Mr. Speaker, it is a pleasure to speak to this private member's motion moved by the member for Ahuntsic.
The motion is one which the Canadian Alliance supports. I know it is a private member's motion, but it fits with our notion that families are hard pressed in Canada, that families are the building block of society, and therefore need all of the help they can get in terms of tax relief.
In this case, it has to do with employment insurance and a provision that deals with an additional benefit to low income families for those people who are collecting employment insurance. Under that system, families are eligible for the supplement if their net income is under $25,921. It is not a big amount, but the principle is right that we should index this to inflation, in keeping with the idea that we are trying to keep a neutral cost. Inflation does eat away at these things if it is not indexed, and therefore we are supportive of this motion.
As the member who introduced the motion told us earlier, the same concept works with the Canada pension plan, old age security, guaranteed income supplement and the Canadian child tax benefit. The preliminary cost of indexing would be about $7 million annually. While that is a substantial amount, we believe that it is important that this still be done.
We strongly support and believe that families should benefit and those people who are unfortunate enough to be out of work and having to collect employment insurance should benefit from this provision.
However, I do want to take the opportunity today to talk about some of the problems with the current EI system. This is a band-aid. We believe that reforms need to go far beyond this motion today. While we are supportive of it, we will be pushing hard and are pushing hard for basic reform of employment insurance.
One of the problems we have seen in this place is that the government has used the employment insurance fund, or employment insurance premiums from employers and employees, to build up a tremendous reserve. It has overtaxed or overcharged Canadian employers and employees to the tune of something like $40 billion over the past eight years.
While people might think that this amount is sitting in a fund someplace, available for employment insurance premiums, that is simply not true. It has gone into general revenue and been spent on a lot of government programs. I would make the case that some of those programs should not be priority programs, and that employment insurance premiums should be reduced for employers and employees so that it is revenue neutral.
We hear from the various people who look at these things, the chief actuaries, that there is a need for about a $15 billion fund for employment insurance. We think it should be a hard fund that is put in place and should not go into general revenue, but that fund would have to be built up over a period of time. However $15 billion is what they suggest is necessary to ride out an economic downturn or a cycle in the economy. Unfortunately, that fund has now reached over $40 billion, which represents $25 billion being overcharged by the Liberal government over the past several years.
It gets worse than that. The fund continues to build about $3 billion a year. The government is conscious of this. It knows that the fund is building and that it is overcharging, but it will not reduce the amount that is needed to bring this into a revenue neutral position. It is not just families who are collecting EI, about which the private member's motion talks, but families in general are being overcharged because they are employees, and in many cases employers as well. That is our biggest complaint with the EI program. The federal government must simply stop overcharging Canadians on this account.
In addition to that, we believe that the employment insurance program should be brought back to a true insurance program for job loss. That was the original intent some 25 years ago and that has changed. It has become more of a social program these days and we believe it needs to be brought back to a true insurance program and run in a business-like manner. That is what our Canadian Alliance supports and would do if we were elected. We would revamp the EI program.
The minister has told us that the government wants some transparency and that it is looking at that but in the recent budget we were very sorry to hear that the minister had postponed those reforms for a further year. We have to wonder how serious the government is about really making the changes that are necessary to the EI program.
Under our proposal, employment insurance premiums would be set by an independent commission and would be based on the recommendations of a chief actuary, as I have just said. That would vary from time to time, depending on how much is required in the fund, but it would be adjusted to be as revenue neutral as possible. As I said earlier, there would be a hard reserve there that would not be just put into general revenue and spent at the discretion, or lack of discretion in some cases I would point out, by the government.
In addition to that, employer premiums would be experienced rated so that employers who have a record for fewer layoffs than other employers in the same sector would pay lower premiums. I think this would help in the rationalization of the industry.
In addition to that, there are different methods to resolve the problem that the member who introduced this motion brought forward. We think families are hard-pressed in terms of paying too much tax right now. One of the things that the Canadian Alliance has suggested is that there should be a child tax deduction of $3,000 per year, which would be off the taxes payable. That would represent about $3.5 billion in savings to Canadian families per year, which is a substantial amount.
In addition to that, we think there may be some room to do something within the four personal income tax brackets, especially for hard-pressed, middle income families that pay so much tax.
We have a little different point of view. The Liberals seem to think that families earning $60,000, $70,000 or $80,000 a year are rich. We do not think that at all. We know there is a high cost to raising a family in this country. We believe those hard-working taxpayers, who are trying to raise families, trying to put their children through university and trying to do everything they can to provide their children with opportunities for the future, need some relief. We would reward them by giving personal tax relief.
I was just looking at how much the basic personal exemption is right now. It is only $7,757 per year before an individual starts paying taxes. It just seems to me that is a very low amount. I hate to get into the debate about what is the poverty level, but I think someone who earns $7,700 a year should not be on the tax rolls at all. We think the basic exemption should be raised so that individuals working and their spouses should have the same exemption rates. That would provide some relief. The $3,000 exemption for each child would also make a significant difference so that low income families would be given a leg up. They would be able to work and earn an amount of money that would be more in line with what they need before they would even start paying taxes to the federal government.
The reason we think we have that kind of flexibility is that we think the government is spending far too much money on program spending right now. It is not necessarily the program spending that it is locked into, such as the equalization program, health care and all of that, but the direct program spending for which it is responsible.
In the budget that was brought down on February 18, the finance minister introduced $25 billion of new spending initiatives over the next three years. That is a 25% increase in spending. Those were the kinds of spending levels this same Liberal government was guilty of from the late 1960s onward for about 15 or 20 years that put us into a very deep hole and caused our national debt to rise to $536 billion. It has put us in a difficult position.
Canadian families are paying about 22ยข out of every tax dollar they send to Ottawa just to pay the interest on the national debt.
We simply have to correct some of these past failures, not go there again, and give tax relief to Canadian families so they can do things with their tax money with their priorities in mind.