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.