Madam Speaker, I am very pleased to have the opportunity to participate in the debate on Bill C-12.
I would like to make some comments at this stage on the changes proposed to the original bill and in particular to the costs associated with the changes.
It is important to focus on the amendments which were made in committee. They are based on all the hard work that the committee has been involved in, going back two years when the committee of human resources development was sent across the country to hear the views of Canadians, then when the bill was introduced in its
first phase to where we find ourselves today. It is some 140 days since we have had hearings and went clause by clause in committee. We find ourselves in the House today dealing with amendments at report stage of this bill.
The increased costs of the three main amendments to Bill C-12 that have been accepted by the government will be offset by adjustments in other areas. The amended bill will still mean that a total of $1.2 billion will be saved by the year 2001-2002 which is a gross savings of $2 billion minus the $800 million that will be reinvested in re-employment measures.
Hon. colleagues should by now be familiar with the amendments proposed because the members who have proposed them, at least from the government side, have been very up front with them, have sent them across the country and to their own constituents.
The first amendment is the provision to lessen the impact on workers in all industries who have gaps in their work and earning patterns. The fixed period for calculating benefits under the original proposal was considered to be too harsh for workers in this situation.
Now all claimants will be able to use a full 26-week period prior to making a claim to calculate average earnings. Average earnings over this period, excluding gaps, will determine the level of benefits. What it means is that workers could have several weeks of breaks in employment during this 26-week period without having their benefits reduced due to these gaps in employment. This change will increase benefit payouts by about $246 million for workers with unstable work patterns.
The second amendment changes the way the average is arrived at and the way the benefit is calculated with those with only the minimum number of weeks. My colleague in the Liberal Party spoke to that issue which is what we call the divisor.
Under the original proposal the divisor was set at three or four weeks above minimum entrance requirements in high unemployment regions and between zero and two weeks above in low unemployment regions. Therefore, individuals in high unemployment regions with the least opportunity for finding additional work exists would have been greatly penalized by these measures.
However, the purpose of having a divisor that is higher than the minimum qualifying requirement is to encourage people to take extra employment and try to work more than just the minimum required to qualify.
However, a balance between providing incentives and ensuring fairness had to be found. With the amendment of my colleague which is supported by the government and the Minister of Human Resources Development, I believe we have been able to do that.
Consequently, the government has agreed to an amendment that will set the divisor at only two weeks plus the minimum number of weeks necessary to qualify in all regions, that is, a minimum divisor which ranges from 14 to 22 weeks depending on the unemployment rate in the region. It will thereby retain the incentive to work, but will be fairer for those in truly difficult situations. People will have a 26-week period in which to find the weeks needed to maximize their benefits. This proposal will have a positive impact on benefit payments for workers in high unemployment regions and little impact elsewhere across the country. The new divisor will increase benefit payouts by about $95 million.
The third main amendment is the new intensity rule. Under this rule people who draw on the system year after year will see a modest reduction in benefits. All future claimants who have received 20 or more weeks of regular benefits within a five-year period, beginning with the new bill when it is passed into law, will have the weekly benefit rate of their next claim reduced by 1 percentage point, from 55 per cent for every 20 weeks they have been on claim. The maximum reduction will be 50 per cent of weekly earnings for someone who has received more than 100 weeks of benefits over a five-year period.
The amendment the government has accepted is to exempt from the intensity rule those individuals with very low incomes who have children. That threshold has been set at $26,000 or less. Approximately 350,000 claimants qualifying for the family income supplement will not be subject to this rule. We should keep that in mind when some 2.4 million Canadians collect unemployment insurance each year. This exemption of the intensity rule for some 350,000 people is a significant improvement. It is a way for the government to ensure that the poorest of the poor are not affected. Quite frankly, they do not need an incentive to work. Being poor, I am sure, is enough incentive for anyone to try to find a job.
While the intensity rule will reduce weekly benefits somewhat for those who use the system frequently, those with the lowest incomes who are most in need are protected. It will increase benefit payouts by about $24 million for 188,000 claimants in low income families who otherwise would have been affected by the rule.
Taken together, the three amendments will increase the payouts to individuals under the employment insurance program by roughly $365 million over what was proposed in the unamended Bill C-12. That shows how important committee work is. When members make proposals, even though they have a significant cost factor, when proven to be fair to the people we are trying to help and protect, the government has reacted very favourably.
Now for the other side of the ledger, the changes that will be made to tighten up the system to reduce expenditures to offset the
increased payouts I have just mentioned. Those have to be put in perspective.
The scope of potential cost reductions is very wide. For example, if 50 per cent of EI claimants collect just one week fewer benefits the savings would be $300 million in one year. Think of it. One week with no benefits for individuals who happened to find an extra week of work would save the system some $300 million which could be used in other areas.
What the government is planning to do is tackle three longstanding problems of the old system in order to reduce costs and to make the operation of the system fairer for all those who contribute to it. One of the major problems is that there has been an inefficient early use of all means available to help claimants get back to work as quickly as possible. In too many cases there is a tendency to simply fill out the forms and mail out the cheques without a concerted effort to ensure that the individual claimant has help to find other employment. That will no longer be the case in employment offices across the country. Now the question will not simply be: "Where do we mail the cheque?", it is going to be, "What do we need to do to get you back into the workforce right now?"
In addition to other services provided to those who are looking for work, a new and ongoing series of group information sessions will be provided to claimants in specific categories. These include claimants in demand occupations. For example, those who have skills that employers are looking for, repeat claimants, past fraud claimants and those affected by structural changes who may face long periods of unemployment.
At these sessions claimants will be informed of all the services available to help them get back into the workforce rather than remain on benefits. These include the electronic hiring hall, which we have all heard about, and will include the computerized job search system which was introduced in the last number of years.
Approximately 400,000 unemployed workers every year will qualify for a very flexible and innovative series of new measures which will help more people get jobs. These include wage subsidies, income supplements, self-employment assistance, skills, loans and grants and community job partnerships.
These changes in the bill are intended to save a significant amount of money. It is estimated by the year 2001-2002 if we get more proactive in helping people find a job, we can recoup the finances put back into the system with the three amendments that the members have made and the government has accepted.
That is the rationale for these amendments at this point. I hope to speak more on those amendments as the day goes on.