Debates of May 2nd, 1996

The House resumed from May 1 consideration of the motion that Bill C-217, an act to amend the Criminal Code (protection of witnesses), be read the second time and referred to a committee.

Criminal Code

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I believe you would find unanimous consent for the following motion:

That the vote on Bill C-217, scheduled to have taken place this morning, be further deferred until Tuesday, May 6 at the conclusion of government orders.

(Motion agreed to.)

Government Response To Petitions

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

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

Petitions

[John Bryden, Liberal, Hamilton—Wentworth, ON]

Madam Speaker, pursuant to Standing Order 36, I am pleased to rise in the House today to present a petition from my constituents of Hamilton-Wentworth calling on Parliament to refrain from implementing taxes on health and dental benefits.

Questions On The Order Paper

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

Madam Speaker, Question No. 24 will be answered today.

Question No. 24-

[Peter Milliken, Liberal, Kingston and the Islands, ON]

What docking facilities, operated by the Department of Transport, are used to provide ferry services to islands in Canada and what are the costs of operation, maintenance and repair of such facilities ( a ) in dollars and ( b ) as a percentage of similar costs for all docking facilities owned and/or operated by the department in Canada?

[David Anderson, Liberal, Minister of Transport]

Mr. Speaker, Transport Canada advises as follows.

Ontario is the only province in which Transport Canada operates docking facilities to provide ferry services to islands.

In the Ontario region of transport there are five ferry operations that provide services to islands. The five ferry operations are listed and pertinent information is included.

Tobermory to South Baymouth (Manitoulin Island): Manitoulin Island is accessible by Highway No. 6 of the provincial highway system, therefore the residents of Manitoulin Island do not depend solely on the ferry for access to the mainland. Because of the highway access, the Manitoulin Island operation may not be a good example for a cost comparison. It should also be noted that the ferry to South Baymouth is operated by the province of Ontario, Owen Sound Transportation Company Ltd. and it operates for only six months of the year.

The following maintenance and repair costs have been incurred at the Tobermory/South Baymouth sites:

Tobermory/South Baymouth:

1990-91 Wharf repairs $4,500 1991-92 Wharf repairs $129,200 1992-93 Wharf repairs $396,300 1993-94 - - 1994-95 - - 1995-96 Electrical Repairs $500

Kingsville to Pelee Island/Leamington to Pelee Island: The Pelee Island residents rely solely on the provincially operated ferry for

access to the mainland. The operator of the ferry operations is the Owen Sound Transportation Company Ltd.

The ferry structures at Pelee Island, Kingsville and Leamington were rebuilt just recently in a joint federal-provincial government agreement that was made under ministerial agreement signed in December 1992 by Transport Canada and the Ministry of Transportation and Communication. The project started in 1992 and was completed in 1995. The Transport Canada share for this project is shown below:

Kingsville Ferry Terminal $2,285,000 Leamington Ferry Terminal $3,663,000 Pelee Island Ferry Terminal $4,868,000

Millhaven to Stella: The Amherst Island residents rely solely on the provincially owned ferries for access to the mainland. The ferries are operated by the twonship of Amherst Island. The following maintenance and repair costs have been incurred at the Millhaven and Stella sites:

Millhaven: 1990-91 Timber crib repairs $22,000 1991-92 Wharf repairs $46,000 1992-93 Wharf repairs $359,000 1993-94 Wharf repairs $356,000

Stella: 1991-92 Wharf repairs $34,000 1994-95 Wharf reconstruction $37,000 1995-96 Wharf reconstruction $443,000

Wolf Island to Cape Vincent, New York: The Wolf Island residents rely on two ferries for access to mainland. The Kingston ferry provides year round service; however, Transport Canada provides no infrastructure for this operation. The Horne's Point ferry is a privately operated international ferry to Cape Vincent, New York. The following maintenance and repair costs have been incurred at the Horne's point ferry structure:

Wolf Island: 1991-92 Wharf repairs $39,000 1994-95 Wharf repairs $50,000 1995-96 Wharf repairs $432,000

Moosonee to Moose Factory Island: Moosonee school children rely on the privately owned ferry for transportation to and from school each day. The ferry operates from ice out, usually the first week of June, to freeze up, usually the last week of October each year. Also the ferry service provides access to the hospital that is located on Moose Factory Island. The alternative access methods to the island are freighter, canoe, helicopter and in the winter, cars, trucks and snowmobiles.

