Debates of March 4th, 1996

Unemployment Insurance Reform

[Douglas Young, Liberal, Minister of Human Resources Development]

Mr. Speaker, as regards the proposed unemployment insurance program, we are all aware of the concerns that have arisen pretty well throughout the country and we have said clearly that, as soon as the parliamentary committee resumes its deliberations, we will raise, properly I hope, the question of calculating benefits for the unemployed and the intensity rule.

As to the surplus, I am sure that the hon. Leader of the Opposition is aware that, last year and two years ago, we were in a deficit situation with unemployment insurance.

Frankly, I would reassure the Leader of the Opposition that the surplus has nothing to do with the changes we are going to make to the unemployment insurance program. This program must reflect reality for both people looking for work and the labour market.

[Michel Gauthier, Bloc, Leader of the Opposition]

Mr. Speaker, is the Minister of Human Resources Development daring to claim that the $5 billion surplus already being counted on by the Minister of Finance does not come from two main sources: the cut in unemployment benefits and the exclusion of hundreds of thousands of unemployed from the plan?

[Douglas Young, Liberal, Minister of Human Resources Development]

Mr. Speaker, at the moment, the program has not undergone the changes proposed in Bill C-111. The present surplus is the result of a fairly dramatic change in the country's employment rate.

No doubt the Leader of the Opposition is aware that, in recent years, the job situation has improved in the country, though it remains painful for those unemployed.

I would point out to the hon. Leader of the Opposition that, over the past three years, there has, each year, been a fairly small reduction in the contributions made by employees and employers to the UI program.

[Michel Gauthier, Bloc, Leader of the Opposition]

Mr. Speaker, I must point out to my hon. colleague that the Minister of Finance, in last year's budget, counted on annual surpluses of $5 billion in the coming years. Now they tell me that they will cut payments to the unemployed and the plan's benefits without taking into account the changes to the plan. Now I really do not understand.

My question is as follows: Does the Minister realize that, by cutting benefits to the unemployed in order to create a huge surplus in the unemployment insurance fund, he will continue to unload the federal government's deficit onto the provinces, since it is the provinces that will have to look after the many unemployed who are no longer eligible for benefits under the plan with the government's proposed changes?

[Douglas Young, Liberal, Minister of Human Resources Development]

Mr. Speaker, we are very aware of the possibility that the changes proposed in Bill C-111 could indeed result in a number of people being denied the benefits they have enjoyed for many years.

This is why my predecessor before Christmas and I, since I have been asked to take on the department, confirm that, with the resumption of the deliberations of the parliamentary committee-I am certain of it, because all members of the House have heard their constituents' claims and concerns-the members of the committee representing all parties in the House will sit down at the table later this week to begin the work that is part and parcel of the legislative process and which consists in making the necessary changes to Bill C-111, thus reflecting some of the concerns raised by my hon. colleague.

[Francine Lalonde, Bloc, Mercier, QC]

Mr. Speaker, my question is for the Minister of Human Resources Development.

The proposed unemployment insurance reform, that the Minister of Human Resources Development seems stubbornly determined to bring back instead of letting it die on the Order Paper as he should, contains many unacceptable measures, which we will apparently discuss, including the reduction of the maximum yearly insurable earnings from $42,400 to $39,000, when what is required is an increase.

My question is the following: Given that employers would no longer have to contribute beyond this $39,000 ceiling, does the minister not realize that this will act as a very strong incentive for all businesses, and those so-called capital-intensive operations that pay high wages in particular, to make as many employees as possible work overtime?

[Douglas Young, Liberal, Minister of Human Resources Development]

Mr. Speaker, this legislation contains several elements that seek to do the exact opposite of what my hon. friend has just described. In fact, I think there is ample evidence across the country that many people believe that the UI program is being abused and that there is not enough incentive for people to go out and look for a job.

We have taken the approach of having every hour worked count and including in the program right from the start anyone who has worked at least one hour. I do not quite understand the question about limiting the contributions made by high income earners. Naturally, by reducing the maximum payable, we hope to protect low income earners. It is always interesting to see how systems evolve, because today's newspapers report that Quebec plans to increase the insurance premiums paid by those with the highest salaries.

