moved:
Motion No. 12
That Bill C-2, in Clause 59, be amended by adding after line 33 on page 30 the following:
“(3) Any increase in the contribution rate referred to in subsection (2) for the year 1997, 1998, 1999, or 2000 shall not come into effect unless the cumulative increase in anticipated revenues under the Canada Pension Plan resulting from the changes in the contribution rate after December 31, 1996 are offset by at least a cumulative decrease in anticipated combined employer and employee contributions under the Employment Insurance Act for the years 1998, 1999, and 2000.
(4) The contribution rate for self-employed persons shall not exceed 10.25 per cent even if the Chief Actuary of the Office of the Superintendent of Financial Institutions, in preparing the report under section 115, is of the opinion that a higher contribution rate is warranted.”
Madam Speaker, this amendment concerns the rate of contribution to the Canada pension plan and accordingly to the employment insurance program.
We all know that excessive payroll taxes kill job creation. Small and medium size businesses are hit hard by increases in payroll taxes. We must encourage them to expand and not force them to limit their projects because they simply lack the means to hire the staff it takes to do the job.
The first part of our amendment would tie CPP premium increases to EI premium cuts. It would require that at least for the first three years, increases in cumulative CPP revenues from the combined CPP employee and employer CPP premium increases be at least offset by cumulative EI revenue decreases from combined employee and employer EI premium decreases.
We know that the government's internal reports show that the EI premiums could be cut to less than $2 and still cover the cost of the program. This amendment would ensure that at a minimum, higher CPP premiums are at least offset with EI premium cuts over the next three years.
We are deeply concerned about EI and CPP payroll taxes. We have been talking about this since the very beginning and we are not the only ones. Business leaders and organizations from across this great country have been telling the government the same thing. If we want to create jobs, start by cutting payroll taxes. Put people back to work. Give them the opportunity to make our economy grow. The government chooses not to do that. Last Friday it announced new EI premiums for the year 1998. While it had the opportunity to give Canadians a much needed tax break, the government decided to spin a mere 20¢ reduction in EI premiums as good news.
It is not good news to Canadians who have to foot the bill for an $11 billion tax hike with CPP premium increases. That is an $11 billion tax hike.
It is not good news to a small businessperson who come the new year will have to lay off people. It is not good news for the Canadian economy. Actually it may be good news for the Canadian economy, the underground economy that is. A lot of people will be forced to lay off because the cost of having skilled workers will simply be too high.
In the last election we heard the Prime Minister say during the campaign that he could see the light. I recommend to him today to turn on his lights and bring the cuts necessary so that employment in this country can grow.
To the extent that this can be done, increases in one program should be offset with decreases in the other. The current EI premiums are now set more than 50% higher than EI benefits justify. This year alone the EI surplus is expected to be $7 billion. Hello profit, profit on the backs of Canadian workers, profit that equals deficit as far as employment growth goes.
This is a shame and I sincerely hope the government will choose this opportunity to see the light.
The levels of contributions to the Canada pension plan are of grave concern to Canadian workers. This is why I think we must amend Bill C-2 by adding another paragraph.
I would, however, like to draw your attention to a small omission in the French version as it compares to the English one. The second line of subclause (4) should read “même si” rather than just “si”. This omission is important, because, as you will agree, it radically changes the meaning of the sentence.
Thus amended, the French text of the subclause reads as follows:
Le taux de cotisation des travailleurs autonomes ne peut dépasser 10,25 p. 100 même si l'actuaire en chef du Bureau du surintendent des institutions financières est d'avis, au moment de préparer le rapport prévu à l'article 115, qu'un taux de cotisation plus élevé est justifié.
As it stands, the bill, which affects almost all Canadians, permits an increase in contributions without new legislation. If we let that go through, we will be giving the government a blank cheque essentially. This is unacceptable.
What I propose is that we preclude any increase above 10.25% without a decision by this House on the matter.
To put it plainly, any increase over 10.25% would require new legislation.
This would mean the consent of the provinces was essential for any premium increase. The CPP cannot be changed except with the agreement of at least seven provinces representing 50% of the population.
Why this amendment? The answer is very simple. By their very nature, actuarial estimates are subject to error. Even if CPP premiums were to exceed 10.25%, there would be such a discrepancy between the basic actuarial estimates and those submitted to Parliament that there would automatically have to be a review.
If the government is serious when it says that amendments to Bill C-2 will keep premiums from climbing past 9.9%, it should not be afraid to ask Parliament to review amendments if the rate were to reach 10.25%.
It should also be emphasized that the fact of making it more difficult to increase premiums beyond 10.25% is not just the result of some bloodless number crunching. On the contrary. CPP premium rates have a direct impact on the lives of millions of Canadians, whether they are employers or employees. So imagine what is like for Canadians who fall into both categories.
Self-employed workers are hard hit by higher premium rates. They must shoulder the heavy burden of a combined premium. When there is talk of a 10.25% premium rate, the self-employed worker does not need a calculator: he knows he has to turn over $10.25 of every $100 earned.
Some people will perhaps say that the self-employed represent only a small proportion of the labour force and that, on the whole, this is not an issue of concern to Canadians generally. Wrong. It is indeed of concern to Canadians generally, increasingly so.
It is precisely about the 2.5 million self-employed Canadians that members should be thinking as they consider Bill C-2 and the proposed amendment. We have an obligation not to allow premium increases until the House has examined the consequences to Canadian workers, particular those who are self-employed.