Debates of Dec. 11th, 2002

Committees of the House

[John Williams, Canadian Alliance, St. Albert, AB]

It could be 50¢ lower. It would create jobs. I would not mind if the government were to take credit for creating jobs if it were to drop the EI rate and that is what created the jobs.

We have to be competitive in the world. We understand how our productivity is declining versus that of our friends in the United States. What happens? The government continues to squeeze the employers and employees for more tax and more tax. The Auditor General has pointed out that is not appropriate. It may not be illegal but it is definitely inappropriate.

We could look at the other types of things the government has wasted money on. We voted on the Kyoto accord yesterday. That will also be another tax on industry. It is fine for the Minister of Finance to stand up and say that he will put a cap of $15 on every tonne of carbon dioxide that is produced but our friends in the United States do not have to pay a single penny because they are not going to participate in the Kyoto accord.

How are we going to maintain our competitiveness? The cost of Kyoto will be foisted upon business. The cost of this overtaxation on EI has been foisted on business. It goes on and on.

The Liberals seem to think they are acting more like socialists than entrepreneurs where they think they can tax those people and they will continue to produce. They will not continue to produce. They will pack their bags and move to the United States or somewhere else where there is a government that is friendly toward the concept of job creation, wealth creation and for that they do not mind paying a share of that in tax. But to be gouged by the government is not on.

We think also of the $7 billion that the government has parked in foundations. There is the $2.5 billion millennium scholarship fund. There is the medical research foundation. It goes on; there is a whole list of them.

The Auditor General pointed that out too. There is $7 billion of taxpayers' money parked in private bank accounts, paid for by the taxpayers of the country, paid for by the employers and employees of the country. The government has stashed it in private bank accounts so that it can at its wish, at its time and at its whim, decide that the money is going to be spent and presumably at the most appropriate time to buy votes for the next election. The Auditor General has been highly critical of that also.

The second report of the public accounts committee takes issue with the fact that the government takes the surplus, it continues to take an excess of EI premiums from employers and employees of the country. It puts the money into the general bank account of the Government of Canada and at the end of the year says, “What a wonderful thing. We have another surplus”.

The Liberals brag about that surplus as they take that overtaxation and stick it in private foundations. They waste it on gun registries where the costs are totally out of control. They waste it on the $1 billion boondoggle at HRDC. They waste it on advertising contracts. We heard evidence before the public accounts committee where it was said, “I knew what I was doing”, but the Auditor General said that they broke every rule in the book.

The litany goes on. The waste goes on. The overtaxation goes on. Canadian taxpayers are fed up. They want this to come to an end. Therefore, I would ask that we concur in the second report of the public accounts committee.

[The Acting Speaker (Ms. Bakopanos)]

Before I take questions and comments, it is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for New Brunswick Southwest, Health; and the hon. member for Elk Island, Government Advertising.

[John Bryden, Liberal, Ancaster—Dundas—Flamborough—Aldershot, ON]

Madam Speaker, I too sit on the public accounts committee. I certainly support the Auditor General in almost all the recommendations that she comes down with.

The government needs to re-examine and regularize the way in which employment insurance is collected. I would take issue with the member opposite that this is a payroll tax that is having a negative effect on the economy. I would remind the member opposite that employment insurance is a shared charge. It is not just the workers who contribute to employment insurance, it is also the employers themselves.

In a very strong sense those who contribute to employment insurance are the very large manufacturing corporations, the automakers, the steel industry and so on. When we talk about reducing EI premiums we must remember that in doing so we are reducing the expenses of the corporation. It is not just the organized workers.

I would also observe that many of the people who pay into employment insurance are the unionized workers for the very large corporations who make, in the case of General Motors and some of the large automakers, the base rate. The base rate for unskilled labour is I think about $69,000.

I think one has to bear in mind that the payroll tax that we are talking about, and I suppose we could call it a payroll tax, I have no problem with that, is a tax that benefits the economy. The $40 billion I point out is a notional amount of money. We can debate how real it is. The point about the $40 billion is that it is not much less than the debt.

