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House of Commons Hansard #41 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was salaries.

Topics

Parliament of Canada ActGovernment Orders

5:15 p.m.

The Acting Speaker (Mr. Marcel Proulx)

The question is on the motion. Is it the pleasure of the House to adopt the motion?

Parliament of Canada ActGovernment Orders

5:15 p.m.

Some hon. members

Agreed.

Parliament of Canada ActGovernment Orders

5:15 p.m.

Some hon. members

No.

Parliament of Canada ActGovernment Orders

5:15 p.m.

The Acting Speaker (Mr. Marcel Proulx)

All those in favour of the motion will please say yea.

Parliament of Canada ActGovernment Orders

5:15 p.m.

Some hon. members

Yea.

Parliament of Canada ActGovernment Orders

5:15 p.m.

The Acting Speaker (Mr. Marcel Proulx)

All those opposed will please say nay.

Parliament of Canada ActGovernment Orders

5:15 p.m.

Some hon. members

Nay.

Parliament of Canada ActGovernment Orders

5:15 p.m.

The Acting Speaker (Mr. Marcel Proulx)

In my opinion, the yeas have it.

And more than five members having risen:

Parliament of Canada ActGovernment Orders

5:15 p.m.

The Acting Speaker (Mr. Marcel Proulx)

Call in the members.

And the bells having rung:

Parliament of Canada ActGovernment Orders

5:15 p.m.

The Acting Speaker (Mr. Marcel Proulx)

The division stands deferred until tomorrow, at the end of government orders.

Parliament of Canada ActGovernment Orders

5:15 p.m.

Liberal

Dominic LeBlanc Liberal Beauséjour, NB

Mr. Speaker, I rise on a point of order. I think if you seek it, you would find unanimous consent to see the clock as 5:30 p.m.

Parliament of Canada ActGovernment Orders

5:15 p.m.

The Acting Speaker (Mr. Marcel Proulx)

Is there unanimous consent to see the clock as 5:30 p.m.?

Parliament of Canada ActGovernment Orders

5:15 p.m.

Some hon. members

Agreed.

Message from the SenateGovernment Orders

5:15 p.m.

The Acting Speaker (Mr. Marcel Proulx)

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

Employment Insurance ActPrivate Members' Business

5:20 p.m.

Bloc

Paule Brunelle Bloc Trois-Rivières, QC

moved that Bill C-278, an act to amend the Employment Insurance Act (improvement of the employment insurance system), be read the second time and referred to a committee.

Employment Insurance ActPrivate Members' Business

5:20 p.m.

The Acting Speaker (Mr. Marcel Proulx)

I now have a ruling to share with the House concerning Bill C-278.

The Chair has examined Bill C-278, an act to amend the Employment Insurance Act (improvement of the employment insurance system) to determine whether its provisions would require a royal recommendation and thus prevent the Chair from putting the question at third reading.

The improvements to the employment insurance program envisioned by this bill include the required minimum number of hours worked in order to qualify, lengthening the period that one can receive benefits, and, as well, increasing those benefits.

It is clear that such changes to the employment insurance program would have the effect of authorizing increased expenditures of public revenue. Inasmuch as section 54 of the Constitution, 1867, and Standing Order 79 prohibit the adoption of any bill appropriating public revenues without a royal recommendation, the same must apply to bills authorizing increased spending of public revenues. Bills mandating new or additional public spending must be seen as the equivalent of bills effecting an appropriation.

Accordingly, I must require that Bill C-278 be accompanied by a royal recommendation. Therefore, in its present form, I will not put the question on third reading unless a royal recommendation is received for this bill.

Today, the debate on the motion for second reading will continue as scheduled, and the motion shall be put to a vote at the close of this second reading debate.

Accordingly, the House will now proceed to the consideration of private members' business as listed on today's Order Paper. The hon. member for Trois-Rivières.

Employment Insurance ActPrivate Members' Business

5:20 p.m.

Bloc

Paule Brunelle Bloc Trois-Rivières, QC

Mr. Speaker, during the last election campaign, I learned about the difficulties experienced by the unemployed in my riding and throughout Quebec. Employment insurance is particularly inequitable for young people and women; for young people who must accumulate 910 hours before being eligible for their initial application, as well as for women returning to the labour force after more than two years' absence.

When we see that, in the early 1990s, no less than 52% of the unemployed aged 25 or under were receiving EI benefits and that now, only 16% are, we cannot help but want to change EI. That is why, today, I want to debate the bill I am introducing, the aim of which is to amend the Employment Insurance Act (improvement of the employment insurance system).

Employment insurance is no longer an assistance program, but a hidden tax. The current Prime Minister, as finance minister, raided the EI fund to balance the budget. The Auditor General's latest report, tabled November 23, 2004, states that the government continues to raid the EI fund, despite the efforts of parliamentarians.

Furthermore, the powers of the Employment Insurance Commission, which consists of individuals who are contributors, will apparently be suspended for yet another year. Even now, the Prime Minister is interfering in social affairs, by misappropriating the EI fund.

