Mr. Speaker, I am glad to have an opportunity to join the debate on Bill C-2, especially following the eloquent remarks from the previous speaker. Building from that, I will try to demonstrate that some NDP members are in fact deep thinkers and I will share some of those deep thoughts with the him.
We are discussing Bill C-2, which really seeks to fix what I believe is an irreparably broken program. I believe we should start from the basic premise that the EI system is busted. It is broken. The wheels have fallen off it. It does not work any more. It ceased to fill its mandate long ago. Let us be clear that its mandate was to provide income maintenance to unemployed people.
We now have a program where less than 40% of unemployed people can hope to get any benefits whatsoever from the program. What kind of an insurance system is that? What if people had house insurance policies that they were forced to pay into because they had no choice. However, when their houses burned down there was less than a 40% chance of collecting any benefit whatsoever. They would think they had been robbed. They would think they had been fleeced by some clever insurance salesman. That is the only conclusion they could really come to.
That is the situation Canadian workers are facing today. Believe it or not but the figures are even worse for women. There is a gender issue here. Unemployed women have a less than 25% chance of collecting any benefit. It is even worse for youth. An unemployed youth under 25 years old has a less than 15% chance of collecting any benefit.
It is not as though the fund is unable to pay those benefits out. The fund is operating at a surplus. There is $500 million a month, not per year, being paid into the program. That is more than is being paid out. The dollar figures are the fund paid out $7 billion worth of benefits last year to unemployed workers and has a surplus of $7.8 billion. Less than 50% of the revenue generated by contributions from employers and employees goes to its intended purpose, which is income maintenance and training for unemployed workers. Over 50% goes into the general revenue for the government to do whatever it wants to do.
These are pretty poor odds. A person gets better odds than that from a VLT machine in Las Vegas. They pay out 94% and they are a rip-off. Frankly, we are being really ripped off when we pay out less than 50% of what we are putting in.
Let us keep in mind another important fact. The government ceased to pay anything into the UIC fund in the late 1980s. It used to be kind of one-third, one-third, one-third. The government stopped paying in at all. It is now solely made up of contributions from the employer and the employee. For every dollar the employee contributes, the employer contributes $1.40.
What gives the federal government the right to use the surplus money at all? It is not its money. The member for Mississauga West argued that because the government is responsible for any shortfall, when that happens, when there is a surplus it is the government's.
When we added up the total accumulated aggregate deficit that the fund had ever gone into, it was something like $11.4 billion. Over the course of many years, and during those years when there was not enough money in the fund to pay for all the unemployed people, we did go into the red.
We now have a surplus of $32 billion and it is growing. By the government's own logic, it should take back the $11.2 billion and put the rest back into benefits, into income maintenance for unemployed workers as it was intended. In that case that would be fair and I do not think there would not be any protests from the NDP.
We should take that $32 surplus, pay back all the money that we were credited with by the government during those periods of high unemployment and use the rest for income maintenance for unemployed people. What could be more fair than that?
Bill C-2 tinkers with a broken system instead of taking active steps to repair it. It tinkers with the intensity rule, the least of our problems. It tinkers with the clawback provisions, again a minor detail. The real problem unemployed workers have is the divisor rule. The method by which benefits were calculated changed dramatically in 1996 and left people, if they were lucky enough to be eligible at all, with collecting less money per week for a shorter period of time.
The divisor rule is so fundamentally wrong because eligibility is calculated based on the hours worked in the previous 52 weeks or one year prior to becoming unemployed. In other words, if a workers get enough hours to qualify in that 52 week period, they will get a claim. However the benefit is calculated on the 26 weeks immediately prior to their filing.
In the carpentry industry some of those might be dead weeks. Maybe there was no work at all for many of those weeks. It used to be that the benefit would be calculated by the previous weeks that one had worked. Obviously the average benefit will be dragged down if in that 26 week period only 13 weeks were worked and the other half were not worked at all. Right away, after making an average of that, it is 50% lower.
We have unemployed trades people and unemployed seasonal workers filing their claims. They used to receive maybe $400 a week in benefits because of the way it was calculated. With the new divisor rule, it is not unusual to see those same people coming in with paystubs for $128, $213 or $34. We had one actual illustrated example of a seasonal worker in New Brunswick who used to be able to count on approximately $315 a week. She now receives $38 a week.
