moved that Bill C-299, an act to amend the Employment Insurance Act, 1997 (premiums and Employment Insurance Account) be read the second time and referred to a committee.
Mr. Speaker, I am pleased to address Bill C-299, an act to amend the Employment Insurance Act as regards the premium rate setting and the employment insurance account, which was tabled in this House in December 1997.
Let me first remind members of the context in which this bill was introduced, along with five other bills on employment insurance that were introduced by Bloc Quebecois members, namely the hon. members for Frontenac—Mégantic, Hochelaga—Maisonneuve, Québec, Repentigny, and Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques.
Since 1990, the federal government has imposed four employment insurance reforms to fight the deficit. The federal obsession with the elimination of the deficit at any cost was prevalent under both the Conservatives and the Liberals. With each of these reforms, the government changed the rules with the obvious goals of excluding claimants, of reducing the amount of benefits, and of shortening the period during which these benefits are paid.
It can, therefore, be stated clearly and unequivocally that the deficit is being overcome at the expense of the unemployed. Even if the federal budget is balanced, moreover, the government is sticking with the same policies and showing no hesitation in o misappropriating the surplus in the fund for its own use.
Ten years ago, in 1989 before these reforms were introduced, four out of five unemployed people were entitled to benefits. A drop from 80% to 20% may well be impressive, but mostly it is disgusting, that now two out of five unemployed people draw benefits. At the same time, the government is getting its hands on the sizeable surplus in the employment insurance fund. At the moment, this surplus is estimated at close to $20 billion, and it is expected to exceed $25 billion by the end of 1999. I will come back to the matter of the surplus later on in my speech.
Bill C-299 was therefore introduced in December of 1997, in order to improve two aspects of employment insurance, the setting of contribution rates and the employment insurance account. The first clause therefore addresses the way decisions are made on premium levels. At present, it is the governor in council who does so, on the recommendation of the Minister of Human Resources Development. Judging from past experience, hon. members will agree with me that this is not very reassuring.
Going back over the events of last fall, we had to keep on asking questions of the two ministers until December, before finding out what would be happening to the contribution rate in the coming year.
How is it the government has so much power to determine contribution levels, when, since 1990, it has not contributed a cent to the employment insurance fund?
The money in this fund comes entirely from workers and employers. It is absurd that they have no say in contribution levels and have no choice but to pay, without a word, but smiling all the while.
Therefore the amendment we propose to clause 1 of our bill is intended to give full powers to the Employment Insurance Commission to establish contributions. It must be said that this commission is tripartite and comprises representatives of employers, workers and the government. Initially, the commission would have the power to establish levels of contributions.
To make the process more transparent, since at the moment it is particularly obscure, Bill C-299 provides that every two years the Commission will hold at least one session to hear the observations of parties interested in making their opinions on the establishment of contribution levels known.
Within 60 days of the session, the commission must publish an opinion in at least five major francophone papers and five major anglophone papers.
This bill therefore makes the process much more transparent and much more democratic, because it will enable interested members of the public and organizations to have their observations on contribution rates heard.
This provision gives power back to those who should have it: the contributors, employees and employers. This is all the more important because the government is using the premiums as it pleases.
The premiums paid by workers are currently set at $2.55 per $100, while those paid by the employers are at $3.57. Of that $6.12, the government is spending $1.28 for purposes not related to employment insurance.
This looks a lot more like a tax on employment than an insurance in case of a loss of employment. The government is deliberately altering the basic purpose of the employment insurance fund. This type of behaviour is not acceptable in a country that prides itself on being the best in the world.
The second part of the bill seeks to separate the employment insurance account from the government operations account.
This is why clause 2 of Bill C-299 provides that:
—on September 1, in each and every, there shall be credited to the employment insurance account and charged to the consolidated revenue fund an amount equal to the amount calculated in accordance with the following formula:
A - B
Members will no doubt want to know what A and B stand for.
—where A represents all amounts paid into the consolidated revenue fund or obtained by it pursuant to this act in the preceding financial year; and
B represents the total amounts used by the consolidated revenue fund to meet its obligations under this act that have been credited to the employment insurance account in the preceding financial year.
The result of this amendment would be that, on September 1 of each year, we would know exactly where we stood with the EI fund.
Right now, even though these surpluses are close to $20 billion for 1998, they could be said to be virtual, because they are part of the consolidated revenue fund.
Amending the legislation in this manner would create a separate account for the EI fund. This surplus should obviously be used exclusively for the purpose of administering the EI regime.
What is so shocking right now is that the EI surplus is melting away like snow on a warm day, particularly when we recall the repeated assurances of the Minister of Finance that the EI surpluses were a good thing because they represented a hedge against periods of lower employment.
The discrepancy between what the Minister of Finance says and what he does is very troubling. In 1997, 64% of premiums paid into the EI fund went towards paying benefits to unemployed workers. The remaining 36%, approximately $7 billion, was used by the Minister of Finance to eliminate the deficit, pay down the debt and finance the federal government's forays onto provincial turf. According to the 1999 budget, the Minister of Finance will be helping himself to $5 billion from the fund.
Since 1993, employers and employees, the only contributors to this fund, have paid the government's share, have wiped out the $6 billion deficit in the fund, and have built up the surplus of $20 billion. It is clear that the government does not want to change the rules of the game one iota, because the employment insurance fund is a real milk cow for the Minister of Finance.
He has done away with the deficit with the money of the workers and employers, and has started to pay down the debt. He is also using these funds to interfere in education via the millennium scholarships, which have been criticized by Quebec, and is using it as well to interfere in the health system of Quebec and the other provinces. These costly duplications have been funded with this money.
This, then, is the context that justifies Bill C-299. The employment insurance program is based on a consensus among the population that everyone needs to be assured of a decent income when temporarily out of work. This is the very purpose of having such a program.
As we have seen, however, the Liberal government has completely altered the nature of this plan by tightening up the rules for eligibility so that a large number of people are excluded, particularly women, youth and seasonal workers.
The present government is using the fund as if it were an employment tax, as if it were deficit insurance. The employment insurance fund no longer serves workers; it is there to serve the government, and the Minister of Finance in particular.
The purpose of Bill C-299 is, therefore, to give more power to contributors as far as setting premium levels is concerned, and to differentiate between the employment insurance fund and the Treasury. These amendments would add transparency to the program.
I hope, therefore, that all parties in this House will support the bill.