House of Commons Hansard #41 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was provinces.

Topics

Employment Insurance ActGovernment Orders

12:10 p.m.

The Deputy Speaker

In my opinion the yeas have it.

Employment Insurance ActGovernment Orders

12:10 p.m.

Some hon. members

On division.

(Motion agreed to)

Business Of The HouseGovernment Orders

12:10 p.m.

Glengarry—Prescott—Russell Ontario

Liberal

Don Boudria LiberalLeader of the Government in the House of Commons

Mr. Speaker, if you would seek it, I think you would find unanimous consent that the vote scheduled for the conclusion of report stage of Bill C-2 later this day, one hour from now, be deferred until the conclusion of government orders later this day.

Business Of The HouseGovernment Orders

12:10 p.m.

The Deputy Speaker

Is that agreed?

Business Of The HouseGovernment Orders

12:10 p.m.

Some hon. members

Agreed.

Business Of The HouseGovernment Orders

12:10 p.m.

Liberal

Don Boudria Liberal Glengarry—Prescott—Russell, ON

Given the motion that has just passed and the unanimous consent, I would like to clarify the business of the House because it has been changed. In any case, there have been consultations about future business which I would like to share it with the House.

After completing the debate on Bill C-2 at report stage, the House will return to third reading of Bill C-8, the financial institutions bill. After this we will call Bill C-18, the equalization bill; Bill C-17, the innovation foundation; and Bill C-22, the income tax bill, in that order.

Tomorrow shall be an allotted day, as already announced.

Wednesday shall be the day allocated for third reading of Bill C-2. I understand there will be some co-operation to ensure that all parties have a spokesperson on Wednesday. I intend to do my part on this side of the House in that regard.

On Thursday we shall resume the list from today, adding at the end Bill C-9, the elections bill. We shall continue the list on Friday, adding Bill C-12, the Judges Act amendment.

The House resumed from March 29 consideration of Bill C-2, an act to amend the Employment Insurance Act and the Employment Insurance (Fishing) Regulations, as reported (with amendment) from the committee, and of the motions in Group No. 1.

Employment Insurance ActGovernment Orders

12:10 p.m.

Bloc

Pierre Brien Bloc Témiscamingue, QC

Mr. Speaker, we are debating Bill C-2, an act to amend the Employment Insurance Act, at report stage. Some of the proposed amendment are good, of course.

However, there is a major item we strongly dislike and that is the fact that the government wants to get its hands on the employment insurance fund surplus. The government clearly did not take this opportunity to make much more substantial changes to the situation related to the whole employment insurance fund, and to adopt measures that could have benefited many people who have been penalized for several years, in fact since 1993 when the Liberals came to power, because of the way they restructured the employment insurance system in order to shamelessly grab the surpluses year after year.

It is most unfortunate that after having created very high expectations, after having made campaign commitments and after having the Prime Minister admit he had probably made some mistakes, the government is now coming up with the same legislation it had introduced before the election. In many regions, in Quebec as well as in other provinces, this has provoked much discontent.

I would first like to draw a small picture of the coverage rate of the employment insurance system. In 1993, 65% of those losing their jobs were covered by the system. The cutting trend had started in the early 1990s, as in 1990, 83% of workers losing their jobs were still covered. In 1993 it was down to 65%. I am not blaming the present government, as a major restructuring was started by its predecessor.

In the last six years, this percentage has fallen to 43%. This is unbelievable. Cuts were more drastic than when there was an economic crisis, with a dreadful deficit. When the economic situation improved, the government started to generate a surplus but reduced the level of coverage. This means that now only four out of ten Canadians who lose their jobs are eligible for benefits. I am not even talking about the level of benefits, but only about the number of unemployed eligible for benefits.

Those most affected by this are women and young people. For those between 20 and 24 years of age, one out of four persons who lose their jobs will be covered by the EI system. As for women, the percentage is approximately 38%. So this is below average. They are the ones who have been most affected by the successive EI reforms.

It has been said many times by many people, but does not appear to move the government. Once again, what it wants is to shove some amendments through, rapidly and expeditiously, to send a message to the public, saying “Look, see the changes we have made”. A word of warning to all those with high expectations: better lower them, for in another year or year and a half they will see that the reform did not amount to much after all.

