Mr. Speaker, I am very pleased to speak today on the occasion of the start of debate on Bill C-2 on employment insurance.
From the start it is important to establish clearly the point we have reached in this debate. In January 1997, the reform of the employment insurance plan took effect. It was supposed to attune the plan closely with the realities of the labour market and enable people to return to work quickly.
However there is a major flaw in the system. Under cover of the reform, which was to improve employment insurance, the plan started pumping money to the Minister of Finance of Canada. It became one of the best tools in the fight against the deficit on the backs of the unemployed, workers and employers.
The federal government wondered how to go about collecting as much money as fast as possible and as quickly as possible, and on the backs of whomever would be the easiest. It turned toward society's most disadvantaged, the unemployed, people who were not necessarily solidly organized in social terms, and imposed the employment insurance plan on them.
I will provide an example for members. The employment insurance plan is based on contributions by employers and employees, and benefits are paid. In 1994 the surplus was $2.3 billion; in 1995 it was $4.3 billion; in 1996, $5 billion; in 1997, $6.7 billion; in 1998, $7.3 billion; in 1999, $6.5 billion; and in 2000, $5.6 billion. The surplus is approaching a total of $30 billion to $31 billion.
Accordingly, the federal government, since imposing the new employment insurance plan, has taken $31 billion more from the pockets of employers and employees than it has paid out to the unemployed as benefits.
I will not use the word that we would use back home because it would be considered unparliamentary, but the government has plumped up its coffers by making employers and employees pay excessively high premiums and by tightening the screws across the board.
First, it looked for a way to reduce benefits to a bare minimum. One thing it came up with was the intensity rule. For the past three or four years we have been telling the government that this rule has to go. Finally it listened to us and introduced a provision to that effect in Bill C-44. The intensity rule is federal bureaucracy at its best. The federal government is saying that our seasonal workers are unemployed because they want to be, because they simply do not want to work. The idea is that it will give people 55% of their average earnings the first time they draw EI benefits and bump them down to 54% the next time around. It figures this will encourage people to get out and work.
Let us take someone earning $600 a week. This is not astronomical—it amounts to $30,000 a year. If such a person worked 18 to 20 weeks, at $600 a week, his employment insurance cheque would normally be $330 a week. The intensity rule would lower this to $300. This means that the government has pocketed the $30 difference, a loss that is keenly felt at this income level. The federal government has siphoned off quite a bit this way.
The demands for changes to this rule of intensity, which the government has finally decided to change, are nothing new. They have been around for a very long time.
The government imposed a program that would collect as much money as possible to battle the deficit. I have already given some examples of the amount of money it has generated. As a result, the program no longer has any credibility.
Today, about 40% of the unemployed qualify for benefits. If this were a private insurance plan, no one would subscribe to it. When we pay premiums for a car, a house or other kinds of insurance, we expect to get some benefits in the end. This one is a mandatory program to which everyone contributes. The Liberals changed the rules in 1997 and now everyone pays into it.
Young workers start contributing as soon as they start to work, even if they do not work the 910 hours required to qualify. Women returning to the workforce contribute as soon as they start to work. If the young worker has not accumulated 910 hours, “so long”. No question of paying him or her any benefits. Although the worker has contributed, there is no entitlement to benefits. Today's bill does nothing to correct this.
A system has been created, a way of doing things that works to the detriment of the people in our society who are the worst off. It has, however, been realized that the surplus accumulated over the years has to be put back into the system one day in the context of the present legislation. There was a provision that the government could decide to use this money for other purposes within one economic cycle. That it has done.
At the end of the economic cycle, it should put these surpluses back into the system but it does not want to do that. Making lower income earners contribute has worked just too well.
For example, people pay premiums on their income up to $39,000. Someone earning $100,000 pays premiums on the first $39,000 but not on the difference between $39,000 and $100,000.
Similarly, someone earning $45,000 pays premiums on the first $39,000 but not on the additional $6,000. This is assuming that person contributes to the employment insurance program, because many people do not. During his last mandate, we even informed the Prime Minister that he was not contributing to the employment insurance program. After 30 years as a member of parliament, he did not know that. We informed him of that fact.
