House of Commons Hansard #39 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was weeks.

Topics

Employment Insurance ActGovernment Orders

12:25 p.m.

The Acting Speaker (Mr. Kilger)

All those in favour will please say yea.

Employment Insurance ActGovernment Orders

12:25 p.m.

Some hon. members

Yea.

Employment Insurance ActGovernment Orders

12:25 p.m.

The Acting Speaker (Mr. Kilger)

All those opposed will please say nay.

Employment Insurance ActGovernment Orders

12:25 p.m.

Some hon. members

Nay.

Employment Insurance ActGovernment Orders

12:25 p.m.

The Acting Speaker (Mr. Kilger)

In my opinion the nays have it.

And more than five members having risen:

Employment Insurance ActGovernment Orders

12:25 p.m.

The Acting Speaker (Mr. Kilger)

The recorded division on the motion stands deferred. The division will also apply to Motion No. 3.

We now proceed to Group No. 3, which contains Motions Nos. 4, 5, 6, 200 and 201.

Employment Insurance ActGovernment Orders

12:25 p.m.

NDP

Chris Axworthy NDP Saskatoon—Clark's Crossing, SK

moved:

Motion No. 4

That Bill C-12 be amended by deleting Clause 2.

Employment Insurance ActGovernment Orders

12:25 p.m.

Bloc

Francine Lalonde Bloc Mercier, QC

moved:

Motion No. 5

That Bill C-12, in Clause 1, be amended by replacing lines 6 to 28, on page 1, lines 1 to 44, on page 2, lines 1 to 42, on page 3, and lines 1 to 8, on page 4, with the following:

"6. Subsection 25(11) of the Unemployment Insurance Act is repealed."

Employment Insurance ActGovernment Orders

12:25 p.m.

Acadie—Bathurst New Brunswick

Liberal

Douglas Young LiberalMinister of Human Resources Development

moved:

Motion No. 6

That Bill C-12, in Clause 2, be amended by adding, after line 8, on page 4, the following:

"(5) For the purposes of sections 15 and 145, the Commission may, with the approval of the Governor in Council, make regulations for establishing how many weeks of regular benefits a claimant was paid, in order to take into account benefit reductions or deductions in the calculation or payment of those benefits."

Employment Insurance ActGovernment Orders

12:25 p.m.

NDP

Chris Axworthy NDP Saskatoon—Clark's Crossing, SK

moved:

Motion No. 200

That Bill C-12 be amended by deleting Clause 177.

Employment Insurance ActGovernment Orders

12:25 p.m.

Acadie—Bathurst New Brunswick

Liberal

Douglas Young LiberalMinister of Human Resources Development

moved:

Motion No. 201

That Bill C-12, in Clause 177, be amended by replacing lines 22 to 25 on page 134 with the following:

"ance Act;".

Employment Insurance ActGovernment Orders

12:25 p.m.

Bloc

Francine Lalonde Bloc Mercier, QC

Mr. Speaker, I would like to echo the words of my colleague, the member for Rimouski-Témiscouata. During the whole process leading to this moment in the House, not only the official opposition, but also the people who wanted to be heard, did not have the opportunity to voice their concerns.

Rarely have the people concerned been prevented from truly speaking their minds on such an important issue as this one, which will affect the lives of millions of people in a very practical way, since it will deny them access to a minimum level of security if they lose their jobs, it will reduce their benefits and it will cut the period of eligibility for those benefits. Millions will be affected by this bill, which has not been discussed adequately and about which the official opposition and the people have not had the opportunity to voice their concerns.

The government seems utterly unconcerned about what will happen to men, women, young workers and older ones, workers living in seasonal work areas and pregnant women. The government could not care less about the fate of these people.

This unemployment insurance system is the pillar not only of economic stability in times of recession, but also of a minimum security for those who do not have total job security or who cannot rely on personal or family wealth. That affects a wide segment of the population, and if the government had not acted as it did, it could have designed a real system by widening the assistance and especially by widening the base for those who can contribute to make this system a real one.

This government did not want to have a real system. It has preferred to reduce benefits and to make them unavailable to many people.

We now know that time is running out for us, which is a shame. We now know that the party in power does not want us to expose the true nature of this bill. We will try, during what time we do have, to repay it back in kind, because this is totally unacceptable.

All the people at home who may listen to members opposite were told, regarding this reform, which proposed a new concept based on hours worked, that they would get a better system, but that is totally false. At first glance, it might seem interesting to take hours worked into account, but the truth is the government took advantage of this change, to a great extent, to multiply by three the eligibility criteria.

Someone who was not in the system, a young person or a woman who got out of the workplace to have a child or who never got into it, or whoever has not been in the system for more than two years, for whatever reason, could go back into the system by working twenty 15 hour weeks. There was a threshold. The government had said that twenty 15 hour weeks, or 300 hours, was a threshold.

From now on, how many hours will the government require for these same persons to become eligible? The bill stipulates 910 hours, or twenty-six 35 hour weeks in a year, instead of twenty 15 hour weeks each. Those are the facts. Some will have to wait two years to become eligible. Even if they are in need, there is no eligibility until they have reached the number of hours required.

In a way, those affected are really those who need the system most. A researcher said that young people in particular must have access to real unemployment insurance, because jobs are so scarce. According to researchers, one of the main differences between someone who is eligible for UI benefits and someone who is not, is that the former will stay on UI for one more month, and use it to look for a job, a better paid job.

Is that wrong, considering the cost of living and the fact that young people, especially those who are thinking about starting a family, cannot possibly do so on minimum wages and will have trouble doing so if they are the only breadwinner and earn $10 or $12 an hour?

Good jobs, like good bosses, are extremely hard to find. Nowadays, what we are seeing is that businesses that provide stable well paid jobs are more likely to be closing down rather than starting up. Companies that paid good salaries are closing and are replaced by small businesses which, in many cases, do not pay salaries that allow people to live decently. This is, and will be, extremely hard on a lot of people.

What about someone who is in the system? Since the last change was made, when the unemployment rate was at its highest, the person must work twelve 15 hour weeks. What will happen now? From now on, the same person will have to work twelve 35 hour weeks. This is for the regions where the unemployment rate is highest.

In regions where it is lower, such as Victoria and Vancouver, people will have to work twenty 35 hour weeks. When the human resources development committee went there, it found out that, yes, there are rich people, but there are also many for whom this affluence only makes the cost of living higher, including their rent. The result is that so-called ordinary people have a hard time. They may lose their job and it may take time before they find another one. Still, these people will have to work twenty 35 hour weeks.

Between these two extremes, there is a whole scale of variable conditions. For the Montreal region, the requirement will be fourteen 35 hour weeks, or 490 hours. The bill went from weeks to hours worked, but the government has used the opportunity to increase the basic requirements considerably.

The bill does not take into account the fact that, for many people, one hour of work does not necessarily equate with one hour of wages. Part time teachers who often earn very little money and work in difficult conditions need a true unemployment insurance system between periods of employment. For these people, one hour of work does not equate with one hour of wages.

The same is true for musicians, actors and many people in this "new economy", where an hourly wage is not the rule. This bill is unfortunately legislation right out of the past. It is a pretext to make the system more inaccessible to those who need it. It is a bill that the population will reject.

The next government to be elected will pledge to change it. Jean Chrétien, leader of the official opposition-

Employment Insurance ActGovernment Orders

12:40 p.m.

The Acting Speaker (Mr. Kilger)

Order. Without getting into the issue of using titles rather than names, I must inform the House that the member's 10 minute period is over, unfortunately.

