An Act to amend the Employment Insurance Act (qualification for and entitlement to benefits)

This bill is from the 39th Parliament, 2nd session, which ended in September 2008.

Sponsor

Yvon Godin  NDP

Introduced as a private member’s bill. (These don’t often become law.)

Status

Report stage (House), as of June 9, 2008
(This bill did not become law.)

Similar bills

C-280 (40th Parliament, 3rd session) An Act to amend the Employment Insurance Act (qualification for and entitlement to benefits)
C-280 (40th Parliament, 2nd session) An Act to amend the Employment Insurance Act (qualification for and entitlement to benefits)
C-265 (39th Parliament, 1st session) An Act to amend the Employment Insurance Act (qualification for and entitlement to benefits)
C-373 (38th Parliament, 1st session) An Act to amend the Employment Insurance Act (qualification for and entitlement to benefits)

Elsewhere

All sorts of information on this bill is available at LEGISinfo, an excellent resource from Parliament. You can also read the full text of the bill.

Bill numbers are reused for different bills each new session. Perhaps you were looking for one of these other C-265s:

C-265 (2022) National Perinatal Mental Health Strategy Act
C-265 (2021) Émilie Sansfaçon Act
C-265 (2016) Secure, Adequate, Acessible and Affordable Housing Act
C-265 (2013) Canada Post-Secondary Education Act

Employment Insurance ActPrivate Members' Business

February 7th, 2007 / 6:20 p.m.


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NDP

Penny Priddy NDP Surrey North, BC

Mr. Speaker, I am pleased to speak to Bill C-265 and to comment on the EI injustice in my community.

In the past, part time workers needed 910 hours to collect employment insurance. Under those circumstances, only 32% of women are eligible for employment insurance. In point of fact, only 37% of men are eligible for employment insurance. No matter what we do with the hours, the injustices in the EI system will continue as long as we continue to look at seasonal workers the way we do.

I represent Surrey and the lower Fraser Valley where about 8,000 to 10,000 farm workers are considered seasonal workers. They are primarily elders and almost 100% of them do not speak English. They depend entirely on the farm contractor or farmer to fill out their forms and then they sign them.

These people are trying to make a small amount of money to add to their family income. They are grandmothers and grandfathers living with their families. They are not used to being dependent upon someone and they want to make their own contribution. These people work many hours a day beyond what is acceptable. When harvest is in, picking hours are long.

These farm workers sign the forms that the farmers give them but they do not know what they are signing. No one is in the fields to tell them in their own language their rights but they do know that if they do not sign the form they will not get paid and will not be able to go back to work. They, therefore, sign the form even though they do not know what they are signing.

These elders, who do not speak English, did not have someone explain their rights, were used by farmers and farm contractors and are now being sued by the government. They really work piecemeal. A farmer or farm contractor divides the piecemeal work by the number of hours and tells the worker to sign the form. The government is now saying that they tried to defraud the EI system but they did nothing of the kind. They had no idea what was going on. The workers who worked in 1997 are currently before the courts, which means there are another four years yet to go.

It has been suggested that it will take about $6 million to try this case that will collect $600,000 for the government. Is that economic efficiency to spend $6 million to collect $600,000? This money is not being collected from large corporations that are not paying the taxes they should. This money is being collected from 80 year old people who have moved to this country because they believe in justice. They are trying to do the right thing but because they are frightened by their employers they sign the form. They did not know it was wrong but the government is taking them to court. What on earth would they pay us back with? They barely have enough money for the clothes on their back.

As I have not worked in the fields I would not suggest that I know what it is like. However, I have talked to some of these elders through translators and they have told me what it is like to be in the fields with the sun or the rain beating down on them for 14 to 16 hours a day picking fruit. It is outrageous for someone to tell them that if they do not sign a form they will not get paid and they will not be allowed back to work.

I have been told about a similar circumstance in New Brunswick involving fish plant workers and a former Liberal MP who found a particular way to deal with those seasonal workers.

I am not saying that is the same situation. What I am saying is that we need a different kind of EI structure for seasonal workers, such as those working on the farms in the lower Fraser Valley from which many of us across the country receive our fruit, particularly blueberries and cranberries.

The other people involved in part time work are in security, in construction work and so on.

These farmers are just trying to do their best. They have come to this country to be with their children and make a contribution to the household. Therefore, for the bill to be fair, it needs to look at B.C.'s seasonal workers. The act has an overall inherent flaw in how EI is granted to farm workers.

Employment Insurance ActPrivate Members' Business

February 7th, 2007 / 6:10 p.m.


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Bloc

Yves Lessard Bloc Chambly—Borduas, QC

Mr. Speaker, first I want to thank and congratulate the NDP member for Acadie—Bathurst, for his perseverance in defending the unemployed for so many years, often in rather difficult situations, as the member for Cape Breton—Canso pointed out earlier. The situation in which he was put when the next to last budget was presented made things even tougher for him. The member for Cape Breton—Canso himself had probably not noticed, but $2.5 billion had been taken out of that budget. I think this was a deplorable misfortune about which the hon. member surely has regrets. It could even make him cry, but this is the past. Let us just say that such things should not happen again, because it does not help workers.

