Debates of May 10th, 1996

Employment Insurance Act

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, it is with some regret that I do not have the time in this grouping to do an analysis of the member's remarks.

Most of us here know there needs to be a critical analysis done on those remarks. It really surprises me to hear the comments of the hon. member for Mercier on basically supporting restaurant owners who clearly do not want the current hour system in place because they like that 15 hour trap.

As the member said and the restaurant owners are suggesting, students should be provided with an exemption for EI premiums because they will not qualify for benefits. Some students can qualify for EI. Those who lose a part time job may qualify if available for work during the same hours as before.

Members opposite have complained about the entrance requirements. Work as a student can help someone meet new entry requirements when they enter the labour market on a permanent basis. Four hundred thousand full time students making $2,000 a year or less annually would have all premiums refunded. This represents about 40 per cent of full time students with earnings.

The government is working in other ways to help create employment opportunities for youth, in part through the $315 million announced in the budget.

In this group of amendments in the course of my remarks I want to give the members opposite a challenge to support more openness and more decision making by MPs in government.

As the member for Malpeque I have an amendment at this stage to improve the bill. Motion No. 23, if carried, will ensure that members of Parliament will be given greater control over future changes in the EI act. That is what democracy is all about. Members of Parliament can be involved more in the decision making process.

The bill in clause 14(5) reads: "For the purpose of achieving a uniformed divisor of 22 in subsection (2), the minister may, with the approval of the governor in council, by regulation amend the table in that subsection by increasing to a maximum of 22". Subsections (6) to (12) give the rules of procedure in terms of how that would be done.

My rationale for deleting those clauses of the bill are this. Under the current legislation the minister would bring forward an increase to the divisor on the basis of a report to the minister, not Parliament, which satisfies the minister, not Parliament, that individuals, communities and the economy have adequately adjusted to the changes contained in the act to the insurance and employment assistance programs and to the effectiveness of the employment benefits and support measures contained in the act.

The terms and conditions of the report and the process by which is provided to Parliament are outlined in clause 3 of Bill C-12. However, in terms of examining clause 14, as written, there is no provision made that the minister must await a report from the appropriate parliamentary committee before the minister can bring forward the regulations increasing the divisor.

I always worry about what the minister may or may not do. Increasingly the public is concerned about government by executive council rather than by the people's representatives. By deleting this section we ensure any changes relative to the divisor will be

made after appropriate discussion and legislative change in the House.

I agree with the concerns of the public of executive government and that decisions of the magnitude of increasing the divisor should be made only after serious debate by representatives of all parties in the House of Commons.

There is no question there are some out there who are using that section of the act against us right now. There are some who are saying these are great amendments put forward, known as the Scott, Regan and Augustine amendments, but really they are saying these are just smoke and mirrors because after 1998 "the minister may".

What this amendment will do is to ensure that those amendments made by my colleagues in the Liberal Party will remain intact. If further changes are to be made, they will be debated in the House prior to any such changes being made. The public will have a chance to have input.

There are other good reasons for this amendment. I am sure the members opposite will enjoy this. On page 91 of the red book there is the following statement:

The most important asset of government is the confidence it enjoys of the citizens to whom it is accountable.

The people are irritated with governments that do not consult them, or that disregard their views, or that try to conduct key parts of the public business beyond closed doors.

This amendment ensures we meet that red book commitment and that debates are held in this place prior to important decisions being made.

What will be required of the minister is that without the sections currently in the bill the minister will have to table in the House the appropriate legislation to increase the divisor. As a result of this the bill to increase the divisor will receive first and second reading, committee examination, report state and third reading, as all legislation currently does.

As a result members of Parliament will have an opportunity of debating and, if required, amending the legislation on future divisors. The report provided to the minister under clause 3 will then have a key role to reform in providing the government and members with the justification for any future changes to the divisor.

Most important, Canadians who will be directly affected by any changes in the future will have the opportunity of submitting their views to their MPs in a parliamentary committee.

Taking power out of regulation, out of the bureaucracy and putting it into the hands of parliamentarians and the people they represent is improving democracy and improving openness in government.

I expect members opposite as well would see the amendment as worthy of their support. This is a real opportunity for members opposite to support openness in government and I call on them to support this very important amendment.

[Val Meredith, Reform, Surrey—White Rock—South Langley, BC]

Mr. Speaker, I listened with great interest to my colleagues across the floor speaking in support of this legislation. It amuses me, to say the least.

We find these reforms supposedly made to the unemployment insurance act are really cosmetic changes that in essence centralize rather than decentralize.

This whole reform to the unemployment insurance program will not help create any jobs. It will probably be instrumental in bringing job loss to the part time workforce.