Some people may still believe that the government contributes to employment insurance. The fund has no government contribution. The only contributors are the employees and employers; the government does not contribute one red cent. It is the one that makes the decisions, the one that directs it, and now it is going to give itself more powers than ever, by limiting the commission's ability to set contribution rates, to define the size of the surplus to be generated.

Without having to contribute one cent, it is going to direct and define and also to pocket the surplus funds. This means, clearly, that every year—I am referring here just to the amount of the surplus in the fund—the government is going to get $6 billion from it to add to the general public funds.

The people who pay their contributions into the fund, the workers and the employers, are funding all manner of things other than an employment insurance plan. I repeat, this is supposed to be an insurance program.

Mr. Speaker, imagine if you or other members of this House were paying house or car insurance premiums and the company announced to you “Well, we collected the premiums for that but we have decided to apply them to something else. Instead of compensating people making claims, we are going to invest the money right and left, spend it on other things”. That would make no sense. An insurance plan should serve those who pay into it.

This is not what is happening with the $6 billion; the government may well say that it is putting it into health and other noble causes, but let them have the courage to call it a payroll tax or an employment tax. That is what employment insurance has turned into.

Let us look at the figures. For the year 2000, the contributions, and therefore the revenues, collected by the government from the employment insurance fund reached $17.2 billion. The plan itself cost $12.3 billion; therefore, there was a surplus of $5.6 billion for the year. This means that $5,600 million was taken from the employment insurance fund.

What would the situation be today if the fund had really been independent, with a separate bank account? There would now be $31.4 billion in that bank account. This shows the extent of the surplus accumulated, mainly over the last six years.

It is true the plan experienced deficits at times, for example in the early 1990s, during the recession, but the surpluses have largely covered those past deficits and have grown to an accumulated surplus of $31.4 billion.

There is no point going looking for that money, it will not be found. It was added to the consolidated fund and spent on all sorts of programs. Good or bad, those were not what that money was meant for. Such a practice is totally unacceptable and inadmissible. To collect taxes and use them for something else but their intended purpose is a bad management principle, which borders on immorality, if not outright illegality.

This situation will not improve because, with the measures being proposed now, next year's surplus will be similar. Some might say that we were keeping a reserve in case of another recession. Let us not kid ourselves.

If there were a recession tomorrow, the fund would be pretty much balanced. It is structured in such a way that it will not take a beating, because eligibility has been restricted, the number of hours needed to qualify increased and the duration of benefits decreased. The spending that is going to skyrocket if there is a recession is the spending on social assistance, which is funded by the provinces. This spending will go up dramatically and there will be no safety net, while the EI fund will pretty much balance or show a slight deficit.

Yes, the government could keep a cushion, a reserve, but not on the order of $30 billion. Thirty billion dollars could cover benefits for the next three years without a single additional cent in premiums being received.

If there were a separate account, everyone could be told “For the next three years they would not have to pay premiums because they would be drawn from the accumulated reserve”. Does this not give an idea of the size of the obscene surplus which has built up but disappeared because was been misappropriated?

In conclusion, there are a number of things we could do. The Bloc Quebecois has proposed a series of amendments and we would like to see the bill improved. For instance, the government could have abolished the waiting period, created a separate fund, increased the coverage rate from 55% to 60%, reduced to 300 the number of hours required to qualify for special benefits and increased the duration of benefits and indexed the annual ceiling. All sorts of measures could have been passed. I have a series of proposals which we have discussed in committee and have been discussing for a long time.

None of this is irresponsible because it can all be done without any threat to the fund. Even if all these suggestions and others were implemented, the fund would still have a surplus and a slight cushion for contingencies. The government is turning a deaf ear. The Minister of Finance prefers to rake in a surplus and do all sorts of things with it. That is why we will be voting against the bill at report stage and at third reading.

Employment Insurance ActGovernment Orders

12:20 p.m.

Liberal

Jerry Pickard Liberal Chatham-Kent—Essex, ON

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.

Employment Insurance ActGovernment Orders

12:30 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, may I say that you look very comfortable and proper in that chair. You are doing a good job in recognizing those of us in the opposition parties who would like to add to the debate.

I will begin my remarks by registering a grievance of sorts. In the short period of time that I have been a member of parliament more often than not when I get up to speak it is during a time allocation situation. I am not saying that all bills which go through the House of Commons end up with some form of closure or time allocation but, by some bizarre freak of nature, every time I want to speak it is under the circumstances that there has been time allocation imposed. Frankly, it is starting to jade my world view of the House.