We do know that anything that the government can do to reduce the debt has a net positive effect on the economy. It creates jobs. I point out to the member for Prince Albert that Canada is leading the United States in economic prosperity and job creation right now.

How did that occur? The fact is that the government had its priorities straight. It looks to debt reduction. It is true that in the employment insurance procedures that are being undertaken right now I think that the government should revise how employment insurance is collected.

I would like to see a two scale system, where the large manufacturing companies and those sectors of industry in which the salaries are very high pay perhaps a higher employment insurance premium than those people who are in the less affluent and less safe sectors, the small businesses.

The message that we get from the Auditor General is that it is time for the government to again review employment insurance. It is time to structure it in a way that it does not simply benefit the large corporations and protect the large unions that have such benefits from their corporations that even when they are unemployed they have the opportunity of receiving 95% of their income.

We must take this message from the Auditor General that the way employment insurance is managed now is not satisfactory and turn it into an opportunity to give a break to those small businesses that have one, two or three employees and are forced to contribute to employment insurance and give the kind of protection that we need to give to the small entrepreneurs and the people who are in marginal income categories and for whom an employment insurance premium is a significant deduction from their payroll.

I must say that when we are in that category of worker where the base rate for unskilled labour is around $70,000, then I am not so sure that the employment premium of $2.10 is so terribly unfair.

I always support the member for St. Albert when he says laudatory things about the Auditor General because she has been doing excellent work now, but a government must always remember that its job is to govern and to find a way to manage the government's finances and the country's finances that benefit not just the best off in society, not just the best paid workers, not just the large corporations, but benefit small businesses and employees who have less opportunity.

I think a two tier employment insurance system is a great idea and I would love to hear the thoughts of the member for St. Albert.

[John Williams, Canadian Alliance, St. Albert, AB]

Madam Speaker, I would like to thank the hon. member for his intervention. He does sit with me on the public accounts committee and I do appreciate his contribution to the committee. However I must take a couple of exceptions to some of the remarks he just made, while I may agree with some of them.

First of all, I do not see that there is any tax of any kind that could ever be called a benefit to our society.

The other area is this concept of notional account. The dollars taken for EI are real and expensive dollars. They are consolidated with all other tax revenues, as I explained in my speech, and the cheques that are paid out in EI benefits are all written out of the basic bank account of the Government of Canada.

We are required to keep track of EI revenues and expenditures in order that they may balance themselves roughly over the business cycle. That is the issue: real dollars in, real dollars out; $40 billion more real dollars in than has gone out. The chief actuary has said $15 billion is sufficient and we would have a surplus of $25 billion.

I appreciate the member's point of view about two different rates for small business versus big business. Today we have one expensive rate for all business and all employees. If the member has some compassion for small business and the lower income employees, why is he not standing in his place and demanding that the government introduce EI reductions for small business? It is a great start, but I have not heard him stand in his place and demand that. He has supported the government in keeping the rates artificially high, higher than they would otherwise be, not just for the high income wage earners, but even for the low income wage earners, and also for the small business people who sometimes have a difficult time making ends meet.

We have the worst of all worlds. We have an EI rate that is too high. There is no recognition of the complexity and the difficulty for small business people and low income earners, no recognition or sympathy, and everyone else has to pay.

I would hope that if the member believes that he would join with others such as ourselves in the official opposition to demand that the government bring openness and transparency, and explain itself as to what is going on, and how it could ensure that the rate be reduced.

[Wendy Lill, NDP, Dartmouth, NS]

Mr. Speaker, I would like to ask the member who has been speaking about a phenomenon I am seeing every day in my riding. I am seeing many more people who are no longer eligible for employment insurance.

Over the last couple of years $20 million has been removed from my community that used to come in to workers who were unable to find work, or who were without work for a period of time. That is $20 million that would have gone into small businesses, into the community, and is no longer there because we have been carving out the employment insurance system and putting it all in this growing surplus.

I would like to ask the member how it is that he is able to justify with his motion the further hollowing out of this important income support program for people who are unable to find work, or who are without work for a certain period of time.