The following maintenance and repair costs have been incurred at the Moose Factory site:

1990-91 Annual service contract $14,250 1991-92 Annual service contract $25,250 1992-93 New timber floats $23,000 1992-93 Annual service contract $8,750 1993-94 Annual service contract $23,000 1994-95 Float modifications $2,500

In all cases mentioned above Transport Canada owns the main structure for the ferry operation, but it does not own the ramps for the loading and unloading of vehicules and passengers. Part (b) of Question No. 24, making a percentage comparison to other marine structures may not be a fair comparison because the structures are substantially different in load requirement and overall size. Also, the location of a structure can have a dramatic effect on the yearly maintenance cost, i.e., ice conditions, wind and wave action, as well as current speed or flow.

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

Madam Speaker, I ask that all the remaining questions be allowed to stand.

[The Acting Speaker (Mrs. Ringuette-Maltais)]

Is that agreed?

[Some hon. members]

Agreed.

The House proceeded to the consideration of Bill C-12, an act respecting employment insurance in Canada, as reported (with amendment) from the committee.

Employment Insurance Act

[The Acting Speaker (Mrs. Ringuette-Maltais)]

There are 221 motions in amendment standing on the Notice Paper of the report stage of Bill C-12.

Motion No. 9(a) cannot be proposed to the House because it is not accompanied by the recommendation of the governor general. Standing Order 76(3) requires that notice of such a recommendation be given no later than the sitting day before consideration.

The other motions will be grouped for debate as follows.

Group No. 2: Motions Nos. 1, 2 and 3.

Group No. 3: Motions Nos. 4, 5, 6, 200 and 201.

Group No. 4: Motions Nos. 7 and 8.

Group No. 5: Motions Nos. 10 and 10A.

Group No. 6: Motions Nos. 17, 18, 20 to 25, 35, 36, 72, 73, 171, 173 and 189.

Group No. 7: Motions Nos. 75 and 76.

Group No. 8: Motions Nos. 80, 81, 92 and 93.

Group No. 9: Motions Nos. 111, 112 and 113.

Group No. 10: Motion No. 128.

Group No. 11: Motion No. 188.

Group No. 12: Motions Nos. 191 and 192.

Group No. 13: Motions Nos. 214, 215 and 219.

Group No. 14: Motions Nos. 216, 217 and 218.

Group No. 15: Motions Nos. 9, 11 to 16, 19, 26 to 34, 37 to 71, 74, 77 to 79, 82 to 91, 94 to 110, 114 to 127, 129 to 170, 172, 174 to 187, 190, 193 to 199, 202 to 213.

The voting patterns for the motions within each group are available at the table. The Chair will remind the House of each pattern at the time of voting.

[Francine Lalonde, Bloc, Mercier, QC]

moved:

Motion No. 1

That Bill C-12 be amended by replacing the long title, on page 1, with the following:

"An Act to amend the Unemployment Insurance Act."

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Madam Speaker, on a point of order, in order to enable MPs as much as possible to speak to the motions, rather than listening to motions being read to us, there might be consent that all the motions whose numbers have been recited just now by Madam Speaker be deemed to have been moved, seconded and proposed to the House. If the House gives its consent to that we could spend our time debating the actual text of the motion rather than listening to the titles being read to us.

[The Acting Speaker (Mrs. Ringuette-Maltais)]

Is there unanimous consent?

[Some hon. members]

Agreed.

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

moved:

Motion No. 2

That Bill C-12 be amended by deleting Clause 1.

[Francine Lalonde, Bloc, Mercier, QC]

moved:

Motion No. 3

That Bill C-12, in Clause 1, be amended by replacing lines 4 and 5, on page 1, with the followingL

"1. The Unemployment Insurance Act is amended by adding the following to paragraph 6(2)( a ):

"has, during the person's qualifying period, held insurable employment or insurable employments numbering at least the number of weeks"

1. The Unemployment Insurance Act is amended by adding the following to paragraph 6(2)( b ):

"has had an interruption of earnings from his employment or employments"

1. The Unemployment Insurance Act is amended by adding the following to paragraph 6(3)( a ):

"has held twenty or more weeks of insurable employment or employments"

1. The Unemployment Insurance Act is amended by adding the following to paragraph 6(3)( b ):

"has had an interruption of earnings from his employment or employments."

1. The Unemployment Insurance Act is amended by adding the following to paragraph 6(2)( c ):

"less than fourteen prescribed weeks that relate to employment or employments"".

