Mr. Speaker, I am pleased to rise on this topic today. It is my first opportunity to speak to a topic pertaining to my new portfolio as chief critic of HRDC. It is pleasing to have the chance to show our support for this resolution and to thank the member for bringing it forward.
We in the Canadian Alliance believe very strongly that the programs we offer through HRDC are important ones. They offer support to those citizens who are less fortunate, those who have been placed in a situation where they and their families are dependent on these programs for support, although we hope temporarily. However that remains a significant problem today in Canada as unemployment rates are on the increase and as, unfortunately, a growing number of families find themselves needing to use these programs to sustain some reasonable level of income and standard of living for themselves and their children.
What the motion is designed to do, as was mentioned by the previous speaker, is index the family supplement to the cost of living in the next federal budget. Though we are curious as to why this should not be done on a regular basis, on a statutory basis, we do support the intent of the motion. It is in keeping with the recommendations the member has made but, more important, from my standpoint it is in keeping with Canadian Alliance policies as to fair taxation and the fair structuring of benefits that will support families.
Right now the family supplement is paid to EI recipients who are in low income families. That means families making less than $25,921, families with children and those who receive the child tax benefit.
Canadians may not be aware of this but recipients of the family supplement have an EI benefit rate of 80% of their insurable earnings instead of the 55% that most claimants are paid. Persons receiving the family supplement are subject to a maximum weekly benefit of $413, as are all other claimants.
That being said, according to the 2001 monitoring assessment report, about 11% of all EI claims receive higher weekly benefits because of the family supplement. With the family supplement not being indexed to inflation, we are eroding those recipients' ability to support their families and themselves at the level that they previously could. Obviously this is sort of similar to the old bracket creep problem that we had under this government for many years whereby people were thrust into higher income tax situations even though their purchasing power was not going up.
It is logical and it seems fair that we take into account the impact of reduced purchasing power on a level dollar for Canadian families and that we index according to the levels that the member has recommended in her proposal.
I will cite some statistics here. In 2000-01 the number of claims that included the family supplement declined by 4% and total payments declined by 2.3% over the previous reporting period, but the fact remains that most other federal programs, their requirements, their payments, are already indexed to inflation, including the child tax benefit.
What the member is proposing is not a costly proposal. We believe it would direct around $7 million for the first full fiscal year of implementation to those in Canada who are most in need. When one considers that in the context of the current situation with regard to EI, particularly since the previous finance minister took away the arm's length rate setting mechanisms for EI, we have a situation where working Canadians and employers are being asked to submit billions of dollars more than is necessary to sustain the EI program. We are taking money away from some of the working poor, particularly the lower income people who suffer as a consequence of higher EI premiums. Yet, under the previous finance minister, we removed the arm's length mechanisms for setting those rates and gave them to the political masters of our country.
What they have done is maintained a higher than necessary rate for working Canadian men and women and for employers. It is a shell game. It takes billions of dollars more out of the pockets of working people, puts it in the hands of the government, which it can use it out of general revenue for anything it wishes. I would suggest this slush fund is a worthwhile place from which to take $7 million. It is a worthwhile place and a very defensible way in which to use the money that has been taken from these people, many of whom were paying into the EI program for years before needing these benefits. This is a worthwhile reciprocation of the trust they showed in the program when they paid into it to now offer them fair compensation based on and reflective of the rate of inflation.
Just to use an example, in 2002 and 2003 the total cost for the EI program, that is the expenditures under it, were estimated to be about $16.6 billion and total revenues were $19.6 billion. Therefore it follows that there was a surplus in that year alone of $3 billion. The accumulated surplus in the EI account projected for this fiscal year end is an unbelievable $45.6 billion.
We all understand there needs to be a reserve for higher unemployment demands that may occur, in particular under the management of this government it is necessary to have a reserve in that account, but the Chief Actuary of Canada says that a sufficient reserve would be in the area of $10 billion to $15 billion.
What about the other $30 billion or $35 billion that has been taken from working people across Canada on the basis that it would be required for EI program expenditures? That is not the case nor has it been the case for years. The reality is that for 2003-04 the finance minister has projected that $2.5 billion will come out of working Canadians' pockets to be given to the government.
This is a $7 million proposal and a very good one. Based on the context of our policies, which require that the taxation system and the benefit structures of the country be fair, we believe this is a very good proposal with a tremendous amount of merit and we support it.
Just to conclude I would like to allude briefly to some other issues that we will be advancing that we think are critical regarding EI in a broader context. We in the Alliance believe that the premiums for EI should be set by an independent commission, not by the politicians in the country, and they should be based on the recommendations of the Chief Actuary. The Chief Actuary's recommendations have been ignored by the previous finance minister and, as a result, to his advantage, I suppose, strategically some might say, he has built this giant slush fund that makes him look good, but at what price to Canadian working people?
Second, we would want to see a separate hard reserve established that would ensure the payment of benefits in difficult times.
Third, employer premiums should be experience rated so that employers who have a record of fewer layoffs than other employers in the same sector would pay lower premiums.
Finally, we believe that the frequency of maternity leave and sickness leave will not affect employer premiums.
We think those are compassionate proposals. We believe they will help the most deserving and the most needy among our population. We believe they are constructive and, in the context of today's discussion and this proposal, as one aspect of these larger proposals, we ask other members of the House to support the Canadian Alliance and support the member's resolution. We believe this will be well received by the Canadian people.