In May 2001, the Bloc Québécois adopted a unanimous report of the Standing Committee on Human Resources Development andthe Status of Persons with Disabilities on employment insurance reform and we continue to call for its implementation. The Bloc Québécois is against the fund being wasted and proposes the creation of an independent employment insurance commission and fund, the reimbursement by the government over a 10-year period of misused money, the setting of premium rates by the Employment Insurance Commission and the improvement of the system for the most vulnerable workers.

The Bloc Québécois has proposed special employment insurance measures for workers affected by the softwood lumber crisis. Consider this: the current employment insurance fund surplus of $46 billion is roughly triple what the Chief Actuary at Human Resources Development Canada thought would be enough in 2001—some $15 billion.

In 2000, an HRDC study showed that 35% of claimants reached their maximum weeks of benefit. The 2004 employee premium rate is $1.98 for every $100 of insurable employment. The equilibrium premium rate for 2004 is estimated by HRDC to be $1.81. The seasonally adjusted unemployment rate in January 2004 was 7.4% across Canada and 9.1% in Quebec. The average regular benefits in dollars a week is $289.54.

Accordingly, in the summary of this bill to correct a few of the problems, we find several amendments made to the Employment Insurance Act.

First, it reduces the minimum qualifying period to 360 hours of work regardless of the regional rate of unemployment. It also increases the benefit period by five weeks. It increases the rate of weekly benefits from 55% to 60%, and It repeals the waiting period. It eliminates the distinctions between a new entrant and a re-entrant to the labour force. It also eliminates the presumption that persons related to each other do not deal with each other at arm’s length. In addition, It increases the maximum yearly insurable earnings from $39,000 to $41,500 and introduces an indexing formula. It requires the Canada Employment Insurance Commission to pay out, as workforce support measures, at least 0.8% of the insurable earnings—as estimated by the Commission—of all insured persons. Finally, it provides that, if a person has insurable earnings of not more than $3,000 a year the Minister of Human Resources Development must refund all deductions made from those earnings.

Taking it point by point, first we have the reduction of the minimum qualifying period to 360 hours. We know that on May 3, 2004, the Standing Committee on Human Resources Development held public hearings in connection with the updating of its 2001 report. The major unions presented a unanimous proposal to modify the EI eligibility rules.

The current system provides that eligibility for EI benefits begins in a range of 420 to 910 hours of work, depending on the place of residence and whether the person is a new entrant or a re-entrant to the labour force.

Unanimously, these same unions asked that eligibility for employment insurance begin at 360 hours of work, regardless of residence. This rule would provide more satisfactory coverage for workers in seasonal businesses and also for all workers in insecure jobs.

As things stand now, the threshold for eligibility for benefits varies between 420 and 700 hours. It is 420 hours in regions with an unemployment rate over 13% and 700 hours in regions where the unemployment rate is 6% or less. The bill before us today would reduce the minimum qualifying period to 360 hours of work for everyone, but the benefit period would vary with the region and the regional rate of unemployment.

In comparison to the current figures, the new system would represent an average increase of five weeks in the benefit period and an increase in the maximum benefit period from 45 to 50 weeks.

In regions with high unemployment—13% or more—it would provide between 30 and 50 weeks of benefits depending on the hours worked and the unemployment rate. For Quebec's high unemployment regions, it would substantially reduce what we call the spring gap or black hole.

For example, in Gaspé, where the unemployment rate as of December 4, 2004, was 20%, a person who worked 360 hours would be eligible for 36 weeks of benefits. If that person worked 420 hours, he or she would be eligible for 37 weeks, which is 5 more than at present. On the North Shore, where the unemployment rate is 12%, the maximum benefit after 360 hours of work would be 26 weeks and after 420 hours, 27 weeks.

The CSN appeared before the Subcommittee on the Employment Insurance Funds on November 15, and stated that their main demands still concern the same things: to improve the eligibility rules by requiring only a minimum of 360 hours so that 70 to 80 percent of those who lose their jobs can receive employment insurance benefits. The main reason for this is that 39% of the work force only works 35 hours a week.

The Canadian Labour Congress, through its representative, Hassan Yussef, said the following:

We've submitted a full brief, and more recommendations for training and of course 360 hours for qualifying for unemployment insurance. The CLC recommends scrapping the current patchwork of qualifying hours in favour of 360 hours for all EI entitlements, unemployment benefits, as well as pregnancy, parental leave, sickness, and compassionate leave benefits

Quebec is increasingly interested in the principle of reconciling work and family life, and therefore views this 35 hours yardstick as a significant obstacle to developing such a policy. It needs to be revised without delay.

Let us look now at extending the duration of benefits. In this bill we are suggesting an increase of 5 weeks, from 45 to 50. As you are aware, there are many workers in industries with seasonal fluctuations, including the fishery, agri-food, tourism, the hotel industry and so on.

Seasonal employment is common in the regions, but it also affects the major centres, particularly as far as tourism is concerned. Every year, many people are confronted with the seasonal gap, which can be as much as a dozen weeks long, between the time their EI benefits run out and their work starts back up. According to federal statistics, close to 35% of EI recipients use up all their benefit period.

The Bloc Québécois is calling upon the government to put an end to this seasonal gap by adding five weeks to the maximum benefit period, raising it from 45 weeks to 50.

