Debates of Feb. 13th, 2001

Employment Insurance Act

[Joe McGuire, Liberal, Egmont, PE]

Mr. Speaker, before I begin my remarks I would like to congratulate you on your election to the chair. I believe you are the third elected Speaker that we have had in the history of the country.

I would also like to take the opportunity to thank the voters of Egmont for returning me for the fourth time in the last general election. I believe we came into the House at the same time, Mr. Speaker, so we must have been doing something right for our constituents.

This is the fourth time the people of Egmont voted for me. I am both humble and grateful that they bestowed the honour upon me. The riding of Egmont extends from the new city of Summerside on the eastern boundary all the way west to the North Cape. With the exception of the aerospace industry in Summerside, most of the industries in the riding of Egmont are seasonal in nature.

It is a very important fishing area of Atlantic Canada, with 12 small craft harbours in existence and a very lucrative lobster industry. Farming is a very important part of the economy of my riding with exceptional potato producing areas and dairy and swine industries. Forestry plays a smaller but vital role. Tourism is an ever growing part of the economy of Egmont. The construction industry also plays a vital role in the riding.

The unemployment insurance program is a vital program for the people of my riding because most of the industries are seasonal in nature. They must have this program in order to survive.

As I stated earlier, I have been here 12 years and I have seen the evolution of this file, the EI-UI debate, through the previous Conservative government and our own EI bill. Now, as a newly appointed member of the HRD standing committee, I will be playing a closer role with the program to see that it becomes a more responsive program for the people of Canada.

I heard people say how unfortunate it was to have time allocation invoked to get the bill through the House, even after we have gone through the last two federal elections with EI being one of the more prominent issues in the election debates. Both times the people of Canada have returned this government. They must be supporting our concept of employment insurance much better than the proposals that were set forth by the Conservatives, the Alliance, the Bloc Quebecois or the NDP governments.

Maritimers have also heard criticism that perhaps Atlantic Canadians should go to where the jobs are. The most mobile people in Canada are the people from Atlantic Canada. If we were to go to the oil fields of Alberta, for example, we would find that most of the workers there are maritimers. If we were to go to Fort McMurray, we would see that over half the population of that city comes from Newfoundland and other parts of Atlantic Canada.

We always respond to where the jobs and have done so since Confederation, whether it was out immigration to the Boston states as we call them, or to Toronto when there were job opportunities, or to Vancouver when there were job opportunities or to Alberta where there are job opportunities now.

I know people who work the seasonal industries in my province. In the fishing industry, for example, workers fish during the spring and summer. They go to Alberta to work the rest of the year. Then, they return to Atlantic Canada to go back to the jobs where they grew up as sons of fishermen, hoping one day to replace their parents in the fishing industry.

Critics of the government claim that the contents of Bill C-2 represent backtracking on the reforms introduced in 1996. Nothing could be further from the truth. The government promised that if a monitoring process indicated that the changes were not producing the desired results, then legislation would be changed. Today this is what we are doing. We have found that the bill, as passed by the House a number of years ago, has a number of flaws in it. We are moving to correct those flaws.

It was generally agreed during the early days of this government that the unemployment insurance scheme needed to be replaced. It did not respond to the new economy in the 21st century. After much consultation with Canadians and despite the outraged cries of the opposition, some of whom did not want an EI program at all and others who wanted a guaranteed annual income, the government brought in a program to replace the old regime with the employment insurance program.

The new plan was designed to be sustainable, to be fairer, to encourage work, to reduce dependence on benefits, to assist those most in need and to help workers get back to work and stay at work. The program was implemented with the knowledge that being new it would not necessarily be perfect. We knew that with time we would likely identify areas requiring improvement. The legislation allowed for a period of continuous monitoring and assessment of the program to measure its impact on people, communities and the economy.

This is not the first time that adjustments to the EI regime have proven necessary. The government acted quickly in 1997 to launch a small weeks project in order to correct a disincentive for some people to work weeks with low earnings.

As the member for the area who identified the weakness, I knew that potato grading companies could not find workers. If people came into the potato warehouses for one, two or three days during the week, their benefits would be cut in half by their response to that call to go to work. This obviously was a disincentive to get people to work. We immediately moved to correct that.

Our studies and discussions with Canadians have shown us that many parts of the EI program are working well. There are some provisions that have proven ineffective, particularly toward seasonal workers. We have always had and we will always have seasonal industries. These industries are vital to our economic well-being.

On Prince Edward Island, in Prince county alone, 65% of the workforce works less than a 12 month period in one year. I take offence with anyone who suggests that these changes will simply make it profitable for industries to gear up for a short season. I would like to comment that the seasonal businesses which are profitable, when they have such a short window of opportunity, are very fortunate.

It should be noted that seasonality is determined by a much higher power. If mother nature did not co-operate these businesses could no longer be profitable and the basic existence of many of them would be put into jeopardy.

As for the employees, if the EI program was not in place what would they do to support their families without an income? We are talking about the reality of seasonal workers across Canada, not just in Atlantic Canada. Because these industries by definition employ people for only part of the year, we must always remain watchful to ensure that our economic and social programs do not exclude these people from living and working.

While EI aims at helping all unemployed workers, we must also recognize that some groups, such as seasonal workers, have particular needs and the program has special features built in to benefit seasonal workers across the country.

The hours based system, for example, takes into account the fact that seasonal work often involves long hours of work per week. It also identifies a sector of the workforce, even with part time work over the full year, that can now qualify. For example, an employee who works in a seasonal job can accumulate hours in smaller numbers in the pre and post season in order to qualify for benefits which previously he or she was not entitled to.

As I have mentioned, one of the intentions of the EI program is to reduce dependence on benefits by all Canadian workers, including seasonal workers. The so-called intensity rule was therefore introduced to discourage use of EI benefits by reducing the benefit rate of frequent claimants.

The unavoidable fact is that many seasonal workers have no choice but to resort to EI benefits. There simply are not enough job opportunities available to them in the off season. That is why Bill C-2 proposes removal of the intensity rule. This translates into a maximum of $988 for a 26 week period and $1,710 for a maximum 45 week claim in the pockets of Canadians. If there was a maximum claim of 26 weeks, they would only get $40 more a week when the intensity rule is dropped. It may not seem like a very large amount of money, but for someone making $200 a week this represents a very large portion of that person's income.

I encourage all members to support this program and get these measures through as quickly as possible for the benefit of all seasonal workers in Canada.

[Francine Lalonde, Bloc, Mercier, QC]

Mr. Speaker, this bill is shameful. I admit that it brings slight improvements to the so-called reform we began talking about in 1994. Through this reform, the unemployment insurance plan, which actually needed to be reviewed but not transformed nor diminished, has in fact become a plan whereby the government gets richer but people in need get poorer.

This bill, not the one we have now but the one which became the so-called unemployment insurance reform act, was renamed employment insurance plan without any consideration for what is actually going on.

I admit that the unemployment rate has dropped, but if it has gone down, it is largely because the Canadian economy has been pulled along by the American economy. However, the unemployed who continued to suffer from not being able to find a decent or permanent job have been badly hurt by the new employment insurance plan.

The public must realize that the government is introducing in the House a bill proposing slight improvements by reducing cuts which should never have occurred and which total around 8% of benefits paid.

What is the government really aiming at through these slight improvements? It wants to gain full control over the fund, which contains a surplus of $36 billion to $38 billion—we will know the exact amount soon—taken from the incomes of workers and businesses.

Again, these contributions are paid up to a maximum of $39,000 of gains earned by workers and up to $39,000 paid by businesses. Beyond that limit, there are no contributions to employment insurance. This means that the $37-$38 billion, which went in full to eliminating the deficit, was paid for by low and middle income people, but mostly by small and medium size businesses.

They were paid mostly by these people. Higher wage earners pay a smaller percentage of their income in EI premiums, as do capital intensive businesses, which pay their employees high wages.

The government should take over, push the commission aside and decide on its own—that is how it was supposed to be—what the level of the premiums should be. This is some very bad news that will only make people more cynical.

To make it look like the money will really be used for specific purposes, EI or Deductions for EI purposes is written on paycheques.

Ever since employment insurance has been in effect, the number of eligible recipients has decreased significantly, almost by half, but what is even worse is that the hardest hit were young people.

I have heard members make eloquent statements in this House to the effect that young Canadians need jobs. Yes, absolutely. However, the EI system is designed to ensure that, between jobs, no one has to go on welfare or take just any job because they need money. That is no way for young people to start building a future for themselves.

This bill will bring the benefits of seasonal workers back to the same level as those of all unemployed. This is good news. It was necessary. We strongly opposed this penalty imposed on seasonal workers, which was part of the employment insurance reform, but we also know that this was not a coincidence and that the government refused to listen not only to those affected but also to those who worked with the seasonal workers in those regions.

As members of the Standing Committee on Human Resources Development, we knew that those in charge of unemployment insurance were targeting seasonal workers. They thought that by penalizing them they would force them to relocate.

Not all workers in Newfoundland are prepared to relocate. I heard many men and women say that they wanted to raise their children with dignity on their own land. What those at the highest levels wanted was to force these people to move away and look for work in regions where work was available.

This bill proposes modest improvements regarding the employment insurance eligibility of women about to give birth, but there are huge flaws in this system.