Madam Speaker, before cutting into the short 10 minute period allotted, I would like to ask why Motion No. 9A was not accepted. Could I get an answer on this?

[The Acting Speaker (Mrs. Ringuette-Maltais)]

In support of the Chair's decision, I would like to quote citation 246(3) in the fourth edition of Beauchesne:

1. (3) The guiding principle in determining the effect of an amendment upon the financial initiative of the Crown is that the communication, to which the royal demand of recommendation is attached, must be treated as laying down once for all (unless withdrawn and replaced) not only the amount of a charge, but also its objects, purposes, conditions and qualifications. In relation to the standard thereby fixed, an amendment infringes the financial initiative of the Crown, not only if it increases the amount, but also if it extends the objects and purposes, or relaxes the conditions and qualifications expressed in the communication by which the Crown has demanded or recommended a charge. And this standard is binding not only on private members but also on ministers whose only advantage is that, as advisors of the Crown, they can present new or supplementary estimates or secure the royal recommendation to new or supplementary resolutions.

I trust this answer is acceptable to the hon. member.

[Francine Lalonde, Bloc, Mercier, QC]

Madam Speaker, this excerpt from Beauchesne's explains the absolute limits to which the opposition is subject in a debate such as the one on unemployment insurance reform. Given the fact that you reject the amendment, your interpretation of the article just read implies that in no way can our proposed amendments have the effect of changing the amounts of charges and expenditures, even though the main point of the debate on the unemployment insurance reform concerns precisely this issue.

This extreme constraint means that the opposition can only refer to the current act, since the primary purpose of the bill is to lower contributions for workers earning between $39,000 and $42,400, to eliminate contributions from major corporations regarding such amounts, thus reducing the tax base, to increase the tax burden of

those who currently do not pay unemployment insurance contributions by making them pay such contributions, and to force these small earners who will now pay contributions to make up for the $900 million shortfall, for the gift that the government is giving to major corporations and workers earning between $39,000 and $42,000 per year. Indeed, the idea is to make up for this loss by making those who currently do not contribute pay premiums, that is people who work between one and fifteen hours per week, even though most of them will not be eligible for unemployment benefits. The rest of the reform provides for cuts, so as to meet the objective of $1.9 billion set out in the budget. You will understand that, in this context, the opposition is bound and gagged, utterly.

This bill, whose title shamefully refers to employment insurance, provides absolutely no assurance to workers that they will have a job even if they collect benefits, which is not a sure thing; in fact, no one is certain to collect benefits, because there is no right of appeal regarding employment benefits.

The bill's title does not even correspond to reality. Moreover, we claim, and we have every evidence to support our claim, that not only does the bill not guarantee a job, nor promote job creation, but also that it is anti-job.

It does not promote job creation because it reduces interregional subsidization. It will make the poor regions even poorer. When I talk about regions, I mean the regions with seasonal work and high unemployment rates. I mean the Gaspé peninsula as well as the Atlantic provinces in general, but also the Montreal area.

I would like to read from a brief submitted by some very important people, Robert Morrissey, the minister of economic development and tourism, and Jeannie Lea, the minister of education of Prince Edward Island. Their brief states: "In Prince Edward Island, the net loss in unemployment insurance benefits would thus add up to over $15 million and increase to $24 million by 2001-2002. Such large losses have a major impact on an economy as small as ours, although Prince Edward Island ranked first for job growth in 1985".

Even though the cuts are somewhat reduced by the amendments, cuts are the hallmark of this bill. They will have an impact on the whole economy. If the minister of the economy in Prince Edward Island, a province that ranks first in job creation, can claim his province cannot cope with $15 million in cuts, what could be said of cuts in the Montreal area, where they will represent $500 million if the 1994 cuts are taken into account?

This is the equivalent of the definitive closure, in just one region, of dozens and dozens of businesses. The impact on the economy will be staggering, and the social impact will be just as severe, because those who are excluded, many of whom do not get benefits, will be forced to make greater contributions.

That is what they told us time and again. They also expressed their opposition through demonstrations and sometimes desperate protests. We can say one thing: If the government felt it had to make minor amendments, to the tune of $365 million on total cuts of almost $2 billion, it is because of the despair expressed in those demonstrations.

We should not forget that those who were able to take part in demonstrations were people who were organized and could see the immediate impact on a whole area. Isolated individuals who have unstable jobs, who fear for their job or are already unemployed, and those who are on welfare, feel helpless in their isolation and do not know how to join in demonstrations. What we have here is a far cry from an employment insurance plan.