I would like to speak to the government's promise in the budget speech that it would not raise any taxes. I find that quite funny because here we have it adding a 7 per cent payroll tax through a change in the unemployment insurance program. This 7 per cent payroll tax will affect part time workers, the young people who are trying to enter the workforce in part time employment while they are going to school, many of whom are trying to help finance their education.

This will be a great loss to them. It will also be a loss to part time workers who happen to be mothers trying to get some work experience to get back into the workforce when their children are old enough to go to school.

For these young people and moms who work part time this change in the unemployment insurance act will reduce the number of jobs available to them. It will add a tax burden to the employers as well as to these part time workers. I find it a bit hypocritical that the government said in the budget it would not bring in any new taxes but then brings them in under program changes.

This 7 per cent payroll tax is likely to affect about 2.23 million jobs. That is not a small number. It is a substantial number of first time jobs and part time jobs which will be affected by the legislation. Our party is very concerned about that.

Our party is also very concerned about the lack of changes to maternity benefits. Presently there are two benefits, a maternity benefit for natural parents and a parental benefit for both natural and adoptive parents. Under the present system a natural parent may be eligible for both benefits up to 30 weeks, whereas an adoptive parent is eligible only for a minimum of 15 weeks.

The Reform amendments to the legislation repeal both of these benefits and introduce one new child care benefit for which all

parents, natural or adoptive, may apply. This benefit is for a duration of a maximum of 15 weeks.

We have heard adoptive parents tell us they feel very discriminated against under the present legislation because they are eligible for only 15 weeks where natural parents are eligible for 30 weeks. We in the Reform Party believe there should not be any discrimination in government legislation. Therefore we would like to see this discrimination removed.

The Reform child care benefit would eliminate any inequities or discrimination between these different types of parents. It would avoid making any value judgments as to whether natural or adoptive parents are more deserving of certain types of leave, longer leave, et cetera. Instead they would all be eligible for the same period of benefits, 15 weeks.

These changes to the Unemployment Insurance Act are positive moves and something which should be supported by government members.

We also find great difficulty in a promise by the government during the referendum debate of last fall when it promised it would transfer manpower training to the province. Under this legislation it is reneging on that promise and keeping control of manpower training at the federal level. The government has failed to meet this promise and that changes should be made to bring the dollars for manpower training under the jurisdiction and control of the provinces.

The Reform Party believes that although there are changes which need to be made to the unemployment insurance programs, the government has fallen far short of meeting some of the great needs the country faces. We do not feel its changes have done anything but add more dollars to the coffers for the federal government to spend recklessly.

It is undermining job creation. It is undermining young people in their attempts to enter the workforce. By not addressing discrimination of parental benefits and maternity in the legislation it is certainly continuing the discriminatory practice.

I urge government members to consider the amendments placed before the House by the Reform Party and give them due consideration to improve the legislation they have put before the House.

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, I wish to thank the hon. member for Fredericton-York-Sunbury and say that I also observe the rules that members must speak in turn.

I heard the comments made by the Reform member. I share many of her views, especially about the broken promise concerning provincial repatriation of manpower training. But I am more critical of the hon. member for Malpeque who, once again, decided to correct the facts given by the hon. member for Mercier. I think he got his figures all wrong when he said that the government announced a $315 million allocation for young people.

As the critic for youth and training up to last month, I can say that, according to the press release issued by the Minister of Human Resources Development, the amount was rather $160 million. I will not make an issue of it, but it is very important.

I do commend the hon. member for one thing: his amendment should limit the power of the Minister of Human Resources Development by forcing him to report to the House. I recognize that as a good point. At the same time, this suggests a certain degree of mistrust in the overly centralized power of ministers of Human Resources Development, present and future.

The hon. member referred once again to the red book, when he talked about transferring powers from bureaucrats to committees and to the House. He should not have mentioned that, since we were gagged in committee. For only the second time in this Parliament and the first time since Confederation, a committee got gagged by the House.

[Wayne Easter, Liberal, Malpeque, PE]

It was a filibuster.

[Antoine Dubé, Bloc, Lévis, QC]

There have been lots of filibusters on other occasions, but for the first time since Confederation and the second time in this Parliament, the government has curtailed the proceedings of a committee. So much for that promise. The hon. member for Malpeque was a member of that committee. He says that they will hold more consultations and that they will avoid holding consultations behind closed doors.

