Debates of May 14th, 1996

[The Speaker]

Colleagues, would you please join with me in welcoming home the oldest sitting member of our House of Commons. Herb, we have missed you. Welcome home to your House of Commons.

[Some hon. members]

Hear, hear.

Point Of Order

[The Speaker]

Colleagues, on May 1st, 1996, the hon. member for Richelieu raised a point of order to argue that, contrary to my statement that remarks made outside the House are not necessarily within the purview of the House, the hon. member for Rosemont had been obliged in 1993 to withdraw remarks he had made outside the House. I explained that, as I recalled the 1993 case, it differed because the remarks made in that instance concerned the House directly. Nonetheless, I promised to review the matter and come back to the House, if necessary.

I am now prepared to respond to this point of order. Let me point out that the 1993 case is not analogous because the remarks in question were a direct attack on the Chair. What was at issue is that a member was reported in a newspaper article and had criticized the conduct of the Assistant Deputy Chairman of Committees of the Whole.

Remarks critical of the speakership, be they uttered inside the House or outside the Chamber, particularly when uttered by a member of the House, are very serious and in themselves have been ruled to be breaches of privilege as per Beauchesne's sixth edition, citation 168(1):

Reflections upon the character or actions of the Speaker may be punished as breaches of privilege. The actions of the Speaker cannot be criticized incidentally in debate or upon any form of proceeding except by way of a substantive motion.

When this matter was raised in the House in 1993, the hon. member for Rosemont was given the opportunity to respond and explain his comments. Speaker Fraser, having listened to this explanation and to remarks from all sides of the House, stated, in part, on page 17404 of the Debates :

If we consider the words that were reported, we clearly have a prima facie case that affects the dignity of this House and our colleague, because our colleague is an officer of this House- like the Speaker, he is an officer of this House and an attack against the integrity of a person in that position is an attack against this House.

The Speaker ruled the matter to be a prima facie question of privilege. A motion was moved to refer the matter to the then Standing Committee on House Management for examination, and the motion was adopted. Two days later, the member for Rosemont rose in the House and withdrew his comments. From there, the matter was considered closed.

There is no question that both sets of remarks, the remarks by the hon. member for Rosemont in 1993 and the remarks by the hon member for Nanaimo-Cowichan, two weeks ago, were made outside the House. The distinction to be made between the two, however, is not where the remarks were made, but rather that the remarks in one case were critical of the Chair and in the other case were not directed to the House or any of its members.

I thank the hon. member for Richelieu for bringing this matter to the attention of the House.

Government Response To Petitions

[Paul Zed, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's response to two petitions.

Canadian Security Intelligence Service

[Herb Gray, Liberal, Leader of the Government in the House of Commons and Solicitor General of Canada]

Mr. Speaker, I have the honour to table, in both official languages, the 1995 public report and program outlook of the Canadian Security Intelligence Service.

National Security

[Herb Gray, Liberal, Leader of the Government in the House of Commons and Solicitor General of Canada]

Mr. Speaker, before I give the annual statement on national security, I would like to express my sincere thanks to colleagues on all sides of the House for their expressions of support, encouragement and good wishes. I appreciate them very much, as I appreciate similar expressions from Canadians in every part of the country.

I am especially touched by expressions of support and encouragement from people I likely have never met who have faced situations similar to the one I am facing and have surmounted them. Once again, my deep thanks to all these expressions of encouragement and support. I am deeply touched by them and I appreciate them very much.

I am pleased to rise today to present to Parliament the fifth annual statement on national security and to table in the House the 1995 public report and program outlook of the Canadian Security Intelligence Service. This document provides both parliamentarians and the public with a review of the current global and domestic security environment.

Additionally, the program outlook provides information on CSIS resource levels for the current year and for the two next fiscal years. We are providing this information in keeping with the government's commitment to more openness and accountability.

It is the view of the government that a well focused and effective security intelligence capability is vital in today's world. Let me review the efforts of CSIS to protect Canada's interest and, most important, to protect Canadians from threats to their safety and security.

Today's security threats are multi-faceted. I say this because they are global in their reach and effect, they come from a variety of sources, not just a few states as during the cold war era, and they are targeted against a wider range of institutions.

For example, today economic espionage is a real concern. So is the proliferation of nuclear, biological and chemical weaponry. Ethnic conflict and the collapse of states threaten international security and have numerous implications for a country such as Canada which is noted for its refugee efforts and peacekeeping contributions.

Transnational crime was identified by leaders at the last G-7 summit as a growing threat to the security of nations. I think the House is well aware that terrorism remains the primary concern of security agencies around the world. We know the terrorist threat is increasingly sophisticated and global in nature, with some organizations having transnational structures while some continue to be state sponsored.

We must also face the reality of domestic extremism which has been manifested so tragically in the United States in the bombing of a United States federal building in Oklahoma City last year and in Japan with the poison gas attacks on Tokyo subways.

In another act of domestic terrorism we were horrified late last year by the assassination of the former prime minister of Israel, Yitzhak Rabin, an act which has threatened the very delicate efforts which we hope will bring about peace in the Middle East and which contributed to the latest resurgence of violent outbreaks between Israel and Hamas in Lebanon.

In another corner of the world we see the resumption of IRA bombings of civilian targets in Britain. The assassination of Prime Minister Rabin and the resumption of IRA bombings are examples of how promising political solutions to longstanding grievances can be jeopardized when terrorists strike.

I want to confirm that Canada has been a keen and active participant in international co-operative efforts to combat terrorism. In June of last year the Prime Minister chaired the G-7 summit in Halifax which placed international terrorism high on the agenda of discussion by world leaders.

The heads of government agreed to share their experiences of and lessons learned from major terrorist incidents. As well, they agreed to strengthen their co-operation in all efforts against terrorism.

Following up on this commitment, last December in Ottawa I chaired the very first ministerial level meeting of the G-7 countries, together with Russia, to discuss specific co-operative measures to prevent and investigate terrorist acts. The result of that meeting was a document known as the Ottawa declaration. It is a milestone in international co-operation and in the strengthening of our common resolve to defeat terrorism. I would like to briefly review the agreements contained in the Ottawa declaration.

First, we all know of the existence of a number of international conventions that spell out concrete actions against terrorist acts such as hijacking and hostage taking. We resolved that greater efforts needed to be made to get all states to join in and implement these conventions by the year 2000. We agreed that this is the key to circumscribing the ambit of international terrorism and denying it sanctuary.

In this spirit, the ministers were unanimous in denouncing states that support terrorists. The declaration called on all states to renounce terrorism and deny financial support as well as the use of territory to terrorist organizations. Ministers also committed to action to inhibit the movement of terrorists and to develop measures to prevent falsification of travel documents.

The Ottawa declaration was unequivocal on the need to bring perpetrators of terrorist acts to swift justice. We also agreed to increase our preventative efforts against terrorism in our aviation, maritime and other transport systems.

One of the most important tools we have to counter terrorism is the sharing of information. We agreed, through the Ottawa declaration, to strengthen the sharing of intelligence in information on terrorism in a large number of specific technical areas.

We were encouraged by the progress made in Canadian and multilateral efforts to combat terrorism, and we are proud of the significant accomplishment embodied in the Ottawa Declaration.

As the Prime Minister stated to the participants of the March Summit of Peacemakers in Egypt, Canada is doing its part to fight terrorism and we are doing so in a way that is consistent with international standards of human rights and laws.

He noted that Canada is pursuing the objectives of the Ottawa Declaration in every available international forum.

Further progress was made on this front just last month, when Canada joined with twenty-one western hemisphere countries in signing the Lima Declaration, at an anti-terrorism conference of the Organization of American States.

Here at home we continue to monitor threats to security and their implications for Canada. We are concerned, for example, with the potential for foreign conflicts to spill over to Canada and threaten Canadians. Canada, by its very peaceful and democratic nature, can be attractive to terrorist organizations seeking sanctuary or funds to continue terrorism in other lands. CSIS identifies and investigates such groups. It acts as the linchpin in assuring effective consultation and information sharing with appropriate Canadian law enforcement agencies, including the Royal Canadian Mounted Police and other police services as well as with its foreign counterparts.

The primary role of CSIS is to forewarn and advise. CSIS threat assessments provide timely information to the government concerning potential or imminent threats. As well, CSIS helps keep terrorists and other dangerous individuals from entering Canada through its assistance to Citizenship and Immigration Canada in screening individuals wishing to enter our country.

