House of Commons Hansard #43 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was workers.


Message From The SenateRoutine Proceedings

3:30 p.m.

The Acting Speaker (Mr. Bélair)

I have the honour to inform the House that a message has been received from the Senate informing the House that the Senate has passed certain bills, to which the concurrence of the House is desired.

Employment Insurance ActGovernment Orders

3:30 p.m.

Bonavista—Trinity—Conception Newfoundland & Labrador


Brian Tobin LiberalMinister of Industry

moved that Bill C-2, an act to amend the Employment Insurance Act and the Employment Insurance (Fishing) Regulations, be read the third time and passed.

Employment Insurance ActGovernment Orders

3:35 p.m.

Laval West Québec


Raymonde Folco LiberalParliamentary Secretary to Minister of Human Resources Development

Mr. Speaker, I first want to thank all the committee members who examined this important bill with such care. They did an excellent job, on which I congratulate them.

One thing is certain. Once this bill has been passed, it will make it possible for the system to be more firmly anchored in the realities of today's labour market. As well, it will offer a better response to Canadians' needs.

For some decades, the employment insurance system has been one of the cornerstones of our social security system, and thanks to it Canadian workers and their families have been able to cope with temporary job loss and get through difficult times in their working lives.

Today we in this House have the opportunity to support this bill, which will bolster the foundations of that system for the benefit of the Canadians of today and of tomorrow.

Our government has always acknowledged its duty to help people who are experiencing difficulty getting into the work force, or remaining in it.

The bill aims to ensure that the employment insurance program will be fairer to Canadians and more effective. We also want to correct and adjust certain measures which turned out to be less effective than anticipated.

First, we will eliminate the intensity rule. Introduced in 1996, the intensity rule was intended to reduce frequent users' dependence on employment insurance.

We are also changing the criteria for reimbursement of benefits. We want to be sure that it applies only to taxpayers with higher than average incomes.

Moreover, first time claimants and everyone who receives sickness, maternity or parental benefits will also be exempted from the clawback provision.

The well-being of families is a top priority for the government. We have therefore taken into consideration those parents who return to the labour force after taking time off work to look after their children. In addition, we are extending the look back period by four years for parents. Instead of being treated as new entrants into the workforce, these parents will require the same number of hours as any other claimant should they lose their jobs and need regular benefits.

As you can see, the bill makes substantial improvements to our employment insurance plan, improvements to benefit workers in seasonal jobs, families and many claimants.

When we undertook the employment insurance reform in 1996, we had promised to monitor the effects of it very closely. With the intent of honouring our commitment, we instituted an annual evaluation mechanism to allow us to identify and correct aspects not producing the desired effects. This mechanism is very useful. In 1997, it allowed us to correct certain anomalies by launching the short work weeks adjustments projects.

Today that same evaluation tool enables us to make other concrete changes to help job seeking Canadians even more. Above all, the monitoring and assessment process assures us that we are heading in the right direction.

In February, we tabled the fourth annual employment insurance monitoring and assessment report, which revealed clearly that most of the aspects of the system were achieving their intended objective. On the whole, the system is accessible to workers who have contributed to it and find themselves temporarily out of work. In addition, its first priority is those needing it most, that is, low income families.

This report tells us that 88% of paid workers should be entitled to employment insurance benefits if they have lost their job or left it for valid reasons.

It should also be pointed out that claimants do not generally exhaust their benefits. On the average, they use about two thirds of them.

In fact, data from Human Resources Development Canada studies reveal that of those persons who exhausted their benefits, about 12.4% moved on to social assistance, a number that is down from before the 1996 reform.

Turning to the EI commission, members of the opposition have suggested that this bill should have dictated the framework and the results of the review of the EI premium rate setting process. We believe the bill allows the review to take place in a stable and predictable rate setting environment. Certainly on this side of the House, we will not preclude the work of that important review.

The EI commission will continue to conduct important work with respect to the other areas of its mandate during the two year review period provided for on the bill.

The Canadian public has given us a third consecutive majority mandate, because it shares our values, balanced approach and vision of the future.

In 1996 we introduced solid reforms to the employment insurance system, one of the cornerstones of our social security system. Today I ask everyone in the House who wishes to strengthen the foundations of our employment insurance system to support the bill.

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3:40 p.m.

Canadian Alliance

Val Meredith Canadian Alliance South Surrey—White Rock—Langley, BC

Mr. Speaker, I would ask for unanimous consent to split my time with the member for Saskatoon—Rosetown—Biggar.

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3:40 p.m.

The Acting Speaker (Mr. Bélair)

The hon. member has asked for consent. Is there consent?

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3:40 p.m.

Some hon. members


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3:40 p.m.

Canadian Alliance

Val Meredith Canadian Alliance South Surrey—White Rock—Langley, BC

Mr. Speaker, it is my pleasure to rise to speak at third reading on Bill C-2. The bill was introduced by the government to live up to some of the election promises it made before the last election.

The minor amendments included in Bill C-2 are, at best, tinkering. It is quite obvious after listening to many witnesses that the EI act has become so convoluted and confusing that a new act is required to treat all employees and employers fairly and to clearly define the role and limits of employment insurance in Canada.

The Liberals' misuse of EI has betrayed workers in traditionally seasonal employment. That was made abundantly clear by the witnesses we heard from. The current EI rules discourage education and skills acquisition. It is incumbent upon the government to develop a strategy for workers in traditionally seasonal employment which, to a large extent, is a rural Canadian issue. It is incumbent upon the government to address that issue.

However, there are many who felt that EI legislation was not the vehicle for the government to do that. The 1996 amendments to the EI legislation were to do three things: one, to make unemployment benefits more active, for example, to rely less on income support and more on labour market adjustment; two, to enhance employment stability; and three, to lower program costs.

When the government introduced Bill C-2, it said that these objectives had not been met, that in fact the adjustments had failed to reduce frequent EI use. The government bases its position on a study that examined the impact of intensity rules during the first year of application. While the professors who did the study justified an examination of only one year, another professor testifying at the very same time said that one year was not sufficient to study a change in behaviour. Therefore, there is some contention as to whether the information the government has used in Bill C-2 to rescind changes made in previous legislation in 1996 is questionable.