I am sorry to say that the fundamental problem for seasonal workers is not that their benefits declined from 55% to 50% of their salary, which is serious; it is the reduction in the number of benefit weeks, which creates a 4-5-6 or 7-week gap, as they call it in that region, when they do not have any income at all. It is the reduction in the number of weeks that penalized seasonal workers most, and this bill does nothing about that.

As for pregnant women who want to draw on the plan, was the required number of work weeks brought back to a decent level? No, not at all. The plan, which has been lowered to 600 hours, still has this requirement, which totally excludes many women, not to speak of self-employed women.

This bill, which provides for slight improvements, has huge gaps. In particular, it allows the government to lay its hands on money that is not its own. The government should at least recognize that it is indebted to the people and state that it will put this money at the workers' disposal if they ever need it because of a recession. What we are proposing is a true reform.

[Loyola Hearn, Progressive Conservative, St. John's West, NL]

Mr. Speaker, it is certainly a pleasure to be able to say a few words on the bill, which certainly affects rural areas more than the more lucrative urban areas, and perhaps areas like Atlantic Canada and parts of Quebec more than any other area of the country.

There are a few changes in the bill that are looked upon as being positive, one of them being the throwing out of what we call the intensity rule and reverting to letting people who draw employment insurance draw 55% of their regular wage. That in itself is a bit deceptive and I will comment on that.

The ability for family members to get back into the workplace after staying off because of the birth of children without having to be looked upon as new entrants certainly is positive. The minor changes to the clawback arrangements will also benefit some of those at the higher end.

However, the people who are affected most by employment insurance are the ones who receive no reprieve at all from the new legislation.

There are three issues that should have been addressed in the bill and have not been addressed. The first issue is what we call the divisor rule. It is bad enough to see a person who is generally living and working in an area where unemployment is meagre and quite often where the wage is low having to resort to drawing employment insurance knowing that he or she will start with only 55% of what he or she normally makes.

If the intensity rule had not been changed, people would have drawn less as each year went by. However, besides drawing just 55%, they find their week's work is not what is divided into the total income. The number of weeks is, as we say, exaggerated. The divisor rule means that for somebody who obtains 12 weeks or 420 hours, when the amount of money that person should receive is factored in, the total income is divided by 14. This means the individual is getting much less than the 55%, which appears on the surface. That rule is completely unfair and should have been eliminated.

The second concern is the 420 hour minimum in areas of high unemployment and the 520 hour minimum in areas of low unemployment.

There are pockets in the country that depend entirely on seasonal employment. Occasionally these people do relatively well. There may be an exceptionally good fishery, a good construction season, or a good year in forestry. That is the exception lately rather than the rule, for a number of reasons.

The mismanagement of the fishery, and perhaps we could say the mismanagement of our forestry resources to some extent, has led to very meagre employment. The lack of concern for the processing end of our fishery means that we are seeing a lot of our resource going out of our provinces and out of our country in a non-processed or semi-processed state.

This means there is less work for the people involved. This past year in Newfoundland, for example, the main source of work in the various fish plants was processing crab, which has replaced cod as the most lucrative species now caught and processed in our province. However this past year saw a 15% to 20% cut across the board in relation to quotas, which meant 20% less work for people working in our fish plants.

Along with that the markets this past year, in particular the Japanese market, dictated that the commodity they wanted was crab sections rather than the extruded crab meat, the main product exported over the last x number of years. Sending the crab out in sections meant less work for the people who worked in our plants. Mechanization has also eliminated a number of jobs. Consequently we saw people who worked in our fish plants receive much less work this year than previously, not because of their fault but because of resource, market demands and mechanization, which is attributable to the employers.

Teachers have also been affected. Because of what is happening in our education system with consolidation and tightening up of belts economically, we see a lot of substitute teachers who no longer even get work enough to qualify for employment insurance.

There are times in certain parts of the country where conditions are completely outside the control of the individuals involved. It is practically impossible for the average seasonal worker to obtain enough employment to qualify for employment insurance.

I am certainly not advocating that we return to the old 10-52 method: if they obtained 10 weeks of work and a few hours each week they could qualify to draw employment insurance for the rest of the year. I do not think anyone is advocating that, but the pendulum has swung too far.

During the election campaign the Prime Minister apologized to working people in New Brunswick, especially seasonal workers, for a mistake that was made some years ago when new employment insurance regulations were brought in. Instead of changing them last fall before the election, he ran the election promising to make the changes. Now we have the bill before the House. The changes that were brought in last fall are still the same ones.

Despite the fact that many people expressed concern during the election, there have been a few minor amendments, but the real changes that would affect people in the areas where they are hurting most have not been made.

The hours required are too stringent in certain parts of the country during periods when there are downturns. In the construction industry, for example, because of lack of input from federal and provincial governments into the great infrastructure agreements we hear about, the hours fail to materialize or the money is spread so thinly that many smaller regions cannot avail themselves of it.

In terms of federal-provincial-municipal cost sharing, most small municipalities, because of the financial situations they face, cannot avail themselves of the infrastructure agreements. They cannot come up with their share of the total input.

These areas are hit extremely hard. There should be provision in the new legislation to modify the regulations during times when working conditions, lack of resources or whatever make it impossible for seasonal workers in those areas to obtain enough employment to qualify for employment insurance.

Another concern is the length of time. We are not advocating the 10-52, but we are finding that as people continue to draw employment insurance, as they always will in the areas with seasonal employment, it is getting to the point where they find themselves with absolutely no income during the periods of the year when it is needed most. Quite often the employment insurance benefits end in March or April during times when heating costs are extremely high and when the cost of living in rural areas is extremely high.

These issues should be addressed in the new legislation. I certainly hope that the minister takes them into account as she reviews and hopefully provides us with amendments that we can all pass.

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, I take this opportunity to congratulate you on your new position. I am sure you will serve the House well, and I hope you enjoy it. I also thank the constituents of York West, my family and staff for their support in the November 27 election. I am glad to be back and very pleased to speak in favour of the bill today.

We on this side of the House know how important the EI system is to Canadians. That is why we feel really good about reintroducing the bill that was presented and debated in the House last fall. I had an opportunity to be a part of that.

Canadians showed us in the last election that they agreed with the direction we are taking. We also know how important it is that we in government monitor EI and make sure that it continues to do what it was meant to do: to help those who are out of work. That is why I support Bill C-2.

The legislation is a result of the government's ongoing monitoring of EI. It recognizes the need for EI to keep up to date with the realities of the Canadian economy. The government recognizes there were needs for changes in the bill.

About four years ago the government introduced major changes to the old unemployment insurance program. At that time we wanted to change a variety of things. We wanted to make the system fairer, reduce dependency, lower program costs, and emphasize active employment measures that would help get Canadians back to work.

The basic objective of that reform was to produce a system of employment insurance that would support Canadians in times when they were without work, but that would also encourage and support them to get back into the workforce as soon and as effectively as possible.

By and large that reform process worked very well. Measures like the new hours based eligibility system opened up access to EI for workers who had not previously qualified, such as multiple job holders who may be working a few hours for several employers. Many women who are employed in those part time jobs now qualify for EI if they need it.

At the same time new partnerships have been formed with other levels of government and with the private sector to help people prepare for and find jobs. The EI system was strengthened and improved by the reform. The economy has also improved since that time. On a national basis we are experiencing very positive economic circumstances. The national unemployment rate is down. More people are working in Canada than ever before.

Generally speaking, Canadians have never been more prosperous and our economic development has never been more robust. However not all Canadians have benefited from this renewed prosperity. Some regions of the country continue to have high unemployment rates. Seasonal workers, in particular, report that they continue to have difficulty finding work in their off season in their community. Many of these seasonal workers are being affected by one of the measures introduced with the EI bill in 1996, the so-called intensity rule.

The intensity rule was originally put in place to reduce dependency on EI and to encourage repeat claimants to find work. Unfortunately the intensity rule reduces the EI benefit rate for repeat claimants. The rate goes down by one percentage point for every 20 weeks of regular benefits collected in the past five years. The impact can reduce benefits paid to repeat claimants from the normal level of 55% to 50%.

The intensity rule was brought in because Canadians were concerned about people becoming too dependent on the employment insurance program. However, it turns out that the intensity rule is achieving little in terms of reducing dependency and increasing work effort. Our research has found that the intensity rule has not curtailed repeated EI use, particularly in areas where there are few job opportunities.

Despite tremendous employment gains in many parts of the country, there is still high unemployment in some regions and seasonal workers find it difficult to find off season jobs. There is a growing concern that the intensity rule has become more of a penalty on seasonal workers instead of an incentive to find work as originally intended. This is a situation that the government recognizes needs to be fixed.

How do we fix it? We eliminate the intensity rule as proposed in Bill C-2. It will remove the penalty imposed on Canadians who happen to live in areas with very limited opportunities for work.

Who will benefit? Canadians will benefit in every province and territory. We have heard about the benefits that it will bring to Atlantic Canada, and this is good news. However, it is also important to remember that claimants from Atlantic Canada account for less than 20% of the EI claims in any given year. This will help people everywhere in Canada.

In reality, seasonal employment is a fact of life all across Canada and there are many regions where alternative employment is difficult to find. We can ask construction workers in central Canada how they feel about this, or workers in the forest products industries in the western part of Canada, or the many seasonal workers in Quebec or the north. In truth, removing the intensity rule will provide economic benefits that will be welcomed throughout the country.