The bill before us is a positive measure that does two things. First, it reduces the number of hours required to qualify for employment insurance benefits to 360 hours, and bases benefits on the highest-paid 12 weeks. This means 12 weeks of 30 hours, thus making it easier for people to qualify.

As the hon. member for Acadie—Bathurst rightly pointed out, over 60% of workers are excluded from the employment insurance program when they lose their job, even though they have contributed to that program throughout their working life.

The parliamentary secretary and member for Blackstrap wondered whether these were good changes in this day and age. I find that question to be disconcerting. There is no specific era to determine whether we should help those in need or those who are not in need. There is no specific era for making such a distinction. There is no specific era for determining whether the government has a responsibility towards the unemployed. I think the answer is obviously yes. This bill provides proper solutions to the problems faced by the unemployed.

Ever since the Liberal Party reformed the EI program, the government no longer considers it to be an assistance program. It is a hidden tax that has particularly helped the Liberals achieve fiscal balance. However, the only ones contributing to the employment insurance account are the workers and the employers. As we are speaking, over $50 billion has been diverted from that account.

This is nothing new. Since 1998—when the incumbent was a man—and up to the most recent report, released on November 23, 2004, the Auditor General has reported that the government continues to loot the employment insurance fund, thus violating the rules that were set by the government itself.

As for the Bloc Québécois, of course we will vote in favour of this bill. It is a bill that addresses concerns that we raised with other bills. My colleague for Cape Breton—Canso said earlier that it is just one part of the measures that should be implemented. It is positive and it must be implemented.

It also reflects the will of the parliamentarians who sat on the Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities, which made 28 recommendations. By mid-December, it had made 8 recommendations and added another 20 on February 15, 2005. The measures found in Bill C-265 are actually measures recommended by the Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities.

This same committee had recommended that the misappropriated amounts be restored to the employment insurance fund. Guess what? Last year, the Bloc Québécois tabled a bill calling for the establishment of an independent fund, as recommended by the committee.

During parliamentary committee meetings on Bill C-280, it was the Conservatives themselves who suggested the rate at which the fund should be reimbursed.

Now that they are in power, they no longer hold the same positions they did when they were in opposition, back when they supported the Bloc's demands on this issue.

Let us review, in brief, the history of these bills. Last year, in the previous session, the Bloc introduced a bill that included these measures. Bill C-269, introduced by a Bloc Québécois member, is now in second reading in committee. It, too, contains these measures.

On November 8, the House of Commons voted to debate Bill C-269 in second reading.

This bill was drafted in response to the demands of major unions and groups of people who are unemployed. It acknowledges the real needs of unemployed people. These groups made statements to the parliamentary committee.

I would like to speak in detail about the costs of these two measures. In December 2004, Malcolm Brown, an assistant deputy minister at the Department of Human Resources and Social Development, stated that the Bloc's proposed measure concerning the 360 hours—12 30-hour weeks—would cost $390 million of a $16 billion budget. It would improve employment insurance and enable 90,000 more unemployed people to collect employment insurance. Furthermore, the assistant deputy minister calculated that the measure in this bill concerning the 12 best weeks would cost $320 billion. This measure alone would help 470,000 people in need. Those 470,000 would not have to collect social assistance from the provinces. Obviously, under the circumstances, they are currently exacerbating the fiscal imbalance.

Over the past 12 years in particular, the restrictions imposed by the Liberal Party on the employment insurance program have not only penalized people who lost their employment, but also the families of those people. They have also penalized the regions in terms of the regional economy. In your riding, Mr. Speaker, there is an annual shortfall of between $30 million and $40 million because the unemployed do not receive the EI benefits they are owed. It is scandalous. These people go on welfare, of course, which increases the burden on the provinces and Quebec, since they have to support these people.

In closing, the Bloc Québécois will support Bill C-265 in order to have it considered at second reading.

The Bloc Québécois sincerely hopes that the House of Commons passes this bill unanimously, or at least with a majority, refers it to second reading to deal with it quickly, receives it at third reading and that cabinet does not apply its royal recommendation to block this bill.

That would be the best thing that could happen for the unemployed. For once, the government—

Employment Insurance ActPrivate Members' Business

February 7th, 2007 / 5:55 p.m.


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Conservative

Lynne Yelich Conservative Blackstrap, SK

I am trying to tell the member because he has been jiggling the figures. For example, individuals who have never worked, or those who are self-employed, have not paid into the program and are, therefore, not eligible to receive the benefits.

The B/U ratio also includes those who have paid EI premiums but are not eligible for benefits because they voluntarily quit, they were unemployed for two weeks or less, or they worked fewer than the required hours.

When we look at the access rates of those for whom the program is designed, we can see that the actual rate is quite high and again over 83%.

Nevertheless, the government recognizes that in regions where unemployment levels are high, it can sometimes be difficult to obtain enough work to meet the employment insurance qualification requirements. That is why the EI program includes a variable entrance requirement, something that the member did not allude to.

