Debates of May 14th, 1996

Employment Insurance Act

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup, QC]

Mr. Speaker, this minor procedural imbroglio allows me to put another question to the hon. member. We are indeed making a major change for the 21st century, a change that will affect the whole economy, including the labour market.

Does the member feel that the changes made take into account the new reality of temporary and precarious employment, of how people will find work in the future? Unemployment insurance is meant to provide an income between jobs.

Are there not many measures in the reform that divert from its intended use the money in the UI fund? When workers and employers pay unemployment insurance premiums, is it not primarily to allow those who are between jobs to have an income to maintain their lifestyle, to make it through a period of unemployment? Under the reform, a lot of the money will be allocated to programs that maintain duplication with existing provincial initiatives, including in the manpower training sector.

[Francis Leblanc, Liberal, Cape Breton Highlands—Canso, NS]

Mr. Speaker, I will be brief. This is essentially the point I wanted to make. Given the new reality, and we do not know it completely yet, in the unemployment sector, an income support program for the unemployed must do more. Such a program must of course provide an income, but it must also help people move from one job to another and constantly renew their skills, working capacity and employability, so as to best meet future labour market requirements.

Otherwise, our program will always be misdirected and it will be increasingly at odds with the needs of Canadians. This is why we have launched the process. We are starting with this reform. We will continue to have to change it, to improve it, but we are starting with a system that will be more flexible and that will better meet the needs of the 21st century. This is why that reform is so important.

[The Deputy Speaker]

The hon. member for Peace River has indicated that he wishes to share his time with a member of another political party. Is there unanimous consent so he may do that?

[Some hon. members]

Agreed.

[Charlie Penson, Reform, Peace River, AB]

Mr. Speaker, I am happy to share my time with the member for Saskatoon-Clark's Crossing, to give as many people as possible the opportunity to participate in this important debate.

This debate is on the reform of the unemployment insurance program, a reform that has been anticipated for some time by Canadians. What Canadians want from an employment insurance program is some certainty that the program will provide help for those people who are unemployed through a time of crisis in their lives for a short period of time until an adjustment can be made to find a new job and make those adjustments.

Unfortunately, that is not what we have in this program. We do not have equality. We have different terms for different parts of the country. There are something like 62 different regions that all have different criteria. Some people are upset about that. They are upset that the same terms and conditions do not extend from one side of the country to the other. They are also concerned about the

dependency. I will talk about that in a moment. I believe they are concerned about trying to reform the unemployment insurance plan into a plan that conforms more to a true insurance plan in the future.

I want to speak about the regional inequities in this bill. Everyone wants fairness. I believe it was the member from Kenora who responded earlier when a Bloc member suggested that the people of Quebec were not being treated fairly in this legislation. It was astounding to hear the member from Kenora say: "We are being fair. We are giving $1.33 back for every $1 contributed by people in Quebec". That says a lot right there.

A dollar for a dollar. It seems that all parts of the country should be treated equally and the same standards should apply to all.

One part of the country is doing quite well, a lot of new jobs are being created. In the last six years 87 per cent of all new jobs created in Canada were created in Alberta and B.C. At the same time, through this bill we are trying to encourage people to stay at home in parts of the country where there is a net job loss and a low possibility of any jobs in the future. That flies directly in the face of common sense.

My grandparents and my mother lived about 40 miles south of here around 1912. They moved to Alberta, to new opportunity, to new farmland that was available. People have been mobile in this country for many years. It seems that is part of our Canadian society. We move to where the new jobs are. People generally do not want to collect unemployment insurance. They want opportunities.

In the Canada Employment Centre in my riding there was a time when we experienced about 4 per cent unemployment. As my colleague from Medicine Hat explained, this means no unemployment. It is only indicated because of the way we built this institutional reform into our unemployment insurance in 1971 when the Government of Canada became involved.

Last year, at a time when there was essentially no unemployment in my riding of Peace River, I met with a number of contractors. They said that they were having trouble getting trades people, yet the unemployment centre will not advertise Canada wide. We had a lucrative situation.

There were plumbers, for example, in Nova Scotia and Newfoundland who wanted jobs. They did not want to collect unemployment insurance, but there were no jobs available in their provinces. They were not even made aware of the opportunities in other parts of the country. The Canada Employment Centre was advertising in Edmonton and Calgary for the Grand Prairie area. Both areas were running quite well; there were no unemployed people. Therefore, they could not get experienced trades people. It was an intolerable situation.

Alberta and British Columbia are experiencing strong growth with many jobs being created. Out of the 443,000 jobs that have been created in Canada in the last six years, 345,000 have been created in Alberta and B.C. The largest four provinces in Canada have created 101 per cent of Canada's jobs which means that the rest of Canada has been losing jobs. We know where those areas are. Yet the reforms proposed by the government still encourage people to stay at home in those areas of net job loss to collect unemployment insurance. It is shameful.

The country has been broken into 62 regions. In Nova Scotia there are five regions with different unemployment criteria. That is simply not acceptable. We need national standards that are agreed to by all provinces.

I will take a moment to talk about dependency. That is an unfortunate part of the unemployment insurance program, especially since 1971. That is when the federal government intervened. It used a regional fairness scheme to try to engage in social engineering.

We are sending the wrong signals to Canadians. We are sending the signal that dependency is okay. We now have up to second and third generation families that have just graduated into this cycle of collecting unemployment insurance. Yet at the same time, parts of the country are crying out for workers.