There are others who do not contribute, including all the professionals who work but do not pay EI premiums. This means that these people did not do their share in the fight against the deficit.
When there are surpluses, as has been the case in recent years, people expect lower taxes. For some, it is the way to get something back for helping to fight the deficit. However, those who do not pay much tax, those earning $15,000, $18,000, $20,000 or $25,000 per year—and there are many who earn such salaries and even less than that—do not really need a significant tax reduction but rather an acceptable and adequate employment insurance program that will provide them with a decent income when they find themselves between jobs. The bill still does not provide such a program.
This issue was the subject of a major debate during the previous parliament.
The debate was so important that during the election campaign the Prime Minister was obliged to recognize that a lot of errors had been made in the reform. He said, for example, on November 4, 2000 “We realized that it was not a good decision in that we should not have done it”. He was talking about the cuts to the employment insurance plan his government had imposed.
The Prime Minister himself has recognized that the government made a mistake. Bill C-44 had been introduced before the election campaign and people were rightly saying that it was not enough. It was in reaction to this position that he said “It is true, we did make major mistakes”.
The problem today is that the bill before us is the same one we had before us prior to the election. During the election campaign, the Liberal Party noted very clear messages on this. It told the public that significant changes would be made.
For example, I quote the Secretary of State for Amateur Sport, who said during the election:
Once a Liberal majority is elected, 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.
The Minister of Public Works and Government Services, who is also responsible for Quebec, also supported the arguments in favour of changes to the employment insurance plan. The Secretary of State for Amateur Sport continued, speaking as well for the Minister of Public Works and Government Services, “The government is open to discussion”.
There is a problem in this government, because we did not know who speaks on its behalf, except that now we know, the bill has been introduced.
On the subject of this bill, the remarks of the Secretary of State for Amateur Sport and the Minister of Public Works and Government Services, who is also responsible for all of Quebec, were rebuffed by the government. Once again with the administration of the employment insurance account, it would appear that it is not those who want improvements who have won but the Minister of Finance. Money must continue to flow from the pump for him because he needs it and he is still getting it the way he always did.
This attitude is unacceptable. Politicians cannot expect to be taken seriously by public opinion if the government keeps acting this way.
If one makes a promise during an election campaign and, immediately after winning the election, one forgets one's promise, this fuels frustration and cynicism toward politicians. The Liberal Party is truly responsible for that.
There is even worse. Cynicism does not stop people from eating. It is something very difficult to bear and very damaging to democracy but today we have a situation where Canadians expect significant corrective measures, a situation where people going through hard times expected much more than what they are seeing.
It has been proposed that the intensity rule be abolished. It would be interesting to increase the average benefits from 50% to 55% for everyone. However we have seen that 55% is not enough. The thing to do would be to increase this percentage to a higher level, something like 60% of the average salary. Thus the unemployed could count on a decent income between two jobs, which was the intent of the employment insurance plan.
Even if economic growth is optimal, some seasonal jobs will not reap the benefits. Economic growth is important because it is essential to job creation and is part of the fight against poverty.
In forestry, agriculture and tourism, the fact that the economy is in good shape does not necessarily translate into a significant increase in benefit weeks or hours of work. As we have pointed out, the jobs in these seasonal industries are also seasonal. These workers are therefore entitled to a minimum acceptable income.
There is also the whole issue of maternity and parental leave. After much lobbying, the government reduced the number of qualifying hours from 700 to 600. It may interest members to know that before the reform, however, a woman needed 300 hours to qualify for maternity leave.
If the government had just stuck with the requirement in the 1997 regime—20 weeks of work at 15 hours a week, or 300 hours of work—nothing would have changed and more women would have been able to qualify.
At the time the federal government took advantage of the situation and raised the requirement to 700 hours, or 20 weeks at 35 hours. That is many weeks. The result was that far fewer women were able to qualify. For five years, we were stuck with a regime that was divorced from the conditions workers actually face.
