Bill C-279 (Historical)

An Act to amend the Employment Insurance Act (amounts not included in earnings)

This enactment provides that pension benefits, vacation pay and severance payments are not to be included in earnings under the Employment Insurance Act and therefore will not reduce benefits under the Act.

Employment Insurance Act

[Malcolm Allen, NDP, Welland, ON]

moved that Bill C-279, An Act to amend the Employment Insurance Act (amounts not included in earnings), be read the second time and referred to a committee.

Mr. Speaker, it gives me great pleasure to debate my private member's bill today on the issue of severance and vacation pay for those who may receive it for pension income.

The EI act looks at moneys in certain ways. It sometimes takes it into income and sometimes it does not. Sometimes it treats it in a different manner. In the case of severance pay, which is due employees upon their termination of employment, it treats that income differently, as if they were actually collecting employment insurance and out in the workforce.

At this moment in time, the gross up provision, which is an anomaly in the act, says that individuals can earn 40% of a claim up to $179 while on a claim. The act takes severance and deducts that dollar for dollar from their claim and leaves those individuals with less because they have severance rather than if they had actually taken on part-time work and deducted that in a different manner. This is really an inequitable system.

The nub of all this is that severance pay is really about pay for time that has gone before. In other words, in some situations individuals would get paid a week for every year that they may have been employed.

There are two parts of the act that talk about earnings as paid and payable. I would suggest that we ought to look at severance pay the way we did some 20 years ago when it was not used as a calculation for unemployment insurance. It was deemed to have been paid because it really was for the time that individuals spent prior to their termination because that is how it was generated in the first place. Severance pay is not paid on a go forward basis in the sense that individuals would be paid for what they might have worked. They are actually being paid for the time they did work.

At some point the act was changed to have those moneys deducted. Severance was seen to be as if someone was working but clearly they were not. That is why they were given severance pay. The reason it is called severance pay is because the individual was severed from employment.

What happened? What transpired that changed the system? We have to go back some 20 years and look at the changes that started to come into effect during the latter part of the eighties and well into the nineties under the leadership of two previous governments. The Conservatives enacted some changes in the 1980s. During the nineties, the Liberal government made a wholesale change of the system, reducing the number of people who qualified from a high of nearly 86% back in 1990 to the lows we see today, which is less than one in two, just slightly under 50%.

Why did that occur? What situation was so dramatic that the unemployment system needed to be changed wholesale?

The first question we need to ask is whether or not the system had enough money. The obvious answer to that is, no, because we know the surplus in the EI system during the nineties and into the early 2000s was approximately $54 billion. That money rightfully belonged to workers who had paid into the system, who were rightfully entitled to receive benefits from that system, and who saw the system actually become denigrated to the point where they were no longer able to collect from that system.

The obvious question to ask is, what happened to the $54 billion? Some of us are still asking that question today. It seems as if that money has vanished. In fact, some say it has been absconded. Some say it went to the surpluses of the Liberal government that preceded this Conservative government. Liberals wracked up those great surpluses talking about economic management. What the Liberal government actually did was take it from those who paid into the system and then denied them entry into the system. One has to wonder, what if we had left the $54 billion in there, would we need to drawback the severance pay of those who, at this point in their lives, need it?

This reminds me of the story of a young woman in Oshawa who received a severance package when she was laid off. She no longer lived with her parents, who had been laid off before her. Her father asked if she could assist them because they were going to lose their house because they were going to default on their mortgage. He was still waiting for employment insurance. His severance pay was basically gone because he had to use it up before he qualified for EI. She agreed to turn over her severance pay to help them keep their house. That is what families in this country do for one another.

However, under this present system, she has signed herself into poverty. The fact that she gave the severance package to her parents does not negate the fact that she will have to wait an equal amount of time of that severance pay. It would be exhausted out before she is eligible to qualify for EI. And if she qualifies subsequent to that, she would then collect.

For ease of example, if she is entitled to eight weeks worth of severance and she gives it to her parents, she will have no income for the next eight weeks. Employment insurance will not pay her one thin dime because of that. She will wait out those eight weeks and the two week waiting period for a total of 10 weeks. She will fill out a report for the next two weeks, perhaps on the third week, which will now take her to week 15. If she is extremely lucky and the system works the way it is supposed to, she will receive her first cheque on week 16. In the meantime, she has no source of income because the severance pay that has been allocated for her has all but been exhausted because of her willingness to help her parents.

When we look at that, it tells us there is something wrong with the system. The system was never designed to take people's severance pay. Severance pay was never designed to be seen as earnings. It is for income tax purposes, but it was never designed to be a qualifier for EI. That is the way the act was initially.

This bill talks about the future, but it goes back to the past at the same time to recapture the days when the system actually worked for the unemployed. That is not the way it works now.

When it comes to the issue of why it should be changed, it begs the question of why it changed. We are still waiting for that answer. No one from either government, Liberal or Conservative, has been able to explain to us that it was changed out of necessity. One might posit the suggestion that it was changed to reduce the EI premium. I think if we went to workers and asked them if they really needed $2 or $3 off their EI premium every week, which is basically a cup of coffee and a doughnut, most would probably say, “No, thank you”. They would ask us to keep the premium the way it was and to keep that money in the system so that if they perchance get laid off, the system will be there to protect them.

Twenty years ago, individuals could collect more money on EI than they can today. Think about that. Twenty years ago, we could collect more dollar for dollar on EI, of course at that time we called it unemployment insurance, than we can today under the present employment insurance system because it used to be 66% of earnings. It as driven down to 60%. It has now been driven down to 55%. Unless we get changes, we are going to see more folks in poverty than we have ever seen in this country's history.

Because of the system that we pay into, those of us who work, those Canadians out there who toil every day, who are paying their premium on a regular basis in good faith expecting to qualify, are finding themselves thrown onto this heap. It becomes a maze for them and it becomes this whole system of inequity. For them, that is an injustice because it is their system. It does not belong to us. It does not belong to the House. It belongs to workers. Those are the folks who contributed. Those are the folks who built up the fund. Those are the folks who built up the surplus.

Those are the folks who expected to draw on a surplus in a time of need. Now, when they find an absolute time of need, what do they find? The surplus is not there. We are not sure where it went. There is some conjecture about where it went. They are not sure where it went. Their hard-earned money disappeared. They ask if they can get into the system. They want to be treated the same as others across this land and, indeed, they are not. We have workers in certain parts of this country who have to have more hours than others.

There is an easy fix to all of this. New Democrats proposed and received the majority approval of the House to make changes. We asked the government to do that. At this economic moment in time, Canadians who work hard every day, pay into the system, and play by the rules are telling the government to listen to what they are saying. They need change. They need the system to be modified the way it once was, when it protected them as workers when they were unemployed. That is all they are asking for. They are not asking for their taxes to be raised. They are not asking for a government handout. They are just asking for some of the money they put in back.

