Debates of June 1st, 1998

Supply

[The Speaker]

I am going to put him down as questionable here.

[Rob Anders, Reform, Calgary West, AB]

Mr. Speaker, I will tell the House what taxpayers expect. They expect they will get that money back. They expect they will not overpay and that they are rightly owed what they deserve. That means that the government should be giving that money back to them rather than taking it out of their pockets and that EI premiums should be cut.

I can talk about regressive mathematics. It is paying a half million dollars a year for every section 45 appeal to try to let a murderer walk free. Regressive mathematics is giving money to crown corporations when they are cutting money in the Canada health and social transfer for education. Regressive mathematics is sending money overseas and giving it as foreign aid and funding dictators when they are cutting money to the Canada health and social transfer for health care. Regressive mathematics is giving out corporate welfare subsidies and grants to corporations when they are cutting seniors benefits and the old age security. That is what is regressive mathematics, and the Liberals should be ashamed.

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, I have a few comments as well as a question or two for my colleague. I am intrigued with this idea of the surplus. They keep saying that we have to have this surplus.

If we have a surplus it means that the money will be accumulating somewhere. The fact of the matter is that it is simply going into the general revenues of the government. That is a fact. We have it right from its documents.

I am very curious about the fact that the employers and employees are paying this money. If it really were a surplus, if there really were a separate fund and even if they use it to reduce the indebtedness, should they, to be honest and fair to the employers and employees, use it as a loan from them to pay off other debts and attribute the interest?

I am not terribly good at math. I just did it for 31 years. That is all. If we have an accumulated surplus of $15 billion and we assume a nominal rate of 6%, it would provide $900 million in surplus, almost a billion dollars a year in interest alone. This is money that has been taken from employers and employees and applied toward the debt. There is no accountability. There is no answering for it at all.

I would like my colleague to comment on that. I would also like him to comment a bit on something that is Reform Party policy. We would like to rationalize employment insurance funds and personalize them. Again I have done a few calculations. If we take the maximum members are paying, employers and employees together, it comes to $210 a month over the year.

I ask my colleague to take these numbers at face value and we can do the arithmetic together later. That money accumulates. If it were put into an individual fund it would give an incentive to an unemployed person to top up his or her income with as much part time employment as possible, whereas with the present scheme they get nothing. It would also permit the person to look very hard for a job because he would be using his own money instead of somebody else's money when he is unemployed. In the event that he is able to go through life without being unemployed, it could add to his retirement income.

At a nominal 6% if he were to pay for 10 years before asking for a benefit it could give him a benefit of $685 a week for a whole year, way more than we get under the present insurance plan. But the money would be his besides. If he were to use it for retirement it could give a retirement benefit of $346 per week in perpetuity without ever touching the $300,000 which has been accumulated with interest.

That to me would be a very creative scheme to solve the unemployment insurance and also put a lot of money into the hands of the people who earned it instead of just having the government taking it away from them.

[Rob Anders, Reform, Calgary West, AB]

Mr. Speaker, those are some good ideas. I sit day in and day out on the human resources development committee that decides some of these things, or at least we like to pretend we do. I think some of those ideas should be considered.

This would be a system whereby people feel they have real ownership of their plan, where they know that the government is not going to abscond with the money and do with it as it pleases, a system whereby they have a real sense of ownership and a sense of pride and an ability to put more in if they like and an ability to have it roll over and become part of their retirement income. I think those ideas are bang on. I wish we could make the changes necessary to do that.

I see government members across the way who sit on the HRD committee as well. I hope they give those ideas consideration. Money right now is going toward employment insurance. Students and some self-employed Canadians have no ability to collect on the fund. With the high premiums that are charged to everybody else there is little likelihood they are ever going to see back in a given province or a territory the type of money they have put into it. If they had the ability to put that money into their own type of fund and therefore draw out what they needed when times are tough, whatever surplus was left, whether it is $300,000 or more, with they would be able to roll that over into a pension fund. Would that not be impressive?

It would be a great incentive for them to want to make sure they maintain the funds in their own private fund. It would give them a real nest egg for retirement, something totally unlike what we have with the Canada pension plan.

Chile has a plan where people feel they have a sense of ownership. They brag about the benefits of that plan.