I will give an example. In 1989, before all the reforms, 82% of unemployed women qualified for benefits. We saw this percentage drop dramatically as soon as the Liberals introduced their change. In 1994, benefits had dropped to 59% of earnings. The downward trend continued, and in 1999, 38% of unemployed women qualified for EI.
This behaviour is totally unacceptable especially because, with the increase in precarious jobs and part time jobs, the number of people contributing to employment insurance but not eligible for benefits has increased. This is the ideal clientele for the Minister of Finance. On the one hand, he collects the money and, on the other hand, he does not give it back.
The same thing has happened with young workers. In 1989, 98% of young people between the ages of 20 and 24 were eligible. In 1999, only 24.9% were.
This means that only one young adult out of four is eligible. In Bill C-2, there is no provision in this respect. They have decided not to change their tune. I have already asked questions on this and I received the same answer as when I asked about the intensity rule “This rule has been put in place because people are unwilling to work hard. If we cut their income, these people are going to go back to work”. This is the point of view expressed by the Prime Minister himself when he referred to the unemployed as beer drinkers.
This is the bureaucracy went by for four years. People were systematically penalized. They were told they would lose benefits because they did not want to work. We realized that after three years of studies on this matter. During that time, a lot of people lost money and could not afford to meet their mortgage or car payments or to raise their families. This is unacceptable.
Today the government is proposing that the measures be retroactive to last October. These people should benefit from retroactivity back to the date the plan came into effect because it is inhumane. Canadian workers are being treated like economic guinea pigs. It is totally unacceptable.
The conception that people are a little lazy and do not want to work is being applied to young people. The minister herself told me “If we take away the discrimination toward young people, they will all drop out”. That is the exact same conception as for seasonal workers.
When young people drop out, it is not because they do not want a job but rather because they have a problem. We see nothing to that effect in the new bill. It is as if the new bill would not change anything. This is not acceptable to me.
We have in front of us a system that does not function well. Everybody contributes from the first hour worked. There is a dramatic drop in the number of contributors who qualify. We have seen it with women and young people. There are those who earn more than $39,000, as I was saying previously, and women who just do not qualify any more. More and more women could not qualify for the employment insurance system.
Average benefits also dropped considerably. The tables have been changed. Instead of being eligible for 40 weeks of benefits after a certain number of hours of work, people now qualify for only 32, 33 or 34 weeks, which means less income, and the creation of what has been known as the spring gap. People will live through that again this year.
Last summer there was an attempt to change the regional map. In my area, people applied for unemployment benefits between July 9 and September 17. Because the minister had changed the regional map without reasonable consultation having taken place prior, 565 hours were required to qualify instead of 420 hours previously. Instead of being eligible to 32 weeks of benefits, they were given 21.
We should remember what happened as a result of public protests. It was a few months before the election. The federal government was paying a lot of attention to these things. It decided to correct the situation. On September 17, it said it would return to the old rules: 420 hours to qualify and 32 weeks of benefits.
However it cannot correct the situation that it created with the summer gap between July 9 and September 17. These past few weeks there are people in my region whose benefits are running out. It did not correct that situation, while it would have the opportunity, in legislation such as the one we have before us, to say it made no sense to create for two months sub-citizens, sub-unemployed, people who do not have what is required to qualify.
Some people came to my office. They were two friends who worked in the same business. One said “I submitted my request on September 15 and got 21 weeks of benefits”. The other said “I went on September 18 and for the same length of employment I got 32 weeks of benefits”. Where is the justice in this?
At the time, when this correction was made, the minister told us that it would take a legislative change. The legislation would have to be changed. Legislation cannot be changed like that. Changes cannot be retroactive.
Today the legislation is being changed. This would be an excellent opportunity to amend the act and to restore the dignity of an EI system that would provide the benefits that these people deserve. There is no such amendment, even if the Prime Minister himself was made aware of the situation.
I wrote him last December asking if there was really no way to address the situation so as to provide these people with more acceptable conditions. I am still waiting for an answer.
The government is now making some corrections that were suggested as important a very long time ago, dealing with the intensity rule, eligibility for special benefits and clawback. According to the present system, seasonal workers who make a lot of money, particularly in the building industry, have to give it back when they file their income tax, when they earn more than a certain amount.