[John Williams, Canadian Alliance, St. Albert, AB]

Mr. Speaker, we are not proposing any hollowing act. We are saying that the government is collecting far too much money to provide the service that it is currently committed to providing.

[Bryon Wilfert, Liberal, Parliamentary Secretary to the Minister of Finance]

Madam Speaker, I was not going to enter this debate but since the member has raised a number of issues I thought I would set the record straight.

The government has been in the business of reducing EI rates ever since it came into office. The EI commission set the premium rates from 1998 to 2001, not the government. The commission is made up of representatives from labour, business and the government. It follows the criteria set out in the Employment Insurance Act in setting these rates.

Analysis done by the chief actuary at the time did not suggest that the rate could be lowered to anywhere close to the rate being suggested. Furthermore I would point out that had it been lowered to the amount suggested the federal government would have recorded a deficit in 1998 and 1999.

This is the same group across the way which talks about not getting into deficit spending. We cannot have our cake and eat it to. Either we are not going to go into deficit which the government has pledged not to do, or we are.

With the possibility of a deficit again in 1999 and 2000 it would not have been able to implement in October 2000 the $100 billion tax reduction plan or provide incremental funding to the provinces for health care in September 2000.

On the one hand if we took the advice of our friends across the way there would have been no personal income tax reductions which our friends claim they support. In fact they would like us to go further. Our friends across the way suggest to us that in fact we should do more for health care and help the provinces deliver health services. Yet at the same time they apparently are able to do all of these things magically that no one else can do. It is not possible, not even by the arithmetic suggested by the Canadian Alliance.

Prior to 2002 the government did not set the rates. That was the responsibility of the employment insurance commission. It set the rates according to the criteria set out in the Employment Insurance Act at a rate to be set at the level which would be appropriate. In doing so what did the commission have to do? It had to look at two things: first, ensure that there would be enough revenue over a business cycle to pay the amount authorized to be charged to the EI account , second, and maintain relatively stable rate levels through the business cycle.

Each year the commission received the chief actuary's annual report on EI premiums. The commissioners reach a consensus on the premiums each and every year. This resulted in the rate being lowered. In fact it has been lowered every year since 1994. The legislation passed by the House in 2001 gave the government the authority to set the rate for 2002 and as we know the rate was lowered again. The minister announced a further reduction.

We have said, and the record proves it, that we want the EI rate to be brought down over time to a point where it just covers the cost of the program. However we are not going to be irresponsible and go into a deficit, again something that the members across the way would be the first to holler about if we did.

The member should know that the employment insurance account is not an account containing cash. It is an accounting device used in setting the premium rate. The EI account has been consolidated with the books since 1986, on the advice of who? The Auditor General. Therefore any annual surplus or deficit in the EI account affects the government's bottom line in the year, but the cumulative surplus is simply a bookkeeping entry that adds up to these annual amounts.

Maybe the member has missed this and I should mention this for his edification. In 1990 the employment premium was $2.25 and the annual surplus was $.9 billion. The account balance was $2.2 billion. In 1991 it went from $2.25 to $2.80. Then we had a $4.2 billion deficit.

In 1992 it went to $3.00. Members will notice that it was going up. Then we had an annual deficit of $2.6 billion. In 1993 it was $3.00 again, a $1.2 billion deficit.

In 1994 we started to see a decline, as I said. Eventually what happened was that in 1996 it went to $2.95, then to $2.90 in 1997, then to $2.70. In other words, it was continually going down. It went down to $2.25 in 1998 and in 2000 it went to $2.40. It was $2.25 in 2001 and $2.20 in 2002. As we know, the Minister of Finance announced in the House that it is now at $2.10.

Clearly there has been a downward approach. Again, we have indicated very strongly that we believe this is the continued approach we want to take but that we want to take it in a fiscally responsible manner, which I think is very important to all members of the House, whatever side they happen to be on.

