Mr. Speaker, I am pleased to speak today on this important restructuring of the current unemployment insurance system.
I want to congratulate my colleagues who sat on the parliamentary committee and worked on this complex problem. This bill is about modernizing our unemployment insurance program, that was created in the 1970s. Because more and more Canadians are affected by rapid economic transformations and the government's budget for social programs is already stretched to the limit, no one can deny that these changes were needed.
I would like to focus on three topics today, which are the computation of eligible hours, the effect on small businesses and the application of this system to high income earners.
First, this bill constitutes, in my opinion, a fundamental change as far as eligibility to the system is concerned. From now on, eligibility will be based on the number of hours worked and not weeks. In today's labour market, a system based on the number of
weeks worked creates unfairness. For many workers, one week does not mean 40 hours from Monday to Friday any more.
When establishing the eligibility of workers according to the number of hours worked, the government wants to ensure that every hour of work counts. Thus, it would be more advantageous to work as long as one can. The new system takes into account the fact the labour market has changed and that millions of people now have work patterns that no longer correspond to the traditional work week. They deserve the same protection as their fellow citizens holding regular jobs get in case of a layoff.
The new system is a lot fairer for people working part time or in seasonal industries. For example, people working less than 15 hours a week will be insurable from now on. With employment insurance, 90,000 part time or seasonal workers will become eligible for benefits. Many will become eligible earlier and for longer periods and will see a bigger part of their earnings insured.
Second, I would like to talk about the effects of the bill on economic growth. The government's objective is to create an environment that is good for business, economic growth and job creation. That is the main objective of our employment strategy.
That objective will be met in many ways. I will cover only two. First, the lowering of the maximum insurable earnings will match more closely than the present system insurable earnings and salaries in Canada.
That change will lower the payroll charges, thus increasing the revenues of employers as well as those of employees. The reduction in employer and employee contributions will be particularly apparent in high salary sectors.
Second, one element of the employment insurance program will constitute an important support program for small businesses. You will agree with me that small businesses are vital to Canadian economic renewal.
The small business support program will reduce the impact of any increase in the contribution level. This will be aimed at companies with fewer than 25 employees that will pay less than $30,000 in premiums in 1996. Any raise in the contribution level representing $500 or more as compared with the base year, 1996, will give the employer a partial rebate. Companies affected will get a rebate of up to 50 per cent of any raise in 1997 and 25 per cent in 1998. This two-year program will begin in January 1997 to coincide with the implementation of the first dollar earned policy and the annual calculation of maximum insurable earnings. Employers whose 1996 contributions are less than $25,000 will be entitled to a maximum yearly rebate of $5,000. Those whose contributions are between $25,000 and $30,000 will see their maximum rebate reduced dollar for dollar.
Finally, I would like to talk about this system as it applies to high-income people. Some of my constituents have mentioned the fact that, under the present system, it is possible to work a few months during the year and to increase one's income by drawing unemployment insurance for the rest of the year, and to do so year after year. This inequity was raised by several Canadians during the consultations that led to this bill.
The employment insurance program will have stricter clawback provisions. Claimants who will have received more than 20 weeks of benefits over the last five years and whose income exceeds $39,000 will have to reimburse a greater portion of their insurance benefits than is the case at the present time. These people could have to reimburse up to 50 per cent of the benefits that were paid to them.
High-income earners who contribute to the program will continue to have access to reasonable benefits in case of unforseen job loss. However, those who work only part of the year and whose income is still higher than average will not be able to increase their income by drawing considerable amounts in employment insurance year after year.
In conclusion, I think this bill makes necessary changes to the unemployment insurance system to modernize it. The new system confirms the value of work since every hour of work counts. So the system will protect 97 per cent of the labour force. It will be more fair and more balanced. It provides for recovery of benefits, thus guaranteeing that people with high incomes receiving benefits frequently will no longer benefit from the system unfairly. Finally, the move to employment insurance will be gradual so that small businesses will have the time they need to adjust to the changes. This bill represents a compromise between our budget constraints and our desire to offset the negative effects of unexpected loss of employment.