A solution had to be found, because no one enjoys giving back part of the money earned during the year, money used to keep the family, and having to give it back suddenly in March and April.
I do not think we would like to live with this kind of situation given the kind of work we are doing. If we were told in February or March that for the purpose of our personal income tax return the vacation allowance should be considered as a supplement and returned to the government, we would not find it very interesting.
We are still faced with a situation or a government approach that is unacceptable. We have a fundamental problem that is reflected in the spirit of the Speech from the Throne. I quote the only sentence referring to employment insurance in the Speech from the Throne “There was a time when losing a job also meant immediate loss of income for workers and their families. And so Canadians created Employment Insurance”.
That is a complacent statement. It is as if, when employment insurance was created, we had solved all the problems of the unemployed people who needed income between two jobs. Rather, it is the opposite. It is unemployment insurance that was created soon after the war in order to provide people with sufficient income. It is only when the plan was changed under the Liberals that it became the employment insurance plan.
We had an unemployment insurance plan under which people, through collective solidarity, could get a decent income between two jobs. The name of the plan was changed and not only the packaging but also the content were changed. It has become a money pump for the finance minister. It has become a way to make sure the government gets as much money as possible. This certainly does not meet the objective outlined in the Speech from the Throne, which was to ensure an income for workers and their families.
I think employment insurance has been one of the main factors in the increase in poverty in Canada over the last five or six years. We keep hearing about concerns for children with respect to the child tax benefit. It is not a bad program per se but we must remember that if there are poor children, it is because there are poor parents to begin with. If the situation were different, if employment insurance had not been cut as it has, many children would be much better fed every day in their families.
A lot of people would not have to resort to food banks at the end of each month. We are talking here about money and an insurance program, a program based on contributions. Society as a whole, workers and employers contribute collectively to offer those who lose their jobs some form of income. But cuts were made to this program, which changed it into a program promoting financial dependency. I think an important social pact that existed in Canada was also broken.
For many decades now the resource rich regions of Canada supplied the raw material, the basic resources our society needed to function. Now that we have also developed the new economy, this employment insurance plan has put an end to an existing agreement. Under this agreement, the resource regions that had industries, such as forestry, agriculture, tourism and fisheries, were to develop their resources but because these industries do not operate all year long, the plan would provide adequate income to workers so they could have a decent life in their own region. However the government put an end this agreement unilaterally.
One the one hand, it has decided to apply to seasonal workers the principle that they do not work because they are lazy and that putting more stringent conditions into the plan will make them work harder. Benefits will be cut and workers will have to manage.
On the other hand, the government was supposed to invest in the diversification of regional economies and thus counterbalance the effects of the tightening of the employment insurance plan. But that money never came, and when it did, it was invested inefficiently.
We witnessed the HRDC boondoggle. A program called the transitional jobs fund was used for electioneering purposes, especially in 1997, to help the Liberals win more ridings. We have never seen so much investment in Bloc ridings as we did then. The Liberals had carefully targeted the ridings where they wanted to get results. But this did not resolve the social pact issue.
Right now, resource regions have to adapt, and they have had to bear a disproportionate share of the fight against the deficit. Now that we have surpluses, they cannot get their fair share. I think there is a basic problem with the implementation of the plan.
There is also another important aspect. The employment insurance program has been in place for five years now. It is reviewed every year. It is in its fourth year and we are waiting for the report. We hope the report will be published soon and it would be important to have it before the end of this debate. Maybe we could adjust things based on the report.
Apart from the financial problems the unemployed may have, there is a need to bring the plan in line with the labour market. Among other things, the Bloc Quebecois has proposed that self-employed workers be eligible on a voluntary basis. Why not put this possibility on the table? Today, with the new reality of the workplace, why can we not be more flexible and find a way to make the program more acceptable, since many people work part time and 18% of the people are self-employed?
The answer is always the same: the basic principle is not to provide people between jobs with a decent income but to accumulate as much money for the finance minister, so that he can invest in all kinds of activities with the money of those who are the worst off.