I want to examine some of the aspects of this legislation which we are dealing with at third reading.

I want to deal specifically at this time with the intensity rule.

The minister stated that the intensity rule has had the unintended consequence of being punitive. Some industries at the committee told us that they had seen their entire workforce, subject to the maximum reduction of benefits, going from 55% of their salary down to 50%. In some industries, like the fishery industry, the workers pointed out that they were not seasonal workers, they just worked in an industry that was seasonal. The government designates the period of time when these fishermen can work. The government determines when the fishing season is open, thus limiting the time when work is available.

However, the seasonal use of EI has permitted more companies and individuals to remain in an industry than is economically viable. We cannot escape the fact that by definition the regular use of the EI program makes it a wage subsidization program and not an insurance program.

I would like to move on to the benefit repayment provision which is known to most Canadians as the clawback.

The minister stated that the clawback was being modified because it was not properly targeted. The clawback was introduced to discourage individuals with higher incomes from repeatedly collecting benefits.

The minister stated in her appearance before the committee that some affected groups under the clawback provision from 1996 were not clearly dependent on employment insurance. That may be, but by exempting individuals who have collected less than one week of EI in the previous 10 years from the clawback, it is clear that the main point of the clause in Bill C-2 is to eliminate the graduated schedule of high repayment rates for frequent claimants that was introduced in 1996.

With Bill C-2, an individual who collected two weeks of EI benefits in the past 10 years would be subject to the same 30% clawback as an individual who collected 200 weeks of EI over the past 10 years. That is taking someone who only collected two weeks and treating that person in the very same way as someone who collected over 200 weeks. It is quite clear that the attempt is to eliminate the graduated schedule of repayment for frequent claimers.

I think every Canadian understands and appreciates that there has to be a limit set and that there has to be a set amount of income where an individual no longer qualifies. I do not believe any Canadian would like to see NHL players collecting EI in an off season. I think Canadians accept the fact that there has to be a limit set. The big question is where should that line be set? What is the limit that should be set?

The average yearly earning in Canada is currently $31,700. This means that the clawbacks affect only those individuals who currently make significantly more than the average Canadian. The elimination of the graduated schedule of increased clawbacks for high income earners who are frequent EI collectors means that low income contributors to the EI fund who never claim employment insurance are in effect subsidizing those high income earners who frequently claim employment insurance.

The one issue we all agree with is that there was widespread support, or opposition to depending on how we look at the issue, from both the employers and the union. While they had different objectives with the rates, both groups strongly opposed the way government was using surplus EI premiums in general revenue. Both the employers and unions objected to the cabinet taking over the control of setting employment insurance rates. Clause 9 has been snuck into the middle of a bill.

I ask, Mr. Speaker, for unanimous consent to have clause 9 struck from the bill.

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3:50 p.m.

The Acting Speaker (Mr. Bélair)

Is there unanimous consent?

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3:50 p.m.

Some hon. members


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3:50 p.m.

Some hon. members


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3:50 p.m.

Canadian Alliance

Val Meredith Canadian Alliance South Surrey—White Rock—Langley, BC

Mr. Speaker, that is certainly one way to get the government members to join in this debate.

There was almost unanimous agreement that the government had no right to take over the rate setting processes from the commission. There was almost unanimous consent from all parties, with the exception of the government side, to removing this aspect. Although the government said that this was a temporary measure for only a two year period of time, it is very clear to all of us in the House, and to most Canadians, that whenever the government takes over control of anything it very seldom, if ever, returns that control where it belongs.

Both employers and employees, and I will include the unions in this, are very much against the government using the EI surplus of $35 billion to balance its books. They feel that money has been accumulated by premiums of both employers and employees, and should be used for no other purpose than the employment insurance account. This is just one more example of how the government has taken control. It has taken responsibility, authority and control of matters like this and put them into the hands of a small group of people in the cabinet.

I would like to report the position as I heard it from the business community. The Canadian business community was almost unanimous in the opposition to major elements of this bill. While the business community believes that people in seasonal industries need assistance, they do not believe that it is appropriate for it to come from the employment insurance fund of which they are required to pay 60%. The business community felt the EI fund should not be used by the government to fund social programs. It felt that was a taxation that should be shared by all Canadians, not just the business community and the workers.

The Canadian Chamber of Commerce viewed Bill C-2 as being inconsistent with development of advanced skills or entrepreneurial spirit and did not advance Canada's competitiveness in a global economy.

A survey by the Canadian Federation of Independent Business found that between 250,000 and 300,000 jobs went unfilled because of a shortage of suitable skilled labour. It is criminal that there would be 250,000 to 300,000 jobs that we cannot fill because we do not have a trained, skilled labour force.

It was also obvious from the witnesses that we heard that this bill is a major concern in rural areas of Atlantic Canada and Quebec. Approximately three-quarters of the witnesses representing local communities or organizations were from these regions. They talked a lot about the impact the 1996 changes had on their communities. In some cases millions of dollars had been removed from the regional economy. That should be a concern to the government.

I want to respond to some comments that have been made about the attitude of people in Atlantic Canada. Comments have been made that Atlantic Canadians might be considered to be lazy. Lazy people do not work in Cape Breton coal mines. Lazy people do not go out in December to pull up lobster traps in the cold and the dark.

While some businesses have complained about being unable to find workers, there is little wonder when one considers that the maximum weekly employment benefit is $413. A minimum wage job of $7 an hour, seven hours a day, five days a week is only $245.

The question has to be asked. Is Atlantic Canada only good enough for minimum wage jobs? The answer to that is no. Atlantic Canadians have as much right as any other Canadian to expect to get paid a decent wage so they can support their families.