That is why we, in the Bloc Quebecois, want and urge the minister to take the time to develop a real reform that will not attack those already in trouble, like Prime Minister Chrétien used to say-I am sorry, I should not be using his name-the former Liberal Leader of the Opposition, who was Jean Chrétien, the present Prime Minister, about a previous reform that was much less drastic than this one, this so-called reform that has already made $2.4 billion in cuts in unemployment benefits since 1995.

Thus we will show the Prime Minister and the Minister of Human Resources Development how they should take great care of that instrument, which was most effective during the 1981-1983 recession and the most recent one, but which will be less and less so because its stabilizing effect will be less and less effective. This is true of the economy as a whole, but even more so of individuals.

How many people in our society do not even have minimum security? Their only security is unemployment insurance, which allows them to continue hoping to get another job. Therefore, we have no right to change overnight this essential instrument of social and economic stabilization.

[Geoff Regan, Liberal, Halifax West, NS]

Madam Speaker, I rise today to speak on the bill regarding employment insurance.

Over the past two years, the government has carried on extensive consultations in relation to matters of social policy, in particular the question of the unemployment insurance system which will now be called employment insurance.

It is very fitting that the new name of the system is employment insurance. We do not talk about having death insurance although we only get that insurance when we die. It seems reasonable not to call it unemployment insurance since the idea to be reinforced is that of people having employment, not unemployment. We want to assist people in achieving employment, which is what this bill is all about.

The bill is about helping people to get jobs. It is also about strengthening work incentives. I do not believe this bill is perfect which is why I am glad that the human resources development committee over the past number of weeks has had a chance to look into the bill, to hear witnesses and to discuss possible ways to change it.

Two other members and I have brought forward amendments. There are over 200 motions to amend the bill. I believe many of them will go through and will improve the bill substantially. It is important that fairness is ensured in the system through these changes.

This bill will also help workers adjust to changing economic times. One of the most important changes to the employment insurance system will be the process of counting hours of work rather than counting weeks of work. That seems to be a more reasonable and accurate way to measure work. Most people work according to the number of hours per week.

In Atlantic Canada this change will mean that the vast majority of workers, for example, those in seasonal industries who often work more than 35 hours a week-some as much as 70 hours per week-will now get full credit for the hours they work. That is a very important change that will benefit people in Atlantic Canada.

It is also important to realize that under the new bill every hour and every dollar counts toward people's benefits. That is a change from the past. Before, whether you had 16 hours a week or 80 hours a week, it meant the same thing. That is surely not an accurate way to measure work or what will be insured. The new system will improve on that substantially.

For example, consider a person in the construction industry, which is usually a seasonal industry. During the summer months, the heavy months of work, people will often work up to 70 hours a week. People in that sector will benefit from these changes. A week in which they work 70 hours will mean the equivalent of 2 weeks toward eligibility.

One of my original concerns about the bill was the way it dealt with the divisor. The divisor is the number of weeks by which people's income is divided to determine what is their income.That is then multiplied by 55 per cent to determine what their benefits are.

The problem I had with that was that under the original bill in the highest unemployment regions people were required to work three or four weeks beyond the eligibility period. Let us say it was the equivalent of 12 or 14 weeks. In the 12 week areas they would have to work the full 16 weeks, and about 17 weeks in the 14 week areas in order to get the full benefit, whereas in the areas of lowest unemployment where it would be easiest to get additional work they would have to work no further weeks of work.

It is similar to saying that in the areas where it is toughest to get additional work, that is, the areas of highest unemployment, an incentive is needed to get additional work and there is supposedly no need in the areas of highest employment where it is easier to get additional work. It would have meant hardship for the people in Atlantic Canada and in other high unemployment regions across the country. I felt it was very important that we remove that kind of hardship from the bill.

By the same token, there were various groups, even unions in some cases, who came forward to say that it was true that there were some people who, after getting their 12 weeks of eligibility, would stop working. They would arrange to get themselves laid off or whatever. I do not think it is a big number of people but they exist. We have been told by those people and others that an incentive is needed for people to work a little extra, to ask them to stretch a bit but not to ask them to go off a cliff.

I put forward the idea that instead of having the addition of four weeks in the highest unemployment areas and the addition of zero weeks in the lowest, it should be a flexible eligibility plus two weeks period for the divisor.