I mentioned that CSIS, while not itself a law enforcement agency, works in co-operation with the police, in particular with the RCMP. I should point out that the RCMP has an important role to play because of its extensive role in security enforcement under the Security Offences Act and in providing security to designated persons, federal property, as well as foreign embassies and missions here in Canada.

Violence in the pursuit of political objectives has no place in Canadian society. While CSIS and the police have separate mandates, they are joined by a common mission which is to protect the interests of all Canadians. Co-operation and co-ordination between police and security authorities has proven successful in defining threats and getting the best possible intelligence on criminal activities of terrorists.

Although since the end of the cold war espionage has changed its focus and its character, its intensity remains a concern to Canada and its allies. CSIS remains vigilant and active in discerning and investigating such threats to the security of Canada.

Canada plays a prominent role in the world community. We all know well that in various areas of the world, the world community is fraught with strife and unrest. In this volatile environment persistent threats must be dealt with and new ones emerge almost daily.

I want to conclude by reiterating that this government continues to put a premium on the need for reliable and timely security intelligence and security enforcement in order to protect the interests of all Canadians and of Canada.

[François Langlois, Bloc, Bellechasse, QC]

Mr. Speaker, I would like first of all to say how pleased I am to see that the Solicitor General is back. We were all very concerned about his condition during his absence, and we are pleased to see him back in his seat today, because he was sorely missed. This makes us realize how fragile a gift health is. As the hon. member for Laval Centre would probably say, we must be ever mindful of our health.

I am somewhat torn between the pleasure of welcoming the Solicitor General back and the comments I have a duty to make, as a member of the official opposition, about the Canadian Security Intelligence Service. Having participated in 11 elections, the Solicitor General will no doubt understand that, as much as I may admire his work, I must also do mine, hence the following criticism.

Of course I agree with the statements of principle the Solicitor General made with regard to the role of the Canadian Security

Intelligence Service. I am also happy to see that the hon. member for Fundy-Royal agrees with my previous remarks. I hope that we can continue to see eye to eye.

The trouble does not lie so much with what the Solicitor General said. We can of course readily share his views about Canada's best interests and threats to national security. On the subject of espionage, industrial espionage and new spying techniques, he expressed some interesting thoughts because, as he said, these problems have to be tackled.

He talked about the worldwide nuclear threat arising from the break-up of countries possessing deterrent and even nuclear attack capabilities; that too is something that concerns us. The same goes for international terrorism using chemical weapons. The incidents in Oklahoma City or Tokyo and the assassination of Prime Minister Rabin in Israel were mentioned.

But not a word was said about the role played by the Canadian Security Intelligence Service at home, in Canada, and that is our main concern. Our main concern stems from the realization that, for all intents and purposes, the Canadian Security Intelligence Service is out of control. It has literally become a state within the state.

Who knows about CSIS operations? Perhaps a handful of officials at the Department of the Solicitor General, sometimes the Solicitor General himself. But it has become obvious since the beginning of the 35th Parliament, since I personally became involved in the work of the national security sub-committee, that the Canadian Security Intelligence Service does not have any watchdog, inasmuch as the legislation provides for one, in the form of a review committee, which reviews whatever it is given to review.

The Security Intelligence Review Committee, or SIRC-CSARS in French-is an organization that has demonstrated its utter inefficiency in carrying out the duties entrusted to it by Parliament. If the Solicitor General has privileged information from SIRC, he should pass it on to us.

Since the end of 1994, almost two years ago, we have been working on the Heritage Front affair. This problem did not occur in Israel, Belarus or the Middle East, but here in this country. There are allegations that an extremist group may have committed illegal acts here in this country.

For two years we have been bogged down in our efforts to enlist the co-operation of members of the famous SIRC or Security Intelligence Review Committee, who have appeared before us parliamentarians in the Sub-committee on National Security but who have been hiding behind their so-called immunity to refuse to answer the legitimate questions asked by members. This ordeal has lasted for nearly two years. They laughed at us and refused to answer our questions, so that we have not made much progress so far. We, of course, had to make deductions rather than rely on honest, clear and precise answers to our questions.

There is a problem in a democratic society when a review committee, an external committee like SIRC, sees parliamentarians as the enemy. Rather, those people should see us as those who are responsible for public administration and for monitoring them, and should give us all the information they have without arguing. Unfortunately, such was not the case.

It is with sadness that once again this year I must point out that the membership of SIRC has not been reviewed. We as the official opposition, and the hon. member for Surrey-White Rock-South Langley on behalf of the Reform Party, had asked that SIRC be a reflection of the 35th Parliament. Who are the members of SIRC, the Security Intelligence Review Committee? Only people who represent or were appointed on the recommendation of the Liberal Party of Canada or of other parties that are not even recognized any more in this House, namely the Progressive Conservative Party and the New Democratic Party. Since the beginning of the 35th Parliament, no one has been appointed on the recommendation of the Leader of the Opposition or the leader of the third party. This is not normal.

How can we trust an organization that deals in this fashion with national security issues that may have a direct impact on democracy in Canada? The level of confidence is extremely low, and perhaps even non existent. Psychologists refer to "basic trust". The basic trust is no longer there. The basic trust required for an organization to function properly is gone; it has been gone for a long time.

It is imperative to amend the Canadian Security Intelligence Service Act so as to change, among others, the Security Intelligence Review Committee and decide on its membership at the beginning of each Parliament, based on the will expressed by Canadians through their ballots. It is not normal to see an organization such as this one represent political parties that were in place previously, instead of reflecting the current situation.

Once again, I urge the minister to consider this request to review the act. We will, of course, support the measures we have been seeking for a long time. I will continue to raise this issue.

I also want to point out the lack of co-operation between the government and the parliamentary sub-committee on national security. Throughout 1995, and for a good part of 1996, we benefited from the contribution of the hon. member for Scarborough West, who was a full-fledged member of this committee. His help allowed us to make major progress on the Heritage Front

issue, concerning which we should normally table a report. In fact, we are meeting this morning at eleven.

I urge government authorities, and particularly the Solicitor General, to reinstate the member for Scarborough West as a full-fledged member of the national security sub-committee, so that we can arrive at a decision. The member was a regular at the committee, as well as a leader in the search for truth that we were obliged to conduct by inference, since we had little information to go on.

I also ask the government to follow up on the unanimous wish of this House, as expressed by the adoption of Motion M-38, on March, 21, 1995, more than a year ago. The motion, tabled by the hon. member for Scarborough-Rouge River, asked that the operations of the Communications Security Establishment, the CSE, be reviewed by an independent body. The CSE was set up during World War II, by order in council and, today, its operations are not monitored by anyone, except the Prime Minister's office and, from time to time, the office of the Minister of National Defence. The time has come to act, since the House sent a message to that effect.

As I said earlier, we should amend the Standing Orders of the House of Commons, to make the Sub-committee on National Security a standing committee. The same members could sit on this standing committee and meet throughout the duration of a Parliament. They could have a much broader power of inquiry than they have now, including the powers to call witnesses, to order the production of documents and to carry out in-depth cross interrogations, thongs we cannot do right now. Were are a bit like a paper tiger and have become a laughing stock.

Moreover, all reports submitted to the Solicitor General pursuant to section 54 of the Canadian Security Intelligence Service Act should also be forwarded to the Sub-committee on National Security for examination, in camera of course. Granting us this power would go a long way in enhancing the role we have to play as parliamentarians. Such a committee would provide a very efficient service and help all Canadians to regain confidence in the parliamentarians they have elected to run the country.

We have one last request for the Solicitor General. We would like the government, through the Treasury Board, to act as soon as possible in order to grant, as requested by the current director of CSIS the money needed to pay the bilingual bonus to RCMP officers transferred to the service when it was first established in 1984, as well as to other employees of the service. In a letter he sent us last Friday, the Solicitor General said that in order to pay these bilingual bonuses cuts within the service would be needed.

The thing is, we should not have to cut the services CSIS needs, rather we must inject the money needed, as was done in the rest of the public service, in order to pay a bilingual bonus to the employees who deserve it and are entitled to it.

Mr. Speaker, I thank you for your indulgence and your patience and for giving me 20 additional seconds to conclude.