Employment Insurance ActGovernment Orders

12:40 p.m.

Liberal

Charles Hubbard Liberal Miramichi, NB

Mr. Speaker, being from Atlantic Canada, it is certainly important for us to present our views on the employment insurance act. It is particularly important

to bring to the House some of the important concerns we have in Atlantic Canada.

As Liberals, we have always prided ourselves in introducing the original unemployment insurance bill, changing it in the 1970s and promoting and encouraging it, and to see that Canadians who are unable to find work are protected by legislation and by a program that will enable them to have a satisfactory standard of living.

Since the Liberal Party formed this government, we have been involved in discussions across the country through the HRD committee and through our members of Parliament meeting with constituents to discuss the ramifications and look at their concerns about unemployment.

Jobs are the major concern of many Canadians. Many of our young people, especially those in the 15-24 age group, have great difficulties finding jobs. Nearly 10 per cent of our labour force at any given time has difficulty finding work.

In Atlantic Canada, as in the rest of the nation, people do not want to be unemployed. They would prefer to find work, to have steady income. We as members of Parliament and as a government must attempt to bring forward measures to encourage programs, to develop an environment that will enable Canadians to find satisfactory and worthwhile forms of employment.

Since the bill was originally introduced last December, most of us went home to our constituencies and held town hall meetings. We attempted to find the concerns with the legislation originally introduced.

In Atlantic Canada there were two major concerns. Some people were concerned with what is called the gap, the idea that weeks were being presented on a consecutive basis. If one were to file for unemployment, HRDC would look at the consecutive weeks of work. In many cases in Atlantic Canada that was a major problem.

Others were concerned with what is called the intensity rule. It is the concept that those who filed annually or were unemployed annually were being penalized because jobs in their areas were not available year round.

In Atlantic Canada a lot of jobs are seasonal in nature. We do not have seasonal workers, we have seasonal jobs. In the forest, the fishery and the tourist industries people generally are only able to work when the season is right. When three feet of ice covers Miramichi Bay it is impossible to fish. When the snow is four feet deep it is impossible to conduct forestry activities. Even though New Brunswick has promoted winter activities in recreation and tourism, this industry is basically one which is conducted in the summer.

The committee which studied the bill when it was reintroduced has come up with solutions to the gap in the system. The system will apply so that one may go back 26 weeks to pick the best weeks that will add up to the required number of weeks in order to qualify for unemployment insurance. The committee also recommended that the intensity rule would only apply to those with family incomes of over $26,000.

We as Liberals are able to protect those people in society. We have not been able to bring forward a guaranteed annual income, but we certainly have brought forward a system of protection so that those who are most needy are able to gain the most benefits from the program.

There are some other positive aspects to the bill. The system of hours of work for example will assist many people in terms of qualifying. Many workers in the past who had small numbers of hours in any given week were not allowed to count those hours toward their benefits. Now all hours will qualify. For those who might criticize that system we must point out that those who have paid in on an hourly basis and are unable to draw because they are students or are involved in a short term enterprise may apply for a refund of their contributions. The hours system is good because those who work long hours for example in the construction industry will be able to use the 35 hours as the basis of a week.

There are five cornerstones here which will help people who are unemployed. There is the system of wage subsidies and earning supplements. More money is being put into the self-employment assistance program. More than 45,000 people across the country are involved in becoming entrepreneurs and developing their own companies and businesses, thereby being able to employ others and continue in full time employment. Money is going to be put toward skills and loans grants for enabling people to further their job skills to better qualify for employment.

There will be a fund which will enable communities to participate in providing work. The fund will enable environmental, community and other groups to develop programs and improve their communities. They will use money from the fund in order to make their area a better place in which to live.

I have listened to members opposite. I know they have many concerns, as we in Atlantic Canada have many concerns. We are concerned with the fact that people need jobs. By the same token we are concerned about the fact that people need help when those jobs are not available.

We must respect those 90 per cent of Canadians who on any given day are working full time and who through their contributions to the system are paying 3 per cent of their wages into a fund which will help those who are unemployed.

This week the fishermen in Atlantic Canada, especially in my area, went out in their boats for their annual fishing season. The fishermen's UI is separate from the major part of the program.

I hope when we eventually bring before the government an unemployment insurance system for fishermen that we will be able to have a dialogue and hear their concerns. It will bring to the people of Atlantic Canada and those on the west coast about whom they spoke this morning a program which will enable them to remain a viable part of our economy. It will enable our fishermen to go out and fish each summer. The fishery is a very important part of our Canadian economy.

I support the bill. It certainly is not perfect. There are some members who would like to have a perfect bill. We never have perfection but we as Liberals try to work toward that degree of perfection. We try to work toward the concept that we as a party and as a government will look after those people who are most in need. We want to assure them of our concern and support of their best interests.

Employment Insurance ActGovernment Orders

12:50 p.m.

Bloc

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

Mr. Speaker, I think it is a disgrace that the government has decided to move a time allocation motion on such an important bill. Let me explain why it is a bad decision.

Under the definition provision, which is part of the amendments before us, insurable employment is defined. The definition of insurable employment has been a major problem for several years now: there is an incredible backlog of applications waiting for a decision by Revenue Canada. There are more than 20,000 applications on hold.

This bill had been under consideration for two years now, and we still have not found a solution to the problem; we have not come up with a way to deal with this very real problem. The government has only one goal, to recover $2 billion through this reform. That is its only goal. To get $2 billion in cuts. In the meantime, the problem is not going away.

Let me explain the problem with insurable employment. In some cases, employment can be considered non-insurable because the employee and the employer are not dealing with each other at arm's length, and the people concerned often file an appeal. It is true that sometimes the employment is proven to be non-insurable, but in thousands of cases, nothing can be proven and the people are successful in their appeal. The government has not dealt with this problem; it has not even come up with an amendment on this issue, even if we suggested some changes and mentioned the problem to the minister when he appeared before the committee.

By moving time allocation, the government is only prolonging these kinds of problems. The people affected by this issue are not the banks, nor the individuals who make billions of dollars in profits, but rather wives who work alongside their husbands on the family farm, for example, or spouses who open a business together or the sons and daughters who work with their parents. These are the kinds of situations we see in real life. No, the government is not ready to correct these situations, it is not ready to solve them. It will rather gag the House by skipping debate at second reading and limiting to ten hours consideration in committee.

As for the report stage, the government will also limit debate next week while there are concrete examples of problems that need to be addressed. The only way to settle these problems is to put an amendment forward or, ultimately, to send this bill back to committee so that it can do its job and solve these problems because this is totally absurd.

Pursuant to the appeal process, people who are not satisfied in the first stage must then deal with the revenue department. Across this country, Human Resources Development Canada has employment centres providing first line services. These centres are close to the people and can give advice, interprete the legislation. However, the government could not find a way to give them the authority to make the decisions in this process. No, they wanted the revenue department to do it, although it must deal with a mind-boggling number of cases, more than 20,000 cases, like I said. This is utterly unacceptable.

At the same time, on the subject of definitions, they tried to pull a few fast ones on us. First, they decided to give the definition of an affidavit. Do you know what an affidavit is? It is a statement which you make when you lost a document or when you witnessed an event that you have no proof of other than to swear it is true. Affidavits can be made in all sectors of life. But a definition is added here in the legislation to limit its application. And I can assure you that, when going after persons guilty of fraud and offenders, this legislation is a regulatory jungle.

The Unemployment Insurance Act can be compared to a highway on which there would be ten or fifteen different speed limit indications on a two-kilometer stretch and police everywhere making sure you are not over the limit. Often, it is not a question of being dishonest, it is just a failure to understand. The definition of affidavit will be a means to catch people, to ensure that we will be able to catch them. It is unacceptable and we have asked the government to withdraw it.