The variable entrance requirement is designed to provide for consistently high program access by making monthly adjustments to qualifying requirements that reflect the latest unemployment rates in each region across the country. Do members think the member understands that this is designed to provide for consistently high program access by making monthly adjustments to qualifying requirements that affect the latest unemployment rates in each region across the country? This is where he is being served well by this employment insurance program.

When a regional unemployment rate increases, the entrance requirement is relaxed and the benefit duration is extended to allow more time for a successful job match. On the other hand, if a regional unemployment rate goes down, the entrance requirement is raised and the benefit duration shortened, thus recognizing the greater opportunities that are available for employment.

It is worth noting that to assist those with significant labour market attachment provides a significant benefit. For example, workers in high unemployment areas can get up to 37 weeks of benefit for about 12 weeks of work. All programs must have entrance requirements.

Bill C-265 proposes we abolish the variable entrance requirement and adopt a reduced flat 360 hour entrance requirement that would be the same for every region regardless of the unemployment rate.

There are a number of problems with this proposal. It would disproportionately benefit those living in regions with low unemployment over those in high unemployment regions. Reduced entrance requirements could create disincentives to work since workers may choose not to work beyond the minimum entrance requirements, and it would have only a very marginal impact on the number of additional people who would qualify for benefits.

The evidence indicates that the variable entrance requirement has played an important role in equalizing the percentage of individuals who meet employment insurance entrance requirements across various regions. Further, this measure could reduce labour force participation at a time when Canadians are facing growing labour shortages.

The new government is not in favour of eliminating the variable entrance requirement as the bill proposes. Evidence does not support abolishing it. This does not mean that the government is opposed to making improvements to employment insurance. I too have a soft spot for those who are unemployed--

Employment Insurance ActPrivate Members' Business

February 7th, 2007 / 5:50 p.m.


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Blackstrap Saskatchewan

Conservative

Lynne Yelich ConservativeParliamentary Secretary to the Minister of Human Resources and Social Development

Mr. Speaker, it never ceases to amaze me how dramatic the member who introduced this bill can be. He has to consider our position here. He went on about the Liberals and the Conservatives agreeing. What he has not realized is he is a member of the third party in the House and he probably will never be in the position to make this decision.

I am pleased to join this debate on behalf of the new government. Let me begin by saying that Canada's new government is committed to ensuring that the EI program continues to serve Canadians in an effective and timely manner. The government knows how important EI is to unemployed Canadians and we want to make sure the program continues to operate in a way that meets their needs in a prudent and responsible manner.

We are not only prudent, we are caring. That party, which claims to be everything to everyone, has forgotten that we do care, but we temper it and we balance it, and we balance it with prudence. That is why any proposals for a change to the program must be looked at in the context of the overall Canadian labour market, as well as be consistent with the fundamental objectives of the EI program, something that was missing from the member's speech. Most important, they need to be supported by evidence.

Bill C-265 is asking the government to amend the Employment Insurance Act in the following ways: to reduce the entrance level requirements for the employment insurance program benefits to a flat 360 hours; to eliminate the variable entrance requirement; and to introduce a new best 12 weeks approach for determining benefit rates. Those would be significant changes. The question is, are they the right changes for these times? To answer that question, let us look at the environment in which they are being proposed. Let us look first at the current state of the labour market.

Canada's labour market is strong. Canada's labour market is performing well. Some would say it is performing exceptionally well. According to Statistics Canada, the national unemployment rate, which currently is about 6.1%, is the lowest it has been in some three decades and the share of the population that is employed today is at near record levels. This is good news. It means more Canadians are working and the demand for labour is strong. It also means that the opportunities to find and keep work are many.

We also know that many sectors are experiencing labour market shortages and many are looking for more workers.

We also know that even in this strong labour market, many Canadians will go through transitions and will continue to look to the employment insurance program for support and the employment insurance program will continue to help Canadian workers.

Employment insurance provides financial support during periods of temporary unemployment. It can help balance work and life responsibilities. It can provide assistance as unemployed workers adjust to the market changes and seek help to re-enter the labour market. These are all important functions of the program. Anyone interested in how well the program is delivering on them can consult the latest monitoring and assessment report which is prepared by the Employment Insurance Commission.

The latest report, for example, analyzes the operations, the impacts and the effectiveness of the employment insurance program for 2005. It demonstrates that the program is clearly meeting its objectives. When it comes to access to employment insurance benefits, we know that over 83% of unemployed workers who had paid premiums into the program and who had recent job separation, who qualified, were eligible to receive benefits. In other words, despite the member's claims to the contrary, the evidence shows that access to the existing employment insurance program is actually quite high.

There are those who claim that the number of hours needed to qualify for EI benefits should be reduced because they say that too few unemployed persons receive employment insurance benefits in some parts of Canada. However, they are often quoting a statistic known as the B/U, or beneficiary to unemployment ratio. That is a misleading statistic. It is not an accurate indication of actual access to the EI program.