The issue before the House is the member's suggestion that somehow we can do all these things at the same time and be able to balance the books. I have clearly demonstrated the intent of the government. I have indicated what we have been able to do and how we are committed to reductions in that regard. I think that is very important in terms of looking at this particular issue.

I do not think there is any question that we all agree the rates need to come down and that is why we have been committed to doing so. It is not, however, appropriate, in my view, to make some wide-eyed suggestion that we can suddenly reduce it by 50¢ or 60¢ and not look at the repercussions on the finances of the nation.

At the same time, we are dealing with reports, including the Romanow report. We are going to be committed to looking at the issue of health care funding and, at the same time, committed to reducing personal income taxes, which again I know my friend across the way has, with all due respect, supported on a continual basis.

Harry Houdini passed away many years ago. He is not alive and well here. We are not able to do the impossible. What we are able to do is to be fiscally responsible, to make sure that we deal with the corporate tax issue. As we know, corporate taxes by 2006 will be five percentage points lower than in the United States at the present rate. As we know, the $100 billion tax cut continues, again committed to by the minister and the government.

I would suggest that the issue before the House is whether the government is taking a responsible approach in reducing EI premiums. The answer clearly is yes. Every year it has continued to go down and every year the rate has been set. The new rate this year alone will save employers and employees $860 million. That is not exactly a small amount. I think that is important for us as members of Parliament to take note of.

If my friends on the other side wanted to criticize us, they could have criticized us if we had not been reducing the rates but we have reduced them in a responsible manner. We have indicated that we are interested in moving to the point where we will be able to reach an appropriate level but that in order to do so we have to do it in a responsible manner. I have not heard anyone complain about the fact that we have been reducing them.

Some may say the pace is not as fast as they would like, but the reality is that we on this side of the House are charged with governing and we are going to govern in a responsible manner. We are going to make sure that when the EI rate is reduced it will be reduced to cover the cost of the programs, and we are going to do that effectively.

All the cheap shots that I keep hearing from across the way do not add up to the fact that we are still responsible for making sure that we do it in a responsible manner.

Maybe I should get my friend across the way a new calculator because the reality is that we cannot do what has been suggested. We cannot do it unless we go back into a deficit and we on this side of the House will not use that word. We are not prepared to do that. I have very clearly outlined the position of the government.

I certainly am prepared to go further but I think my colleagues across the way, if they ponder and review the comments that I made, will realize that we have moved, I think, quite significantly. When we talk about a rate that was $3.00, we are now down and continually going down in a responsible manner from when we came into office, I would suggest that is good governance. I would suggest that is showing responsibility, and doing so, as I said in the past, in a very fiscally responsible manner.

The issue that the member has raised realizes that we are continually reviewing all expenditures. Our colleagues across the way have made some comments about some issues that are in fact figments of their imagination.

I hear them talk about the HRDC issue, which is absolute nonsense. They know that a billion dollars was not lost but they continue to fabricate and promote a myth. That is rather irresponsible on the HRDC issue, and they know that. Some of the members who were on that committee should know better. If they do not, they should have a discussion with their colleagues who were on the committee at the time.

In any event, we are committed to making sure that we govern in a responsible manner. We made sure that the elimination of the $42.5 billion deficit was supported by Canadians. It was done with the support of people across this country. People said that it could not be done but it was done.

The opposition sometimes, particularly some in the Alliance, will suggest to us that the provinces suffered. The provinces have the same access to taxation authority that the federal government has. Governing is about making choices. If their choices were making tax cuts first while they had a deficit and not spending money on health care but tax reduction, then that was their choice, certainly not our choice.

We took a more fiscally responsible approach and said that we would eliminate the deficit first and then we would deal with tax cuts. We did that.

As I say, I have no fault with the provinces. If the Ontario government wanted to cut taxes while at the same time complaining that it needed more money for health care, more money for education or more money for this, that was its decision. It, through its legislature, was responsible to the people of Ontario.The important point here is that in terms of the transfers, we made sure that we did it appropriately.

I find it unbelievable that side of the House would suggest for one minute that somehow we should do all these things and at the same time be able to slice the EI rates by 50¢ or 60¢.