I want to register as a grievance to the federal government that my experience in the House is being warped by its abuse of the system and by its stamping all over the democratic process by once again implementing time allocation.

Speaking, with what time I have, to Bill C-2, let me point out that I and the NDP caucus believe that Bill C-2 is fundamentally flawed, not because of what is in the bill, because there are elements we support within the bill, but because of what the bill fails to do.

Bill C-2 fails to recognize the real problem with the EI system, which is that nobody qualifies any more. It is not an employment insurance program if unemployed people do not get any insurance benefits out of it. The very name has become a misnomer. Those who need the benefits that the EI system is supposed to provide do not get them.

We are starting from a very dangerous premise here. We have this revenue generating cash cow for the federal government that is failing to meet the needs of unemployed workers. We then have the government ramming this through before substantial changes can be made to address the real flaws and errors within the program.

What really bothers me is that even the amendments do not find their origins in any real desire on the part of the federal government to meet the needs of unemployed workers. Most of what we see in Bill C-2 and in any EI reform in the past 10 years seems to find its origins in this underlying position that there are lazy people who would rather sit on EI than take part in the workforce. The government has decided therefore to use some kind of a tough love policy against these people to kickstart them into the workforce no matter what their circumstances. The whole thing finds its origins in the attitude that people would rather be unemployed and on EI than taking part in the workforce.

I remember the hysteria and fear in the mid-seventies, when UIC was available, about the UIC ski team of teenagers in Banff cheating UIC. During that period of time the government made a nationwide survey on the issue of UIC fraud and abuse. It found that there were actually more federal government Tory cabinet ministers guilty of fraud on a ratio and proportion basis than there were UIC recipients guilty of fraud.

Every year approximately 200 EI recipients are called to task for some kind of abuse of the system. During the Mulroney years approximately 30% of federal Tory cabinet ministers were guilty of fraud compared to an infinitesimal, an amount almost too small to count, of EI recipients who were called to task on fraud. The attitude that there is widespread abuse of the system bothers me when I know, because I deal with people who use the EI system frequently, that simply is not true.

I began my speech today by saying that Bill C-2 is flawed because of what it fails to do. It fails to deal with the eligibility issue. The fact that less than 40% of unemployed people qualify for unemployment insurance should strike people as somehow being wrong? It actually gets worse when we deal with unemployed women. There is a real gender issue here. Less than 25% of unemployed women qualify for any benefit whatsoever. Less than 15% of unemployed youth under the age of 25 qualify for any benefit whatsoever. How can we even call this an insurance system when virtually nobody qualifies?

Eligibility is the first issue. The rules should state that when we are unemployed and need income maintenance, the benefits will be there. When we are forced to pay premiums it is only fair that we have a reasonable expectation of collecting the benefit.

The second fundamental flaw is the way the government arrives at what our benefits will be. Even if we are lucky enough to be one of those 40% of unemployed Canadians who qualify for benefits, the way that the government calculates the benefit is so wrong that we end up collecting far less per week than we used to under the old rules.

To get any benefits whatsoever is a Herculean task. Once we do qualify for benefits, the way that the government calculates our benefits we end up getting far less money. There are fewer people collecting and those who are collecting, collect less money. It is no wonder there is a surplus.

The surplus is the third thing I would like to address. I have said this in the House before and I need to keep saying it over and over again until it sinks in with the Canadian people just how badly the program is being abused and milked by the Liberal government and being used as some kind of cash cow. The surplus is $750 million per month. There is more money going into the program than is being paid out in benefits. That is $7 billion to $8 billion per year.

Now we find ourselves in a budgetary surplus situation. Let us look at the sources of the revenue that the government now calls its surplus: $35 billion to $43 billion surplus accumulated out of the EI system alone; $35 billion cut out of programs through the health and social transfer; and a further $30 billion surplus that everybody seems to have forgotten about, the public service pension plan by legislation, by act of parliament, was taken away from those workers last year.

It is no coincidence that when we add those three up, $35 billion, $35 billion and $30 billion, all on the backs of the unemployed, working people and those who need social programs, it adds up to $100 billion, which is exactly what the Minister of Finance gave in tax cuts to the wealthy and to corporations. I do not think it is any coincidence that those figures are identical. I just wanted to point that out.