I do not think that is an unfair request. In fact, I would suggest that is a more than reasonable request because ultimately it was theirs in the first place. We collected for them as a government and as a Parliament and we administered it for them. They gave us their money in trust, not for us to do willy-nilly whatever the government wanted depending on the flavour of the day. Workers said to us, “Here is our hard-earned money, it is our insurance premium. We expect to collect our insurance when we need it”. What have they found now that they really need it? It is not there and now we have made all these rules to make sure they are excluded so we can push them aside, so we can tell them they just do not qualify in the system, sorry. Yes, they paid their premium, but we are sorry about the fact that they do not qualify.

Instead we can reverse the system. We could go back to what it once was. We could go back to a day when 86% of those who paid into the system qualified within the system. We could go back to a day where 66% of earnings were qualified as insurable earnings and were paid. As members of Parliament, who live on a salary which is very commendable and very lucrative, I defy any of us to wake up tomorrow and say we are going to work on 55 cent dollars. In our case, if we were unemployed tomorrow, we would be collecting $435 a week and I would have a hard time thinking that most of us in the House would actually manage to live on that. But again, that is the high end. That is not the average. The average is close to $340 a week. Living on $340 a week before deductions, because people still pay income tax on that, and raise a family is impossible.

We know all of those things and the government knows all of those things. It talks about statistics of who qualifies and who does not. It tells us every day that it understands the needs out there. Ministers stand in their place every day and tell us they understand. If the government truly understands, it should change the system. We are not asking to reinvent it. It does not have to because we basically told it how to do it. New Democrats, with our friends in the opposition benches who voted for it, put a plan in front of the government so it did not have to go to the department to get it rejigged and all those marvellous things. It simply has to enact it. It could go back to 1993 and bring that act forward and implement it again. I am sure the Parliamentary Library has a copy. It would be dead easy. It will not be hard or difficult.

Canadians who are unemployed will be forever grateful, not just to the government but to all of us in the House because it is about all of our constituents. There is no constituency in this land that does not have someone unemployed. Not one of us has full employment in our area, so we are dealing on behalf of all our constituents.

It is an absolute crime if we are not willing to raise the hand that we are fully capable of doing in the House, raising that hand to our fellow Canadians who find themselves in a time of need through no fault of their own. Unemployment is not a choice. The rules are clear, if people quit a job they do not qualify. We need the will of the House to have the government implement what has been spoken from this side.

As we look at the situation, it never was lucrative to be on employment insurance. For those who think it was, they are absolutely misleading folks. If anyone had been on employment insurance, they would know it is not lucrative.

For the government, now is the opportunity to make changes. The NDP motion has shown how to mend a system that is truly broken. I ask the government to do the right thing and accept the NDP changes and correct an EI system that the previous Liberal government destroyed. Now is the government's opportunity to say that it knew better than the Liberals when they were in government and it has fixed it for workers. Workers will forever be grateful. Conservatives should not lose that opportunity.

[Ed Komarnicki, Conservative, Parliamentary Secretary to the Minister of Human Resources and Skills Development and to the Minister of Labour]

Mr. Speaker, I have listened to what the member has said. Some of what he has said makes good sense.

However, there was a provision for improvements to the EI system, which we put before the House for a vote. It included a five week extension that would help approximately 400,000 people, a work-sharing agreement that would help approximately 80,000 people and skills upgrading and training that would assist about 190,000 people. That was about a $4.5 billion stimulus injection through improvements to the system and the member's party voted against each and every one of those proposals.

How can the member justify that at this time in the economy? Why would he not have supported those absolutely positive initiatives to help a good number of people?

[Malcolm Allen, NDP, Welland, ON]

Mr. Speaker, I hate to sound like a broken record, but I have said this in the House about a dozen times now. Five weeks of nothing is still nothing. If someone does not qualify, five weeks makes no difference.

The Association of Universities and Colleges has said quite clearly that if the government does not provide somewhere close to about $1.5 billion to build spaces in community colleges, those apprenticeship programs will not mean a tinker because no one will have a seat to sit in. These are at the top end and there are no places for one to sit.

Yes, they need the added five weeks, and I congratulate the government for adding those additional weeks for those who qualify. However, what will the government do about the other 54% that do not? Just leave them out there with nothing? That is a typical attitude. Fifty-four per cent does not mean anything to the government. It is simply going to discard those people.

We say, no. It used to be 86%. The government has the opportunity to bring that other 30% back into the system.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Mr. Speaker, I congratulate my colleague for bringing his private member's bill to the House. I think it is very clear that more needs to be done in the employment insurance system. The government has failed Canadians miserably, particularly those who are losing their jobs through no fault of their own.

There are a number of ways the EI system can be changed. The member has mentioned a number of them. They were in a motion before the House about a month ago, for which a majority in the House voted. He is making the case on his bill tonight.

Specific to his bill, can he talk about some of the stakeholders or organizations who support it? Has he had a chance to do any costing as to what the incremental cost to the employment insurance fund might be if we did go back? He is right. Up to the 1980s severance was not part of that calculation on EI. Has he done a costing as to what it might be to the EI fund for his specific bill?

[Malcolm Allen, NDP, Welland, ON]

Mr. Speaker, as far as those who are supportive of the bill, Canadian workers are supportive. I need no other validators besides Canadian workers. Those working and those who are unemployed have said to me for the past 20 years in which I have been an EI advocate in different venues that this is what they want to see happen. I have not met a laid off worker yet who has not said, “My severance shouldn't be touched”.

As far as the costing, it is simply a delaying tactic. Severance delays unemployment insurance. People can still collect the same amount of employment insurance at the end. If they are so unfortunate as to be unemployed that length of time, they simply eat up their severance and their entitlement to EI.

There is no cost to the EI system per se because of severance pay. What it does do is it lets people keep their house. It perhaps lets people keep their youngsters who may be involved in recreational or cultural activities in those activities for perhaps an extra month or two. It keeps people out of abject poverty hopefully until they can get a job. That is what keeping their severances does, at no cost to the EI fund. They will qualify for EI anyway and they will collect those numbers of weeks. The old argument was, if people received EI from day one, and had eight weeks worth of severance, we could take that out of the fund by that eight weeks.

In this day and age that is not the case. We all know that. The workers are entitled to it. They ought to be able to keep it. Hopefully the House will pass the bill.

[Ed Komarnicki, Conservative, Parliamentary Secretary to the Minister of Human Resources and Skills Development and to the Minister of Labour]

Mr. Speaker, I welcome the opportunity to join in the discussion of Bill C-279.

Our economic action plan commitments to improve the EI program clearly indicate the employment insurance program is very important to our government. It is important to Canadians.

The bill put forward by the hon. member for Welland proposes that pension benefits, vacation pay and severance payments, collectively called separation payments, not be included in earnings under the Employment Insurance Act and therefore will not reduce benefits under the act. While this government appreciates the sentiment behind the bill, it is important that we look at the central premise of employment insurance and that this debate be put in context.

At the core of the employment insurance program is the insured-based objective that EI benefits are available to those individuals who are facing a loss of employment income. To be consistent with this objective, it naturally follows that, under the EI program, separation payments be considered as income arising from employment, and that is what they are.

The rationale behind the current system is that benefits are not paid simultaneously as, in reality, there is no loss of employment income. Once the time allocated to separation money expires, EI benefits can be collected. People are not losing EI benefits, it is saying they must use up the earnings from employment, or the income, first. When that is used up, then they go on EI. Severance payments are there to replace lost income. It is something that happens by negotiation between employer and employee. It is something that is paid out through legal action. That is meant to replace employment loss and it should be used up.

