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.