What incentives are being offered which create this dependency? Twelve weeks to qualify in much of Atlantic Canada and in Quebec. It is 18 weeks in the rest of the country. Is that fair? Should a worker who is unemployed in my riding be treated differently from somebody who is unemployed in Newfoundland or Quebec? They should not. This creates that same dependency. People will stay at home and collect unemployment insurance.

This is not a true insurance plan. We need a plan which is administered by employees and employers. They would soon sort out the people who are ripping off the system. Their premiums are being used to finance people who are abusing the system.

Abuse is a very common factor in unemployment insurance. Payroll taxes reflect this. Employers and employees have had to pay higher amounts in the past several years which has resulted in a slush fund that the government will be using to buffer the deficit. Employees and employers are being asked to help pay down the deficit. That is unfair.

Payroll taxes in Canada are very high. Up until about 1971 you could take the unemployment figures from the United States and Canada, plot them on a graph over many decades and see that they were almost identical. In the bad times and in the good times the chart would show that unemployment figures in the United States and Canada were almost identical.

What happened in 1971 when the federal government intervened and became involved in the unemployment insurance fund? There has been a consistent spread of about 4 points in the last 25 years between Canada and the United States. Unemployment in Canada is always higher. That is the result of the institutional unemployment which has become part of the system because of these generous benefits.

We need national standards. We need a plan which is run by employees and employers. It could be done on a provincial basis which would enable it to be responsive to local needs.

The other part of the bill which really bothers me is that over two million part time workers will have to pay unemployment insurance premiums. These people have a tough time making ends meet to begin with. Often they are working at minimum wage. Now we are asking them to pay an unemployment insurance levy as well. I believe that will have the opposite effect. It will put many people in the position where they will say: "Why should I work? I may as well sit home and collect unemployment insurance".

We are moving in the wrong direction. What the people of Canada want is real reform of the unemployment insurance system, not something which is regionally based, not something which is unfair. They want all Canadians to be treated equally. They want to stop the abuse of the unemployment insurance system. They want to be generous enough to say to those people who are unemployed: "Yes, we are going to look after you through that time of your life when you are unfortunate enough to be unemployed".

Canadians are generous. That is why we pay our unemployment insurance premiums. We do not pay our unemployment insurance premiums so that individuals can live off the system from one year to the next. It becomes an abuse program which does not do much for our self-worth. I believe that most people need to work and to feel they are contributing to society.

We are not stopping the cycle of dependency which was started over 25 years ago. We are sending the wrong message to Canadians. I am opposed to Bill C-12. I will be voting against it. If we ever have the opportunity, we will make this a true insurance program. I look forward to that opportunity.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup, QC]

Mr. Speaker, I found my colleague's speech most interesting. Although I am not in agreement with a number of his points, he has raised a fundamental question.

We are told that people must stay home and wait for work. Should they not be mobile across Canada? To that, I reply that people are not just economic beasts of burden. They are not just consumers, they are human beings with families who have lived in a region for several years, often several generations. They have the right, in my view, because that was how Canada was developed in the past, to economic development tools allowing them to develop their region. There is no region in Canada where employment cannot be developed, no region that cannot be helped to turn itself around, develop and take pride in its development.

The approach suggested by Reform members is essentially to go back to the situation that existed before 1935. In this connection, I would like to quote Prime Minister Bennett, who said at that time: "During the years of anguish you have just experienced-he is speaking about the Great Depression-you have seen the great weaknesses and abuses of the capitalist system. They have led to unemployment and misery. In order to meet the new needs, we must reshape the capitalist system so that it serves the people better, and distribute the benefits more equitably among the various classes and regions of the country".

When governments decided to distribute the benefits, was it not more with the idea of allowing a program that had shown its worth to be a good economic regulator and to ensure that individuals could develop in their own regions?

In closing, I would like to say that it is true that Quebec has long received more unemployment insurance than it paid in premiums, but that was linked to unemployment. Last year, in 1995-96, it was not one and a third dollars for a dollar, but a dollar for a dollar that was spent.

In the end, will the position that the hon. member is defending, which is to take away from the unemployment insurance system any role as regulator, not have a negative effect greater than the possible benefits to Canada?

[Charlie Penson, Reform, Peace River, AB]

Mr. Speaker, I welcome that comment. This gentleman has identified an issue I want to explain.

I believe that when people are unemployed temporarily or on welfare, it is incumbent upon the people of Canada to look after them during a temporary time in their life and to make those adjustments. What bothers me is when it becomes a way of life. I do not think anybody wants that because it is not very good for the people involved.

I want to address the regional issue. If an area is not doing very well, we have to look at the reason. It is the job of the government to create an environment for business in order for people to invest in the economy and get it going. That has not taken place. For example, if we were to ask small businesses why they are not expanding they would tell us that the high cost of doing business and the high payroll taxes are deterrents. The fact that the

government is spending $10 billion more just on interest this year than it did when I was elected in 1993 tells us something.

Atlantic Canada is a perfect example of why we have to move forward. Prior to Confederation, Atlantic Canada had its main business contacts in the New England states. It was a good relationship, one which was north-south, a natural trading corridor. After Confederation that was changed. More east-west flow was encouraged. High tariffs encouraged more east-west flow of goods and trading. That was detrimental to Atlantic Canada.

Under free trade we now have the opportunity to say to Atlantic Canadians that we will open some doors for them in the future so that they can become real partners in Canada. It is incumbent upon the Government of Canada to remove impediments to trade and allow areas like Atlantic Canada to fulfil their true potential. I believe they have lots of potential.

[The Deputy Speaker]

Before going on with the debate, it is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Mackenzie-railways; the hon. member for Mégantic-Compton-Stanstead-disability tax credit; the hon. member for Davenport-health.