This is because the statistic includes those who have not contributed to the employment insurance program by paying premiums.

Employment Insurance ActPrivate Members' Business

February 7th, 2007 / 5:30 p.m.


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NDP

Yvon Godin NDP Acadie—Bathurst, NB

moved that Bill C-265, An Act to amend the Employment Insurance Act (qualification for and entitlement to benefits) be read the second time and referred to a committee.

Mr. Speaker, as always, it is an honour and a privilege to represent the people of Acadie—Bathurst in the House of Commons. It is also an honour to introduce Bill C-265.. I would like to thank as well the member for Sault Ste. Marie—that good northern Ontario city, as he said earlier—for supporting my bill.

Let me say at the outset, that we got off to a bad start because about 15 minutes before the bill was read in the House of Commons, I saw that the Conservatives were already calling for royal recommendation. I could see that the LIberals were going to support that and back what the Conservatives were saying.

In short, they are saying that the workers' money, the employment insurance premiums paid by workers and companies, does not belong to them. Those monies were seized by the federal government when the Liberals were in power, and were put into the government coffers, in the general revenue fund. Now, the government says that it wants to pay down the debt and balance the budget at the expense of workers.

From the start I said that was not right. In the past I have used the following example. The amount of tax paid is shown on an individual's pay stub. Usually, the tax is used to pay for things that the country has to fund, such as the health system, roads, pensions and all that. In addition, there is the Canada pension fund. What is the pension fund used for? It provides a pension to individuals when they are older. That is why these monies are withheld from workers' pay. The other deduction is for employment insurance. That is used to pay people when they lose their jobs. It is money that belongs entirely to the workers and the government is responsible for managing the employment insurance fund and making it available to them.

It is thus regrettable and shameful that this evening, in this House, the Conservatives have asked the Speaker for a royal recommendation for this bill, arguing that this money belongs to the Conservative government and that it will be used to pay down the debt and achieve a zero deficit at the expense of workers.

But coming back to my bill, which is an important one, when we ask that the threshold for becoming a claimant be lowered to 360 hours, this is like taking the EI fund and putting it back in the hands of the workers who have lost their jobs, to whom this fund belongs.

In Canada, only 32% of women who contributed to the EI plan currently qualify for benefits. Only 37% of men who had employment qualify for employment insurance benefits even if they contributed to the plan. This means that the vast majority of women with seasonal jobs or part-time jobs 20 hours per week will not be eligible for employment insurance initially, if they are required to accumulate 910 hours of work.

That is how the government came to play with the figures and with the formula to rob them of their EI. That is how it was done, and that was done under the Liberal government.

Today, we have a Conservative government. I cannot wait to hear the government line. I am sure that it will say that 85% of Canadians who are eligible for employment insurance do qualify for benefits. But if they are eligible, every one of them, not 85%, should qualify.

We in the NDP say that the money should go back to those who contributed. For example, students who pay EI premiums and attend university will never see a cent in EI benefits. Women who work but do not accumulate 910 hours and young people starting off on the labour market will never be eligible for employment insurance.

This is why the 360 hour level requested in this bill would help put the EI account back in the hands of those to whom the money belongs, and these people could finally qualify.

The National Council of Welfare has just released its latest report.

It indicates that reduced accessibility to employment insurance benefits is a cause of poverty among the various age groups, including children. In 1990, 80% of unemployed workers qualified for employment insurance benefits, compared to only 37% today.

How can the government say that 85% of workers qualify for employment insurance, when there is a $50 billion surplus in the employment insurance account? This is money that was taken by our governments, money that was taken from the country's poorest. Today, I would not want to find myself out of work. When a man or a woman loses his or her job, he or she goes back home and must tell the family that he or she will not be entitled to employment insurance benefits the next week. Imagine the impact on the family.

We are talking about poverty in Canada. The employment insurance program has generated poverty in this country. There are 800,000 Canadians who do not qualify for employment insurance. These are workers who lost their jobs. The Liberals and the Conservatives should be ashamed to have implemented such a system and to take workers' money. This is totally unacceptable and despicable.

I am also asking in the bill that we take the best 12 weeks, instead of the best 14 weeks. It is bad enough that workers only get 55% of their salary, up to a maximum salary of $740. Now, even though workers are only getting 55% of their salary, the government still feels it has not taken enough money from them. It will use 14 as a divisor, so that unemployed workers will barely get anything.

When the Conservatives were in opposition, they were interested in only one thing: lowering employment insurance premiums. There is not a single company in Canada that went belly up because of employment insurance premiums. However, I have seen families, women and children suffer because of the changes made to the employment insurance program.

This evening, I spoke to an employment insurance official. I am going to talk about a real case that I want the public to know about.

A woman in my riding decided to look after a senior who is over 80. The senior pays the woman $30 an evening, or $90 a week. The employment insurance service denied the woman employment insurance because this constitutes a work week. The woman stays 12 hours a night, because she spends the night at the senior's home. Her pay amounts to $3 an hour. This violates New Brunswick's and Canada's minimum wage legislation, but that is fine.