No wonder there is a surplus. Hardly anybody qualifies and those who are lucky enough to win the lottery and qualify receive dramatically reduced benefits. There is a basic unfairness. If the system were being maxed out or there were a shortage in the system, we would have to be more miserly in the distribution of the benefits, but with a surplus of $500 million every month it is obscene.
I have often said that if we deduct something from a person's paycheque for a specific purpose and then use it for something completely different, in the very best case scenario that is a breach of trust. We entered into a trust relationship with employees when we took money off their cheques and told them we would hold it for them until they needed it. Then, on the very day they need it, we tell them we have changed our minds and we are spending that money on building roads, hospitals or for whatever else the government is using its consolidated revenue fund.
This is beyond a breach of trust. It is out and out fraudulent. People have reasonable expectations which were created when we told them that we were taking the money off their cheque for a specific reason, to give them income security if they become unemployed. We created that trust relationship and I would say it is a legal relationship. As the hon. member from the Bloc Quebecois very accurately pointed out, Bill C-2 seeks to institutionalize what is fundamentally wrong. It seeks to legalize what I believe is a challengeable situation.
That is what is wrong with Bill C-2 in a nutshell. It could have dealt with eligibility. It could have dealt with the real issue that less than 40% of Canadians qualify. It could have lowered the bar so that more people were eligible because the impact in certain regions is horrific.
We have heard members talk about Atlantic Canada today. Let me give one example from my riding of Winnipeg Centre. It is the third poorest riding in the country by whatever measurement is used, whether incidence of poverty or average family income. In the third poorest riding in the country the changes made to the EI program sucked $20.8 million a year out of my riding alone. That is just one little neighbourhood in the core area of Winnipeg. That is $20.8 million of payroll that would otherwise have been spent in the local economy.
Let us imagine that a company wanted to move into my riding with a payroll of $20.8 million. We would pave the streets with gold to attract that company. It would get government grants and subsidies. We would welcome it with open arms because it would generate a level of activity of $20.8 million a year.
We have had $20.8 million sucked out. The reverse happened in my riding. When we add what happened in St. John's, Newfoundland, the total impact is over $100 million a year. The very poorest and most vulnerable people have been pushed over the line from a reasonable income maintenance benefit into poverty.
What happens to those people? They go on social assistance, so the burden is offloaded on to the provinces that are already maxed out. The CHST is cut back, adding to the burden of the provinces, and their ability to provide income maintenance to poor people is reduced because of the reduction of EI benefits.
If the government were sincere about fixing the EI program it would have talked about eligibility in Bill C-2, but there is no mention of that. The government does not seem to think there is anything wrong with it. Why? It is a cash cow. It is a goose that lays golden eggs. It just keeps squirting out these treasures every month.
It has paid down the deficit on the backs of unemployed workers, the most vulnerable people in the country. Even worse, it has not just paid down the deficit with that money. Now it is giving tax cuts to the wealthy with that money. It is a sick and perverted form of Robin Hood, to rob from the poor to give to the rich.
The member across says that is nonsense. What would the member call a further reduction in capital gains tax? What would the member call a reduction in the corporate tax rate from 17% to 16%? Where is the government getting that money to give away? It is getting a considerable amount of that money, $32 billion of it, from the EI fund, from unemployed workers who would otherwise receive benefits and now get zippo, zilch. They are shut out of the system. We are not pleased with Bill C-2. We are kind of upset by it.
There is one point that is even more galling. As a tradesman I served a four year apprenticeship. It is a beautiful system because one is engaged with the workforce. One can earn while one learns. One has an attachment to the workforce while in school with the community college component of the apprenticeship.
When I went to community college for my apprenticeship training I received EI benefits. It is one of the designated uses listed in the EI act. It was a great system. The EI system used to purchase block seats in community colleges. It would buy a whole classroom of seats and provide income maintenance to the students while they were there.
Now there is a two week waiting period. Now EI is treating the students as if they are unemployed. When they leave the job site and go to the community college, with no interruption in their work they are not unemployed. They still have bosses and they still have jobs. They are just going through the school component of their apprenticeships.
An insignificant amount of money is being gained. It is a miserly thing to do. The total impact of this for all apprentices is about $80 million a year when a surplus of $500 million a month is being shown.