At the same time, we know that EI is only part of the solution. We will continue to work hard with provinces and territories and with businesses and community leaders to stimulate local economies because the best solution to unemployment is employment.

I will proudly vote for the legislation and I urge all of my colleagues in the House to do the same.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Mr. Speaker, it is not only as the Bloc Quebecois critic for the status of women that I rise this afternoon in the House, but also as a woman who has paid employment insurance premiums all her life and who has never been able to get any benefits.

During my maiden speech in the House, reacting to the throne speech, I said that the Liberal government does not care about the realities and the hardships of Canadians and Quebecers.

I would again like to quote a sentence that caught my attention when Her Excellency, the Governor General of Canada, the Honourable Adrienne Clarkson, read the throne speech, where the intention of the Liberal government to “secure a higher quality of life for all Canadians” is expressed.

The first real evidence of this true intention to secure a higher quality of life was the minister's reform proposing a plan that is completely out of sync with the new social and economic realities of women living in Canada as well as in Quebec.

The minister knows very well that the first persons to be penalized by her new reform are the women, more than 70% of whom have precarious jobs and frequently rely on employment insurance because they cannot find a stable and well paid job.

Too often, these women are the sole support of a single parent family. They do not have a stable job, but must nonetheless support their children, feed them, clothe them and give them a good education, and they would certainly have wished for a little more compassion from the minister.

There are also some sections of the Employment Insurance Act that discriminate against women. Let me explain.

To be eligible for maternity or parental benefits, one needs 600 hours of work, while someone working in a high unemployment area can be eligible for EI benefits with only 420 hours of work. A woman living in the same area would need 600 hours to be eligible for maternity benefits. Previously, the requirement was for 300 hours or 20 hours spread over 15 weeks.

Moreover, the new eligibility criteria for parental leave are unfair to women who were supposed to give birth after January 1 and asked for parental leave but were unfortunate enough to have their child before that date. They cannot ask for the 35 week parental leave because there is no flexibility in the act. It is not their fault if they had their child at the beginning of December even though they were not expected to give birth until January 15.

What happens then? Did the government think about the adverse effects of this situation for these women and their families? Did the government not think that these women were also hoping to benefit from the new measures, however limited they may be, just like other women? What about the thousands of self-employed workers who were also forgotten?

According to Statistics Canada, self-employed workers account for 18% to 20% of the total workforce. The monitoring and assessment report confirms that this category of workers is experiencing strong growth.

Yet, these workers are still excluded from the employment insurance plan. We also know that women account for over 40% of these self-employed workers. Almost one worker in five is not covered by the new employment insurance plan merely because of the nature of his or her work, and that group is constantly growing in Canada.

Earlier, I said that some workers were forgotten, excluded from the act. There is no question that the Liberal government and the Minister of Human Resources Development lack vision and are not very familiar with the realities of the labour market.

Yet, in an HRDC release dated February 12, 1998, the then Minister of Human Resources Development and current Minister for International Trade said that one of the objectives of the employment insurance reform was to adapt the plan to the new realities of the labour market. The following is an excerpt from that release:

The objectives of the employment insurance reform were to reduce costs and modernize the plan to better reflect the social and economic realities facing all Canadians.

This is not what is happening, because self-employment is also part of the new social and economic realities.

The Liberal government and the minister are also acting in bad faith. During the last election campaign, the Prime Minister himself said the following during an interview given to the Canadian Press :

We realized that it was not a good decision in the sense that we should not have done it.

The Prime Minister was referring to the cuts made by his government to the employment insurance plan.

Even Minister Coderre said “After a majority Liberal government is elected, we are going to re-establish the process and ensure that the changes are appropriate and respond in large part to the realities and needs of the population”.

Employment insurance has become a privilege for the women of Quebec and of Canada. This is why the Bloc Quebecois concludes that employment insurance reform has been a double, nay, a triple, failure.

With a view to shouldering greater responsibility for the disadvantaged, a fair and equitable distribution of the billions of dollars in the employment insurance fund in the hands of the Liberal government, with a view to taking into consideration the endlessly increasing numbers of people living below the poverty line, with a view to helping poor families in desperate and terribly urgent need, with a view to providing the children of Quebec and of Canada with three meals a day, the Bloc Quebecois would have preferred the government to have presented two separate bills.

The first of these would focus on dealing with the urgent situations to which I have referred, like the mothers of premature babies who cannot take advantage of the new provisions. The second would concentrate on administration of the employment insurance fund. This approach would provide a prompt response to the needs of the forgotten members of society, while leaving the more technical matters to be debated in committee.

In its desire to share the wealth, and in its great magnanimity, the government prefers to gets its hands immediately on the huge surplus in the fund, and to forget about the people, to forget about all its fine promises, to forget about the dire living conditions into which it is forcing families in need in Quebec and in the rest of Canada.

I again call upon the government on behalf of my colleagues in the Bloc Quebecois for justice and social equity. Rest assured that the Bloc Quebecois is still prepared to pass improvements to the program quickly, separate from the debate on administration of the fund.

[The Acting Speaker (Mr. Bélair)]

I would like to remind my colleagues, especially the new members, that they should not refer to other members in the House by their names. Ministers should be referred to by their departments and other members by the names of their ridings.

[John McKay, Liberal, Scarborough East, ON]

Mr. Speaker, I would be remiss if I did not congratulate you on your appointment. I hope that you enjoy your appointment and that you find these speeches utterly fascinating.

I am somewhat reluctant to get into this subject because I am from Toronto. Toronto is of course the place that everyone loves to hate. Indeed, there are times when my colleagues, particularly those from the maritimes, express some sentiments that, shall we say, may not be Toronto-friendly.

Let me take a few moments to discuss the goals of EI and how changes in the bill support those goals.

As the House knows, the unemployment insurance act was first designed in 1940 as a safety net and as an income support for Canadians temporarily out of work. Since then it has evolved. It has allowed workers and their families to remain attached to the labour market, staving off, in many cases, a period of dislocation and financial worry.

Over the years, it has changed dramatically. Our employment insurance system has become a far more sophisticated entity as it attempts to respond to market realities. Some of the changes to EI actually resulted in market distortions and had to be addressed. In 1996 we updated the system to better reflect market realities.

The objectives of our EI reform were to make the system fair, reduce dependency, help low income families, ensure the program was sustainable, encourage active employment and reduce market distortions. There were a number of bizarre situations wherein clearly it was better to be on EI. We would therefore have the ironic situation of EI creating unemployment rather than creating employment.

Many of these goals have been achieved and are as important today as they were in 1996. We promised Canadians that we would carefully monitor and assess the changes to see if they were working as intended. In fact that is in the legislation. We always promised to make adjustments as needed, and the time has arrived. Since the reform it is clear that many elements such as the divisor rule and the family supplement are working well and that other parts of the program need some fine tuning.

We listened carefully to the concerns of Canadians about the EI program. In fact, as other members have pointed out, this was an election issue during the last two or three elections. Members such as the hon. member for Fredericton have articulated concerns here and elsewhere that are reflected in the bill. Canadians have told us about some of their difficulties with some elements of EI. Some elements need adjustment to ensure the effectiveness of the program. We have responded with concrete and progressive changes that reflect today's economic realities.

The clawback was originally implemented to discourage high income claimants from claiming benefits year after year. The member for Mississauga West repeatedly pointed out in the House and elsewhere that the threshold was far too low. Once the bill is passed it will raise the net income level at which clawback applies for repeat claimants from $39,000 to $48,750. In future only higher income Canadians will face repayment.

Middle income workers who need to claim EI will have more money to spend because we are raising the income threshold at which clawback begins. The vast majority of middle income earners have contributed to the system all of their lives without ever drawing benefits. Yet under the current system, we claw back the very first time an individual makes a claim. This is using a sledgehammer to kill a fly. By definition first time claimants are not dependent on EI. They are not the people who are using EI as an income supplement.

We are also removing the clawback for those collecting special benefits. Pregnancy or illness should not affect one's entitlement. Special benefits are designed for Canadians who are too sick to work and for those who stay at home to care for a newborn or an adopted child. These are not the people using EI as an annual income supplement and there is certainly no reason to penalize new parents or people who are too sick to work.

By changing the clawback provision we will be helping three broad groups of Canadians. First, middle income groups will benefit primarily due to the change in the threshold. Second, Canadians receiving special benefits will no longer have to repay any of those benefits. Third, first time claimants will be exempt from benefit repayment.

In addition the bill would eliminate the intensity rule. The rule provided that the more frequent a claim, the greater the reduction in the percentage benefit to which one was entitled. The rule has proven to be ineffective with the unintended consequence of being punitive. The elimination of this rule should be of the greatest benefit to seasonal workers.

Simultaneously it is hoped that the raising of the clawback and the elimination of the intensity rule will not mean a return to business as usual. Employment insurance cannot be a substitute for a job. It cannot make it impossible for a low wage employer to set up shop in a region. A prospective employer should not find himself or herself competing with EI. Otherwise it becomes self-defeating.

We should look at the reduction in EI premiums from $3.07 to $2.25. Every 10 cents costs the federal treasury $700 million, cumulatively a $6.4 billion tax reduction.

Some say that the government has eliminated the deficit and is now paying off the national debt on the backs of the workers. It is true that EI is going into general revenues and for good reason. There is no separate bank account for EI when times get tough, which they will sooner or later. All taxpayers of Canada, whether they are employers or employees, will be obligated to unemployed workers. There is no better guarantor than the Government of Canada.