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

Mr. Speaker, on behalf of the Reform Party I would like to take this opportunity to welcome the Solicitor General of Canada back to the House. Our prayers have been and continue to be with him.

I am sure the minister knows better than the rest of us that the demands of government and the House do not wait for any one individual.

Today we have the annual national security address. As is tradition, the minister has reminded us of some recent terrorist activity: last year's bombing of the federal building in Oklahoma City, poison gas attacks on the Tokyo subways, the recent assassination of the Prime Minister of Israel and the resumption of IRA bombings in London. Terrorism remains a worldwide problem.

In addition, the media is usually full of tragedies arising from conflicts around the world. Many of these conflicts from faraway lands have implications here in Canada. Be it the Middle East, Bosnia, Somalia, Sri Lanka or Punjab, conflicts in these diverse locations impact on the emigre communities in Canada. While the overwhelming majority of immigrants or refugees from these areas are intent on starting new lives in Canada, a small majority involve themselves in activities supporting terrorist groups.

As the minister stated in his address, Canada has joined the other G-7 nations to deal with terrorism. A document known as the Ottawa declaration calls on all states to renounce terrorism and deny financial support, including the use of territory, to terrorist organizations. While the government has congratulated itself on its efforts in this regard, its actual commitment has been somewhat underwhelming.

The minister boasts of the government's efforts to fight terrorism and to pursue the objectives of the Ottawa declaration. However, I would like to draw the attention of the House back to last year around this time.

On May 4, 1995 I asked the Minister of National Revenue about the Sikh militant group, the Babbar Khalsa, having charitable tax status. The minister's response was: "I would be grateful if the hon. member would provide that information so that investigations can be carried out rather than simply making allegations of the type she has made today".

I attempted to follow up this issue on June 5, 1995. On that date I provided the Minister of National Revenue with photographs of the founder of the Babbar Khalsa, surrounded by weapons, and a

statement in which Talwinder Singh Parmar declared that if anyone wanted to commit suicide he should board an Air India plane.

The minister's response was a lame attempt at humour, stating that he felt it was contradictory for the Reform Party to be against terrorism at the same time that it was opposed to Bill C-68. That was the government's response to fundraising for terrorist groups a year ago.

Fortunately things have changed. The Prime Minister went to a conference in Cairo and suddenly the government is concerned about fundraising for terrorist groups. As well, we have a new Minister of National Revenue. There are grand pronouncements about the tough action the government will take to stop the support of terrorism in Canada.

Finally, on April 13, 1996 the government buried a small little notice in the Canada Gazette. The item was that Revenue Canada has withdrawn the charitable status of the Babbar Khalsa. A year ago the government thought it was a joke. Now it realizes that the Reform Party's concerns were valid right from the beginning.

I am sure the minister is aware that there are a number of other groups involved in this kind of activity. Last week we heard that the RCMP had arrested one of its former translators on charges of attempting to obstruct justice and perjury. According to a police affidavit this individual was hired by the RCMP to translate wiretaps in a major investigation into a Tamil-speaking Sri Lankan forgery and alien smuggling group.

Unfortunately for the RCMP, neither the translator nor the Mounties initial background check mentioned anything about his membership in the terrorist group, the Liberation Tigers of Tamil Eelam, also known as the Tamil Tigers.

The police stated: "It is our belief that he tried to infiltrate the RCMP while a member of a terrorist organization". The Mounties are concerned that the translator may have been working on sensitive documents relating to his homeland and they are now going through a damage control exercise.

Who would have thought that a translator in one of the solicitor general's agencies was actually working against the interest of his employer? It is important for the government to live up to its commitment to stop individuals living in Canada from supporting terrorists overseas.

The government cannot just talk about taking a stand against these activities, it must act and it must be seen to be acting. Burying announcements in the Canada Gazette is not sufficient. Let those involved know that their activities are unacceptable, make them illegal and prosecute them.

The minister says in his statement that he cannot canvas all the activities of CSIS and the RCMP in support of national security and I do not imagine that he would have.

In the May 12 edition of the Vancouver Province we learn that CSIS officers in British Columbia have been questioning Tamil leaders to determine if they are raising money to support guerrilla warfare in Sri Lanka. The response of the president of the Eelam Tamil Community Association of B.C. was that while he owes his allegiance to the Tamil Tigers, his group raises money only for humanitarian uses.

A number of terrorist organizations do have a faction that is involved in humanitarian endeavours, but how much money goes to humanitarian efforts and how much money goes to terrorist activities is impossible to measure.

If the government is serious about the Ottawa declaration, and if it is serious about the summit of peacemakers that took place in Cairo in March, it must make clear to everyone that support for terrorism will not be tolerated no matter what disguise it tries to take. Any organization that targets innocent civilians is a terrorist group and must be dealt with as such. The government may have to offend some individuals and groups to make that message loud and clear.

Petitions

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, I would like to table a petition that was sent to me by the workers of MIL Davie. It reads as follows: "Since 1990, the federal government has not contributed a single penny to the unemployment insurance program, which is funded entirely by workers and employers. Following legislative amendments made in 1990, 1993 and 1994, benefits paid have decreased, which has resulted in a large surplus in the UI fund. That surplus will reach an estimated $7 billion by the end of 1996. Ottawa wants to reduce benefits paid by a further $2 billion a year and use the UI fund surplus for its own purposes. We say no to drastic cuts in the unemployment insurance program and ask the House of Commons in Parliament assembled to withdraw this bill".

Questions On The Order Paper

[Paul Zed, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Mr. Speaker, I ask that all questions be allowed to stand.

[Yves Rocheleau, Bloc, Trois-Rivières, QC]

Mr. Speaker, I would like to draw your attention to the fact that four questions to the Minister of Human Resources Development and one to the Minister of Public Works have been standing in my name on the Order Paper since March 11, 1996.

The government was supposed to answer these questions within 45 days, and that period expired a good 15 days ago. In the public interest, I would like to know when the government will answer these four questions, which will shed new light on a rather controversial issue, namely the transfer of the human resources development department regional management centre from Trois-Rivières to Shawinigan, an issue where the public interest has not been taken into account.

[François Langlois, Bloc, Bellechasse, QC]

Mr. Speaker, I simply wanted to mention that the hon. parliamentary secretary to the government House leader asked that all Order Paper questions be allowed to stand and the official opposition gave its consent. We want you to know there is unanimous consent in this regard.

[The Acting Speaker (Mr. Kilger)]

I take the point of order raised by hon. member for Trois-Rivières under advisement. I thank the hon. member for having brought to the attention of the House and, in particular, of the government, the issue he raised quite a while ago already.

According to the practice in this House, the government should answer your question, as I hope it will, but feel free to call on the Chair if you think it necessary. Unfortunately, since nobody seems to be able to respond to this point of order for the time being, I will take the issue raised by the hon. member for Trois-Rivières under advisement.

Shall all questions stand?

[Some hon. members]

Agreed.

Petitions

[Alex Shepherd, Liberal, Durham, ON]

Mr. Speaker, I have two petitions signed by people in my riding.

The first petition contains 225 names. It refers to the Canadian Human Rights Act, which of course has already been amended. However, I will refer to the second part which has to do with the charter of rights and freedoms.

The petitioners pray that we do not grant societal approval of same sex relationships and homosexuality, including amendments to the Canadian Human Rights Act and the charter of rights and freedoms to include in the prohibited grounds of discrimination the undefined phrase of sexual orientation.

The second petition is basically on the same matter. The petitioners pray that we do not amend the Canadian Charter of Rights and Freedoms to include or otherwise define the undefined phrase of sexual orientation.

[The Acting Speaker (Mr. Kilger)]

I wish to inform the House that, because of the ministerial statement, Government Orders will be extended by 31 minutes.

Employment Insurance Act

[Lawrence MacAulay, Liberal, for Minister of Human Resources Development]

moved that Bill C-12, an act respecting employment insurance in Canada, be read the third time and passed.

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

Mr. Speaker, the employment insurance system set out in Bill C-12 is not just another version of the old UI program. It is in fact Canada's employment insurance system for the 21st century. It supports the government's agenda for jobs and growth. It is a system that Canadians themselves have helped to define and shape for the future.

As we have mentioned in this House before, we have had extensive consultations not only on Bill C-12 but on the whole question of social security reform over the past year and one-half. Over and over again Canadians from all walks of life, from every possible kind of business, occupation or organization repeated one message loud and clear: the best form of security is a job.