The same can be said of the word document. They put in a catch-all definition of what a document is for the purpose of the Unemployment Insurance Act. They did this to reinforce again the principle that people who receive unemployment insurance are trying to abuse the system. To consider that Canadians are neces-

sarily trying to rob the system is an unacceptable basic element of the government's bill.

According to statistics we have received, it is proven that fraud amounts to no more than 4 per cent. Four per cent of 2 million UI claimants-last year's figures-is not much. If we submitted businesses and taxpayers to such an inquiry, I believe we would discover a higher rate of fraud. But they decided to go after these people because they are less organized, less resourceful. That is where the government wants to go.

This time allocation motion will prevent us from doing an in-depth study of this bill. It is an important piece of legislation that will govern unemployment insurance for years to come. There will not be such a reform every year. The government has enough trouble as it is dealing with the impact of this reform on workers. You can be sure that it will not impose another reform on the maritimes because if the Liberal members from that region vote for this bill here in the House, they will certainly pay the political price for it in the next election.

What is the impact of this reform? It is a one-way street to poverty. One of my constituents told me on the phone yesterday that the Liberals argue that changing the system from weeks to hours worked will improve the situation, but we need concrete examples to support that. Here is a concrete example.

Previously, to become eligible for unemployment insurance, a person had to work 20 15-hour weeks, a total of 300 hours. Now, a new entrant on the job market will have to work 910 hours, or 26 35-hour weeks. So the government has dealt a fatal blow to CEGEP graduates who work in seasonal industries such as tourism, recreation and applied ecology. All those who have seasonal jobs or even those who just started their first job will be systematically forced onto welfare. And the present government has the audacity to use the term employment insurance to refer to a piece of legislation that will do nothing but send people on their way to the welfare office.

Because that is what awaits those who went to school, who attended primary school, high school, college, university. If they do not work 910 hours the first year, or 26 weeks at 35 hours a week, that is 26 weeks of full-time work, they will not be eligible. There are a lot of seasonal industries where it is impossible to work 26 weeks. Just try working in a peat bog or in the forest for 26 weeks to see what it is like. Just try working 26 weeks in the woods.

Yesterday, a Liberal member said that this legislation would motivate people to work a little more. I can tell you that, where I come from, the problem is not motivation but finding jobs. Things will be a lot more difficult for people who, even now, must keep two or three different jobs to accumulate the 12 weeks presently required.

True a system based on the number of hours may be interesting for some people. However, it is totally false to say that the government has tried to improve the situation. Besides going from weeks to hours, the government raised all the system's criteria and standards to make unemployment insurance less accessible. The savings give us an example of that.

The UI program will produce surpluses averaging $5 billion every year. It is not an underfinanced program, but a program used by the government to reduce its deficit. Since it was unable to get that money from foreign markets, it decided to penalize UI claimants without raising taxes.

It is a sad thing to see because, in the past, Liberal governments showed from time to time that they cared for the regional economic development by putting in place a good regulating system in periods of economic downturns, but the present government is killing it. Unemployment insurance plan is supposed to help alleviate the overly severe effects of recessions and prevent depressions like the one we had in the 1930's.

Today, we can say without a doubt that if the measures proposed by the government are allowed to stand, in the next recession we will find ourselves facing situations that are going to aggravate the economic crisis, which will have the effect of driving people from the regions to the cities, where there will not necessarily be any jobs. We are in the process of creating a model seen in certain developing countries, but that we never thought we would see here. The present government is creating this type of situation.

Another thing I find completely unacceptable is keeping the intensity rule. Under this rule, someone who draws UI benefits for 20 weeks loses 1 per cent of his benefits, another 20 weeks, another 1 per cent. At this rate, within three years, anyone who regularly draws UI benefits will drop from 55 to 50 per cent.

I will conclude my remarks with this. Twenty-five dollars a week is perhaps not much for people earning $60,000, $70,000 or $80,000. But people getting $500 a week will end up with $25 less, which now can be used to buy things, to keep the economy going, but especially to help people put bread and butter on the table. Canada's present government, with its reform, will bring all this to an end. I think it should be made very clear that gagging us will not solve the problem. This problem will dog them for many years to come.

Employment Insurance ActGovernment Orders

1 p.m.

Liberal

Ron Fewchuk Liberal Selkirk—Red River, MB

Mr. Speaker, I am pleased to have the opportunity to speak on the report stage of Bill C-12 concerning employment insurance.

It is evident that a change is required to our unemployment insurance program. The old UI program is outdated and out of touch with today's working environment.

I have spoken with many of my constituents who are looking for employment. Some of my constituents have over 100 CVs floating around in the employment market. It is a very competitive market today.

Employers can pick and choose from an enormous number of candidates. It is not uncommon to hear that 200 or 300 people are applying for one job opening. That is incredible. It is why Canadians who are looking for work today need, require and deserve protection. It is why they require a safety net called employment insurance to help them during this critical time of job hunting.

A growing number of Canadians are holding down more than one job to make ends meet. In most cases, they are not permanent jobs. Chances are they are working just as many hours per week as the traditional full time single job worker. Their work is not insured under the old UI program. These jobs hold no benefits if employees are sick. They do not get maternity or other benefits. They do not qualify for many government employment programs if they find themselves out of work.

The reasons why this unfortunate situation occurs is because eligibility for UI benefits in any job is based on weeks of work, with a minimum requirement of 15 hours per week. One can work five different 10-hour per week jobs, totalling 50 hours per week, but as far as UI is concerned, it counts for nothing.

I am pleased that Bill C-12, employment insurance, will rectify the situation. Employment insurance eligibility is based on hours, and all hours count, whether one puts those hours in for one, two or five different employers.

Working counts with EI. Many people who work two or three part time jobs will get insurance protection for the first time. In fact, statistics show that some 500,000 more part time workers will be insured under the EI system than were under UI.

Another example of improvements under the new EI system is that a worker who holds down a full time job which pays $500 a week and also works at a part time job which pays $100 a week will now be better off. Under the previous program of UI only the first full time job is insured but under employment insurance both jobs will now be insured.

This will make a difference to a worker if he or she loses his or her full time job. In this situation the benefits under UI would be considerably lower than under the new employment insurance. That is because when UI calculates the insured weekly earnings, it ignores the part time job that pays $100 a week. That part time job is not insured.

The new employment insurance takes that extra $100 into account. When the calculations are done the worker ends up with $275 per week in benefits. Under the previous system the benefits would be reduced by $31, as a result of continuing to work while receiving UI benefits. Therefore the benefits would fall to $244 a week.

Under the new employment insurance system the worker will receive $330 and the benefits would be reduced by only $18. The worker would be able to earn up to $82 from a second job without reducing the worker's weekly benefits. Therefore the worker's cheque actually amounts to $68 more than under the old UI system.

Bill C-12, employment insurance, simply works better for all Canadian workers. I believe that this new EI system better protects working Canadians and addresses the problems that they face in a more realistic way.

Employment Insurance ActGovernment Orders

1:05 p.m.

Bloc

Antoine Dubé Bloc Lévis, QC

Mr. Speaker, I called last week the week of the gag. We have just be notified that there will be a time limiting motion once again, to be announced Monday. So, here we are headed for a second week of the gag.

This current week, however, has been the week of problems relating to keeping or not keeping one's word. Without going into great length, I would like to take a few seconds to read certain paragraphs of a letter by the present Prime Minister. As I have already read it out in the House, I will not read it all, but some parts of this letter, written to the Mouvement Action-Chômage when he was Leader of the Opposition, merit rereading.