As things currently stand, the EI program makes provision for workers who receive separation payments to have their benefit periods extended by each week for which separation moneys are paid up to a maximum of 104 weeks. This means that EI claimants are eligible to collect EI benefits over that period of time. EI can continue up to a maximum of 104 weeks.

For example, if claimants qualify for 45 weeks of benefits and receives separation pay that equals 6 months of regular salary, they may receive their benefits provided they are still unemployed, once this initial 6 month period has elapsed. Therefore, claimants use up the six months, then go on EI and they are entitled to the full benefits.

If we use this example, while these individuals may not be able to receive EI benefits for a six month period, they, through their separation pay, already have employment income to live off for six months. Given that these individuals have income to live off for six months, the current system assumes they have not suffered the loss of employment income for this period of employment.

While the obvious effect of the bill would be to remove separation payments from amounts that may be deducted from benefits payable, it is important to note that the full implications of this proposal are difficult to determine.

For example, as the bill proposes to change the definition of earnings throughout the EI Act, it is not clear how the amendment may affect what would be considered to be insurable earnings and how it would affect premiums collected. Premiums have to be paid. As benefits are extended, premiums have to be increased. The ramifications could be quite substantial and would require considerable effort to clarify.

It is therefore difficult to estimate the full cost of implementing the changes proposed in the bill. Looking solely at exempting separation moneys for determination of EI benefits, the cost would be approximately $130 million annually.

Our government is always concerned when Canadians lose their job. We understand the pressures faced by Canadian families during these challenging times. That is why, through our economic action plan, we will help over 400,000 people benefit from an additional five weeks of EI benefits. We will help 190,000 people, including long-tenured and older workers, get retrained to find a new job and put food on the table for their families.

Our government has heard the needs of Canadians and will continue to deliver the protection they need to get through these difficult times. We recognize that during these challenging economic times, more and more people are unfortunately losing their jobs.

People who have lost or are at risk of losing their jobs need to know that their government is working hard for them to get them the assistance they need. That is why, as part of our action plan, we are investing an unprecedented $8.3 billion in Canada skills and training transition. Looking at that, it is a huge amount of dollars. With this strategy, we are making use of employment insurance to bolster benefits and invest in skills training.

Our government remains committed to having a highly skilled, globally competitive workforce. Helping Canadians receive training is essential to meeting this goal. That is why important changes to EI also include supporting long-term training for those workers who have been in the labour force for many years and have not made significant use of EI. For these workers, we are extending EI income support for the duration of training up to two years. These are moneys well spent, positioning people for the time when this economy changes.

I would also like to highlight that in our economic action plan, we committed to allowing earlier access to EI regular income benefits for eligible individuals investing in their own training, using all or part of their separation package. If they use all or part of that, EI would then kick in. Training and skills development are key to helping permanently laid off workers who need to change occupations or sectors, preparing our nation for the jobs of tomorrow.

Our proposal will help unemployed Canadians invest in the training they need for the jobs of the future, while allowing them to receive their EI benefits sooner.

Our government is also assisting laid off workers by providing nationally the advantage of an extra five weeks of EI benefits previously offered as part of a pilot project that was only provided in specific regions with high unemployment. Additionally, the maximum duration of benefits available under the EI program has been increased from 45 weeks to 50 weeks. These changes mean that unemployed Canadians, who otherwise would have exhausted their benefits, will receive financial support for a longer period of time. These new measures became available on March 1.

These are some of the measures that the Government of Canada is taking to temporarily provide additional income support to unemployed workers facing transitions in tough economic times.

Our government has also taken steps to provide assistance to unemployed individuals who are unable to qualify for EI benefits at all. By establishing a new strategic training and transition fund, we are investing $500 million over two years to help these individuals obtain training and other support measures. In the event they do not qualify for EI, this program and fund is available for them. We understand that the provinces and territories know local needs best, so these funds will be delivered through existing labour market agreements.

Our plan also takes into account that, in economic downturns, it would often be older workers who would be most severely affected. To provide them with greater assistance, we are investing an additional $60 million over three years in the targeted initiative for older workers program. We are also expanding its reach so communities with a population fewer than 250,000 will now be eligible for funding. It makes no difference if these communities are located in larger metropolitan areas. They are still eligible. Our plan provides additional support to unemployed Canadians over the short term and is designed to meet the needs of the current economy while helping Canadians get the skills they need for the jobs of tomorrow.

We believe that while the intent of this legislation is laudable, the wording of it is unclear. If passed, it could have considerable impacts on the fiscal framework and significant implications on other aspects of the EI program that are unclear at this time.

As I mentioned earlier, our government is already proposing a measure that will allow earlier access to EI benefits if individuals use some or all of their separation payments to purchase skills upgrading or training for themselves.

These initiatives, when taken as a package, are meant to address the needs of Canadians. It is unfortunate that the member and members of his party oppose each and every one of these proposals, such as extending the EI program by five weeks. It matters very much to those Canadians who are still looking for a job and have not found one. That five weeks is very significant. It matters to those who want to job share to ensure that all of them have an opportunity to work, while the economy recovers. There are 190,000 people who want to get their skills upgraded and want to have training so they are prepared to enter the job market of the future.

That party has opposed and voted against very important measures. In fact, it said that it was going to vote against them before it had an opportunity to read and understand what these measures were. One has to look at this whole picture as a package.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Mr. Speaker, again I would like to congratulate my colleague, the member for Welland, for bringing this bill forward. Clearly, he understands the issue, cares about it passionately and has given a great deal of thought to it.

I want to start by talking about how big an issue employment insurance is in Canada right now. Today we got word that according to Statistics Canada a staggering 325,700 EI claims were received in February. That is up 51,000, some 18%, from January. That is the largest number of EI claims since the tracking of EI data began. The total number of regular EI beneficiaries has climbed 22% since October 2008. Today there are well over 600,000 Canadians collecting benefits.

This issue is gripping Canadians. I would say it is an issue that is gripping Canadians who for many years probably thought, not in an arrogant way but because of history, that they would not be touched by a faltering economy. However, now they are, through no fault of their own.

The government's response has been very weak. When the economy started to dip a bit last year, instead of dealing with it, the Prime Minister decided to call an election. In the fall when Barack Obama was already talking about a stimulus package, the Conservative government came out with an economic update that did nothing to stimulate the economy but did a lot to stimulate politics in Canada. Then in January when we finally came back here, yes, there had been an improvement.

The parliamentary secretary, from his briefing notes that we just heard him read, spoke about the additional five weeks. That was helpful to a small percentage of Canadians, the less than half of Canadians who can claim EI. There was some money for training. There is so much more to be done. It is not just what people sometimes refer to as the usual suspects, the social policy groups, the anti-poverty organizations and organized labour, but even organizations like the C.D. Howe Institute have said that they were surprised the government did not do more on EI.

Today at the human resources committee, we were doing an anti-poverty study. My colleague from the Sault who is in the House tonight is well aware of this. Armine Yalnizyan from the CCPA, Dennis Howlett from Make Poverty History, and Canada Without Poverty, formerly NAPO, the National Anti-Poverty Organization all spoke about how important EI is as part of the country's social infrastructure.