The last few minutes that I have, I want to point out another shortcoming in Bill C-2 that is very close to my own personal experience. The apprenticeship system has suffered terribly under the changes to EI and, in Bill C-2, the government has chosen not to correct it. This is something for which there is almost unanimous support. Virtually every industry, academic and economist we have spoken to has agreed that this is wrong, yet it has not been addressed in Bill C-2. The two week waiting period that unemployed workers must wait before getting their first benefits is applied to apprentices when they are going through the trade school component of the apprenticeship.

In other words, they are being treated as if they are unemployed when they are not. They are apprentices. They are employed and have an attachment to the workforce. They are simply going through the annually scheduled eight week training period in community college and yet are being penalized with the two week waiting period at the front end.

This is a new change that was made in 1995-96. It has had the effect of driving people away from apprenticeship programs. A lot of young people simply cannot afford to be without income for that period of time and are choosing not to attend the eight week scheduled apprenticeship training in community college. Gradually a four year apprenticeship turns into a seven year apprenticeship and many simply are dropping out.

It is having a dilatory effect on the apprenticeship system and on industry because of what I believe is a miserly point of view on behalf of the Liberal government, using the EI system as a revenue generating cash cow instead of providing income maintenance to unemployed workers, and in this case, providing trade school apprenticeship training to people in the skilled trades.

Employment Insurance ActGovernment Orders

12:40 p.m.

Bloc

Mario Laframboise Bloc Argenteuil—Papineau—Mirabel, QC

Mr. Speaker, with all due respect, I know I must address the Chair, but I also want to address unemployed Canadians, particularly those from Quebec who are listening and especially the 60% of them who could not benefit from the EI plan. They were excluded for many reasons. That is why many amendments to the bill were requested by the opposition parties.

When a government amends an act as important as the Employment Insurance Act, there are always questions to be asked. First, why is it amending it? Because there are pressing demands, which often come from the opposition parties.

Let us remember that in 1996 the Liberal government made major changes to the Employment Insurance Act, which included the infamous intensity rule. With that rule, seasonal workers were virtually excluded from the plan, to the point where today only 42% of workers who could use benefits are eligible for benefits.

This was a change made in 1996 by the Liberal government. It directly contributed to the increase in the EI fund surplus. Since the 1996 changes, a surplus of $5 billion was added to the fund each and every year. At the present time, this surplus is close to $32 billion.

Once more, in 2001, the Liberal government is proposing a legislative amendment. We should always ask ourselves why the government would change this legislation. The answer should be that it is for the good of the unemployed in Canada, and particularly in Quebec.

We know, of course, that the intensity rule, the purpose of which was to make sure that almost no seasonal unemployed worker could get employment benefits, will be abolished. In ridings such as Argenteuil—Papineau—Mirabel, where 65% of the economy is based on agriculture, forestry and tourism, more workers will be made eligible for employment benefits.

It must be said that this is something the opposition parties have been requesting since 1996. The opposition parties have been asking the government for this for five years.

Finally, it is not the workers of Quebec and Canada who are seasonal, it the jobs that are seasonal. It is not the workers' fault they do not have access to an EI plan.

It must be understood that I am talking about an EI plan. On many occasions I have heard members of the government describe the employment insurance plan as a social safety net. The employment insurance plan has never been a social safety net. It is an insurance paid for entirely, half and half, by the workers and their employers. Since this plan belongs to the employers and the employees in Quebec and Canada, the $31.4 billion surplus belongs to them also.

We would have expected that the amendments to Bill C-2 would include, on top of the elimination of the intensity rule for seasonal workers we wanted, important changes to the plan because it belongs to the employers and the employees in Quebec and Canada.

I will repeat, for the sake of workers and especially the unemployed in Quebec and in Canada who are watching this debate, that the bill does not improve the plan and does nothing to correct the decades old inequities under the Employment Insurance Act.

We still have a waiting period, the infamous two week penalty for workers. They do not get any benefits for these two weeks. They just have to wait.

I find this most unfortunate because it does a lot of damage, in view of the fact that an increasing number of businesses in Quebec, among others, are hit with damage or fires, as a result of which there are temporary closures for many reasons other than the going out of business.

Once again, workers who find themselves without a job overnight because of a fire or other disaster are subject to the qualifying period, the famous two week penalty. They lose the first two weeks and do not receive any compensation in spite of the fact that they bought insurance that they have been paying 50:50 with their employer, an insurance policy called the EI fund. There is still a waiting period.

