Mr. Speaker, when all is said and done, Bill C-2 should be viewed with some pride and a great deal of satisfaction by all parties in the House. The bill is evidence of an effective governance and effective law-making.
In 1996 the government set out to put in place a much improved plan to assist Canada's unemployed, to help get them back to work and keep them working. That plan had goals that are as vital today just as they were then: a fairer system that treats all workers more equitably; a system that encourages work and reduces dependence on benefits; a system that provides assistance to those most in need, namely people from low income families with children during periods of unemployment; and a system designed to help people get back to work and help keep them at work.
A very important part of that system included a provision to continuously monitor and assess the system to see if it was in fact living up to its design goals. As a result, the EI system has been adjusted to ensure it continues to serve the purposes for which it was introduced. Bill C-2 is another step in this evolutionary process and warrants the support of all members of the House.
This is how effective programs are designed and implemented. No regime should be fixed in amber, unresponsive to changing economic and social conditions. I sense that, in general, members opposite also welcome the changes proposed in the bill.
However it seems that much of the discussion on Bill C-2 has focused on the rate setting process for EI premiums. The government has been charged by members across that premiums are too high and benefits are inadequate. Surely we must acknowledge that rates have been consistently reduced in recent years.
The employee premium rate for 2001 has already been set at $2.25, down from $2.40 in 2000. This is the seventh straight year premiums have been reduced. At $2.25, employers and employees will save approximately $6.4 billion in 2001 compared to where the premiums were at when we took over as the government in 1994, which was $3.07. That is a total reduction in premiums of 82 cents. If that is taken as a percentage of the present rate of $2.25, that is a 32% reduction in rates. That is a very fundamental reduction.
The argument that a surplus in the EI account is evidence and that the premium rates are too high does not hold water. The EI account must be allowed to accumulate a surplus during periods of improving economic conditions to ensure that premiums do not have to be raised if the economy is in a downturn which would inevitably be accompanied by higher unemployment and higher demands on the EI account.
Surely we do not want to raise premium rates in an already depressed economy which would put a further damper on economic growth and job creation. We should bear in mind that during the last recession a $2 billion surplus in the EI account at the end of 1990 became a $6 billion deficit by the end of 1993, in spite of the rise in premiums. As to the adequacy of benefits, that is precisely what Bill C-2 would propose to improve.
The intensity rule would be removed. The so-called clawback provision would be adjusted to ensure that first time users and those on special benefits would be exempt from paying back the benefits. The re-entrant rules would be adjusted so that re-entrant parents would qualify for EI regular benefits with the same number of hours as other claimants when they returned to the labour force following an extended absence to care for young children.
The opposition has also criticized the provisions in Bill C-2 concerning rate setting, claiming that the process should be placed at arm's length from the government. However these criticisms are clearly beside the point. Even the auditor general questioned whether an arm's length treatment would improve the process. Arm's length or not, the question is what is the rate setting method that would best serve Canadian workers, employers and taxpayers?
The Standing Committee on Finance recommended the EI premium rate setting procedure be reviewed. The government is addressing this question and prior to Bill C-2 made a commitment to review the rate setting process over a two year period.
The auditor general stated that the review could result in a better methodology and that he welcome anything that would clarify the rate setting procedure. However, until such a review can be completed, the government has provided a means to ensure predictability and stability in the EI premiums.
The governor in council will set the premium rates for the year 2002-03 allowing time for review and allowing the government to adjust the changing economic conditions. Researching and deciding on a sound rate setting mechanism will require taking into consideration interests of workers, employers and taxpayers. This is not something we could hope to achieve through Bill C-2.
The Department of Finance, along with Human Resources Development Canada, will carry out a review during which all stakeholders will be consulted, including the EI commissioners representing workers and employers. Surely that is a better method. I would say that it is the only rational method for devising a rate setting structure that best meets the interests of all parties in the longer term. I believe that the hon. members should reserve their views and feelings on the rate setting method and permit the review to take its rational course.
The passage of Bill C-2 will present no obstacle to the successful completion of that review. That is why the House should give speedy passage to the bill and permit Canadians to begin benefiting from its improvements to the EI program.