The reality is that it is about choices, and as I said, the provinces have the same ability as we do.

I know they will be after us and saying that we have to be--Madam Speaker, I think there is another conversation going on.

[The Acting Speaker (Ms. Bakopanos)]

Order, please. There are two conversations going on. It is very difficult for the Chair to listen to the hon. member. Members will have 10 minutes for questions and comments. If there are comments, I will make sure that everyone who wishes to make a comment or ask a question has the floor.

Right now it is the hon. Parliamentary Secretary to the Minister of Finance who has the floor and he has 4 minutes and 41 seconds left.

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Madam Speaker, one of the members yelled out that this information was incorrect. I am saying it nicely. The reality is that those are the facts. I know we are not allowed to use props but I have the listing of those reductions. The reality is that these are the facts.

It is funny that some people are entitled to an opinion but apparently we on this side are not entitled to give answers because those on the other side have all the answers.

What I said about the provinces apparently offended one of the members across the way. The member should check the record. The provinces have the same ability to tax as we do. They made decisions and we made decisions. We stand by our decisions and they can stand by theirs. We did not cut health care. We do not deliver health care. The provinces deliver health care.

Last year the government of Ontario announced $1.2 billion in funding for health care and $1.1 billion came from the federal government. The province happened to conveniently leave that out.

In terms of the government's commitment to health care that we made in September 2000, we make no apologies for that. We make no apologies at all as the provinces agreed to that at the time. Absolutely not.

The Minister of Finance stood in the House and talked about the reduction, talked about the savings of $160 million to employers and employees. That is not a trifle.

[Monte Solberg, Canadian Alliance, Medicine Hat, AB]

Madam Speaker, I want to question the competence of the government. I just heard a ridiculous speech from the member. He made a number of erroneous and misleading statements. There were so many I hardly know where to begin.

I want to address the issue of the Human Resources Development scandal where the government did lose a billion dollars. Does the member across the way deny that when the audit became public the audit revealed that grant money was handed out without applications, through verbal agreements and that money just disappeared somewhere into the atmosphere?. That is what the audit revealed.

What we see every time the government gets up to deliver some kind of new program is that it has no way of keeping track of the money. The same is true of the firearms registry. The same will be true for Kyoto. It has no plan for Kyoto.

We on this side of the House are arguing that instead of going into deficit the government has another option. It can be responsible with the money that it already has. If it were it would not have to worry about constantly raising taxes or, in this case, not lowering taxes to where they should be.

The member was wrong again when he said that the actuary was not recommending that EI premiums come down much more than he is arguing. The actuary is recommending that they be as low as $1.75 a hundred, 50¢ lower than they are today.

I challenge the member on a number of things that he said and I ask him to respond to what I just commented on.

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Madam Speaker, the member can make sarcastic comments but I will not lower myself to such negativity.

I would point out that we have said this over and over again and the facts prove it, there was no billion dollar boondoggle. I would be surprised if they could find the word in the dictionary. In any event, no billion dollars were lost. He knows that but he continues to propagate the myth.

We are the government that released the audit and we are the ones who said that we would have the Auditor General report to committee four times a year on HRDC. This was at the same time that issue was being debated in the House. Members were scurrying across here asking the Minister of HRDC if she could prove this or prove that but at the same time they were denouncing publicly a program that they wanted.

The reality is that there were no billion dollars lost. They know that. Everyone on this side of the House knows that. The facts prove it and, quite frankly, it is a bit tiring listening to that nonsense.

[Odina Desrochers, Bloc, Lotbinière—L'Érable, QC]

Madam Speaker, at the beginning of his speech this afternoon, the Parliamentary Secretary to the Minister of Finance said, “I was not going to enter this debate”.

Given the remarks he made, I think that he should have just remained seated as it is apparent that he does not realize the magnitude of the problem.

[An hon. member]

And the issue.

[Odina Desrochers, Bloc, Lotbinière—L'Érable, QC]

He does not realize the magnitude of the issue either.

The Auditor General's name has been mentioned. The Auditor General has said three times now, “People, this is not working. The surpluses are too high. Where is the money going?”

