to the order paper and shall be deemed to have been considered and approved at all stages completed at the time of prorogation of the first session. This also means that those items on the order of precedence remain on the order of precedence or, as the case may be, are referred to committee or sent to the Senate.

Just as individual items of private members' business continue their legislative progress from session to session, the Chair's rulings on these same items likewise survive prorogation. Specifically, there are six bills on which the Chair either ruled or commented with regard to the issue of the royal recommendation. The purpose of this statement is to remind the House of those rulings or statements.

Members will recall that on May 4 the Speaker made a statement expressing concern regarding the spending provisions contemplated by two bills, namely: Bill C-357, An Act to amend the Employment Insurance Act (Employment Insurance Account and premium rate setting) and another Act in consequence, standing in the name of the member for Gaspésie—Îles-de-la-Madeleine and Bill C-362, An Act to amend the Old Age Security Act (residency requirement), standing in the name of the member for Brampton West.

Just as was done last May, the Chair invites members who would like to make arguments regarding the need for a royal recommendation for these two bills or any of the other bills on the order of precedence to do so at an early opportunity.

Members will also recall that during the last session some private members' bills were found by the Speaker to require a royal recommendation. At the time of prorogation, there were four such bills on the order of precedence or in committee. Let us review briefly the situation in each of these four cases.

Bill C-265, An Act to amend the Employment Insurance Act (qualification for and entitlement to benefits),standing in the name of the member for Acadie—Bathurst, was before the Standing Committee on Human Resources, Social Development and the Status of persons with disabilities. The Chair ruled, on March 23, 2007, that the bill, in its present form, needed to be accompanied by a royal recommendation.

Bill C-284, An Act to amend the Canada Student Financial Assistance Act (Canada access grants), standing in the name of the member for Halifax West, was awaiting debate at report stage. On November 9, 2006, the Chair had ruled that the bill, in its form at second reading, needed to be accompanied by a royal recommendation. In committee all clauses of the bill were deleted. In its present eviscerated form, Bill C-284 need no longer be accompanied by a royal recommendation.

Bill C-303, an act for early learning and child care, standing in the name of the member for Victoria, was awaiting debate at report stage in the House. The Chair ruled on November 6, 2006, that the bill, in its form at second reading, needed to be accompanied by a royal recommendation. The Chair finds that the amendments reported back from committee do not remove the requirement that the bill be accompanied by a royal recommendation.

Finally, Bill C-269, An Act to amend the Employment Insurance Act (improvement of the employment insurance system), standing in the name of the member for Laurentides—Labelle, was at third reading in the House. The Chair ruled, also on November 6, 2006, that the bill, in its form at second reading, needed to be accompanied by a royal recommendation and reminded members, on April 18, 2007, that the amendments reported back from committee did not remove this requirement.

Consistent with past practice, although today's debate on Bill C-269 may proceed, the Chair wishes to remind members that the question on third reading of the bill in its present form will not be put unless a royal recommendation is received.

I thank hon. members for their attention.

Employment Insurance Act

[Lynne Yelich, Conservative, Parliamentary Secretary to the Minister of Human Resources and Social Development]

Mr. Speaker, I am happy to discuss Bill C-357, An Act to amend the Employment Insurance Act. I would like to thank hon. colleagues from all parties for their contributions on the bill. All of the opinions put forward on the bill are valuable and provide great input into possible reforms to the EI program.

From the outset, let me state that this government supports the principles behind the creation of a separate EI account. I see other proposals put forward in this bill as well. I note the opposition has proposed several program changes during the course of this Parliament, often without supporting evidence for clear program objectives.

It is important to get these things right. Canadians depend on us and particularly their new government to ensure that the EI system remains a system that is effective, sustainable and reflects their needs.

There is a reason we need to have this debate today. The reason is simple: Liberal mismanagement. The previous Liberal government allowed over a period of 10 years a $51 billion surplus to accumulate in what many in the House have called the EI account.

During a study of a previous incarnation of this bill, Bill C-280, during the last Parliament the hon. member for Haliburton—Kawartha Lakes—Brock stated during committee study that the Auditor General surely did not foresee that the government would continuously and deliberately overcharge employers and workers and allow a massive surplus to build up, but it did. It allowed the surplus to grow and it became addicted to it.

