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.