[Chris Axworthy, NDP, Saskatoon—Clark's Crossing, SK]

Mr. Speaker, let me begin by thanking the member for Peace River for sharing his time with me, particularly as we do not agree very much with regard to this question. I will make three points with regard to the changes to the unemployment insurance regulations.

First, in quite an outrageous way the government is taking according to its numbers $1.1 billion out of the fund. It is taking that money from employers and employees. By other calculations there will be as much as $4 billion taken out of the fund. It is not the government's money; that money belongs to employees and employers. They are the ones who contributed. The government has no moral right to take that money from the fund.

Second, I would like to comment on the continued attack by the federal government on the unemployed. One bank president this past week indicated that the country's real rate of unemployment is 13 per cent. Changes to the UI bill continue the attack on the unemployed rather than the attack on unemployment.

Had members on the government side been on the opposition benches when the bill was put forward, as they were prior to 1993, not only would they have spoken against it, they would have voted against it. They would have been outraged at the contents of this legislation.

Third, there are procedures in the bill, so-called active programs, which are designed to provide unemployed Canadians with the needed skills and opportunities to return to the workplace. The way these programs are designed is almost perverse. Quite clearly no attention was paid to the successful active programs which are component parts of the UI programs in Europe, particularly in northern Europe. If attention had been paid to those programs, these active measures would have been designed entirely differently. It is almost as if the intent is to make sure these active programs do not work.

Earlier today I heard some talk about the consultations which took place. It is really a sham to talk in terms of consultations. It is all very well to have large meetings and for them to go on and on. But if the government does not listen to what anybody says and in particular does not listen to what the critics say, those are not true consultations. That is what happened.

There is absolutely no doubt that the proposals put forward by the government were originally proposed by the previous Conservative government. They follow on step for step with those policies. We know that in 1993 the government changed but the bureaucrats and the policies did not change. There is a continuation of the Conservative agenda.

These revisions mark the ninth time since 1975, the fourth time in the 1990s, and the second time since 1993 that unemployment insurance has been systematically attacked.

By the end of 1997-98 there will be a surplus of $9.4 billion in the UI account. This is money which properly belongs to the 13 million workers who contributed to it, not to the government which is taking it away to pay for its own fiscal mismanagement.

In 1971, 96 per cent of those who were unemployed were covered by the unemployment insurance program. In 1990 it was 87 per cent. By 1995 under these rules it was only 52 per cent. By January of this year it was 46 per cent. At the present time only 42 per cent of unemployed Canadians are covered by the unemployment insurance provisions. By the time this process all works through, less than 40 per cent of the unemployed will be covered. We will be down to levels lower than some of the United States. This is a continuation of the attack on the unemployed, not on unemployment.

These changes will have devastating effects particularly in Atlantic Canada, the north and high unemployment regions. It will have devastating effects on low income families. It will push more and more of those individuals and families below the poverty line.

Let me quote the former Minister of Human Resources Development when he talked about UI cuts by the previous Conservative government which were far less severe than these: "I totally disagree with these amendments. The kind of legislation being brought in by this Minister of Employment and Immigration makes Margaret Thatcher look like Mother Teresa by comparison. All it does is simply put the squeeze on the people least able to protect themselves". Those words speak for themselves. It is no wonder that Canadians have trouble recognizing any integrity in government at this time.

The government says that unemployment insurance is a problem for the following reasons. It says that it creates disincentives to work and therefore constitutes a cause of rising unemployment. It argues that unemployment insurance actually discourages the search for work. It argues that the program fosters a dependency in some regions and industries. It argues that the payroll tax that finances UI has its own "perverse effect on job creation which has contributed to Canada's rising core rate of unemployment".

The very studies the government ordered from experts in the field to address unemployment insurance refuted every single one of the criticisms the government had against unemployment insurance. The studies presented by the government to support its own claim made it clear that the great majority of unemployment is involuntary and the result of a shortage of jobs and hours of work relative to the demand of work. In other words, people do not choose to be unemployed. Those who are unemployed should be offended by a government which suggests that they might.

Quite plainly, the focus of the studies is that it is the lack of jobs rather than the lack of incentives to take paid work which constitutes Canada's high rate of unemployment. The studies also point out that premiums are an appropriate way of funding unemployment insurance. All the evidence suggests that the total costs are borne by workers, not by employers and that it is not a significant deterrent to work, as the Minister of Finance likes to say it is.

The reasons for attacking unemployment insurance are refuted by those who conducted the studies on behalf of the government to presumably provide evidence for the need for the attack. It is a continuation of the Mulroney agenda, the Mulroney cuts. I have been here since 1989. This is the fifth time I have seen the same agenda set out.

The main problem we are facing here and why this government likes to attack, as its predecessors did, the unemployed rather than unemployment is that there is no clear vision, no clear industrial strategy, no clear economic strategy, no vision of where this country could and should go. We all know the famous words of Yogi Berra, if we don't know where we are going, we might end up somewhere else. What is happening is Canadians are ending up somewhere else without the job security they need.

In closing, there are two clear failings with regard to the so-called active programs the government has put forward. One of the things it likes to do and one of the things it should do is provide information on available jobs across the country. It should also provide for employers an indication of what skills unemployed Canadians have so that there can be a more appropriate match of skills and jobs.

The government should have looked at the system in Sweden. In Sweden all employers are required to register every job which will last for longer than 10 days with the appropriate government department. Employees are also required to register with that department. Ninety per cent of job vacancies in Sweden are covered by the program. If one wants a job that is where one goes.