I will now read an excerpt from the 2001 report of the Standing Committee on Human Resource Development.

The Committee recommends that the government consider readjusting Schedule I of the Employment Insurance Act so as to provide a maximum benefit entitlement of 50 weeks like that afforded combined maternity/parental benefits.

Compared to the existing schedule 1, consideration should be given to augmenting benefit entitlement beyond the minimum hourly qualification requirement, so as to provide an additional incentive to work for a longer period of time than the minimum number of hours required to qualify for benefits. The new schedule 1 should provide no more than a maximum increase of five additional weeks of benefits for any given combination of hours of insurable employment and regional unemployment rates. In addition, schedule 1 should be reconfigured, to the greatest extent possible, to ameliorate the “gapper” problem.

This is how, every year, seasonal workers go through the gap. Resource regions are particularly hard hit by that problem. It seems to us that action is urgently required.

With respect to the third element, increasing the rate of weekly benefits to 60%, we are asking that benefits be increased from 55% to 60%. This can be illustrated by saying that, in Quebec, minimum wage is $7.45. For an employee working 35 hours a week, this means $260.75 gross, which would entitle this person to employment benefits of less than $287, before tax, every two weeks, or $574 per month.

In 2002, 192,000 Quebeckers were earning minimum wage, of which 66.6% were women. The 55% benefits rate affects in particular low-income workers, two-thirds of whom are women. Hon. members will understand that, as critic for the status of women, I am very sensitive to this problem facing poor women in Canada, who are raising children in poverty, in addition.

On May 4, François Vaudreuil, the president of the Centrale des syndicats démocratiques, told the Standing Committee on Human Resources, Skills Development, Social Development and the Status of Persons with Disabilities, “We also believe it is urgently necessary to increase to 60% the replacement rate of the benefits”.

At that same committee, many witnesses called for an increase in the rate of benefits. Some were suggesting it be set between 60% and 66%. It is nonetheless important, they reminded the committee, to find a balance between meeting the needs of eligible unemployed workers and reinforcing the incentive to work.

The committee heard the testimony of the the acting director general, labour market policy directorate, at Human Resources Development Canada. Her name is Wilma Vreejwijk, and she told us:

These are important questions in terms of ensuring that there is the income adequacy. Certainly, when looking at the issue of the benefit rate, we need to strike a balance between ensuring that there is sufficient support provided to those people that need it. At the same time as ensuring that we have the work incentives right. So that is why we have the family supplement, and the family supplement has, as you pointed out, gone up each and every year quite recently. This supplement has gone up because the families need it.

Another change is to repeal the waiting period, which penalizes workers who have lost their jobs. There is also another change. There is the elimination of the distinction between a new entrant and a re-entrant to the labour force.

There is also the elimination of the link between persons related to each other. This is a question of members of the same family being entitled to employment insurance.

Accordingly, the Bloc Québécois bill wants to make a change and shift the burden to the commission to prove that there is a link of dependence between the employer and employee.

Note that the Employment Insurance Commission would be required to pay out, as workforce support measures, 0.8% of the insurable earnings—as estimated by the Commission—of all insured persons.

Since my time is running out I will just say that this is an important measure to ensure that it is no longer unemployment insurance we are talking about, but employment insurance and that we understand the need for training for all workers.

In conclusion, this bill to amend the Employment Insurance Act proposes eliminating some of the irritants and inequities in the employment insurance program. I hope that all the hon. members in this House will support it for the good of our society, which needs more of our attention.

Employment Insurance ActPrivate Members' Business

5:35 p.m.

Bloc

Paul Crête Bloc Rivière-Du-Loup—Montmagny, QC

Mr. Speaker, I would like to congratulate the member for Trois-Rivières on her speech, which was very precise and clear, but most of all, respectful of the commitments that the Bloc Québécois made in the election campaign.

The same cannot be said of the Liberal Party of Canada, which forms the government. We had the best proof of that this week. It decided to reduce the employment insurance premiums by 3¢. That means 3¢ per $100 of earnings. For people earning $500 a week, it would mean 15¢ more in their pockets as workers. At the end of a year in which they worked 40 weeks, it would mean $6.

My question for the member from Trois-Rivières is the following. Would it not have been more relevant and worthwhile, instead of reducing employment insurance premiums by 3¢, to evaluate the increased amount and to redistribute it and broaden eligibility to the employment insurance plan? Would this not be comparable? Would this not have been preferable?

Basically, I do not think that there is a single member of this House who went around during the election campaign telling people that, if his party were elected, it would reduce employment insurance premiums by 3¢, saying that he was proposing a benefit. This is not what we understood. We understood the Liberal Party to say that there would be real reform. I was here when the report was adopted unanimously three years ago. I was our human resources critic at the time. Today, we are seeing the same behaviour of the Liberal majority.

I would therefore like to know from my colleague whether it would not actually have been much better to reduce the eligibility requirements to 360 hours, as she proposes? In this way, we would have a much fairer system for people who are unfortunate enough to lose their jobs and who need an income between jobs.

Employment Insurance ActPrivate Members' Business

5:35 p.m.

