Madam Speaker, I appreciate the concerns my NDP colleague has brought to the House. It is truly a very important issue that needs to be addressed by the government. We will go along and take some second thought on the amendment. I am not sure that it is an adequate response to the problem of the incomes of seasonal workers. I will relate some of the reservations I have about it. I acknowledge that it is an important issue and the member is to be commended for having raised it in the House this evening.
As was already said, it is a given that we have the reality of seasonal work in Canada. Certain businesses and industries in Canada have seasonal ups and downs regardless of the business cycle which means that fewer workers are needed at predictable times of the year. The result is that workers in those industries will apply for benefits at predictable times of the year on a repeated basis year after year.
Seasonal work is a reality in Canada, perhaps more so than in other countries because we have so many resource based industries compared to other countries around the world. As has been brought to our attention by the two previous speakers, the problem we have before us and the reason the motion is here today are because of the 1995 act and how it has affected seasonal workers. That is the reason we are debating this motion today. Seasonal workers are getting less in the way of benefits as a result of those changes to the unemployment insurance program introduced by the 1995 Employment Insurance Act.
The government member who spoke prior to me referred to the intensity rule which the act introduced. That rule in its first time coming into effect distinguishes between frequent and infrequent recipients of benefits under the EI program.
Frequent users of EI receive reduced benefits based on their previous use of the EI program. They are reduced by 1% when 20 weeks of benefits have been collected and may go as low as as 50%. They are not wiped out altogether but there is a significant 5% reduction depending on the frequency of previous claims. The lowest possible rate of 50% is in contrast with the standard rate of 55% for regular claimants. That has had an effect on real people, on Canadians, those who work in seasonal industries in Canada.
The 1998 EI monitoring and assessment report produced by the Department of Human Resources Development acknowledges that communities with high levels of seasonal employment were more likely to have industries that showed declining benefit levels.
What did the government intend to happen? What was the motive of the government in all of this? What did it hope to accomplish by means of this intensity rule?
It would seem that it hoped workers would move out of seasonal industries and seek employment in industries where they would be able to be employed year round. The reasoning is pretty simple. Since seasonal workers would get less in EI benefits, they would be in a position where they would seek employment that would not be seasonal, that it would have that effect upon them.
Seasonal workers are not doing anything different despite what the government assumed at that point. Unfortunately it did not have that effect on a wide scale. Most seasonal workers, at least during the time of the study that led to the 1998 monitoring report, said that the intensity rule would not affect their work patterns. That is their plain statement on the matter. When asked about their plans, they said that they had few employment opportunities outside of their existing seasonal jobs and that they would remain with their existing employment and continue to apply for EI despite the intensity rule.
There may be some different ways to deal with this but I do not believe we should go the route of what has been proposed today by my colleague from the NDP. There are arguments for leaving EI as it is if that is the only solution or proposal on the table.
First, Motion No. 222 would move EI away from pure insurance principles which the Reform Party supports for the employment insurance program. EI is supposed to protect workers against—and I underline it—the risk of “temporary involuntary unemployment”. The member who introduced this motion mentioned that, but I think we need to get the context here and underline that it is for those where there is risk and it is temporary and involuntary.
In the case of seasonal workers we are not talking about risk, will I or will I not. They well know that come that certain time of year, they will be laid off. There is that predictable pattern of unemployment. For this reason EI as an insurance program based on insurance principles is really compromised when workers come back year after year at the same time of year for benefits.
EI no longer functions as an insurance program, but rather it is a wealth distribution program. That is not to say that wealth distribution is not appropriate during a transition phase, but that is perhaps another debate for another day.
My point here is that the EI program as it was originally intended and as I quoted here would not be honouring true insurance principles if we used it to address the problem of seasonal workers.
The report of the Forget commission on UI stated on page 60: “Although it transfers money from the employed to the unemployed and to some degree from the rich to the poor, unemployment insurance is not a very effective income redistribution program”. There are other ways of doing it if that is our intent.
Second, Motion No. 222 would subsidize certain industries but not others. Companies that lay off workers at the same time every year have a huge benefit if those workers do not move away to find work elsewhere but stay in the area, collect EI and then are available to return to work when that work season begins again. This in effect means that such companies are being subsidized by the EI program.
If such companies were forced to pay higher premiums than other companies, then things might be fairer. Those companies might also be motivated to extend work seasons to avoid those higher premiums. That might be administratively difficult, I acknowledge.
Third is why we should stay as is as opposed to the motion of the member, unless there is some other proposal on the table. We do have an amendment to which we will have to give some thought and consideration. Some seasonal workers have not been as affected as regular workers by the 1995 changes. That needs to be brought to our attention.
Neither of the previous members made note of the fact that some seasonal workers have not been as affected as regular workers by the 1995 changes. In fact, the hours based system has actually helped some seasonal workers who work longer than the average hours per week, which is often the case with seasonal work. They work from sunup until sundown. They work long hours and they get lots of hours in over a short period of time. They are thus able to qualify for benefits in a shorter period of time. On the other hand non-seasonal workers who tend to work normal hours were not helped by the switch to the hours based system as some seasonal workers were.
Fourth, I would maintain the status quo or at least the present system as opposed to the motion under discussion here, because changing the rules for seasonal work might create an incentive for people to enter seasonal industries. We usually hear of the person who already has a seasonal job, but what about the person looking for a first job or looking to make a job switch? They might be more tempted to try to get a seasonal job than a long term employment option if they know that EI will supplement their income. Clearly we want some incentive in place that will make a person prefer the non-seasonal yearlong job. We need to have that in our EI program.
Can we affect seasonal patterns? I think to some extent we can over the course of time. Seasonal patterns themselves have changed over time. During the 1970s, seasonality in employment declined somewhat, primarily in the primary industries mainly due to the decline in the size of the agricultural sector relative to the rest of the economy.
Seasonal variability in unemployment has declined even more. In 1966 the difference between unemployment in the highest and lowest months was 46%. By 1980 the difference had declined to less than 26%.
We might ask how a government would go about affecting work patterns. One excellent proposal is that of experience rating. A fundamental reform which could help us is a proposal by Professor Jack Mintz contained in a taxation on business report. He talked about experience rating which relates to insurance premiums. This is used in the United States in cases where an insurance scheme penalizes those companies which lay people off more than the industry average. This is relevant to our situation today.
In a situation where there are many seasonal employees such as the forestry industry, a pulp and paper outfit which lays off more than the norm in that particular industry would see its premiums go up. This would create a disincentive to lay off people.
A couple of years ago I was struck by a situation in a Wal-Mart store in Maine. It hired a number of people before Christmas and then laid them off normally, but it hired people to do a variety of other things and kept them on in the long term.
We should pursue these types of possibilities in some of our other seasonal industries. It is doable. We need to use some creative minds in terms of our approach so that we go after experience rating as a possibility for seasonal workers.