Canadians in every province and territory will benefit from the improvements to the Employment Insurance Act. The changes are in keeping with the values that Canadians hold dear, values like taking care of each other and looking out for one another in times of need.

When we designed the employment insurance system, we wanted to do more than just merely insure people's wages. We wanted to get them back to work. However a concern echoed by many Canadians is that the design that we have can be improved.

The bill is about ensuring that the system continues to work well and is responsive to those who are most in need. It is about ensuring that the system responds to the needs and realities of working people. The bottom line is that EI must be there for Canadians. It must be there for those people who have contributed and who now need our help.

Taken together, the changes to the intensity rule and the clawback will improve our ability to address the original goals of EI, which were to ensure fairness, to help people return to work quickly and to reduce dependency without penalizing those most in need.

The simple fact is that our employment insurance reforms were in the right direction and these reforms are even more in the right direction. Employment insurance is working but it will always be a work in progress.

I would like to specifically acknowledge the members for Fredericton and Mississauga West, who in our caucus repeatedly brought forward these issues. I congratulate the relevant ministers on their willingness to be responsive to members of caucus and indeed members of the House.

That is why I will be voting for the bill and I would encourage other members to do so as well.

[Stéphan Tremblay, Bloc, Lac-Saint-Jean—Saguenay, QC]

Mr. Speaker, I am very excited to rise today for two reasons, one being that it is the first opportunity I have to speak in the House since I was re-elected. The other reason has to do with the relevance and importance of the employment insurance issue to my region.

I rise not only as a parliamentarian, but also as a former bush pilot who has had to rely on employment insurance in the past. I will put the problem in context.

What we have experienced in the Saguenay—Lac-Saint-Jean area since last July has to do with the fact that, under the act, employment insurance zones have to be reviewed every five years. I did not lose any time in making representations, saying that the status quo had to be maintained, which meant that people had to work a minimum of 420 hours to be eligible for 33 weeks of benefits. I was not the only one thinking this way, since other parliamentary colleagues shared that opinion.

In my region, Human Resources Development Canada, through its economist, recommended to the minister that the status quo be maintained. Why? Not just for the sake of it, but rather because it matched the reality of our region.

To our surprise, when the HRDC data were made public on July 1, it was not 420 hours any more that people needed to work to qualify for 33 weeks of benefits but rather 525 hours, and for how many weeks?

[Gérard Asselin, Bloc, Charlevoix, QC]

Twenty-one weeks.

[Stéphan Tremblay, Bloc, Lac-Saint-Jean—Saguenay, QC]

My colleague from Charlevoix, who faces the same situation in his riding, knows it is for 21 weeks.

This might seems like a very innocent series of figures for members here in the House, but for many families, many workers and many employers, these figures can have major implications.

I have tried to determine the loss of potential revenue for my region, statistically, as far as the money and the premiums we pay are concerned. As a good member of parliament, I thought “I will go get this information”. I contacted the HRDC economist. Who did he refer me to? To the department's chief actuary in Ottawa, who came to the riding to explain why this unexpected change was made, in summer when everybody was on holidays.

Much to my disappointment, we did not get any appropriate answer. The officials from the department led us to believe that it was the employability figures that explained the new ways of doing things. In short, it was a completely unsatisfactory argument.

Of course, people protested, not only in my riding but in the riding of my colleague from Charlevoix. They were also protests from the north shore, the Lower St. Lawrence and the Gaspé Peninsula, where the same situation prevailed. In view of the flurry of protests, but also, probably and unfortunately, because there was a general election in the offing, the minister concluded that transitional measures were necessary.

Why did we need transitional measures? So that our workers could get used to it. I completely disagree with the idea that workers have to get used to poverty. This is totally unacceptable to me. Nobody can get used to poverty and we will see more of it with this legislation and the new regional realities.

I was talking with the minister and she told me “Stéphan, the solution is not unemployment but employment”. I totally agree. I too believe that employment is the solution.

In this country, in certain sectors, as we can see in my region or in my colleague's region, the reality and the economic structure are such that employment insurance is a tool of development, since it makes up for deficiencies related to our economic structure.

In the tourism industry, for example, summer is the high season. Unfortunately, the season is rather short. Some would say that the season should be extended. We are working on it. Serge Plourde, the president of the Association touristique régionale, was telling me that the government must absolutely understand that keeping these new regulations, which make employment insurance less and less accessible, will have major impacts on the tourism industry. People are unable to qualify or to make ends meet.

Come February, when no more income is coming in and you do not qualify for social assistance because you own a house or a car, what are you supposed to live on? Air? That is what is going to happen. According to the tourism industry, this will result in an increase in employee turnover, which will have a serious impact on a fast expanding industry that is trying to extend the season, as many would like it to do.

The same is true in agriculture and the forestry industry. There is no way to prevent the ground from freezing. It is unfortunate, but that is the way it is. I am a former bush pilot, and in the bush, we land on water. When the lakes freeze, the season is dead. That is the way it is.

The government has to take its role seriously in committee. The Secretary of State for Amateur Sport mentioned this in the election. Right off, the government said it was prepared to further relax its bill, to use the words of the secretary of state, “if well reasoned and justified arguments are brought forward”.

If my fellow citizens are given the opportunity to explain in committee, I promise that they will provide well reasoned and justified arguments.

In the same vein, the Secretary of State for Amateur Sport made a personal commitment to apply corrective measures to the Employment Insurance Act. He said, moreover:

Once a Liberal majority is elected—

I think this is what we have here.

—we will reinstate the process and make sure that the changes are effective and meet the needs, for the most part, of the people of the Saguenay—Lac-Saint-Jean and Canadians as a whole...I have made a commitment to change the law and we will see to it.

The Saguenay—Lac-Saint-Jean, that is my home. I would be prepared, perhaps, to forgive a government that imposed time allocation today in the context of this very important debate if it were responsible and in committee the public had the opportunity to speak and present well reasoned and justified arguments.

What I find hard to justify is that on July 1, 2000 the government introduced a new measure that for the people at home brings big changes. Why did the government want to cut employment insurance? It is all the harder to comprehend given that the fund's coffers are overflowing. We are not in difficult economic times. We will be, in the Saguenay—Lac-Saint-Jean region, because this will have phenomenal consequences, not only for the workers, but for the employers as well.

During the election campaign, business people were telling me “Stéphan, the government must absolutely understand this reality, because there are going to be serious economic consequences”.

I have a lot of sympathy for people who will have to live on a shoestring this winter, but I also have sympathy for employers who will have difficulty keeping their employees. If the government wants very economic arguments, we will give some.

I have been very interested in the issue of globalization for several years. This issue is getting more and more important, and I am very pleased. I think this, as well as our role as parliamentarians in the House, might be the subject of another debate. What must we do in the context of globalization?

I am not against globalization. I am against certain forms of globalization, and I will mention one. In its strategy for employment, the Organization for Economic Co-operation and Development said:

To increase labour market flexibility in a number of countries, it is essential to reduce the largesse of compensation under unemployment and other social benefits, and to limit access to these programs.

It also states:

Canada is the only country that seems to have applied the recommendations made during the first series of reviews.

What is governing us? Is it consistent and sensible economic strategies or a bunch of bureaucrats in international organizations who make recommendations on employment that are absolutely inadequate and totally out of touch with the reality in our regions?

I hope we will be able to seriously debate this in committee.

Business Of The House

[Derek Lee, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Mr. Speaker, there have been consultations with all parties in the House through their leaders and I believe you would find consent for the following order governing the proceedings for the visit of the Prime Minister of the United Kingdom on February 22:

That, notwithstanding any Standing or Special Order, the House shall meet on Thursday, February 22, 2001 at 2 p.m. and the order of business shall be the same as on a Wednesday;

That the Address of the Prime Minister of the United Kingdom, to be delivered in the House Chamber on that day before Members of the Senate and of the House of Commons, together with all introductory and related remarks, be printed as an appendix to the House of Commons Debates for that day and form part of the records of the House; and

That media recording and transmission of such address, introductory and related remarks, be authorized pursuant to established guidelines for such occasions.

[The Acting Speaker (Mr. Bélair)]

The House has heard the terms of the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

(Motion agreed to)

The House resumed consideration of the motion that Bill C-2, an act to amend the Employment Insurance Act and the Employment Insurance (Fishing) Regulations, be read the second time and referred to a committee.

Employment Insurance Act

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Mr. Speaker, I would like to congratulate you on your appointment to the chair.

It is my pleasure to speak on Bill C-2, particularly because the changes to the employment insurance legislation will make a tremendous difference in the lives of Canadian families.

As chair of the greater Toronto area caucus, I can vouch for the fact that colleagues in our caucus have been enunciating the issue for quite a while and have indicated our support for the changes, particularly with regard to the intensity rule and the clawback.

Overall we know our EI reforms are working well, but we also know that we need to update the system to better meet the needs of working families.

The vast majority of Canada's working families confront a broad range of challenges that they cannot easily solve alone. Today many mothers and fathers work outside the home and discussions about child care are commonplace. There is no doubt that the workforce has changed dramatically over the past few decades and our employment insurance system must change with the changing needs.

When unemployment insurance was created in the 1940s most employees were male. Today women make up nearly half the workforce. In the 1940s most women stayed at home and cared for their children. Today dual income couples make up about 40% of the working population. It is a fact of modern life that both parents working is now the norm and not the exception.

