Debates of April 8th, 2003

Parliamentary Employment and Staff Relations Act

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

Mr. Speaker, I thank my colleague, who I know had a distinguished career in municipal politics in the City of Windsor.

As a former municipal politician and a former president of the Federation of Canadian Municipalities, I want to emphasize very clearly that in 1983 the FCM proposed the national infrastructure program. It then lay dormant under the Conservatives until 1993, when this government picked it up.

We implemented the national infrastructure program. We placed $2 billion on the table. As the hon. member knows, we leveraged that money with the provinces, the municipalities and indeed the private sector. Not to stop with that, in 1997 we renewed the program with another $425 million, leveraging again, through the Canada Infrastructure Works Program, to stimulate over $8.3 billion in municipal investment.

The hon. member said that this budget ignored cities. Not only did it not ignore cities, it went beyond what any government in the history of this country has done with regard to cities.

Let me quote the FCM's president from March 5: “FCM has enjoyed a long and productive relationship with the Government of Canada. Many specific initiatives come to mind. The first Canada Infrastructure Works Program in 1994, support for the homeless, renewed and expanded funding for affordable housing, the groundbreaking green municipal funds, which were recommended by the FCM, the creation of a caucus task force to look at the state of our cities, and the rural secretariat all testify to a record of collaboration with Canada's municipal governments”. That is from the president of the FCM, John Schmal.

I point out to the hon. member that for years, when I was FCM president and before I was president, municipalities asked for a 10 year program in infrastructure and this government delivered. How can one suggest for a moment that we ignored cities in the last budget: homeless, health care, universities, R and D, research, infrastructure. Of course we have a down payment, as the minister said, on infrastructure. There is $100 million this year and it will be increased every year, and we expect our provincial partners to come to the table. As that Ontario member knows, it is the provincial Government of Ontario that has not been at the table. One would have to ask why it was so silent on cities when it came to its budget. It was absolutely dead silent.

This government makes no apologies for our work with cities. We continue to work with our municipal colleagues. I will tell members that I am very proud, not only as a former FCM president but as the Parliamentary Secretary to the Minister of Finance, to note that we have listened to cities. We are going to continue to do so.

With that member's help, we are going to make sure that even though cities are under section 92 of the Constitution, and are the creatures, a word I hate, of the provinces, we are going to work collaboratively with them because it is in the best interests of all Canadians.

I appreciate the member's question.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, it is a pleasure to rise to counter some of the points the hon. member has noted as a result of his long history with municipalities.

I would like to point out that President Schmal also can be quoted on the budget. He said, “Today's budget does absolutely nothing to fulfill these promises”. The budget has also been described as doomsday by other municipal leaders.

I agree with the hon. member's assertion that the Province of Ontario has not provided adequate support for municipalities, but let us do the funding formula, with an example of $2 billion, $2 billion and $2 billion. Because of provinces like Ontario putting caps on industrial, commercial and multi-residential, here is what happens. The senior level of government knows it has a responsibility because it steals the gasoline tax and does not put it back into roads. This will end up squeezing people on fixed incomes because provinces and municipalities will have to go to residential property owners, and seniors and other people on fixed income are going to pay a disproportionate amount. That means that residential people will pay for big business and industry and this government does not have the wherewithal to match that challenge in the face of a lack of support from a province.

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Mr. Speaker, again quoting the president of the FCM to the Minister of Finance, “Faced with a $57 billion infrastructure deficit, we were disappointed and said so”. However, he goes on to say, “Since then we have noted your reference to the total funding representing only a down payment. We welcome this clarification”.

The reality is that the FCM is prepared to work with this government. The reality is that if municipalities need more taxation authority, they need to go to their provincial counterparts, which have the ability to provide them with a hotel tax, a gas tax, whatever they happen to need. To suggest for a moment that one order of government should collect money from Canadians and then turn it over to another order of government, which will then be able spend it without any accountability, I have some difficulty with that. I had difficulty with that notion when I was at FCM and I still do.

I do believe that when it comes to infrastructure it is by leveraging dollars and working collaboratively with our municipal and provincial friends that we are going to solve the problem the member has raised.

[Jim Pankiw, Canadian Alliance, Saskatoon—Humboldt, SK]

Mr. Speaker, since the Liberal government came to power in 1993, it has been overtaxing employers and employees through the employment insurance fund. In other words the premiums that employers and employees pay into the fund have exceeded, every year the Liberal government has been in power, the amount of money that the fund actually needed to operate. It has exceeded it to the tune of between $5 billion and $8 billion a year so that collectively over the years the Liberal government has been in power, employers and employees have overcontributed $39 billion to the EI fund.

However, that money is not in the EI fund. That money has been diverted to the federal government's consolidated revenue fund. It has been spent on wasteful programs such as bilingualism, the firearms registry and $8 billion a year in handouts through the Indian affairs department, to name a few examples.

That is an issue in and of itself, but on February 20, I brought up another issue with respect to employment insurance premiums. When a person leaves employment partway through the year and starts a new job, that person and the new employer begin contributing to the employment insurance fund through their premiums all over again. In many instances a worker in the course of a year actually exceeds the EI contribution limit.