I would remind the hon. member for Malpeque that we proposed that consultations on the Unemployment Insurance Act be held in the field, but the Liberal majority refused, preferring to hold them in Ottawa. However, they agreed to hear witnesses, but through video conference, not in the field. We asked the Liberal members if it was possible to hear several groups at a time through video conference. They said: "No, only one group at a time, and only two people". They do not want them to be in a room where people could hear and see, even though in the Gaspé peninsula and in many other areas people do not have access to the TV channel broadcasting committee proceedings.

In spite of that objection, they said no and they curtailed debate. Was that the red book promise, to start holding consultations and then ask the House to first gag the committee, and second to limit debate at report stage and allow only one day of debate on third reading? We have to remember that second reading was skipped because we supposedly had had a pre-study in committee.

I would rather judge people after what they do and not after what they say or even what they write. The red book was prepared three years ago, and it is only this year that things get done.

In previous comments, I spoke about the unemployment rate. I have here a Canadian Press report published by the daily La Presse . Here is what it says: ``The unemployment rate is underestimated, Scotia says. A study by the Bank of Nova Scotia says that the real unemployment rate in Canada is higher that the official monthly figures. Two economists at the bank have estimated that the real unemployment rate in March was not the 9.3 per cent reported by Statistics Canada, but 13 per cent. The study offers a depressing view of an economy unable to generate enough jobs to keep up with the number of people capable of working''.

It goes on to say: "-the number of employed people has grown at only one-third the pace of people old enough to work during the 1990s. Officially, the unemployment rate has dropped from 11.9 per cent in 1992 to 9.3 per cent in March".

The study says that some people are now being left out of statistics. This is a serious study by the Bank of Nova Scotia.

Since we are dealing with figures, let me point out another thing, that is the unemployment insurance fund surplus. When the government took office in 1993, the deficit for that year was of $1.208 billion. The following year, that is the first full year the government was in power, there were cuts-Bill C-17 was enacted and its effects are still being felt-and there was a $2.283 billion surplus.

The preliminary data for 1995 show a $4.313 billion surplus. Because of the measures the government is expected to take, the surplus should reach $4.805 billion and we know it will go up to $5 billion. As the hon. member for Mercier said, in a surplus situation, why was the government in such a hurry to go ahead with this initiative? Also, this year, we are forgoing something like a billion dollar in premiums. Why? What was the hurry?

According to the government's own documents, the repercussions in each of the provinces are as follows: for 1997-98, we have 13 per cent less: $43 million for Newfoundland; for PEI, the province of the hon. member for Malpeque, it is 10 per cent less, $15 million; for Nova Scotia, 8 per cent less; for New Brunswick, $65 million, 11 per cent less; for Quebec, $400 million, 8 per cent less; for Ontario, $300 million, 6 per cent less; for Manitoba, $30 million, 6 per cent less; for Saskatchewan, $20 million, 6 per cent less; for Alberta, $80 million, 6 per cent less; for British Columbia, 9 per cent less.

I would like to remind those who believe that some economic sectors will be winners that all of them will be losers, according to the figures of the Department of Human Resources Development. In agriculture, it is 12 per cent less; in forestry, 14 per cent less; in mines, 7 per cent less; in manufacturing, 9 per cent less; in construction, 9 per cent less; in transports, 8 per cent less; in communications, 3 per cent less; in wholesale trade, 6 per cent less-and I am mentioning the highest only; in the hotel industry, 8 per cent less; in other services, 7 per cent less; for an average of 8 per cent less. All economic sectors will be losers according to the figures of the Department of Human Resources Development.

Amendments were moved. The three would add up to $365 million, of which $345 million will come supposedly from savings made because of a better fight against fraud by the government. It is hoped that $345 million will be recovered. Right now, fraud recovery is estimated at a total of $90 million. How can we recover four times that amount? We would need to catch four times as many cheaters to get that amount. That is what the bill is all about.

I repeat, despite its name, this is not a reform aimed at creating employment opportunities, but a reform aimed at imposing more control on potential unemployed persons. As the hon. member for Malpeque said, the reform should be a reform aimed at eliminating bureaucratic errors. About $300 million were lost because of errors and three times out of four these errors are made by the Department of Human Resources Development.

I would like to mention the administrative errors contained in the numbers given by the bureaucrats. The last evening of our work in committee, I myself spotted two errors in a computer produced table distributed by the government. One of them concerned Quebec and, listen to this, it was an error of $4 million made by the computers.

It was the same thing for B.C. I cannot give you the total picture, but the real impact for Quebec was a loss of about 6 per cent of the total-and a loss is a loss. With the three Liberal amendments, there are possible savings of $365 million. I do not say that it would be the best solution, because the $2 billion in cuts will remain, but at least, it is not as bad.