At the same time the struggle to meet both work and family responsibilities is a top concern for Canadian men and women. Forty per cent of Canadian workers report a high level of work and family stress. This is significantly higher than just 10 years ago.

If we listen carefully to Canadians and their concerns about the EI program, it would seem clear that we must find new ways to make our system more responsive to the challenges facing today's families.

The government recognizes that today's parents find it difficult to balance the demands of caring for children and making a living. For children to get the best start in life, parents need the time and the resources to nurture them. This is why on December 31, 2000, we enhanced the EI parental benefits to allow a parent to stay at home with a newborn child for up to one year.

This is also why we proposed to support parents under the bill by eliminating the clawback for Canadians collecting special benefits under EI. Canadians use special benefits when they are too sick to work or when they are at home to care for their newborn or newly adopted children. We realize that the benefit repayment system was unduly limiting the assistance Canadian families could receive at a time when they needed the most help.

The clawback was designed to discourage high income earners from collecting benefits year after year, not to discourage parents from using maternity and parental benefits. We do not want to penalize parents who stay home to spend more time with their young children, or people who are too sick to work. Canadians who collect special benefits will no longer have to repay any of the benefits.

In addition, middle income Canadian workers will have more money to spend on their families because we are moving to one threshold, $48,750 of net income. The repayment will be no more than 30% of their net income in excess of the threshold.

We are proposing to eliminate the intensity rule which reduces a person's EI benefit rate by one percentage point for every 20 weeks of benefits he or she has collected in the previous five years. Depending on the number of weeks of benefits paid in previous years, a person's benefit rate would drop from the usual 55% to 54% to a minimum of 50%.

By eliminating the intensity rule we will help workers who have to rely on EI more often than they would like because job opportunities in their communities may be scarce. These workers will no longer be penalized, which means they will have more money for their families.

The rules will also be adjusted to make it easier for parents to qualify for regular benefits after returning to the workforce following an extended absence to care for young children. In essence, the rules will make it easier for parents to qualify for EI regular benefits if they lose their job during the difficult period of transition into the labour market.

That is why we are extending the look back period for re-entrants. Claimants who have received maternity and parental benefits in the four years prior to the current look back period will require the same number of hours as other clients to be eligible for regular benefits. Combined with extended parental benefits, these further changes are good news for new parents and will give parents the choice of spending more time at home with their children.

Finally, the EI premium rate has been reduced by 15 cents to $2.25, putting more money into the pockets of Canadian families. This change may seem small and insignificant, but it is the seventh consecutive reduction and has translated into billions of dollars in savings for employees and employers.

These amendments enhance a number of important initiatives the government has put in place to help Canadian families.

In earlier EI reform, we introduced the family supplement. With the supplement, claimants from low income families with children can receive up to 80% of their insured earnings. Nearly 200,000 Canadian families benefited from this measure in 1999-2000. Another important initiative is the national child benefit, which makes it possible for families to break away from poverty. Providing more income benefits and services outside the welfare system makes easier for families to support children while remaining part of the workforce.

The bottom line is that easing financial pressures on Canadian families may lead to better environments for their children, more opportunities for parents and a better chance for the family to improve its overall quality of life.

These amendments to the employment insurance program are good news for Canada's hardworking families. They reflect our government's strong commitment to build new opportunities for Canadians that reward work and strengthen families. These changes will let thousands of mothers and fathers help care for their children during the critical first months of life. They will alleviate a major source of economic pressure on working families and they will put the country's policies more in line with the realities facing today's families.

I support these amendments and ask the House to consider them.

[Monique Guay, Bloc, Laurentides, QC]

Mr. Speaker, before getting into the heart of the matter, I would like to take a few seconds to thank the constituents of Laurentides for having once again put their trust in me.

For the third time in a row, the people of my riding have chosen me as their representative in the House of Commons. I am profoundly touched by this great vote of confidence. As I did during my two previous terms of office, I will do everything in my power to serve them as best I can. I promise to take all the necessary steps to represent their interests in this House.

I will start fulfilling that promise right away because, as usual, this government is once again trying to take us for a ride with Bill C-2.

For many years now, the employment insurance issue has been a priority for the Bloc Quebecois. It is normal because the EI program helps people who are in need or who, periodically or for conjunctural reasons, have to rely on it because they have no income. We are talking mostly about self employed workers, seasonal workers, workers in regions, young people and women.

The Bloc Quebecois has been fighting for years against the federal government's plan to grab the surplus in the employment insurance fund, a plan that has now become a reality with Bill C-2. Let us say it as it is: with Bill C-2, the federal government is about to literally establish and legalize the misappropriation of $30 billion in funds. This money does not belong to it. This $30 billion belong to the unemployed, workers and employers, period. This fund was not created to save money and to create a surplus in order to pay off the deficit and now the debt of the country.

With such a surplus in the employment insurance account, the people of Quebec and Canada were expecting major changes to the employment insurance plan. With Bill C-44, the predecessor of Bill C-2, which was introduced just before the election was called last fall, the Bloc quickly realized that such was not the case. History is repeating itself with Bill C-2, which contains only cosmetic changes. Bill C-2 is almost a carbon copy of Bill C-44. There are some minor changes here and there, but almost nothing to answer to the real needs of workers.

The Bloc Quebecois has not been the only party to denounce Bill C-2. Advocacy groups for the workers and the unemployed also denounced this bill. They think that the government is not trying to resolve the real problems and that the changes proposed are far from being enough. The main problem—eligibility for the plan—remains unsolved.

In its arguments, the government is basically saying that Bill C-2 is a major reform of employment insurance, because, based on government estimates, it will cost $200 million this year, $450 million next year and $500 million in 2002-03.

It is plain and simple hypocrisy. It is playing the people of Quebec and Canada for fools, nothing else. Just imagine a situation where I pick $100 directly out of your pockets but, being a very generous person, I give you back $8. That is how generous this government is. That is exactly what it wants to do with this so-called employment insurance reform. Moreover, as I said earlier, it is running away with the employment insurance fund and its $30 billion, and the population and the Bloc Quebecois should say thank you to the government? We say never.

More specifically, it means that, based on a $6 billion a year surplus in the employment insurance fund, the government would only give back 8% of the amount it picks each year from the pockets of the unemployed, and we should be thankful for that?

Employment insurance has become a payroll tax, because the government refuses to give back to the unemployed and the workers what is owed to them and is continuing to accumulate surpluses at their expense.

The government obviously does not feel for the unemployed and those left behind in the employment insurance reform. The measures contained in this bill do not adequately address the problems caused by the plan, particularly as they relate to seasonal and regional workers, young people, women and self employed workers, and here is why.

To begin with, the government has clearly decided to ignore self-employed workers, yet their numbers keep increasing on the labour market. According to Statistics Canada, the percentage of self-employed workers went up from 12% in 1976 to 18% in 1999, so that nearly one worker in five is self employed. The EI plan ignores these workers. It is as if they did not exist, while there are more and more of them in the Canadian economy.

Let us talk about students now, our future, those who will forge our society of tomorrow. Our young people must have access to higher education if they are to satisfy the needs of the new economy. Between the rhetoric of this government, which claims to be very worried by our students' fate, and reality, there is a world of difference. The EI legislation does not help all our students to study, on the contrary.

As we all know, more and more students pay for their studies by working part time, and full time during the summer. They pay premiums without even being able to get any benefits under the plan.

The last census in 1996 revealed that there were more than 2.8 million full time students. The 1999 control and evaluation report states that nearly one million Canadians earned less than $2,000, which entitled them to a refund. However, only 40% of those applied for it, 42% of whom were under 25 years of age. In other words, nearly 2.6 million students had to contribute to the EI system while trying to pay for their studies.

The EI eligibility rules are a real orphan clause. Young newcomers face more restrictions in applying for benefits. Instead of a minimum of 300 hours, that is 15 hours a week for 20 weeks, they need 910 hours, which amounts to 35 hours a week for 26 weeks. It is utterly unacceptable.

On top of that, how can one explain that, with a plan that is supposed to help those who pay premiums, benefits have dropped 28% between 1993 and 1999, and the number of people collecting regular benefits has dropped 52.4%?

How can one explain that, in 2001, having a child is something that should be penalized, according to the federal government?

For the government, having a child is something that should now be penalized. To punish mothers, the federal government and the Minister of Human Resources Development, who is a woman, have decided that, to collect the maternity or parental benefits, 600 hours will soon be required. Whereas a worker in a region with high unemployment will be entitled to benefits after 420 hours of work, a woman in the same area will have to work at least 600 hours to collect maternity benefits. Up to now, 300 hours, or 15 hours a week during 20 weeks, were required. Where is the moral sense of this government?

Being a responsible political party that wants to meet the needs of the unemployed and the workers, the Bloc Quebecois is prepared to pass Bill C-2 quickly on one crucial condition, that it be divided into two separate bills.

The first bill, as suggested by the Bloc Quebecois, would meet the urgent needs of the workers not appropriately covered under the current plan. Among other things, the Bloc Quebecois would want the new bill to eliminate discrimination against younger workers and newcomers on the labour market—910 hours to qualify—to increase benefits from 55% to 60% of insurable earnings, to level the playing field for seasonal workers and to eliminate the waiting period.

The second bill would include long term measures to be debated in committee. The Bloc Quebecois is in favour of an independent employment insurance fund and coverage for the self employed.