To not have any requirement on the part of employers means that any attempt to bring employers and employees together will surely fail. Why would we have a system like that? Why would the government not have learned from a very successful system?

Germany is another example. Potential workers at risk of unemployment are identified ahead of time so that some preventative measures can be taken. Why do we not have that kind of system in Canada?

In closing, we can have all the active programs we like, but if we do not have a strategy and a vision for full employment, Canadians will continue to be unemployed in unacceptably high numbers.

[The Deputy Speaker]

We now move to questions and comments. Since members of three parties wish to ask questions, I would ask you to be very brief.

[Jake Hoeppner, Reform, Lisgar—Marquette, MB]

Mr. Speaker, being new to the House I have not had the experience the hon. member for Saskatoon-Clark's Crossing has had. I wonder if he would confirm or interpret the comments he made for me.

Are the Liberals now changing their philosophy compared with the previous Parliament when they were in opposition? Is he saying the Liberals and the Conservatives are really one animal? How does he explain that?

[Chris Axworthy, NDP, Saskatoon—Clark's Crossing, SK]

Mr. Speaker, this is a question many Canadians are asking.

Liberal-Tory, same old story. Members know that only too well. It is clear we have a straight continuation from the government before. Canadians recognize that. We are not solving the problem. It continues to get worse.

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, in the same vein, I see that the Reform member has shared his time with an NDP member coming from the same region.

I would like to ask the hon. member whether this points to a new association between the Reform and the NDP around social programs.

[Chris Axworthy, NDP, Saskatoon—Clark's Crossing, SK]

Mr. Speaker, I doubt it.

[David Iftody, Liberal, Provencher, MB]

Mr. Speaker, I appreciate the hon. member's presentation. The member from the Reform Party, the hon. member from Saskatoon and I are all from western Canada.

The Reform Party spoke about equity and fairness and pointed out, rightly, job growth in western Canada. I would like to ask the member from the NDP whether he agreed that weeks worked to be eligible for unemployment insurance in Manitoba ought to be the same as other areas in western Canada, for example, in Alberta.

[Chris Axworthy, NDP, Saskatoon—Clark's Crossing, SK]

Mr. Speaker, the real point is not the specific rules and regulations with regard to the details of employment insurance. The real point is how do we ensure that Canadians who are unemployed find work. We cannot do that with a program such as we have here because it is not part of an integrated program which puts jobs at the top of Canada's priorities.

Only if we commit ourselves fully to a fuller employment economy will we be able to do that. Then we do not have to ask the question training for what. We do not have to ask what premiums might be charged around the country because we can find ourselves moving toward a real economy with job growth in it.

Saskatchewan, with the lowest unemployment of any province, has a partnership approach to government, business communities, everybody working together for the aim of creating jobs in the economy. That is what this government should do.

[David Iftody, Liberal, Provencher, MB]

Mr. Speaker, I welcome the chance to speak to Bill C-12 and to comment on how the changes being put forward will improve the climate for doing business in Canada.

The simplified new approach to the calculation of premiums and the streamlining of the reporting process this legislation puts forward will substantially reduce the administrative costs and paper burden associated with the old UI program.

This is especially important to small business. We have heard often from the business community, especially from the small business community, about the high cost of administering the old system of UI, the so-called UI paper burden.

It is fair to say there has been a good deal of paperwork associated with administering that antiquated plan. Under the current UI scheme employers have to keep track of employee earnings by week. They need to make sure, for example, the weekly earnings, dollars earned, are above the weekly minimum set by UI legislation.

If the earnings are too low, the employer must also check to see whether the hours, the time worked, exceed the weekly minimum. The employer must also check to see if employee earnings are more than the weekly maximum.

Once all these tests are applied, the employer then must calculate the premium payment for each employee and the corresponding employer's premium payment. Does it sound confusing? Obviously.

In some cases this complicated system has to be repeated through each and every week for each and every worker. Imagine the administrative complexities here, even for a small business, to keep people on staff to do these very tedious jobs.

The new system will do away with this complicated process. Premium payments will be calculated beginning with the first dollar earned and there will be no minimum hours or dollars to qualify. It will be easier for the employee to understand as well.

As it is now, it is difficult for an employee to know if the employer has made accurate premium calculations unless the employee goes through the same complicated record keeping exercise and keeps a cumulative personal record of UI premium payments.

A system based on first dollar premium payments for those making less than $2,000 to have their premiums refunded will be simplified, straightforward and easy to keep track of. At the same time as we are simplifying the process we are extending it so more workers will be covered, and that means more businesses, especially small business, will now be included in the plan.

Concerns have been raised about the potential impact of these changes on the payroll costs of small business, particularly in the service sector where many part time workers who had previously been excluded from UI would now be eligible under the new program. Here are some answers to the concerns.

Under the new plan about two-thirds of the small businesses currently contributing to the UI program would pay less or the same as before. If premium rates are reduced, as we hope they will be when the first dollar coverage kicks in, that number would go up so that about 77 per cent of the small firms would pay less or about

the same as before. This would still leave 23 per cent that might be subjected to an increase.

The aim of the legislation is to improve the system, not to raise the payroll costs for small business. The bill includes a transitional premium refund plan, a plan which will provide small businesses that face premium increases of more than $500 in 1997 and 1998 with a refund. The maximum refund will be $5,000 per year. It is estimated this will provide transitional relief to about 300,000 small businesses whose employees will now be participants in this EI program.

Thus we believe the bill strikes a reasonable balance between opening up the employment insurance system to the tens of thousands of part time workers who will now face the 15 hours per week constraint to developing the necessary earnings history to qualify for benefits and adding incrementally now to the cost for some employers.