On March 26, 1993, he wrote as follows:

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.

Skipping several paragraphs, he goes on to say in the second-last paragraph:

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.

Since then, he has heard plenty of "positions on this issue".

It started in the human resources development committee. During six weeks of conducting hearings across the country, we heard a good many positions. We also witnessed a good many demonstrations. Let me only recall what happened in Montreal. I do not say that I approve, but at some point, people get fed up. We have said this repeatedly. Last week, they wanted to gag us, now they want to do it again. It will not work. We will be heard.

In summary, after the hearings held by the committee, the Liberals decided to wait until after the referendum in Quebec. They waited all that time. Then in December, after the referendum, they came out with a special step called a pre-study, they eliminated second reading, supposedly to give the committee more time. What was done in committee? It was just before the holidays, not a proper time to look at a bill. Not only that, people did not have much time to present submissions. There were many submissions. Therefore, the committee started examining them.

However, the government came up with the most brilliant idea. It decided to have a speech from the throne. It wanted to make something new out of old stuff. It wanted to reintroduce, and in fact did reintroduce some ten bills, under new numbers. Bill C-12 is the same as Bill C-111, as it was called before. So, during that time, we waited again, because the throne speech put an end to the session and the committee's proceedings. We resumed work hurriedly after the throne speech.

Last week, the committee began clause by clause study. We got as far as clause 2. The government wanted to limit study of each clause to five minutes. In the group of motions dealing with clause 2, we ask that the whole clause be deleted. What is in that clause? All the definitions. Take the first one for example: "affidavit". It is an addition, it did not exist before and people did not know exactly what it meant.

But there is worse than that; because I have very little time, I will read a clause we wanted to examine more thoroughly. At the bottom of page 3, it says:

(3) A document or other communication under this Act or the regulations may be in electronic form.

We are talking about electronics. But what did we hear this morning? For the second year in a row, people are waiting for old age security payments. Last year, about 50,000 people have seen their payments delayed. The minister admitted it this morning. This year, the same thing happened again. Now they would like the unemployment insurance reform to bring a similar system.

Frankly, I think we were right to voice our concerns in committee. For the second time, the government gagged the committee. Its imposed time allocation on a very important bill to bring it back to the House as quickly as possible. Now, we were just told that after a day and half of debate, there will be time allocation, the same system used in the case of the rail strike. This government is going to be known as the gag government, because there are no precedents, except once under the Conservatives. Before them, this had never happened in the history of Parliament.

There is another clause I would like to talk about and on which we had proposed an amendment, which is to strike the two clauses denying people the opportunity to appeal decisions relating to the unemployment insurance bill. We find that is very important.

As an example, so that our listeners can understand, we wanted to correct the bill so that anyone could challenge a government decision under any program. Why did we want to do that? It is because the Mouvement action-chômage, in Quebec city, among others, told me that, when a decision of the unemployment insurance commission was challenged, the claimant was found to be right in 75 per cent of cases, and the government itself admits that.

I will show the House a report we asked for in which the minister makes alarmist comments about the increase in fraud cases. So what does the report say? In 1991-92, 130,081 people were charged with and convicted of unemployment insurance fraud. By 1995-96, that figure had fallen to 116,603.

Some may say: "Wow, that is a lot of people". True, that is a lot of people, but the figure applies to all of Canada. The total is not so high considering that some 3 million benefit claims are submitted in a year-which does not mean 3 million unemployed. Some claims may be for a short period only. Out of a total of 3 million, the number of fraudulent claims amounts to less than 6 per cent. The auditor general has already determined that there are always cases of fraud in any government program, regardless of what segment of the population it is intended for.

What is happening? We could have recovered $272 million last year. In cases of fraud, however, only $93.4 million were recovered. The remaining $179 million was due to honest mistakes, occasionally by recipients but, three times out of four, by the unemployment insurance commission.

This explodes the myth of fraud, which is, in fact, the basis for this reform. They want stricter controls and increased mechanisms.

They want better control of measures. Why? To catch more people because unemployed Canadians are seen as potential cheats.

We object to this kind of approach, because we know that, in many cases, UI benefits keep people from starving after they lose their jobs.

There is something else we find quite extraordinary and revolting. I often tell this story to help people understand. Everyone knows the story of Robin Hood. I am not saying he was right, but he used to take from the rich to give to the poor. But what is the Liberal government doing by lowering the contributory earnings ceiling from $43,380 to $39,000? It is saving $900 million. It is giving a present to the better off in our society. I am not saying that people making $40,000 are rich. The government is giving a present to business, to large corporations. But what is it doing to compensate for this $900 million? It is collecting this $900 million from those working less than 15 hours a week, who had not been paying UI premiums. And 70 per cent of those working less than 15 hours a week are women and young people. This is unacceptable.

By calculating benefits based on the number of hours rather than the number of weeks, the government is heating up the competition for McJobs. People who want to qualify for benefits will apply left and right to take someone else's job.

This bill is unfair. It is not an employment insurance bill, as it ensures that fewer people will qualify for benefits, thus hurting the most disadvantaged in our society. That is why the Bloc Quebecois is spending all its energy fighting this bill to have it withdrawn by the government.

Employment Insurance ActGovernment Orders

1:15 p.m.

Liberal

Wayne Easter Liberal Malpeque, PE

Mr. Speaker, I had intended to address some of the points raised by the member for Mercier. Instead I must address some of the points raised by the member for Lévis.

Is there a reason the member for Lévis is dealing in rhetoric rather than in substance? What he is doing in dealing in rhetoric is the same thing that was done at the committee hearings. They do not want to deal with the substance because it will show what is really in the bill, that the bill has been improved for the working people of the country.

Opposition parties led by the Bloc filibustered debate for approximately 26 hours at the beginning of clause by clause examination of Bill C-12. The filibuster took place from approximately 9.30 a.m. on Tuesday, April 23 until 4 p.m., Wednesday, April 24. As a result, we missed being able to debate the substance of the issue and really get the facts out there.

Let me address the points raised by the member for Mercier, the Bloc critic for HRD. I grant that her heart is in the right place and that she does care, but she should look at the facts as they relate to the bill. Her remarks were long on rhetoric and extremely short on facts.

The member argued the issue was not debated and she alleged the government does not care what happens. She is just plain wrong. The social security reform committee, which I believe she was a member of, held 600 hearings. There were public meetings held by MPs. The idea was to hold 100 hearings, and I believe close to 90 hearings were held.

The people of Canada showed their concern. The difference between the Bloc, the Reform and the Liberals is that when Liberal members heard those concerns we proposed amendments to the bill. If we look at the Order Paper, at the positive changes made by the minister and other members of the Liberal Party to that bill, we looked at the concerns of Canadians and have tried to address them.

In my past life as a farm union leader I had considerable experience dealing with legislative committees. In all my experiences before legislative committees I have never seen such substantial change come to a bill addressing the concerns of Canadians. Very seldom does a minister say he recognizes there are some problems with it. Both the previous and present Ministers of Human Resource Development have said there were some problems with Bill C-11 and C-12 and asked the committee to address them.

The difference is that Liberals on the committee said "yes, we will go the people, we will put forward positive amendments. All the Bloc, the Reform and some labour unions could say was scrap the bill. That is not productivity.

Members on this side of the House have addressed the gap, which was a serious problem. We have addressed the divisor, which was a serious problem. We have addressed to a great extent the problem of the intensity rule. Through the amendments we will address the concern that there may be too much control by the governor in council so that debate in the future on the divisor in terms of weeks will be done in the House. We have made major improvements. The bill has become an expression of what Canadians want.