However, it is inconceivable that this woman, who looks after a senior, should be denied employment insurance. The government claims that this is a full-time job. The woman is paid $30 an evening for three days of work a week. Yet the Department of Human Resources claims she is not entitled to employment insurance. Do you think this is humane? The employment insurance system is in drastic need of reform.

When they were in opposition, the only thing the Conservatives did when recommendations were made was to call for lower premiums. Pity the poor companies. Their premiums are too high, they are going to starve, even though some are making billions of dollars.

In the nine and half years I have been a member of Parliament, I have never had a call from an employer in my riding complaining that its employment insurance premiums are too high. Never.

Where is our social conscience? Where is the wonderful country we like to boast about?

An employee does not decide one Friday not to come to work on Monday. What happens is that the employer has no more work for the employee. The employer asks the employee to stay home because of a lack of work. Why punish the employee? Why punish that person's family?

Why punish his or her children? In my riding, I receive cries from the heart from people who do not qualify for benefits because of the changes made to the plan in 1996. These are shameful changes, which are still in the statutes of Canada.

Yesterday, in the House of Commons, the Liberal leader said that the Conservative cuts were almost criminal. But these cuts were made by the Liberals, with the Conservatives' support, back in 1996. Earlier, when the Conservatives suggested that this bill would need a royal recommendation, the Liberal member rose and said that he was in agreement with that. That is what is making me say that there is no difference between the Liberals and the Conservatives. They are the same. It is shameful and monstrous to attack people who have lost their jobs and have been paying for a system that belongs to them, a system that they and their employers have paid into. Nowhere in Canada have I seen employers take to the streets because they were starving as a result of EI cuts or premium increases. I did, however, see families in that situation. I have seen thousands and thousands of them.

I want to commend two groups in Quebec: Mouvement Action Chômage and the Coalition des sans-chemise. People walked from Montreal to Ottawa and took to the streets in support of the workers, to defend their cause. I want to commend them. They have once again stood up and sought justice from our Parliament, from our governments. What a shame.

Allow me to come back to the divisor based on the best 12 weeks. In the fisheries sector, fishers can work between 70 and 80 hours per week for the first few weeks but that does not continue throughout the fishing season.

I have something to say to those in Ontario and the west who do not understand. At the end of the season, when fishermen work only 20 hours, that is considered a week. This is where the problem lies. This is a basic problem. One must accept that, in the fishing business, fish and cod cannot be caught on Yonge Street in Toronto. We cannot fish for lobster on St. Catherine Street in Montreal. Fish and lobster are caught in the ocean, and there comes a time when there are no more and when the work weeks are shorter. That is why it is shameful to set the divisor at 14, when these people have only 55% of their salary. Thus, they are punished twice.

For example, the greatest gift that could be offered to my riding of Acadie—Bathurst would be investments to ensure that everyone there has jobs. They would be happy to work 12 months of the year. Instead of constructing enormous buildings here in Ottawa and providing all services from Ottawa, why not invest in the regions where the unemployment rate is high?

Peter Mancini, former NDP member from Cape Breton, proposed creating new jobs in regions with high unemployment in order to help these people find work. We do not want to move the jobs. People back home do not want to leave the riding of Acadie—Bathurst, they do not want to leave Caraquet, they do not want to leave Shippagan, they do not all want to go out west to work for the big oil companies that the Prime Minister favours by decreasing their taxes and cutting benefits for workers who lose their employment. It is shameful. It is monstrous, shameful and unacceptable.

That is why I am calling on this House, on behalf of workers in Canada and in Quebec, to support the bill, to decrease the number of hours so that women in our country will be equally entitled and there is no discrimination. Let us stop abusing the women in our country.

We can also help people by lowering the divisor from 14 to 12. This would have an impact on the amount of money they receive. Given the number of hours they work in a week, this equals 12 weeks. That is why a divisor of 12, not 14, would be right.

Mr. Speaker, with that I want to thank you for giving me the opportunity to talk about Bill C-265.

Once again, I am asking for the House of Commons to support the workers. In the meantime, keep in mind that this money does not belong to the Government of Canada. It belongs to those who contributed, namely the workers.

Bill C-265--Employment Insurance ActPoints of OrderGovernment Orders

February 7th, 2007 / 5:05 p.m.


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Regina—Lumsden—Lake Centre Saskatchewan

Conservative

Tom Lukiwski ConservativeParliamentary 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 Bill C-265. Without commenting on the merits of the private member's bill, I would appreciate your consideration on whether the bill requires a royal recommendation under Standing Order 79.

Bill C-265 would increase employment insurance benefits by lowering the threshold for eligibility for some claimants in changing the formula for the calculation of benefits. Both of these changes would result in significant new expenditures under the Employment Insurance Act.

Precedence clearly establishes that bills that create new government expenditures for employment insurance benefits require a royal recommendation.

Mr. Speaker, on December 8, 2004, you ruled, in the case of the 38th Parliament's bill, 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, you ruled, in the case of Bill C-269, extending employment insurance benefits, that:

Funds may only be appropriated by Parliament for purposes covered by a royal recommendation, as explicitly stated in Standing Order 79(1). New purposes must be accompanied by a new royal recommendation.