Bloc

Paule Brunelle Bloc Trois-Rivières, QC

Mr. Speaker, I thank my colleague for his question. It is all the more interesting because yesterday we were able to obtain more information at the Subcommittee on the Employment Insurance Funds. Mr. Malcom Brown, assistant deputy minister of the Department of Human Resources and Skills Development, stated that reducing the qualifying period for the employment insurance program to 360 hours for everyone would cost only $390 million, the same cost as a reduction of 3¢ in premiums. It is a choice that should have been made.

With all the workers in our constituencies coping with the gap, with the growing poverty that we see, we all know that this money would have been well used to meet essential needs if it had been put back into our regional economies.

That would have made it possible to reduce the required number of hours to 360. It would have opened access to employment insurance for another 90,000 people. It would have been wonderful for workers and it would have given a big boost to our economy.

Employment Insurance ActPrivate Members' Business

5:40 p.m.

Bloc

Yvon Lévesque Bloc Nunavik—Eeyou, QC

Mr. Speaker, I congratulate my colleague on the bill that she has just introduced. It is even more significant because in those regions that are far from the big centres the change from unemployment insurance to employment insurance has led to a loss of income. In just one region, Abitibi—Baie-James and Abitibi—Témiscamingue, the loss amounts to $66 million. That is a lot of money for the regional economy. We know that many remote areas of Quebec are in real difficulty.

I ask my colleague if this measure would really allow low income workers and seasonal workers to achieve a more decent standard of living.

Employment Insurance ActPrivate Members' Business

5:40 p.m.

Bloc

Paule Brunelle Bloc Trois-Rivières, QC

Mr. Speaker, there is no question that increasing the benefit period by five weeks would help the regional economy and workers. For many of them, employment insurance is not a choice but a last resort. In this type of economy, most workers cannot wait for something else to come along. There is nothing else.

It is important to know that the government does not put one cent into the employment insurance fund. It is insurance, plain and simple. People expect, when making a claim, to receive their fair share from what employees and employers have paid. This is only normal.

If I insure my home, and something bad happens, or there is a fire or what have you, I expect to be paid for the damages incurred. I would think that the same principle should apply to employment insurance.

Employment Insurance ActPrivate Members' Business

5:40 p.m.

Peterborough Ontario

Liberal

Peter Adams LiberalParliamentary Secretary to the Minister of Human Resources and Skills Development

Mr. Speaker, I am pleased to join in this debate on Bill C-278, which proposes changes to employment insurance.

This is a particularly important debate, because EI plays a key role in providing temporary income support for people coping with job loss and for employed people who cannot work for reasons of sickness, childbirth, parental responsibilities, or the need to care for a dying family member. Also, for those Canadians who have lost a job, EI provides skills development opportunities, that is, training so that they can return to work quickly.

To illustrate the importance of EI, let me outline how it helped Canadians during the period 2002-03. During that time, Canadians filed 1.87 million new EI claims and $12.3 billion was paid out in benefits. In addition, 638,000 people participated in active re-employment measures, an investment of $2.1 billion in training and in the labour market success of the people concerned.

Clearly EI is there for people when they need it most, but this was not always the case. Before the introduction of EI in 1996, aspects of the old unemployment insurance system caused some to question the very sustainability of this vital program, a program which is vital for social reasons, for reasons of humanity and, by the way, for reasons of keeping our economy going. Those features included the encouragement of people to become dependent on program benefits, and it emphasized unemployment rather than employment, in some cases actually acting as a disincentive to work.

Unfortunately, this bill threatens to return us to the situation that confronted us in the past. Let us take, for instance, the bill's proposal to relax entrance requirements.

Four successive monitoring and assessment reports, the reports which review the program regularly, have stated that overall access to EI benefits is strong: 88% of employees would be potentially eligible for EI if they lost their jobs. Among those working full time, 96% would be potentially eligible for EI if they lost their jobs. Among part time employees, 57% of women and 41% of men would be potentially eligible for EI if they lost their jobs.

Bill C-278 would also increase the benefit duration, which could have the effect of making unemployment more attractive than work. Such a suggestion contradicts successive EI monitoring and assessment reports which have said that the current duration of benefits is in fact appropriate.

For example, on average, regular beneficiaries receive benefits for less than two-thirds of the weeks for which they are eligible, which means that the benefit duration is already more than enough for most clients. Even people living in areas of high unemployment typically do not use more than 70% of their entitlement. Add to this the fact that benefit exhaustion rates have steadily declined since EI's introduction, from approximately 37% in 1995-96 to about 31% in 2001-02. All of this suggests that the benefit duration is appropriate.

What about the bill's call for the government to raise the replacement rate and maximum insurable earnings? In my opinion, this also is unwise given that the current 55% replacement rate serves as a balance between income adequacy and ensuring that work incentives are maintained. In addition, individuals in low income families with children can get additional support through the family supplement, which allows these individuals to receive as much as 80% of their insured earnings.

I might add that at the time of EI reform concerns were raised about the fact that the level of maximum insurable earnings at that time was substantially higher than the average industrial wage and so was acting as a disincentive to work. To address this, the level was reduced to $39,000 a year with the understanding that it would be reviewed at some later date when the average industrial wage increased to the equivalent of that level.