The simple fact is our EI system, as we know it today, is not recession tested. So how do we fix that? Our colleague has brought forward his idea. There are other things we could do, obviously. We have a regional rate system, and maybe we could go to a national standard. That has been called for. We could increase the percentage of earnings that an individual could qualify for, a maximum of 55% of $42,000. It is still not exactly as my colleague said, it is not 55% of replacement earnings for somebody who maybe had been working in the auto sector or had another job. Maybe we could look at that. Maybe we could go to the best 12 weeks.

Maybe it is time we seriously looked at the structural issues of EI, as to how they affect women and part-time workers who are not well treated in the EI system. We know that.

My colleague from Cape Breton—Canso is in the House tonight. He was on the human rights committee, along with others, when it looked at this issue. Up until 1984, I think, severance was dealt with separately. People did not lose EI because they had received a severance payment. I think Michael Wilson was the finance minister when that was changed. It was the way things were done. The human resources committee has looked at it before and has done some work on this.

How do we prioritize what we are going to do on EI, and where does this bill fit in with that? I do not think it is right to say that there is not a cost. There is a cost to the system, but it may well be a justifiable cost.

With respect to the EI fund, as people know, there has been a surplus each year for the last number of years of what has been paid in and what has been paid out. Some money is there, even in normal times, that we could look at when it comes to the need of the country for a stronger social infrastructure.

There was a point in time when the percentage of replacement earnings was about 75% to 77% in Canada. We have to look at those things. We have to determine in each case what is the cost and what is the benefit.

We also have to remember that this recession is an opportunity to focus on the needs of our social infrastructure, but issues existed before, things like regional rates, how women, largely part-time workers, are affected. We need to do some things.

Vacation pay is for work that was provided in the year directly previous to somebody being severed from his or her employment. That should not affect EI.

The question on severance is a little more complicated. There are many arguments in favour. Some workers have worked for the same company for many years. They put their heart and soul into that company. They should be treated well for their service when they are let go. Those workers paid into EI for years. Why should they not draw some kind of full benefit from the employment insurance system?

Maybe there are other possibilities. Maybe there should be lump sum protection in the EI system. Maybe there should be a specific percentage clawback. These are things that we could look at. It may be that more evaluation is required.

This is an indication of the kinds of problems we have with the EI system. At their time of hardship, people are not getting the financial support that this country is well known for and the kind of financial support they expect.

Some anti-poverty groups say that if issues on EI are going to be prioritized, this would not be in the top five. They think we should get rid of regional rates, look at the two-week waiting period, and maybe even add more than five weeks to the employment insurance system, as is being done in the United States.

I get emails, as do all MPs. I received an email from somebody the other day who had been laid off without any severance package at all. It took her more than a year to get fairness from her company. She eventually won her case and the company had to pay her a lump sum, but employment insurance clawed back the money.

These people are not rich. EI is not a lucrative system, contrary to what the minister has indicated. The minister said she was concerned about making employment insurance too lucrative. She did not want to pay people not to work. That is a throwback to Reform Party days. At $440 maximum earnings a week, and an average of $335 a week, employment insurance is not too lucrative. We could afford to do a lot more for Canadians than what we are doing for them right now. The Conservative government has to act.

There was the other spectacle regarding the two-week waiting period. That is really a misnomer. It is not a waiting period; it is a period during which the individual does not receive benefits. The waiting period is how long an individual has to wait to get a claim processed. We have seen ample evidence in this country of people waiting a long time. The standard, according to Service Canada, is that 80% of claims are dealt with in 28 days or less. That has slipped dramatically.

On November 27 I stood in the House and asked a question of the Minister of Human Resources and Skills Development about this. On December 19 I sent her a letter. Two months later I received a letter from her apologizing for the delay in getting back to me about my concern about delays.

The government has not made employment insurance adjustment a priority. It has not put a priority on building that social infrastructure that makes Canada strong. As a result, people are hurting severely.

Bill C-279 brings up the issue of severance. It brings up the issue of pensions in some cases. It brings up the issue of vacation pay in some cases.

I want to congratulate my colleague for bringing this bill forward. I want to congratulate many colleagues in the House. I see my colleague from the Bloc, who has brought forward measures on EI that have come to our committee for consideration.

We need to make sure the government understands that the EI system needs to be more robust, especially during a recession.

Somebody back home said to me that a recession is too important a thing to waste. In other words, let us do something about poverty in this country. Let us do something about the social infrastructure, including employment insurance.

I congratulate the member for Welland for bringing this issue up. I look forward to the further debate on it and seeing how things turn out.

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

Mr. Speaker, in order to put those listening to us in the right context, it would be wise to remind them that we are discussing Bill C-279, which provides that pension benefits, vacation pay and severance payments are not to be included in earnings in order to give people access to employment insurance benefits immediately. This strikes us as totally fair under the circumstances.

What we feel is unfair is the present situation. Like my colleague who spoke before me, I wish to congratulate the member for Welland for bringing this bill before the House, a bill that I feel will result in a little more humanity in our employment insurance program.

It is also a good time to remind hon. members that the Bloc Québécois has intervened in a number of ways over many years in order to correct this program which has, over time, been gradually destroyed by the two parties each in turn. With respect to benefits when there is money owed to the worker after he leaves, the Conservatives are the ones who imposed that limitation on benefits in 1985. From the 1990s on, the Liberals in turn adopted various measures to limit as much as possible any access to EI. This is one such measure.

Fortunately, as we have just heard from our colleague from Dartmouth—Cole Harbour, the Liberal Party has rethought its position. That member has brought in some slightly more equitable thinking in order to remedy this situation, which is absolutely unfair to the unemployed. One of the measures in which our colleagues have participated, particularly those in the Liberal Party and the NDP, were discussed at the time of the 2005 examination of employment insurance reform.

Recommendation 23 was focused specifically on correcting that shortcoming. The committee wanted to see the EI regulations not include in calculations of income for benefit purposes any pension income, severance payments or vacation pay. This measure has therefore been in existence since 2005 and two successive governments have not acted on it. I must also indicate, as the preceding speakers have done, that this is only one of the measures that needs to be put in place in order to restore the employment insurance program.

There are currently a number of bills before the House of Commons about this issue. The Bloc introduced four of those bills, and I myself introduced one on behalf of the party. Bill C-308 calls for the following amendments. It would change the qualifying period to 360 hours of work. People would have to work 30 hours per week for a period of 12 weeks to accumulate 360 hours. This measure would eliminate the existing disparity that excludes unemployed workers based on unemployment rates in each region.

The bill would also increase the rate of benefits, which is currently 55%, to 60%. Unemployment organizations, anti-poverty organizations, unions, and even the three opposition parties, if their participation in the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities is any indication, are unanimous in their support of this initiative.

This bill, Bill C-308, eliminates the distinctions between a new entrant and a re-entrant to the labour force. That distinction discriminates against women because they are often in unstable jobs and are more likely to be laid off. Also, many women work in so-called atypical part-time jobs. This bill also eliminates the presumption that persons related to each other do not deal with each other at arm’s length; the department must prove it. The bill also increases the maximum yearly insurable earnings to $42,500. That is all in Bill C-308. It is useful to bear these bills in mind.