[Andy Scott, Liberal, Fredericton—York—Sunbury, NB]

Mr. Speaker, I thank the hon. member for Lévis for editing the reports which guided our deliberations late into the night.

I would like to explain the amendments. In order to explain the need to make the amendments I want to put on the record why I personally believe the legislation was worthy of amendment rather than rejection. There are some good things in the bill that I want to bring to the attention of the House.

The shift from weeks to hours as the method of calculating eligibility or the value of work is an improvement, in terms of accessibility, in terms of duration, and in terms of people who have multiple jobs, for 87 per cent of the labour force in the province of New Brunswick. Eighty-seven per cent of the people work more than 35 hours a week. If they work more than 35 hours a week they benefit from the new bill.

People are entitled to employment benefits even after they have exhausted income benefits going back three years, or five years in the case of maternity or illness. That means all kinds of people who lost out on UI based programs in the past will now be eligible for up to three or five years of benefits, depending on the nature of their previous benefits.

The people whose family income is less than $26,000 saw, even before the amendments to which I am about to speak, an average increase in benefits of 7 per cent.

Finally, and this is very important, I support the clawback as it applies to people who draw on the system every year at the high income levels. Committee members from across the way were having difficulty with this, so I want to put it on the record. I do not think we can sustain the program politically if there are people making the minimum wage, working regular jobs and paying into the program when there are people making twice as much money and drawing every year, year over year. I just do not think that can be politically sustained. I am not talking about someone who lost their job; I am talking about someone who makes a large amount of money and draws every year. I do not think it is fair.

Having said that, there are three major amendments. There are many amendments and I thank the hon. member for Malpeque for recognizing the need to amend the suggestion that would allow the government to move on its incremental shifts.

There is the intensity rule. At the start we were talking about an intensity rule which would draw down the level of benefits from 55 to 45 on 10 weeks. By the time the legislation was introduced in December it was drawn down from 55 to 50, depending on 20 week blocks. The amendment of the hon. member for Etobicoke-Lakeshore will protect low income families whose family incomes are under $26,000 from the intensity rule. That means that instead of increasing their benefits by 7 per cent, their benefits will be increased by 13 per cent. That is a 13 per cent average increase in benefits for people whose family incomes are less than $26,000.

On the question of the divisor, when we originally started talking about it a year and a half ago we were talking about something in the neighbourhood of 26 weeks as a constant. By the time the legislation came forward it was 20 weeks. Then it was decided, to the credit of the former minister, that it should be done incrementally so as not to shock the system too much. It would be done over a period of time.

Finally, the fourth time the divisor was changed via an amendment presented by the member for Halifax, the divisor became two weeks more than the amount one would need to get into the system. In my part of the country it is 12, 14, 15 or 16 weeks, depending on the unemployment rate, plus 2. That is the improvement to the divisor. It is a significant improvement worth an enormous amount of money to people who cannot afford to lose in this program.

Third, there is the gap. I am inexplicably linked to the gap on this issue. I have a hat. Every time the commercials come on American television my kids say that daddy's going to be on television, they are talking about the gap.

When the shift was made from weeks to hours, the government had to come up with a mechanism to determine how much money a person would get in the new system. The original proposal was that from the time persons made their claim, they would go back the amount of weeks as defined by the divisor. Unfortunately, the language of the bill was that one would go back 14 weeks, or 15 weeks or 16 weeks. There was no reference to work.

Consequently, if claimants worked a period and were off for a period, then worked enough to get their claim, when they counted back consecutive weeks from their claim, there were many zeros. It was because people worked in industries where they might work in the spring and in the fall but might not work in the summer. It is very important to recognize that space.

The amendment that I was proud to put forward states that if one does not work for up to 26 weeks, it does not count. One can go back from the time one lays a claim, not to weeks but to weeks of work. By doing that $246 million was put into the system which will go into the hands of people who are struggling to put enough weeks together to draw employment insurance. It is very important that Canadians understand exactly what this means. There is equity in the program.

I would like to thank the two ministers, the present minister and his predecessor, for having engaged this place in a very extensive discussion. Anyone who says that this debate was closed down should have been with the committee in Whitehorse, Edmonton, Saskatoon, Victoria, Vancouver, Yellowknife, Iqaluit, all over the country. Over a couple of years it received approximately 600 briefs.

This was a very well debated issue. As a result, many changes were made. I remember the two-tier concept which we do not see anymore. There are various amendments I have talked about today. We went into this exercise with a twofold objective, to deal with

the anomalies created by unemployment insurance of which there are many. That has been done.

It is not over. It will never be over. It is an ongoing process to which improvements can always be found. I am beginning to identify some aspects of the system which need attention. On balance it is a significant improvement which constitutes very significant reform in the system.