Again, on November 10, 2006, you ruled, in the case of Bill C-278, extending benefits, that:

...would require the expenditure of additional funds in a manner and for a purpose not currently authorized. Although contributions to the employment insurance program are indeed made by employers and employees, appropriations for the program are taken from the consolidated revenue fund and any increase in such spending would require a royal recommendation.

These precedents apply equally to Bill C-265, which should be accompanied by a royal recommendation.

Bill C-265--Employment Insurance Act--Speaker's RulingPrivate Members' BusinessRoutine Proceedings

December 7th, 2006 / 10:20 a.m.


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The Deputy Speaker Bill Blaikie

Order. At this time I would like to share with the House a ruling. The Chair would like to take a brief moment to provide some information to the House regarding the management of private members' business.

On May 31, 2006, after having reviewed all of the bills on the order of precedence which, at first glance, appeared to involve spending, I shared with the House a list of bills that caused the Chair some concern. Without making any decision on these bills at that moment, hon. members were invited to present arguments as to why, in their view, each of these bills did or did not require a royal recommendation. This practice of preliminary review is one that the Chair intends to continue.

Accordingly, following the replenishment of the order of precedence in November, I have reviewed the additional bills that have come forward for consideration. I can report that only one of these bills, 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, gives the chair some concern, given the spending provisions it appears to contemplate.

The Chair would encourage hon. members who would like to make arguments regarding the need for a royal recommendation for this bill to do so at an early opportunity.

I thank the House for its indulgence in this matter.

Income Tax ActPrivate Members' Business

October 30th, 2006 / 11:30 a.m.


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Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

Mr. Speaker, I am happy to speak about this issue today. I also had the opportunity to talk about Bill C-265.

This is not the first time a bill on taxing social security payments has come before this House. In November 2004, my Conservative colleague was on this side of the House, and we shared his joy when his spouse gave birth to a child. Naturally, we congratulated him.

Today, I congratulate him on again raising this issue by introducing Bill C-305. The purpose of this bill is to reduce the tax rate from 85% to 50% for Canadians and Quebeckers who receive United States social security payments.

At first glance, this bill might not seem very important. But this issue affects thousands of Quebeckers and Canadians. For over 20 years, we have been looking for an equitable way to solve the legislative problem facing Quebeckers and Canadians.

Why could Canadian and Quebec citizens who receive payments from the American government not benefit from the same conditions as American citizens who receive a pension from the Canadian and Quebec governments?

To help members understand where we are at today, I will give some background on this issue. Four protocols have been negotiated between the United States and Canada. I want to talk about the fourth protocol, signed in July 1997 with a number of other countries, including the United States. Under this protocol, only the country of residence is able to tax social security benefits. Since then, Canada has been able to tax American benefits paid to residents of Canada and Quebec.

The problem is that the protocol gave Canada, under the U.S. Social Security Act, the right to increase the tax rate from 50% to 85%. Bill C-305, before us today, would correct this situation.

The Bloc Québécois supports the bill, because it rectifies an error the previous government made in 1997. Several thousands of Quebeckers left their families to go work in the United States, often for years, and have been punished by the provisions of this legislation. These are people who, in many cases, were close to their roots and did not want to leave their country for the United States.

The 1997 legislative amendment enabled the federal government to bring in a lot more revenue at the expense of a population that could be considered vulnerable and economically weak. It is important to understand why Bill C-305 is now before the House and how it corrects a past blunder.

As I mentioned, historically, four protocols have modified the Canada-United States tax convention. In 1980, the income tax convention provided that social security benefits are taxable only in the originating country. It was only sometime later that the benefits were initially taxed in the United States.

The portion of benefits deemed taxable rose from 0% to 50%, depending on the taxpayer's net revenue and when the benefits were paid.

Modest income families and individuals were generally exempt from paying taxes on their benefits. In March 1984, a second protocol modified the Canada-U.S. tax convention. This agreement made social security benefits taxable only in the taxpayer's country of residence. From then on, 50% of the benefit amount was exempt from taxation.

For example, an American citizen residing in Canada was taxed on 50% of the benefits received from the United States. Bill C-305 is designed to return to this situation.

A third protocol was signed in March 1995. It gave the country paying benefits under social security legislation the exclusive right to tax those benefits.

This means that the United States taxed social security benefits paid to Quebec and Canadian residents at a rate of 25.5%, while Canada did not tax benefits received by American taxpayers.

Finally, the fourth agreement to amend the tax treaty was signed in July 1997. It provided that benefits paid under U.S. social security legislation to a resident of Canada would be taxable only in Canada, as if they were benefits under the Canada Pension Plan, except that 15% of benefits were made tax exempt in Canada.

Under this agreement, the tax rate became 85% of the payments made to Canadian residents.

However, the last agreement provides that the benefits paid under Canada's social security legislation to a resident of the United States are taxable only in the United States.