The member for Mercier talked about shorting access to benefits. Let me again clear the record for the member. The fact is 350,000 claimants in low income families will get a supplement. With regard to part time workers, 500,000 more individuals will have their work insured; about 380,000 of these will have all their premiums refunded; 140,000 part time workers who pay premiums today will also have their premiums refunded. The list goes on. Some 90,000 unemployed people who not now eligible for UI now will become eligible for EI. Those points should be put on the record.

Again let me correct the member for Mercier on the point about women. On eliminating the 15 hour per week job trap, to avoid paying UI premiums some employees restrict part time workers to less than 15 hours per week. An hour based system will eliminate this 15 hour trap. Extending coverage to part time workers, the hour based system broadens coverage to 270,000 women who work part time. Of these, 204,000 will have their premiums refunded.

In terms of women holding multiple jobs, a greater share of working women hold multiple jobs and under the EI hours based system all hours count toward an EI claim. This means multiple job holders will now be fully insured should they take sick, maternity or paternal leave or lose one or more of their jobs for another reason.

There are exceptions to the intensity rule which will help women. The intensity rule, which reduces the benefit rate by 1 per cent for every 20 weeks of regular benefits claimed over the past five years, will not apply to 108,000 women who receive the family income supplement and have a history of past use of EI. It is important that I put these points on the record and correct some of the rhetoric of the member for Mercier.

I want to correct a point by the member for Kamouraska-Rivière-du-Loup on his concern about Revenue Canada. Since 1971, for administrative and cost efficiency reasons, responsibility for the determination of the insurability of employment earnings and assessment of premiums was legally transferred from the commission to Revenue Canada. The hon. member was informed of that at the committee but because of their filibuster it might not have sunk in.

Of some three million UI claims per year only some 60,000 or 2 per cent are sent to Revenue Canada for insurability rulings. These requests are an important control feature to ensure UI benefits are properly paid, thus saving the UI program some $116 million annually.

I point out for the member's benefit as well that there are 10 Revenue Canada tax service offices in Quebec which provide rulings on the insurability of employment. Five of these offices handle appeals to the minister in terms of minister's determination, and with this are the fewer than 28 human resource Canada commissions adjudicating claims in Quebec. These are more than sufficient to handle the 3,938 appeals to the minister in a typical year.

The member for Mercier talked about UI as economic stability. I point out to her that is what we see as a major important plank to the EI system. It is an economic stabilizer in the country. That is why we are trying to target the benefits to regions and to people with low incomes.

We have the clawback provisions and we recognized long ago that EI is important in terms of working men and women's lives and in terms of having an insurance program. It is an important economic stabilizer for the country as a well. It ensures that workers are available and that skills are available in the various regions throughout Canada.

In terms of the amendments in the bill put forward by the Liberals, we will improve that and ensure economic stability so there is prosperity in the future across the country.

Employment Insurance ActGovernment Orders

1:25 p.m.

Bloc

Antoine Dubé Bloc Lévis, QC

Mr. Speaker, I have let the hon. member speak have his say, but he mentioned that we, the members of the opposition, had not made a positive contribution to the work of the committee and that we had not proposed any amendment. I wish to get things straight. We proposed some 15 amendments, which were all rejected except the amendment I proposed, which dealt with a single word.

I wanted to get things straight in order to avoid leaving the impression-

Employment Insurance ActGovernment Orders

1:25 p.m.

The Acting Speaker (Mr. Kilger)

I regret to interrupt the hon. member but that was a point of clarification and, insofar as the issue has been settled, I think it will be generous enough to say that it was rather a matter of debate.

It being 1:30 p.m., the House will now proceed to the consideration of private members' business as listed on today's Order Paper.

The Constitution Act, 1996Private Members' Business

1:25 p.m.

Reform

Herb Grubel Reform Capilano—Howe Sound, BC

moved that Bill C-213, the Constitution Act, 1996 (balanced budget and spending limit), be read the second time and referred to a committee.

Mr. Speaker, it is a great honour for me to speak on Bill C-213, which one might call the bill to prohibit deficits and limit the size of government. In order to avoid this mouthful of a description, from now on I will call it the taxpayers protection act.

This bill addresses one of the most fundamental problems facing Canada and other modern democracies. It addresses a problem which has already been taken care of by similar legislation in many of the provinces.

It is unfortunate the government has decided all we can do is speak about it for a few minutes today and publish an obscure text. It will not be made a votable bill. I am very disappointed about this. However the people of Canada will have to judge whether or not this was justified.

In the next 20 minutes I will present my arguments for the necessity of this bill. I will provide a background. I will outline briefly the main provisions of the bill. I will take care of the objections which are certain to arise in the speeches the government has prepared in response to my analyses.

The need for a taxpayers protection act has arisen since the 1970s when suddenly outside of wartime, governments in Canada and in other western democracies began to spend money that they had not raised through taxes. In other words, they ran deficits.

It is well known that very soon the federal debt will reach $600 billion. That amount of money is incomprehensible to most people. Suffice it to say that very soon, in order to service the debt approximately one-third of every dollar raised from Canadians will go to pay the interest on the debt. This is more than a transitory problem.

I have attended a large number of university seminars. I have read many studies. I am personally acquainted with a man who received the Nobel prize in economics for developing a theory which I will sketch briefly. It explains that the deficits in the western world run by governments have been called the Achilles' heel of modern democracy. It is called the public choice theory.

Governments have found it to their advantage to increase spending targeted at providing benefits to special interest groups, groups which have assembled and organized themselves for whatever reason. As a result of those spending allocations and tax concessions these groups receive benefits which in the aggregate make it very worthwhile for them to respond positively to the government. It has also led them typically to resist any opposition party which would promise in an election campaign to cut those special benefits.

Those special benefits typically are not in the interests of all of society. Clearly, they benefit the group to whom they are given but not society as a whole. In looking carefully at subsidies to industry, to agriculture, to wherever our money is going, we clearly see a pattern for many. It is such that if there were a free vote and average Canadians had been asked whether they wanted to be taxed to serve this type of program, they would have said no.

How do politicians get away with giving these benefits to special interest groups? Who is paying for it? The answer of course is that the rest of Canadians are paying for it. Why do Canadians not rise up and say to stop this? The answer is quite simple. The cost per Canadian for each individual program is very small. As a result, it does not pay for them to organize and provide politically effective opposition to these kinds of tax concessions.

What is worse, there are Canadians who will have to pay for this bribing of special interest groups, this buying of votes and these people cannot protect themselves. They are our future generations. They will have to pay the interest on the debt because some governments, rather than raising the money now to pay for the special interest groups, have found it more convenient to let future generations pay. Nobody is speaking for them.

This is the modern theory of public choice. It is widely accepted as a fair description of processes that have haunted all modern societies. While we have begun to take care of the current deficit, there is no guarantee these problems will not be repeated in the future. That is why we should have legislation, preferably constitutional requirements to limit deficits and the size of overall government spending.

In all those issues the question always arises, why did all these spending explosions take place in the 1970s? Why were governments suddenly able to get away with adding to the debt and letting the unborn and unprotected generations pay for it, rather than facing the voters and taxpayers of the day? The answer comes in two parts.

Modern communications technology has made it possible even for relatively small interest groups to get together and become very effective in making themselves known to government. They make it known that they can deliver the necessary marginal votes which will bring about a victory in crucial electoral districts.

