Mr. Speaker, back in April my colleague, the member of Parliament for Yorkton-Melville, outlined some very good reasons for not supporting this particular bill. I would like to briefly review those reasons before providing some thoughts of my own.
The changes proposed by the hon. member for Saint-Hubert would amend the Unemployment Insurance Act be revoking the arm's length provision used by unemployment insurance adjudicators to determine if family members employed by other family members are in a true employer-employee relationship and therefore insurable and eligible to collect UI benefits should they be laid off. This includes employment by husbands and wives, mothers and fathers, brothers and sisters.
Therefore, as I understand it the net effect of this bill would be to allow all family members employed by their immediately relatives, mainly husbands and wives, to become eligible to collect UI benefits without giving the government any means of determining if the employer-employee relationship is legitimate.
Government officials predict that this change would result in at least 3,750 additional claims for unemployment insurance being allowed each year. Considering that the average benefit paid to each UI claimant in 1992 was $6,613 we are talking about a minimum annual increase in UI payouts of about $25 million. These figures were confirmed by the office of the hon. member who is proposing this bill.
Reformers oppose this bill for the following reasons. There are four of them. First, 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 up the system, tightening up the loopholes and saving employers' and employees' UI premiums to cover UI claims by workers and families hardest hit by today's high unemployment.
Second, it would increase payout of UI benefits by many millions of dollars.
Third, it directly contravenes Reform Party policies which support elimination of fraud and abuse on returning UI to true insurance principles.
Fourth, spouses employed by their partner already have an advantage over other Canadians because they can split their income and reduce their taxes. Reformers support income splitting for all married couples, not just those running their own business.
I would now like to respond to some of the rationale used by the hon. member for Saint-Hubert when she spoke during the first hour of debate on this bill. The hon. member said the current law presumes that family members who work for their relatives are guilty of defrauding the UI account and must prove they have a legitimate employer-employee relationship with their husband or wife, mother or father, brother or sister.
Reformers say this is simply a reasonable safeguard in a system in which there is real potential for abuse. I must point out that Revenue Canada identifies over 3,750 UI claimants a year who are denied benefits because they do not work in a true employer-employee relationship and are denied benefits as a result.
The hon. member says the current law discriminates against women, not technically but socially because most of the people affected by this law are women. Reformers say that this particular section of the UI act is not discriminatory and is just a reality of small family businesses.
If a woman works for her husband in a small business, then she must be prepared to convince Revenue Canada that she is in fact in a true employee-employer relationship, not just hired on in fiction to add a nice windfall of UI benefits to the family income some time down the road.
The investigations carried out by Revenue Canada on behalf of unemployment insurance every year identify significant abuse in this area.
Why would we want to throw the door wide open to allow still more people to take advantage of the system. If this safeguard were not in the system there would undoubtedly be more abuse and many more millions of dollars wasted on bogus UI claims. The end result would cost workers and employers millions more dollars in UI premiums.
I want to emphasize that these premiums would be funded by an increase in payroll taxes which come directly out of each worker's pocket. People not trying to take advantage of the system who are legitimately and truly employed by immediate family members are not penalized. Why should we not support rules to deny abusers the right to rip off other workers?
The Parliamentary Secretary to the Minister of Human Resources Development also spoke against this bill in April. He told members of this House that of the tens of thousands of claims filed by employees of family businesses 15,000 had been reviewed by Revenue Canada and 25 per cent, the 3,750 claim-
ants I mentioned earlier, were found not to qualify for UI because they were not in a true employer-employee relationship.
Reformers agree with the government's concern about preserving the integrity of the unemployment insurance fund. Reformers think the current law is balanced and fair and must be maintained.
Our policies are developed by ordinary members of our party. This is the policy these average Canadians have put in place concerning unemployment insurance: "The Reform Party supports the return of unemployment insurance to its original function, an employer-employee funded and administered program to provide temporary income in the event of unexpected job loss". Reformers encourage the government to get on with its efforts to reform the unemployment insurance system.
The Minister of Human Resources Development promised an action plan in May, delayed it until June and then postponed it again until this fall. Yesterday in response to a question from our leader the Prime Minister said a discussion paper, not an action plan, will be released in October.
Canadians are fed up with the waste, fraud and abuse in the UI program and they want it cleaned up. Canadians want action, not still more discussion. Reformers believe that Canadians want real reform of unemployment insurance, not just more liberal tinkering around the edges.
Here are the issues Reformers believe are fundamental in any consideration of changes to the UI program. Do taxpayers, workers and employers think the UI program should be compulsory as it is now, or voluntary? Do taxpayers who are present employers think the government should continue to control the UI program or should unemployment insurance be administered by the employees and employers who pay the premiums?
Would workers like to have a choice to invest their money in their own savings plan to protect them against unexpected unemployment rather than being forced to pay UI premiums?
Would workers get a better return on their investment than the government run UI program offers them if they invested their money privately?
Should the UI program be turned into a self-financing program administered by the employees and employers who pay the premiums with government safeguards?
Should unions and employers be permitted to opt out of the government run UI program by establishing privately administered unemployment insurance programs for the benefit of their workers?
We know that the hon. member who proposed this bill has a genuine concern for the plight of unemployed Canadian workers and their families but she will not help them by allowing their pockets to be picked by fictional employment arrangements allowing bogus UI claims.
The UI program will take $19.8 billion this year directly out of the pockets of people trying to keep businesses afloat and people trying to earn a decent living. That is approximately $1,485 for every single Canadian worker covered by the unemployment insurance program.
I have suggested some fundamental issues that ought to be addressed in order to design a reformed system that truly works for the benefit of those who are paying the big dollars to support it. Rather than increasing the burden on these working people, I urge the member to work with us to find ways to make the system more efficiently and effectively meet the very real needs of Canadians who suffered the distress and hardship of unexpected job loss.