Again I thank both ministers, I thank all colleagues involved over the past two years in committees on this issue. It has been an incredible exercise. As I said a week ago during debate on this bill, the system, the committee and the process has served the nation well.

[Roger Pomerleau, Bloc, Anjou—Rivière-Des-Prairies, QC]

Mr. Speaker, it is a pleasure to speak on the motions in Group No. 6. I believe they were moved by the Reform Party, the Liberal Party, the Bloc and the NDP.

The Bloc motions seek to delete many clauses of the bill, namely clauses 12, 14, 25 and 27 to 61, which would make the bill inoperative as far as those clauses are concerned. As my colleague from Mercier said on several occasions, members will recall that this strategy was used ad nauseam by the current Minister of Human Resources Development when the Conservatives introduced the controversial GST legislation in this House. Members will also recall that the minister himself presented more than 60 amendments to neutralize one by one all the clauses of the bill on the GST.

Following that, the Liberal government promised to "scrap"-of course, I am quoting here-the GST, and this promise resulted in the resignation of a member, a minister and, to some extent, in a loss of confidence of Canadians in this government.

Along with the attempt to delete some clauses, other amendments were also moved. All that allowed us to point out and prove to the population that our fundamental option on this issue is a perfect match for what ought to be the population's best interests. Our main option is to have the bill withdrawn and to start all over from scratch.

Why? Because this bill is utterly unfair. It will result in claimants receiving fewer benefits for shorter periods of time and therefore being forced to go on welfare much sooner.

My colleague for Lévis earlier quoted new statistics from Scotia Bank indicating clearly that the unemployment rate quoted, the one given in the statistics, is not the real rate, because more and more people are not appearing in the statistics on unemployment or elsewhere. They have simply stopped receiving benefits and are not yet getting welfare, although they are headed in that direction.

The bill is also unfair because it will be increasingly difficult to obtain unemployment insurance and because the bill creates two categories of unemployed: the ordinary unemployed and the frequently unemployed, that is, seasonal workers who will not have quite the same rights.

The bill is also somewhat regressive. There has been a lot of talk about the decrease in the maximum insurable earnings from $42,380 to $39,000. What does this mean in reality? It means that people earning over $39,000 will stop contributing. That is, people who earn over $39,000, before, it was $42,000, will contribute less, and the big companies employing them will also pay less. The difference in the amounts is estimated at $1 billion right now. This reduction in contributions will, to be compensated, be transferred to the base of the pyramid, to the lowliest folks, those hardest up and those who work very infrequently. They will be taxed. Their contributions will have to be paid the first hour they work.

So $1 billion from the upper class and the most profitable companies will be transferred to the class of people earning the least and to small and medium size businesses, which are the only ones that create jobs. Therefore, this bill is anti-employment, because employers who have workers earning more than $39,000 and who need people to work 10 per cent overtime will, instead of hiring people who will pay premiums as soon as they start working, prefer to ask those already employed to work overtime. This means there will be no incentive to share work.

From a fiscal or bookkeeping point of view, the surplus of $5 billion will, as we have so often said, show up on the books as government assets when, in actual fact, it is as though the government were garnisheeing wages to artificially reduce its deficit.

Each and every time they address the bill before us, the government has been trying to find a scapegoat.

We all remember what the Prime Minister himself said at least twice in the House. It was two years ago, I think. When asked why public finances were in such a mess, he answered it was the beer-guzzling couch potatoes that were to blame. This made the headlines for a while, but he had just singled out those in the system who were to be targeted by the cuts and let on that they should been ashamed.

Furthermore, my Liberal colleague for Malpeque said this morning, among other things, since he spoke several times, that it would be like encouraging some people to burn down their own houses, to torch the system. But we all know that those who are torching the system are not those at the bottom of the social scale.

They are not on UI benefits. The auditor general has just identified them.

I will just take a few minutes to read an article on what was just found by the auditor general. It made the news for only one day, but I hope there will be more reports on this topic, because it is the tip of a gigantic iceberg. The auditor tells us: "We have examined two advance rulings concerning transfers to the United States of assets worth at least $2 billion held by family trusts in Canada. In our opinion, the transactions these decisions were about"- listen to what the auditor has to say, he is the epitome of diplomac -"have thwarted the legislator's intent"-this means that the law was not abided by, but it is put in very kinds terms-"with regard to taxing capital gains".

This means that $2 billion were transferred from a Canadian family trust to the United States. This case was under review. By making this decision, the government created a precedent, and now, if the decision is not rescinded, everybody will take advantage of it.