Essentially, the purpose of Bill C-305 is to reduce from 85% to 50% the tax rate on United States social security payments received by Canadian taxpayers.

For over 20 years now we have been trying to find a fair and equitable solution for all Quebeckers and Canadians dealing with this problem.

Thousands of Quebeckers and Canadians live near the border and have been suffering the never-ending repercussions of these tax reforms over the past 20 years.

Of course, this measure does not come without a price, but it is a small price to pay considering the thousands of people who have sacrificed their lives and their families to work far from home and their loved ones. These people wanted to stay here and keep their identity.

We, the Bloc Québécois, support lowering the tax rate on benefits paid to taxpayers, from 85% to 50%, because it corrects certain injustices. For this reason, I would like to congratulate the hon. member for his bill, which we will support.

Income Tax ActPrivate Members' Business

October 30th, 2006 / 11:05 a.m.


See context

Conservative

Jeff Watson Conservative Essex, ON

moved that Bill C-305, An Act to amend the Income Tax Act (exemption from taxation of 50% of United States social security payments to Canadian residents), be read the second time and referred to a committee.

Mr. Speaker, I am very pleased to rise today to speak to Bill C-305, an act that is designed to lower from 85% to 50% the inclusion rate for the amount of income taxable for Canadian seniors who collect the U.S. social security pension.

I spent a lot of this past weekend in reflection, thinking about things that are important. I thought back to about 10 years ago and how very different things were for me, when I was unmarried and worked at a job scrubbing giant inflatable balloons as they came back from parades. Ten years later, some things have changed in my personal life. I am now married with four kids. I am no longer scrubbing inflatable balloons but have the great privilege of being a member of Parliament representing the communities of Essex.

Sadly, 10 years later some things have not changed. Bill C-305 exists because an injustice was committed a little more than 10 years ago and still needs to be righted.

As I said earlier, Bill C-305 is about lowering the inclusion rate from 85% to 50% for retired Canadian seniors who collect a U.S. social security benefit. This follows on the heels of two previous private members' bills, one by the member for Calgary Southeast and my own private member's bill in the last Parliament, Bill C-265, which passed second reading, as members of the House may know, and went to the finance committee, where it died a very slow death.

There are a lot of new members in the House since the last election and there may be Canadians looking in on this debate this morning who may not know exactly where this particular bill fits in history, so I want to take a few moments to go back and look at how we got to where we are today.

A major change occurred on January 1, 1996, for about 85,000 Canadian seniors in Ontario, Manitoba, British Columbia, Quebec and New Brunswick, who lived in Canada but happened to work in the United States and upon retirement collected U.S. social security cheques. What happened on January 1, 1996, is that their entire retirement changed. They were given a pretty substantial tax increase that changed the economic presumptions for their retirement years.

Of course, that all started three weeks before January 1, a week before Christmas in 1995. When most kids were writing letters to Santa Claus about all the good things they would like, these seniors received letters from a government agency informing them that in three weeks the way they were taxed was going to change.

We have a Canada-U.S. tax treaty that exists for some very important reasons. The two countries came together and agreed, for example, on how a Canadian resident in the United States, or an American who collects CPP, the Quebec pension plan or old age security, was going to be taxed and treated. We had to define on this side how we were going to treat Canadians who collect U.S. social security pensions or Americans who happened to be resident here as well.

At one time, these seniors were not taxed at all but in 1984 two protocols to the Canada-U.S. tax treaty changed the way they would be taxed. They were taxed in the country of residence, not in the source country, where the benefit came from. The maximum inclusion rate was set at 50%, so half their income would be included for taxable purposes. That was the situation that existed from 1984 to 1996.

Then came the third protocol, in the dreaded Christmas letter that these seniors got. The change was that their taxation would be done in the source country, where the benefit came from. They would have 25.5% of their income withheld at source.

Let us imagine this change. There was literally no time for these seniors to respond. There was no ability to cushion against the shock of such a change. There was no control over the benefit they received because it was withheld at source, so what they would get is all they would get. It was a tremendous and very drastic change that happened over that Christmas season. Starting January 1, suddenly 25.5% of their income was withheld at source and they got a much smaller pension cheque.

At that time, a citizens' group mobilized in the region. Canadians Asking for Social Security Equality mobilized very quickly and in large numbers, because many seniors were affected. In our region, I think the member for Windsor—Tecumseh will recall some of the meetings at the time. They came out in the thousands and forced the government of the day to go back to the table and renegotiate with the United States.

In Canada at the time, the finance minister, the current member for LaSalle—Émard, was looking to balance his budget. In the United States, President Clinton was looking to balance his budget and saw an opportunity to tax the richest of the seniors in the United States. He saw this as his opportunity to do that.

Therefore, we had a fourth protocol negotiated between the two countries. It changed back to residence taxation instead of these seniors being taxed in the nation where the benefit came from. But something interesting happened. After these seniors were promised that this was going to be a revenue neutral change, many of them were expecting that we were going back to the 50% inclusion rate. They had a really nasty surprise. The inclusion rate was set at 85%. It did not go back to the way it way before January 1, 1996, so instead of the wrong being righted, it was compounded.