We have listened to that message. Employment insurance first and foremost is about jobs. It is about jobs in a very simple and direct way. It will make it easier for people to work longer and encourage employers to keep people in their jobs longer. It will help employers hire more workers. It will create more work and more jobs for Canadians. It will help increase the earned income of Canadian workers. Every part of this bill is focused on that goal. Let me give some examples.

With EI insurance premiums, the tax on jobs will be lower. The premium cut and reduced maximum insurable earnings will save workers and employers over $1 billion in premium payments in this year alone. Streamlined administration and reporting requirements will save employers another $150 million and some 300,000 small businesses will get a special temporary rebate so employers can afford to hire more workers.

This system will support job creation instead of perpetuating unemployment. Income benefits are structured to make it easier for people to work longer removing the barriers that sometimes keep people from accepting the jobs they need. This system is pro

employment and makes work pay. Active employment benefits are there for those who lose their jobs and need help getting back to work.

We will be reinvesting $800 million in the tools which help people help themselves and create employment opportunities for Canadians. As well, we are investing another $300 million in a transitional jobs fund to kick start employment in areas of high unemployment. Some 15,000 jobs for Canadians will be created as a result of this initiative.

When the measures described in this bill are fully implemented, there will be 75,000 to 100,000 more jobs for Canadians. That is just part of the story.

Employment insurance is an integral part of the government's broader vision for jobs and growth in this country. It is a growth agenda that sees economic growth going hand in hand with the best social security system in the world. Our agenda is based on creating a healthy economic climate for growth. We brought inflation down to its lowest level in 30 years. We are meeting and exceeding our deficit reduction targets. Our agenda recognizes Canada can compete with the best in the world.

Over the past 14 months the government's Team Canada approach to international trade has brought $20 billion worth of new deals for Canadian exports. Every $1 billion in exports means 11,000 jobs for Canadian workers. It can be seen that our agenda is beyond all doubt working. More than 600,000 new jobs have been created in this country since November 1993.

As jobs and our economy grow, we must ensure that our social safety net keeps pace. That is the fundamental message in the government's budget. We are taking action to ensure that Canadians can continue to rely on a strong social safety net that is affordable, effective and in tune with the future.

The bottom line is clear. This government is totally committed to bringing Canada into the 21st century with a strong and growing economy and the best social programs of any country in the world.

Bill C-12 is part of that commitment. We want to make sure that employment insurance is not only pro employment, but balanced and fair for all Canadians. That is why we have listened very carefully to the comments and advice from Canadians throughout the hearings on this bill.

We heard tremendous support for an insurance system that is truly focused on jobs and employment. We also heard some real concerns that the system would not be flexible enough to reflect the real job opportunities that exist in different parts of Canada. We listened to those concerns and we have taken action.

We recognize the need for a number of important amendments to the bill. For example, people from all parts of the country, from the New Brunswick Federation of Labour to the National Action Committee on the Status of Women to the Kativik Regional Government argued that the method proposed for calculating benefits was too inflexible.

The amended divisor used to calculate benefits fixes that problem. As a result, EI will be more responsive to monthly changes in local employment conditions. That is a change that makes sense. It is a change that deserves our support.

Many groups, especially those representing the concerns of workers in seasonal industries and students expressed serious concerns about the effects gaps in work would have under the new system. Under the amended system, EI claimants will have a longer reference period to put together the required weeks of work and gaps will not affect the outcome. For example, a person who needs 15 weeks of work to qualify can look back over 26 weeks and ignore up to 11 empty weeks if necessary. Again, this is a change that makes good sense.

Many people were concerned that the intensity rule which reduces the benefit rate for repeat users would be particularly hard on the most vulnerable and those in most need. In the amended system, people who receive the EI family income supplement will be exempt from the intensity rule. This will safeguard a basic level of EI income for low income claimants with family responsibilities.

We will also take steps to address concerns about potential fraud and abuse of EI with stiffer sanctions and penalties for claimants and employers who break the rules in order to get benefits they are not entitled to.

In all of these cases, we have listened closely to what Canadians are saying. The employment insurance system will be better as a result. It will be more flexible. It will be fairer. It will meet our savings targets. It will focus more effectively on our number one priority which always has been getting Canadians back to work.

Jobs, economic growth, a strong and affordable safety net: these are priorities every Canadian shares. They are priorities we are resolutely committed to as a government. Employment insurance is one part, an important part of the action plan Canada needs to achieve those goals and to move with confidence into the next century. I urge all members at the end of today to support this bill. The fundamental changes in it are going to be good for Canadians for years and years to come.

[Francine Lalonde, Bloc, Mercier, QC]

Mr. Speaker, I will begin by saying that today, May 14, 1996, the day Bill C-12 will be passed, unless the government finally comes to its senses, will be one of deep shame for the Liberal party.

This party helped give Canada a social security system, not the best in the world, it must be said, no, because overall we are a long way from the social measures generally available in Western Europe, but in North America, our system was the envy of many. Increasingly, this party is aligning its social measures with less progressive measures in the United States.

Bill C-12, this deceptively named act respecting employment insurance, is an attack on the unemployment insurance system so appreciated by most Canadians and Quebecers, as we were reminded by an Angus Reid poll at the very beginning of the new Liberal reign, when it was setting out on what looked like a reform of social programs, a reform to improve social programs. That was before the first budget.

This Angus Reid poll said that 70 per cent of Canadians and Quebecers, almost 80 per cent in the case of Quebec, wanted to keep this unemployment insurance system, and at the same time feared that the announced reforms, despite all the fine talk, were going to hurt those in the greatest need. Canadians and Quebecers were right.

Although it will not be pleasant, I would like to remind members that, in his maiden speech, the Minister of Human Resources Development said that what was needed was a particularly Canadian formula so that, when the social program reform had achieved its goals, Canadians would be proud to be Canadians. He repeated this expression ad nauseam.

Well, what we can say this morning is that, far from being proud, Canadians must be worried, deeply worried, except perhaps for those who have a steady job, who are working over 35 hours a week. But all the others, Canadians and Quebecers must be worried and anxious to hear what form this new system will take.

It must not be forgotten that this bill, which is supposedly about employment insurance, comes in addition to a so-called reform from 1994, Bill C-17. That was a bill implementing the first Liberal budget since their return to power. That budget, that bill, slashed the unemployment insurance scheme by $2.4 billion starting in 1995, of which $735 million were to be cut in Quebec, and $630 million were to be cut, starting in 1995, in the Atlantic provinces.

The effects of this new reform are in addition to those of the first reform. Once again, the word reform loses its meaning. "Counter-reform" would be more appropriate, because in most people's minds, a reform is something that improves a situation.

In the two cases in question, the reform is no improvement. Far from it, it brings cuts. It cuts into the only little bit of security some people in Canada can count on, those who are not so fortunate as to be among those who enjoy total security or who are rich enough to be able to depend on investment profits and do not need to work. For every one else, unemployment insurance represents a bridge, rather a narrow one sometimes, and one that is not as long as it might be, but a bridge nonetheless, between two jobs.

These cuts will total $4.4 billion, if we add up the $2.4 billion and the additional $2 billion of this "new" reform. This will make the Liberal Party of Canada look good the next time they seek a new mandate. They will be able to boast to Canadians and to Quebecers "Look, we have cut UI benefits by $4.4 billion since 1995, and Quebec-I am using the department's figures here-will lose $1.271 billion". Keep in mind, now, that this is the department's evaluation of the figures involved in the amendment. By the way, no one but the department has any figures, so we have to rely on them. According to the department's numbers, by the time the plan matures in the year 2000, the Atlantic provinces will be $806 million worse off than before, every year.

Adding up the two-this is interesting since the Atlantic provinces and Quebec together account for about one third of Canada's population-we get $2.1 billion of the $4.2 billion. And if we look at the portion of the cuts affecting the Atlantic provinces alone, $806 million out of $4.4 is quite a chunk.

These cuts in benefits will mean less money going to the high unemployment areas. This means that one of the objectives when the plan was created after the 1929 depression, which was to have interregional adjustments, has more or less come down to nothing now. In the case of Quebec, Quebecers will figure out what it means, at some point. In this case of the Atlantic provinces, I trust they will draw some political conclusions. In many cases, I think it will be a considerable shock.