I want to ask a question. The statistics presented to the Standing Committee on Public Accounts were quite clear on this point. Money from the unemployed and SMEs goes toward the Liberal government's debt.

Will the Parliamentary Secretary to the Minister of Finance have the courage today to admit that the government is relying strictly on the employment insurance fund surpluses to pay down the debt and also to pay all its little hangers-on?

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Again, Madam Speaker, maybe the member should have sat down and not asked the question, because I am not sure what the question was. The reality is that we continue to reduce EI premiums. Every year they are being reduced. Every year money is going back to employers and employees. I will say it again: $860 million in the latest reduction.

If my colleagues on the other side have a concrete proposal that they can provide and would like us to evaluate, they should do so. Instead, all we hear is negativity. We do not hear any constructive suggestions on how they would reach that. They can say they want to reduce it by 50¢ or 40¢ and they can say this and that, but again, it is about how. How would they do that?

Again, the reality is that we have demonstrated this. We have eliminated deficit. We have reduced EI premiums every year. We continue to support health care in this country. We continue to do the types of things that Canadians want. Until this government came in, we were not seeing that. In fact, we were seeing a reversal. We were seeing a larger deficit. We were seeing larger EI premiums. But again we do not get any thanks from the other side, because of course the other side says, “Just let us do it. We can do it better. We can do it faster. We can do it more effectively”. In fact, the reality is that we are doing it. We are not just talking about it. We are actually acting.

[Brian Pallister, Canadian Alliance, Portage—Lisgar, MB]

Madam Speaker, the member asked us to be constructive so I will do my best, but it is difficult. Frankly, I find it disappointing that the member would put such delusional partisan rhetoric on the record, such as he did when he said the government did not cut health care. I sat in the provincial cabinet when we were forced to deal with downloading from this government firsthand. Without pre-notice, without consultation of any kind in any way, shape or form, that government decided to cut our transfer support for health care. For the member to put that on record flies in the face of the facts.

The member suggested in his comments that we fabricate and that our statements and criticisms are figments of our imagination. I suggest to him that the fabrication comes from that side of the House and certainly shows in his own comments. When he reads them I hope he will recognize that it was the receivers of health care services who were directly impacted by his government's arbitrary decision.

That being said, I would now like to move to the constructive suggestions.

Yes, we in the Canadian Alliance would reduce EI premiums. We would reduce them by making cuts elsewhere. The cuts we would make would be in areas such as untendered granting of contracts on a partisan basis. We would end the violations of Treasury Board guidelines so commonly undertaken by members opposite and which have resulted in the shuffling off of numerous members on their frontbench as a consequence of them following the lead of a Prime Minister who violates his own guidelines in his conduct. We would pursue changes of that nature.

We would avoid doing things like cancelling a helicopter contract and costing taxpayers hundreds of millions of dollars just so the government could avoid doing the right thing for the good of the country. It cancelled a contract and caused the taxpayers in Canada to pay hundreds of millions of dollars on the basis of nothing else but politics.

We would avoid wrongfully condemning previous prime ministers and having to fork over hundreds of millions of dollars, as in the Airbus scandal.

We would avoid the excessive partisanship of the member, and his comments are revealing of excessive partisanship, and we would avoid using taxpayers' money to try to cover our partisan backside.

[An hon. member]

Oh, oh.

[Brian Pallister, Canadian Alliance, Portage—Lisgar, MB]

The member will have her chance to speak, and I certainly encourage her to do that.

The member for Oak Ridges spoke about figments of his imagination and he threw around the buzzwords of responsibility, good governance and things like that, but the fact remains that this government which, for example, has invoked closure more than any previous government in the history of Canada, has also been besieged by wrongful conduct by its members and in particular members of its cabinet. This country has seen that kind of conduct.