Liberal mismanagement comes as no surprise. We have seen a billion dollar HRSDC boondoggle under the Liberals' watch. We have seen a $2 million gun registry turn into a $2 billion gun registry. They ran a rule-breaking sponsorship program. Now we have seen the accumulation of $51 billion in workers' and employers' money with no explanation and certainly no apologies. This should come as no surprise to the party of adscam and sponsorgate, but nonetheless, it is no less insulting to every Canadian.

Mr. Speaker--

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

Mr. Speaker, I am pleased to speak to this important bill, Bill C-357. The bill seeks to give workers and employers, the sole contributors to employment insurance fund, control over their fund.

I would like to congratulate my NDP colleague, the member for Parkdale—High Park, for her excellent speech, which, in my opinion, summarizes this deplorable situation.

As I begin my speech, I am thinking of people—people who have lost their jobs and have no income and no recourse to employment insurance benefits. They should receive these benefits because they contributed to the employment insurance fund. For example, I am thinking of the people who worked at the Régence plant in Saint-Émile in the riding of Charlesbourg. The Conservative member who represents that riding did nothing to help those people. That is just one example. I could mention other ridings represented by our Conservative colleagues. The Conservatives are misleading people by telling them that they have set up a program to assist older workers—the targeted initiative for older workers, or TIOW. This program is designed to get these workers back into the labour market—those who can still work, that is. That makes sense, because these people want to work.

However, in many cases, people over 55 cannot find jobs because there are none available in the region or elsewhere or because employers do not want to hire them because of their age. These people have no options, even though they contributed to employment insurance for their whole lives. What happened? Take, for example, Whirlpool in Montmagny, or the textile industry in Huntingdon, Sherbrooke, Estrie or Drummondville. Similar situations exist in all of these regions. People did not receive employment insurance or were unable to take advantage of POWA. Why? Because the former Liberal government cut employment insurance programs so deeply that over 60% of workers who lose their jobs cannot collect benefits even though they contributed to employment insurance.

Mr. Speaker, you are someone I know a little bit, and I know that you are cautious. I am sure you have insurance to protect you in the unfortunate event of a car accident, an injury or a house fire. What would happen if your house burned down? You would contact you insurance broker to be compensated, since you pay premiums. How would you react if your broker told you that he is sorry, but you are no longer covered, because the rules changed at some point. He might tell you that your insurance only covered a fire that would have started in the living room, and that if it started in the kitchen, then you are not covered. It is that bad. You would say that this insurer is not honest, that he cheated, that he used the money for other purposes, and you would initiate legal proceedings against him.

The unemployed do not have the option of initiating legal proceedings. Yet, so far, the government has misappropriated over $54 billion. This is money that belongs to these people.

I have here a memo dated yesterday, which indicates that, according to data released by the government in February and March, employment insurance surpluses stood at $50.4 billion on March 31, 2007, instead of the projected $50.8 billion. So, this misappropriation is still taking place.

Yet, when the Conservatives were in opposition, they pledged to put a stop to this misappropriation of funds. They even said that they agreed with the establishment of an independent employment insurance fund, to allow those who contribute to this fund—the employees and employers—to regain control of their fund, so that it could be used for the purposes for which it was created. However, that is not happening, because the Conservatives are doing exactly like the Liberals. This is a serious economic crime that adversely affects workers who lose their jobs.

Mr. Speaker, you are the most senior member of this House, and you have been representing your riding here for a long time. You are highly esteemed in your riding, and I know that you also care about protecting the interests of your constituents. However, it must be realized that, in each of our ridings, this situation creates an annual shortfall of between $30 million and $60 million in the economy, and that families are also adversely affected. Indeed, if the person who loses his job is also the breadwinner, the whole family is affected. It also means less money in the economy of your region, your riding, and your province.

What happens when a person no longer has an income? They turn to social assistance. I do not know how it works in your province, Mr. Speaker, but in Quebec, social assistance was designed for people who have nowhere else to turn. It seems that the money is staying in Ottawa and the responsibilities that should have been taken on by Ottawa are being transferred to the provinces and to Quebec. This further worsens the fiscal imbalance. It is a very serious economic crime and we must take notice. In other sectors, under other circumstances, and even here in this House, people would be up in arms.

