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.

Employment Insurance Act

[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.

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

Mr. Speaker, the member spoke about premium rates. He did not really think that the dollar increase to premiums was important.

Manufacturing is very important in Quebec and small business is important. There is a huge constituency of people across Canada who have small businesses. In fact, about 98% of small and medium business enterprises have 500 or less employees and some of them less than 100. These are small businesses. I can see, and I want to ask this member if he can see, what an unfair burden this would be on small businesses?

These are large numbers. He speaks a lot about the industry in big numbers, but what about the big numbers of small businesses out there? There are very many small and medium business enterprises that have less than 500 and some less than 100 employees. An increase in premiums would mean a lot to these employers and employees. That is my question.

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

Mr. Speaker, I want to thank the Conservative member for her question, because it allows me to further explain our position on this issue, with regard to reducing the premium rate for businesses.

The example she gave of businesses with 100 employees or less is increasingly less frequent in a number of our regions. I could explain what happened at home, where three major companies, namely Gaspésia in Chandler, Mines Noranda in Murdochville, and Stone in New-Richmond, had several hundred workers, that is 400, 500 or 600, depending on the location. However, these companies are no longer in existence.

Most of the companies that are in operation in regions such as ours are very small businesses. I do not like terms such as small, major or big, because they are businesses nonetheless. However, they may have one employee or 50 or 10. When these people see that the premium rate is set, but then goes down continuously, they ask themselves this question: Is the fact that their premium rate, as employers, is going down such a good thing, considering that their business employs 5, 10, 15 or 20 people? The entrepreneur realizes that there is the clientele on the other side. Unemployed people also buy products. In a way, this is also part of the economy.

They realize, through the principle of solidarity—and that is what you must understand in my explanation—that it is more important to make even a slight improvement to the employment insurance program than to make a minimal reduction in the premium rate. In some cases, the reduction does not have any effect. Real savings are realized by companies with 1,000, 5,000 or 10,000 employees. In these cases, the premium rate may come into play and provide the shareholders of these large companies with a little more money. However, whether we are dealing with a very small, small, medium-sized or large business, it thinks in terms of solidarity.

That is what I would like my colleagues, and particularly my colleague who asked the question, to think about with respect to creating an independent fund. Setting a premium rate solely out of political interest runs the risk of again being a complete mistake. For this reason, the creation of an independent fund, with an independent commission where employers, employees and the government would be represented, would perhaps make it possible to correct this type of injustice.

[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.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I thank and congratulate the member for Gaspésie—Îles-de-la-Madeleine for again raising issues related to employment insurance, or unemployment insurance.

The Parliamentary Secretary to the Minister of Human Resources and Social Development has given us a real history and has berated the House and parliamentarians for raising employment insurance yet again in the House, asking to consider changes. That is our right and our responsibility. In certain regions of the country it is even more acute that those changes be considered.

Consider, for instance, the situation now in Alberta. There is no unemployment in Alberta. They are paying people in fast food restaurants twice what they are paid in most other provinces because they cannot find enough people. These people pay their employment insurance and will not collect any benefits because there is full employment in the extreme.

There are regions of the country where that is not the case. The member has laid out, on behalf of his constituents, his province and the Maritimes, where seasonal industries are a unique challenge for the system. Right now the system does not properly respond to that economic, industrial or business based reality.

We could ask why these seasonal workers do not get another job after that season is over and go into another business rather than another season. We could say that the onus is on them. That would be an ideal solution if there were another seasonal industry in the next season where they could readily get a job.

It does not happen that seamlessly. The reality is people are trying to work hard, trying to make a living and supporting their families and themselves, but there is a disruption and it is a constant disruption.

Maybe the question for the parliamentary secretary to ask of the minister is this. Do we want to pay some attention to the unique situations in regions and provinces of our country, where in fact the options are not as readily available? Do we really want to let it keep going?

Are there some options? Could there be some business development initiatives to create the work in those areas where there will a skilled and ready workforce available for companies that are there? That is the party that talked about the Maritimes as having a defeatist attitude, that they did not want to work. That was the Prime Minister.

I know the Conservative attitude. Anybody who claims EI must be a burden on society, that they are doing it on purpose and taking money out of the system.

This is a rash condemnation of a lot of Canadians who are in that situation. In my own riding a lot of people who collect EI. Also a lot of people pay EI all their lives and never collect a penny of EI benefits in their entire working career. That is a good thing because EI is an insurance program. It is our wish that no Canadian would ever have to draw on those benefits.