Today we put a question to the minister on this very issue. I will repeat the question: The minister has the authority to rescind decisions by Revenue Canada and collect hundreds of millions, if not billions, of dollars in taxes owed to the federal government. Is she going to take action? Her answer was that she had taken action. She was reviewing the case.

In the meantime, billions of dollars are going south and the unemployed, who have hardly any means of support, are being pointed out as parasites. I think it is a case of mistaking identity: the ones who are torching the system are not the ones we think. As a matter of fact, the auditor is not the only one to raise this issue. I will remind the House that he is not a member of the Bloc Quebecois nor the Parti Quebecois, of course.

Yesterday, the Financial Post came out with some astonishing news based on material it obtained, apparently, from Revenue Canada, and I quote:

A federal government report points to news of offshore tax havens by Canadian corporations and says up to 20 per cent of international transactions that should be reported are hidden from Revenue Canada. Who is the problem in this country?

We should not be singling out the unemployed. We should start by collecting the taxes that companies do not pay. I continue.

The study suggests as much as $60 billion-

We hear figures of $500 million, $200 million. We are singling out the unemployed as one of the biggest problems in Canada. We spend a whole week talking about that and, meanwhile, $60 billion have left the country. We have set precedents which will allow this practice to continue. We put questions to the minister and she tells us that she is studying the matter.

People whose unemployment insurance will be cut-and it will come pretty fast-should remember that if they are targeted for cuts, if the government is appropriating the surplus of the unemployment insurance fund to reduce the deficit, it is because billions are leaving the country without any taxes being paid and nothing is being done to prevent it.

I will just read a little bit more:

Total international transactions by banks and trust companies soared to $84 billion in 1991 from $52 billion in the previous year.

Thus there is a constant upward trend. Since coming to the House, from the very first weeks in fact, the Bloc Quebecois has been asking for an exhaustive study of the Canadian taxation system, family trusts and tax havens. What did we get? We have absolutely no idea how many family trusts there are. We have no idea how much money there is in those trusts. However, we know that billions of dollars leave Canada while the unemployed are being used as scapegoats.

As far as tax havens are concerned, we are told the issue will be examined in a few months by people who are the chief users of such tax havens. You can easily understand that we are not enthused about supporting an unemployment insurance reform in such circumstances.

[René Laurin, Bloc, Joliette, QC]

Mr. Speaker, because of the difficult economic context of the past few years, most people must now question how long their jobs will last and how secure they are. Because of the economic context, even someone who has been in the same job for the last 10, 15 or 20 years can no longer be sure of how long he will be able to keep it.

Recent examples have shown how bad the situation is. The most recent one is the Kenworth plant, where workers whose jobs had seemed secure for many years suddenly learned the plant was closing. In this kind of context, people must be much more provident than before in preparing for what could almost be called the whims of fate. No one today knows whether they will be able to keep their jobs.

As a result, all the plans people were making to buy things like houses, trips or cars have become uncertain. People can no longer make long term plans because they feel insecure. In the old days, their relative job security allowed them to spend or at least to think: "If I ever lose my job because of economic conditions, I can still

count on unemployment insurance to keep me at the same income level for a certain time while I look for a new job".

People had much more confidence in the unemployment insurance system, which was then a true insurance policy. It was aimed at providing a degree of security for workers; it was a cushion protecting them against job loss. People could still afford to buy a house on the grounds that, if they lost their jobs and were without a salary for a few months, UI would make up the difference. With the help of lending institutions such as banks and credit unions, they could hope to pull through.

In the last two years in my riding office I have had the opportunity to meet with and talk to hundreds of people having problems with the UI system. The economic context being as I described earlier, more and more people have trouble seeing the UI system as a real insurance policy in case of job loss.

Not only did the unemployment insurance fund show a deficit during those years, but the administrative process became heavier and the claims system became more complicated to a point where people in need were not even sure if they would qualify for unemployment insurance.

Here are a few examples. First, let us look at people who have a business and who have a family, who have children. The first people they hire are their children, which is quite normal.

Let us suppose I own an asphalt paving company. You know that, in Canada, at least in Quebec and I think in most provinces, asphalt paving is a summer industry. It is rather difficult to pave streets, driveways, and so on, in the winter.

Let us suppose I own an asphalt paving company and I hire my two sons to work for me. They work all summer but, unfortunately, I have to tell them in November: "I no longer have work for you. There is no paving work done in driveways and in the streets because snow is coming. The government has stopped all highway construction work for the winter".