This is a complicated subject. Many people will find it a little complex and hard to understand. The point is that it will be fairer across the board for all Canadians. It will mean that the divisor period will follow the rate of unemployment.

As the unemployment rate in an area goes down and it becomes easier to find work, people will have to work a little longer to get their full benefit. As the unemployment rate in an area goes up and it gets harder to get those extra weeks of work, they will have fewer weeks to work, maybe one or two, obviously depending on the nature of the unemployment rate, to get that full benefit.

That is an important measure. It will have a cost to it. It will mean $95 million will go back into the economy. It is a very important measure particularly in the areas of highest unemployment which would have been unduly harshly impacted on by the bill as originally written.

I am delighted the government has accepted my proposal. The minister has put forward an amendment which requires a royal recommendation since it involves the spending of funds. He has also put forward proposals by my friend from Fredericton-York-Sunbury and by one of the members from Toronto.

He put forward an amendment in one case regarding the gap or the question of weeks of zero employment. This would have been very problematic in some areas. There was another relating to exempting people in low income families from the intensity rule. That is a very important measure. The other measure will give people who are working while on UI a credit toward their next term on UI and a credit in relation to the intensity rule.

Those are very important measures which will substantially improve the bill. I do not claim that this system will be perfect. I have never seen a government system that is perfect. I once heard someone say that the thing about all human institutions is that they have human failings. We are probably never going to create a perfect institution.

The idea is to improve the situation as much as possible. Certainly, the change from a weeks based system to an hours based eligibility system will dramatically improve the employment insurance system for the majority of people who are claimants in my region. That is very important.

There was another thing that was very important to me about this bill. When I first learned about the proposals on this bill last summer, one of my biggest concerns was that there was a reduction in the amount of funding going toward this. I recognize that there was an increase in the cost of the program from $8 billion 10 years ago to $20 billion today.

My constituents have said that people should not be making high incomes year after year and also drawing as much as $10,000 in UI year after year. People are very strongly against that. I told the Minister of Human Resources Development it seemed to me that if we were going to change the system, the way to do it was to take it out of the high end, not the low end.

The result is that people in low income families will end up getting about 14 per cent more because of what has been brought forward with the family income supplement. It is a very important progressive measure in the bill. It will mean that those low income families who depend on unemployment insurance will get a boost, a little more than the regular 55 per cent that others will get.

It also means that for the vast majority in the middle the system will be maintained in a very positive way. But the fact is, for those who make $50,000 or $60,000 a year there will be a reduction because the employment insurance benefits of those people will be clawed back. The vast majority of Canadians will strongly support that change. It is one I certainly support. This is a very progressive measure.

We saw changes to the unemployment insurance system by the previous Conservative government which simply slashed and cut. It increased the number of weeks required to work and cut the amount of benefits and that was it. That was not the proper approach. The system needed vast reform which we have done. It will be a very strong and much better system.

[Jan Brown, Reform, Calgary Southeast, AB]

Madam Speaker, this bill which has come before the House probably represents one of the most technical of all the pieces of legislation we have had to deal with in this session to date. Indeed, the social and fiscal implications for same will be felt for many decades to come.

Certainly the amendments the Reform Party of Canada is bringing forward will add a positive element to the debate. In terms of reasoned amendments, we have put forward 10. I mention that because I do hope members on the government side will look at the amendments we bring forward in the true spirit of co-operation, but also with the intention of participating in the debate with some reasoned thought and proposals which we feel do have validity in today's workplace.

I would like to read into the record some elements of the definition of unemployment insurance, as our party sees it. The whole definition of unemployment insurance has changed radically under the bill. We have moved away from the notion of true insurance based principles. It is important for us to acknowledge that fact.

The employment insurance bill which we continue to debate today has taken us very far away from what UI was intended when it was originally designed. Today, as we have heard from hon. members on the other side of the House, EI is thought of as an income supplement and not as an insurance.

The Liberal minister of labour in 1940 when he was supporting the concept of individuals caring for their own unemployment situation, quoted from a report that went way back to 1919 when Manitoba Chief Justice Mathers said:

We recommend to the your government the question of making some provision by a system of state social insurance for those who, through no fault of their own, are unable to work, whether the inability arises from a lack of opportunity, sickness, invalidity or old age. Such insurance would remove the spectre of fear which now haunts the wage earner and make him a more contented and better citizen.

I do agree with the sentiments of the then labour minister who was concerned that UI be used to get people from one job to another, to support them for that short transition time before they went into the other job.