Such a review has not occurred because the maximum insurable earnings figure is still 10% higher than the average industrial wage. It is important to note that 70% of all paid employees have earnings below the $39,000 level, which means that the majority of claimants have their employment income fully insured by the EI program at its current level. This level seems to be set properly as well.

Finally, there is the proposal to increase the premium refund threshold from $2,000 to $3,000, while also lowering entrance requirements to 360 hours. This recommendation is also ill-advised since it would effectively result in some workers being in a position to qualify for and receive EI benefits without having paid premiums, something none of us would wish to see happen.

It is clear that the bill contains a number of serious flaws. That brings me to the heart of the matter, namely, that given the vital importance that EI plays in our social safety net, it is critically important that any changes we make to it be well thought out in advance to avoid unintended negative consequences that could damage the whole program and its ability to help workers.

Of course, this is not to say that EI is cast in stone, never to change. Some fine tuning is required from time to time, and when evidence indicates that such changes are necessary, the government has acted. For example, this happened when we removed the intensity rule, when we adjusted the clawback, and when we made the small weeks provision a permanent and national element of the program and subsequently increased the threshold.

We have also commenced a pilot project to test labour market impacts in areas of high unemployment by adding five weeks of entitlement to address the needs of those who go without income for a period of time prior to the resumption of their work.

However, rather than make rash, badly thought out changes as this bill would have us do, we instead need to pursue a balanced approach that takes into account larger issues such as the likely impact of changes on the labour market as a whole, on the financial sustainability of EI in the future and on the EI program as a whole. Because EI is such a complex program, involving employed as well as unemployed people, that impacts many aspects of our economy and the lives of millions of workers and their families, we need to get it right for their sake and for the sake of future generations who will need to call on this program for assistance. It is for this reason that I cannot support the bill.

That being said, I do want to commend the member for her commitment to helping workers cope with job losses and the difficult task of balancing workplace and family demands, a commitment which I share and which the government shares. I particularly share her concern about balancing work and family and particularly about the return of women to the workplace. Those are two areas in which I personally would be glad to work with her to maximize the benefits of this program.

I would urge her and other members to work with the government as it seeks to pursue a balanced and thoughtful approach to fine tuning the EI program so it can continue to help Canadian workers for generations to come. It is only by getting the full range of ideas and insights, such as some of those the member has put forward this evening, that we can make this important program even better than it is.

I regret to say that I cannot support the bill.

Employment Insurance ActPrivate Members' Business

5:50 p.m.

Conservative

Peter Van Loan Conservative York—Simcoe, ON

Mr. Speaker, when we talk about unemployment and the employment insurance program, it is important to remember that the most important priority has to be the creation of jobs so that people do not have to claim employment insurance and that they do not have to stay on employment insurance for a long time. I am not sure that the bill in front of us addresses that; in fact, I believe it may have the opposite effect of hurting it.

The real problem in the employment insurance system for basically over a decade has been an overtaxation of the workers who are paying employment insurance premiums and an overtaxation of the employers who pay matching contributions, in fact a larger proportion of it. Over the past decade that has produced a surplus of some $46 billion.

That is $46 billion more that has been taken in by the system than has been paid out. It is far in excess of anything that would be possibly required to sustain a system. What it constitutes is a theft under the guise of employment insurance of tax dollars in order to help the government with its general revenue issues. That is where the money has been diverted. It is a theft from the workers and employers under the guise of employment insurance.

The worst part about it is for the people for whom the impact is greatest, the people from whom it takes the most. It is unlike income tax which is quite progressive, and unlike the goods and services tax which is related to spending and has a progressive element. This is the most regressive. In fact, after a person's income tops a certain level, the person stops paying employment insurance premiums. The overtaxation and the surplus hits most of all the people who earn the least. That is the real problem.

We have to stop adding to the $46 billion surplus. We have to return that money to the people who paid it. If we look at that money, $46 billion in 10 years has been taken from employers and employees. That money could have been used to create more jobs. That money, had it been in businesses, might have kept many of them from going bankrupt. In the hands of individuals, that $46 billion could have been used to pay mortgages, to buy skates for their kids and to live better lives.

Simply put, the premiums have been too high for the past decade, far in excess of what was necessary to pay the system. We need to change it to solve that. I am not sure this bill does it.

In fact there was an announcement recently by the minister about a drop in the rate. Employees have been paying $1.98 on $100 of earnings. That is going to drop to $1.95. Under those numbers, based on the performance we have seen in the past, the employment insurance system shall again generate a significant surplus. That is demonstrated based on the performance year after year.

In making that decision, obviously the government has decided to continue this process of overtaxation of workers and employers. Through that overtaxation it will continue to generate a surplus and turn it over to general revenues. It will continue that process which is a very regressive and unfair taxation that hurts workers.

There is only one other alternative if that is not the case. The numbers show clearly in black and white, and we do not have to be sophisticated accountants to understand, that it would have taken $1.88 or $1.82 in premiums, depending on to whom we listen, to be balanced in the past year. Therefore, $1.95 is going to be too much and will continue to produce a surplus.