We also believe the streamlining and reform of the old UI system and the many cost savings and reductions and the paper burden that will result will be very welcome in the business community.

These reforms will also produce significant administrative efficiencies in cost savings for the Government of Canada. As many as 2,000 employees of the Department of Human Resources Development are now involved in handling the administration for the existing record of employment forms. If the forms are simplified and the reporting process streamlined there will be substantial efficiencies to be gained from the simpler, easier to administer system in government as well.

The second major area of opportunity the bill opens up relates to enhancing the employability of workers through the employment benefits in part II of the legislation and the act of employment benefits in particular. From the perspective of the business community this is an important part of the legislation, for it will help to better integrate the needs of workers and employers in order to create meaningful employment experiences.

These measures will reinforce the value of work. The employment benefit measures are designed to strengthen the work incentive and to help employers and workers alike adjust to economic changes and take advantage of new opportunities.

For example, benefits in the form of wage subsidies will encourage employers to hire people who need experience on the job but who cannot make a full contribution to the enterprise immediately. This will allow employees to bring new people on board and let them grow into the job without being an undue economic burden.

Targeted earning supplements will be available to top up wages of eligible workers as an incentive for them to take paid employment, even low paid employment, instead of insurance payments. This will help address the concerns we have heard that small business often finds itself competing with UI employees.

It is important to note on that score alone that a recent survey in Atlantic Canada found that 45 per cent of the employers in that region voiced their concern that they were competing with the Government of Canada insurance system and felt they could offer jobs to Atlantic Canadians if there were changes made to the underpinnings of the system.

The new legislation will allow us to continue to pursue job creation partnership programs in co-operation with the provinces, local communities and business organizations in order to create jobs consistent with local economic development objectives. We already have some good examples of highly effective job creation projects with partners in the private sector. We know this approach is needed and will work.

The new employment insurance plan will be good for business. So do many of the business people we heard from. The Canadian Federation of Independent Business indicated to the Standing Committee on Human Resources Development that employers are supportive of the overriding purpose of the bill to help encourage unemployed Canadians to get meaningful employment. The present UI system is more of a disincentive for people to get back to work.

The Business Council of British Columbia sees Bill C-12 as a more positive initiative. The president of the Quebec Chamber of Commerce believes a streamlined program will be a more effective program. The executive director of the Canadian Council for Human Resources in the environmental industry has said the new employment insurance strategy working with the national sectorial council has the potential to help Canadians find and keep jobs.

That is what the government wants to do, help Canadians find and keep jobs. The new employment insurance legislation is an essential and integral part of that new vision leading into the year 2000.

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, the member for Provencher has made much of the fact that businesses and employers would, in his opinion, benefit, since two thirds of businesses would find themselves paying lower premiums.

I would like to ask him two things. First: Is he aware that the bill calls for employers whose workers abuse the system, in other words where there is fraud, to have to pay twice as much in some cases, and even three times in others, in the way of penalties? As a corollary to that: Is he aware that even the volunteer administrator of a not for profit organization could be considered guilty of fraud, should an employee cause some problem, some irregularity with

the government? Is he aware of the new and much stricter mechanisms for employer penalties in this connection?

Now, to the second aspect of my question. He has spoken of simplified procedures. I would just correct one thing. He has referred to how wonderful it is that students will be able to get a refund of up to $2000, whereas at this time they do not even have to contribute. I do not see where the improvement lies, when they will have to wait nine months to get any money back.

[David Iftody, Liberal, Provencher, MB]

Mr. Speaker, I thank the hon. member for his rather lengthy question.

With respect to fraudulent claims, discussions with my constituents in Provencher regarding both employer and employee contributions allowed me to conclude quite categorically that whether it was farm people who hired part time workers to work for them in the summertime who might claim unemployment insurance following that, or whether it was people in the northern part of the riding in the forestry industry, both the employers and the employees, indeed all Canadians, are concerned about the fraudulent use of taxpayer dollars.

The other point I would like to make very quickly to the member is with respect to job creation. Even in his own province, the member might want to look at the self-employed component of this job creation package and the fact that many of the women who find themselves unemployed in the province of Quebec may find a venue through that system.

[Jake Hoeppner, Reform, Lisgar—Marquette, MB]

Mr. Speaker, I wonder if my hon. colleague from Provencher would agree with my colleague from Peace River that there should be some kind of incentive to relocate if there are jobs available.

I had to relocate to start farming. If I had not relocated, my boys would not have been there to farm today. Therefore should we not have some kind of incentive to relocate if the possibility is there?

[David Iftody, Liberal, Provencher, MB]

Mr. Speaker, in the package the government has presented there is a measure or measures which would allow for transition payments. I believe there was a considerable sum of money allocated to that process where workers who are changing jobs and getting into new job areas would find some monetary benefits in this package.

[Jean Augustine, Liberal, Etobicoke—Lakeshore, ON]

Mr. Speaker, let me begin by stating my support for Bill C-12 as it now appears before the House.

With this legislation, the government has lived up to its commitment to reform the unemployment insurance system and bring in a fair and balanced regime that accommodates the needs of Canadians in all regions.

As a member of the Standing Committee on Human Resources Development, I was pleased to take an active part in the amendments to this bill. I wish to compliment not only the government and the minister for their approach, but also two of my opposition friends for encouraging and pushing us in the direction in which the explanations and the discussions have helped to improve this process.