The minister of labour at the time was also concerned that UI would never become a way of life for people and that measures would be taken which would indeed avoid people becoming heavily reliant on that kind of subsistence. To make his point he quoted from a report by the Civil War Workers of Great Britain who said:

-how much unemployment there will be and over what period it will last is impossible to forecast. But, whatever it be, there must be a great deal of unemployment which can only be dealt with in one of two ways: either by a considered scheme of insurance-or by state doles, hurriedly and indiscriminately issued when the moment of crisis arrives.

There can be no question which is the better way. State doles may lead straight to pauperization. A well devised scheme of insurance preserves the self-respect of the worker and assists and encourages them to supplement it by provision made industrially through an association.

It is exactly this original intention of what unemployment insurance was meant to provide and what it was meant to mean that has slipped away from us in these major changes the Liberal government is bringing to the House today and on which we will vote in just a few days.

For many in Canada today, UI has indeed become a way of life. For too many people UI is that dole to which the then labour minister referred. With the new changes to UI the Minister of Human Resources Development has announced there are over $1 billion of training programs for areas of high unemployment. This is exactly the kind of dole that history in the past has repeated and cautioned us to not endorse.

As I was reading the executive summary of the bill, I was struck by a number of elements. The first one that made me certainly question the relevancy to unemployment insurance and work was the statement that "income support is provided in a way that reinforces work". I have asked questions on that statement many times and there is no one who has suggested or has even come close to explaining exactly how income support can provide a way to reinforce work. To me they are two discrete and very different things.

The executive summary went on to say: "It also permits simplification of the reporting requirements for employees and premium collections". I am going to read from a very real life example which is from the Canadian Restaurant and Food Services Association. We are seeing that indeed simplification is not on when it comes to this industry.

The result of the change with respect to the conversion to an hours based system from a maximum weekly insurable system has major financial implications for employers and especially part time employees in Canada's food service industry because so many of our part time students work in this area.

Using the 1996 premium rate of .0413, human resources development officials have estimated the cost to this one industry alone, the food service employers, to be $35 million. This is certainly higher than what the Canadian Restaurant and Food Services Association had originally estimated. It represents a 17 per cent increase on employer contributions of approximately $211 million.

Once again I ask: How does the statement "it also permits simplification of the reporting requirements for employees and of premium collection" really have any relevancy here when we understand that the impact of first dollar coverage on individual food service companies is going to fluctuate substantially depending on the percentage of part time employees working less than 15 hours per week? The nature of the reporting has become so complex that an analysis of this indicates that the employer is going to actually see an increase in employer premium costs from 15.7 per cent to 72.6 per cent.

That conversion to an hours based system not only alters the cost structure of some companies disproportionately, it also results in competitive distortions within the industry. It also creates a huge backlog of extra effort administratively for these businesses. That is something which I believe requires a great deal of clarification on the part of the Liberal government.

I understand my time is coming to an end, but there is another contradictory statement here. We look at two terms here: wage subsidy linked with reduction of dependence on income support. Those two statements are made in the same paragraph in the executive summary. I hope that over the course of this debate I will be able to come back to these elements of the executive summary because they are not the same thing. They are contradictions in terms. They also have great implications for the unemployment insurance scheme as it has been developed by the Liberal government.

On that note, for this time, I will close.

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

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.

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

Madam Speaker, we have finally made it. We still had not had the opportunity, four months after the introduction of the bill, to examine this issue in detail, but we will now be able to do so thanks to the Bloc amendments included in the first group of motions. How can the bill before us be entitled an Act respecting employment insurance in Canada, when all it provides for really is a lot of amendments to the Unemployment Insurance Act?

Let me try to explain. During the 1993 fall election, voters told us that they thought employment should be the first priority of the federal government. They wanted seasonal workers to have the opportunity to work during the winter, they wanted workers between 45 and 50 years of age affected by technological change to have access to other jobs thanks to productivity gains, and they wanted female workers to be able to make the most of their potential and skills.

The government took the message the Canadian voters sent it and turned it into what is now improperly called an Act respecting employment insurance in Canada. As we have heard this morning, some members believe that this bill will encourage people to work a bit longer. They started with a bill and said: "We will call it employment insurance". An employment insurance ought to help everyone get some work and help workers who lose their jobs find another one as soon as possible, so that their full potential is used.