In conclusion, if the bill is not divided, there is no way that the Bloc Quebecois can support such a clear misappropriation of $30 billion from the EI fund and a discriminatory bill that is totally inconsistent with the needs of the unemployed and the workers of Quebec and Canada.

[Peter Adams, Liberal, Peterborough, ON]

Mr. Speaker, I am very pleased to join in the debate with respect to the bill, which is designed to improve our employment insurance program so that it will be of more help to unemployed people. Like my colleague from Oak Ridges who spoke earlier, I will focus my attention on the parts of the bill that actually deal with families.

I think you know, Mr. Speaker, that this government has focused attention on children and families from when it was first elected in 1993. In fact, in the depths of the budget cutting exercise that we went through, new money was being flowed into prenatal and post-natal programs and into support for children. In my own riding for example, the family enrichment centre, which is now the family resource centre, received considerable new funds in those times, so the government has a record of supporting children and strengthening families. This is the sort of investment which, by the way, is even more valuable in difficult times because it allows us to invest truly in the future, our children.

In this case with respect to EI, there are a number of important changes that affect families. Already in terms of supporting children we have created the national child benefit, one of the most innovative new federal-provincial-territorial programs of the last few decades, which is aimed directly at fighting child poverty. I think members on all sides of the House agree it is something which we must tackle at this time. In terms of the EI legislation, that child benefit helps parents stay in the labour market while they are bringing up their children.

We have improved benefits and services for low income families with children. We have reduced the barriers that many low income families face in moving from social assistance to the workforce. Particularly in Ontario there are these serious barriers with this discrimination against families on social assistance, particularly when they get to the point where they can move into low paying positions so they can move up the wage scale.

The child benefit is increasing federal benefits to children by $1.7 billion a year for low income families. This means better food, clothing and shelter for children in those families. It also means a better and fairer chance for those children.

To make sure that we can do an even better job in helping children break out of the cycle of poverty, we will provide a third significant investment in the national child benefit by the year 2001. This means that by 2004 the maximum benefit received by a low income family will increase to $2,400 for the first child and $2,200 for each other child.

Parents in a two child family, by the year 2004, could receive up to $4,600 to assist them in bringing up their children. Many other programs are also helping Canadian families. In this case, the EI program has a role to play. We are talking about families and keeping the parents in the workforce or, when they are out of the workforce, allowing them to get back into the workforce as effectively as possible.

One measure is the family supplement, which tops up benefits to a maximum of 80% for claimants in low income families with children. Again the emphasis is on families with children.

As of December 31, 2000, we enhanced EI parental benefits to provide parents with the flexibility to spend more time with their young children during the crucial early years of life.

The proposed changes in the bill to the EI program will take us one step further by providing more money to the families of claimants and fixing some of the problem areas that Canadians have identified in the EI program.

We have learned that the intensity rule, which was designed to reduce reliance on EI and increase incentives to work, simply has not proved to be effective. The intensity rule reduced repeat claimants' benefit rates by one percentage point for each 20 weeks of benefits claimed in the past five years. This feature has not discouraged the repeated use of EI benefits in part because many workers in areas of high unemployment simply cannot find other jobs in the off season.

The bill before us proposes to eliminate the intensity rule altogether. I campaigned on that and I support it. This does not mean that we accept high unemployment levels in the communities concerned. Our challenge is to work together with the provinces and territories, business groups and community leaders to come up with local solutions that will expand working opportunities in areas of high unemployment.

Canadians have also told us that the clawback sometimes reduces the benefits of middle income clients. When this happens it means that money is taken away from many families for whom money is tight. The bill proposes to raise the net income level at which the clawback applies to repeat claimants from $39,000 to $48,750. In future only high income Canadians will face any repayment of employment benefits. This will provide relief to middle income earners who are temporarily unemployed.

Canadians also told us that it was not fair to claw back the benefits of people who are too sick to work or who want to take time off with their newborn or newly adopted child. The bill would exempt those collecting maternity, parental and sickness benefits from having to repay any benefits.

A number of parents returning to work after caring for young children also told us that the current EI provisions dealing with re-entrance make it hard for them to qualify for regular benefits. Consequently the bill would create a level playing field by extending the so-called look back period for re-entrant parents by four years. This means that claimants who have received EI, maternity or parental benefits in the four years prior to the current two year look back, will require the same number of hours as other claimants to be eligible for regular benefits. This is only fair.

This change makes particularly good sense in the light of the government's commitment to families with children through initiatives, such as the extension of parental benefits, which are designed to help parents balance the demands of work and the demands of family while their children are very young.

It should also be noted that as a part of the bill we propose to modify the fishing regulations to ensure that self-employed fishers can take advantage of the enhanced maternity, parental and sickness benefits. This measure would be retroactive to December 31, 2000, the same date the enhancements came into effect for other EI claimants.

Many parents told us that they wanted the EI premium rates to be kept at a moderate level so that they could keep more of the pay they earn to buy the necessities of life. Accordingly the premium rate has been reduced by 15 cents from $2.40 in 2000 to $2.25 in 2001. This is the seventh consecutive reduction in premiums, resulting in billions of dollars in savings for workers and their families.

Taken together I believe these changes represent good news for a large number of EI claimants and their families. They leave more money in the pockets of families. They will protect first time special benefits and middle income EI claimants from having to repay their benefits. They will also support the critical transition back to the labour force for parents who take time out to take care of their children.

Mr. Speaker, it has been a pleasure for me to address you for the first time. I congratulate you on your appointment, and I intend to support the legislation.

Business Of The House

[Marlene Catterall, Liberal, Ottawa West—Nepean, ON]

Mr. Speaker, discussions have taken place between all the parties and I believe you would find consent for the following:

That the recorded divisions scheduled today at the conclusion of government orders take place in the following order:

All necessary questions to dispose of the supply day motion in the name of the Leader of the Opposition.

All questions to dispose of second reading of Bill C-2.

All questions to dispose of second reading of Bill C-8.

The main motion concerning the Address in Reply to the Speech from the Throne.

I understand there will be another motion, a pro forma motion, once the motion has been adopted.

[The Acting Speaker (Mr. Bélair)]

The House has heard the terms of the motion. Is there unanimous consent?

[Some hon. members]

Agreed.

(Motion agreed to)

The House resumed consideration of the motion that Bill C-2, an act to amend the Employment Insurance Act and the Employment Insurance (Fishing) Regulations, be read the second time and referred to a committee.

Employment Insurance Act

[Gérard Asselin, Bloc, Charlevoix, QC]

Mr. Speaker, this is my first speech of this 37th parliament. I have had the opportunity to rise on questions and comments a few times, but this is my first speech and it deals with Bill C-2, the employment insurance bill. It was the second bill to be introduced in the House of Commons since parliament reconvened.

First, I must thank all the voters of Charlevoix, all the workers, all those who are unemployed and all the seasonal workers. We have fought relentlessly since the Axworthy reform—which became the Young reform and which has taken the names of other ministers since then—which was part of the government's electoral platform.

The Prime Minister and the government said that as soon as parliament reconvened they were willing to correct their mistake and to make significant improvements to the bill.

We have before us today Bill C-2, which replaces Bill C-44. During the election campaign, the Prime Minister told us that the reason Bill C-44 did not pass third reading in the House of Commons was that the Bloc Quebecois refused to have this bill rammed through the House.

Bill C-44 was not passed at third reading because of a government strategy. The Prime Minister decided to introduce a bill at the very end of the session in June, in order to give parliamentarians time to think about first, second and third readings, and perhaps royal assent, over the summer.

Seeing that the bill did not have the unanimous support of the House, of workers and employers in the regions, of social organizations, women's groups and so forth, the Prime Minister told himself that going into an election campaign with such a bill would be a surefire disaster. He decided that he would withdraw it and not introduce it at third reading.

During the recent election campaign, he promised to introduce a bill, the one we are considering today, but parliamentarians are not being allowed to debate it in depth. The bill was supposed to have been extensively amended. We have to get across to the government, especially the Minister of Human Resources Development and the Prime Minister, people's concerns about this bill which, in our view, is worthless.

In our view, this bill only allows the government to correct part of its mistake. In its reform, it had taken the intensity rules and reduced the rate from 55% to 50%. Hence the penalty to seasonal workers of 1% a year.

The minister admitted that this was a mistake. Many regions believed the government's promises, given the $30 billion surplus in the EI fund alone, and the budgetary surpluses of the government and the Minister of Finance because of cuts in transfer payments for health and education, in a wide variety of areas.

However, Charlevoix was not taken in, because we have seen what happened in Gaspé, where there have been plant closings and unemployment has risen. The government tried to solve the problem in Gaspé or soften its impact, at the expense of the north shore, the Saguenay—Lac-St-Jean and the Lower St. Lawrence, taking from them to give to Gaspé.

This is more or less what the government has done so far. It gives with one hand and takes away with the other. In an attempt to compensate for the funds it would take to increase the number of insurable weeks in Gaspé, it decided to reorganize the economic regions and to combine the north shore and the Lower St. Lawrence, which has forced us into a transitional measure involving an unacceptable proposal for our seasonal workers. We were, for example, proposed a figure of 525 hours worked for 21 insurable weeks.

Already, with the 420 hour requirement, six out of ten contributors to employment insurance are not entitled to it, that is, the seasonal workers in the tourist or forestry industry, in fisheries or some other area where employment is seasonal.