I speak as a Bloc Quebecois member, but on this issue, as on many others we worked in opposition on behalf of all of the people of Canada. What is unacceptable about this change is that Canadians and Quebecers see this as a significant alteration to what they consider the role of unemployment insurance to be.

Instead of discussing the disappearance of this interregional adjustment-which academics are demanding, saying that there is none in such and such a country because their constitution does not allow it-the government has decided to forgo discussions, to hold no debate whatsoever, just chopping it completely.

Since this move on the part of the government was obviously in the books, when I was in Toronto during the initial consultations I asked representatives of unions whose membership were in high pay brackets whether they were not fed up subsidizing workers in the Atlantic provinces. They did not say: "Yes, we in Ontario are fed up with paying for the Atlantic provinces". People in Canada, and I think I understand, realize the need for support among the regions. I repeat, this is what the Bloc Quebecois is saying. This example, like others, illustrates that there were no major debates on this reform.

This reform, with even its name looking like some sort of camouflage, means open season. Calling it employment insurance camouflages it. Instead of bringing the unemployed, particularly the unemployed in regions with high unemployment, closer to a job, this reform will move them away from one.

As this is the first opportunity we have had the time to give a decent speech in this House, I will use it to point out that the official opposition was prevented from playing its role at each stage. Here again, I can understand. The government doubtless did not want Canadians to be informed. All the same, a survey in Quebec indicates that the people have not been fooled by what is going on. This will be the subject of my conclusion.

I wish to speak to all of Canada. I want to say that the first reform hit the Atlantic provinces hard. The second one is going to be even harder to swallow. I keep saying that the regions with high unemployment will be the ones hit.

I would like to quote the tourism and economic development minister of Prince Edward Island. The province has a population of about 170,000 and is well placed to observe its labour market. So what does the minister of economic development have to say? He says, on the subject of financial repercussions: "The previous stage of the unemployment insurance reform, which surely was not on the same scale as the present bill, has already had a significant impact on our province. In 1995, with the rate of unemployment such as it was, a person who qualified after 12 weeks' work received benefits for 32 weeks, making a total of 44 weeks. There were still, however, eight weeks where the person received no income".

The first demonstrations in the Atlantic provinces were not against the new reform, but against the implementation of the previous reform, which hit them hard. As a consequence of this first so-called reform, people did not have enough weeks of unemployment insurance to get through the year. They had to turn to welfare, which is very complex, because, if you are on welfare, sad to say, it is very hard to return to work.

What does this brief say? It predated the amendments, but if we take off a few millions, a lot of what it says is still true. It says: "In Prince Edward Island, the net loss of unemployment insurance benefits will thus reach $24 million in 2001-2002". So, if we take off the maximum, let us say $8 million-I am being very generous, very conservative-there would be $16 million less.

The minister went on to say: "The economy of Prince Edward Island is, nevertheless productive. We are tops in Canada in job creation and we cannot absorb such a loss". In other words, for all the regions that are not the top job creators in Canada, this reform will be devastating in macro-economic terms. It will widen the gap between the regions where people are relatively well off and the regions where unemployment is high, despite the fact that jobs may be created, but where there is less industry or business.

I talked about the regions, I now want to talk about individuals. Added to the previous reform-which leaves many seasonal workers with too few benefit weeks, forcing them on welfare for the rest of the year-cuts provided for by the present reform create a desperate situation for some.

The workers who came last week from the Gaspé and Magdalen Islands sounded desperate. They were talking about their region, saying that they will no longer be able to keep young people. They are the ones who are leaving and when young people leave, the regions fall apart. The same is true in every region with a high unemployment rate. When young people leave, fewer services are provided. There is a shift in demographics and soon, only aging people are left, villages and towns die. This is what people came here to scream and cry about, saying that it did not make any sense.

When I hear one of my colleagues laughing I think that either he has no heart, which I do not believe, or he has not studied the impact of this bill. It saddens me because people are going to be hit hard. It will affect many people. The impact will be felt by many other than seasonal workers, in spite of the amendments and what the government is claiming. The amendments speak volume about the original bill.

It will affect all workers in the tourism sector, all those for whom one hour of paid work means many hours of unpaid work. They are legions in our society. I am thinking about all adult education teachers, this is true in every region, and all those who, in cities, towns, and villages, entertain, educate or instruct people who, for one reason or another, need such training.

Usually, they are paid by the hour, without any firm contract and, without any exception, they will find themselves in a very precarious situation. Women will also be affected. The Fédération des femmes said that, yes indeed, 5 per cent more women working part time would be covered, but being covered means that they will be paying, but as far as being entitled to benefits, that is a different

story. On the other hand this bill will be very harmful for 25 per cent of those who now work 15 to 34 hours a week.

And I have not yet mentioned artists, artisans and all those who barely survive on government programs, as well as pilots and flight attendants. There would not be time enough, 40 minutes would not suffice to name all those who will be affected.

It is a radical transformation we are witnessing here and that transformation is contrary to the intention which prevailed when the unemployment insurance program was created. I would like to quote part of the speech Prime Minister Bennett made, in 1935, when he first tabled that bill. He said: "To meet new needs, we will have to modify our capitalist system-we were just coming out of the great crash of 1929-and make it into a more useful instrument for the people. You will be studying measures creating a global plan which will reduce the present social and economic inequalities and distribute the benefits of the capitalist system more equitably among the various classes of our society and among the various regions of the country".

Since the 1971 reform, we have witnessed a continuing reduction of benefits. I must say that it started under the Conservatives and the most serious change was cutting the system off from the consolidated revenue fund. That was bad enough.

Researchers came before us and told us that an unemployment insurance system has an important stabilizing effect and we realize that when we look at others around the world. It has an economic stabilizing effect benefiting society as a whole, and it also has a redistributing effect. Over time maternity benefits and health benefits were added to the system. They are now adding in this so-called reform training benefits, which will no longer be paid from the consolidated revenue fund, but by the unemployment insurance fund. When we consider all of this, we wonder, we do not understand why the government reduced the maximum insurable earnings.

It is not difficult to understand. It means that from now on, workers who make over $39,000 a year, will no longer contribute to unemployment insurance after that limit. They will pay on the first $39,000, but nothing after that. This is totally illogical. This is exactly the reverse of what we are doing with income tax.

With income tax, the more you earn, the more you pay. For unemployment insurance contributions, the more you earn, the less you pay. Companies which are able to pay salaries of $39,000 or more are the ones receiving this gift. A gift of some $500 million a year is not inconsequential. Which employees and businesses will pay for the equivalent of this gift? Employees who work from one to 15 hours per week and small businesses.

It is not surprising small businesses are against these provisions. They agree with the reduction of maximum benefits, and we can understand their viewpoint, since a social viewpoint is something else. But this reduction of maximum insurable earnings does not make any sense.

Many researchers came to tell us as well that this did not make any sense. It does not make sense because it reduces the pool of contributors. It does not make sense either because, while the government is making a huge gift to big businesses-a gift that totally eliminates premiums when salaries are over $39,000-it reduces by 0.05 per cent the premiums of contributors as a whole.

If we look at what this means in concrete terms, for a small business, it will mean about $7 less per month for each worker if his salary is $200, while the gift to big businesses is total elimination of premiums. That goes against common sense, as is the case for a major part of this bill.

Mr. Speaker, could you tell me how much time I have left?

[The Acting Speaker (Mr. Kilger)]

Fifteen minutes.

[Francine Lalonde, Bloc, Mercier, QC]

There is so much I could say about this bill.

Researchers came to tell us this is a leap in the dark, because if you ask one economist to examine the effect of this measure, he will tell you one thing, but if you ask another economist to examine the effect of this measure, he will tell you something else. At least, Mr. Audenrode of Laval University said clearly: "It is not so much any specific measure that concerns me but the extent and complexity of the proposed reform. If one can easily imagine the impact of a specific modification to one aspect of a given system, it is almost impossible to imagine the consequences of a reform as far-reaching as the one being proposed".

He went on to say: "I am unable to give you even an indication of what would be the impact of the proposed reform, and I honestly think that no economist can do so".

When I asked senior officials what they thought of that statement, they told me: "We in the department have an enormous file but we, of course, built this proposed reform on an econometric model". That is the problem. What is the hurry? Why take the chance of seriously hurting regions and people, when there is no hurry? Why is there no hurry? Because the $5 billion surplus that is forecast for the end of this year without the reform would be less if the reform goes ahead. It would go down to $4.5 billion, so there is no hurry.

