Mr. Speaker, I am pleased to have this opportunity today to speak on Bill C-218 which seeks to amend the Unemployment Insurance Act. The member for Saint-Hubert proposes to eliminate the exemption that prevents family members from collecting UI if they work in the family business.
I suppose the intent of unemployment insurance at the time it became law in 1940 was to provide financial assistance to industrial and commercial workers during periods of unemployment. Since that time the program has expanded to encompass everything from grants to organizations under section 25 to maternity leave and sickness benefits. Today 97 per cent of paid workers are covered by the unemployment insurance program. The originators of the program would not recognize it in its present form today.
For some time now Canadians have been expressing concern over the abuse of the unemployment insurance program. Even the Minister of Human Resources Development realizes there is a need to tighten up the system and close the loopholes.
When the hon. member for Saint-Hubert outlined her reasons for introducing this bill, she said that the primary effect of section 3(2)(c) is the systematic exclusion of women who work for their spouse. She finds it objectionable that such employees must prove to Revenue Canada adjudicators that the labour contract has all the features of a job that the employer would have given to someone else who was completely unrelated to him or her.
We believe that if a wife works for a husband or vice versa, they should be prepared to prove that a bona fide employer-employee relationship exists. At this point many people on farms would qualify under those regulations.
It should be incumbent upon them to show they are not taking advantage of the system and trying to add to the family income. I do not believe this is an unreasonable safeguard in a system that is all too often abused. Members from the official opposition often talk about abuse in the system.
Revenue Canada adjudicators would adjudicate arm's length relationships. Statistics show that each year some 3,750 UI claimants are denied benefits because they do not work in true employer-employee relationships. This actually amounts to one-quarter of the claims that are reviewed each year. This means there are some 11,000 arm's length relationship claimants who do receive UI benefits. If this amendment were passed those 3,750 claims that are rejected each year possibly would be approved. Taking the average benefit from 1992 which is
$6,600, the minimum annual increase in UI payments would be $25 million.
I am sure my colleague for Saint-Hubert believes that her amendment would be a great benefit to women and to the small business community. The truth is that she is ultimately bringing more harm to those people she is trying to protect.
The changes and add ons brought in since the inception of the program have been costly to the workers and their employers. Together the contributions by employees and their employers average 7.3 per cent of contributors' income.
As it stands now the UI program will take $19.8 billion from the people who are trying to keep their businesses solvent and from workers who are trying to make ends meet and pay their taxes. That $19.8 billion amounts to approximately $1,500 from every Canadian worker covered by the unemployment insurance program. It is the second highest source of revenue for the federal government, second only to personal income tax.
If the hon. member really wanted to help women and small businesses she would support the proposal of the Reform Party for a private insurance plan, one which is operated on basic, actuarially sound insurance principles. She would be proposing an amendment to make UI contributions voluntary so that those who are not eligible to collect benefits would not have to contribute to the plan. She would be calling on the government to lower the tax rate so that money could be left in the hands of the entrepreneur, the farmer, the small business person who relies on family members to help out on the farm or in the store.
We feel most Canadians would agree with our party's belief that a dollar left in the hands of an entrepreneur, a small business person is far more likely to stimulate economic growth than a dollar left in the hands of mother government or bureaucrats.
Reform Party members oppose this bill for many reasons. It opens up the Unemployment Insurance Act to yet another avenue of abuse and waste of taxpayers' dollars at a time when we should be tightening the loopholes and saving employer and employee UI premiums to cover UI claims by workers and their families hardest hit by today's high unemployment. This bill would increase payouts of the UI benefits by millions of dollars per year. It directly contravenes Reform Party principles which support elimination of fraud and abuse and returning UI to true insurance principles.
Most important, spouses employed by their partners already have an advantage over other Canadians because they can split their income and reduce their taxation in that way. While Reformers support income splitting for married couples, we would like all Canadians to have equal opportunity to do so.