Therefore, I advise my sons, who paid unemployment insurance premiums during the whole period, to apply for UI benefits for the winter. But now people at the UI office question the validity of their claims. They think there is something fishy because they are the owner's sons. There were no questions asked when it came time to take the premiums, to deduct the premiums from their salary, but now when they come to claim benefits, there is a great concern over whether the owner's son was really in an employer-employee relationship or whether it was not more of a father-son relationship.

All the while the UI inspectors carry out their investigation, the kids have no income. They too, in turn, must deprive their own children of the necessities of life because when you have no income, the whole family suffers.

While UI is carrying out its investigation, these citizens who paid UI premiums do not receive benefits, until it is established beyond all doubt that they are indeed entitled to them, until it is established beyond all doubt that if these kids had not done the work, their father would have had to hire other people to do it.

This is the kind of thing that, in my opinion, is very unfair to people paying for a service. If there was a desire to improve things, instead of assuming from the outset that people were dishonest and taking advantage of a situation, why not trust them and assume from the outset that, in these cases, since their premiums were accepted, they will be considered eligible for unemployment insurance and receive the benefits claimed? If investigations are needed, let themm be done afterward; if false claims are discovered, people will be penalized accordingly. But taxpayers who have made contributions cannot be made to wait for months until an investigation is over.

That is the first example of how Bill C-12, as it stands, does not make unemployment insurance any better.

My second example involves availability, which we would have liked to have seen improved by Bill C-12. Someone on UI would often like to take training, so as to improve his chances in today's competitive atmosphere. His idea is: if I am having trouble making a living with the knowledge, experience, skills and training I have at present, I will try to improve my situation by taking some upgrading courses and learning something new. This is a completely normal reaction, and one many people have.

Unfortunately, when a person is receiving unemployment insurance, he does not have the luxury of doing this, for anyone who enrols in a course is considered by unemployment insurance officials to be no longer available for work. In other words, if you get off your backside and take the initiative to do something, you will get your UI cut off as no longer available for work. Not very encouraging to those trying to help themselves.

We might have hoped that Bill C-12 would have done something to help these people improve their situation, but no. And what is worse yet, when there were openings for people to take courses, they were even told: "Sir or Madam, you have too much education already, you have plenty of training, you are quite self-sufficient enough, so you do not need this course. So just keep on waiting until we find some way to help you".

Mr. Speaker, I see you are indicating that my time is up. I hope to be able to continue sometime this afternoon, so as to get across my entire message on this matter.

[Bob Nault, Liberal, Parliamentary Secretary to Minister of Human Resources Development]

Mr. Speaker, I want to enter this debate and speak on part II.

It is important to talk about part II because there has been a significant amount of contradiction by the opposition. The Bloc has been claiming on a number of fronts in the last weeks as we have debated this bill both in the House and in committee that it is a do nothing bill, that it is intended to reduce costs, that it does not create employment or that it is not intended to help create jobs. On the reverse of that, which is the intriguing part of this, the Bloc then criticizes the bill for having active measures to help people get jobs and the clear job creating measures it contains.

We all know and have heard this on numerous occasions. The member for Mercier has asked when the Minister of Human Resources Development is going to help people get back to work. He has asked when certain things are going to be done as far as the active measures are concerned. Then opposition members stand during this debate and say there are no measures to help people get back to work.

With the contradictions and the compounding of the confusion the member for Mercier is putting out to the public, I thought I would take the last 10 minutes I have today to set the record straight.

The confusion the members have is hurting their credibility and God only knows in this place we certainly do not need members' credibility to be affected by making contradictions. As an example there is the claim by the member for Drummond who said on May 6 at page 2374 in Hansard : ``There is no concrete measure for job creation in this unemployment insurance reform''. Then there is the member for Châteauguay who said on May 6 that this was an anti-employment measure because it has the audacity to cut a payroll tax that we know affects job creation.

How then do opposition members describe the job creation partnerships that are provided in the bill? How do they describe the transitional jobs fund of $300 million that will go to work to create some 15,000 jobs which, once this bill finally passes the House, will be available in the higher unemployment regions? Some of those areas are Quebec, northern Ontario and Atlantic Canada.

I can safely say that many of us in this place are waiting for that transitional fund to kick in so we can help people find employment. How do opposition members explain the fact that this bill will result in some 75,000 to 100,000 new job opportunities once it is fully implemented?

Again those are contradictions members continue to dismiss as irrelevant in their debate. They say that no jobs are being created, that there is no help for anybody. At the same time they argue asking why we are entering into provincial jurisdiction and why there are these five employment measures. There are all kinds of these arguments which for some unknown reason we cannot square no matter how hard we try.

The simple fact is that employment insurance is about jobs. It focuses on helping people get back to work with the right kind of support, whether the help is financial through income benefits or through employment benefits which is part II of the bill.