[The Speaker]

I know the hon. member has more to add but the time has run out.

It has been pointed out to me that I mentioned that the member for Ottawa Centre was questionable. I did not mean that he was questionable. I meant that he was questioning some of the statements made. I hope he will accept my apologies

We will now hear from the member for Bourassa. I would like to ask him if he will be sharing his time with another member.

[Denis Coderre, Liberal, Bourassa, QC]

Mr. Speaker, I will be sharing my time with the member for Oak Ridges.

I am pleased to rise today to speak to the motion before us.

I think this motion is another example of the attitude of the member and his colleagues from his party who are trying to demolish the progressive legislation that our government put in place during its first mandate.

We have listened to Canadians. The Government of Canada has modified the outdated unemployment insurance program to adapt it to the new realities of the job market. After two years of consultations, we have fulfilled the wishes expressed by Canadians in that regard.

We have created a forward looking employment insurance program that is more flexible, that meets the needs of a greater number of workers and—I really want to stress this last point—that is self-sustaining.

The main purpose of the new employment insurance program is to help all unemployed Canadians, regardless of where they live, to go back to work, and that includes Quebeckers from the member's riding. The government is very pleased to have been able to help more than 3,100 residents of the riding of Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques to find jobs since 1993.

With employment insurance, we have put in place a system that is more fair and equitable. We wanted to put an end to the vicious circle of dependency encouraged by the previous system. The employment insurance program is better equipped to create jobs in regions where unemployment is high.

Our employment insurance system strikes a balance between providing workers who lose their job the income support they need, and giving them the means to return to work.

For example, the system is specifically geared to workers who are entitled to the family income supplement, which helps low income claimants with children. For these people, this supplement is more than double the weekly benefit supplement that they used to receive under the old system.

Moreover, the employment insurance system sets at $50 the minimum amount of eligible supplementary earnings, thus allowing low income claimants to increase their employment income without having their employment insurance benefits cut. Those who are entitled to the family income supplement are exempt from the intensity rule. Moreover, the system pays back the employment insurance contributions made by those who earn less than $2,000 a year.

The employment insurance system is not only compassionate, it is also well thought out. For example, by determining eligibility based on the number of hours worked instead of the weeks of employment, the system is more fair and gives greater consideration to the realities of the current labour market.

It is true that people must work for a reasonable period of time before qualifying for benefits, but this is only reasonable. Again, the system is compassionate towards those who did not work long enough to receive benefits. The new system provides better support than did the old one.

For example, any person who collected ordinary benefits in the past three years can benefit from active re-employment measures. The same goes for those who collected maternity or parental benefits during the last five years, and who left the workforce to take care of a child.

These active re-employment measures give unemployed workers an opportunity to gain the skills and experience necessary to find a job. We are helping, among others, up to 45% of provincial welfare recipients.

In his motion, the hon. member claims that employment insurance treats women unfairly. I do not know where he got this idea. The system is far from unfair to women, quite the contrary.

Since the employment insurance plan has been implemented, part time workers, a number of whom are women, are not limited to 14 hours a week jobs like they used to be. Does the hon. member realize that the plan now covers about 270,000 women who were not eligible under the former unemployment insurance plan? Does he realize that nearly 70% of recipients—I must be touching a nerve, because members opposite are hollering—who get the family income supplement are women, and that nearly 700,000 women who work part time will have their contributions reimbursed?

More important, contrary to measures promoted by the Bloc Quebecois, we are well on our way to helping women re-enter the labour market through active employment measures and job creation projects. Any reasonable person will admit that putting people back to work is better that keeping them on benefits for a longer period of time.

The hon. member is worrying about the impact of employment insurance on young people. Let me tell you that young people today would agree that developing their full intellectual potential is crucial if they are to get a well paid job in today's knowledge based economy.

It is a fact that eligibility criteria have been made more stringent for newcomers on the labour market, but the intent is not to penalize young people. Quite the contrary, studies have proven that too easy an access to the former unemployment insurance plan was an incentive to drop out of school for small short term jobs followed by dependency on benefits.