Also, a revolution in thinking about the nature of capitalism which was brought about by Keynesianism removed the previously existing stricture on deficits. Until the 1970s deficits had been a sin for governments which they engaged in only at the expense of severe punishment by the voters.

Then came a revolution in economics. I was a graduate student at the time and learned and absorbed it. I was soon cured of it and have been fighting against it ever since. Even today there is still a generation of economists who believe that deficits do not matter, that they can be piled on to future generations in order to maximize output today. I believe this is also being reversed.

Having set the stage for explaining the necessity for Canada to have a constitutional provision or at least an act that prohibits deficits and limits the size of government, I will sketch briefly in non-legal form the provisions in my bill.

The first provision is that the government must balance its budget every year. The second provision is that the size of government must be limited to the extent that we take today's spending and allow increases in spending only to reflect inflation and population growth.

What is innovative in the bill is the third provision. If the government does not meet the deficit target, that is, it does not have a balanced budget in any year, there will be penalties. The

penalties will be reductions in the pay of members of Parliament who voted for the budget. For example, if there is a budget of $200 billion with a deficit of $10 billion, that is 5 per cent. According to my proposed legislation, the pay for that year of members of Parliament would be reduced by 25 per cent, the 5 per cent deficit times five.

Similarly, there would be provisions for penalizing government members of Parliament who voted for a budget which resulted in an increase in the size of government going beyond that which was specified. In other words, spending in the next year must increase by no more than inflation and population growth.

Turning now to the topic of the objections I am sure both the government and the opposition will raise to my proposed bill, the first is that the sovereignty of Parliament will be violated. I must confess that for many years I was on the side which I am sure they will represent. In my naivety as a young man I believed that every four years voters had the right to throw out those bastards and therefore there was no reason at all for there to be an externally imposed limit on government. Democracy works that way.

I have written a major study and have read a lot of different thinking on this matter. One thinking is that all parliaments of the world have had limits imposed on them. We could look to England and the Magna Carta and the United States with its constitutional amendment on freedom of speech. Yes, even Canada has put limits on the freedom of Parliament.

Parliament is not able to pass legislation which violates the charter of rights and freedoms. It embodies our fundamental rights which are not to be violated by a simple majority vote in Parliament. I believe that future generations should be protected through a similar charter which would protect their right to their income, unburdened by obligations incurred by past generations over which they had no democratic influence.

An amendment to the Constitution is as important as the charter of rights and freedoms. It does no more than the charter of rights and freedoms does on certain legislation. Democracy cannot be run by simple majority on issues which affect fundamental human rights. It has to be limited because sometimes people, overrun by the heat of a current debate, by a current issue, will be tempted to ask Parliament to pass laws which in themselves will destroy the very foundation of a democracy.

That is the justification for having freedom of speech as one of the most fundamental rights; the right to a fair trial, to be innocent until proved guilty. Those are fundamental rights which no Parliament may override.

I believe that in the same vein we need protection for future generations which cannot be overridden by Parliament.

The second objection that I know will be coming is that it is impossible to balance the budget every year. Here too I had a conversion. I believe the Minister of Finance in this government has given me the clue on how it is done. The government builds in a contingency reserve. It simply makes sure that its estimates of spending are conservative, that its estimates of revenue expected are conservative. If they happen to go in the wrong direction, the government has a cushion so that it does not have a deficit.

In spite of such conservative attempts to make sure there are no deficits, there may be unforeseen contingencies. It could be an earthquake, it could be a war, it could be almost anything. Under those circumstances Parliament should be protected.

I cannot go into the details here. If Parliament is asked to define what is an acceptable contingency, it is in the same position where, in the English style democracy, the government really is a dictator and can say: "We simply define it is a contingency and therefore we can run deficits".

Other parliaments have handled those situations by requiring that there be a 75 per cent majority vote in favour of accepting what is an acceptable contingency which would permit the government to run a deficit in that year.

Similarly, on limits of spending levels I have provided a flexibility that they must be equal only over a three-year period. There will be a downward bias in overall government spending. This is all deliberate because a bias is also offset by the fact that the contingency spending every year will result in a reduction in the debt. Therefore, more money is becoming available every year because the interest cost on the debt decreases and therefore this will sort of wash out.

Finally, I know a general objection which probably will never be raised by the Liberals who have such unlimited faith in the ability and honesty of government. The Canadian public is cynical. They will say: "What good does it do to pass such a bill?" I am an accountant and I could cook the books such that whatever the limits are, they can be got around by redefinition and by the shifting of expenses between periods and categories and all that kind of thing. I was very much aware of this. Therefore I have some technical provisions which suggest that it should not be possible to do so.

I hope we will have a lively debate on this subject and I look forward to the comments from the other members who are here taking their Friday afternoon to debate with me.

The Constitution Act, 1996Private Members' Business

1:50 p.m.

St. Paul's Ontario

Liberal

Barry Campbell LiberalParliamentary Secretary to Minister of Finance

Mr. Speaker, I rise to speak against Bill C-213.

The hon. member's proposals at best reflect, as he admitted, a fundamental mistrust of the parliamentary system and the Canadian public, doubts I do not share. At worst, they amount to fiscal foolishness.

This bill is really the Reform Party's zero in three budget in disguise.

On February 21, 1995, the leader of the Reform Party presented what was called the taxpayers' budget, the Reform Party's strategy to eliminate the federal deficit in three years.

The public did not accept it. In fact, the Reform Party has stopped making proposals in view of the response they have received.

So, here we are today before a desperate attempt to revive this failed budget in the form of a private member's bill.

The Reform Party's slash and burn taxpayers' budget paid no regard to the consequences of the actions it proposed. If one is willing to institute mindless cuts, a favourite Reform strategy, indeed one can achieve short term savings and a balanced budget, but only if one believes in substituting decisiveness for thoughtfulness and fairness.

The hon. member's proposed bill would surely result in substantial long term costs. The proposed fiscal straitjacket could mean gutting social programs, leaving the vulnerable in society to fend for themselves.

It could mean cutting assistance programs without giving Canadians the tools to help them get back to work. It could mean eliminating tax preferences for small businesses which over the long run would result in less innovation, fewer companies and less employment. When one's only tool is a hammer, everything one sees looks like a nail. That would be the effect of this bill.

In short, the member's strategy would be more hardship, a weaker economy and much greater spending pressures in the end, sabotaging the very goal of his legislation.

The proposed private member's bill would put the government and the economy into a straitjacket. To meet its balanced budget goal would require that taxes be raised and spending be cut during a recession, rather than allowing the automatic stabilizers built into the tax system to work. The legislation would force government to make any recession worse because it would not be allowed to take action to assist Canadians.

The Reform Party, the hon. member, and the government have a fundamental disagreement about the role of government. Canadians want a government that has the flexibility to act and to tailor its actions to meet the circumstances of the day. Canadians will not be fooled. The Reform Party goal, reflected in the hon. member's bill remains what always has been, to emasculate government as an end in itself. Canadians do not want a government that stands aside. Canadians want a government ready and able to stand alongside them.

This legislation would put controls on total government expenditures without any regard to whether these spending pressures came from national or international developments, from developments over which the government has little or no control.

Does the hon. member believe Canadians want to see their government respond, for instance, to interest rate swings by immediately slashing elderly benefits, unemployment insurance benefits, transfers to the provinces for medicare and social assistance? That is not what Canadians want and that is not the policy actions of a responsible government.

Perhaps the hon. member is under the mistaken impression that because the United States has balanced budget legislation, Canada too should have the same. There is a bit of faddishness to what is going on here. Let me remind the hon. member that our systems of government, as he well knows, are quite different.