When the minister tells me “Sir, we would like to try extending the seasons in your area”, I would dearly love to put a dome over the peat bogs so that peat can be cut longer, but that is impossible.

We also looked into the possibility of enclosing the hills at the Saint-François river under a refrigerated dome so that there could be skiing on artificial snow until August, but that too is impossible.

We have also tried looking into various ways of carrying out logging operations in winter with 5, 6, 7 or 8 feet of snow, but that too is impossible.

The minister asks us to extend our seasons, and I must mention the tourism industry. People who go camping celebrate Christmas in August, not on December 25, when campgrounds have long been closed. We can promote tourist attractions at various times of the year but, on a campground, Christmas is celebrated in August, not in December.

The Minister of Human Resources Development, the Minister of National Revenue and the Secretary of State for Amateur Sport criss-crossed our regions during the election campaign to inform us of the transitional measures that they had put in place. They recognized that it would be difficult for those who had qualified with 525 hours for 21 weeks, because there would be a grey area.

We are now in that grey area. On February 15, people will stop getting EI benefits. In my riding, people are no longer getting EI benefits and they will probably not work before June 1. They now find themselves in that so-called grey area. These people have no income at all, yet, there is $30 billion in the employment insurance fund. People need their EI benefits to pay their rent and their food, to put bread and butter on the table. Right now they find themselves in the grey area.

In the coming days, Statistics Canada will probably tell us that the unemployment rate miraculously dropped in Charlevoix. It will be down in February, in March and probably in April. Statistics Canada will come up with these figures. Of course, the government is handing out fewer cheques, since people no longer qualify, since they are no longer entitled to benefits.

When people no longer get EI benefits, the unemployment rate as determined by Statistics Canada drops by osmosis, but income security goes up in Quebec, since a number of these people have no other option than to go on welfare.

When welfare is involved, the bill is footed 100% by Quebecers, but EI premiums are in no way the property of the federal government. In my view, the federal government has the authority to legislate, but not to interfere. It is unfortunate that we are being forced to debate this today in order to get the government to understand that the bill it is preparing to have passed can perhaps put right some of its mistakes.

However, when the government promised to look at the bill in depth, we in the Bloc Quebecois told it that the money belonged to employees and employers. We suggested a parliamentary committee to split the bill in two in order to correct the mistakes that were made when the intensity rule was lowered from 55% to 50%. If we correct this error, we can immediately improve the rule. We would be favourable to raising the intensity rule to 60% instead of 50% or 55%. We suggest that there be uniform eligibility criteria.

Why does a new entrant on the labour market need 910 hours to qualify for employment insurance? Someone who works 32 to 35 hours a week for 10 to 12 weeks and who pays premiums is not entitled to EI. We want this abolished. We want the number of hours to be the same for everyone—300. Things would be much easier then.

We also suggest that the two week waiting period be abolished. Why two weeks? We meet someone who has just lost his job and received his last week's pay, and he tells us that he has to wait two weeks. It takes a month for the person to begin receiving benefits.

The Bloc Quebecois is going to vote against Bill C-2, although we know that it will improve things and correct the mistakes of the government, which dipped into the fund. We know, however, that the bill allows the government to help itself to the surplus in the employment insurance fund. This is unacceptable. We have always been critical of this, as have trade unions and social organizations. For our part, we will continue to speak out against this practice. On behalf of the seasonal workers in Charlevoix, we will be voting against this bill because we think it is unacceptable.

[John Cannis, Liberal, Parliamentary Secretary to Minister of Industry]

Mr. Speaker, I have congratulated the other Chairs. However, this is the first time I can congratulate you on your new assignment.

Throughout the debate today we heard members from both sides of the House talk about the technicalities of the debate, the statistics, the hours, the payments, the clawbacks, et cetera. What I would like to do is talk a little about the contributions to the employment insurance program. Then I want to go back 40 to 50 years and talk about where the program was then, where it is today, how it has changed, the purpose of it and why we had to make changes to it after we came to government in 1993.

As you will recall, Mr. Speaker, you were a member of parliament at that time as well. We did a mass review of overhauling the system. At that time, my colleagues from Brampton Centre and from Parkdale—High Park and I worked together to modernize the program.

The member from Calgary West made some comments which I would like to respond to. The member of the Bloc from Mercier also made some comments with respect to the program. I say to my colleagues that it is appropriate that we take this opportunity, not just to talk about the bill itself which will go to committee and changes will be made, but to tell the audience out there what the EI premium is all about.

I want to start out by saying that in 1993 the EI premium was pegged at $3.30 per $100. That is what Mr. Mulroney and the current leader of the Conservative Party left us with. Over seven years that premium has declined to $2.25 per $100, as was mentioned earlier by my colleague from Peterborough. If we add those pennies, as someone called them, which are well over $1.05 per $100, and we look at the two million people who have found employment since 1993, they add up to billions of dollars.

There is a fundamental difference here that the opposition refuses to acknowledge. In 1993 Canada had an unemployment rate of 11.4%. Today, thank God, we have an unemployment rate of 6.5% or 6.6%. In the last seven years over two million people have come back into the employment factor of the equation. What does that mean? Simply put, prior to 1993 there were two million people taking money out of the system. That is why the system was in a shambles. Now over two million people are putting money into the system.

Fortunately, today we are in the position of having surpluses with which we can reinvest, surpluses that unemployed people have an opportunity to access. Earlier the member from the Bloc talked about higher education. These surpluses go toward helping our youth get higher levels of education, or retraining, or perhaps to become a computer programmer, or an engineer or a graphics designer.

Many people have a problem when they talk about the EI contributions. As a former employer part of my obligation was to make contributions to the Canada pension program and to the unemployment insurance program. I am willing to bet that most of the members in this place, as well as the average Canadian, drive a car and own a home. They buy some form of insurance. I am tired of hearing comments from the opposition, such as those made by the member for Calgary West. He said that we were robbing the people. The member referred to the pages, which was uncalled for.

I drive a car. Year in and year out I pay an auto insurance premium. I wish never to have an accident. I have insurance for when and if I need to access it. Nobody is paying into this employment insurance program with the intent of accessing it.

There are people in the Atlantic provinces, Ontario, British Columbia and other parts of Canada who unfortunately are seasonal workers. There are single mothers in Ontario, Saskatchewan and other parts of Canada who work part time to subsidize whatever incomes they have so they can buy boots for their children for the winter. Perhaps they wish to subsidize school programs which are being cut right, left and centre in Ontario, for example. Are we going to penalize single mothers or single fathers who are trying to provide for their families? Surely not.

The member for the Bloc said earlier today that we are righting the wrong. I remember my father saying that to err is human, to forgive divine. Today we are trying to change that. Today we are saying that maybe there was a mistake. During the election campaign the Prime Minister, when was in the Atlantic provinces, said that we would correct it. That is what is happening today. We are making the adjustments to this program through Bill C-2.

I have a problem when I hear the opposition talking about the surpluses. I will go back to buying insurance. If a person is a good driver, his or her insurance premium over the years will be reduced to some degree. We contribute to the EI program and draw from it. However, if the EI system is being continuously used then surely there will be some provisions to offset that in some form or another.

It said in the 2000 monitoring and assessment report that in the year 1999-2000 about 400,000 jobs would be created. Time will tell once the statistics come out.

Let us look at those 400,000 new primarily full time jobs. There will be 400,000 people who will no longer be accessing the system. They will contributing to it. No one would have thought seven years ago that we would be in this enviable position today talking about reinvesting in our country, reinvesting in higher education for our youth and reinvesting in health programs.

They talked about the Canada pension program. Yes, there has been a slight increase. When this government took over it knew that it had to do something about it. The previous Conservative government and the leader of the Conservative Party refused to take the responsibility. They had an opportunity to make those changes and come to an agreement with the provinces, but they chose not to. They were afraid to. We made that decision with the provinces. Yes, there has been a small increase, but when we compare the decrease in EI contributions as opposed to the increase in Canada pension contributions, I think it is a pretty fair deal.

What Canadians out there need to know is that any premium increase to the Canada pension program has to be done with the agreement of all provinces. The government alone does not have the right to make that increase arbitrarily. I am taking this opportunity, without going into the guts of Bill C-2, to tell Canadians this story so they will know that.

People talk about the surpluses. I am very happy to stand on this side of the House, as a representative of the government, to say what has been done with the surpluses and to say that we are not robbing Canadians. It is a fair and equitable system, a system that has been in place since 1940 to support Canadians.

In closing, I encourage all members to support this new and changing legislation.

[Ghislain Lebel, Bloc, Chambly, QC]

Mr. Speaker, I have followed the debates that have gone on since this morning with considerable interest, especially since the party in government invoked closure, with the aim of preventing us from speaking more and perhaps from looking more closely at the whole employment insurance system governing workers and work in Canada and Quebec.

Employment insurance, it must be understood, is a sort of mutual insurance, a kind of insurance frequently found in Quebec, although less and less so now, because what was mutual is being demutualized.

The federal government's approach and concept of the employment insurance plan was to guarantee real mutual insurance. Thus, workers fearful about one day losing their job decided to contribute an amount of money in order to create a fund for themselves that would help them, in darker days, to continue their day to day existence, meet their obligations, the first of which is to eat. That was the aim of employment insurance.