Then there is Bill C-241, introduced by my Bloc colleague from Brome—Missisquoi, which eliminates the waiting period. I am not the first member to have raised this issue. Tomorrow, in the late afternoon, we will be voting on this bill at second reading. I would urge my colleagues in the House to vote to refer Bill C-241 to committee so that we can eliminate the waiting period, which is yet another measure to prevent as many people as possible from collecting benefits.

Bill C-336, introduced by my colleague from Berthier—Maskinongé, changes the way in which the qualifying period is calculated in the case of a labour dispute. I am thinking about the dispute that took place in Lebel-sur-Quévillon. The employer claimed that it was not a plant closure. He put off closing the plant as long as possible by locking out the employees. When he finally announced that the plant was closing, the employees had been locked out for more than 200 weeks and therefore did not qualify for employment insurance benefits. This is another serious injustice that must be corrected. We will correct it with Bill C-336, another Bloc bill that will soon be studied at second reading.

Bill C-339, introduced by my colleague from Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, extends the maximum period for which special benefits for illness, injury or quarantine may be paid from 15 weeks to 50 weeks.

These are the Bloc Québécois bills that are being examined and that are designed to correct what has been done to the employment insurance system in recent years. As a result of the changes that have been made, close to 60% of unemployed people are currently excluded from the employment insurance system.

The employment insurance program is a measure supposed to prevent people from growing poor or even living in misery as they lose their job. However, it is not what is happening right now. In committee, with my colleagues who spoke earlier, we are studying the question of poverty. Different witnesses give us their opinions on this subject.

For example, this morning, we heard the following national and pan-Canadian groups: the group for the abolition of poverty, the Canadian Centre for Policy Alternatives, Citizens for Public Justice. These are the most important groups. They have a lot of expertise on the state of poverty. And, as far as measures to fight poverty are concerned, employment insurance is at the top on their list.

Poverty exists because there are impoverishment factors, and one of the factors which makes it now more difficult to get out of poverty is the fact that close to 60% of the workers who lose their job are being excluded and are not entitled to EI benefits.

I will conclude by reminding the House that we will vote in favour of Bill C-279 because delaying employment insurance because the employee is still owed some last amounts is simply unfair.

I encourage my colleagues to vote in favour of Bill C-279.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Mr. Speaker, I too want to congratulate the member for Welland for bringing forward Bill C-279. I am going to touch on some specifics in a moment.

However, I also want to acknowledge the good work that the member for Acadie—Bathurst has done. Over a number of years he has been a champion for EI reform in the House. I believe in previous sessions of the House he had brought this bill forward for approval of the House.

The member for Welland has raised a number of very good points, but I want to touch briefly on what Bill C-279 actually does. It is trying to rectify an inherent unfairness in the employment insurance system. It is attempting to have the following categories no longer considered as earnings, so that when someone files a claim for employment insurance, the start of that claim is not delayed because he or she has been in receipt of a pension, superannuation, a retiring allowance, vacation pay, or severance.

I am going to put it in context in terms of what is happening in our economic climate. It is important because in effect when workers receive these payments it is actually money as a result of past service. This is money that is received as a result of the years they have worked or vacation pay for the year that they worked. Really, it is retroactive.

The argument when this was changed in the 1980s was that this should be considered as income arising out of employment. What that failed to take into account is that for many workers, particularly in the current economic climate, it is a buffer. It is a safety net for them.

What we are hearing in many of our communities is, for workers who manage to qualify, there is no guarantee that at the end of their employment insurance claim they are actually going to have a job.

I have heard from workers in Nanaimo who have talked about the fact that they are in their late 40s, or early or late 50s, they have worked all their lives in forestry, and their EI has run out. They have been sent for training as long distance truck drivers and there is simply no work for them.

For those workers who actually got severance pay, that money would have been a safety net for them when their EI claims ran out. Instead, they are forced to look at having to sell their homes or go on welfare. There is not much dignity for workers who have spent their entire lives in the workforce to be forced into those kinds of circumstances.

I want to touch on those circumstances. First of all, it has been mentioned in the House but I think it is worth repeating that the Minister of Human Resources and Skills Development, on January 30, 2009, said, “We do not want to make it lucrative for them to stay home and get paid”.

The member for Welland raised the point that the average weekly benefits rate now is $335 a week. That is before one pays one's tax.

I do not know where the minister lives, but where I live I would challenge anyone to live on $335 a week. People have to pay rent and are lucky to get anything under $1,000 if they have a family. They have to buy groceries and might actually have to pay for clothing or education for their children. It is hardly lucrative.

I have not met workers who say they would rather stay at home and collect their $335 a week than go out there and have a good-paying job.

In this current economic climate, I want to speak to why these reforms for employment insurance are so important. Other members have referred to the fact that the NDP had proposed a motion that was going to see some significant changes to the Employment Insurance Act. It was going to look at reducing the number of hours to qualify, expanding the number of weeks that people could get paid, and increasing the benefit rate. All of these are very important in this economic climate.

I come from a community that suffers from the recession because of what is happening in the forestry industry. A couple articles have come up and I want to reference them.

Today, in the Nanaimo Daily News, the headline is:

Province's once-mighty forestry industry is now faltering badly. An estimated 22,000 forestry workers are off the job in B.C.

That is nearly half of all the forestry workers in British Columbia, out of roughly a 55,000-person workforce. This includes thousands in the mid-island region where my riding is. They remain idle as mills continue to close or cut back and logging operations are shut down as the ailing industry continues to struggle. Analysts see no light at the end of the tunnel.

In a report released last month PricewaterhouseCoopers reported that the nation's largest forest, paper and packaging companies hemorrhaged red ink in the last quarter of 2008 and the forestry analyst company does not paint a very rosy picture for the near future in this industry.

We recently had a representation from the CEP, formerly Canadian Paperworkers Union, about the fact that pulp mills are in desperate straits in this country because of a loophole in a tax in the United States. They are talking about the Canadian pulp and paper industry facing mill closures and the loss of its global markets over a massive United States green energy subsidy that could provide a $6 billion taxpayer handout to American pulp producers. This could cut as much as 60% of the cost of chemical pulp in the United States. It goes on to talk about the fact that it is going to crush the pulp industry in Canada if there is not something done about that subsidy, that tax loophole in the United States.

In the Times Colonist today there was an article that says: “Lumber industry bottoms out” and goes on to quote the president of West Fraser Timber who said he is seeing a bottom, not because markets are rebounding but because things cannot keep getting worse. Lumber prices are below the cost of production, forcing massive curtailments both here and in the U.S.

In that grim background, if we do not fix the employment insurance system, we are going to see workers having to walk away from their houses and many of them will end up on welfare. We are already seeing the welfare rolls rise in many provinces including British Columbia.

I want to talk about some of the companies in my riding and why severance and vacation pay are so important. These are the ones that have already collapsed. We do not know how many more are going to go down that road. We had a company called Munns Lumber which was a contract logging company based in a little community called Mesachie Lake. It is gone. It laid off all its workers.

