Mr. Speaker, thank you for the opportunity to bring our concerns before the House.
I would like to focus my remarks on the government's proposed changes to the unemployment insurance program. In the budget tabled on February 22 the government proposed the following changes to the UI program, some of which are included in Bill C-17.
The government is rolling back UI premiums for 1995 and 1996 to $3 for every $100 in insurable earnings, down from $3.07. It is reducing the benefits to 55 per cent of insurable earnings, down from 57 per cent. It is increasing the benefits for those UI claimants with low earnings and dependants to 60 per cent of insurable earnings. That is up from 57 per cent.
The government is increasing the minimum amount of time a person needs to work to qualify for UI from 10 weeks to 12 weeks. It is allowing more workers who voluntarily quit their jobs or are fired with just cause to collect benefits. Also, the length of time a worker can collect UI in regions with high unemployment has been reduced from a maximum of 32 weeks to a maximum of 26 weeks.
Finally, the length of time a worker can remain on a claim has been reduced. For example, workers who work 20 weeks used to
be able to collect benefits for 17 weeks. Under the new schedule, they will only be able to collect 10 weeks of benefits.
Those are some of the changes. The Reform Party is generally supportive of the changes proposed by the government. However we maintain that the government did not go far enough.
On Tuesday of this week the leader of the Reform Party asked the Prime Minister if there would be additional spending cuts to those outlined in the recent budget and the Prime Minister answered yes. Yesterday in the House of Commons the Prime Minister and a number of his ministers, despite repeated questions from the Reform Party, refused to identify which programs would be cut.
We maintain there are billions of dollars to be saved by returning unemployment insurance to a true insurance program. This means to protect workers who become unemployed through no fault of their own. That is what we mean.
I would like to comment specifically on each of the measures proposed by the government and then put forward some constructive alternatives for the government to consider. We do not just try to criticize, but we also give positive alternatives.
The government is to be commended for reducing premiums to employers and employees. UI premiums are simply payroll taxes and payroll taxes are job killers. This is probably the only thing I have ever heard all economists agree on.
The government is to be commended for reducing these job killing taxes and restoring some confidence in the business community by assuring the rates will not increase for 1995 and 1996. The government says this will create 40,000 more jobs than if it had let the rates rise, proving once again that lowering taxes creates jobs.
In fact the government's own reports show that reducing UI premiums is a cheaper way of creating jobs than its own $6 billion infrastructure program, most of which will be financed by borrowed money. That again will increase the deficit and the national debt and undermine confidence in the economy.
I remind the House this is the same government that increased UI premiums by 7 per cent on January 1, 1994 and less than two months later announced a premium reduction for 1995. Talk about being confused. This also shows the government can and will change the rules anytime it wishes.
The government reports that reducing UI benefits will save $725 million this year and $2.4 billion in each of the next two fiscal years. Again the government is moving in the right direction but not quite fast enough. The government's own budget documents show that the cumulative deficit of the UI account as of December 31 is $6 billion.
The Prime Minister was silent a few weeks ago when asked by some angry fishermen in Atlantic Canada where it was written in the red book that the government would cut UI benefits. At least the Reform Party campaigned on cutting spending on unemployment insurance. The Liberal Party did not campaign on that. The government is finding out how hard it is to say one thing during an election and then to do the exact opposite once elected. Canadians will remember.
Increasing benefits to UI claimants with low earnings and dependants is commendable. It is a recognition of the Reform Party principle that assistance should be targeted to those who need it most.
The Reform Party was vigorously attacked during the election campaign for suggesting that universality was not financially sustainable. Now the government has contravened the sacred principle of universality. Will the government finally admit that universality is dead?
As a final comment, the reduction in the length of time a worker can collect UI benefits in regions with high unemployment is a small admission that the current UI system creates disincentives to work. It reduces worker mobility, discourages self-employment, undermines personal and community initiatives and impedes productivity for employers.
The Reform Party says it is time to use the government's initiative to phase out regionally extended benefits altogether. I would like to put the government's UI reforms to a simple test. I am going to call it the taxpayers' test.
Question No. 1: Do the government's proposals make the UI program financially sustainable? Look at it. No.
Question No. 2: Do the government's proposals help people become less dependent on the system? A little, but how many will return to welfare? The entire income security system is sick and it needs to be fixed.
Question No. 3: Do the government's proposals reduce abuse of the UI system? No. Abuse is still rampant. For example, there are now 43 just cause reasons which will allow job quitters to collect UI. There are 43 different ways.
Question No. 4: Are the government's proposals fair and do they treat all Canadians the same regardless of where they live? No. The UI program still allows people who live in uneconomic regions of the country to become permanent wards of the state.
Question No. 5: Do the employers and employees who pay for the UI program with their premiums have a real say in how their money is spent? Do they have any say in that? No. The government should democratize unemployment insurance. Let the people who pay for it run it. That is the essence of democracy, not this top down bureaucracy.
Question No. 6: Is the UI program a true insurance program? No. Unemployment insurance rewards repeaters and seasonal workers at the expense of permanent full time workers.
In closing, I reiterate that the unemployment insurance program is still being used as a vehicle for social engineering. The UI program still breeds dependence. The UI program is overly generous when compared to other OECD countries.
The Minister of Human Resources Development will soon put forward an action plan for the reform of social programs. This review provides us with a remarkable opportunity to revamp our unemployment insurance program.
I encourage the government to consider the principles the Reform Party has put forward to ensure that any future changes will pass the taxpayers' test.