This is the terminology the Liberal government found to try to convince them to accept this two week penalty. Notwithstanding the fact that they have an insurance, they still have a two week penalty. These two weeks inevitably contribute to increase the fund. This surplus, this revenue from the EI fund, now totals more than $31 billion.

Once again, the bill tabled did not contain any of the amendments put forward by the Bloc Quebecois. This particular amendment was rejected. We still find in the bill the two week waiting period, the penalty the workers are facing for losing their job. Even if the business does not shut down, even after a disaster, they are still subjected to this two week loss, which is used, among other things, to increase the EI surplus. So, there are no major changes.

Let us talk about the $31.4 billion surplus. Why has the government introduced this bill? As members may have guessed, it is because the Liberal Party, the government, covets the $31.4 billion that belongs to workers of Quebec and Canada.

Clause 9 of the bill would allow the government to get its hands on the surplus of the employment insurance fund. The government wants to do that for its own ends, that is to spend the money in any other program it deems appropriate but which will not necessarily serve the interests of workers in Quebec and Canada.

Why does the bill not provide for an independent fund, which would belong, since half of it is paid for by workers in Quebec, to workers as well as employers and which would be administered by workers and employers, who could then choose the appropriate way to use the fund?

Since I only have a minute left, I will use my time to try to promote awareness among members on the other side, who too often take the employment insurance fund, which actually is an insurance fund, for a social security fund. This is where the problem lies.

They want to turn employment insurance into a social security fund, which the government wants to get its hands on and use in a totally different area, which government members call social security, while in fact employment insurance is an insurance fund that belongs to workers and should only be used for them. We should have an independent fund administered by workers, in their own interests.

Employment Insurance ActGovernment Orders

12:50 p.m.

Bloc

Ghislain Fournier Bloc Manicouagan, QC

Mr. Speaker, needless to say, I am very pleased to resume today on Bill C-2, an act to amend the Employment Insurance Act and Regulations.

I would first like to congratulate the member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, whose great determination resulted in the passage of a motion on the employment insurance bill.

As I said in my last speech on February 13, the bill is a disgrace. This debate began in January 1997 as part of EI reform. The reform was supposed to meet the needs of the public and the realities of the workplace. The opposite effect was felt and observed, and this could have been predicted.

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 the poor get poorer.

The Standing Committee on Human Resources Development and the Status of Persons with Disabilities has concluded its hearings. The proposed amendments were almost all rejected, with one exception, because it was not directly related to Bill C-2. This is why the Bloc Quebecois felt it better not to move any amendments at committee stage.

However, as I said earlier, a motion moved by the member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques was passed, which will commit the government to consider other amendments to the Employment Insurance Act as a whole. The motion reads as follows:

That the Standing Committee on Human Resources Development and the Status of Persons with Disabilities report to the House of Commons all other amendments to the Employment Insurance Act and that this report be tabled to the House no later than June 1, 2001.

With the passage of this motion, the Bloc Quebecois, as the party responsible, intends to put all its long sought amendments back on the table in June 2001 when the committee tables its report.

After long refusing to abolish the intensity rule, the government has conceded that we were right. I hope that it will take the time to reflect on the other amendments which the Bloc Quebecois will be submitting with the report and admit that we are right about them as well.

In addition to deleting clause 9, on the setting of the premium rates, we are going to propose the following amendments: eliminating the qualifying period; establishing an independent employment insurance fund; increasing coverage from 55% to 60%—we have long been asking that benefits be increased to 60% of a person's income, as was the case before the reform—; extending the base period from 26 weeks to 52 weeks; allowing self-employed workers to be insured through voluntary contributions; bringing back to 300 hours the eligibility criterion for special benefits; increasing the period of benefits; setting income increases at 25% for all claimants before employment benefits are cut; indexing the insurable annual income at $41,500; changing the process under which the premium rate is set, so as to give all the powers to the commission; setting the threshold for the refund of premiums at $5,000, instead of $2,000; increasing from three to five years eligibility for active employment measures; eliminating the arm's length relationship clause—this applies primarily to seasonal workers—eliminating the divisor rule; providing special benefits for older workers; investing 0.8% of the total payroll in active employment measures.