Two generations of Atlantic Canadians have been caught in the EI trap. Witnesses testified that young adults were leaving the fishing communities. The average age of food processing plants in Atlantic Canada is 44 years. It is unlikely that these individuals will be writing software in the high tech businesses in the near future. With the way the high tech businesses are going in today's economy, those jobs might not be there anyway. Atlantic Canada has a burgeoning offshore resource economy. It is vital that the government provide the necessary education and training to assist this region in diversifying its economy.

I sometimes get into trouble in my caucus when I say this, but there is a parallel between Atlantic Canadian fishermen and Canadian farmers in the prairies. While fishermen suffer from a lack of supply, farmers suffer from a lack of demand. However, in both instances these are traditional occupations in the midst of dramatic transformation. The government must work with stakeholders to reinvent these industries for the 21st century. The government has an obligation to make sure that people who rely on those industries move forward in the economies of the 21st century.

For people who are in situations that do not offer them opportunities, government has an obligation to think outside of the box. The government has to look for alternatives for people who are working in a seasonal industry area. One of the most important things the government has to show some support for and put many resources into is education.

Young people in communities who traditionally rely on seasonal employment must be provided with other alternatives. Education will afford them choices that they may not have now. Individuals must be provided with job skills for the workplace in the 21st century. We have to move forward in what we offer for education.

We have to provide training so that people who are stuck in a seasonal industry can move into another industry that becomes available, which hopefully the government will help to develop. We must provide people who are presently in a seasonal workforce with job training and job skills for the workplace in the 21st century.

Another thing we heard was the way the apprenticeship program operated and that sometimes it discouraged young people from looking at it, or even older people, because of the delay in receiving benefits or the two week disallowance for benefits. We feel that anybody who is in job training or in educational programs should be covered for those two weeks. We do not think there should be downtime for people who are trying to advance their skills so they can move on in the workforce. It is important that the government address this in order to encourage more young people to continue or enter apprenticeship programs.

One of the things the government has to address in thinking outside the box is that there has to be a long term commitment to infrastructure programs in Atlantic Canada, in Quebec and all across this country, because only long term infrastructure programs will open up those economies to diversification. It is only by building bigger and better roads that material can be moved to and from industries and that will open up those areas.

There is a reason why the Halifax port did not become the super port. It lacked the infrastructure necessary for it to get the product to the marketplace. It lacked the infrastructure necessary to be considered a super port.

The government has to make a commitment to those areas where there are seasonal jobs. The government has to commit to opening up those areas, to putting infrastructure money into those areas and to putting money into job training and skills training so those economies can diversify and move forward in the 21st century.

Employment Insurance ActGovernment Orders

4 p.m.

Canadian Alliance

Carol Skelton Canadian Alliance Saskatoon—Rosetown—Biggar, SK

Mr. Speaker, it is a pleasure to rise today in the House of Commons in the debate on the third reading of Bill C-2 in regard to the government's 1996 reforms to the EI system.

Before I speak to the content of the bill, I just want to take a moment to thank the witnesses who appeared before the committee to tell us what their concerns were. Most of them felt that the legislation is inadequate, that at best it is tinkering.

It would seem that we at least have the government's attention, because for the next number of weeks the standing committee on human resources development will be taking a broader look at labour market issues, with specific attention to be given to the EI system. This is clearly necessary given the depth of concerns raised by all sides during our study of Bill C-2.

Everyone agreed that what was required was a thorough review of the system with a view to how it could be improved. Whether that is what we end up with at the end of the day remains to be seen, but at least we have been given the opportunity to try. All the witnesses are to be congratulated for helping us convince the government to allow greater study of the EI bill.

Before the last election Bill C-2 was known as Bill C-44, which died on the order paper. Bill C-2 is designed largely just to tinker with a few of the changes made to EI in 1996. Some people have suggested it may even have been part of the government's re-election strategy, but perhaps I will say more on that later.

The EI act and the EI system have become so convoluted and confusing that what is really required is an entirely new act. All employers and employees need to be treated fairly and equally and the role and limits of employment insurance in Canada need to be clearly defined by law.

The Liberal misuse of EI is really a betrayal of workers in traditional seasonal employment. Current EI rules do not encourage education, training and skills development. The key to reducing dependence on EI in areas of traditionally seasonal employment depends on this. We absolutely must reform the system to provide heavy emphasis on skills development, education and training in order to break the cycle of dependence on the EI system.

It is incumbent on the government to develop a strategy for workers in traditionally seasonal employment, which to a large extent is a rural Canadian issue. The Canadian Alliance is more than ready to assist in this regard.

One of the provisions of the 1996 legislation that Bill C-2 seeks to remedy is the so-called intensity rule. The intensity rule was introduced to discourage repeat use of EI by gradually reducing benefits from 55% to 50% over time.

The minister has stated that the intensity rule had the unintended consequence of being punitive. Indeed, some industries have seen their entire workforce subject to the maximum reduction of benefits. Workers in some industries, like the fishery, point out that they are not seasonal workers.

The provisions of the clawback system are quite complex and convoluted. By exempting from the clawback individuals who have collected one week or less of EI in the past 10 years, the main point of the clause is to eliminate the graduated schedule of high repayment rates for frequent claimants. With Bill C-2, an individual who has collected two weeks of EI in the past 10 years will be subject to the same 30% clawback as an individual who has collected 200 weeks of benefits.

What of the worker in the high tech sector who finds himself or herself downsized and out the door, only to be gainfully employed again in a few weeks? If this happens twice in an eight year to ten year period, is that person a frequent user?

We already know that we will be taking a look at the larger EI issue in committee in the coming days and weeks. Whether the government takes any notice of our work remains to be seen.

My colleague and I will be advocating some of the things I spoke of earlier. We will be advocating skills development, training and education, and education for young people in communities that traditionally rely on seasonal employment. We must provide those young people with alternatives to seasonal employment or, at the very least, something to fall back on during the off season. We must also provide training and skills development for individuals currently working in areas with traditionally seasonal employment. We must provide these individuals with job skills for the workplace of the 21st century.