I will tell the House the predictable consequence and exactly what is happening. Apprentices are not taking their schooling when it comes up. They get their notices from the community college that it is their turn to go to school. Struggling apprentices with young families are faced with two weeks with no income whatsoever. They are just passing on it and saying that they will not accept it this year, that they will try next year when their number comes up again, extending their apprenticeship and disadvantaging the industry that needs graduating journeymen.
That is one example of the many hundreds of tiny things the government did to the program in 1996 which has caused this incredible windfall surplus. There is no mention of that in Bill C-2.
We will be moving that as an amendment and we would seek broad support from the other parties for the basic, fundamental issue of income maintenance for apprentices while they are in community college. I hope we will get broad support for that. I understand that even the Progressive Conservative Party sees the logic in that issue.
There is a huge gender issue here too, which I think should be raised on behalf of the many women who are disadvantaged by the EI system. I have already said that less than 25% of unemployed women are eligible for EI. There is a reason for this. Women are often more likely to be in part time jobs where they have difficulty getting the number of hours they need to qualify.
There is a charter challenge. I am proud to say that the community unemployed health centre located in my riding has managed to succeed to the next level of federal court with an argument that the current EI system structure affects women in a way that violates article 15 of the charter which states that everyone deserves equal access to all the benefits and the provisions of being a citizen of Canada.
It disproportionately affects women in a negative way far more than it affects men. I believe the women of Canada and their advocates have a legitimate case to make. Whether it was by design, by omission or by accident, there is a gender imbalance disadvantaging women more than men.
Even the whole hour system is structured in a way that fewer people qualify. I am not trying to hearken back to the old system as if it were perfect, but if people worked more than 15 hours in one week in the old days they were given credit for one insurable week. Granted the benefit would be lower because it would be a low income week, but at least they received credit for the week.
Now 920 hours are required to requalify into the program, with 700 hours being required for an initial application. Rather than 14 to 20 weeks depending on where one lives, one now needs 700 to 920 hours. That is a lot more. It is like six months of work. The eligibility bar has been raised. A lot of people working part time will never get 920 hours. UFCW workers who are store clerks at Sobey's or Canada Safeway are deliberately held down to 15 hours a week. They will never qualify. They have to pay in but they never qualify. This is absolutely unfair.
A number of things in the EI bill are fundamentally wrong. It is a revenue generator for the government. It is not an insurance system. It ceased to be an insurance system a long time ago when it failed to provide reasonable income maintenance for unemployed workers as per its original mandate. At $500 million a month the Liberals cannot afford to be fair. If that is the case, maybe we should pack the system up because it is failing to meet the needs of unemployed workers.
I mentioned the intensity rule and the clawback rule. Both of these will be changed by Bill C-2. They are positive steps. We do not deny that these are two of the things that needed to be changed. However they are insignificant. The intensity rule meant an individual was punished for being a frequent user of the system. If one collected this year one would lose 1% of the benefit the next year on a rolling scale up to a total of 5%. If one collected five years in a row, one would be 5% lower than one's colleagues.
The Canadian Labour Congress put together a series of proposals to improve the system and make it more accessible. It is shooting for 70% and 60%. Seventy per cent of all unemployed workers should qualify and they should be compensated at sixty per cent of their gross earnings. This would be an employment insurance system that would actually provide insurance for unemployed people.
It is supposed to be unemployment insurance system. The government changed the name in a very cynical way in 1996 to try to take the focus away from what it was originally intended to do: to provide income maintenance and training for unemployed people so they could re-enter the workforce.
We heard a lot about labour market training in the Speech from the Throne. Suddenly there is a renewed interest in a highly skilled workforce where key elements in building a highly skilled workforce are being taken away. I am talking about job security, income maintenance when unemployed and good access to labour market training so individuals can get back into the workforce should they be unfortunate enough to become unemployed.
What would members say of home insurance program if they had less than a 40% chance to collect? What would we say of any kind of system that paid out less than 50% or what was put in? The odds are better in a Las Vegas VLT where at least 94% is paid out. Here $7 billion is paid out and $7.8 billion is put into surplus and then squandered by the Liberal government spending it on whatever it wishes.
Unemployed workers in this province have been fleeced. They have been hosed since 1996 and they are fed up. They are coming to us pleading for the government to understand what it means to be a seasonal worker, a construction worker or any Canadian who finds himself unemployed and needing income maintenance.
Bill C-2 is as flawed as the employment insurance system.
