Madam Speaker, I am pleased to address this bill. It gives me an opportunity to discuss some of the serious unemployment problems in Canada and to determine if the government's response has been adequate and propose some constructive alternatives.
I would like to start by saying that the hon. member for Hochelaga-Maisonneuve has proposed some fairly significant changes to the government's older worker adjustment program, one of which if passed would cost millions of dollars more and require the renegotiation of six federal-provincial agreements.
As well intentioned as this bill is, I think the consequences and the cost of implementing this bill have not been considered as long and as hard as they would need to be.
This bill would dramatically change the eligibility rules for the program for older worker adjustment, otherwise known as POWA. Section 5.1 of the Department of Labour Act gives the minister the authority to enter into agreements with provincial governments for the purpose of making income assistance payments to older workers between the ages of 55 and 65. Workers are eligible only if they have been affected by major permanent lay-offs and have exhausted their UI insurance benefits.
The federal government has entered into POWA agreements with six provinces: Newfoundland, Nova Scotia, New Brunswick, Quebec, Ontario and British Columbia. As there is a limited amount of money allocated to POWA agreements, the government establishes in each agreement a formula for determining what it considers to be a major layoff. The formula is based on the size of the city or community, the size of the company and is different in each federal-provincial agreement.
Here is an example of the formula used in a Quebec POWA agreement. In a community, let us say, of a million people you would require a number of employees to equal 100. If your community or city has 165,000 people then you need only 80 employees to qualify under a POWA agreement. As the size of the community decreases so does the number of employees.
Just to illustrate this, in a community of 50,000 people you would require 50 employees to qualify. In a community of 17,000 or fewer you would require 20 employees to qualify under this program.
Eligibility for POWA assistance is determined for each specific mass layoff and then for the individual employee affected by the layoff. Interestingly, between April 1, 1992 and December 23, 1993, 380 layoffs in the six provinces were designated under this program. Annuities were purchased for 3,500 older workers for a total cost of $104 million to the federal government and some $39 million to the provincial governments.
Officials have told us that the federal contributions to POWA have been capped at $50 million and estimates for 1994-95 confirm that the government will spend $50 million on POWA.
The hon. member is proposing in this bill to change this program significantly with huge financial implications and creating a potential problem in the area of federal-provincial relations. This bill would remove the discretion the minister has in negotiating federal-provincial agreements. Instead of leaving the determination and eligibility for POWA based on the size of the community, impact on the community, type of industry, size of the company and the number of employees affected, this bill would require both federal and provincial governments to include all companies with 20 or more employees.
This member's office has confirmed that it has no way of knowing how many companies or how many employees would become eligible for coverage under POWA as a result of the changes proposed by this bill.
The member is asking Canadian taxpayers to write a blank cheque.
How could anyone in this House support this bill not knowing how much it is likely to cost the federal government? Not only would this bill require the federal government to assume new and unknown program cuts, which would surely be in the tens of millions of dollars, the bill would also require that the province increase its contribution to the program for older workers adjustment.
Second, I would point out in regard to this bill in clause 5.1 that the amendment would immediately rescind all current federal-provincial agreements and require the Minister of Human Resources to renegotiate each one of them.
What would this mean for federal-provincial relations? What would this mean for older workers who are already receiving assistance under the POWA program?
This bill clearly creates more problems than it solves.
The Reform Party would like to thank the hon. member for introducing this bill. While we cannot support it, it is always enlightening to investigate a government program and see how the problems were addressed in the past, what was wrong with the approach and possibly how it could be done better in the future.
When we look at the program for older worker adjustment, we see a government using its powers to design a discriminatory program which supports older workers, subject to a completely arbitrary formula based on the size of the community, type of industry, the size of the company, and the age and employment status of the employee.
This means if I were a worker aged 59 living in Montreal, laid off from a company with more than 100 employees in the textile industry and had just used up the last of my unemployment insurance benefits, I would be eligible for assistance under POWA.
On the other hand, if I were a 59 year old Montrealer laid off from a company with 90 employees, not 100, in the textile industry and had just exhausted my UI benefits I would not be eligible for assistance under POWA.
While I admire the government's intent to keep the cost of POWA capped at $50 million, I am frankly amazed that the government would implement a program that is this discriminatory.
What about older workers who are in exactly the same boat but did not work for the right size of company or a specified industry? What about all the older workers who are in the same or worse circumstances because they worked for themselves all their lives? No one is coming around to them with a guaranteed annual income.
I believe that if the government is going to create a program for older workers who have exhausted their UI benefits and have little opportunity for employment, then it had better include all older workers, not just a few selected workers in a few selected industries in a few selected provinces.
While we may sympathize with the plight of older unemployed workers and while the intentions of the government and my hon. friend who introduced the bill are entirely noble, the fact is that many Canadians are facing tough times and would like the government to buy them an annuity until they reach age 65.
What would happen to these older workers if there were no pilot program? Many of them would find work eventually or would find work elsewhere. A number of them would rely on their families for help until they did find work. Unfortunately some may have to resort to welfare.
In my opinion, Canada is not short of safety nets. In fact, I believe we have too many. The program for older worker adjustments is an illustration of this point.
Specific groups of people who are hard pressed lobbied the government for help and the government, in a legitimate desire to help, creates yet another social program, another income supplement program.
In our view, Canada needs only one income supplement program and it should be administered through the income tax system. How much money would be saved by using this Reform approach? We say billions.
The government's social programs are an overlapping, confusing mess that few politicians and few Canadians understand. It is time to bring some common sense back to our social programs and to get our social spending under control. This is why I am here in Ottawa and I intend to do my best to do just that.
Let me summarize once more why we cannot support the measures in the bill. The bill changes the eligibility criteria for POWA programs, increasing the number of persons eligible for the benefit and as a result would dramatically increase costs both for the provincial and the federal governments.
Reformers were sent to Ottawa to save the taxpayer money not to find new ways to spend it.
The bill would remove the discretion that the minister has to negotiate provincial-federal agreements. While that is not necessarily all bad, it may not be in the best interest of the Canadian taxpayer.
The bill would require the government to immediately rescind and renegotiate six federal-provincial agreements. This would likely cause a problem not only in the area of inter-governmental relations but for older workers now and in the future.
I understand the member's motivation for presenting the bill. I am sure he has the best interest of the older laid-off workers in his constituency at heart and I commend him for that, but has he taken into consideration fully the Canadian taxpayer? What we really need is a complete overhaul of our social programs.
My colleagues across the way have set for themselves the onerous task of reducing the federal deficit to 3 per cent of gross domestic product in three years' time while maintaining an acceptable level of social security.
We still spend $70 billion a year on these programs, half of all the money taken in. If the Liberal government is going to reach the target it has set for itself, it has no alternative but to reduce program spending, not increase it.
We feel that if there is a problem for all older, laid-off workers, whether they work in a big company, a small company or for themselves, then the government should not be selective in which older workers qualify for assistance.
This having been said, we think the social safety net for older workers is sufficient and there is no need for POWA. To this end we will be making a proposal to eliminate the program through our standing committee under section 81(7).