Is that what the hon. member wants? I am sure his constituents will be happy to hear that. The government does not think it is a good idea to encourage young people to become dependent on benefits. Our goal is to encourage them to stay in school as long as they can and then help them make the often difficult transition from school to the labour market.

The hon. member of the Bloc Quebecois and his colleagues should know that the new employment insurance plan is very advantageous for seasonal workers. Many of them work long hours and are therefore at an advantage under the new system, which is based on the number of hours worked. I repeat: many seasonal workers work long hours and are therefore very much at an advantage under the new system, which is based on the number of hours worked.

If the Bloc Quebecois had its way, it would revert to the old unemployment insurance system, that passive system that Canadians, including Quebeckers, rejected as outdated. We will not do that.

We look toward the future and the future has already begun. The Government of Canada and the Government of Quebec signed a labour market development agreement under which we will invest $2.7 billion in the next five years. The province will be able to develop and manage programs specifically tailored to the needs of Quebeckers.

But, as usual, for the Bloc Quebecois, there is nothing good and bad things are our fault.

However we are ready for the future and the employment insurance program has a role to play in that future, even though the members of the Bloc refuse to admit it.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC]

Mr. Speaker, I have seldom seen such a demagogic exercise as the one we have just witnessed.

In studies paid for by the department and conducted by an economist chosen by the department, to assess the 1994 reform, we find the following:

Just like workers in provinces or industries where unemployment is high, in particular the Atlantic provinces and to a certain extent the province of Quebec, primary industries and the construction sector are much more likely to lose jobs. Any worker chosen at random from these provinces or these industries could expect to lose a lot more weeks of benefits than a worker in any other region of Canada, under Bill C-17.

For instance, a fish plant worker and a forestry worker both received an average of 25 weeks of benefits before the new system came into force. Since the reform, that number has fallen to 20, which means that Bill C-17 has had a disproportionate impact on the provinces and the industries that need this insurance program the most.

The system the Liberals have set up was highly and vehemently criticized by none other that the current Prime Minister, a few months before the last general election.

What does the hon. member for Bourassa have to say to all these experts who state that the employment insurance reform acts more or less like a tunnel leading to social welfare?

[Denis Coderre, Liberal, Bourassa, QC]

Mr. Speaker, if the separatists were serious, they would remember there was a consensus in Quebec to bring about major reforms in the old unemployment insurance program.

This is strange, because the separatists are advocating the same philosophy of active measures to put people back to work, but this time on the welfare issue. They proposed a welfare reform based on need. This is what we have done in fact.

The important thing is for people to get back into the workforce. I do not want a society that relies solely and constantly on these benefits. I want to find active measures for women, for seasonal workers and for young people to put them back to work.

What the members of the Bloc Quebecois want is to live like in the good old system. It is clear that they are totally out of touch with reality. This is not what Quebeckers want. They want active employment measures and this is what the minister has done.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Speaker, my colleague talks about people who are out of touch with reality.

What about the current Prime Minister who, when he was in the opposition in 1993, said that, instead of dealing with the roots of the problem, the Conservatives were attacking the unemployed? What happened to the hon. member's Prime Minister? Can he explain this to me, without looking for all kinds of excuses? Let him tell the truth. What happened to the hon. member's Prime Minister?

[Denis Coderre, Liberal, Bourassa, QC]

Mr. Speaker, a majority of 9,000 people gave me this seat because I was telling the truth. I am very happy to be a member of this political party.

I will remind my dear friend opposite that, when we came into office, with the huge deficit we inherited, and when I see what deficit the NDP had, for example in Ontario, when that party was in power, I do not need the hon. member's advice on the definition of truth or the definition of management.

It is clear that we did our homework, that we took adequate economic measures. There is never a perfect system, but I can tell you this: 700,000 more workers benefited from it. The people in my riding are very happy. In the riding of Kamouraska, 3,100 more people are benefiting from the new measures and this is what is important.

[The Speaker]

Before resuming debate, I would like to remind you that questions and answers should always be put through the Chair.

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Mr. Speaker, I appreciate the opportunity to participate in today's debate. There are a few clarifications I would like to make with respect to this motion as its wording places a negative connotation on the government's approach to employment insurance.