The Prime Minister, rightfully, has taken efforts to move those members off to the sides. That is an interesting thing that largely has gone unnoticed by the member opposite in his comments, but over here we certainly have noticed the changes. They are happening pretty well every weekend. In fact, one of the members opposite said about a month ago he was hoping the Prime Minister would let him golf with him on a Sunday. I think he said that in the hope the Prime Minister would not announce his demotion that Sunday as he had moved other members around on the three previous Sundays.

We have a basic objection to this boondoggle approach that the member denies the government has taken, and he of course contradicts the Auditor General. I put more faith in the Auditor General's comments than I do in those of the member. The gun registration program is boondoggle number two and boondoggle number three is just waiting to happen, because the government is way past understanding that it cannot run the country like the Liberal Party. It has to run this country for the benefit of all Canadians, not just members of its party.

This is my question for the member. Does he not understand that by shedding some of these old style, patronage based and long discarded approaches to good management he could save taxpayers of this country hundreds of millions of dollars and, therefore, his government would be able to reduce EI premiums along the lines that the Auditor General has suggested would be appropriate?

[The Acting Speaker (Ms. Bakopanos)]

Unfortunately time has run out, but I will permit the parliamentary secretary to answer if he so wishes.

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Madam Speaker, I find it ironic that on this side of the House when we make constructive comments and present the facts, we are being unduly partisan and on the other side when those members make comments, they are not partisan at all.

I find it rather interesting when that party talks about good governance and good fiscal management. Bad fiscal management would have been to take the $42.5 billion deficit we found in 1993 and extend it. In fact we eliminated it. We did not extend it. We eliminated it. Bad management would be to have EI premiums go up even further from $3. In fact, no, they went down. I do not know what is in their water--

[The Acting Speaker (Ms. Bakopanos)]

Resuming debate. The hon. member for Rimouski--Neigette-et-la Mitis.

[Suzanne Tremblay, Bloc, Rimouski-Neigette-Et-La Mitis, QC]

Madam Speaker, as you likely know, I will be sharing my time with the member for Lotbinière—L'Érable.

The motion before us is one that is very interesting. We have a report that we will be concurring in, but which makes reference to a major problem. Since coming to the House in 1993, I have heard about one issue almost every day: employment insurance. The second thing we hear about, is that the premiums are disgustingly high. The third problem that we hear about, when it comes to employment insurance, is the negligence of the government, which decided to drastically cut benefits for the unemployed.

Another problem, since the premiums are too high and the benefits too low, is that the surplus has reached inordinately high levels. The surplus has grown so much that one wonders if helium was used. We have seen the numbers in the House. There really is a surplus. This requires no leap of the imagination.

And what happens when there is too much of a surplus? The government says it is going to pay down the debt. The surplus becomes a hidden tax. The government does not even have the courage to call it a real tax on workers and employers. They are the ones who have to pay for it. At the end of the year, the government tells us, “We are going to pay down the debt; we have ended up with an enormous surplus”.

The former Minister of Finance could not count, except when it came to his companies in the Bahamas. Then he had no problem counting. However, when it came to the government's budget, he was never able to tell us beforehand how big the surplus would be. What he was most interested in was how much of a surplus he could squeeze out of the EI fund.

Three times now we have been told by the Auditor General—first the former Auditor General, and now the current Auditor General—that the surplus in the EI fund was too big, that the fund had too much money. That is one way of describing it. I want to make this clear, because people are listening to us. In fact, there is no fund. It is a fund with no money, because money in the fund goes directly into the consolidated revenue fund of Canada.

[An hon. member]

Like Ali Baba's cave.

[Suzanne Tremblay, Bloc, Rimouski-Neigette-Et-La Mitis, QC]

Yes, it is a little like Ali Baba's cave. My colleagues are in a festive mood and are recalling childhood tales. However, this is not fiction, this is a disturbing reality.

The money is pouring into a cavernous fund and the government no longer knows what to do with all of it.

The Auditor General says that if we had a little cushion of two or three billion dollars, it could help. The government should understand once and for all that it has to create an independent fund for employment insurance contributions. It must hand over the responsibility of managing this fund to those who contribute to it and delegate government representatives to ensure that the fund is well managed, if need be. We have all witnessed the Liberal government's extraordinary expertise in managing funds.