The minister, in appearing before us, invited us to make suggestions for improvements. I am pleased that he has been responsive to the amendments that were put forward: the divisor used for calculating benefits; the question of gaps in earnings; the so-called intensity rule governing reduced benefit rates for past claimants. These have all made the bill a far better one. I encourage all opposition members to support this final decision.

I want to focus on three areas that I think are important at this time to bring before my friends in this debate. Bloc members charged that higher entrance requirements for EI will make it tougher for women who are re-entering the job market and force them on to welfare.

In setting the record straight, let me say that it is true that women are more likely to be new entrants or re-entrants to the labour market. However, new entrants and re-entrants will now need 910 hours of insurable work to quality to benefit. However, if they work at least 490 hours in their first year in the labour force they only require a minimum of 420 to 700 hours to qualify the following year.

The government recognizes how difficult it can be for a woman to jump back into the job market after taking time out to raise a family. That is why it has extended access to EI's employment benefits to any Canadian woman who has collected maternity or parental benefits over the past five years.

Employment benefits will help women boost their earnings, contribute to their job stability, forge new trails in new and emerging sectors. These benefits will be delivered in the woman's own community. They will encourage other women to participate and take into account the needs of the local workforce.

Child care support will be available to women who are taking part in these employment benefits. Under EI's hours based system, many women with part time jobs or several small jobs will be able to qualify for maternity benefits for the first time. Women will still need only 700 hours to qualify for special benefits such as maternity benefits.

Not only will EI enhance employment opportunities for women, but it will actually create work. EI reforms are expected to generate between 65,000 and 115,000 new jobs funded by an $800 million investment fund. On top of that, modernization will create 150 jobs and a transition job creation fund is expected to provide work for 15,000 more Canadians.

The Canadian workplace recognizes the importance of women's participation and the EI legislation reflects the realities of this modern system. One of these new realities is that women are working part time. In fact, women currently make up 70 per cent of Canada's part time workforce. Under EI they will be covered from the first dollar earned for the first time.

Women also make up a slight majority of those holding multiple jobs. Again, under EI many will be insured for the first time. While more women will be insured, many others will have their premiums refunded. About 700,000 women who earn $2,000 or less a year will receive a refund, including 495,000 who premiums today.

The government has also implemented special measures to help offset the impact of the reform on low income claimants, many of whom are women. Benefits for single parent families, most of which are headed by women with incomes below $26,000, will actually increase by about 13 per cent on average under the new system. Benefits to low income families with children will go up by 12 per cent on average.

The family income supplement will boost the weekly earnings of many low income families. It will provide an average of about $800 to each family with an income below $26,000.

The new rules also mean that low income women will be able to increase their weekly income without jeopardizing their EI claim. The increased earnings exemption will mean women are able to earn up to $50 a week or 25 per cent of their earnings, whichever is higher, while on claim. This means that EI not only encourages work efforts, but also enhances women's employability.

I have a few points on the issue of young Canadians. Some Bloc members have charged that higher entrance requirements for EI will doom young Canadians to living off welfare and moonlighting at night. The truth is that new entrants, many of them youth, will now need 910 hours of work to qualify for benefits.

The entrance requirements have been raised for a very important reason. We want to discourage young people from becoming dependent on a handout. We want to encourage more young people to stay in school instead of dropping out early to take unstable jobs. Too many young Canadians use up their UI benefits without upgrading their education or acquiring new skills. They are stuck on a hopeless treadmill, one of short periods of work alternating with UI claims.

Evidence shows that some young people are drawn into the job market before they finish their education due to easy access to UI. In fact, the working group on seasonal work and unemployment insurance stated: "Something has to be done to stop young people from leaving school to take advantage of the specious, short term benefits of UI to the detriment of their future and their career prospects".

Increased entrance requirements will ensure that youth will develop a stronger attachment to the labour market. It will ensure that young people stay in school to get the skills they need for the jobs of the 21st century.

It is true that high entrance requirements will affect some young workers, but they will also allow many youths who work part time or who earn a living at several small jobs to insure their work for the first time. It is estimated that 39,000 of them who cannot qualify for UI today will qualify for EI benefits.

These reforms are primarily designed to actively help people find and keep stable employment. This includes young people. EI's active employment measures will help young people gain the skills they need for the changing job market.

These are some of the reasons for my colleagues to be convinced that this is good legislation. This is legislation that needs to be supported. I call on all members, despite the discussion and the arguments, to support Bill C-12.

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, I know the hon. member for Etobicoke-Lakeshore well, having been on the human resources development committee with her for the past two and half years, ever since the Liberal government was elected.

I know how sensitive she generally is, and I know she feels a bit uncomfortable when she comes back to the House to tell us what we have heard several times in committee from the mouths of staff members of the Department of Human Resources Development. I would ask, on another level, how she felt as a woman who has always shown sensitivity and humanity, after hearing the testimony of the Fédération des femmes du Québec and other organizations representing women across Canada, who told us that this unemployment insurance reform made no sense, because it would penalize women.

Yes, with the hours principle, some 5 per cent of women will perhaps be able to take advantage of unemployment insurance in future, but 25 per cent will be excluded. The hon. member knows the reason: many who used to need 15 hours of work per week or

less will now need many more hours to be eligible for UI. In my region in particular, people will have to work a minimum of 26 weeks, at seventeen and a half hours a week. What is more, they will all have to contribute, but will not all be able to draw benefits.

The situation is so bad that the Fédération des femmes du Québec is contemplating going to court to raise the issue of discrimination against women, to prevent the act from being implemented. The same thing goes for young people.