Another thing came up during committee testimony. Apprentices should be paid allowances during the two week waiting period while taking courses. Not only would this help employees, but it would help employers too.

Finally, the government must undertake a long term commitment to infrastructure spending. The one area where the Liberals should be spending money is the one area where they have not. A strong transportation infrastructure will allow regions that rely on traditionally seasonal employment to attract more investment and greater opportunities.

The bill as it stands is a smoke screen at best. It touches the edge of the reforms passed in the House in 1996, but fails to recognize what is really required: an overhaul of the system.

The committee recognizes the need to do more and will hopefully come up with a solid set of recommendations for the minister. We can only wait to see if that will translate into legislation that is actually meaningful and productive for the millions of employers and employees in Canada.

Employment Insurance ActGovernment Orders

4:05 p.m.


Paul Crête Bloc Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC

Mr. Speaker, Bill C-2, now in third reading, is, let us not forget it, the same as Bill C-44, which had been introduced in the last parliament before the election campaign as an act of contrition by the Liberal Party. It was as the party it had said “We did reform EI in a way that is extremely hard on the workers, the unemployed and the employers. In the end, we more or less used the till to fight the deficit. We are introducing this bill because we have recognized, long after everybody else, that the intensity rule, for example, was a low blow and unacceptable for the workers”.

It deprived people, most of them with low salaries, of the money to make ends meet. We were told that the reduction would amount to only $10 or $11 a week, but for the worker who earned $250 or $300 a week and lost his or her job, this small amount was what was missing to buy butter, to finish paying the rent or things like that.

The Liberal Party realized that its reform did not make sense. but nonetheless, during the election campaign it said that it would go further than Bill C-44. The Prime Minister himself said that “Major mistakes have been made and EI has major shortcomings, and they should be corrected”.

When the House reconvened, we were very surprised to have brought before the House Bill C-2, which is a mere copy of Bill C-44. But what is important to mention is that a poisoned gift was left in the bill in the form of clause 9. Under this provision, the government would alter the legislative arrangements for setting the premium rate.

In other words, after the vote to be held this afternoon, if the Liberals maintain their position, the government would no longer have to strike a balance between the EI plan and the plan requirements. It would no longer have to give back to the plan the money it used for purposes other than what the EI plan was originally set up for. In fact, it would be able to spend the money on any government operation.

What this means is that this clause will legalize the mismanagement of funds, the theft of the hard earned money the government has been taking from the pockets of workers and the unemployed for several years now. This is why, right from the outset, we in the Bloc Quebecois have said that we would not be voting in favour of this bill if that provision was left in.

We were able to get the consensus of all the other opposition parties. We also have the support of the auditor general, management and unions. Both the CLC and the Conseil du patronat du Québec said they did not want the federal government to make sure it can do whatever it wants with the money without having to account for it.

The figures have been more or less the same for the past few years: each year, $18 billion is collected in premiums and $12 billion is put back into the plan. This leaves a surplus of $6 billion, which is used to cover the government's general expenditures, to pay down the debt with money belonging to those who contribute to a fund that has become a very regressive payroll tax.

Members should know that premiums are paid on a maximum annual income of $39,000. This means that people earning $45,000 do not pay premiums on the extra $6,000 and, therefore, do not contribute their fair share toward this portion of the government's general expenditures. Those with the lowest earnings contribute more than their fair share.

Even worse, people like us, MPs, and all those who are self-employed, such as physicians and lawyers, those who do not pay into the plan, make no contribution whatsoever. They do not carry their share of the burden, not out of malice but simply because the government has turned this into a regressive payroll tax, allowing it to dip into the pockets of those most in need. And it did not stop there.

Since 1997 there has also been a terrible tightening up of EI eligibility criteria. Fewer people qualify. I heard the parliamentary secretary mention 88%. What she is saying is that 88% of workers would qualify for benefits should they become unemployed. The purpose of the EI plan is to provide financial support not to those who have a job but to those who are unemployed. In this case, it is not 88% but rather 40% of the workers who really qualify for employment insurance when they lose their job.

Since the reform, thousands of young people pay premiums from day one and in the end they never qualify for benefits. Only 25% of the unemployed young people qualify. This means that 75% of them are paying for nothing.

Clearly, we had many reasons to oppose the bill. We still played the parliamentary game and I think that in the end it will have paid off. Sixty or seventy groups were heard by the committee. The great majority of them were from Quebec and had been recommended by the Bloc Quebecois. One after the other they systematically told us that it was not Bill C-2 but real reform of the employment insurance system that they wanted.

They talked about everything that was wrong with the bill. The committee unanimously adopted a motion that I brought forward. I will read it because I think it is the only message of hope we have on the whole employment insurance system. It 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.

Between the November 2000 election and the date when parliament returned, the government did not do its homework. Perhaps the Liberals told themselves “Let us give it a try. Let us table Bill C-2 as if it were Bill C-44. It might work and we will not have to give them more”.

However we were there to do our job. We heard witnesses in committee and they showed that many more amendments were required. All committee members, whether from the Liberal majority or the opposition, supported the motion that I proposed. I hope this will allow us to finish the job in the coming weeks, so that by early June we can have a new government bill that will correct the other flaws of the plan.

There are many things that are unacceptable. Let us begin with the creation of an independent employment insurance fund. The frustrations of the workers and employers who appeared before us had to do with the fact that people contribute to a plan over which they have no control. They find this unacceptable. That issue will have to be debated again because it is not true that people who contribute to the plan will continue to give 33% of the money to the government.

Either the government will turn contributions into a payroll tax—and then we can make a complete overhaul—or we will have an independent fund but that issue is still on the table.

There are other matters that are urgent as well, very important ones having to do with unemployed workers' bread and butter, such as abolishing the waiting period. No benefits are paid during the first two weeks of a period of unemployment. This is a throwback to the old Unemployment Insurance Act of the 1940s. Now that people pay premiums from the first hour, why must we still have this waiting period, which no longer exists in many countries? It should be abolished.