There was a company called Ted LeRoy Trucking based in Chemainus. It was a full phase logging contractor handling all of the harvesting operations that grew in response to the move by major companies to get out of the business. This is part of the transition that has been happening in British Columbia. Leroy logs primarily for Timberwest Forest. Now Leroy Logging is also gone. We have seen a company that had a very proud history of providing heavy equipment to the forestry sector, so we are not only seeing forestry companies close down and workers lose their jobs, but also the companies that supplied them.

A company called Madill had 190 employees in its Nanaimo operation. That company had been in business as a heavy equipment manufacturer for the logging industry since 1911. It is gone. One of the saddest sights I have ever seen was the equipment from Leroy and Madill in a huge acreage filled with logging equipment. I drove by thinking that maybe there are some good things happening, only to realize that they were auctioning off the remains of what was once very proud forestry operations on Vancouver Island in the riding of Nanaimo—Cowichan. This has happened all over the province of B.C. and the rest of Canada.

It is absolutely essential that we make the changes to the employment insurance system to ensure that workers have the wherewithal to continue to provide livelihoods for themselves and their families. That is an important economic stimulus for our communities as well. We hear the other side talking about economic stimulus. If we want to provide economic stimulus in our local economies, we should make sure the workers have some income. They have to be able to pay their rent. They have to be able to buy food. They have to be able to pay for their kids to go to school whether it is supplies or clothing. One of the ways to make sure that economic stimulus happens at the local level is to give those workers some income.

I would urge the House to look at the very sensible bill that the member for Welland proposed. I would hope that all members in the House will support the bill, so that this is one step in that process of reforming the employment insurance system. With any kind of democratic process, we will see the government implement the NDP motion that proposed substantial reforms to EI to make sure that those workers and their communities can continue to have the kind of access to a safety net that we would all expect as reasonable Canadians.

[The Acting Speaker, Conservative, Barry Devolin]

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.

The House resumed from April 28 consideration of the motion that Bill C-279, An Act to amend the Employment Insurance Act (amounts not included in earnings), be read the second time and referred to a committee.

[Ed Fast, Conservative, Abbotsford, BC]

Mr. Speaker, I want to begin by making it very clear that our Conservative government is determined to make sure unemployed Canadians get the help they need during these tough economic times.

As members know, the global economic crisis has not spared Canada. As far back as 2007, our government could see storm clouds on the horizon, and it began positioning Canada to cushion itself against the economic storm.

We reduced taxes on Canadians by over $200 billion to reduce the burden that families and small businesses bear.

This past week we learned that under our Conservative government tax freedom day for Canadians now comes 19 days earlier than it did under previous Liberal governments.

We have also provided the Bank of Canada with additional powers to respond to recessionary times and introduced even greater accountability and liquidity into our banking system. The result is that the World Economic Forum has declared Canada's banking system to be the safest in the world. Canada is expected to be among the first countries to emerge from the world economic crisis.

More recently, as the world recession deepened, we have made unprecedented commitments and investments to help laid off workers through these tough economic times and give them the training they require to return to the labour market.

That is why I cannot support the bill before us.

As members know, the EI system was designed to replace a loss of employment income. When people lose their jobs and their income dries up, they rightfully expect to receive some benefits under Canada's employment insurance program.

However, and that is a big however, there are situations where individuals lose their job but receive severance payments from their employer to carry them for a period of time after termination of employment. In other words, there is no immediate loss of employment income. In those cases, EI benefits should not kick in until the period covered by those severance payments is exhausted.

Today I received an email from the sponsor of the bill, and the email suggested that severance is like savings. I am here to tell the House that severance is not savings in most cases. Severance replaces lost income for a period of time that is required by the courts and by legislation for the employer to give notice to a terminated employee.

Let me talk about my personal experience.

In my previous life as a lawyer, I counselled clients in the area of severance. From time to time, I would represent employers. On other occasions, I would represent employees. We would negotiate severance settlements between the employee and the employer.

Each of our provinces has legislation that fixes the minimum amount of notice that an employer has to give to an employee when the employee is terminated without cause. Then there is the common law, which provides enhanced notice requirements in our court system.

When an employee is terminated, the employer does have to give notice of that termination. If the employer wants to terminate the employee right away, the employer has to provide compensation in lieu of that notice requirement. That may be two weeks, it may be a month, it may be a year. It can in some cases be up to, or even more than, two years of notice or compensation in lieu of that notice.

What is that compensation commonly called severance? That is simply compensation in lieu of the earnings that the person would have earned during the notice period that the employer is required to give. These are earnings on an ongoing basis for a period of time.

The bill before us suggests that even though an employee might be terminated and receives severance payments, in other words, earnings for a period of time, that on top of those earnings the employee should be entitled to receive unemployment benefits under our employment insurance program.

Employment insurance was never intended to be a windfall for employees. It was never intended to be double dipping, which would be at the cost of taxpayers. It was intended to be an insurance against loss of earnings.

The Employment Insurance Act talks about termination of earnings as triggering employment insurance benefits. That is why the current system does not pay EI benefits on top of, and simultaneously with, severance payments.

However, under the EI Act, workers who receive pension, vacation pay and severance payments can have their benefit period extended by each week for which separation or severance moneys are paid. That can run up to a maximum of 104 weeks. In other words, if people are entitled to receive employment benefits because they have worked long enough and paid in enough, once they exhaust their severance payments they can still collect EI.

Just to make it very clear, when a worker loses his or her job and does not receive a severance package, only the normal two-week waiting period would apply. Such individuals understandably do not have to wait as long to receive benefits.

The bill before us is deeply flawed. Not only would it allow some individuals to benefit unfairly from our employment insurance program, there are also a number of ambiguities in the bill which are created by redefining the term “earnings”. For example, it is not all clear how the redefinition will affect the term “insurable earnings” under the act.

Furthermore, the bill completely fails to take into account how much this bill would increase the cost to taxpayers, employers and employees. What is clear is that the impact would be substantial. To begin with, by no longer requiring laid-off workers to take into account and use the resources from a severance payment, which is again in lieu of future earnings, the bill would add another $130 million in EI costs per year, costs which have to be raised through EI premiums. Who pays those increased EI premiums, one might ask? It is the employers and the hard-working employees who pay for that.

During these very challenging economic times, the very last thing we need is imposing new financial burdens on employers and employees alike. But then, we recently heard the news that the Liberal leader has admitted that he intends to raise taxes on Canadians, so it is not surprising to hear his Liberals are now supporting increased EI premiums. Like so many other schemes concocted by members of the NDP and supported by their Liberal and Bloc coalition partners, they neglect to consider the financial burden they are imposing on other Canadians.

There is another crucial point and that is the fact that this government has taken significant steps to provide additional income support to unemployed workers facing transitions during this recession. These new moneys are over and above the benefits I already described. For example, let me remind my colleagues in the House our recent economic action plan provided for an unprecedented improvement to our EI system. For the next two years we have extended EI benefits by an extra five weeks. We have also increased the maximum duration of benefits available under the EI program.