I have trouble recognizing my colleague's usual character when she takes such a position, when she finds it normal to be harder on young people who have never yet drawn any benefit from unemployment insurance. Now she is letting herself be influenced by the arguments of the department's employees, who told her young people are potential cheats, potential abusers of the system.

I am appealing to her sensitivity, I am appealing to her sympathetic ear as a member of the human resources development committee, where 75 or 80 per cent of the men and women who came before us in the last two and a half years told us this was not acceptable. I am trying to find out, and I really do wonder, if she feels right about her party's line.

[Jean Augustine, Liberal, Etobicoke—Lakeshore, ON]

Mr. Speaker, I have great admiration for the member who just spoke and with whom I have worked for the past couple of years.

The member knows that I took very seriously the arguments he brought. I went back and spent a good deal of time with my colleague and others in looking at the parts of the bill we considered to be difficult. We looked at parts of the bill we considered would disadvantage several individuals. We put forward amendments to assist and to make the bill a far better bill.

The member also knows that it was not without deep consideration of all concerns: the hours, the dollars, the situations of people in various regions of the country, that I arrived at the point where I was satisfied that we were doing what would be in the best interests of all Canadians in every region by amending certain parts of the bill.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup, QC]

Mr. Speaker, this is the last time I will rise in this House on this bill. We have followed it in committee for nearly two years. We have tried to make the government aware of the Canadian reality. Rather than get into technical arguments, I would ask the Liberal members to consider the upcoming vote and look at the effects on Canadians, the people of the maritimes, of Quebec, Ontario and especially northern Ontario, and western Canada and even the major centres. I will explain.

This bill on unemployment insurance reform is a sort of model for society the government wants us to choose. It has decided to kill off the old model of Canada where some things worked and other things did not work so well, but the desire to ensure that each region received equitable amounts, at least in terms of compensation for economic development, is gone. The government decided to do away with this sort of development, and now we have this bill before us today.

I am going to give a more down to earth example, which seems to me to be very close to the truth. As you know, the economy in our regions is a bit like a second hand car that uses up a lot of oil. Its motor does not work well, because the oil evaporates too readily. Usually, you put oil in the engine to keep it running, and, at some point, you decide to have it repaired so that it will then work properly.

For the UI reform, the government decided that even if the engine was using up too much oil, the solution was to quit topping it up and after that the engine would repair itself. We know very well that it does not work like that. Regional economies, the economies that depend on seasonal industries, are economies that need diversification.

That was proven by the human resources development minister's committee on seasonal workers, as well as by the demonstrations seen by the human resources development committee. It was also proven by people in the last consultation on the bill itself, when people from the Gaspé Peninsula, as well as other areas, gave us examples where there were 50, 75, 100 applicants for one job. So, people want to work and see their economy develop, and that raises serious questions about an inequitable principle, an unacceptable principle in the present system, which is to decide from the outset that people are taking advantage of the system.

This bill assumes guilt on the part of the people using the unemployment insurance system. It considers that they must be punished to set them back on the straight and narrow. This approach is difficult to understand coming from the present government, because when it was elected it told us that it would make employment a priority, and came up with the slogan: "Jobs, jobs, jobs".

It therefore proposed a model of society that was completely different from that of the former Conservative government. If we had the present reform before us and it was the former Conservative government that had introduced it and been elected, we could say that Quebecers and Canadians had chosen this kind of government, that that was what they wanted, and we would act accordingly. But no, we have before us a government that was elected on a completely different philosophy than that in the bill.

Today, it is abdicating completely the responsibility of a party in power, which is to do what it was elected to do. This government, particularly the members from the Atlantic provinces, will have

some terrible political fallout to contend with if they vote in favour of this bill.

Allow me to quickly quote several excerpts from a letter signed by the present Prime Minister on March 26, 1993, when the Conservatives were taking measures far less harsh than those contained in this bill. Among the points made in the letter-and it is the present Prime Minister, who was Leader of the Opposition at the time, speaking:

I can assure you that the Liberal Party shares your concern about this attack against the unemployed. We do not believe either that the recent superficial amendments will change the fundamentally unfair nature of these measures.

Do you not find that this bears some resemblance to the three little amendments we have had tabled before us just now? The Prime Minister, Leader of the Opposition at the time, goes on to say:

Instead of getting to the heart of the problem, it goes after the unemployed.

In closing, he says:

You can be assured that the Liberals will continue to call on the government to withdraw this unfair bill.

This may be the most serious effect of this bill.

It is true that it penalizes the regions and the workers. It is true that there are regional economies in danger of destruction. It is true that people are made out to be nothing but economic agents.

They are telling us mobility is necessary. That the fact that you have been in the same community for generations does not give you the right to stay there, the right to demand development of the economy in your area. No, you have to go where the jobs are. That is what the government is saying. The most serious point is that it casts doubt on the credibility of elected officials. The fact of being elected with a mandate and failing to fulfil it gives politicians today a standing of 4 per cent in the polls. And this is totally unacceptable.

It is true that there are major negative consequences. This applies to regional economies, but also to the major centres. In the next few years, the labour force will move out of the regions, including those people with skills in the tourist industry, who will not be able to accumulate the number of hours they need to be eligible for unemployment insurance. The race for hours will be on. People in the labour force will move to the major centres, empty the regions of valuable resources and put unacceptable pressure on the work force in the major centres. The negative effects of this will be significant.

The unemployment insurance system is the best economic regulator during a recession. My greatest fear is that, in the next recession, we will be dealing with economic situations similar to those of the 1929 depression, where people were literally dying of hunger because there were no social programs.