The system should be there regardless of where a person lives in Canada, to ensure that there can be some support and assistance to allow people to live in dignity with their family when they cannot get a job.

We also know there are specific cases in the industries that the member raised such as the tourism, forestry and fisheries industries. These are vital industries. Some would ask this question. If they are so vital and if they are seasonal, which means they are in high demand for skilled people at the time when the season is at its peak, why are those industries paying so poorly and thereby reducing effectively the amount of benefits for which anyone would qualify? This is a problem to be addressed.

This bill needs a royal recommendation and it is clear that is not going to be forthcoming from the government. That has already been stated. The other day the Speaker reaffirmed that this bill requires a royal recommendation. It will get the debate, but at the end of third reading debate, the question will not be put, the bill will die and we will have had this discussion.

Every time we have this discussion the member should take some encouragement from the fact that in the Parliament of Canada we are raising again for the interest of anyone whose ears will listen that there are challenges that we can meet.

The parliamentary secretary preferred not to talk about the member's bill which is her right and I respect her right, but to say that it was the Liberals who mismanaged the fund, well there is a commission--

[Lynne Yelich, Conservative, Blackstrap, SK]

Now.

[Paul Szabo, Liberal, Mississauga South, ON]

Now she is going to argue with me and we will talk about it later.

The problem is that in the years of the Conservative government of Brian Mulroney, the EI fund, which currently is in a surplus position, was actually in a deficit position of $12 billion.

I hope the parliamentary secretary will pay attention for a second. The Auditor General told the Government of Canada that this is a program for Canadians that has revenues coming in and expenses going out. It is inappropriate to have that accounted for outside of the consolidated revenue fund, the bank of the Government of Canada, because it is not a fair reflection of the economic condition of the country and the performance of the programs which the taxpayers' dollars support.

Accordingly, the Auditor General told the government that it must incorporate the financial activities of the employment insurance program into the consolidated revenue fund so that we have a fair reflection of the finances. That is how it happened.

The commission that was set up continued to keep track of money in and money out. When there is a surplus, interest is being earned by the fund. It is not money just sitting there for the use of the government.

The commission is charged to do certain things. One is to ensure that there always is at least two years of benefits available in the event that the country would enter into a deep recession. The commission is to assess the trend line of the economy and the projected benefits, et cetera coming in and out to determine how much it can reduce premiums, or if there is an introduction of new programs, take those into account. In any event, the activities recommended by the commission are to bring that EI account into the direction of getting it down closer to the level of the two years.

What has happened? Under the government of Brian Mulroney, EI premiums were scheduled to go up to $3. When the Liberals took office in 1993, we immediately reduced them and they in fact have been reduced each and every year since then by the Government of Canada.

Who would have thought when the U.S. went into a recession that Canada would not go into a recession? Who would have thought we would have the economic performance that we enjoy and the surpluses we have had, because we have had the lowest unemployment in 31 years because we have had a sound growth rate and good economic management? That is a reflection of why the EI surplus continues to grow. It is almost impossible to wipe it out too quickly.

There are ways to deal with this. Members could say that it is in the consolidated revenue fund. If we want to set up a separate account, first of all let us determine whether the Auditor General will be in favour for good accounting reasons and I think that is not the case, so that is not the option. The issue is how to bring it down in an orderly fashion so that it is fair to all.

Again, I thank the member for raising the issue. I think this is one that is clear from some of the statements I have heard from the parliamentary secretary that the government still does not understand from where we came, where we are, and where we are going.

[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.

[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.

[The Acting Speaker, Conservative, Royal Galipeau]

The time provided for the consideration of private members' business has now expired, and the order is dropped to the bottom of the order of precedence on the order paper.

It being 2:30 p.m., the House stands adjourned until next Monday at 11 a.m. pursuant to Standing Order 24(1).

(The House adjourned at 2:30 p.m.)

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.

Speaker's Ruling

[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.

[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.

[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--

[The Deputy Speaker, NDP, Bill Blaikie]

Order, please. The Chair is informed, unless hon. member insists to the contrary, that the hon. member spoke in the first hour of debate on this bill. Therefore, he is not eligible to speak.

[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.

[The Deputy Speaker, NDP, Bill Blaikie]

In my opinion the nays have it.

And five or more members having risen:

Pursuant to Standing Order 93 the division stands deferred until Wednesday, November 28, immediately before the time provided for private members' business.