It is much easier to force a worker whose status is precarious, a young man or a young woman starting to work at 15 hours a week and getting a pay cheque for the first time, to contribute to the plan. How can he or she protest and say “ It does not make sense for me to contribute when I do not even qualify”. Before these young persons get organized and make representations, things will not change much.
People have learned their lesson. I am now very satisfied with the public's reaction to Bill C-2. I just received a call from a representative of the Mouvement autonome et solidaire des sans-emploi du Québec. I asked him if he had a problem with the fact that we considered it unacceptable for the government to legalize the misappropriation of these surpluses and, as a result, that we oppose the bill even though it proposes some improvements we have been asking for a long time. He answered that he did not because the association thinks that the bill is a disgrace. The government ought to be ashamed of trying to use blackmail by saying “I stole $100 from you and I am giving you $8 back, so you should be delighted”. When someone takes $100 from me he owes me this sum and he must give me back $100, not $8. Otherwise it is unacceptable to ask us to be delighted because we are getting $8 instead of the $100 owed us.
I think that in this regard we are on solid ground. Unions and other representatives of the workers and the unemployed know very well that we stand for social equity. This is what the population wants and it needs no explanation. We are going to defend social equity and I am ready to debate our position at any time.
People know very well that if we just agreed with the bill, the $30 billion surplus would just disappear into the system. The unemployed would never benefit from the surplus. All the sacrifices they had to make in the fight against the deficit would not earn them anything while other groups would benefit from those sacrifices.
Management of the system must appear to be fair for people who contribute to the plan, for the employers and the employees.
Seasonal workers are at the mercy of economic cycles. Unemployment rates are down in every region of Canada. In many places, the 10%, 12% or 13% unemployment rates we saw a few years ago are now 7 or 8%. However in those areas seasonal workers do not necessarily work a higher number of weeks. For them the situation did not change. They need to qualify for employment insurance to get an income for the winter months and the months when the industry they work for slows down. When the unemployment rate suddenly decreases in an area, instead of needing 420 hours in order to qualify, they will need 500, 560 or 600, and in the end they will get benefits for fewer weeks.
This has given rise to a situation where there are problems not only in rural areas but also in cities where there has been a big drop in the unemployment rate. There are situations where people have to work 700 hours in order to qualify and they end up being 7, 8 or 10 weeks without any income. It is not a very interesting situation in which to be.
This debate is closely connected with the issue of globalization. We must not forget that the 1994-95 employment insurance reforms were carried out because the International Monetary Fund and other organizations urged Canada to put its fiscal house in order. To be productive, Canada had to create programs that were quite similar to those of the United States.
The government tried to bring our employment insurance system in line with the American system. Sometimes it forgets to look at both sides of the fence.
Even in the United States, for example, for the waiting period, there is, just like in our system, an old principle stating that during the two first weeks, the claimant is considered to be unemployed and, therefore, he gets no benefits. That principle dates back to the time when workers did not start paying premiums the moment they started on the job. A person had to work 20 hours a week for 15 weeks in order to qualify. Now that everyone contributes right from the first hour worked, this archaic waiting period ought to be done away with, but it is still in the plan.
This is another element the government should change. There is a $30 billion surplus and the bill involves about 8% of the annual surplus in the employment insurance fund in recent years. If there is an annual surplus of $6 billion, that will mean $500 or $600 million will be put back into the fund, which is about 8% of the surplus. The government keeps the rest, which should go to employment insurance. This is unacceptable.
The government must be brought around to changing this, and I hope that will happen during the committee hearings. It will be very important for all groups wishing to make representations to come and do so. People have met with the Secretary of State for Amateur Sport, the Minister of Public Works and Government Services and probably with ministers in the maritime provinces as well, and just about everywhere else, and have been told changes would be forthcoming. Those people are not very happy this morning to learn that this bill contains nothing of what was promised to them. The only way they can get their point across properly is in a parliamentary committee.
Members can be certain that those of us in the Bloc Quebecois will be open to people having an opportunity to be heard, so that amendments that reflect the points they have brought up can be introduced.
I am anxious to see the Secretary of State for Amateur Sport and the Minister of Human Resources Development contradicting each other on issues on which they have theoretically reached agreement secretly during the election campaign.