The $2 million budget for firearms grew to $1 billion. With such astounding expertise, the government could at least be allowed to delegate someone to the fund's board of directors to ensure that employers and the unemployed manage it properly.

It is vital that this be understood. If it was a real fund, those in charge of it could invest the money from it. They could set aside the two or three billion dollars they need for contingencies and, with the rest of the money, they could provide decent benefits to those who are insured against losing their job.

If you have replacement cost insurance on your car, you will pay the corresponding rates. But then you lose your car, it is stolen, and you are told “No, we have changed the policy. You are insured for the cost of replacement, but we are only going to give you 55% of the value of your car. Sorry, but that is all”. Would you be happy? No, you would not.

So, how can the government think that the workers I met in Saint-Fulgence and Saguenay—Lac-Saint-Jean are satisfied? We also met with workers in the Berthier—Montcalm riding, and I see them in my region. A spectacular assistance program has been announced, but it is just more party politics and propaganda and does not help anyone because it is ill suited to their needs.

If there were an independently managed fund, premiums could be increased by 55-60%. We could take a certain amount and say, for example, “There is a problem there, the cod are gone. So, a special program will need to be created to help the cod fishers”. It is true that those suffering from the cod problem are in Quebec. Fishers in the Maritimes received assistance, but it is not clear if there will be help for those in Quebec.

In any case, with an independent fund that had truly competent managers, money could be withdrawn from the fund—not stolen, not misappropriated for other purposes than those intended—but this money could be used to create special programs to assist cod fishers, because the cod are gone. These people could get help learning to do something else, getting retrained. They might become seal hunters, who knows? If they want to. But, at least, the fund managers would have some means at their disposal.

For the poor minister who has to manage the fund, there is nothing in it. When she wants to announce new programs, she has to consult with the ministers for Natural Resources, Foreign Affairs, International Trade , and Industry. By the time they get together and agree on a program, it is so watered down and whittled away that it ends up helping no one.

The second report contains very interesting recommendations, which the government should follow in order to be able to do much more for the workers who contribute to a plan.

This is what the government must understand. Strangely enough, when they where in opposition, the Liberals realized that what the Mulroney government was about to do made no sense. They said, “Elect us. We will not do that. They are really going too far. What the Conservatives want to do makes absolutely no sense”.

Once in office, the Liberals figured, “How great it would be if we were Conservatives instead of Liberals. It would be much better. Let us do what the Conservatives did; let us go ever further. Let us be even more right-wing than the Conservatives we have just defeated”. There were no Conservatives to speak of at the time anyway, which allowed the Liberals to be arrogant, even with just 38% of the vote.

Mr. Speaker, you are signalling that my time is up; I find it very sad because I would have much more to say. I hope that the government will not ignore the second report that was just tabled today.

[Serge Marcil, Liberal, Parliamentary Secretary to the Minister of Industry]

Mr. Speaker, to listen to the hon. member, it is as though employment insurance were a disaster. The term “employment insurance” is perfectly clear. It is not a job creation fund. It is an employment insurance fund. It provides income insurance for workers who lose their jobs. That is what it means.

All those years prior to 1990, when we had the infamous unemployment insurance, as it was called at the time, the Government of Canada ran deficit after deficit. When the other party was in power, that is the Progressive Conservative party, it decided to change things. In 1990, it ran a deficit. In 1991, it ran a deficit. In 1992, it ran a deficit. In 1993, it ran a deficit. It constantly increased the premium rates in order to balance everything. At one point, in 1994, the premium rate reached 3.7¢. It was at that point that the employment insurance fund had a surplus. Thus, in 1995, the government decided to lower the rates. It had a surplus.

In 1994, the rate was 3.7 and today it is 2.20. That is a decrease of almost one dollar. Contrary to what the hon. member said earlier, there is cause and effect. Look at the Canadian economy. The unemployment rate has decreased by almost three points since 1995. Therefore, there are more people who are employed. If there are more people employed, there are more people contributing. Every year there is a decrease—