First I would like to put this topic in some context of the government's overall fiscal management and deficit reduction strategy. When the government took office in 1993, it recognized that the key to a prosperous future for Canadians was getting Canada's books in order.

Thanks to the government's determined and balanced approach, the vicious cycle of high deficits, high interest rates and slow economic growth was transformed into a virtuous cycle where lower deficits have helped produce lower interest rates leading to higher economic growth and lower unemployment and leading ultimately to the elimination of the deficit last year.

Hon. members are aware that the deficit is now dead. It is dead for 1997-98, 1998-99 and 1999-2000. This is the first time Canada has had a balanced budget in 30 years. This will be the first time in almost 50 years that the Canadian government will have had three consecutive balanced budgets.

Canada I am pleased to report in the current economic cycle has had the first balanced budget of any G-7 nation. In addition, the debt to GDP ratio fell last year, the first meaningful decline in 20 years. Again it will fall even more.

We have also pursued budgets of balance, budgets that recognize the need to continue to make key economic and social investments even with demands of fiscal constraint. Over the last four years we have invested in children by enriching the child tax benefit. We have improved tax assistance for the disabled and for charities. We have provided more help for post-secondary students and for those supporting them. We have placed a high priority on improving Canadian health care.

As the books improved, one of our first and most significant initiatives was to introduce legislation to increase the Canada health and social transfer cash floor from $11 billion to $12.5 billion. This will provide provinces with over $7 billion more in cash from 1997-98 to 2002-03.

Now with the deficit millstone gone, we can afford to take even stronger action to help Canadians meet the challenges they face and take advantage of the opportunities of tomorrow. We will do this by pursuing and pushing the balanced strategy we have followed since coming to office, to build a strong economy and a secure future.

First, we remain committed to responsible management of the nation's finances. We will reduce Canada's debt burden to a two front strategy of stronger economic growth and a debt repayment plan.

Second, the improvement in our finances means we can make strategic investments such as the Canadian opportunities strategy. This strategy will improve access to knowledge and skills Canadians will need in the 21st century.

Third, the 1998 budget launches the process of general tax relief starting with those who need it most.

Over the next three years $7 billion in tax savings is being provided primarily to low and middle income Canadians. These measures must be modest in the beginning because the fiscal dividend that makes them possible is modest as well.

The government has made it clear though that it will not allow unsustainable tax reductions to put in jeopardy either Canada's regard for fiscal health or delivery on the country's priorities such as health care and education. As the fiscal situation improves and the debt becomes more manageable relative to the growth of the economy, the amount of resources that can be channelled into other areas, such as increased tax relief, will grow.

This brings me to the subject at hand, employment insurance. As hon. members know, employment insurance first and foremost is an insurance system to help the unemployed bridge the gap between jobs. I can assure the House that our government has no intention of breaking that very important link.

Some of our critics have suggested, and quite wrongfully, that the government is being too prudent and is hiding surpluses that could be used now for other purposes like lower taxes and in particular the tax that supports EI. This is simply not the case.

There is no denying that the EI account has a material impact on the government's fiscal health and stability. The annual surpluses in the EI account have contributed significantly to achieving the fiscal targets over the last four years. However, we should also remember that the government's improved fiscal outlook has a positive impact on employment and the EI account. The decline in the unemployment rate from 11.2% in 1993 to 8.4% at present makes that clear.

Look at what else has been happening. The government has lowered the EI rate four times, from $3.07 in 1994 to $2.70 in 1998. We would like to reduce the EI premiums further but the premium rate must be set to ensure that the EI account will have sufficient funds to pay benefits even during a recession.

In the event of an economic downturn a major increase in EI premiums would be harmful to the economy, as I think the members opposite would agree, and to Canadian workers. Clearly we must avoid that at all costs.

The premium rate will continue to come down but in a balanced manner and in the way to meet all the priorities indicated to us by Canadians, for example, personal tax cuts and health care spending.

I will return once more to the word balanced. Canadians asked for a balanced approach and that is what this government is giving them. We have reduced both the debt and tax burden and increased our spending priorities such as on health care. The fact is that the EI premiums are part of what makes the balanced approach work.