Coverage could also be increased from 55% to 60%. Unemployed workers were among those who helped to pay down the deficit but they did not get tax breaks because they do not earn enough to qualify for any significant deductions. One way of helping them would be to give them an adequate income between jobs.

Our seasonal workers also need a status which is independent of economic activity, because a period of growth like the one we are now experiencing has a negative effect on them. We require them to work more hours to qualify but we allow them fewer benefit weeks when all is said and done, although they are in jobs which give them 15 or 20 weeks of work year in and year out, economic growth or no economic growth. They do not get 25, 30 or 40 weeks of work in forestry or tourism because the economy is booming. They might get an extra week or two but not 8, 10, 12, or 15. This is something that needs to be addressed.

We also discussed the whole issue of self-employed workers, of whom there are an increasing number in society. They represent an important segment of the labour force but are not covered by any plan. It would be necessary to reflect, to make recommendations, to ensure people of worthwhile, minimal protection. We need, to take advantage of the present situation since we sense that it is possibly going to lead to a downturn, or perhaps already has. Before we get into a recession, or worse yet, a depression, we need to have a system in place that will provide people with enough to survive on. I am willing to bet that the present system will not.

There are all manner of other improvements needed. There is the discrimination toward young workers and women who are new to the workforce. They will be required to have accumulated 910 hours of work before being eligible for employment insurance. It has already been shown, although it took three years, based on the statistics, that the intensity rule was not having the desired results. This has cost people $250 million since 1997.

I requested an amendment to Bill C-2 that would take the retroactivity back to January 1, 1997. The reply from the minister, who had to authorize this, since royal assent was required, was “We find that is too much money to have to pay back to people”. It was not, however, too much to take from them in the first place. It was perfectly all right to take it from the low wage earners. This is one more thing that needs examination and correction as soon as possible.

Then there is the whole matter of the older workers. We live in a society that has produced people who often have worked in a factory or in various sectors where there are massive layoffs as they reach the age of 45, 50, 52, 53, or 55. These people find themselves without a job and cannot easily be retrained for other types of work. All the active measures are in place to help them learn other trades but it is not true that a forestry worker can be turned into a computer technician overnight. There is a limit that cannot be crossed. There are people like that.

We live in a society benefiting from gains in productivity but the government should have the courage to distribute them properly, to create a bridge so that when people 52, 54 and 55 years of age cannot be reclassified in another job, we can find a way for them to carry on until they are entitled to their old age pension. This too is part of an employment insurance plan.

I will give some examples but there are a whole lot of others that will have to be corrected by June 1. We must be able to make proposals. In my opinion, the ultimate scenario is one in which there will be a number of proposals that could receive unanimous committee approval, I hope, and a number of others that will not but at least the door would be opened after five years' effort.

Let us think back to 1995-96, after the employment insurance plan was tightened up. At the time, we said it was unacceptable. We heard the Prime Minister say “The unemployed are beer drinkers”, something he apologized for in the fall of 2000. The trend has been reversed but we must not stop halfway. We must devise a real, adequate employment insurance plan.

It is sad that all this is happening when the government is grabbing the fund's surplus and no longer wants to comply with the act's provisions requiring the system to balance out over a single economic cycle.

The chief actuary of the EI plan has said that a reasonable surplus to deal with any economic crisis would be in the order of $14 billion. Yet the current surplus is over $30 billion. The only way the government has found to avoid meeting its obligations is to remove from the EI commission the right to set the premium rates. We are faced with a situation that is not very pretty.

However, we know why the government has done this, that is because the EI commissioners have gone as far as they could. They could not, in conscience, go any further and tell the government that it was reasonable to leave the premium at $2.25 when the plan could balance out with a premium of $1.75. The employers and the unions were unable to support the government's policy. Therefore, the way the government found was to say “We will remove your moral responsibility, we will remove from you the responsibility of making a decision and, thus, we will be able to do as we please”.

Faced with this situation, we feel it is obvious that the legislation is still unacceptable. I say to all workers, all employers and all the unemployed that the representations were not made in vain.

Tenacity is important. A task has been given to the human resources standing committee. It has until June 1 to recommend further amendments to the employment insurance plan. I think a door is now open and we will be able to finally convince the government that it has a responsibility in this matter.

Obviously the finance department and the federal government are really intent on grabbing as much money as possible. With that money, they can then spend in all kinds of sectors that are not under their jurisdiction.

The witnesses who appeared before the committee and all those who have a good grasp of the situation have shown a great deal of tenacity. For one thing, they have certainly understood that the federal government has diverted their contributions to the employment insurance plan.

The deduction on our cheque stub does not indicate general government expenses or payroll tax but employment insurance premium. For every $3 in premiums, $2 go to the EI fund and $1 to other expenses. This, people still find unacceptable.

During the campaign and at the beginning of the debate on this issue, the Liberals accused the Bloc of stalling this marvellous bill and suggested that those we are supposed to stand for would not put up with our attitude.

I did some checking. I went in the field and asked around to see whether ordinary citizens thought we were right to say that the bill was unacceptable, because it is not true that the government is doing its job by putting $500 million into a plan with a $28 billion surplus. People said to us “Go and say that it is unacceptable for the government to help itself to the surplus like this. Try to win other points, try to get them to see reason”.

The work we have done and the witnesses we have heard from are proof of people's tenacity. I am not saying that the battle is over and won. I am saying that we will have a chance in the next two months to submit a report through the Standing Committee on Human Resources Development and the Status of Persons with Disabilities, which will make it possible to finish the job and to bring about real EI reform. I hope we finally achieve this result because we will have done our job.

After being told that people chose to be unemployed, after seeing something like the intensity rule imposed, we will have abolished it and we will realize that it is the same sort of situation with young people. They are not going to work longer just because 910 hours are required. They are going to work as long as there are jobs and opportunities and we give them a chance. In this way, we are going to help the regions hang on to their resources.

This is an important point. For decades there was a social pact between Canada's resource regions and its central regions. We in the resource regions provided the raw materials: wood, wood products, agriculture and tourism. In return, we had an EI plan that gave people a decent income during periods of unemployment, particularly during the winter.