It is hard to understand why, once in government, people's only concerns seem to be debt and political priorities. Military equipment and weapons are good examples. Last August, in the space of a week, $17.5 billion was taken from the consolidated revenue fund for military commitments. Year after year, no less than $2 billion or $2.5 billion is taken out. Some years, it is up to $7 billion. This money does not belong to the country's consolidated revenue fund. It is a straight out misappropriation of funds. How is it done? As I said earlier, by giving fewer benefits to workers, who are losing their jobs and who are entitled to these benefits.

Anyone who is reasonable, sensible and concerned about properly representing their constituents would vote in favour of this bill. Such members would not say what I heard from a Liberal Party member, when he suggested that people do some reading to understand what good things the Liberals did. People do not need to read up on what the Liberals did right, because they are suffering from what the Liberals did wrong. That is what Canadians must live with—with nothing, because of the Liberals. In fact, the Liberals left them with less than nothing. The problem is, once the Conservatives came into power, they seemed to forget everything they had done in opposition. They took on all the Liberals' bad habits.

It is urgent that we establish an independent fund that will not be administered by the government alone, but rather by a commission made up primarily of employees and employers. Money must also be returned to the fund and there must be reciprocal loans. If the government wants to borrow money, it must make the same commitments it would to a bank. It could pay interest to the fund, which could then distribute it.

This is the nature of the bill and anyone who claims to defend the interests of his or her constituents will vote in favour of the bill. Indeed, I urge all members to do so.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, I am pleased to speak to Bill C-357 which is the Bloc Québécois bill to amend the Employment Insurance Act.

Employment insurance is fundamentally important to working people in Canada. Work is central to our lives. It is not only about the money that we get to support ourselves and our families, it is about our self-worth, it is about who we are as people.

My experience in talking to many working people over the years is that job loss is absolutely devastating to a worker. Any support or any help that workers can get to ease that transition from unemployment back into a paying job is money well spent.

We have been through massive changes in our economy over the last decade or more. We have seen tremendous transitions in new technology, changes in manufacturing, and many thousands and thousands of workers have been through this period of unemployment and had to scramble and find their way back into a job.

Unemployment insurance, as it was originally structured, is designed to help cushion that transition, so that workers can make their way from the job they just lost and get into a new job. Any insurance plan, whether it is for a house, or a car or anything else, is a plan where we pay a premium and then get a benefit. When we pay the premium, we know exactly what the rules are and know we are going to be able to get that benefit.

However, that is not how it works with employment insurance. It is an anomaly to call this insurance because it actually provides very little insurance. In the 1990s of course deficit cutting was the order of the day. There were many cuts to all kinds of programs more aggressive than needed to happen in order to eliminate the deficit, and many people suffered.

The previous government under finance minister Martin made major cuts to many social programs and--

[John Cannis, Liberal, Scarborough Centre, ON]

Mr. Speaker, on behalf of the Liberal Party, I take this opportunity to speak to Bill C-357. The bill proposes some changes to the Employment Insurance Act as it relates to the setting of the premiums charged to employers and employees.

First, employment insurance is a very important program, a program that plays, in my view and I am sure in the view of all members in this honourable House, a very vital role in assisting workers in Canada when they find themselves either unemployed or underemployed. It is a program that supports workers while going from job A to job B.

Allow me to provide a little history to the employment insurance program for the benefit of all Canadians.

In 1934 the Government of Canada established a program that would provide Canadians with a partial income if they found themselves out of work. The Great Depression, as we all know, resulted in millions of Canadians losing their jobs and going through some very difficult times. As a result, the government took action to provide some income security.

The Employment and Social Insurance Act of 1935 paid minimum weekly wages based on earnings to certain unemployed people. It was in 1940 that Parliament passed the Unemployment Insurance Act, during a period when income security was not an issue. For example, we will recall that the war created well over a million jobs in our country at that time.

The program back then was meant to support, on a short term basis, individuals who were in between jobs and was primarily targeted the so-called blue workers. Since that period, employment insurance has become one of the major foundations of Canada's social safety net.

Two major changes occurred in the system, once in 1971 and again in the mid 1990s. In 1971 the program became more universal, with a wide range of occupations falling under its legislative scope. For example, further maternity, sickness and retirement benefits were added to the program. Premiums were reduced and benefits were increased. Prerequisite qualifiers were also raised, while benefit levels were to some degree restrained. At that time, the government placed restrictions on benefits for workers who had quit or had been fired. They were deemed ineligible, except for certain exceptions.