What is the only other option? It is that the government is expecting a massive economic downturn, that it is expecting job losses to grow significantly. If that is the policy position of the government, if that is the pronouncement, and I believe that is the projection of the minister in making that declaration, I think that is something that is very grim. I hope the people of Canada will take note of the pessimistic view held by the government toward the future job environment.

The real answer and the real priority is to stop the theft of those dollars from the system, to make employment insurance work as a real fund so it does not generate excessive surpluses that are turned over to general revenues. The bill, however, does not represent a solution to that problem.

In fact, what we expect would happen with this bill would be a huge increase in the cost of the employment insurance program and as a result, a huge increase in the required premiums. That would mean huge tax increases for ordinary workers and employers who are trying to create jobs. In the end, all that happens when we put taxes on job creation, and that is what employment insurance premiums are to some extent, and when we increase them, it becomes more punitive. We would be limiting the job creation that occurs and taking money out of the pockets of workers.

There are significant problems. Let us take one example only from this particular proposal. That is the proposal to increase the maximum insurable earnings to $41,500 a year. If we did that, the net impact under the current rate of employment insurance would be more money would be taken out of the pockets of employers and employees than would actually be returned to workers through the benefits that result from the increased allowable annual earnings.

Essentially, the proposal from the Bloc would result in a grab of taxes from workers that would then produce a surplus that would be turned over to general revenues. That does not solve the problem. It makes the problem that we have right now even worse. It effectively is an increase in taxation on workers again. Why that is being proposed in this legislation I do not understand.

As well, when one looks at the problems in the system, the private member's bill does not address in any balanced way the nature of the problem. All it speaks to is one side of the equation.

In fact, employers have been very hard done by under the current operation of the employment insurance system. A principle has been established for some time that 58% of the premiums was paid for by employers and 42% by employees, a 1.4:1 ratio, whatever the rate is set at every year. The principle was that employers had some greater measure of control over whether an employee kept or lost a job. That was the justification for it.

Since that principle was established, the employment insurance system has been changed dramatically. No longer is it simply straightforward insurance for those who lose their jobs, but there is a significant social component that has been added. Compassionate care leave has been added, and extended maternity leave has been added, all funded through employment insurance.

In the normal case, there is very little that an employer has to do with an employee's decision on whether or not to have a child. Effectively, that justification for the higher burden on the employers has altered significantly over time as the program has been expanded. Fairness would dictate that the burden should also be shifted to a more even balance, perhaps fifty-fifty sharing. That principle is not established here.

In addition, we have a problem with overpayments. Many people who work multiple jobs or who go from one job to another and change jobs within a year pay into employment insurance in one job and then in another and the employee ends up having an overpayment. When it comes time for those people to file their tax returns, because they have paid too much into the system, more than their insurable earnings allowed, they get a rebate for an overpayment into the system.

Millions and millions of dollars are returned every year to employees, but the employers who made the matching contributions do not have the benefit of that return. They do not get the same compensation. That is unfair and it is an imbalance. We do not see any element to address that in this legislation.

I would suggest that the bill before us is one which is unfair to workers and to the taxpayers who are funding the system, the employees who are trying to make better lives for themselves. It is a system that results in huge increases to them without, in many cases, any perceptible benefit. It is going to kill job creation. It is going to have a drag on the economy. It is not a positive result. For that reason, I find it difficult to support the bill before us.

Employment Insurance ActPrivate Members' Business

6 p.m.

NDP

Yvon Godin NDP Acadie—Bathurst, NB

Mr. Speaker, first, I want to congratulate the hon. member for Trois-Rivières for having introduced this bill in the House of Commons. I am flattered because there are a number of similarities with the bill I introduced before the election. In computer lingo, this virtually called cut and paste. It could be said that the NDP and the Bloc Québécois have much in common when it comes to the needs of workers in regions providing seasonal employment.

Some Liberals also agree with us that changes are needed. There have been past examples of this. I remember our colleague in the House of Commons, Georges Farrah, from Bonaventure—Gaspé—Îles-de-la-Madeleine—Pabok. I think he lost the election just over employment insurance.

This shows the hardships that people can experience in certain regions. We just need to consider the hon. member for Beauséjour, who is in favour of the EI reform. His experience representing people in the region of Cap-Pelé and Bouctouche, people working in the fish plants, has made him understand the importance of EI to seasonal workers.

Not so long ago, I met with the people of Cap-Pelé. The mayor asked if anyone was coming to recruit people working in fish plants to take them to Moncton. He said that he was happy for Moncton. He congratulated the city of Moncton on its unemployment rate, which is 5% or 5.6%. But if everyone from his region goes to work in Moncton, it means that the Cap-Pelé region might as well shut down. As the mayor of Cap-Pelé, he is not happy with the way things are going.

I was surprised to see my colleague from Peterborough shift and say that he cannot support such a bill. He was a member of the committee created after Bill C-2. The recommendations were along the lines of this bill. He has changed since he sat on that committee but, back then, he strongly supported the bill.

I remember too that the people of the Cape Breton region strongly supported it. When there is an election, people want to be part of the government so they can ensure that changes are made to EI because it needs changing. People are starting to realize that there have been a number of elections in which they say they want to sit on the government benches in order to change EI but it does not change.