Somebody, somewhere, must have said “Yes, there will be changes and here is the list”. I am eager to see, when these requests are made public, who will win the battle going on among the departments under the responsibility of the current Prime Minister? Who will win in the end? Will it be those who are seeking improvements or those who want the system to remain the same and to continue to grab as much money as possible?
We, from the Bloc Quebecois, have the advantage of being able to speak publicly on this subject. We do not have to hide behind cabinet secrecy or government solidarity. I can assure the House that we will fully assume this responsibility.
We were expecting much more since the Prime Minister had admitted that it was a bad reform.
Why is there an extension of the evaluation period of the system? We learned in the bill that the annual evaluation, which was to apply for a five year period, would go on for many years. The message is aimed at those who are waging a trench war to obtain improvements to the system. We will have to fight for the issues that we raised on a day to day and year to year basis.
There are encouraging signs. We have long said that we are against the intensity rule and finally the government has decided to do something about it. Our arguments are just as strong on many other issues, including discrimination against young people and women. In the end I am convinced that the government will have to act.
We do not have an election every year and this government's sensitivity is lower following an election. It seems to diminish until the next election gets close. That is a reality with which we have to live but we still believe that the soundness of the arguments and strength of the people who come to tell us what they are experiencing will allow our views to prevail.
In recent weeks I also spoke to Françoise David from the Fédération des femmes du Québec. Mrs. David wishes to make representations to the parliamentary committee reviewing these issues, as do the union representatives and officials from the Associations de défense des chômeurs. I am convinced that in the end we can arrive at a positive solution.
I would like to refer to a release issued by the CLC, the Canadian Labour Congress. The title of the release is to the effect that two thirds of the unemployed will still not qualify. This morning Hans Marotte, who is the spokesperson for the Associations de défense des chômeurs, said the same thing:
The current bill does not in any way solve the issue of eligibility to the plan. The current program will simply improve a number of minor conditions for people already in the system, for example, by abolishing the intensity rule.
However the issues of insurability and the return of the right of access to the plan for those unemployed have not been resolved. In view of all this, clearly we cannot vote for the bill unless it is thoroughly changed.
The Bloc Quebecois proposed two things. First, we recommended that the bill be split into two bills. One would be debated later and would cover the whole issue of management of the fund surplus to enable it to be come an independent fund or a payroll tax. This indepth debate would be held in the coming weeks or months.
The other bill would concern the list of improvements to be made to the plan which we should vote on soon. We are ready every day to do so.
The argument that the Bloc Quebecois is holding up the vote on improvements is totally false. We are ready to vote on improvements at any time but we will not be duped into approving a clause that would enable the government to retain control and legalize the misappropriation of surplus funds. The bill currently permits that.
The government is shifting responsibility for setting the contribution rate from the employment insurance commission to itself. If the bill is passed, next year, when the rate is set, the government would not have to take the needs of current workers into account. It would have to take the needs of labour into account along with its own financial requirements and this would justify anything the government wants to do.
The reason this clause is included in the bill is that we are at the end of an economic cycle. If there is such a change, the government would have to put money back into the system and it is not ready to do that.
What people living with the employment insurance plan want, whether they be employers or employees, is a system that gives value for money. In an insurance plan, when there are surpluses, either premiums are reduced or the terms and conditions are improved but no third party grabs the surpluses and uses them for some other purpose. Those who pay premiums are the ones who should benefit.
We have before us a bill that is totally unsatisfying and inadequate. This is a bill that would not satisfy the unemployed, workers, employers or unions representing workers. This is a bill in which the government is trying to make a fool's deal with us, a deal where it would give us some little improvement, while what is needed is a comprehensive employment insurance reform. Such reform would ensure that the plan would be administered by the people who pay into it and give dignity back to it, so that it can really serve the unemployed and not pay for the federal government's debt.
We all have efforts to make regarding the debt. We have done some in the past but there are people who did not get the return on their investment that they deserved. On their behalf, the Bloc Quebecois will oppose this bill as long as the changes deemed necessary have not been made.