During 1971, the government shifted employment services and benefit costs from its consolidated revenue fund to what was then called the UI account. Although there were some efforts to make further changes to the act during the 1970s and 1980s, it was not until the 1990s that major reform to the act took place.

For example, in 1996 unemployment insurance became known as employment insurance or EI, “employment” meaning let us move forward to get people back into the workforce. Of course there were major changes in eligibility, including an “intensity rule” that reduced benefits for repeat claimants, and adjustments to that clause were made in 2001.

I know, Mr. Speaker, you were here at that time. When I was first elected in 1993, the government inherited a very difficult situation of high unemployment. I am sure you recall that it was close to 12%. EI premiums had been rising consistently. I remember at that time it was pegged at $3.05 per $100. Our country was described as unofficially bankrupt, so we had very little manoeuvring ability.

Later on as the economy got better, as we had eliminated the deficit much faster than we anticipated, economic growth occurred, employment started to unfold and more revenue started coming in because people were working as opposed to us paying out. We were able to look at adjustments as we removed that intensity rule in 2001.

I believe those changes were necessary at the time because of the difficulties that the country had. One was the $48 billion deficit and a $600 billion plus debt that we incurred, inherited from the Mulroney government, the Conservatives.

Earlier today the member for Burlington said that the government was listening to the people. He said, “a government that listens to them”. I think he said that about three times. I always get shivers the moment that someone says to me more than once, “Trust me, trust me”. I do not trust that person. Therefore, when the member for Burlington said on a several of occasions “a government that listens”, it just confirms that it has not listened. Income trusts is one example that I will use.

A short while ago Bill C-269 was before the House, on which we voted, to make some changes to help seasonal workers and to increase benefits in general. We supported that bill, as amended, at committee. I believe that in the current situation we can afford to take a look at EI in general and to see how we can better support all workers.

The comments we are hearing from our constituents, especially our seniors, our veterans and workers in general are as follows. If today our country has been blessed with such high surpluses, close to $14 billion, thanks to the good work that the previous Liberal governments did, it is today that we can take that extra step. It is not a risk. It is today that we have these surpluses and we can look at adjusting these programs.

We have workers in the Maritimes, in the north, in the mining industry who unfortunately and for whatever reasons do not have an opportunity, as some would say in downtown Toronto, to have steady employment throughout the year. This is where these programs must exercise some flexibility. I believe these are the times, when the economy is good, when there are surpluses, we can do that.

As often is the case with members from the Bloc, and I say this respectfully, they always attempt to maintain some kind of feigning sense of relevancy to the House by introducing certain private members' initiatives so they can send them in their householders to their constituents and say, “This is how relevant we are”. That is great. I cannot negatively comment on that. That is their privilege, but it is unfortunate because constituents depend on hearing from their members of Parliament a certain message that has relevancy. In a case like this, they are getting someone's goat going. They are getting them excited, and it is unfortunate.

Let me just point out why I made that statement. The member will know that what he seeks to accomplish already exists, thanks to the efforts and the hard work of the former Liberal finance minister, the member for Wascana, and the former Liberal minister of human resources, the member for Newmarket—Aurora. These changes were made.

What we did was formalize the EI rate setting process with an external process run by a chief actuary, something the member for Burlington said “We are going to do as a government”. We have already done it, as a Liberal government.

The member for Burlington should, as should all members, read up on what has been done before they stand up, for the benefit of all Canadians. It is up to the chief actuary to analyze the labour trends, the employment levels, the expected payments to be made and make recommendations to Parliament as to the setting of the EI rate. It is set in such a way which we put in place that it becomes revenue neutral, if I may describe it as such.

Let me repeat again for the benefit of the member for Burlington and all other members, that the EI--

[Mike Wallace, Conservative, Burlington, ON]

Mr. Speaker, I am pleased to join the debate on Bill C-357, a Bloc Québécois proposal to amend the Employment Insurance Act.

The part of the bill that interests me is the one that calls for a separate account for EI. Conservatives have long supported the principle of a separate account. In our policy declaration of the Conservative Party, we stated our commitment to:

...the establishment of an independent employment insurance system, with a self-accounting fund administered by employees and employers, the surplus of which being used to increase workers’ benefits or reduce contributions.

In this House, the Prime Minister has confirmed that our government is looking for solutions to meet those objectives.