As members can see, our position on Bill C-2 at report stage is that we are opposed to it if clause 9 is not deleted. The federal government must listen to the message that was sent to it time and again by the Auditor General of Canada, the Canadian Federation of Independent Business, the Conseil du patronat du Québec and the central labour bodies, and it must delete this clause, which takes from the commission the right to set the premium rate under the employment insurance plan and gives it to the federal government. Removing the commission from the rate setting process means that these rates could be adjusted on the basis of the government's needs and deficit, instead of being based on the needs of the unemployed, and on the premiums received, as recommended by the chief actuary.

If clause 9 is passed, it will legalize the theft of the employment insurance fund by the government, which will have full ownership of it. The auditor general has criticized the government for its lack of transparency when it comes to rate setting, saying that despite the shortcomings and the lack of clarity of section 66 to some extent, in his opinion, it is nevertheless clearer than the system we would have under the new clause 9.

The people who gave evidence during the committee hearings were unanimous: clause 9 of Bill C-2 must be rejected. The Canadian public is expecting more than mere campaign promises. It is looking for important and concrete corrective measures.

The government is not interested in the plight of the unemployed, who will be negatively affected by this employment insurance reform. The measures proposed in this bill are not enough to correct the problems caused by the system, notably to seasonal workers, and particularly those in the regions, to young people, to women and to workers, particularly older workers.

In conclusion, I would like to remind this House that during the last six years, employment insurance has been the most important factor of poverty in Canada. If the government wants to protect children against poverty, it will first have to protect parents who are poor. If the government had not made such drastic cuts to employment insurance, there would be fewer children starving.

Employment Insurance ActGovernment Orders

1 p.m.

Liberal

Guy St-Julien Liberal Abitibi—Baie-James—Nunavik, QC

Mr. Speaker, in connection with Bill C-2, the bill to amend the Employment Insurance Act, we know that coalitions of the unemployed in Abitibi, Témiscamingue, Val-d'Or and all over Quebec have raised the awareness of the political parties, both the Bloc Quebecois and the opposition. Thanks to these groups, the government has backed down, and that is what is important.

I have heard what my colleagues have been saying about eliminating the rule of intensity and certain other changes relating to the reimbursement of benefits and parental return to the work force. Several Bloc Quebecois members have said that the government had a fund of $35 billion.

However, we need to look at what the Department of Human Resources Development is doing with that money. I have a listing here of some of the programs we need to take into consideration, including the millions that go to the province of Quebec in transfer payments each year. This department has been administering our programs for some years.

As well, we need to look at what is being done in the communities, whether in the resource regions or in the major centres. There are partnerships in social development, community action partnerships, a fund to support the official language minority communities.

What Quebec is currently doing with the money from the fund also needs to be considered. It is providing targeted wage subsidies, help to self-employed workers, contributing to skills development, providing assistance to employment, research and innovation.

We must also look at programs that are provided to assist persons with disabilities, the fund for integrating persons with disabilities. Programs such as youth international, youth service Canada and student summer job action are also provided to help young people and young trainees in Canada. Thus, several billions of dollars from the fund are invested in Canada.

There are also federal transfers. We know that several federal transfers were established recently. I heard Mrs. Marois speech last Thursday. Mr. Landry said there was a $35 million surplus, but we realize that it is ultimately a $2.5 billion surplus, thanks to the nice cheque of about $2.3 billion he just received from our finance minister, a cheque that was transferred to Quebec and whose money came from the fund.

I heard the Bloc Quebecois members' speeches concerning the fund. They said “There is $35 billion, and they are spending it”. If we spend this $35 billion, it will be for reducing taxes, for investing it in health and education. One thing Bloc members often talk about is the $35 billion.

They say this money must be transferred but strangely enough they do not talk about Loto-Québec, which makes $10 million a day, not a month. Loto-Québec is now raking in $10 million a day from 15,138 video poker machines in Quebec. Loto-Québec does not have an agreement because it is not asking the government of Quebec to leave the money there and then distribute it to Quebecers. What is Loto-Quebec doing? We are talking about $10 million a day. This is $3 billion a year that Quebec taxpayers do not see.

We could also mention Hydro-Quebec, which has just made a profit of $1.3 billion. This money should go back to those who pay for electricity in order to help with monthly heating bills but no, into the fund it goes.

The SAQ is raking in billions right now and Bloc Quebecois members are talking about creating an independent fund. There is no independent fund in Quebec. The only independent funds that are allowed to exist are those for non-profit corporations. The Landry government's non-profit corporations, of which there were seven, made $730 million just two weeks before Quebec's finance minister, Bernard Landry, tabled his budget.