Instead, what we have is a bill where workers who lose their jobs get their knuckles rapped, since they are told they will be encouraged to work longer, because if they do not, they will get no unemployment insurance. This is a punitive approach that is out of step with the current employment situation in Canada.

This title was given to the bill in answer to the public's expressed wish to make full use of human potential, but the bill is just a smoke screen, since its content has nothing to do with reality. The reality is that this reform bill offers no guarantees in terms of jobs. It also denies the workers the benefit of an income between jobs.

Unemployment insurance was established in 1935. I would like to quote what Prime Minister Bennett said about it in a speech: "A series of measures that are part of a comprehensive plan aimed at reducing the present social and economic inequities and at distributing more equitably the benefits of capitalism between the different groups in our society and the various regions will be submitted to you". This is the basis of the UI program as we know it today.

Now, let us look at the content of the employment insurance bill, to see if it still meets that goal. Canadians and Quebecers can be proud of that goal. Experts who appeared before the committee told

us that the UI program is the best program to stabilize the economy during a recession.

The amendments to the UI program being brought in by the government will do exactly the opposite: they will reduce this stabilizing effect and it will be a step backward that will eventually lead us to a situation similar to that of the Depression of the 1930s. The UI program was established at that time to help us overcome the crisis and to soften the effects of recessions. I will give some examples of the adverse effects of this bill.

The first thing that is not good for job creation is the lowering of maximum insurable earnings. We are encouraging businesses, big corporations in particular, by giving them a present, to hire people who can earn more than $39,000, who can do lots of overtime, because above $39,000 businesses will not pay premiums anymore. So given the choice between hiring someone at $39,000 and asking him to do more than $10,000 worth of overtime in one year and hiring a part time worker, what will the company choose? To realize economies of scale, the big corporation will say: "Instead of paying $10,000 to 10 part time employees, we will pay overtime instead, which will make for corresponding savings in terms of unemployment insurance premiums we will not have to pay".

When a gouvernment suggests such measures in a bill, it cannot call it employment insurance. In fact, it is an anti-employment bill. We cannot give such a title to a bill. At least, the government should have had the decency to consider it as a series of amendments to the Unemployment insurance Act, and let us determine whether or not they are in accordance with what the people want.

Another significant element is that everybody will have to pay premiums from now on, starting with the first hour of work. The principle of making everybody insurable can be interesting, but it means that many people, including students, will pay premiums.

We heard representations by restaurant owners associations, people who are responsible for McDonald's franchises and others, throughout Canada, and who cannot be accused of not trying to protect the economy. They told us it would have a major negative impact on student employment. Once again, there is a negative impact on employment. So, we cannot say it is an employment insurance bill.

The other element, maybe the most tragic one, at least in my riding, is the way they are killing regional economies. Next year, in my riding, the changes will take away $10 million from the economies of Kamouraska, Rivière-du-Loup, Témiscouata, Les Basques and the surrounding area. In Lower St. Lawrence, it will be $20 million.

And you would have me believe that those cuts will create employment? How could that be? How can the government guarantee that these savings will be used to create new jobs? There is no way it can because it is using the UI fund to supplement its budget. It is using it to show the world that Canada's deficit is not that high, but that does nothing for job creation. So, it is not an employment insurance bill but an anti-employment bill, a bill representing a step backwards for all unemployment insurance rules. I for one think it is unacceptable.

Another example of the negative impact of the so-called employment insurance bill, which is just an amendment of the Unemployment Insurance Act, is the rule prescribing 910 hours of work for new entrants to the labour force. Just think, previously, a new entrant needed 300 hours of work to be eligible, that is 20 weeks at 15 hours a week. From now on, it will be 910 hours.

What effect will that have on new entrants, on young people entering the labour market? After trying for a year to accumulate 910 hours, young people who just graduated from school in applied ecology, in animal health, in tourism, in recreation or in any other field related to seasonal industries will realize that this 910-hour requirement cannot be met. By imposing such a requirement, the federal government is encouraging those people to do clandestine work and is forcing them onto welfare.

Do you think you are encouraging high school, college or university students to work when you tell them that the job they will get after graduating will lead them straight to welfare? This situation is unacceptable, and it is totally misleading to say that this legislation is about employment insurance.

What should the government have done instead? It should have introduced a true reform and not seize this opportunity to tighten all eligibility requirements for unemployment insurance. For this to be a real employment insurance bill, the government should have included in it the right or the obligation to set a goal for reducing unemployment, just as it did for the reduction of the deficit. It said: "We will bring the deficit down to a certain percentage of the GDP". If the government really wanted to address the problem of unemployment, should it not have included in this bill a goal for reducing unemployment so that all government action could be geared toward this goal? There is no such thing in the bill.

