Mr. Speaker, I welcome the opportunity to speak to Bill C-12.
As a member of the human resources development committee, I was able to participate in the hearings on the bill which were carried on this spring over a five week period and during which time we heard from 79 witnesses, individuals and groups. In addition, there were numerous written briefs considered by the committee.
When the bill was tabled late in 1995 my initial reaction was to oppose it because it proposed substantial cuts to the UI system which in my view were unfair and unjustified. For seven years, from 1984 to 1991, I was the employment critic for the Liberal opposition and during that time with the support of my party severely criticized the Conservative government for similar cuts.
Furthermore, during the 1993 election campaign the Liberal Party made no mention in the red book or elsewhere of proposed cuts to unemployment insurance. Quite to the contrary, we condemned the Conservatives for their attacks on this and other social programs.
Despite my initial opposition, I decided to participate objectively in the committee process, to listen to the arguments on both sides and then decide what position to take to oppose or support the bill in whole or in part.
I was encouraged by the minister, who said that within certain limits he would accept amendments to improve the bill, which he has done, and I congratulate him for it. In particular, I refer to the amendments presented by the members for Fredericton-York-Sunbury and Halifax West to change the method for calculating benefits, which amendments will substantially reduce the cuts to benefits as set out in the original bill. Also, amendments were presented by the hon. member for Etobicoke-Lakeshore to exempt low income families from the intensity rule.
The original bill would have cut $2 billion from the unemployment insurance program. These amendments by my colleagues will put back approximately $400 million. All in all the committee did good work. It did the best it could within the fiscal framework, but there is the problem.
One provision of the 1995 budget was to cut the unemployment insurance program by 10 per cent. Consequently, despite the goodwill and amendments of the committee, the bill still results in serious cuts to unemployment benefits at a time when a large number of Canadians are unemployed.
I decided to participate in the committee to honestly listen to the arguments on both sides. The more I listened to the evidence in committee the more I became convinced that on the whole the bill was wrong.
It is true the bill does contain some improved measures such as the hourly base for qualifying for and calculating UI benefits. Under the present law a person must work at least 15 hours per week in order to qualify with the result that many employers hire workers part time at less than 15 hours per week simply to avoid paying their contributions. Under this bill, all hours of work will count for qualification with the result that part time workers will have a better chance to qualify. This is definitely an improvement.
There are other improvements as well. However, the net result when the improvements and the cuts are added up is that fewer people will be covered and the benefits will be lower than under the present system.
As a result of earlier cuts by the Conservatives prior to 1993 and by the Liberals since 1993, the percentage of the unemployed covered by unemployment insurance dropped from 87 per cent in 1990 to approximately 50 per cent to 52 per cent today. Unfortunately this bill will make it worse. In addition, even with my colleagues' amendments, benefits will be lower for most claimants who qualify.
My main concerns about this bill are the following. First, although the move to an hourly system is good in itself, the number of hours of work required to qualify is too high for both regular and special benefits. As a result it will be more difficult for workers to qualify under this bill than under the present law. While some part time workers will gain under these new rules, many workers will lose and will not achieve coverage.
My second concern is that benefits will be reduced for three-quarters of unemployment insurance claimants as a result of three provisions in the bill. The first is the new method of calculating insurable earnings and benefits through the divisor rule. Even with the improvements of my colleagues the benefits will still be less. The second is the intensity rule which reduces benefits for those who are obliged to make repeated claims. I say obliged to make repeated claims. I have in mind seasonal workers and workers who are hired on a temporary basis. The third is the provision in the bill to reduce the maximum insurable benefit from $448 per week to $413 per week. That is the maximum benefit.
My third concern is that the bill reduces the duration of benefits, the time for which benefits are paid, from a maximum of 50 weeks to 45 weeks. As a result there will be more unemployed persons with no benefits. They now qualify for up to 50 weeks; they will be cut off at 45 weeks.
Some supporters of the bill believe that these measures, the measures to restrict coverage, to reduce benefits and to reduce the duration of payments, will force unemployed workers back to work. This belief presumes that work is available which is certainly not the case everywhere. It also presumes that most workers prefer unemployment. Again, there is no evidence to support that. I would say that a great number of workers want to work. There are some who do not and would live off welfare or unemployment insurance but they are a very small number.
These measures might also force the unemployed to take lower paid jobs. With economic growth increasing, such as was stated in both this year's budget and last year's budget, this only continues to widen the gap between the rich and the poor. Why should we force people into lower paid jobs if economic growth in the country is in fact increasing? This is not economic justice.
Another major concern I have with the bill is that it allocates a greater percentage of the UI fund to training and employment support measures. I fully agree that these measures are absolutely essential but until recently they have been paid out of general revenue and not out of the UI fund.
What has happened is the government observed that this year the UI fund would have a surplus of approximately $5 billion so it decided to take some of that money to pay for training which had been previously paid out of general revenue. In the budget last year the government decided to cut approximately $2 billion from the unemployment insurance system, reallocate $800 million of that to training and employment and at the same time the government reduced its funds for training out of general revenue. In fact, the government is solving its general deficit problems by cutting expenditures for training which were made out of general revenue and then taking money for these same purposes from the UI fund.
I must remind the House that the UI fund is made up of payroll contributions from employers and employees. Not all Canadians contribute to this fund. The original and principal purpose of the fund was to sustain the unemployed while temporarily out of work. It was to help the unemployed to pay their bills, to pay their rent, to pay for their food and to keep their children in school. That was the principal purpose of unemployment insurance.
Training, like education, was always paid by all taxpayers because in the long run it benefits all taxpayers. The payment of primary and secondary education is not restricted to parents and students. Why should training then be paid only by workers and employers?
Furthermore, the proposed system leaves individuals who do not qualify for unemployment insurance without the same training and employment opportunities. In particular, immigrants and women who have been at home taking care of their children and go back to work would not qualify for this training and these employment benefits because they have no attachment to the unemployment insurance system.
In conclusion, I would support any measures which would correct abuse and encourage a return to work. However, in my view this bill punishes the innocent with the guilty. I will support the government's amendments to improve the bill but I will also support other amendments that will improve the bill. I must say that I will have to oppose those parts of the bill which reduce coverage and benefits.