It is obvious that various people have many solutions or options in mind, and I can assure my hon. friend that, when committee work resumes, we will gladly listen to all your suggestions and, if any of them seem to meet the needs of the workers-after all, they are the ones we should be trying to help-we will pay serious attention to what you are saying.

[Francine Lalonde, Bloc, Mercier, QC]

Mr. Speaker, if the minister realizes that Quebec's proposal, and not his own, may be the way to go, perhaps he should do what everyone is asking him to do, that is to say, withdraw the bill and review its basis, as it does not make any sense under the present circumstances.

Does the minister realize that, with this lower ceiling acting as an incentive for businesses to increase overtime, he is running counter to the growing consensus about the need to reduce overtime, put in place conditions conducive to job creation and make room for young people? This bill runs counter to this, as we will keep pointing out, and the minister will have to account for this.

[Douglas Young, Liberal, Minister of Human Resources Development]

Mr. Speaker, one of the fundamental elements in all of these proposals is that everyone in Canada recognizes the need to make sure that everybody takes up every hour of work that is available to them no matter where they live in the country.

I want to assure my hon. colleague that whatever we do when modifying the present elements of the law, under no circumstances

are we going to consider any approach that will make it easier for people to take advantage of the system.

I do not think that anyone in the country, other than the hon. member, who has listened to what we have had to say, would believe that somehow it is going to be easier to take advantage of unemployment insurance.

What we are saying, which has offended a great number of people in the industries and in the businesses to which I think the hon. member was referring, is that they are concerned about first hour takeup. They are concerned about the fact that the legislation is going to take care of everybody in the country immediately when they go to work, whether or not they are working part time. The current legislation allows people to perform work for less than 15 hours a week which leads to the abuses to which the hon. member just referred.

Do not think it will be any easier. You might be a little surprised that it will be substantially tougher than it is now.

The Economy

[Deborah Grey, Reform, Beaver River, AB]

Mr. Speaker, last week the Prime Minister said that his job was done. He was satisfied with a $17 billion deficit projection and that now it was time to create a few jobs.

What the Prime Minister does not seem to grasp is the fact that deficit elimination is job creation. Thirty-three cents of every taxpayer dollar goes to pay just the interest on the federal debt. That is 33 cents that cannot go to health care, post-secondary education and pensions.

Does the government really feel that its job is done when 33 cents out of every taxpayer dollar ends up in the hands of money traders? Why will the finance minister not announce a firm date for a balanced budget?

[Doug Peters, Liberal, Secretary of State (International Financial Institutions)]

Mr. Speaker, we have consistently believed that a two-year rolling target is the best system to get to a balanced budget.

[Jim Abbott, Reform, Kootenay East, BC]

Some people believe in Santa Claus too.

[Doug Peters, Liberal, Scarborough East, ON]

The finance minister has consistently said that.

I would like to read something from the Globe and Mail in case the hon. member missed it. It states: ``It is worth noting that Mr. Martin has yet to report a deficit bigger than the one he predicted. This week he will probably say the deficit was less than that, which works out to 4 per cent of GDP or less than any deficit since 1976-77''. That is not a bad record. It is a darn good record.

[The Speaker]

We are back into the second week now and I would ask members please to refrain from using names instead of ridings or titles in the House.

[Deborah Grey, Reform, Beaver River, AB]

Mr. Speaker, when the minister talks about rolling targets, how long are we going to roll along until this thing gets balanced?

If somebody puts the high jump level at one foot I would say anyone could trip over that kind of low and ridiculous target. The Liberal government says that it wants to create jobs, especially for young Canadians. However, in the upcoming budget with its $17 billion projection, more jobs will be created on Wall Street than on any university campus: $250 million for young people versus $50,000 million for interest payments alone to international money lenders.

Why will the government not offer young Canadians real hope and a chance at a real long term job by simply balancing the budget; no rocking, no rolling, just balance it?

[Randy White, Reform, Fraser Valley West, BC]

You don't know what rock and roll is, so let's go back a few years.

[Doug Peters, Liberal, Secretary of State (International Financial Institutions)]

Mr. Speaker, the Reform Party is not willing to listen to answers, they just want to ask questions.

The real answer to the question is that we will. If the hon. member listened to the throne speech, youth unemployment was a key part of it and she will have to listen to the results that come up later on.