This week I thought it shameful that the Minister of Human Resources and Skills Development had the gall—excuse me for saying so—to lower the employment insurance premiums. I thought this was a bit rude of him, especially since the Standing Committee on Human Resources Development is currently considering changes to employment insurance.

Instead, the Minister of Human Resources and Skills Development is listening to the Conservatives. That is why I say there is no difference between the Conservatives and the Liberals. The only thing the Conservatives ever ask for is lower employment insurance contributions, because they think the employers are being over taxed.

I do not know how many times I have said, here in the House of Commons, that no employer has ever called me to say that he was going to lose his business because he could not afford to pay the employment insurance premiums and that he needed them lowered. I hope my phone starts ringing tomorrow morning. I have not received those types of calls.

However, I have seen people demonstrating in the street to say that the employment insurance system does not cover seasonal employment adequately. That is what I have heard.

When I went to the Forestville area before the election, I was talking to people in the streets, including Forestville's young priest and the former priest, who is now retired. I remember what the priest told me. He said it was not a political story, but a human story. The cuts made to employment insurance by the Liberals in 1996 had a direct impact on families and children. That is where they are hitting.

There are 1.4 million children going hungry in Canada and it is the Liberals' fault.

During the election campaign, I remember hearing varying opinions from the Conservatives. In 2000, the Conservative leader said, in the West, “We must not change employment insurance. We must make some cuts in it”. In the east, he said, “We are going to change employment insurance for you.” He did not know that the Globe and Mail is sold all over Canada and that people read both messages.

The shameful thing is that the Minister of Human Resources and Skills Development listened to him and is reducing EI benefits to such a point that there will not be any money left in the EI fund to pay for what people need.

It may be a little comical, but as I have often said, you do not catch lobsters on St. Catherine Street in Montreal. The lobsters are in our waters, in Chaleur Bay and off Cape Breton. The lobsters are in the Bay of Fundy. People in Peterborough love our lobsters.

These people have seasonal jobs in regions like ours, in the Gaspé and Chaleur Bay, where everything freezes up in the winter. In fact, you cannot catch lobster in the winter. And besides that, we have to work within the quotas set for us by the government.

The people of Cap Pelé—and not just them, because this happens all over Canada—have found it necessary to cheat the system to accumulate hours, to do what some call “banking” their hours. They are breaking the law. In Cap Pelé, where the member of Parliament is a Liberal, 1,500 people were caught banking hours. The government told them, “We will not do anything to you. We will make the employer pay $5 million.”

At the same time, in my riding, 11 people were also banking hours. They had to repay the government $10,000 and $11,000. It is shameful that in a national program the government treats people represented by a Liberal member on way and the people represented by a member from another political party another—in a democracy like ours.

This is the biggest theft the government has committed in Canada: it has stolen $46 billion from the pockets of the workers and employers who have paid premiums into the employment insurance fund, and they took it to balance the budget and get to that zero deficit. It was all done on the backs of the workers who have lost their jobs and the children who have nothing to eat. It is shameful. That is what the Liberal federal government has done. Today it boasts that it has lowered premiums every year, and it does that to please the Conservatives.

I would like the people back home to know that the Conservatives are opposed to changing employment insurance. They think that slashing EI will send people back to work. I regret to say that my dear friends do not know their Canada. They do not know that some Canadians are in seasonal jobs and need employment insurance to get by. Punishing them and their families is not the way to help them get by.

I congratulate the member for Trois-Rivières on making recommendations, which I support 150%. I am not likely to ever need EI, but I see the hardships the Liberals have caused in my area.

When Doug Young lost his job here in Parliament, it was because he thrust the people of my area into abject poverty. I have women calling my riding office and talking of taking their own lives, because there is nothing left in the house. I have fathers calling and talking of suicide, because they are not able to support their families. The Liberal government is responsible for their desperate situation, with the help of the Conservatives.

know that I have said all this before. That is because the problem is still the same. There are Liberals who agree with me on this. I hope that this time they will be capable, in a minority government position, to do something about it. The same goes for the member for Beauséjour who has finally said—and it made the papers—that he hoped that, with a minority government, Parliament would be able to bring about the changes required to restore to workers what they are entitled to, and what has been taken from them.

The communities would be delighted to hear that. Workers are not the only ones hit by this. The Liberals are punishing the communities too. We are not all in Toronto, where there are jobs for the taking. In our area the situation is different, our workers are lured away to take employment elsewhere. Our regions are emptied. It is a kind of legal deportation. That is what is happening. The government is sticking it to the people in need.

Is this our Canada? Sometimes, we have to ask ourselves that question. We are not all as lucky as Alberta. If we had oil wells at home and if we no longer needed to fish, things would be different. I can assure the House that people back home are hard workers. When they move to Alberta, they are the first ones to get jobs, because they are hard workers. Contrary to what Doug Young once said in Hamilton, they are not lazy. That was written in the Globe and Mail .