This is not to say that we are not reducing the EI premiums because we are. For 1998 alone, we cut premiums by $1.4 billion. I have just indicated that we will continue to reduce them in a measured way in the future. To those who would say we should cut them faster and deeper than we are already doing, my question would be how? By not cutting the debt? By not reducing taxes? By not spending on health care? I do not think that is what Canadians want.

I should remind hon. members that the EI surplus is currently in the range recommended by the chief actuary of Canada. Let me provide the House with three important facts on which to reflect. The EI premium rate must ensure there is sufficient revenue each business cycle to pay EI costs at relatively stable rates. The current surplus makes prudent provision against rate hikes in the event of unforeseen economic and global changes. It also allows the government to address unemployment where it is most severe.

For example, similar in concept to the 1997-98 new hires programs, the 1998 budget gives employers who hire young Canadians in 1999 and 2000 an EI premium holiday. We must also remember that just a few years ago the federal government deficit was $42 billion. At that time the government looked at all aspects of the fiscal situation and there was no denying the EI surpluses played a role in restoring fiscal health. This was not done in isolation however and contemplated other difficult decisions.

The motion put forward by my colleagues opposite uses phrases such as “catastrophic effects”, “taking over funds destined for unemployed persons” and the government not adapting “to the new realities of the labour market”. I do not believe this is the case.

Canadians and the government and no one else will make the economic and policy decisions for this nation. We have regained control of our fiscal future. By regaining control over the finances, we are setting out a plan to help all Canadians gain access to the tools of tomorrow's success.

I believe we have taken a balanced approach on this issue.

[Yvan Bernier, Bloc, Bonaventure—Gaspé—Îles-De-La-Madeleine—Pabok, QC]

Mr. Speaker, I listened to the hon. member's speech. I must say that some parts surprised me; however, I can see that other members want to ask questions so I will be very brief.

In his speech, the hon. member opposite said that he was glad that some premium money was retained, that everything was not redistributed. He talked a lot about the fact that the government balanced its books, but when it comes to the employment insurance fund he is glad that it is not balanced, that there is more money coming in than going out. He said he was pleased about that and hoped that there would be enough money in the fund to face the next recession.

I would like to ask the hon. member whether he knows that the Minister of Finance has already used the surplus to pay down the deficit, and that, therefore, his dream of being prepared for the next recession is not likely to come true? If this is what he wants, is he ready to side with the Bloc Quebecois and vote in favour of the private members' bills we have introduced to establish an employment insurance fund that would not be part of general revenue?

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Mr. Speaker, it is clear that in my comments I have indicated that the government is taking a balanced approach. It is very clear that the government has to make prudent fiscal decisions.

Clearly there is no question that in having that money set aside, if there is a recession in the future, and we of course hope there is not, we need to be prepared. The member seems to forget the fact that this government has reduced EI premiums continually over four years. There is no question that EI is used as a bridge between people who are unemployed and their next job. I believe the government's strategy is taking a very clear approach, one which will benefit all concerned.

There is no question that I cannot support the Bloc's position because I think the government strategy is one that has been working. It is one which will prove certainly in the short and long term to be the right approach.

[Grant McNally, Reform, Dewdney—Alouette, BC]

Mr. Speaker, I would like to set the record straight quickly as I know there are others who would like to speak. I would like to talk to some of the information which my hon. colleague provided with regard to things such as the balanced budget, debt repayment plan and a few other things such as comments he made regarding the EI fund.

My colleague said that the government is taking credit for a balanced budget. We applaud that and we think that is very good. But we also want to make note that this was done by Canadians and the rate of taxes they have paid. There have been a number of increases in taxes made by this Liberal government. The credit should go where it is deserved and that is to Canadian taxpayers.

[An hon. member]

Name them.

[Grant McNally, Reform, Dewdney—Alouette, BC]

My hon. colleague would like me to name them. I do not have enough time in this brief period to name the numerous, over 30, taxes that have been applied by this government since 1993.

This government also talks about being the defender of health care which I find quite incredible. There have been over $7 billion in cuts to health care and education through the CHST.

I would also like to point out to my hon. colleague the fact that the debt repayment plan he mentioned is a contingency fund that the finance minister has said would be used only if money is available. That is not a concrete plan for debt repayment. The debt has not been decreased as my hon. colleague may have alluded to.