In the United States, the executive branch, the president and cabinet, is separate from congress. Both prepare budget plans on which consensus must ultimately be achieved. That consensus is difficult to arrive at. Balanced budget legislation proposals came about in the United States because of a lack of consensus among legislators and the executive.

In Canada, there is no similar distinction between the branches of government. Parliament is ultimately responsible and accountable.

In 1991, the sponsor of this bill claimed, in a document entitled constitutional limits on public spending and Canada's deficit, that in practice deficits could not be prohibited, quite simply. It was also not desirable to do so for reasons of economic efficiency.

I suppose if it were true then, it is still true now. We have no need for this type of legislation. The ultimate aim of this government is a balanced budget. We have come up with a balanced and fair strategy to achieve this end.

The hon. member and his colleagues have a fundamental mistrust of government. But we are proving every day that a govern-

ment can be fiscally responsible and do it in a way that does not gut the country in the process.

It has set two-year rolling deficit targets and it is committed to achieving them. It is accountable to the Canadian people year after year in meeting those targets and at every election we are ready to be judged.

To date, the government has bettered the targets it has set and it will continue to meet its future targets for a number of reasons. First, for budget making purposes it is using economic assumptions that are more prudent than the private sector average.

Second, it has built into its fiscal targets a contingency reserve which provides an extra measure of back-up against errors and economic planning assumptions. The proposed bill calls for a contingency reserve to be put in the legislation. There is no need to. It is already included in the fiscal plan.

Finally, the government is undertaking fundamental reforms to provide for a stronger economy which in turn will lead to lower deficits.

In closing, I would like only to say that there is no need for this proposed bill. The member's proposal would amount to a triumph of dogma over good sense. The government's finances are on track. It is pursuing a deficit reduction strategy that is measured, deliberate and responsible. I urge members of the House to reject Bill C-213.

The Constitution Act, 1996Private Members' Business

1:55 p.m.

Bloc

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

Mr. Speaker, I am pleased to speak on the bill of my colleague for Capilano-Howe Sound, Bill C-213, The Constitution Act, 1996 (balanced budget and spending limit).

The preamble to the bill states as follows: "Whereas section 44 of the Constitution Act, 1982-and I emphasize this point-provides that, subject to sections 41 and 42 thereof, Parliament may exclusively make laws amending the Constitution of Canada in relation to the executive government of Canada or the Senate and House of Commons". Then, when the actual bill begins, it states: "The Constitution Act, 1867 is amended by adding the following after section 57".

After that come 11 sections focussing on regulating government expenditures and forcing it to balance its budget. Included are all of the mechanisms, and even-as my colleague from the Reform Party has said-penalties set for senators, MPs, public servants and so on. This is, therefore, a very strong commitment and a bill with a very precise method of implementation.

We are convinced that my honourable colleague's bill is well founded on a desire to force the government to balance its budget. In three years, we in the House have seen Canada's debt go up by $100 billion, and it is still rising. That debt was created by the Liberals.

Recently, the Wall Street Journal -as my colleague is already well aware-referred to the possibility of bankruptcy in the long term. Our Reform colleagues, or the majority of them, have referred to that same possibility, stating quite openly:

"If we do not do something rapidly, we are going to probably hit the wall quite soon".

This is why I think my hon. colleague is being true to himself in tabling such a bill. Obviously, the Bloc's position is different. We advocate an analysis of government spending budget item by budget item along with a full review of the use of tax shelters.

We have just been promised a complete review of tax shelters. We note that it will be done outside the House by the very people who use them most. So there has been no follow up to what the Bloc wanted. For the time being, the government is satisfied with garnishing collective salary from unemployment insurance in order to balance the books and shift part of the deficit onto the provinces.

The requirement for this government to balance its budget could be presented by my colleague simply in legislation before the House. However, as my colleague is a man of action, he decided to take the bull by the horns and propose a constitutional amendment. I think he knows what he is doing. The Constitution establishes an obligation not just for one government, but for each successive government, and is very difficult to change.

The Constitution would be a very restrictive framework for the government. The hon. member states in his bill that the government would have to achieve fiscal balance within three years. Given this year's deficit of $24 billion and the anticipated deficit of $17 billion for next year, it is inconceivable that, under the circumstances, we could have a balanced budget in three years without making massive cuts-and I mean massive-in social programs, which would jeopardize the future of generations to come.

I remember the hon. member for Chambly clearly saying in this House that the Reformers' economic or fiscal policy could often be summarized as follows: "If you are in debt, stop eating for a year. It will solve the problem".

Achieving fiscal balance in the long term is a good principle. However, Bill C-213 is much too compelling and its provisions are way too strict.

That being said, the hon. member is making a totally surprising suggestion at this point in Canadian history, by proposing a constitutional amendment. The word Constitution has almost become taboo.

In January, the president of the Bank of Montreal travelled to Reform country, I believe it was in Calgary, and said: "I am a banker. I know how important the economy is. However, under the circumstances, I think we will have to stop talking about the economy and start dealing with the Constitution. There is not much time left. We have 15 months to solve the issue". This was in January, which means that we now have 11 months to solve an issue which seems much more important than the one being raised here.

Following that statement, businesspeople from everywhere got together. Some met here in the Château Laurier, others in Montreal, to start seriously thinking about what should be done in the months ahead, given that this milestone is fast approaching. As well, Gordon Gibson started travelling across Canada with an extremely well made book entitled Plan B , which I recommend to everyone. The book provides a perfect description of the current situation, the constitutional deadlock, and points a finger at the federal government.

We have also seen just recently the statements made by Peter White in La Presse , I think: ``The Prime Minister does not realize that the constitutional problem is serious, according to the president of the Council for Canadian Unity-he is definitely not a member of our party. Canada has two or three years to settle the constitutional problem. After that, it might be too late and-I quote the exact words-if these two or three years' respite are not put to good use, we are done for; if nothing substantial is proposed during that period, Lucien Bouchard will have the right to win his next referendum''.

Mr. White is fully aware of the seriousness of the situation, but I think he is not aware of its urgency, because we do not have two or three years to settle this problem, we have a few months.

It is therefore somewhat ironic, in light of the bill before us today, that at a time when bankers are telling us that we must stop talking about the economy and start talking about the Constitution, a first in Canadian history, now politicians are telling us that we must reopen the Constitution to sort out economic problems. The world is full of surprises.

In his bill, my hon. colleague refers to the 1982 Constitution, and that is the problem. Quebec is not a signatory to this Constitution. And in accordance with the provisions included, naturally we cannot allow anything to be enshrined in this Constitution. Quebec, it will be recalled, was excluded from this Constitution. Federalists or sovereignists, we in Quebec did not give our agreement. And this unilateral patriation without Quebec's agreement was an obvious breach of contract.

Then came Meech and Charlottetown, events everybody would like to forget, which were supposed to get Quebec to sign the 1982 Constitution so that it could apply to all Canadians, including Quebecers. This deadlock led to the 1995 referendum which, as we know, was won by the skin of the teeth, but was in fact a photo finish.

Quebec's expectations are still as urgent as ever. The Constitution must be reviewed before April 1997. We have a few months ahead of us.

Instead of invoking the 1982 Constitution, as my colleague did, to deal with economic problems, I think he should see to it that Quebec signs the Constitution to make it legally binding on all Canadians, including Quebecers if they sign it.

We are now faced with another deadlock and we cannot count on the Liberals to sort this one out. That is why, I think, my colleague from the Reform Party could perhaps help us. We cannot count on the Liberal Party because the Liberal Party has never kept its promises.