I too support the principle of the creation of a separate EI account. I also support the tremendous new direction of this government in making changes to the EI system. Canadians are seeing their new government take a very different approach to the old Liberal one. The old Liberals resisted change and did not listen. They stood in the way of returning contributions to the pockets of employers and employees who pay into EI.

Canadians see that their new government is different from the Liberals. They chose a new government because Canadians are different from the Liberals. The Liberals simply would not listen to Canadians and what they wanted to see in a responsible and sustainable EI system.

The new government is listening and we are getting things done based on what we are hearing. In a little over one year since forming government, we have taken action by bringing in measured but meaningful changes. We have heard the concerns of older workers, particularly in Quebec and Atlantic Canada, who were struggling in the face of changes to the labour situations in their regions. They told us that they needed something to help them with retraining and taking their experiences to a new situation.

We listened to their concerns and we responded to their needs with the targeted initiative for older workers. The targeted initiative designs projects for older workers in communities facing ongoing high unemployment or a single industry dealing with downsizing and it helps them. We have also taken action for workers who face work disruptions in regions with high unemployment.

Canadians found that their fortunes in most areas of the country improved once the new government took over. They are enjoying one of the most prosperous periods of economic growth and record employment in Canadian history.

Many sweeping changes to the EI program at a time of unprecedented labour strength would, at best, be difficult to reconcile with the realities of our thriving national economy and, at worst, it would have a cooling effect. Therefore, a major change is not and was not called for.

However, Canada's new government recognizes that change is required. We appreciate that not all regions are seeing the same growth. We understand the need to make changes to meet these regional realities but we need a measured and effective change.

We introduced a pilot project to extend the coverage for five additional weeks in regions with high unemployment. We heard from seasonal workers and others who told us about the income gap. We wanted to maintain an incentive to work and yet recognize the labour market realities they face.

We have also moved to extend a pilot project that calculates benefits on the best 14 weeks of wages during the last 52. We heard from Canadians who had sporadic employment and were losing out on having their weeks of full time work benefit them. More than 200,000 people in regions of high unemployment benefit from us getting things done for them.

Listening to Canadians is what this new government does and what good government does.

When Canadians came forward with concerns about the limits of their compassionate care benefits, we listened. They told us that there were incidents where benefits ended before the needs they were meant to address were resolved.

Again, it was this government which showed Canadians that their government was listening and ready to make the changes to EI that were needed, for which they asked. Our record, the record of Canada's new government, is one of which Canadians can be proud. Why? Because the changes we are making come from them.

Finally, they have a government that is listening to them. Finally, they have a government that is here for them.

As I return my remarks to the bill, Canadians need only to look at their government's record to see the proof of our commitment to making changes to EI to improve the system for workers and all Canadians. As I said at the outset, I and the new government are firmly committed the principle of a separate EI account. Canadians are satisfied that their new government is interested in solutions, and we will achieve just that.

What Canadians are wondering, though, is where the opposition really sits on EI reform. With 19 EI bills in the works, the other opposition parties have been heaping one EI bill after another onto the order paper, voting for implementation of all, but not prioritizing one of them: $3.7 billion for Bill C-269; $1.1 billion for Bill C-278; $1.4 billion for Bill C-265. There are 16 more EI bills to come, nine of which, including this one, are too complicated to cost. It will cost $4.7 billion to implement the seven which we were able to cost. That is over $11 billion in new annual spending.

With all these proposals for one-off changes to EI, adding up to billions annually in new costs, Canadians are looking for someone to stand up for them and think about the EI as a system. Canadians do not believe a system should be stitched together in little bits and pieces. Canadians are looking to their new government to stand up for them. They are hoping to maintain the EI as a system and protect it from the patchwork proposals made by the opposition.

Canadians will be disappointed in their new government if it did not stand up for them and insist on accountability for the use of their money. They would be disappointed if it did not stand up for them and ensure that the policy for which they have asked, and we have committed to pursuing, is also put together not in a piecemeal fashion as we have in front of us today.

In comparison to our record of taking clear action to getting things done with EI reform for Canadians, the record of the opposition member has been all but clear. Canadians have no idea what its priorities really are. Opposition members have not made it clear when it comes to how they plan their legislation. More often than not, they have not made their intentions clear when one looks at the legislation they put forward.

I take my responsibility to my constituents and all Canadians seriously. I take our commitment to a separate account seriously. I will continue to work for that objective.