With the new EI plan, this pact has been broken. Workers have seen their income support taken away and have been told to manage on their own. In return, the government has not really given them anything to help them diversify their regional economies. One of the consequences has been the exodus of young people.

When, in our areas, there are no young people to take over, it is a catch-22 situation that must be resolved. One of the tools we have to do it—and it is not the only one—is to provide reasonable eligibility conditions for employment insurance so that the young worker who has accumulated 600 hours is not forced to move in order to get the 300 missing hours, never to return after all the resources we put into training him. As we can see, there are still many things to be changed in the employment insurance system.

We will vote against Bill C-2 because the government has decided to maintain the misappropriation of the premiums paid into the system. I believe that this attitude is responsible and that we have the opportunity to transform further the legislation. In that sense, I hope I will get the same support during the next few months. I also intend to consult the people and ask them what their priorities are.

We know very well the requirements that should be in the employment insurance system. We can negotiate efficiently until June with the government to find out what the priorities of the people are. I will do that during the next few weeks. I will try to ensure that we will be able to bring about other changes that will be those that the people really want.

In this way, we will be able to carry out our mandate, which is to ensure an adequate distribution of wealth by means of a real employment insurance system and not a system by which the government puts in its pocket money coming from employers, employees and the unemployed.

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4:25 p.m.


Yvon Godin NDP Acadie—Bathurst, NB

Mr. Speaker, I ask for the unanimous consent of the House to share the 20 minutes allowed me with the hon. member for Winnipeg Centre.

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4:25 p.m.

The Acting Speaker (Mr. Szabo)

The hon. member does not need the unanimous consent of the House to share his time for a 20 minute speech, but I will allow it.

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4:25 p.m.


Yvon Godin NDP Acadie—Bathurst, NB

Mr. Speaker, I would like to thank you for allowing me to share my time with my colleague from Winnipeg Centre. He once was a blue collar worker and is certainly familiar with the problems faced by construction workers and will be able to speak to this issue constructively.

It is a pleasure to address Bill C-2, not that I am pleased with Bill C-2 because it really does not go far enough. The standing committee on human resources development heard witnesses from all over Canada and more than 60 of them came here to Ottawa. I want to thank those who travelled to Ottawa to express their views on Bill C-2 concerning employment insurance.

None of these witnesses said that Bill C-2 went far enough. They focused more on what was not in the bill. That is what was worrying them. I want to thank them for coming to parliament and speaking on behalf of Canadian workers and even management.

We might look at the Canadian Chamber of Commerce, which I have accused of not representing the chambers of commerce throughout the country. Its representatives were saying that employment insurance should not be changed and that it would not encourage people to relocate.

The Prince Edward Island Chamber of Commerce testified before the committee and said that it did not agree with the Canadian Chamber of Commerce. It does not want people to relocate, it wants them to stay home. There are seasonal jobs in Prince Edward Island, in New Brunswick, in Newfoundland and in Nova Scotia. There are also some in the Gaspé peninsula, in Quebec, in northern Ontario and in northern Manitoba. I am sure my colleague from Winnipeg Centre will be able to tell me about it.

The situation is the same in Saskatchewan, in Alberta and in British Columbia. I have travelled to all the provinces. I also went to Whitehorse in the Yukon. Everywhere I went, unemployment was a problem. Employment insurance was created to take care of the unemployed. This system belonged to employers and employees.

When the employment insurance reform happened in 1996, it was all fine and well at the time for employers to say “This is what we must do. We must encourage people to work”. They quickly realized that in small and medium size businesses in Canada, where up to 74% of jobs are to be found in an area like mine—in just one riding—we are losing $69 million in benefits every year. This means that small and medium size businesses lost all these benefits.

Those who receive EI benefits do not have any money left once they have bought food and paid their debts. Who gets the money? The grocery stores and the banks where the car payments and the mortgage payments were made. They are the ones who get all the money.

People soon realized that it was small and medium size businesses that lost the $35 billion that was taken away from workers. With all due respect, EI recipients are not likely to have two bank accounts with millions in them. Many of them do not have any money in their bank account.

The Prince Edward Island Chamber of Commerce did well in representing seasonal workers when it appeared before the committee. Its representatives told us that they did not want the government to make any more cuts in the EI plan, that they wanted to see the plan restored.

Bill C-2 abolishes the intensity rule. As the member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques said, this bill does not go far enough. Coverage should be increased to 60%. I would even push it further and say it should be increased to 66%. It should be two-thirds of the salary.

We must accept the fact that there are seasonal jobs in our country. We do not have seasonal workers. There is no such thing as a seasonal worker. Workers are not the ones who decide on a Friday that they will no longer have a job the following week. It is not the construction worker who decides. He does not decide if there will be construction work for him tomorrow or next week. It is not up to him. It depends on the health of the economy.

I have said it many times before. They took the cart and put it before the horses. The horse has never been able to learn to push the cart. That is the problem. They have taken money away from the economy to help everybody. That is what the employment insurance plan was for in the 1940s. That is what it had been created to do, to help those who lost their job.

It is criminal to take income away from people in the middle of winter. It is criminal to keep a lumberjack who works hard in the woods to make a living from getting employment insurance benefits to help provide for his family because his work is seasonal. That is unacceptable.

It is unacceptable that people working in a fish plant cannot provide for their families because the Liberals decided to cut EI in 1996.

These same Liberals were saying back in 1992 that if they were elected they would eliminate the cuts made by Brian Mulroney. That is what they were saying in 1992. We have press cuttings to prove that. What they have done to workers and Canadian men and women is unacceptable.

Let us have a look at the clawback clause. It is unfortunate that Canadian Alliance members keep saying that we are always on the side of workers who are constantly on EI. The unemployment insurance plan does not belong to the government or to a political party. It belongs to Canadian workers. It belongs to them and not to politicians. This money is not ours. It belongs to workers and employers who have contributed.