We are also supporting training for long-tenured workers. These are people who worked for many years and have not made significant use of the EI program. We want to help these individuals acquire new skills so they can get new well paying jobs. We are providing income support for the duration of their training and this change will benefit a further 40,000 workers across Canada.

We are also going to allow earlier access to regular EI benefits for eligible workers purchasing their own training if they invest all or part of their severance package resulting from a layoff. Both of these measures are to be implemented in partnership with the provinces and territories.

That is not all. Our government is providing the provinces and territories with an extra $1 billion over two years through existing labour market development agreements to provide more skills training to laid-off workers. We are also extending the work sharing agreements to 52 weeks for the next two years. The first people to call me after we tabled our economic action plan were from a company called Columbia Kitchen Cabinets from Abbotsford, B.C. Officials phoned me to thank me for recognizing the challenges they face and that they would make significant use of the expanded work sharing program. They were already using the program at that time. This just provided them with an opportunity to provide their workers with more options to continue working.

We are getting the job done. The bill does not do what it is supposed to do. It is unfair to workers and unfair to employers.

[The Deputy Speaker, Conservative, Andrew Scheer]

Order. I wish to make the following statement before moving on to the next speaker.

I am now prepared to rule on the point of order raised on April 28, 2009 by the Hon. Parliamentary Secretary to the Leader of the Government in the House of Commons concerning the need for a royal recommendation to accompany Bill C-279, An Act to amend the Employment Insurance Act (amounts not included in earnings) standing in the name of the hon. member for Welland.

I would like to thank the parliamentary secretary for having raised this matter, as well as the member for Mississauga South for his comments.

In his remarks, the parliamentary secretary pointed out that Bill C-279 seeks to exclude pension benefits, vacation pay and severance payments from earnings under the Employment Insurance Act. He stated that the effect of such an exclusion would be to make individuals eligible for benefits who would otherwise not be eligible or to increase the benefits to individuals currently eligible.

He noted that there is ample precedent indicating that legislation proposing new spending not currently authorized under the Employment Insurance Act requires a royal recommendation. In support of his claim, he cited earlier rulings from the first session of the 39th Parliament on this topic.

I have examined Bill C-279 and found that the proposed exclusion of amounts from the earnings under the EI Act would have the effect of altering the terms and conditions of this program in a manner which would infringe on the financial prerogative of the Crown. Simply put, the proposal put forward by Bill C-279 is such that more individuals would be eligible to receive EI benefits and those currently eligible would receive increased benefits.

With regards to a similar bill, I stated in a decision on March 23, 2007, at page 7845 of Debates:

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

In my view, the same conditions apply to the bill now before us.

For these reasons, I must conclude that Bill C-279 requires a royal recommendation. Consequently, I will decline to put the question on third reading of the bill in its present form unless such a recommendation is received.

Today’s debate, however, is on the motion for second reading and this motion shall be put to a vote at the close of the second reading debate.

Resuming debate, the hon. member for Bonavista—Gander—Grand Falls—Windsor.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Mr. Speaker, I am grateful for the chance to debate this issue. We are now obviously focusing on second reading and no longer on third reading, as dictated by your recent decision.

Nonetheless, I am glad to have the opportunity to debate this issue because it is a big issue for me personally in my riding of Bonavista—Gander—Grand Falls—Windsor, and particularly so for the area of the Exploits Valley in my riding, which had a mill that was owned and operated by AbitibiBowater in the town of Grand Falls-Windsor. It shut its doors last month or two months ago and now many employees are living in poverty. It is not only affecting them but also the people who work externally to the mill, which would be loggers in this particular situation.

I would like to begin my speech by referring to a conversation I had today with a former employee of the mill. He is the Communications, Energy and Paperworkers Union national representative in the mill. His name is Gary Healey. His situation is one that stands up as an example for all the rest and I would like to share it with the House at this time.

He says that in his situation he is expecting a fairly-negotiated early pension plan. Because of the negotiations that had taken place prior to this moment, he was eligible for an early pension plan. However, because he was laid off with the closure of the mill, he now cannot claim any of these major benefits until he reaches the age of 65, partly because of the legislation but mostly because of the fact that the mill has ceased its operations.

There are also issues pertaining to AbitibiBowater and bankruptcy, but this is a situation where he has now lost 10 years of his life for planning over the next little while, a detrimental situation, only to be taken from him just a few short months ago. That example persists for all of the employees, the vast majority of them certainly for early pensions. Think about those between the ages of 45 and 55 in that area who find themselves in this situation.

The employment opportunities in this particular area are fairly low and the unemployment rate is fairly high. For the most part, a lot of people have to move outside of this area and, indeed, in many cases, outside of the province. I am sure everyone can appreciate the gravity of this situation, as my hon. colleagues from the NDP certainly would because they have put this bill forward.

Here we have it. Bill C-279 hopes to make amendments to the EI Act pertaining to severance, certain pension benefits and also vacation pay.

In the particular mill that I spoke of, the situation people are in is this. When the mill was closed, the company declared bankruptcy. Therefore, it was unable to pay these major severance payments, totalling $40 million. The reason was because, of course, being in bankruptcy, it had to get permission from the courts and the judge in this particular matter. Therefore, people were not paid.

People applied for EI and went through the process. Some of them could not get EI because they had not exhausted their vacation time. The money they received for their vacation was apportioned over a period of time based on their average earnings and they were, therefore, unable to claim these benefits. That certainly suppressed their income at that point. Those who did exhaust their vacation time received the benefits.

Recently, however, the province of Newfoundland and Labrador made the decision, which I congratulate it for doing, to pay the severance payments from the province to the union to be disbursed. That included the loggers who were not originally part of this program. That is $40 million from the government of Newfoundland and Labrador. However, that now puts them in a situation where a lot of questions need to be asked and answered in this area. There are a lot of people like Gary Healey in this situation. There are people, like George Macdonald, in that situation right now who find themselves struggling to stay above the poverty line. I will return briefly at the end to the situation with the mill, but I would like to touch on some other aspects in my riding.

The economies of a vast number of rural communities represented in my riding are seasonal in nature. They are seasonal because they rely on things such as the fishery and forestry. As a stark example, it is impossible to fish off the coast of Newfoundland in a 35-foot boat in the winter months. It is also impossible to fish 200 miles off the coast of Newfoundland in a 65-foot boat during the winter months. One sees that the seasonal nature of this particular program is one that is very important. I press upon the government to realize the seasonal aspect, which is why we, and certainly I, support the 360-hour qualification period.

Employment insurance offers nothing more than a meagre income in this particular situation. With only 55% of the income, they certainly struggle through many of these months. That is the part that we have to focus on here. It is a question of poverty and it is now a question of compassion built back into the EI system. That is what the people of Grand Falls-Windsor, the Exploits Valley and the coastal communities want in this EI system: more compassion built into it. That is what we struggle for here in the House. Certainly I and my colleagues from the east coast, particularly from Newfoundland and Labrador, feel the same way.

Relying on EI is not their preferred way of life. All those who rely on EI would much prefer to be working, but there are no other employment opportunities, as I have touched on before. That is the component of this, because that is the compassion. I have heard the government say on many occasions recently that one cannot work 45 days and then expect to make a living beyond that. However, that is the very essence of seasonal employment.