This money was made during the night because the national assembly was closed. They made it during the night and said “We are going to hand out $730 million”. This went to their friends, to presidents and vice-presidents and all the directors of these seven non-profit organizations. It is even better this year. They have done better and taken $950 million and handed it over to the Caisse de dépôt et placement but nothing is spelled out.

The odd thing is that the $950 million has not been invested. It is not known what they are going to do with it. I hope they will invest it in resource regions because certain points raised by Bloc Quebecois members with reference to the independent fund—

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Bloc

Benoît Sauvageau Bloc Repentigny, QC

Mr. Speaker, I rise on a point of order. The hon. member must realize that he switched parties but he did not change parliaments. We are not in Quebec City, we are in Ottawa. I want to know if he is still talking about Bill C-2 or if his remarks are in response to Mrs. Marois' budget speech?

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The Deputy Speaker

I do believe that the hon. member is getting to the main topic.

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Liberal

Guy St-Julien Liberal Abitibi—Baie-James—Nunavik, QC

Mr. Speaker, I realize why the hon. member is speaking today. There was no room for him in the national assembly. They shipped him to Ottawa. This is why we are talking about federal transfers.

Federal transfers are sent to the province in an effort to improve the situation of Quebecers. When they ask for an independent fund, we think about the $840 million that the Quebec government has left untouched in a building on the main street of Toronto.

There is something truly deplorable about this independent fund. Perhaps the money will be used for tax reductions, health and education. The one really important thing is the retroactive nature of the bill, which will help the unemployed.

Let me get back to Loto-Quebec. They are talking about an independent fund. Let us compare Loto-Quebec and Canada's employment insurance fund. Loto-Quebec is a $3.5 billion business. Indeed, if we take its annual profits of $3.5 billion and multiply them by 10, we get $35 billion. This is what they get in Quebec over a 10 year period with a phantom account. To be sure, the example comes from somewhere. They claim that it is not the same thing. It is the taxpayers' money.

It is true that the federal government does not contribute to the employment insurance fund. It is our workers who do so. The decisions are made by a commission and they involve employers and employees.

There are things that need to be improved. We will improve them together, along with the opposition members who are here.

Again I come back to the comparison between Loto-Québec and the $35 billion fund that is self-sustaining and at arm's length. They say that is where the surplus should be put. Multiplying the $10 million a day that Loto-Quebec makes by the number of days in a year gives $3.5 billion a year. Over 10 years, it gives $35 billion.

In any case, the people opposite have been criticizing me for a while already. The Bloc members in front of me seem to be having fun. They are smiling. The five of them are shouting like ten.

What is really important is trying to find solutions together for the unemployed. It is not easy. Looking at people who are dealing with the unemployed in my area, such as Laurier Gilbert from Val-d'Or, or Vital Gilbert from Rouyn-Noranda, they too are trying to find solutions.

They settle cases at the unemployment arbitration board. They came to Ottawa. They criticized the government. They were right on many points. It is thanks to them that we changed the rules last year. It is because the unemployed were able to shake up the government. They will vote on that. However, it is together that we will try to improve the lot of the unemployed.

We do not want them to be unemployed. What is important is that these people keep their job. That is what is important. Looking at all the programs that we have here available for the unemployed, I feel it is thanks to the money flowing from legislation like Bill C-2.

It has been a pleasure to speak during this debate. I would like Loto-Québec to give its $10 million a day to Quebec taxpayers.

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The Deputy Speaker

I believe some colleagues may well think that the rule of relevancy has got it in the neck but whatever the case may be that debate will be for another day.

Pursuant to order made earlier today, it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the report stage of the bill now before the House. The question is on Motion No. 4.

Is it the pleasure of the House to adopt the motion?

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Some hon. members

Agreed.

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Some hon. members

No.

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The Deputy Speaker

All those in favour of the motion will please say yea.

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Some hon. members

Yea.

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The Deputy Speaker

All those opposed will please say nay.

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Some hon. members

Nay.

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The Deputy Speaker

In my opinion the nays have it.

And more than five members having risen:

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The Deputy Speaker

The recorded division on Motion No. 4 stands deferred.

The next question is on Motion No. 8. Is it the pleasure of the House to adopt the motion?