I would also like to ask my colleague about the $15 billion surplus. That would seem to indicate to me that the premiums are in fact too high and could be reduced. I would like to ask him a question regarding a comment made by his own finance minister when he was in opposition and said that high EI premiums are a cancer to job creation. I want to ask the hon. member if he agrees with his own finance minister. Yes or no?

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Mr. Speaker, if on this side of the House we walked on water the opposition would say “why can't you swim”. It seems we continually hear from the other side that it could do it better. I think we are demonstrating that we are doing it better. I agree with the finance minister because obviously this government has taken the approach in the last four years of reducing EI premiums continually, which had not been the case previously.

Of course it was a partnership. There is no question that Canadians as a whole worked very hard to make sure we were able to reduce this deficit. It is now that the government through the fiscal dividend is able to share, in particular in health care. The national round table on health said that the government allocation of dollars was right on. I think the approach we have taken is the correct one.

[The Speaker]

The hon. member for Saint-Jean. Is he going to share his time?

[Claude Bachand, Bloc, Saint-Jean, QC]

Mr. Speaker, I will be splitting my time with my hon. colleague from Mercier.

I have found this afternoon most interesting, one of the questions from my hon. colleague from Acadie—Bathurst in particular. He asked one of our colleagues on the other side “Exactly what could have bitten you to make you end up in such a situation?”

In a few minutes I will refer to the letter from the current Prime Minister, then Leader of the Opposition. I think that what bit the Liberals was the forgetfulness bug. In other words, they have forgotten their past. They have lost their past history.

Not only is this party, which often pats itself on the back for its liberal values of openness and solidarity, proposing a bill like this one, but its entire policy leads us to believe that it is exactly the opposite.

The one with the most serious case of amnesia of all is probably the former Leader of the Opposition, the current Prime Minister. I refer to a letter he sent in 1993. This afternoon I heard reference to it, but I think it would be very important to quote the entire letter and to comment on it, in order to have a look at the situation the Liberals are in today. They have completely forgotten their past, their values of solidarity, the position they took at that time with respect to the matter we are dealing with now.

My first quote from the letter by the current Prime Minister, then Leader of the Opposition, is the following:

Yet the Minister of Finance

<—the Conservative finance minister at the time—

says that not only will he reintroduce the same taxation, monetary and trade policies—-but he will reduce government expenditures at the expense of the unemployed.

It was the Leader of the Opposition at that time, now the Prime Minister, who sponsored the measure we have before us today, employment insurance reform, and who put people in the mess they are now in. The current Prime Minister is the one who said that back then.

What about now? The basic problem is not being addressed. Instead the unemployed are being hit hard. Their benefits are being reduced, and they are having trouble qualifying for employment insurance.

In passing I would like to get back to what my colleague who spoke before me said about the importance of balancing the budget, the importance of a zero deficit. How was it achieved? First by slashing transfers to the provinces to the tune last year of $1.4 billion in Quebec alone, and on the back of the unemployed. Exactly the opposite of what the former opposition leader used to say.

I will read some more of the letter:

These measures fill Liberals with consternation.

Where is their consternation today? I listened to every Liberal speech made this afternoon in support of the Prime Minister and his cabinet. What happened to their consternation? In those days they were filled with consternation at the thought the unemployed were going to be harmed, but today they are doing even worse than the previous government.

I will quote some more:

By reducing benefits and penalizing more those who willingly leave their jobs, the government obviously does not care about the victims of the economic crisis. Instead of dealing with the root of the problem, the government goes after the unemployed. These measures will have disturbing effects as they will prevent workers from reporting cases of harassment and unacceptable working conditions.

What is going to happen now? Will workers faced with unacceptable conditions dare say “We are going to have to quit our job?” Will women who are harassed be able to say “I am going to quit my job, I am going to try to find something else, but in the meantime I can rely on the social safety net”?

No, and the statistics are here to prove it; nobody will contest them. Only 41% of unemployed workers qualify for employment insurance, half of them are forgotten. When it comes to young people this rate drops to 26%. And yet all we have heard so far is that young people should stay in school.