Are there measures in the bill to encourage job-sharing? Are there employment oriented tax incentives? No. All the government has come up with is a technical committee to evaluate the effects of taxation on employment. Before you know it, we will be in the next recession and we will still not have found any solution, although we will have had the opportunity. If the object was to come up with an employment insurance bill, to define and produce rules such

that businesses are encouraged through taxation to keep employees, to train them, to ensure that they will continue to work for them rather than leave.

It should also have included incentives to reduce overtime. But the opposite is true, as I explained with respect to maximum insurable earnings. Here again, there is nothing favouring job creation, in particular by reducing overtime.

Another thing that could have been done was to increase the effectiveness of training. This means doing the right things in the right places. Why can the government not understand that people throughout Quebec are saying that the waste in this sector is outrageous, that the fact that both governments are operating in the same sector is unacceptable?

Madam Speaker, you are indicating to me that my time is up. I will conclude in one minute by saying that this bill is not an employment insurance bill, but a bill to amend the Unemployment Insurance Act, unfortunately for the worse, as the basic criteria are no longer even met. The result is that unemployment insurance is becoming a luxury in our society.

[Antoine Dubé, Bloc, Lévis, QC]

Madam Speaker, I was expecting to speak a little later today in this debate. But seeing that our friends across the way, and those next to us, have decided to pass, I shall jump in now.

It is somewhat strange to see the Liberals, now they are in power, adopting an attitude so completely opposite to their attitude when in opposition. Without going over all of them we could say this is unkept promises week.

It would be worthwhile repeating a certain number of points relating to unemployment insurance. First of all, I would like to quote the present Minister of Human Resources Development, during the debate on the Borrowing Authority Act on May 1, 1989. He said: "The point I am trying to make, which many of us will have to look at seriously, is the whole notion of trust and credibility. Canadians are prepared to share the burden, if they think it is being done fairly. Unemployment insurance, family allowance, and old age pensions are a sacred trust. We must not allow the trust of Canadians to deteriorate to a point where they become cynical. I have listened to people talk about New Zealand, the United States, and about other countries and how they do it. This country is very special in how it deals across the board with men and women in every part of the country. There are basic standards, basic programs, universal programs, and programs that allow people to deal with their future with some degree of security". Those are the words of the present Minister of Human Resources Development.

Better yet, I will read from a 1993 letter addressed to the Mouvement Action-Chômage by the present Prime Minister, who was the Leader of the Opposition at the time. I think the whole thing needs to be read.

Thank you for your fax indicating your opposition to the legislative measures taken by the government to change unemployment insurance.

You have my assurance that the Liberal Party shares your concerns about this attack on the unemployed, and we also do not believe that the recent superficial amendments change the fundamentally unfair nature of these measures in any way.

I shall skip the next paragraph since it only gives statistics. He goes on to say:

In light of the gravity of this crisis, the Liberals have called upon the government-Conservative at the time-to take steps to encourage economic upturn and job creation. Yet, according to the Minister of Finance, he will not only continue the same taxation, monetary and trade policies which have plunged us into this recession, but will also dump on the unemployed under the pretext of reducing expenditures. . . .

Liberals are appalled by these measures. By reducing benefits and penalising even more workers who voluntarily quit their jobs, the government shows it cares very little about the victims of the current economic crisis. Instead of addressing the problem at its core, the government picks on the unemployed. Besides, these measures will have disturbing consequences because they will discourage workers from reporting harassment cases and unacceptable labour conditions.

Finally, rest assured that Liberals will continue to demand that the government withdraw this unfair bill. As Leader of the Opposition, I appreciate your taking the time to let me know your position on this issue.

This letter is signed by the current Prime Minister. It was signed, it is not something he said on television. As we know, the Prime Minister is rather inconstant in that regard, but it is there, he signed it. I do not know if I can call him by his name. I cannot, but the letter bears his signature.

I also reread several speeches. I could, for instance, talk about the speeches the current chairman of the human resources development committee made in the House. If I may, since you are now in the chair, Madam Speaker, I would like to refer to a statement you made in February, when you said that if the bill remained in its present form you would not be able to support it. You are now in the chair. I simply wanted to mention it.

If you felt uneasy about this bill I can tell you that many members from the maritimes were-