The Minister of Finance cannot say: "Hurry, Hurry, Hurry. The deficit is at stake". That is not true. This year, the reform will reduce the surplus by $1 billion. This figure comes from the Department of Human Resources Development itself. I even took the trouble of confirming it with the actuary, to make sure I was reading it right.

On page 6.6 of the most recent summary of the unemployment insurance account, it says that, as expected, revenues from current contributions for 1996 amount to $19.801 billion. Note 2 adds the following that since premiums are collected on the basis of the maximum weekly insurable earnings-reduced without having passed any legislation to that effect-the government currently collects less money than what the act provides. Consequently, expected premiums should reach $18.806 billion, or one billion less.

So, this year, the reform will result in a $1 billion shortfall. Why hurry to take such an enormous risk? As the researcher mentioned, it is a leap in the dark.

He adds: "All these financial estimates are made by applying the new parameters to existing patterns". However, as he points out, these patterns will change. For example, I do not agree with the fact that people who currently work up to 15 hours per week are not covered by an unemployment insurance system. Yet, from now on, these people will have to pay premiums, unless they earn less than $2,000-and I will get back to this-but will not be entitled to benefits.

What will restaurant owners do? It is true that a large proportion of their peak hours staff works less than 15 hours. We all know how things works in a restaurant. Albert the waiter gets a phone call: "Come. Stay home. The restaurant is full. It is quiet". When restaurant owners will have to do all the related accounting, do you think they will continue to hire students? No. This is why the student federation asked for an exemption.

We have to realize that even though those who earn less than $2,000 will get a refund for their premiums, this repayment will only take place the following year, when they file their income tax returns. Students can no longer get an exemption. Their tuition fees are increasing, but they will be deprived of an amount equivalent to the unemployment insurance premiums they will have paid. They definitely do not need that.

Behaviour will change. Some jobs will disappear. We can hope that weekly wages will go up, but one very important thing is that it will be at a cost. Why has the time not been taken? There is no rush. Or are they in such a rush to reduce benefits from $445, the present amount, to $413, which is what they will be when the new act comes into force.

Are they in such a hurry that they must take the risk they are taking? Let us not forget that the unemployment insurance system is the best way to stabilize the economy. What is stabilizing about it? The benefits, the premiums, play no small role, according to Peter Duncan, associate professor, Department of Economics, University of Toronto. It is an excellent stabilizer, better than income tax, much better than income tax. The benefits have a stabilizing effect. What does the government do? I repeat, it reduces benefits by $4.4 billion over a period of five years.

Why is the government lowering the maximum insurable earnings. Many researcher said they were worried about this change. Is it because the government wants to leave the lucrative market of workers earning over $39,000 to the private insurance sector? is it because, as the deputy minister told us, of these $900 million paid by workers and businesses for those earning between $39,000 and $42,400, a very large portion remains in the Fund?

The deputy minister had the nerve to say that those earning over $39,000 were less likely to lose their job and that they would withdraw only $200 million of the $900 million paid. It is good that those who have higher and more stable earnings contribute to the general economic and financial balance, while at the same time paying their share for maternity leave, educational leave and so on.

This unemployment insurance plan is the only mechanism carrying people over from one job to the next. With this bill, the government is making it twice as hard for those who are already on the labour market to qualify, and three times as hard for young people, women, immigrants, the sick and anyone who is not already on the labour market.

Why make access more difficult? Why divide the applicable earnings by a fixed divider or by the number of weeks worked, which can only have the effect-the effect sought by the government, it said so itself-of reducing benefits? Why reduce benefits? Why reduce the number of weeks? Why make access more difficult when already less than 50 per cent of the unemployed are covered by this plan?

Is it not obvious that this is messing up not only the stabilizing effect it has on the economy as a whole, but also whatever little protection enjoyed by those who are not rich or do not have the armour-clad job security public service employees have? It is the only protection they have; they have nothing else.

As you know, between 25 and 30 per cent of all Canadian workers rely on the unemployment insurance system each and every year. This bill will affect millions of people.

Why is the government in such a hurry? Why did it gag the opposition as it did? We did not get to debate the bill in second reading. Six 10-minute speeches. We were gagged at committee stage, and again at report stage. All the time we have for third reading is one day and, on the government's side, since they are

gagging us instead of having the decency to let us speak, they are taking their sweet time. That is disgusting, because there is no rush.

Why are they in a hurry? There is something fishy, do you not think? Why do you think they are in such a hurry to cut contributions and benefits, when all those concerned, all the groups at various levels are protesting and asking that they not go so fast, but rather take the time to consult them and to develop a real program? What is the rush? Why are they in such a hurry to cut $1 billion in contributions? Why are they in such a hurry to see minister Martin reduce his deficit?

Whether the reform takes place or not, next year more will be added to the $5 billion surplus already accumulated in the unemployment insurance fund. This can certainly not explain the government's haste.

We must however note that, having done everything it could, up to and including using its parliamentary powers to the limit, the official opposition did not succeed in making government listen.

It should be pointed out that there have been demonstrations like we had not seen in a very long time. These protestors, in Quebec and especially in New Brunswick and Nova Scotia-considering all the demonstrations, the 40,000 postcards we tabled, the petitions, the number of people who have expressed their opposition largely exceeds 100,000-succeeded in slightly softening the blow, because what was totally disgraceful has been slightly changed. However, the total package remains unacceptable.

Throughout the day, my colleagues will focus on measures like this one. Indeed, those with two jobs will be able to take all their hours of work into account, but should be wary of voluntarily leaving one of their two jobs because they would then lose all the insurable weeks of work accumulated until then. This is a measure that totally contradicts the spirit the government claims is behind this reform.

What is most dangerous and difficult is hearing hon. members opposite brag about this reform. What I understand, and what some are happy about, is that they managed to modify certain measures so that they are no longer totally disgraceful. They are quite happy with that, although the total package remains unacceptable. They could have carried out a real reform. They could have maintained the maximum insurable earnings or increased them. They could even have made a distinction between maximum benefits and maximum insurable earnings, as is done in the tax system and in other areas. It is not because people some will contribute more that they will be entitled to receive larger benefits in various areas. But they did not have the right to sabotage something Canadians and Quebecers care about, their security, which they are willing to pay for.

The poll results that appeared in this morning's Le Devoir are extremely interesting, despite the trouble we had breaking through the sound barrier. To the question: Who will benefit the most from UI reform?'', 79 per cent of respondents answeredthe federal government itself''. To the other question: ``In the case of Quebec workers, would you like the UI program to be administered by the Quebec government?'', 74.5 per cent answered yes.

People now understand that a true reform is possible and that, with this one, Quebec workers are being deprived of the much-praised "Canadian spirit" of sharing the disadvantages and consequences of unemployment.

Quebec workers, like their counterparts in Atlantic Canada, understand that this reform will reduce interregional adjustments and impede efforts to reduce the gap between the haves and the have-nots. Quebecers value the system, as the poll showed, and I think that if we put the same questions to Canadians, we will get the same results: Canadians value the system. Quebecers value it and they feel the best way to avoid its deterioration is to take it over.

Personally, I regard as a failure the fact that members opposite refused all discussion. They failed to save what deserved to be saved in this country we want to keep as a partner.

[Ian McClelland, Reform, Edmonton Southwest, AB]

Mr. Speaker, as I was listening to the speeches of my hon. colleagues from the government and the Bloc, I was struck by the chasm that exists in our country. Essentially the Bloc looks at this legislation as a welfare scheme or as a guaranteed annual income, but the notion of employment or unemployment insurance is secondary to income support.

The government, represented by the parliamentary secretary to the minister, the member for Kenora-Rainy River, who, on introduction of third reading of a bill of such import and magnitude, was exceedingly brief in his comments. He managed to say nothing in 12 or 13 minutes while the member representing the Bloc was able to say it in 40 minutes.

This unemployment or employment insurance creature has been flopping around in the body politic for years and years. It took its early form, the revision of unemployment insurance, in the now famous Forget report. The Forget report, as everyone realizes, is collecting dust somewhere in the murky, musty archives of Parliament. Forget said it would not be a bad idea if unemployment insurance was just that. That was the idea behind employment insurance in the first place.

