Mr. Speaker, listening to the member for Calgary Centre I feel we are reading two separate acts. One of his concerns was that we were changing the name of this bill from the Unemployment Insurance Act to the employment act, and even that bothered him. Imagine trying to take a positive stance on getting Canadians back to work; this is just another thing they object to.
Canada works when Canadians work. This is the essence of Bill C-111. The previous Unemployment Insurance Act was basically a passive support system. It in many ways encouraged people not to seek employment in other areas. The Canadian economy is very much evolving from what some economists would like to call the old economy into a new economy. It is very appropriate that as Canada approaches the 21st century it attempts to evolve its legislation in the area of encouraging skills and skill development in our workforce.
There is always the question of cause and effect when we get into the issue of unemployment or employment benefits. Many of our younger people are joining the workforce. Alarmingly, over 60 per cent of new entrants have received only a high school education. It is apropos that the government has recognized that and wants to upgrade the basic qualities of skills in the labour market.
Many of us can relate stories from their own ridings, anecdotal or whatever, of people who have purposely chosen not to work because the incentive to work was not there. In other words, they received unemployment insurance benefits and for them to take a job, with possible babysitting costs or whatever other costs attributed to going to work, it was cheaper to sustain themselves on unemployment insurance.
I do not believe unemployment insurance was ever intended to be an income support system. It was basically supposed to encourage and develop skills so that people would seek employment.
It is interesting how Canadian economist Nuala Beck said the economy in Canada has been changing over the last number of years. More people work in the sophisticated electronics industry than in pulp and paper. This is even true in British Columbia. More Quebecers have jobs in health and medical care than in the traditional sectors of construction, textile, clothing, furniture, automobile, forestry and mining combined.
More Nova Scotians work as teachers and university professors than in fish processing, forestry and construction put together. The province has the largest number of universities per capita of any province, making it one of the best knowledge intensive regions in the country. Why I submit that information during this debate is that sometimes we forget how our economy has been changing. We often look at the unemployment statistics and they also follow some of what people would call the older economy.
Basically we want to not subsidize and underwrite people staying with an old economy that possibly is leading to dead end jobs. Rather, we want to give them the skills and the incentive to move along within the workforce.
Canada has one of the highest benefit plans of unemployment insurance in the world. Many have suggested this has created a situation in which people have been reticent about seeking new employment in other areas. In a sense it has actually contributed to the immobility of our workforce and has possibly made it not as dynamic as it should have been.
We have watched the unemployment insurance system change in the last 12 years. In 1982, 15 per cent of workers were repeat users. By 1994 over 40 per cent of the people who accessed the unemployment insurance system have also done so at least one other time in the last five years, which tells us that more and more people have been using the unemployment insurance system not so much as an avenue for getting back to work or looking for new work but as a way to maintain their income levels.
Another aspect affecting our economy is a tremendous change in the remuneration for young people. Those under 24 years of age are today earning less than a similar age group in 1969. Many of these younger people are finding it difficult to access the labour market. Many aspects of this legislation create an open door which allows some of our younger people to get work experience.
How is this new act better than the old unemployment system with the problems I have mentioned? It is better in a number of ways. It assists employers in keeping assistance to small and medium size businesses. Premiums for workers will drop from the current level, which the previous speaker neglected to mention, of $3 to $2.95 in 1996, while employers will pay $4.13 per $100 of employee insurable earnings as compared with the current $4.20. This combined with a reduction in the annual insurable base from the current level of $42,380 to $39,000 means employers could save as much as $170 per worker in 1996.
Time and again employers have told us as a government that payroll taxes kill jobs. Payroll taxes, whether unemployment insurance or Canada pension plan and other benefits paid to employees, mean a cost to the employer to hire that extra employee. The government has realized that, has heard those concerns of employers and has changed the legislation to give employers more of an incentive to hire new workers.
This new system will streamline paperwork and simplify reporting requirements facing employers, thus reducing administrative cost. The elimination of weekly minimums and maximums to determine insurability means employers will save in the order of $150 million in administration costs.
The old system basically made people account by weeks with I believe 15 hours per insurable week of employment. One can imagine where an employer who had employees, some working 15 hours, some working 12 hours, some working more than that, would have a horrendous accounting procedure trying to figure out who was insurable and who was not. It also created a barrier. Some people wanted to get 15 hours in so they could have insurable employment. Many relationships between employers and employees were about who could get these hours and so forth.
It created an administrative nightmare for small business. It also created abuse in the relationship between employers and employees. The government has recognized this impediment to hiring people and has changed it in this legislation.
It is estimated that 60 per cent of small firms that currently contribute to the unemployment insurance system actually pay less under the EI while another 16 per cent will pay the same amount. This is a significant factor. Remember, small and medium size businesses are the employers of the future and have been almost the sole creator of jobs in the past. Over 76 per cent of small businesses will realize a significant reduction in their payroll costs. This will give them an incentive to hire more people.
In addition, further relief will be provided by a temporary premium refund for those small businesses that experience a significant premium increase over the next two years. Some 300 small businesses will be eligible for these rebates. This is another area where the government has heard the concerns of small and medium size business and their desire to create new jobs and a new economy.
In addition, we have recognized the importance of people being able to find that new job. Often the problem has been with the changing workforce and also a changing economy. In moving from the old economy to the new economy people have been displaced. Their displacement has also created a situation in which they were reticent about accepting lower paying jobs which may get them into a new labour force.
This legislation provides up to a $5,000 a year subsidy over a three-year period to allow them to access those new jobs. Eight hundred million dollars will be spent for new employment benefits, and on and on.
There is also the recognition of low income families. It was often cheaper for them to go on welfare than it was to work. The government has recognized that by subsidizing the child tax benefit provisions of the unemployment insurance system to providing more benefits for those young families trying to find a job, find a career. This is only a part of what is a very excellent piece of legislation.
These changes will assist Canadian corporations and their workers in providing new jobs for the young and for all workers in Canada in the new economy and putting the old economy behind us.