It would be nice to point out, of course, that the finance minister of the day left a convenient loophole for family ships not to be taxed. That was in the same piece of legislation, the same treaty whereby these poor seniors were getting a whopping 70% tax increase. What a cruel irony that the rule-maker got to make the rules in his favour while thousands of seniors, who do not have any ability to make or change rules but are affected by them, had a tax increase instead.

As for Canadians Asking for Social Security Equality, what an incredible group. They mobilized in four successive elections, in 1997, forcing the government of the day to go back and renegotiate, and in 2000, 2004 and 2006. I say this with some bittersweet feelings. This group is very successful at mobilizing and at keeping this issue before candidates, prospective members of Parliament and prospective governments. However, I was talking not long ago with some of the folks doing the phone calls. With every election and every phone call, the cold hard reality is that yet another member is deceased, and another and another, or the latest ailment or disease is afflicting the few who survive.

Of course, this news kept coming, election after election. I can tell members that CASSE does not want to mobilize for another election. Quite frankly, its members should not have to. In my opinion, it is time to pass this private member's bill and get on with this measure. Or also, I would be pleased if this wound up being a line item in a budget, something for which I am working hard.

These seniors have been waiting a long time. They are looking for justice. Who are these seniors? Let us go back and look at what that generation achieved. Certainly they worked in the United States, but they lived in our communities. They built our communities across Canada. Talk about great foreign investment: they went to the United States, brought back their wealth and invested it in our communities here.

Let us go back and imagine these seniors in their prime. World War II has ended. They set about growing families and building homes and barns, hospitals and fire halls in their communities, delivering the services that were necessary and starting the businesses that employed others. They built community centres and churches, improving the quality of life in their communities. They went to work in the auto factories, building the cars their generation would drive. They worked the fields, harvesting and sending product to market.

Former NBC news anchor Tom Brokaw called these seniors “the greatest generation”. I do not call them the greatest generation; I call them the selfless generation, a good example to my generation. They were the dreamers. They had a good vision for this country. They were the builders. With their bare hands and their hard work they built this country and made it what it is today.

Those people were selfless because they thought about the generations to come. They did not think about what they wanted or what they could get from everyone else. They thought about what they could save and invest in their children and grandchildren. That is the kind of thinking of this generation. They planned for their own self-sufficiency. They did not ask anybody else to do anything for them. They saved their pennies. They worked hard. They did not just suddenly get to retirement and wonder who would take care of them. They were thinking long before that. This is why this was such a cruel thing. They knew that if they lived to a certain age they would need to save enough to be fine when they retired.

They were the givers. They gave to others and to charities. They started community groups that worked hard to meet the needs of people in their community. They were fundraisers. They went out and raised money for all kinds of noble purposes in their community. They were the generation that never asked for anything in return.

What happened to these seniors? Many have been forced from their modest accommodations into nursing homes or forced to move in with siblings who were also senior citizens. However, this move was symbolic of something, I think, much deeper. They have been forced from independence to a situation of dependence, which is what this tax increase did.

Seniors have been forced into making choices that they never thought would happen. They do not know whether to pay for their prescription drugs this month or to pay the gas bill to keep the gas on in their homes. They do not know whether they should buy groceries or pay the electric bill? The wonder if they can buy a gift for their grandchild's birthday or if they can lend money to their son or daughter who is in a bit of financial difficulty. This is the generation that saved and planned so they could give to other generations but they cannot make those choices any more. That is what this tax increase did to them.

They are bitter. They were misled. They were told that things would go back to the way they were before. It never happened. Their esteem and their future plans for retirement have been shattered through no fault of their own.

There are several roots to bitterness but one of them is the feeling that we are owed something.

While tax relief for any senior is good thing, and I support those measures, for these seniors they are owed something. They are owed a change, a change that will help them heal and help them get to back on top of their lives.

I am calling on members of this House to come together and to find the will to act now so that these seniors get back on top. We owe it to them.

Employment Insurance ActRoutine Proceedings

May 8th, 2006 / 3:05 p.m.


See context

NDP

Yvon Godin NDP Acadie—Bathurst, NB

moved for leave to introduce Bill C-265, An Act to amend the Employment Insurance Act (qualification for and entitlement to benefits).

Mr. Speaker, I am pleased to introduce a bill concerning the best twelve weeks. The Liberal Party had a chance to pass a bill for workers who were short work weeks and found themselves falling into what is known as the seasonal gap.

The best twelve weeks will help seasonal workers. This bill also proposes 360 hours. I am pleased that the member for Vancouver East is seconding this bill. I hope that all members of the House of Commons will support it.

In Canada, only 33% of women who pay employment insurance premiums are eligible to receive benefits. The $49 billion that disappeared from employment insurance coffers were contributed by workers. In Canada, only 38% of working men are eligible for employment insurance.

This bill will bring justice to Canadian workers. The Liberals could not do it, but I hope that this Parliament and its minority government will succeed in passing this bill.

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