Unfortunately, this government is incapable of revealing its true objectives to the people of Canada. It is incapable of telling it like it is and incapable of saying that to eliminate the almost immeasurable accumulated debt of $680 billion, sales taxes or gasoline taxes, already fairly high, or income taxes had to be increased.

The government would rather get its hands on the surplus that was generated to benefit the taxpayers, not to let the government use it to pay back the debt, the deficits that have accumulated over the years. The government's only concern is to show that federalism is profitable and that everything is fine, that the government is rolling over in clover. That is not true. The government is using money it should never have been allowed to grab. The auditor general recently said so.

The previous speaker pointed out that since the government has been in office the premiums of the employees have dropped from $3 to around $2. This is a significant amount of money to pour back in the economy. However, for some five years now, we could have maintained the current EI system without charging a penny more to the workers, because with the surplus we would have been able to meet the needs of all the EI contributors.

Unfortunately, the government lacked the political will to increase the taxes in order to reduce the accumulated deficits. Instead, it chose to ignore the problem. Employment insurance rules have been changed; only 42% of people qualify for it. Yet, 100% of them pay premiums the minute they start working, but the government says nothing about this.

It is as if someone were to take out property insurance and the insurer were to say “If your property goes up in flames, you have four chances out of ten of getting paid, but you must pay 100% of your premiums and pray God that your property will not go up in flames”. This is somewhat the same thing.

The auditor general recently came here and supported the opposition's arguments. There is no basis, no calculation to scientifically establish the workers' contribution rate for employment insurance. It is pulled out of a hat. Things are not so bad. Since much of our debt is owed to foreigners, with the fluctuation of interest rates on the international market, contributions to employment insurance are reduced or maintained at the same level for a while, without any kind of ability to objectively and correctly assess the needs of the plan.

Certainly, if we constantly draw on the employment insurance fund to pay for the accumulated national debt of almost $600 billion, we will never be able to contribute enough to pay off such a debt. Was this the true objective of the employment insurance plan when it was created? Let us not forget that it results from a federal-provincial agreement, from a constitutional amendment made in 1943, I believe, that transferred the whole employment insurance sector from provincial to federal authorities.

People put their confidence in the federal government. We now see the results. In Quebec, we are now used to this, and we no longer have any illusions about these people. That is why members on this side of the House would rather take off with what little they have left now, because in a few years we will have nothing left.

As for the health system, the federal government used to contribute 50% of the costs in the provinces. Now it is barely paying 15%, but it sets the standards. This is like inviting someone to a restaurant and footing the bill while the person decides on the menu. It takes some nerve to act like this. Such is the story of the party opposite.

Let us talk about women's issues, including parental leave, as they relate to this bill. There are studies—and the Liberals know them as well as I do—which show that women are paid less than men. This is not from me. Women are certainly aware of that situation, because they went all the way to the Federal Court of Appeal to defend the principle of pay equity. The government was paying women less than men. It was told so by a number of courts and administrative tribunals. The government threatened until the last minute to take the issue to the Supreme Court of Canada, to challenge the principle that equal work should mean equal pay for women.

It is the same thing with employment insurance. The same old principles that have been governing the Liberals for eons are resurfacing. A pregnant worker is not entitled to benefits unless she has accumulated 600 hours of work. There is no exception to this rule. There are pregnant women who, because of the very nature of their work, because they are exposed to certain risks such as computers, radioactive rays and so on must, on the recommendation of their doctor, stop working before having accumulated 600 hours.

The bill does not provide exceptions for such cases. No, the rules are very strict. It is always black and white for the party in office. That is the law and that is it. They make it and they impose it.

The Liberals are really not exercising the wisdom of Solomon. The hon. member for Hochelaga—Maisonneuve is studying law in his spare time, but it is not a waste of time.

Even though he is doing it in his spare time, it is not a waste of time. He has become a legal expert who can be pretty convincing. He will tell members the same thing I am telling them now. We could have done away with EI contributions for several years, as the auditor general told us. The government would have been able to maintain the program. Now it is going to take $30 billion from those who work hard to earn a living and use that money to pay off the debt Canada has accumulated over the years to cover this government's wild spending.

We are talking here about $2.8 billion. I see you nodding in agreement, Mr. Speaker. The embassy in Tokyo cost $2.8 billion. Five thousand dollars does not even cover the value and the surface area of the embassy grounds. Such lavishness is just incredible. Yet, young women with young children who are unfortunate enough to lose their jobs are condemned to live in misery by this government. It has no qualms about letting these people starve. That is poverty.

When we talk about poverty, that is the kind of poverty we are talking about, and not the poverty of the billionaire friend of the government who made only $250 million instead of $500 billion on a government transaction involving a 40 year lease. He is not the one who is poor. The one who is poor is the woman who arrives at work one morning and is told that there is no job for her any more. It is the woman who is told by her physician that she must stop working because she is pregnant and unable to go on. That woman does a lot for society. I know my friends opposite are totally insensitive to this kind of misery.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, I am pleased to have the opportunity to speak to Bill C-2. To begin, I would like to comment on the last remark about Canada's embassies around the world.

Canada's embassies are very important, and the hon. member opposite knows that. They are important in terms of trade relationships and creating jobs, which the bill is indeed related to. Never mind the malarkey in terms of trying to make a fuss about the cost of an embassy. They are an important part of the Canadian government. I am glad they are there to represent Canada in our business relations and other relations around the world.

I also wonder why the hon. member opposite is so excited about our embassy when Quebec is out there setting up its own embassies and duplicating what is already there. That is where the real waste is, in terms of the embassies that the Quebec government is establishing.

As I said, I welcome the opportunity to speak on Bill C-2. I especially welcome the amendments to the act. It is a very good step forward to improvements on the original bill.

Quite a number of members on this side of the House had serious concerns about certain parts of the bill, especially the intensity rule. That is why, in 1996, we welcomed the proposal to monitor the impacts of the bill. Bill C-2, which is all about making positive changes where needed, is a result of that monitoring.

We want EI to work the way it was intended, and that is to offer temporary support to workers who are unemployed so they can rejoin the workforce. I am pleased that for the most part the provisions of the employment insurance program are working the way they were intended.

My contribution to the debate will be to explain the proposed changes to the intensity provisions. The original thinking behind the intensity rule was to provide a greater incentive to work and to reduce dependence on EI as an income support.

Some thought the intensity rule would accomplish this by reducing the benefit rate of frequent claimants from 55% over time to 50%. In other words, the benefit rate would be reduced by one percentage point for every 20 weeks of regular benefits collected over the past five years.

The rule has proven to be ineffective. The monitoring and assessment reports indicate that the proportion of EI benefits paid out to frequent claimants has remained stable at around 40%. There is a reason for that of course, and it is the availability of work in certain areas. In a country like Canada we naturally have a lot of seasonal industries.

The government has done much in terms of creating the economic conditions for the creation of jobs. We got rid of the deficit. We have introduced new initiatives. In my region we have better utilized the regional development agency, ACOA. We are implementing the Atlantic investment partnership, and are basically there as a government trying to create more year round jobs, more full time jobs and longer periods of work for people in seasonal industries.

These initiatives and others across Canada have improved the employment picture with the creation of over two million jobs since 1993. However, Canada will always have seasonal industries which, by their very nature, require seasonal workers.

My colleague, the member for Egmont, mentioned his riding and the seasonal workers there. These are important industries. Workers in the agriculture and fisheries only work at certain times of the year because of the nature of the industries and of our climate. However, those workers are important to the economy. They contribute to the economy in a very great way.

Therefore, while the intensity provisions make sense in theory, in practice we have found that they do not curtail repeated use of the EI system, especially in areas where there are few opportunities for employment. As a result, we are quite concerned that they have become a punitive measure. I have also called the intensity rule a penalty on seasonal workers, and this bill proposes to change that and withdraw the penalty.

The bill proposes to eliminate the intensity provision altogether and to reinstate the benefit rate at 55% for all claims. These claims, as we said many times in the past, will be retroactive to October 1, 2000.

The government remains fully committed to the goals of the EI reforms introduced in 1996. The program is called employment insurance. It is designed to provide temporary income replacement and to help Canadians prepare for and obtain employment.

Yes, the Canadian economy has been doing extremely well but not all workers enjoy the full benefits of a healthy economy. Some areas in every region continue to have high rates of unemployment. Workers in those areas deserve our assistance.

I ask all hon. members in this place to note that these proposed changes will not affect just the Atlantic provinces. Sometimes we are pegged with that image. Eliminating the intensity provisions will benefit forestry workers in British Columbia, construction workers in Ontario and tourism workers in Quebec. It will put more money in the pockets of those workers so that they are better able to provide for their families.

During this debate I would ask hon. members to keep in mind that EI is just one of a number of ways to help unemployed Canadians. I think we all agree that increasing employment opportunities is a partnership exercise involving the provinces, the territories, communities, and business and labour organizations.

I know that seasonal workers very much want to increase their job prospects. They understand that long term solutions will be found through improving their skills and the economic development in their particular regions. The Liberal government will continue to strive in that direction, working with its partners to expand and diversify the local economies.

The amendments proposed in the bill will certainly help in terms of assisting those families, especially where there are seasonal industries with important workers in our economy. I encourage all members to support these amendments so that the bill may pass quickly through the House, so that those people at work can contribute to our economy, and so that those people who work and contribute to our economy in those seasonal industries and have been unfairly penalized by the intensity rule will now see it withdrawn and will be able to receive full benefits, as is intended by these amendments.