It is unacceptable that workers in the construction or automotive industry are laid off for two months, as is currently the case in Ontario, while their plant is being retooled to produce a new model, for example. It is unacceptable, in this day and age, that they do not have an income to meet the needs of their family during that time.

When members of parliament leave the House of Commons in June and come back in September, they keep their salary. Why should the salary of a construction worker be cut? Why should the salary of a worker in the automotive industry be cut? Why should we not treat these people as we would want to be treated? It is unacceptable.

However, we know one thing. After I was elected I said that I would support any change to employment insurance which would go in the right direction. As far as I am concerned, abolishing the intensity rule is a first step; it is better than reducing it to 45%. I support that.

Regarding the clawback rule, I support abolishing it and increasing the limit from $39,000 to $48,000. It is unfortunate, however, that the government changed its mind and decided to include clause 9 in Bill C-2. I will explain why. In so doing, it has made people wonder what the government has to do in an area where decisions were normally taken by the commission.

I said it right from the start, in 1997, and I have repeated on several occasions in this House “The government stole the money anyway”. This will not stop me today from supporting the changes to the intensity rule and this will be my recommendation to my caucus.

I wish to ask for one thing from the government. With respect to the promises the government made during the election campaign—and this is not only about Bill C-2, because even the public works minister bragged about putting other measures on the table, in Quebec—I hope and ask that, as voted in committee, we will be able to make recommendations to the minister between now and June 1, and that she and the Prime Minister of Canada will show an open mind and that they will not do so for electoral purposes only. Real changes need to be made for the well-being of Canadian workers.

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4:35 p.m.


Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, I am glad to have the opportunity to join my colleague from Acadie—Bathurst in pointing out some of the many shortcomings of Bill C-2.

I will start by saying that I admire the work the member for Acadie—Bathurst has done. He is, probably more than any member of parliament, a leading authority on the subject. He took it upon himself to travel to every province in the country, I believe 28 cities and communities, to listen to workers and employers about EI and other issues. He then wrote a very good report on the subject. I urge all members to get a copy of the report and to listen to what people who really care about these issues have been telling us.

I am pleased to add to the comments of the member for Acadie—Bathurst. He quite correctly pointed out that although there are some elements in Bill C-2 that we can support, such as doing away with the intensity rule and raising the clawback provisions to a reasonable level, it fails to address the real problem with employment insurance which is that hardly anyone qualifies any more. The bar is set so high on the eligibility rules that less than 40% of all unemployed people qualify. What kind of an employment insurance system—

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4:40 p.m.

The Acting Speaker (Mr. Bélair)

Order, please. I would like to point out to the member that he should ask a question or make a comment to the hon. member for Acadie—Bathurst.

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4:40 p.m.


Yvon Godin NDP Acadie—Bathurst, NB

Mr. Speaker, I rise on a point of order. When you were not in the chair it was decided that I would be splitting my time with the member for Winnipeg Centre and that is what we are presently doing.

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4:40 p.m.

The Acting Speaker (Mr. Bélair)

It is just that we are on questions and comments and I was urging the hon. member for Winnipeg Centre to make a comment or ask a question. If the hon. member for Winnipeg Centre wants to ask his question, he may now go ahead.

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4:40 p.m.


Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, I misunderstood. I thought we had moved on from questions and comments.

Would the member for Acadie—Bathurst expand on one amendment that many groups brought to the committee? These groups wanted to know why apprentices, who are in the trade school portion of the apprenticeship program, are penalized with a two week waiting period. Would an amendment to Bill C-2 that would no longer penalize apprentices for that two week waiting period not have been more beneficial?

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4:40 p.m.


Yvon Godin NDP Acadie—Bathurst, NB

Mr. Speaker, that is something I did not address in my speech.

When the government changed the unemployment insurance in 1996, it used the argument that the changes were needed to promote employment and training programs. At the same time, it punished the apprentices who attended apprenticeship programs at a community college by adding a two week waiting period, which was not there before.

It is clear that the Minister of Finance wanted some extra money. The government did not do what it intended to do. It needed some cash and that is why today the government has $35 billion in cash that it took away from the workers, which is not acceptable.

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4:40 p.m.


Mario Laframboise Bloc Argenteuil—Papineau—Mirabel, QC

Mr. Speaker, my question is for my colleague for Acadie—Bathurst.

Earlier, the government representative said that employment insurance was a social security system. It is not a social security system, it is an insurance plan. I would like to hear what my colleague has to say about that.

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4:40 p.m.


Yvon Godin NDP Acadie—Bathurst, NB

Mr. Speaker, that is right. The government would have us believe the EI plan is a social security system.

What the government wants is that retirees who have worked all their life pay into a social security system. It wants to have people on welfare pay for a social security system. It wants these people to pay for the unemployed while we used to have in Canada a plan called unemployment insurance. It used to be the workers and the companies that were responsible for workers. It used to be that way.

Then the government came up with this idea and now the Canadian Alliance has adopted it. Out West they say “Cut employment insurance”. In Ottawa, they say “Cut employment insurance”. They come to our ridings at election time and say “If we are elected, we will increase the employment insurance coverage”. They have it all wrong.

It is not a social security system, it is an employment insurance plan.

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4:40 p.m.


Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, the devastating changes that were made to EI back in 1996 have really starved a lot of rural communities and ridings like my own, Winnipeg Centre. The changes made to the EI system in my riding alone pulled $20.8 million per year of earnings out of my community. That is money that will not be spent in my riding.

The member for Acadie—Bathurst pointed out that this has an effect on small business. Every dollar spent gets spent four times before it finds its natural state of repose, usually in some rich person's pocket, but it gets circulated in the community. This has a huge impact on areas like mine which are economically depressed.

There is one riding in Newfoundland where the changes to EI pulled $57 million worth of benefits per year out of that riding alone. It is no wonder the government is enjoying this incredible surplus, this incredible revenue generating machine. It is like a cash cow that I think the government has become addicted to. It is like some provincial governments become addicted to gambling revenues. This government has become addicted to the revenue generating ability of the EI fund.