This new government decided that the cornerstone of its renewal of social programs would address employment insurance. It would do what it had to do and return unemployment insurance to its lofty ideals of being employment insurance.

What do we have here? We have half a loaf. What we really have is an abdication of leadership, an abdication of responsibility, an abdication of the necessity on the part of people elected to Parliament to speak honestly, to lead, to do what is right for the country and for future generations.

What is this all about? I can best describe this by referring to the most obvious change in this legislation. For years in Canada we have had unemployment insurance. Unemployment insurance was supposedly insurance paid for by employees and employers to protect those who were without jobs on a temporary basis while they were looking for new jobs.

What do we do? We change the name. Did we change anything else? Perhaps. What is the cornerstone? `Poof', we change the name from unemployment insurance to employment insurance.

This name change is to put the emphasis where it should be, on employment, and `poof', magically all the problems are to disappear. Guess what? They will not disappear. They will stay right where they are, festering in the middle of the body politic in Canada because we are not addressing them honestly. We are not dealing with the real problems. All we are doing is skirting around the politically correct edges.

Once again we have the opportunity to actually do something. Once again we do not. First and foremost, the responsibility for training, for unemployment insurance, is a provincial responsibility, not a federal responsibility. It should rest closest to the people. It should rest in the provinces.

What is the responsibility of the federal government? The responsibility of the federal government is to look at our nation and ensure that where employment opportunities exist in one part of the country, it is possible for people to get there. We remove barriers for the movement of people. Jobs do not go to the people, people go to the jobs. Water does not run up hill, water runs down hill.

During the course of human history, when has it ever worked that someone would reverse the natural dynamics of nature and have it work in the long term? That is not the way it works.

Let me give an illustration. Over the past six or so years, 87 per cent of the new jobs created in Canada were created in the two western most provinces, British Columbia and Alberta. Yet those two provinces have only 22 per cent of the population.

Ontario and Quebec combined in the same period created 14 per cent of the new jobs, yet they have approximately 67 per cent of the total population of the country.

Let us figure this out. If British Columbia and Alberta over the past few years have created and accounted for 87 per cent of the new jobs created in Canada, and generally speaking Alberta and B.C. are not areas of high unemployment and therefore do not get the benefit and their citizens have to work longer in order to qualify, what is it about the current system enhancing a situation in which the provinces with the lowest rate of employment, the maritimes, continue to suffer?

Are we creating dependence? It seems the evidence is very clear. It has been clear since the 1970s, since some muddled thinking that somehow we can evolve through a situation of the equality of circumstance. The bottom line is we have the equality of opportunity. Circumstance is earned. It is regrettable but true that if someone lives in a part of the country that does not have an employment base and has not had an employment base, it is very likely it will not have an employment base.

If someone wants better for their children, it is evident the children or the family will have to make whatever adjustments to their lives are necessary in order to see that better future. That is the way it has been on earth since the beginning of time.

How does one suppose we came to Canada in the first place? Does anyone believe my ancestors came from Ireland, Scotland or wherever because things were good? Of course not. They came to Canada for a better opportunity for themselves and their children. Why does anyone think people moved from one part of the country to another? It was for the opportunity for themselves and their children.

While we try to create a situation in which water will flow up hill and we see from evidence that it does not flow up hill, we see that by creating dependence all it does is foster the need for more independence, why should we be surprised when we keep coming back to these same problems time after time?

In his opening remarks the member for Kenora-Rainy River referred to the introduction of this act, changes to unemployment insurance, as part of the social program envelope. That is the problem. Employment insurance is not a social program. Employment insurance is no more a social program or should be no more a social program than automobile insurance is a social program; insurance is insurance.

Employment insurance should be exactly that, employment insurance. The premiums should reflect the risk. The insurance paid should reflect the amount of money paid in and the period of

time over which that money has been paid in. It should have some bearing somewhere on reality.

If we are not using the unemployment insurance system for anything other than unemployment, how do we go about getting money to those Canadians who must have it? If that means we will have a guaranteed annual income, that we will call it welfare and that we have to do whatever we have to do but deal honestly and do it, that is how this debate should be framed and that is what we should be talking about.

However, to put together a program called unemployment insurance which is paying out, as members from the Bloc have pointed out, this year alone about $5 billion more than is being taken in into general revenues, that is nothing more than a tax. That is a top line payroll tax that goes right into the federal treasury which is a job killer of the first magnitude.

Why do I say it is a job killer of the first magnitude? It is because in my past and real life I am an entrepreneur. I have had to live with licence fee increases for the cost of being in business. Unemployment insurance has absolutely diddly squat to do with the profitability of a business. We are not paying these taxes based on how profitable we are. We are paying these taxes based on how many people we employ.

In a certain circumstance where a business is barely hanging on, like that proverbial cod fish on the Grand Banks, by its fingernails, as many small businesses are doing on daily, monthly basis, when the cost of staying in business goes up because the government imposes yet another tax that has nothing whatsoever to do with profitability, what does an employer do?

Employers look at the books and say this will end up costing us $30,000 a year in payroll taxes. For them to get $30,000 a year they will have to increase their sales. If they make a 5 per cent or a10 per cent profit on their bottom line, that means they will have to increase their revenue by 10 times or 20 times to accommodate the increased taxes. In many cases that does not work out to a 1 per cent increase in gross sales but to a dramatic increase in gross sales in order to get enough profit to trickle down to the bottom line in order to pay yet another tax.

What do they do? They do not simply get up in the morning and say "I see my costs have gone up and so I will raise my prices". The trouble is they cannot raise their prices. Most businesses are not suffering from a lack of competition. There is no price elasticity in the vast majority of businesses.

What happens? The only thing that can possibly happen. If their costs have increased by $30,000 they will have to reduce their expenses by $30,000. Can they reduce their rent? No. Can they reduce all the other fixed costs? No. What is the variable? Employees. Another full time job is lost. They could have more part time workers. They are paying the payroll taxes but instead of having a 40 hour work week, everybody will get paid on an hourly basis for the hours they actually work. It is a vicious circle. There will be more part time employment.

That this is not as obvious as the nose on the face of the government is a reflection that the vast majority in this place have never signed a paycheque. They do not have a clue as to how our economy works or why it works. That is what keeps getting us into this mess time after time. To take $5 billion a year out of the economy on a payroll tax so the government can look better on its deficit projections is wrong. It is wrong for the country. It creates a vicious circle. There will be less employment, not more.

How does the current unemployment system work? Will this change anything? Many employees in the system do not look at being on unemployment insurance as a temporary transition measure. It is not considered wrong to use unemployment insurance as a transition method to go from one job to another. If a person does not like their job they will go on pogey until they get a new job.

Employers use the system to lay people off. It is easier to say to someone "we will lay you off. I do not want to fire you and have a confrontation. We will get busier again in the summer. Maybe we will hire you again and maybe we will not".

Unemployment insurance today is misused by employers and employees. People working on a full time basis in a job that does not pay significant income, which encompasses virtually all of the people in the service sector in our country, may find themselves in a catch-22 situation. They may be earning around $15,000 a year and paying unemployment insurance to subsidize those who work on a seasonal basis and may earn $30,000 or $40,000 a year.

If someone is earning on a seasonal basis twice as much as someone working on a full time basis, is it appropriate for the lower paid person to be subsidizing the incomes of those higher paid people? It does not seem right to me. As a matter of fact, it seems kind of dumb to me.

If unemployment insurance were put on the basis that had been envisioned, it would be insurance paid by the employee and a tax on employers. If the premiums reflected the use of the program, that is, the number of times people dipped in and came out of the program and how much they took out of it, it would be the kind of program it was intended to be.

Another concern has been raised by the changes in the bill. How do Canadians who need to get into the employment base get training? Where does the money come from? As it stands, one cannot access programs delivered by UI unless one has an attachment to the labour force. What about all the people who do not

have attachment to the labour force? How do they go about qualifying for these programs?

We have to look at our responsibilities as a nation and figure out how we can best provide entrepreneurs and businesses with a population well educated and highly trained in a diverse range of skills. How best can this be done in harmony with the provinces? How can we address the needs of training, upgrading and the provision of skills to those Canadians most in need?

I speak now specifically of persons with disabilities. They are totally left outside the loop on this. How can they be provided with the tools which will allow them to be trained and retrained in the workforce leading into the 21st century and what will be the nature of the work?