[Raynald Blais, Bloc, Gaspésie—Îles-de-la-Madeleine, QC]

moved that Bill C-357, An Act to amend the Employment Insurance Act (Employment Insurance Account and premium rate setting) and another Act in consequence, be read the second time and referred to a committee.

Mr. Speaker, I am very proud and honoured to rise today to present my first bill, which deals with a very important issue for my community of the Gaspé and Magdalen Islands.

I suppose that my bill is also important for all the communities that want to be treated with dignity and honour, and for those people who, at some point in their lives, find themselves in a bind, strictly for geographical reasons. For example, people cannot fish all year round, even if they wanted to. In the case of tourism, certain considerations also come into play. And the same goes for natural resources, and particularly the forestry sector.

These people not only need social support, they also need economic support. Now, we are talking about establishing an independent employment insurance fund.

I am in politics primarily because of this issue. I have had the opportunity to work with people to whom I paid tribute on several occasions, but today I want to pay tribute again to Gaétan Cousineau, of the Mouvement action-chômage Pabok, who has, for a number of years already, been leading a great battle for justice, for fairness in the employment insurance system.

At the time, we were experiencing problems in my region. Unfortunately, these problems have not necessarily disappeared over time. Other issues have surfaced because of, among other reasons, what is going on with natural resources and fisheries. Problems and crises have erupted, particularly in the shrimp sector.

So, there are people who want justice, no more and no less, because the Department of Fisheries and Oceans and the minister are not meeting their demands. These people are stuck and they have been in the streets for three days already. They are currently occupying offices and marching in the streets. They are expressing their distress, they are sounding the alarm regarding their plight.

We experienced a historic moment this evening when a bill was voted on and concurred in at second reading so that the EI system could be changed and improved.

The bill I have introduced is designed to tighten things up. Unfortunately, governments, past and present, have taken advantage of the fact that those really paying into the EI fund are employees and employers, while the government did not, and that has been going on for years.

As it happens, this fund started to run not a profit, but a surplus that kept growing year after year. In fact, we have even seen record amounts between $7 billion and $8 billion. With all this money available, a rather huge chunk of money, the government of the day decided to deal with another problem, namely the deficit, instead of giving the money to the people in the regions, the unemployed who were having a very hard time qualifying or with issues of fairness and equity.

If I am not mistaken, over the years, from the early or mid 1990s until now, some $50,000 million accumulated in that EI fund has been diverted from its intended purpose. This money was used to combat the deficit.

The hon. member for LaSalle—Émard and former finance minister dared to puff out his chest and boast about helping put Canada's fiscal house in order. He failed, however, to add that this was done at the expense of the unemployed.

The purpose of the bill is to prevent any government from being tempted—and from giving in to the temptation—to take this money and use it for other reasons, as was the case in tackling the deficit at one point. These days we could talk about tackling the debt.

The unemployed, the people in regions like the one I represent and those from other regions are the ones helping to pay down the debt.

That is why it is important to have legislation to stop people with designs on the surplus, which is currently between $1.5 billion and $2 billion a year. Let us not forget to whom we owe this surplus and how it came to be.

Let us not forget that there is a surplus because a certain amount of money is being taken directly out of the pockets of employers and workers.

There is a surplus and there are needs. It is only fair that this money be used to meet these needs. However, that is not what is happening. The needs are far from being met, which is causing a growing gap. Not so long ago, the surplus was $8 billion and the gap was quite large. Now we are talking about a surplus between $1.5 billion and $2 billion.

This evening, members of this House passed a bill at second reading stage. In my opinion, this is a good step in seeking justice, but the battle is far from over.

We have to prevent every government, even a minority government, from dipping into this fund. We are told it is a virtual fund, but that is not so. Workers pay a premium to the employer, which makes this far from being virtual. This money goes directly to the government's coffers. Unfortunately, under the current conditions, we cannot fully trust the government, even though it is a minority, because we see that this money is being used for completely different purposes.

I would like to talk about what is called the summary of the bill, a bill that amends the method for setting the premium rate in the Employment Insurance Act. It also amends a number of provisions in that act with respect to the Employment Insurance Account. The summary is divided into four parts, including one dealing with setting the premium rate.

The bill provides that every year the Canada Employment Insurance Commission will set the premium rate and cause a report to be sent to the Minister of Human Resources and Social Development. The annual report shall contain, among other things, the reasons behind the chosen premium rate.

