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.

Speaker's Ruling

[Paul Szabo, Liberal, Mississauga South, ON]

I apologize, Mr. Speaker.

[The Deputy Speaker, NDP, Bill Blaikie]

At this point I recognize the hon. member for Vancouver Island North

[Catherine Bell, NDP, Vancouver Island North, BC]

Mr. Speaker, it is a pleasure to rise to speak to this bill. Also, let me take this opportunity to congratulate you on your award that you received last night as parliamentarian of the year. It is nice to see award-winning politicians in this House.

There is roughly $54 billion in our employment insurance fund that is surplus. One might ask how we got so much money in there. It is obvious we need to have this money in a separate account. As the previous speaker said, it is not in an account that cannot be withdrawn from by this government. This bill proposes to name a commission in section 71 of the bill. It proposes a separate account and sets out how the fund would be directed, and how the government could borrow from it.

This surplus seems to be growing. I started to think about that aspect of it and why we needed to protect that money. I realized that this EI system that was created over 70 years ago has gone through many changes. This is just one more change to the act and to the fund that would work in the interests of workers.

This program was set up basically to provide financial support for the unemployed. As workers we pay our EI premiums and our employers pay premiums as well into this fund. If we find ourselves unemployed, as did thousands of manufacturing workers this year, the many forestry workers in my riding, fishermen, seasonal workers, that fund is there. That is how it is supposed to work.

Among some of the changes that have taken place over the years, 1971 saw the biggest positive changes when benefits were extended to those whose earnings were interrupted because of sickness or pregnancy. Of course, that benefited many women who were in the workforce. Otherwise, they went off to have their child and basically did not get anything. Even though they had worked, it was not considered a reason for leaving work. It was not insurable.

Unfortunately, since 1971 and those positive additions there have been many cuts to the EI program. In 1990, for instance, around 74% of the people who applied were eligible to receive unemployment insurance. By 2004 that number had dropped to 36% for men, and the number is even lower for women with only 32% of women eligible for EI.

The impact is threefold on women who make lower wages, or who are seasonal or part time workers. The impacts are much greater on them. That, to me, is a real hardship for women.

Qualifications for quitting for just cause was another impact on workers. Originally, if spouses were relocated or had to move for their job, such as military personnel or anyone who may be posted around the country; if they quit for discrimination or sexual harassment and, of course, primarily women were leaving work for those reasons; or if they had obligations to care for a child or a direct family member, they were entitled to unemployment insurance, but no longer. They do not qualify anymore.

People also used to qualify in numbers of weeks. I think it was around 15 weeks, which is approximately 300 hours worked. Now they can only qualify by hours worked and the number is 700, more than double. That needs to also be reduced so people can access employment insurance.

This is one of the biggest barriers to women who work fewer hours, who work seasonal or part time work. It takes a long time to get that many hours. This disqualifies many women from accessing EI. No wonder we see $54 billion in surplus when people cannot access EI. We are down to less than half of the people who think they are eligible, 36% and 32% for men and women respectively. No wonder we have this huge surplus. It is sad.

One the other hand, when people do qualify, they have to wait, in some cases 45 days, to know whether they qualify. This makes it very difficult on families and people who find themselves unemployed through no fault of their own most of the time. This causes real hardship in our communities. That money needs to be protected for those workers.

We would like to see an increase in the amounts that people are paid over time. The cost of living is going up all the time as are housing costs. People need to feed themselves when they find themselves unemployed.

Sadly, the EI system is not working for everyone in the country. Many people have told me their stories and they face hardships when the system does not work for them. They find themselves having to struggle to make ends meet. We should not put people in that position.

The other thing is the government seems to think people are using employment insurance as their sole source of income, working a little here, a little there then getting EI. If people are doing that, they are very few and far between. Most people who find themselves on EI are there because they have lost their jobs through no fault of their own in most cases and are looking for another job. They need EI, which is there to provide financial support for them, as something to fill in the gaps while they look for their next job.

The least we can do, especially when, like any other insurance plan, we pay into it over years and years. Then all of a sudden when we find ourselves out of work, it is not there for us, and that is a shame.

A lot of the money in the fund could also be used for training. There used to be training programs. People need to be retrained if they are in an industry that is no longer viable or that is disappearing. We have seen a lot of places where people need to be retrained and EI could provide some of the funds for those training programs. It would help them get back into the workplace quicker. Those would be things that all members of the House could support.

However, I think the biggest fear of ordinary Canadians is that their EI premiums will be decreased and we will see a big decrease in the fund because of easy access to it. When people pay premiums into it, they know there is a program that is supposed to be there to support them and protect them in times of unemployment. They are happy to pay those premiums if that fund is there.

I encourage hon. members to support this and ensure that the EI fund is there for the future. Even though the economy is good right now, there are changes all the time and people could find themselves in a situation where they will need—

[The Deputy Speaker, NDP, Bill Blaikie]

Resuming debate, the hon. member for Chambly—Borduas.

[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.

[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.