This is where we lack compassion on this issue. There are certain industries that are anchored, including fishing, farming, forestry and tourism. These are the industries that rely on these short seasons, and this is where the compassion has to come in, in this particular system. They are asking for a living. They are asking for compassion.

The sad response from the government is to basically go to where the jobs are. On the surface one might think, is that not the way it has been all along and the way it is supposed to be? It is not particularly easy for someone who has worked in a particular mill or has worked on the coast for so many years. They cannot just turn to the next industry down the street when it is primarily a one-industry town with a higher income.

In many cases, these people are forced to re-educate themselves. They brag about the fact that there are education programs out there, but the education programs also require a payment of 20%, 40% or 50%. A lot of these people have to backtrack and complete the tail end of a high school education to get there. That takes a long time. That is a hard thing to do for someone with little education who is just a shade over 50 years old and ineligible for regular pension benefits such as the CPP.

Recently, in the election of 2008, there was a comment by Mr. Coles, the president of the Communications, Energy and Paperworkers Union, who said that he had a conversation with the current Prime Minister. At that point, the current Prime Minister said maybe they should think about moving to Alberta. That is where the compassion does not come in. That is the problem here. There is no compassion for someone who has just recently been laid off.

That is why we have to fix the EI system. The five weeks at the end is one issue among many. The EI system needs a cocktail of solutions and it needs solutions beyond just the five weeks at the end. It is also a question of eligibility. For people who work in seasonal employment, 360 hours counts a lot. Compassion in the EI system is the big reason we are here today.

I have only a minute left, but I do wish to conclude that over the past little while I have seen poverty face to face in many industries, particularly so with the AbitibiBowater situation in Grand Falls-Windsor. That is why, in principle, I would like to congratulate my colleague for bringing this to the House. I also want to say that I will be supporting this, because we do need compassion back in the system. This bill goes a long way in doing that. I hope that we will have a fruitful debate. Despite the fact that it did not receive the royal recommendation, I hope that the House will give this a lot of consideration before just writing it off.

[Josée Beaudin, Bloc, Saint-Lambert, QC]

Mr. Speaker, once again I have the privilege of taking the floor and speaking on a bill to amend the Employment Insurance Act.

It is common knowledge that the Bloc never lets up on its efforts to make substantial improvements to the employment insurance program, which has become no more than a shadow of its former self. As a result, it unfairly penalizes workers who have faithfully contributed to it their whole working lives.

While definitely necessary, reducing eligibility to 360 hours regardless of region of residence is only the first step, and in no way sufficient on its own. The reform the Bloc Québécois has been urging for ages, along with the NDP, goes a great deal further. Excluding severance pay, retirement pensions and allowances, as well as vacation pay is, in our opinion, an integral part of the reform that should be enacted urgently.

In 1984, during the Progressive Conservative government, then Minister of Finance Hon. Michael Wilson announced as part of his economic update that, in future, benefit calculations would include payments made on termination of employment.

Three years later, in 1987, that same government announced that no benefits would be paid until potential recipients had used up their severance pay, this period being calculated by dividing the amount of severance pay by the salary earned in the last week worked.

For example, a person who earned $500 a week and received $5,000 in severance pay would have no benefits and no income for 10 weeks. Then there would be another two weeks added for the waiting period.

We believe this situation is unfair to workers who have been dismissed, since it their severance was not the result of poor work performance and still less of voluntary separation.

It is obvious that employment insurance is a public insurance program and it must not by compared with private insurance in any way. If we do that, there is a danger of falling into an approach that is contrary to governmental logic, which should focus on the common good and not on supporting mercantile or commercial interests.

Yet that is exactly how one government after another has behaved for the past 15 years.

I would even go further than that: not only have they subverted the social mission of the program, but they have replaced it with a focus on profit, a change in direction that has made it possible for them to stash away $57 billion in profits, at the expense of the unemployed.

The worst, ultimately, was that not only did this system become a government pseudo-corporation operating like the private insurers, but it did worse things that any private insurer would do.

What kind of private insurer would ask its clients who had had a fire, for example, to exhaust their own savings before it would provide the amounts still needed for them to restore their property?

It would be unworthy of a company that is the least bit serious and it is simply shameful of a government. It is indecent when we know that the tiny savings which flow from these measures but have such devastating effects on the unemployed would have been made up a hundred times if the government had not dipped so copiously into what should have been a cumulative reserve employment insurance fund.

Fifty-seven billion dollars: that is an awful lot of money that would have been very useful now that the unemployment rate has reached its highest point in 11 years. More than 400,000 full-time workers have lost their jobs and more than half of them will probably not get any employment insurance.

Fifty-seven billion dollars: that is enough money to eliminate the waiting period for 63 years.

Over the last 20 years, the coverage of the employment insurance system has fallen by half. The beneficiaries to unemployed ratio has fallen from 84% to 44% because the eligibility criteria were considerably tightened, though unjustly so, in the 1990s.

It is high time for the government to finally acknowledge this injustice and do everything in its power to fix it.

The Bloc Québécois and the NDP are not the only ones denouncing it. All labour unions and groups that defend the rights of working people have also been denouncing this injustice, which has led to the perversity of an employment insurance system that does not cover even half of those who are unemployed.

In 2005, the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities adopted a report with 28 recommendations that were almost all ignored by the Liberal and Conservative governments. One of these recommendations expressly addressed the issue of excluding from the calculation of people’s benefits all forms of remuneration they receive upon leaving their jobs.

I quote the report.

The Committee recommends that the government amend the Employment Insurance Regulations so as to not consider pension, severance and vacation income in the determination of earnings for benefit purposes.

It must be noted once again that the committee's work was totally ignored. That is wholly deplorable. Nothing justifies this sort of attitude, which reveals the government's alarming indifference to its social mission. The Bloc will remain critical of this indifference so long as it leaves the unemployed in their current, untenable situation.

This is why we have introduced no fewer than four separate bills to make substantial amendments to the employment insurance plan. Thus, we hope to have the program that became a labour tax at the end of the 1990s and in the early 2000s once again become a program that really protects workers by providing them with financial security between jobs, that is, while they are unemployed.

The creation of the Canada employment insurance financing board in February 2008 seemed like a first step in this direction. But the 2009 budget has frozen contribution levels for the next two years. It seems that the Conservatives' sole concern is to have big business make economies of scale on the few cents per $100 that would be needed to improve the rate of coverage of the plan significantly.

They made a choice, that of big business over workers. They chose to drop the thousands of workers who, rather than benefiting from the support of a plan they pay into day in, day out, without skipping the two week waiting period, find themselves penalized because they receive whatever their employer owes them.

It seems, however, that penalization is the leitmotif of the Conservatives—penalization more severe than the crimes, minimum sentences, the two week waiting period penalty before employment insurance benefits are paid and, now, a penalty for workers who are less badly off than others.

If an employer gave laid-off employees a watch in gratitude, I think the Conservative government would take it into account in calculating benefits. By making sure the unemployed face serious economic difficulties, the government hopes they will return to work more quickly. This cynicism is not in keeping with the role of government. This is why my colleagues in the Bloc and I will vote in support of Bill C-279.