Let me quote the contradiction that pops up with the BQ again. The member for Saint-Hyacinthe-Bagot instructs the government to ensure that people who find themselves in this unfortunate situation are able, in the short or medium term, to re-enter the job market with lasting results. He is absolutely right. That is exactly what the government is attempting to do with part II of this EI reform.

That is the point that members have been trying to make. Bloc members are contradicting themselves again. Active measures are a way to keep insurance costs down by keeping people employed and employment up. That is the whole intent of transferring another $800 million into active programs, to help people get retrained and get back into the workforce. At the same time, added to that is another $300 million, which is a transition fund to help those high unemployment areas adjust to a very large behavioural structural change of EI.

I want to mention something to members because we are having great difficulty with this issue. The Government of Canada has recognized that labour market training is the responsibility of provincial governments and linked to the responsibility for education. We have said this over and over again in the House but for some unknown reason it is not to the benefit of the Bloc to say its members have heard what we are saying.

In Bill C-12 it states very bluntly that these measures, which include wage subsidies, income supplements, support for self-employment, partnerships for job creation and skills loans and grants, are all in line with the government's commitment on training. Skills loans and grants will only be implemented with the consent of the provinces concerned. In fact, we have said over and over again that we will get the consent of the provinces to enter into areas that we know are within their jurisdiction. However, our number one objective in part II is to help people through these kinds of programs to get right back into the workforce. If it is a training component other than getting people back to the workforce very quickly the government has to get the consent of the provinces. I think the Bloc finally recognizes that that commitment is a solid commitment.

I want to stress that point because the BQ members have claimed that the government is still in the training field. The Prime Minister, the minister and Liberal members have said over and over that the federal government is getting out of labour market training. I want to continue to focus on that particular point.

Let me add to this murky mix the Bloc position on expanding eligibility for employment benefits. Let me quote again from the member for Châteauguay: "Not only does the federal government interfere in areas of exclusive provincial jurisdiction"-which we have said we are not willing to do-"such as manpower and social assistance, but it does so with money collected as UI premiums". Can anyone imagine this? That comment would have made good sense if it had come from a member of the Reform Party. However, members have to agree that the federal government, if it does not do anything to help people who have slipped from unemployment insurance to welfare, then what is the point?

A significant portion of this bill deals with helping people. It is estimated that 45 per cent of the people who are on welfare or social assistance can apply for the five major components under part II of employment insurance. The Bloc members, who are the great defenders of the poor so they tell us, are objecting to that. They say that should not be the case. The federal government should not try to help people who are on social assistance. It should get its nose out of it and not help those people get back into the workforce.

The Bloc members are the authors of their own contradictions. They demand that the government create jobs. They demand that we follow a do nothing course on employment insurance that would prevent us from achieving the first goal. They also demand that the government do less for people on social assistance, the most vulnerable in our labour market. I want to disappoint the Bloc.

We are going to meet the very important obligation that was made in the speech from the throne by the Prime Minister and the Minister of Human Resources Development. Part II of the bill contains clear job creating measures. Those measures will be consistent with the policy that has been part of this program since the very beginning. The measures are linked to our specific area of jurisdiction and bring in a new level of collaboration. They expand eligibility for benefits to a wider group of people. The result of part II will be that people will get back to work.

All the juggling of claims by the opposition cannot ignore those essential facts. The most enjoyable part for the hon. member for Malpeque and myself is that we have had the pleasure of dealing with the contradictions which Bloc members have brought to this place in the last number of days as we have debated the report stage motions. They criticize us for not doing anything, but they do not want to talk about part II and the importance of helping people get

back to work. Whenever we do that the only message they want to send to their constituents is that we are entering into provincial jurisdiction.

Again we lay the facts on the table for my friends in the Bloc who desperately need to understand that this will be a structural change for which Canadians will thank us.

A witness who appeared before the committee a number of weeks ago has a reputation for being an individual with vision. His name is Alice Nakamura. He said that our children will thank us for these behavioural changes and the restructuring of this program because they are the most far-reaching behavioural changes which the country has ever seen. The changes are being made because of the new marketplace in which we find ourselves. Quite frankly, I feel very comfortable standing in this place and saying that I agree with Alice. When we look at the changes in the years to come through the monitoring system we will be proven correct.

[The Deputy Speaker]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker]

The question is on Motion No. 18. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Deputy Speaker]

All those in favour will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker]

In my opinion the nays have it.

And more that five members having risen:

[The Deputy Speaker]

A recorded division on the motion stands deferred.

[The Deputy Speaker]

The next question is on Motion No. 20. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Deputy Speaker]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.