I started out by saying that there are two things in Bill C-2 of which we approve. Those are doing away with the intensity rule and raising the clawback provision threshold.

What the government failed to face were the two fundamental problems with EI. One is the eligibility issue. The bar is set far too high to qualify. The second is the method with which it calculates the benefit that a claimant will receive or what we call the divisor rule. It failed to address those two key fundamental issues. As a result less than 40% of unemployed people actually qualify for unemployment insurance.

What kind of an employment insurance program is that? What if we had a house insurance policy that we were forced to pay into but if our house burned down, we would have a less than 40% chance of getting any benefit whatsoever? We would think we had just been cheated or hosed by some fraudulent insurance salesman. That is what the EI system is doing to unemployed workers today.

There is a gender issue here too. If the individual is an unemployed woman, she has less than a 25% chance of collecting any benefit whatsoever. If the individual is an unemployed youth under the age of 25 he or she has a 15% chance of collecting even though the person is forced to pay into this insurance program.

I firmly believe that if we deduct money from people's paycheque for a specific purpose and then use it for something completely different, it is a breach of trust because we have developed a trust relationship with them when we told the them that if they paid into this insurance fund and were unlucky enough to become unemployed, we would pay a benefit. That was the promise that was made. Yet that is only true for less than 40% of Canadians, so it is a breach of trust. In the best light it is a breach of trust. In the worst light it is out and out fraud. We have deceived Canadians into thinking they have an income security system in their employment insurance system but we are denying them the very benefits.

If the government were serious about improving the unemployment insurance system, it would have listened to the 60 presenters who came to the standing committee from all walks of life. We had people from municipalities, chambers of commerce, labour groups and employer groups. All of them found serious flaws in an insurance system that generates revenue for the government to the tune of $750 million a month, not per year. Every month the employment insurance system pays the government $750 million in dividends. That money goes directly into the general revenue. It is not even dedicated for any specific purpose.

I actually heard the House leader of the ruling party once stand up and give us this logic. He said that if the employment insurance system ran into a deficit, the government would have to pick up the loss and pay. Therefore, when it was in a surplus position, the government should keep the surplus.

We did some mathematics. We added up all the times that the EI system has been a deficit situation. The total, cumulative, aggregate amount of money that was ever paid into it when it was in deficit was $13 billion. The total surplus is now $35 billion, predicted to be $43 billion by the end of this year. Even if we accepted the government's logic, what about the other $25 or $28 billion? Take back the $13 billion that was paid in and use the rest for income benefits and maintenance for the people for which the program was designed.

There are only two designated uses for EI money in the act. One is income maintenance for the unemployed and the other is apprenticeship and training. We are not supposed to build highways with it, or paydown the deficit with it or give tax breaks to the wealthy with it. That is not a designated use as contemplated under the act. That is why I say when money is deducted from a person's paycheque for a specific reason and then it is used for something completely opposite, essentially that is a breach of trust in the very best possible light.

The hon. member for Acadie—Bathurst raised another point. Where does the government get off claiming ownership of that money at all? In 1986 the federal government stopped paying into the UIC program. That money is solely and exclusively contributions by employers and employees. It used to be one third, one third, one third paid by the government. It does not pay anything into it anymore. Where does it get the proprietary right to any surplus? Where does it get the right to dictate what the contribution rate would be?

Frankly, the government should have no say whatsoever. It should take a small administration fee for administering the program. The program should be run by those who are actually involved in it, which are the employers and the employees.

It has been enormously frustrating in my whole career, first as a union leader and now as a member of parliament, to wrestle with a dysfunctional program such as employment insurance and to see the failure and mismanagement of a program. Now it has gone beyond mismanagement. I figure it is out and out abuse because it is using it as a revenue generator, which it was never intended to be. It was there to provide income maintenance to people who were unfortunate enough to fall into a situation where they lost their job.

The whole EI program seems to be some kind of a tough love attitude now. We are going to force these people to pull up their boot and get back into the workforce by starving them. It seems to be based on the premise that most people would rather sit on EI than work. I find that offensive. As a working person myself, I find that an offensive attitude.

This came up in 1987 when I think the Forget commission toured the country looking for amendments to the Employment Insurance Act. It studied the UIC system. One labour leader came before the commission and said that the government was always trying to find people who were ripping off the system or who were committing fraud in collecting unemployment insurance. In actual fact, there are more federal government cabinet ministers convicted of fraud, on a per capita basis, than there are EI recipients convicted of fraud.

At that time, I believe seven or eight of Brian Mulroney's cabinet ministers were busted, caught and convicted of fraudulent activities. In that same year only 200 unemployment insurance recipients were caught and busted for fraud. Out of a million some odd people collecting EI, only 200 people were found to be actually committing a crime. Out of 30 some odd cabinet ministers, eight or nine of them were convicted of fraud. It is good to keep it in perspective sometimes.

One amendment the government could have made, a very small cost factor and a change demanded by industry, was the issue I asked the hon. member for Acadie—Bathurst about. When apprentices were in the community college portion of their training, their eight-week community college instalment, whether plumbers, electricians or carpenters, the government started penalizing them with a two-week waiting period, as though they were unemployed.

Apprentices are not unemployed when they are attending community college. They still have jobs. They still have attachments to the workforce. They are simply going through the steps of the community college portion of their education and training. Why then are apprentices being penalized this two week waiting period?

We asked the government to consider that at the committee stage. I personally asked the minister if she would entertain a friendly amendment to the act to give satisfaction to the many apprentices who are involved with this. I even pleaded the case by pointing out that a lot of apprentices were choosing not to go on to their training component of their education because they could be without that two weeks' income. A lot of apprentices were dropping out of the apprenticeship system.

That is just one example of how the government did not listen to what Canadians were telling it was wrong with the EI system.

It is a regrettable day. We are backed into a corner. We are going to vote in favour of Bill C-2 to get through the few details that we would like to see go through. However the government missed the mark. It did not hit the nail on the head at all.