These programs were set up. They realized that the unemployment insurance system at least made it possible to avoid the long term effects of the recession. A person receiving unemployment insurance benefits continued to contribute to the economy and remained a consumer. This will no longer be the case. These are the major changes.

These are the negative effects of this choice of society, the choice of the path of neo-liberalism that disregards the need, in a country like Canada, for stop gap and economic assessment measures making for a better society.

When you vote shortly, give some thought to what will happen to our regional economies if you know people who live in Shediac, Bonaventure, Charlottetown, the Gaspé, in Nouvelle, in Gaspé, in any of the regions and areas. What will happen to a labour force that for a number of years has been working in seasonal industries, which takes workers who will not be able to work the entire year? We are going to put them in unacceptable situations where they will have to go on welfare.

All this in a society where there is an unemployment insurance system that will generate systematically this year, next year and in other years a surplus of $5 billion. Is this in keeping with the values for development we sought for Canada in the past 20, 25 or 30 years? Are people going to want to continue to live in a country that sets all these values aside? I think the answer is very clear to Quebecers.

The Liberal government will have to bear the responsibility for its decision. This is not only an unfulfilled commitment, but a form of disregard for democracy. Who are the real decision makers? What made them create a system like this one?

Why do members who were elected on their promises to work in good faith to promote full employment, to use human potential so their constituents can be happy in their own environments, suddenly all clam up two and a half years later? They are not saying a word on these issues and are no longer making any suggestions so that these results can be achieved.

How come no one told us to set goals in the fight against unemployment, as we did in the fight against the deficit? How come? These are fundamental questions to ask ourselves as they are to be found not only in this bill, but also in other government measures.

There are two types of decision makers. I think the basic flaw in this reform is the link between the UI system and the fight against the deficit.

To have unemployment insurance claimants pay premiums is one thing. They paid them in the past and could have been asked to keep on paying them. But the government stubbornly insists on

drawing $5 billion a year on a fund basically intended to support a person's income between jobs. UI claimants are being penalized and made to feel guilty for using the unemployment insurance system to offset those negative aspects, where the government failed to take its responsibility.

Concerning the $5 billion put to the somewhat artificial use of covering the deficit, the preferred approach would have been to say: We will take a closer look at government spending on items such as embassies or national defence to see if we could not save more on those items. We will settle once and for all the whole manpower issue and stop wasting $250 million a year in duplication with the Quebec government alone.

Had they dug deeper in that area, we would not have had to take actions such as defending, as we are doing now, a reform that is indefensible on the basis of its economic objectives. The $5 billion surplus generated by the system is being sunk into in a bureaucratic machine and conditions created where the money will not be put to productive use. Why not have decided to put this money back in the economy to foster job creation instead of reducing employees and employers contributions?

We are told that, for every penny by which employer contributions are being reduced, approximately 12,000 jobs could be created across Canada.

When will the bureaucratic machine generate such interesting things? We have to realize that the government no longer has any money to spend in areas that are under provincial jurisdiction. It no longer has the money required to be involved in these areas, and it can no longer borrow on foreign markets. The only thing left is the cash cow that the unemployment insurance system has always been. The government is relying on a fund in which it does not put one penny. Indeed, all the money in the UI account comes from employers and workers.

But the government will not let them manage their $5 billion surplus. It will not tell them: Employers and employees, you will decide what to do with your surplus. Are you going to build a reserve for bad times? Are you going to reduce premiums? Are you going to invest the surplus in other ventures? Are you going to increase benefits for those in more difficult situations? This is your money. You do what you want with it. We will simply make sure that it is properly spent. But no. The government does not say that.

Under the circumstances, the opinion of Quebecers regarding these measures should not come as a surprise. According to a poll, 75 per cent of Quebecers feel that the whole issue of unemployment insurance management should become the province's sole responsibility. Moreover, 59.8 per cent of Quebecers oppose the UI reform, while 27 per cent support it. As well, 79 per cent of them think it will primarily benefit the federal government, not workers and employers. These people clearly understand the point I made earlier.

They clearly understand that it is strictly a deficit-related issue. The government is holding employers and employees hostage.

Quebecers clearly understand, since 72 per cent of them oppose a reduction of the benefits paid to the unemployed, while 66 per cent oppose a reduction of the benefit period. It is good to see that Quebecers have clearly understood the negative impact of this system.

There are other indications of that, including the fact that the Minister of Human Resources Development received 40,000 postcards from people asking for the withdrawal of the bill and the patriation of the manpower sector. The fact that 40,000 people took the time to send a postcard is a clear message in itself. It is a message to federal Quebec Liberals, but the message would be the same in the maritimes if the same poll was conducted there tomorrow.

I will conclude by quoting a Quebec poet, Gilles Vigneault, who wrote a line in a song that perfectly applies to the current Liberal government, and particularly to the Prime Minister: "By generating such winds, you prepare quite a storm".

The storm will come from the young people and those you will oblige to work 910 hours, 26 weeks of 35 hours of full time work, in order to become eligible for unemployment insurance, instead of 300 hours. It will come as well from seasonal workers whose benefits you are cutting, event though they paid for these benefits. For each 20-week period of unemployment insurance, they will lose 1 per cent of their benefits. We will be the ones who will have voted for this bill, on behalf of all those who will have to live with it.

It will also affect owners of small businesses. In a region such as mine, there will $10 million less in the economy. This is therefore very significant. I think this bill must be roundly criticized. There is still time to defeat it, and I think the same message as was sent to the Conservatives over the closure of the post offices should be sent to the Liberal government. The Conservatives thought they were right and the people were wrong. The government is doing the same thing and, if it does not change its mind, the people will judge it the same way.