We have committed to a balanced budget. We have committed to two-year rolling targets. We have not only done that, we have met our targets which is something new in this country.

[Deborah Grey, Reform, Beaver River, AB]

Mr. Speaker, youth unemployment is key but there is no sense lending money to kids and then charging it back later, that much plus interest. It is scandalous.

The government has tried to make a $17 billion deficit sound like a victory and a $12,000 a year internship amount sound like the key to fighting and winning against a 16 per cent youth unemployment rate.

The reality is that Canadian young people are less likely to find a job now than when the government took office in 1993. What is more, any young person lucky enough to even find a full time job will be paying more taxes than they can ever expect to receive in benefits from health care, social assistance and public pensions.

Why is the government condemning Canadian youth to a life of unstable employment, higher taxes and reduced benefits by its stubborn refusal to balance the books now?

[Doug Peters, Liberal, Secretary of State (International Financial Institutions)]

Mr. Speaker, I would love to to see their budget this year. We did not get a chance to.

Last year they put out their ideas and those ideas would have condemned Canadians to lower pensions. It would have condemned Canadians to less social benefits. It would have condemned Canada's youth to even higher levels of unemployment. We are doing something. The Reform Party is just talking.

Cuba

[Gilles Duceppe, Bloc, Laurier—Sainte-Marie, QC]

Mr. Speaker, the U.S. government has decided on certain measures against Cuba in retaliation for the destruction of two civilian aircraft on February 24. If the Helms-Burton bill is passed, Canadian companies doing business with Cuba will be liable to prosecution and their directors will be denied access to the U.S. Thousands of Canadian jobs will thus be at risk.

Can the Minister of Foreign Affairs report on the current status of discussions between his government and that of the United States on this matter?

[Lloyd Axworthy, Liberal, Minister of Foreign Affairs]

Mr. Speaker, as the hon. member knows, today the Minister for International Trade is in Washington meeting with his counterpart, raising the serious objections that we have expressed since we knew the bill was being considered by Congress.

The Prime Minister is at a meeting of the Caribbean leaders in Grenada where he is working actively to try to gain their support for a statement. We are undertaking a number of initiatives with other countries to mount international pressure against the implementation of this bill.

Within the bill itself-it has not been passed-there is room for discretion. The U.S. president can waive those parts of the bill that apply specifically to countries outside their boundaries.

At this time we are really taking the leadership internationally in mounting pressure against the bill to convince the U.S. administration that the implementation of all articles of the bill would not be in its best interest internationally.

[Gilles Duceppe, Bloc, Laurier—Sainte-Marie, QC]

Mr. Speaker, considering that the American bill would obviously be in violation of international trade laws, will the minister commit to defending Canadians before the appropriate courts in this connection, should the U.S. Congress and the President pass this bill?

[Lloyd Axworthy, Liberal, Minister of Foreign Affairs]

Mr. Speaker, there are a couple of hypotheticals in that question: one, if the bill is passed and two, if the president does not implement the bill.

Our position is that the most effective protection for Canadians is to insist that those parts of the bill that apply to Canadians and other countries not be implemented. That would save having to get into major legal wrangles or countermeasures.

However, it is quite clear from what the Prime Minister and other spokespersons of the government have said that we will protect the interests of Canadians. We will look at all measures that are necessary to have that protection, but the first and most effective way of doing it is to see if we can convince the Americans not to go ahead with implementing those parts of the bill that apply extraterritorially.

Goods And Services Tax

[Monte Solberg, Reform, Medicine Hat, AB]

Mr. Speaker, this weekend the environment minister said of the GST, "to deny that it's not an issue would be incorrect. People remember us taking a very firm position".

My question is for the Minister of National Revenue. Exactly what would be today's firm position on the GST? Would it be the pre-election position that her caucus came up with, which was to axe, abolish or kill the GST? Or would it be today's position, to replace and harmonize the GST into what amounts to a new super tax on consumer spending?

[Doug Peters, Liberal, Secretary of State (International Financial Institutions)]

Mr. Speaker, our position on the GST remains completely unchanged. We said in the red book that we would replace it with a tax that generates equivalent revenue, that was fairer to consumers and to small business, that minimizes disruption to small business and promotes federal-provincial co-operation and harmonization. That was our position in the red book. That is our position now.