[Claude DeBellefeuille, Bloc, Beauharnois—Salaberry, QC]

Mr. Speaker, I am very pleased to take part in the debate on this important bill. I would remind the House that I am the member for Beauharnois—Salaberry, a riding in which 80% of the land is agricultural and the other 20% is made up of industrial zones where towns such as Huntingdon have been classified as one-industry towns because of the textile factories. I am in a good position to discuss unemployment, because, since 2004, my riding has lost more than 2,500 jobs in the manufacturing sector.

Clearly, as an elected representative, along with my provincial and municipal colleagues, we are working hard to recreate a dynamic economy, seeking employment opportunities and trying to create new jobs. This is not easy, given that our community was built around large factories that employed many people. However, since globalization has changed the rules of the game, factories are closing their doors, like the Goodyear factory in Valleyfield, which closed a few months ago, actually nearly a year ago, resulting in the loss of 1,000 jobs. In addition to that, Quebec's only steer slaughterhouse lost 250 modestly paid jobs —at about $15 an hour. At this time, there are good workers in Saint-Louis-de-Gonzague who are unemployed.

Those in government—the Conservative members—should not think that the Bloc Québécois wants people to be unemployed. Quite the contrary, it is obvious that the Bloc Québécois wants everyone to have a job. Unfortunately, the situation is such at present that some individuals have to avail themselves of the employment insurance program and apply for benefits. They do not always do so lightheartedly. Having assisted a number of people who are having to negotiate with the federal bureaucracy to get their benefits, I can assure the House that these people are not jumping for joy.

I mentioned earlier that my riding is an agricultural one. This means that we have many seasonal employees working in orchards and fields. Unfortunately, by the end of the summer, these employees have not accumulated enough hours of work to qualify for EI benefits which could help support them with an income and eventually find another job during the course of the year.

It is not their fault. Seasonal workers, even those doing a good job, will normally experience a gap, and have trouble finding work until the season begins and then continues from spring or the summer into the fall.

This reminds me that, a few weeks ago, my colleague from Chambly—Borduas visited my riding to discuss with workers and union members all the measures the Bloc Québécois has put forward over the years, including legislation to improve the employment insurance system and all the representations we have made to press the government to deliver on its promise and establish a real program to help older workers.

An old idea which has been in the Bloc Québécois platform for years, namely an independent EI account, is now being put forward. The 20 or so union members and representatives in the group were not overly surprised to hear how much resistance and opposition to such legislation there has been on the part of the Conservative government.

We have to ask ourselves this: why would a country with profits and excess revenue not use some of that money to help those workers who need guidance and support while going through a transition period during their working life?

We are running out of arguments to give when people ask us why the government is reluctant to get behind the bill before us today and give it royal assent, since the money in the EI account does not belong to it.

We know that the fund is made up of worker and employer contributions. What gives the government the right to take workers' and employers' money out of the fund surplus and spend it elsewhere, probably to pay down the debt?

I look good in this political debate, because everyone agrees with me. People do not understand this resistance. If the country was broke, on the brink of bankruptcy, then it might make sense, but the reverse is true. We are headed for quite an unacceptable surplus, and people are astounded.

I cannot wait to cross swords with my adversaries and ask them to explain to the unemployed people in Beauharnois—Salaberry why they voted against the bill designed to improve employment insurance, against an older worker adjustment program and, today, against creating an independent employment insurance fund.

In closing, I want to repeat what we have been saying for the past hour. Since 1994, the unemployment insurance fund surplus has fluctuated constantly, reaching a truly unacceptable high of $51 billion in total in February 2007. This is no small amount. We are talking about $51 billion.

When the Conservatives were in the opposition, they decried this situation and demanded that the Liberals, who were in power at the time, cease pillaging the fund. When the Conservatives came to power—which turned out to be more of the same, really—they kept on using surpluses from the employment insurance fund, a fund that workers and employers contribute to. They are still using these funds for purposes other than those for which workers and employers contribute.

In 2006, 44% of unemployed people collected benefits. Despite surpluses in the fund, despite the country's relatively good economic health thanks to these impressive surpluses, the government is refusing to improve or change the employment insurance program. That is hard to accept. It is infuriating.

When I meet workers who have lost their jobs, they ask me why they are not eligible for employment insurance. They have contributed for much of the year, but they are a few hours short. They wonder why the government refuses to support them through hard times or to help them find another job. It makes me very sad to have to tell them that their government has no interest in supporting or helping workers who have fallen on hard times, even though it could if it wanted to.

If the government members listened to what members of this House had to say, they would be aware of the issue and they would realize that they have to change their minds and agree to this bill so that we can pass it and debate it again. This is a comprehensive bill that will work for workers. Our country and its government are in a position to make this happen.

[The Deputy Speaker, NDP, Bill Blaikie]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker, NDP, Bill Blaikie]

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.

[The Deputy Speaker, NDP, Bill Blaikie]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker, NDP, Bill Blaikie]

All those opposed will please say nay.

[Some hon. members]

Nay.