The report shall also include any recommendations that the commission considers necessary for the improvement of the employment insurance system. The bill provides also that the Employment Insurance Account will no longer form part of the accounts of Canada. This is where we will stop the injustices from occurring. The amounts paid into the Employment Insurance Account will become part of the assets of the Canada Employment Insurance Commission, and the commission will manage them in the best interests of the contributors and beneficiaries under the employment insurance system. In other words, this money will truly serve the interests and needs of the people who pay into the system.

The bill provides that the commissioners who will represent employees and employers shall be appointed from a list of nominees provided by associations representing employees and employers in Canada.

The bill also provides that the government shall pay back, over a period deemed appropriate, the amounts owed to the system, including those used by the government for purposes that did not serve the system.

I would just like to remind this House that the Canada Employment Insurance Commission will be composed of 17 commissioners: a chairperson, two vice-chairpersons, seven employee representatives and seven employer representatives.

The bill provides that the governor in council shall appoint the commissioners who will represent employees and employers from a list of nominees provided by associations representing employees and employers in Canada. The governor in council appoints the vice-chairpersons from among the deputy ministers or the associate deputy ministers of the Department of Human Resources and Skills Development. The chairperson shall be appointed by the House of Commons on the recommendation of the minister following consultation of the commissioners representing employees and employers. The chairperson shall not vote, but shall cast a deciding vote in case of an equal division.

This gives a bit more background on this bill and some context for our debate.

History is such that we may eventually solve the problem. Speaking as a maritimer, I could say that this bill will be a drop of justice in a sea of injustices. That is how I see it.

It is horrible to see how the employment insurance system has been managed in recent years. It is horrible because, in a way, people's needs have been completely ignored. Entire regions, including the region where I live, have been completely forgotten, ignored and abandoned, as have people who, with the sweat of their brow, have helped money build up over the years. This is referred to as a virtual account, but it is anything but virtual. The employment insurance account worked in such a way that it generated a surplus worth billions of dollars, money that was used for other purposes. I am talking about money that belongs to the unemployed, employers' money. Ordinarily, it should have gone to regions like mine to make the social safety net an economic net as well, but it was used for fighting the deficit and other purposes.

To get back to the facts, various inquiries have been conducted in recent years. The Gomery commission revealed the dark, shameful side of government. I would even venture to say that some of this money, which was stolen out of workers' pockets, was used for disgraceful purposes.

Having said that, it is very important to see that what we are ultimately trying to do is to eliminate temptation, this definite temptation that arises to use a pot of money for other purposes and not for what it was intended.

In all of this, we have the unemployed worker who has his back against the wall because he is a seasonal worker. We should not forget, it is not the worker but the employment that is seasonal . All too often we forget this. We have the impression that people are unemployed because they want to be. Let me tell you that it is not pleasant surviving on 55% of one's wages.

You can be unemployed for different reasons. In the region I represent, there are those who work in agriculture, natural resources such as forestry and fisheries, or tourism. These individuals do not apply for unemployment benefits because they want to. There simply are no more jobs. These people are proud. They have dignity and they would like to have a job for 12 months of the year. That is their goal.

The objective behind tabling this bill today is to seek justice for these men and women who work hard and who, unfortunately, at times, have jobs that are not well paid. Therefore, I urge members of all the political parties to support my bill.

Business of the House

[The Speaker, Liberal, Peter Milliken]

The Chair would like to take a moment to provide some information to the House regarding the management of private member's business.

The Chair has developed the practice of reviewing bills after the replenishment of the order of precedence so the House can be alerted to bills which, at first glance, appear to involve spending and interested members can be invited to intervene in a timely fashion to present their views about the need for a royal recommendation.

In keeping with that practice, following the April 19 replenishment of the Order of Precedence with 15 new items, I can inform the House that two bills give the Chair concern as to the spending provisions they contemplate. They are: Bill C-357, An Act to amend the Employment Insurance Act (Employment Insurance Account and premium rate setting) and another Act in consequence, standing in the name of the hon. member for Gaspésie—Îles-de-la-Madeleine.

The other is Bill C-362, An Act to amend the Old Age Security Act (residency requirement), standing in the name of the member for Brampton West.

I would encourage hon. members who would like to present arguments regarding the need for a royal recommendation for these bills, or any of the other bills now standing in the order of precedence, to do so at an early opportunity.