We will have to decide whether we are going to address issues honestly. As the nature of work changes, the skill level required to be able to participate in a meaningful way and to make a good income is going to require consistent change, training and retraining. A good number of workers who through no fault of their own, or through misguided promises by people in political office, will find themselves on the outside looking in.

As we look to the nature of work there will be fewer and fewer people making more and more money. The middle class will continue to erode and there will be a polarization, which is already taking place today, between the haves and the have-nots in our society. It is because of the changing nature of work.

If we accept this premise to be true-there are those who would say that it is not true-then we will have to wrap ourselves around the notion that it is our responsibility to consider ways to ensure a minimum level of income for all Canadians. This would ensure dignity and provide a foundation so the immediately affected generation and future generations would not get caught in the spiral of ever-increasing dependency, of intergenerational dependency on others for their self-respect or their sense of well-being or their daily bread.

We must have a country in which our interdependence is built on a foundation of independence. A foundation of independence cannot be established in a country that fosters the notion of the equality of circumstance.

Our responsibility is to ensure that people have opportunity by providing education and training. It is up to the individual to make use of that education and the training. If individuals are not prepared or are incapable of doing that, then we would not have the equality of circumstance. The thinking of the sixties, no matter how utopian the ideal is, cannot be delivered. It is not honest to suggest that it can be delivered because it cannot. To my knowledge, never in the history of the modern world has any regime been able to deliver on that promise.

I would like to reflect on the importance of this bill and how it made its way through the parliamentary system and on the effect of closure.

Closure may have a more insidious potential in the body politic than just getting legislation through the House or just preventing members from having the opportunity to get on their feet and say a few words about it. It is my opinion that items such as this bill or anything which comes through the ministry that is responsible for this bill, which accounts for the vast proportion of all the discretionary spending on the social side of the envelope, is by far the most important side.

Last week we dealt with Bill C-33 concerning sexual orientation. It was explosive. It was a sad day for many people on both sides of the House. It went through in very short order and now it is over and done with.

However, the legislation we are talking about today really speaks to the kind of society we will have in a pluralistic sense. With this bill and others that come through HRD, we talking about how we can fashion a society that rewards entrepreneurship and initiative, but at the same time looks after those who are less able to look after themselves. That is the measure of a society. The worth of a society is measured by how it looks after the weakest, not the strongest.

As these debates take place we must be cautious of what we are doing. The foundations put down today are the ones that will allow the economy to grow and prosper. It can be done, in my opinion, by ensuring that nothing robs individual Canadians of the responsibility, the ability or the desire to provide for themselves, their children and their future. As a society we should recognize our responsibility to the common good to look after those who need help and make the distinction between wants and needs. We look after those in need. Those in want must look after themselves.

[Bob Nault, Liberal, Kenora—Rainy River, ON]

Madam Speaker, a point of order. I would like to let the House know that throughout the rest of the day on third reading of this bill, members on the government side will be sharing their time equally, 10 and 5.

[Stan Dromisky, Liberal, Thunder Bay—Atikokan, ON]

Madam Speaker, I appreciate the opportunity to discuss Bill C-12, the legislation to bring into being Canada's new employment insurance system.

Of the many improvements brought about by Bill C-12, the most important is its impact on Canada's young people. Youth is a priority concern for the government's job and growth agenda and Bill C-12 neatly reflects that concern.

The employment insurance legislation not only provides more effective treatment for young workers in terms of benefits, but also provides positive, active measures to help young people get and

keep good jobs. For young people a great problem with the current UI system is that it often fails to recognize their actual working effort.

UI measures work in terms of weeks which is a very poor measure of time spent on the job, particularly for part time workers and multiple job holders.

Within the hours based system provided in Bill C-12, part time workers earnings are insured and four out of ten part time workers are under 25 years of age. Another inequity under UI has been the employer's tendency to limit part time employment to less than15 hours per week per person in order to avoid having to pay UI premiums. For many young people this has meant not only do they get less work, but that their earnings are not insured.

Employment insurance eliminates this 15-hour trap. All hours will now count toward eligibility. More young people who enter the labour market after leaving school and who must rely on a number of small jobs to earn a living will now have insurable work.

Further, an impact which particularly benefits young people is the fact that employment insurance also reduces the risk of workers developing a dependency on employment insurance. Far too many young people come into the labour market and end up on UI benefits before completing their education. Then they find themselves in another sort of trap where they work long enough to qualify for benefits then go without work for as long as the benefits last.

The new employment insurance system will discourage this behaviour pattern. It will in fact encourage young people to complete their education rather than dropping out to take short term, often low paying work that does not lead to career advancement.

Higher entrance requirements under employment insurance encourage young people to develop a stronger attachment to the labour market. We have heard loud protests from the opposition about the concept of higher entrance requirements. Far from being draconian, these very measures have been recommended to the government by many many groups.

For example, two recent reports were quite specific. The report of the Standing Committee on Human Resources Development recommended longer qualifying periods to encourage young workers to remain attached to the workforce longer and to improve their career prospects. The working group on seasonal work and unemployment insurance also recommended stiffer entrance requirements for young people.

In the process of designing this legislation, the government listened to the concerns of Canadians in all regions and all walks of life in more than two years of consultations. Town hall meetings, seminars and policy workshops were held. Phone lines were opened and the Internet was put to work. Through these and other channels including open line radio shows, Canadians told us what they wanted. It was social security reform.

The minister invited the Standing Committee on Human Resources Development to further examine ways to improve the legislation. More than 100 witnesses from across the country were heard and nearly 150 briefs were received, analysed, digested and studied very carefully by members of the committee. The purpose once again was to listen carefully to Canadians' views on fine tuning the employment insurance legislation to ensure that the system is fair, to be sure that the system is balanced and reflects the varying labour market conditions across the regions of Canada.

In this process the work incentive provisions of the bill have been strengthened. Changes have been made to make the system fairer to youth, fairer to women, fairer to the low income families and fairer to workers in seasonal industries.

There are other ways in which Bill C-12 will benefit young people. Contributions to EI for example will have minimal impact on young people. For instance a student working 14 hours a week at $7 per hour would pay less than $3 per week in premiums. The hours will now be insured which will help meet entrance requirements when entering the labour market full time. Premiums will be refunded to about 625,000 young people, 49 per cent of all of those who receive rebates. Of the total young people receiving rebates, 400,000 will be full time students.

Again let us look at the benefit side. Total benefits paid out under EI will be less and benefits paid out to young people by the year 2001-02 will decrease by 6 per cent. This is considerably less than the forecast overall decrease of 9 per cent.

We should not forget that EI is a two pronged program: income support for the unemployed coupled with employment benefits to help people get back to work and to get productive work. Targeted wage subsidies for example will help young people who qualify for employment insurance benefits to get needed work experience to qualify for more stable or permanent jobs.

The government has recognized the problems facing Canada's youth and has set in motion a process leading to a national youth strategy which will be announced this fall. The member for North York has been appointed chairman of the ministerial task force on youth which is now holding consultations to gather public input for such a strategy.

The task force is now holding town hall type meetings across the country hosted by local members of Parliament and senators. Such a meeting is to be held in my riding of Thunder Bay-Atikokan on May 23. In this way we can participate directly, solicit the views of our constituents and our young people and shape an effective

strategy to permit youth to fulfil their vital role in our future asa nation.

Bill C-12 and the government's initiatives for young people aim at giving young people hope, hope that they will be better equipped to take their rightful and productive place in the future of our country.

[Yvan Bernier, Bloc, Gaspé, QC]

Madam Speaker, I will have the opportunity to rise several times today to ask a question or make a comment.

There is something bothering me in what the hon. member just said. Could he tell me how seasonal workers will benefit from the so-called training tools that he raved about at the end of his speech and that are supposed to be included in this bill?

There seems to be an inconsistency in the member's speech. First, Quebec has always maintained that manpower training should come under provincial jurisdiction. Therefore, I cannot see how the federal government could boast about promoting manpower training. Second, I represent a region that relies heavily on seasonal industries. It is not our fault if the water is frozen in the wintertime and we cannot fish. The same logic applies if you plant or cut trees in the bush.

These workers have noble occupations too. They do not need additional training to do their work. Sure, they learn and improve their skills every year, but this in itself will not extend their season. The purpose of training is to increase the work period. How does the bill before us, and on which we will vote this evening, benefit people from these regions?