In 1974, it got elected by promising not to impose wage controls. Once elected, it did the opposite. In 1979, it got elected by promising not to tax gasoline or not to increase the tax. Once elected, it did the opposite. In 1989, it promised, if elected, to tear up the Free Trade Agreement. As we know, the Free Trade Agreement is still with us today. In 1993, it wanted to scrap the GST, we should know, we talked about it for one full week, but it never did.

Constitutionally, and I will conclude with this, in 1980, Mr. Trudeau was fighting for his life. The solution arrived at was the 1982 patriation, which resolved nothing, and led to promises that have not been kept. If my colleague truly wishes to resolve Canada's economic problems, I think he should first sort out the constitutional problems, for only then will we be able to find answers to these other problems.

The Constitution Act, 1996Private Members' Business

2:05 p.m.

Liberal

Bill Graham Liberal Rosedale, ON

Mr. Speaker, I am pleased to debate this motion. I congratulate the member for Capilano-Howe Sound for the work he has obviously put into his proposal. I know he is a very reflective person, one who has studied these matters deeply, being an economist. Being a lawyer myself I will refrain from the usual economist jokes about the gloomy profession and I am sure the member will be pleased that I am so doing.

Perhaps he will forgive me if I start by saying I had some problems with this bill from a technical perspective when I first looked at it in terms of how it would work. Having heard the member introduce it I now have some profound problems about where it is coming from.

I was listening to the member and I wondered why he did not propose we go back to the gold standard. It might have been about the same sort of proposition to achieve the same ends, to create a

rigid system within which governments cannot function, cannot move out of straight-jackets and which is generally to the benefit of the moneyed classes, generally to the benefit of those who have large investments because they can be guaranteed that governments will not impinge on them by inflation or other measures which the member referred to.

The member began by reminding us, and quite appropriately so, that we in Canada have become familiar with the fact that deficits are dangerous things, that we are mortgaging our children's future if we spend unwisely and put it into debt. I respect what the member had to say on that.

However, the conclusion he came to was rather startling for me coming from the Reform Party. Its members day after day in the House hesitate to say how they are voting because it must be made very clear that they wish the appearance at least to be there that whenever they vote they are reflecting the immediate wishes of their constituents. How often have the member's colleagues stood in the House and told us "I am not voting on this, my constituents are voting; I have consulted my constituents and I am the representative of direct democracy"?

The member introduces the bill by telling us he does not believe in democracy. The bill is an anti-democratic bill. The member wants to introduce a constitutional change which will inhibit his constituents, my constituents and every other Canadian from voting for individuals or governments that intend to address economic problems in a way that would be inconsistent with the bill. It would put a straight-jacket around government functions in a way that is quite extraordinary. That this is coming from a party which pretends to be in favour of democracy is quite extraordinary.

This party will not vote a change to the human rights code to prevent discrimination against a class of individuals based on their personal characteristics, but it will propose a bill which would make it impossible for the government to affect the economic well-being, the money they have in their pockets.

The member is assimilating the bill to the charter. The member does not even know about the charter. The charter contains in it a notwithstanding clause. Did the member for Capilano-Howe Sound not realize that? It has a provision whereby if Parliament wishes to deal with something outside the constraints contained in the charter both the federal and provincial houses can do that.

He does not even propose that in his bill. His notwithstanding clause is a narrow technical clause which gives war, acts of God and revolution an opportunity to get around the provisions of the bill, and I will come to that when I move into problems with the way the bill operates.

I start by fundamentally pointing my finger to my real philosophical problem with the bill. It is totally and utterly inconsistent with every precept of government and democracy that I have heard advanced by the members of the Reform Party so far in the House.

That being as it is, it is passing strange but it often happens in politics that people propose inconsistent measures. It is curious that inconsistency from that party comes when it comes to a question of protecting money but there is no inconsistency when it comes to protecting basic human rights of human characteristics.

The second problem I have with the bill is its inspiration is, I believe, fundamentally American in nature. This is an American concept. One can understand the American concept of government. In the congressional system one can understand why members of Congress have proposed such a bill. They are trying to constantly deal with that struggle between the legislature and the executive as represented in the president. The bill which has been introduced in the United States is a part of that dynamic of the constant fight between Congress and presidential authority. Congress is seeking a way to impose its will on the president and on the spending of the president as well.

That may make sense in the American system but it does not make sense in a parliamentary democracy like ours where we function under very different rules.

Those are my basic problems with the bill. I now will deal with the recognition by the member that such a strait-jacket could never be automatically applied. Even the member has said we could not lock a government in completely. I recognize his intellectual honesty in that. Then we have to be straightforward and honest about it. We have to look at the nature of exemptions which he has provided in the bill. War is an obvious one.

I suggest that in an international interdependent world in which Canada presently lives creating a bill as simplistic as this does not recognize the problems that will come. The Mexican currency crisis was one. There will be others like that. We will be called on to be involved in many international events that will be imposed on us.

I am not suggesting we as Canadians wish to adventure outside the country into foreign adventures. The integrated world we live in will be imposing things on us which are unforeseeable and unforeseen in the bill. They will then require expenditures. They may involve peacekeeping. These are large expenditures of billions of dollars in order to preserve the integrity of Canada. Whether we are talking about its security, its environment or its health, these expenditures will be necessary.

Because the bill imposes a strict limit on the expenditures of government the inevitable consequences will be that this will be paid for out of the domestic side of the economy and the social programs of Canadians, their health, their unemployment insurance. The guarantees they have for a healthy productive society will be threatened because we have not been able to deal flexibly with the immediate challenges which are bound to come in 21st century.

I leave it with the member that my other problem with the bill is I do not think it is adapted to the modern world in which we are entering. I do not think it is adapted to the enormous complexity of the new international world into which we are moving which will require a great deal of flexibility on behalf of Canadian governments.

Another problem I have with the bill is that it fails to recognize, if I may go back to its anti-democratic roots, the nature of the Canadian people.

In electing this government with the promise it made to reduce the deficit to 3 per cent, by efforts it has been making to do so, it is clearly foreseeable that within two years Canada will be the lowest deficit country of any of the G-7. We are on the deficit reduction track.

Canadians have, through the course of this lesson, learned what are the consequences of overspending. All of us are pulling in what we are doing. In my riding of Rosedale, which is a downtown riding in an urban centre, there are enormous problems of social housing, crime and issues that require a lot of government action and attention, most of the citizens there have willingly recognized that we have to rein in what we are doing.

We wish to discipline ourselves in an intelligent way. We do not just wish to discipline ourselves automatically. The member from St. Paul's called it hitting the nail with a hammer because you happen to have a hammer in your hand and nothing else.

What we need in today's social circumstances is a surgeon's scalpel and not a hammer. The member has provided us with a hammer. In so doing, he will not allow us to adjust in a way in which the government is already indicating governments can adjust and will adjust.

I will conclude by saying that the government has a different approach. It was shown in the last budget, and I am sure that future budgets will show it as well.

In conclusion, this proposal is fundamentally undemocratic and impracticable, and serves only the interests of the richer members of society, not those of average citizens.

The Constitution Act, 1996Private Members' Business

2:15 p.m.

The Acting Speaker (Mr. Kilger)

I have taken note of the request from the hon. member for Capilano-Howe Sound in whose name the motion stands before the House today that, under right of reply, if the time permitted, we could grant him up to no more than two minutes of final comment.

We recognize the work that goes into private members' bills. This one is not votable but the House must understand clearly that he will be the last to speak. After his two-minute conclusion, we will move on to the last order of business.