In conclusion, I hope that hon. members will support this bill, that Liberals who are still not convinced will soon be and will do the right thing. It is not up to the Liberals to take that money and use it to reduce the debt and achieve a zero deficit. That money is there to help the needy, the families, the 800,000 people who do not qualify for employment insurance benefits.

I am pleased to have had the opportunity to tell hon. members what I think and what seasonal workers in our region think.

Employment Insurance ActPrivate Members' Business

6:10 p.m.

Bloc

France Bonsant Bloc Compton—Stanstead, QC

Mr. Speaker, I wish to thank the hon. member for Acadie—Bathurst for his colourful speech, which was a great motivation to me.

The purpose of Bill C-278, before us today, is to make a number of efficient and necessary amendments to the Employment Insurance Act.

As the hon. members know, employment insurance is a reality for thousands of people on the labour market in Quebec. With any luck, you will never have to collect benefits in your life. But that is not true for all workers.

This bill, introduced by my hon. colleague from Trois-Rivières, is geared toward those workers who currently need or will need employment insurance. These workers contribute to the plan and, as such, should be able to use it when necessary. This bill contributes to that, by making it easier to have access to employment insurance for those who really need it. I will explain in a moment why this bill is good for all workers.

First, this bill reduces the minimum qualifying period to 360 hours of work, regardless of the regional rate of unemployment. At present, the qualifying period for employment insurance benefits varies between 420 and 910 hours of work, depending on the place of residence and whether the claimant is a new entrant or re-entrant.

We are asking that this period be reduced to 360 hours, regardless of where the claimant lives. This rules, unanimously approved by the central labour bodies in Quebec, would provide more appropriate coverage for workers in seasonal businesses, and also for all workers in unstable jobs.

Currently, the benefit period is determined based on the regional rate of unemployment. To qualify for employment insurance, a worker must have worked 420 hours in regions with an unemployment rate over 13%, and 700 hours in regions where the unemployment rate is 6% or less.

We can understand that such measures may not be appropriate for seasonal workers in a region where the unemployment rate is low. They are also not appropriate for workers in marginal areas. The same is true for workers in cities where the rate of employment is different from the regional rate.

I want to point out that, while this bill sets the eligibility threshold at 360 hours, regardless of where the workers live, the benefit period will continue to vary from region to region.

Speaking of the benefit period, the cut-off point is now set at 45 weeks. In 2000, a study by Human Resources Development Canada showed that 35% of EI recipients use up their entire benefit period. Many of them were victims of the infamous seasonal gap. In other words, for a period of several weeks, sometimes up to 10 weeks, unemployed people had no income. This gap would be compensated for by the proposal in this bill to raise the benefit period from 45 weeks to 50. Adding those five weeks would, depending on the number of hours worked and the regional unemployment rate, entitle a contributor to receive between 30 and 50 weeks of benefits.

Another change contained in this bill is the increase in the weekly contribution rate, from its present 55% to 60% of insurable income.

In Quebec, the minimum wage is $7.45. So a person working a 35-hour week has a net weekly income of $260.75. This entitles an unemployed worker to an EI cheque of $287 every two weeks, before taxes, or $574 a month.

This is about what it would cost to rent a small apartment in many cities in Quebec, what we call a “four-and-a-half” —oh, but I forget that EI recipients also have to eat and clothe themselves. Where will they get the money for that, if most of their cheque goes to keep a roof over their head?

Statistics show that in Quebec low wage earners are the ones who make use of EI most often. They are earning the minimum wage, as I have already mentioned. In 2002, 66.6% of the 192,000 workers earning minimum wage in Quebec were women, and women also made up two-thirds of low wage earners.

Instead of lowering premiums in a ridiculous way—such as the government's announcement this week that it would save every worker 3¢ a week—the Liberal government should instead look closely at what is in this bill. Increasing the rate of weekly EI benefits from 55% to 60% is a practical measure that would make it possible to give better support to people who really need it.

I would like to go back now to the minimum qualifying period in hours making workers eligible for employment insurance benefits. This time, I would like to point out the ridiculous distinction between people who enter the labour force and those who re-enter it. Fortunately, the bill before us proposes to put an end to this distinction.

At present, a person who enters the work force, or comes back after two years of absence from the work force, must accumulate 910 hours of work to be eligible for EI benefits. For other workers, as I mentioned earlier, the number of hours ranges from 420 to 700. The primary victims of this discrimination are, once again, women and younger workers.

With regard to women, the distinction can be clearly seen when they leave the labour market to start a family. If they prefer to look after their own children, the EI system penalizes them when they return to work.

As for young people, we are aware that first jobs are often seasonal, short-term or part-time. But when that job is over, if the young worker does not have 910 hours, there is no income. This discrimination toward those who enter or re-enter the labour force must be eliminated.

I would like to address another point. This bill will—at last—require the Canada Employment Insurance Commission to pay out, as workforce support measures, at least 0.8% of the insurable earnings—as estimated by the Commission—of all insured persons. In concrete terms, that amount would be used to help the unemployed upgrade their skills, learn new ones, or become self-employed.

I hope that the hon. members from all parties will support this bill and, finally, improve the employment insurance system for the people who are its real stakeholders.

A motion to adjourn the House under Standing Order 38 deemed to have been moved.