Madam Speaker, I am pleased to speak to the opposition day motion put forward by the Progressive Conservatives. Our caucus is pleased to support the motion for a variety of reasons. We are critical that the motion does not go nearly far enough. We would much rather debate the EI Act and argue for its reform. It is clearly dysfunctional and broken.
The EI system is supposed to provide income maintenance for unemployed workers. It is pretty straightforward. That is the deal. That is the pact most working people understand. When they have something deducted from their paycheques for a specific reason, there is a reasonable expectation that they should be allowed to collect income maintenance should they find themselves unfortunate enough to become unemployed.
We approve of other designated uses. We find there is merit to the motion. We believe the small weeks pilot project was necessary and that it had to take place. Obviously too many people were being penalized by the divisor rule which was put in place with the Liberal amendments to the EI system.
The divisor rule is patently unfair in that it brings down the benefit for the unemployed worker by averaging all the weeks leading up to the layoff and not just the weeks in which they worked. In other words, dead weeks or small earning weeks were being folded into the package which brought down the average. Not only do less than 40% of unemployed people qualify for any benefit at all, but those who are lucky enough to qualify for some benefit get less money and for a shorter period of time.
The hon. Minister for Human Resources Development tried to argue that those figures were not accurate. He referred to an analysis on employment insurance benefit coverage recently commissioned and released by HRDC. Holding the report as proof he made the argument that 78% of all unemployed workers actually qualified for EI. Nobody believes that. The media do not believe it. Recent editorials do not believe it. It simply is not true.
The minister made the allegation that opposition critics in this area were reading the report too selectively, misquoting and taking things out of context. In actual fact the minister is taking things out of context. The report clearly states as a summary of the study that the regular EI beneficiaries to unemployment ratio or the BU ratio—some people call it the BS ratio—had declined by almost 50% in the 1990s, falling from a level of 83% in 1989 to 42% in 1997.
That is the figure we hear most commonly quoted in the media and in our own criticisms. Critics from labour and all different groups say that approximately 40% of unemployed workers qualify for EI. Clearly the system is dysfunctional and broken. It is no wonder there is a huge surplus. It is not hard to develop a surplus when nobody qualifies any more and the few people who do qualify are getting reduced benefits and for a shorter period of time.
With that huge surplus—and I am glad other speakers raised it as an issue—we are hearing all kinds of creative ideas on how to spend money that clearly is not theirs to spend. Some people argue we should be spending it on health and social programs. Some of the premiers of the provinces are even saying that. Some people say we should use it for deficit reduction, which is what the Minister of Finance has used the surplus for. Almost unbelievably the Business Council on National Issues is calling for tax cuts.
In some sort of perverse version of Sherwood Forest we have the BCNI advocating that we rob from the poor to give the rich yet another tax cut. It is almost incomprehensible. Shear perversity is what I call it. Fortunately that idea has not caught on in any meaningful way.
Then we have people advocating that we should be cutting premiums with the surplus. A common theme in the business community is that it should be returned to business and employees through premium cuts.
Except for my caucus no one seems to be raising the issue of increasing the benefits and lowering the bar for eligibility so that more people qualify. What could be more simple? The money is deducted from our paycheques every week. To use it for anything but income maintenance would be a breach of trust at the very least and out and out theft in the worst case scenario. To take money from a person's cheque for a specific purpose and to use it for something completely different is fundamentally wrong.
As we talk about the $20 billion surplus, an almost inconceivable amount of money in most people's minds, obviously it should be used to provide income maintenance. It should be put it in the pockets of working people when they find themselves unfortunate enough to be unemployed. They will spend the money in the community. It has the multiplier effect and residual benefits.
Another point has not come up. Many of the changes to EI were quite insignificant when we look at the bigger picture of how few people qualify. One of the changes that went by almost unnoticed was that of people serving their apprenticeship training in a community college. There is now a two week waiting period.
As a journeyman carpenter I served my time as an apprentice. When I went to community college there was no waiting period for the EI to kick in. Now people are laid off from their job to go to school for eight weeks, six weeks or whatever their trade dictates, and there is a two week period where they do not get any income at all. The result has been that many apprentices are simply choosing not to take their in-school component. They are not going to school because they cannot go for two weeks without earnings.
The total savings to the EI system for reinstating this waiting period for students was $10 million per year. The fund is showing a surplus of $500 million per month and the apprenticeship system has been gutted for the sake of $10 million per year. That kind of logic simply was not thought out well and should be reversed immediately.
Actually the building trades unions making this argument have a variety of good recommendations for how we can fix the EI system. One of the things they point to is that all the changes have not even kicked in yet. It will actually get worse in the next year. I guess in the government's mind it will get better because the surplus will be even bigger. One of the changes that will kick in next year is the clawback or the threshold people reach before their EI benefits are clawed back. It used to be $63,000 a year. Those making more than $63,000 a year would start losing their benefits. They would be clawed back. Everybody agreed that was fair, that anyone making $60,000 a year should not be collecting EI and should be able to put some money away.
With this set of changes it was reduced to $48,750. I guess we could argue whether or not that is fair. As of next year it will be $39,000. People making more than $39,000 will have their EI benefits clawed back.
I come from the building trades. A journey person might make $20 or $25 an hour. If they are lucky to get eight or nine months of work in, they might make $39,000 a year. Hopefully they will. However they still have three months without earnings. That $39,000 a year is not a huge amount of money. They are in a very high tax bracket. They do not get to keep the whole $39,000.
I argue that they should not penalized for collecting what is rightfully theirs for the three or four months they need it to span that period of unemployment. It is to everybody's benefit if we can keep people in those occupations during slow times so that they are available when the industry needs them the next spring. Otherwise they will find some other kind of work, leave town or move. It is as simple as that.
My main criticism of the opposition day motion is that I wish it went a lot further so that we could have a substantial debate about EI reform. I can only think the reason it was limited to such a narrow scope was that perhaps they were snookered by the government. Maybe there was some optimism that the Minister of Human Resources Development would see the logic in what they were saying and would announce today that the small weeks program is a good idea, is necessary, and that they should be maintaining it after November 15. Maybe that was the optimism which motivated the people who moved the opposition day motion.
In actual fact I think they have been hoodwinked. The Minister of Human Resources Development just stood and said that they were not interested in extending the small weeks program. He was not interested in jeopardizing the windfall of $7 billion a year that they pull out of the EI program.