On the other hand, the young guy or girl who gets a job to put himself or herself through school starts contributing to the employment insurance plan from the first cent earned, the first hour worked. These young people contribute to the plan but cannot benefit from it.

I find absolutely deplorable all the remarks I have heard there this afternoon. The letter from the current Prime Minister and former leader of the opposition reads further:

In my opinion, it is unacceptable for the people of Canada to continue in this disastrous direction and further penalize the victims of this recession.

Not only did this government go further than the previous one, but I think it has gone much further in terms of the unfair conditions imposed on the unemployed.

We are being criticized for this great disaster, for being disaster stricken. They say we only talk of disasters. Given the statistics I just gave you, in a region like the one represented by my colleague, where nearly 40% of the population is unemployed, it is a disaster.

This minister would better drop the function and technocratic approach and come in ridings to see what it is like in the field, because my colleagues and I know how it is, and it is disastrous.

Whether our colleagues opposite like it or not, facts are what matter to us. That is why I have looked at questions in terms of the concept of reality this afternoon. It is as if these people were completely out of touch with reality and just follow the minister's lead or that of their Prime Minister and not consider the motion before us.

Bloc Quebecois members are not the only ones who happen to think this is outright theft, and that the victims end up paying the price. The premiers of Alberta and Ontario have said that this is nothing short of theft, and you can hardly suggest these people are out of touch with reality. They support our motion. People from all walks of life are behind the Bloc Quebecois on this motion.

And what about the unanimous support of the Assemblée nationale? Are there not Liberal members of the Assemblée nationale who are part of the great Liberal family and who claim to share fundamental values of solidarity? It may be true in Quebec, but it is certainly not the case in this House.

The government acts alone; it does not give a hoot about the victims and imposes its decisions. And then it brags about having a zero deficit this year and in the coming years. It should be said that the government achieved this at the expense of the unemployed and of provincial transfers.

I would like to remind the Liberal Party of the compassionate values it has always stood for. It should govern itself accordingly today. If this plan is a safety net, and if wealth redistribution is important, let the government turn to the wealthy, to the banks and the big corporations, and not to those who are on employment insurance because their region has been devastated by the lack of jobs.

The government should come to its senses, have some compassion and uphold the values it has always advocated. I therefore ask the government to support the motion put forward by my colleague, which is before us today.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Speaker, the hon. member aptly described the problem with employment insurance and how it affects people in his area.

Many who are listening to us on television today realize that I am frustrated. My frustration stems from the fact that there is real problem when, every day, we see in our riding families and children who are suffering because of the changes to employment insurance. In 1993, the Liberals promised they would not change the system.

We often hear from the other side that employment insurance leads to dependency, that it deters young people from trying to find work. Back home, it does not deter young people from working. The problem is that when they do not find work, they are forced to go on welfare.

Do you have the same problem in your area? Do people have to go on welfare, instead of collecting employment insurance and preserving a minimum of dignity?

[Claude Bachand, Bloc, Saint-Jean, QC]

Mr. Speaker, I want to thank my colleague from Acadie—Bathurst for his question. He mentions a problem that is indeed omnipresent.

I said that the Liberal government has been bragging about eliminating the deficit and getting it quickly to zero, but not only did it do it at the expense of the unemployed, it did it by slashing the transfers to the provinces. In fact, transfers to the province of Quebec has been reduced by $1.4 billion. That includes transfers for health, social assistance services and post-secondary education.

Right now, when workers are unable to qualify for unemployment insurance, they end up on welfare and it is up to the provinces to take care of them.

Not only has the government cut the transfers, not only is it making the unemployed pay, but it is also pushing people toward social welfare and saddling the provinces with the problem.

With a $16 billion surplus over two years, the solution to the problem we are currently facing is quite simple. We are not asking for a revolutionary solution. We only want to improve the system, to ensure that workers in regions like the Gaspé area my colleague represents can more easily become eligible. These regions need this insurance program and it is important that we do it this way.

The other solution would be to reduce the unemployment insurance premiums, as we have always heard it mentioned. A decrease of 10 cents would create up to 30,000 jobs.

These are the two solutions: improve the system for those who need it, who need a social security system, and reduce the unemployment insurance premiums to create jobs and get people back to work.