Employees at the end of the year on their taxes get the overpayment back, but the employers who collectively overpaid do not get their money back. That amount is $750 million a year.

The federal government has been using excessive EI premiums to overtax employees and employers under the guise of employment insurance but is really diverting the money to the consolidated revenue fund. What it is doing here is a similar taxation by stealth. Most employers are not even aware that they are being overtaxed. How would they know whether or not an employee they had employed for a few months at the beginning of a fiscal year who had left that employment had overcontributed?

My point to the finance minister on February 20 was why did he in the recent budget not eliminate this taxation by stealth, this unfair tax grab that rips off employers? In many cases they are not even aware that it is taking place. The minister's response was that it would be difficult to contemplate what kind of system could be put in place to do this. If Canada Customs and Revenue Agency already knows how much the employee has overpaid, it is a simple matter to calculate how much the employer has overpaid.

That $750 million is coming out of the pockets of business owners in Canada. It is the latest billion dollar boondoggle by the Liberal government and the finance minister. They are wasting money on questionable program spending but refuse to give back what clearly does not belong to them. The Liberals are picking the pockets of business owners who deserve to get their overpayment back so that it can be used for job creation and economic growth, the backbone of our economy.

The $750 million annual overpayment rightfully belongs to the business owners that paid it. They deserve to get it back in the same manner as their employees do. The finance minister should do the right thing and put an immediate end to the federal government's shameless cash grab of payroll deduction overpayments.

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

Mr. Speaker, I noted the hon. member's comments. I would first point out to the House that there is no separate EI fund. The Auditor General instructed the government of the day in 1986 to put it in consolidated revenue. The minister has announced that there will be a thorough review. In fact he set up a review panel to deal with EI, which will be reporting back in June.

Again the minister has been seized with this issue. As everyone knows, since the government came to power EI rates have continued to go down, and that is important to note. In 2004 it will be $1.98.

On the issue that the member raises with regard to overpayments, as we know employers are required to pay the first dollar for each employee in employment. In 2003 the maximum CPP contribution for employees and employers is $1,802 and EI, $1,147 for employers and $819 for employees. A person who works for more than one employer in 2003 will contribute more than the annual CPP maximum if they have total employment earnings of over $39,900. The same is true for EI total earnings over $39,000. In that case the employee will be entitled to a refund at tax reporting time.

A parallel refund is not provided to the employer. This is because the individual employer has not paid more than the maximum amount in respect of the wage that has been paid to the employee. In other words, the legislation does not allow employers to take into account the previous or other earnings of a worker in terms of the calculation for the contribution of a refund due.

I have indicated before that there are important reasons. Clearly, providing a refund for CPP or EI contributions to employers could violate privacy to which employees are entitled. For instance, providing a lump sum refund to employers at tax time would allow them to infer information about their employees' earnings from other employers or self-employment. The fewer the number of workers on the payroll, the greater potential for the invasion of privacy. I am sure the hon. member is concerned about invasion of privacy and an individual's right not to have certain information released. An employee's work history should not be revealed through the medium of either the CPP or the EI refunds.

Refunds to employers could have other undesirable effects, obviously discrimination in terms of hiring. If employers could receive CPP and EI refunds, they would have an incentive to hire workers who have already contributed the maximum to CPP and EI. I do not think that is the intent the member wants, and I am sure we would not want to do that.

Obviously it could also discriminate against people with little or no previous earnings, like the unemployed or those entering the job market for the first time. That is certainly a concern.

[Jim Pankiw, Canadian Alliance, Saskatoon—Humboldt, SK]

Mr. Speaker, first it is rather comical that the hon. member says they will do a thorough review and report in June. The Liberals have been in government since 1993. He has said that the EI premiums have come down over that time period but they have always been in excess of what the EI fund needed. It has been a tax rip-off from day one.

He said that employers had not paid more than the maximum amount of each employee. However, collectively they have. If an employee has earned more than the maximum in a year through working for different employers collectively, those employers have overpaid. That is why there is a $750 million overpayment. Revenue Canada is well aware of the numbers.

To suggest that it would somehow be an invasion of privacy to repay the employers who have overpaid their EI premiums is ridiculous. Revenue Canada already has the numbers. It could simply inform employers what they have paid over the course of the previous year. Between the two of them, they could have a formula that divides it up and says that collectively an employer overpaid x number of dollars for a certain employee and that employer should get that money back. It is not an invasion of privacy and it would be a simple calculation, easily done.

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Mr. Speaker, all I can say to the hon. member is if there is a system that he thinks could be devised to do so, I would be interested to hear it. The reality is privacy issues are obviously of major concern to Canadians and certainly to the government. I would suggest that it is not feasible. I have outlined the issue with regard to contributions and clearly I do not want to see people being discriminated against. The hon. member may take a different view but in my view I do not think that is what Canadians want.

It is important that we continue to work, hopefully with the hon. member and others in the House, on the review and to establish the kind of EI program which the minister has indicated he would like to see developed. I am surprised that the member would criticize us for bringing the rates down. At the same time, we again have done something which in the previous government went the other way.

[The Acting Speaker (Mr. Bélair)]

The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 2 p.m., pursuant to Standing Order 24.

(The House adjourned at 7:10 p.m.)