[Ghislain Lebel, Bloc, Chambly, QC]

Mr. Speaker, I have a question for my distinguished colleague from Saint-Jean regarding the fiduciary role that the federal government has when it collects money from workers and employers and has the authority, at least morally if not legally, to distribute that money to those who paid it. It is still employment insurance.

Professional associations all have a trust account and, despite the loftiest of intentions, if we take money from a trust account and use it for other things than what it was intended for, just like the federal government is doing, if we use it to pay for groceries and other things instead of using it for its original purpose, can this not be challenged before the courts, as some people are beginning to suggest? I would like my colleague to clarify that for us since I missed that in his speech.

[Claude Bachand, Bloc, Saint-Jean, QC]

Mr. Speaker, I am glad my colleague raised this question. He missed that in my speech for the very good reason that I did not talk about it, but I thank him for giving me the opportunity to do so now.

It is true that the auditor general has proposed that the money be put into a trust account and be used to help those people who need it. I remind you of a question I asked and a point I raised earlier. What we have here is an indirect tax. People pay provincial taxes and federal taxes, and every week there is an indirect tax on their paycheque. This tax is not used to help people. For the last two years, it has been used to eliminate the government's deficit.

I think my colleague has made an excellent suggestion. A trust account is indeed what we need.

[Francine Lalonde, Bloc, Mercier, QC]

Mr. Speaker, I in turn would urge all members of the House to support the Bloc Quebecois motion. I will reread the major elements:

—castigate the government for the catastrophic effects of its reforms to unemployment insurance—

Nobody can deny the catastrophic effects.

—for having taken over funds destined for unemployed persons—

That is what I am going to take a closer look at, and nobody can deny that either.

—and for its inability to adapt the unemployment insurance system to the new realities of the labour market.

No argument here either.

—particularly where young people, women, and self-employed persons are concerned.

There is one aspect of the present situation that can only be described as scandalous, and I am choosing my words carefully. That is the fact that the now $15 billion surplus—around December, it was estimated at $12 or $13 billion—came about, as my colleagues and I have pointed out, and many people have added their voices to ours over the years, because the government cut benefits to unemployed workers, but also because it continued to levy a payroll tax that, let us be honest, is expensive.

The minister says he has reduced EI premiums to $2.70 for 1998. But what members should know is that the department's senior actuary said that the present regime is costing only about $2. That is the truth.

What does the Bloc Quebecois say? We say that the government can have a surplus to cover the unforeseen. It does not have to be so high, because, as it is now, the system is so weakened that the fund will never be used up. It is like a bottomless pit.

Although the fund stood at $12 billion when the government brought down its budget in the spring, members should know that it had planned a surplus of at least $6 billion. If half of this $6 billion were used to lower premiums and the other half to improve the system, so that more young people, women and seasonal workers were eligible, the system would make more sense and be better adapted.

The workers paying EI premiums, because this is the important point, are those earning up to $39,000. This is the main point. Above $39,000, workers no longer pay EI premiums. Why is it that people who work overtime, those who make higher salaries or who are not in danger of being forced to use employment insurance do not pay for what we call economic stabilization?

Employment insurance is not a welfare system, but an instrument of economic stabilization. What is the finance minister doing? He is changing it into another welfare system, but with the difference that it is funded by middle income workers. This is out of the ordinary.

The second element is that businesses are paying. Businesses that pay their employees less than $39,000 are mostly small businesses. A small business employee will seldom earn more than $39,000, except perhaps a few management people. This means that on these $39,000, the tax paid by the business is 1.4 times the one paid by the employee. Small businesses do not pay this with their profits, but with their revenues.

This means we are in an absurd economic situation in a country that wonders why its productivity is low and the unemployment rate is too high, where workers who earn up to $39,000, not the others, pay once again to reduce the deficit and to restore a bit a social solidarity in Canada.

The Minister of Finance was saying “We reduced taxes for 83% of Canadians and eliminated them for 400,000 people”. But what he is saying? He is saying that the government did so with money paid mainly by small businesses and by workers earning less than $39,000. This is redistributing poverty, to a certain extent. It is clear that this makes no economic or social sense. I would be inclined to say this makes no political sense.