Debates of May 14th, 2004

Employment Insurance

[John Duncan, Canadian Alliance, Vancouver Island North, BC]

Mr. Speaker, I rise on a point of order. I may be off base, but is there a question and comment period after I spoke? Is that not the case in this part of the sequence?

[The Acting Speaker (Mr. McNally)]

There are only questions and comments for the mover of the motion. Resuming debate.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC]

Mr. Speaker, it is with great pleasure that I rise today to speak on this motion. This is not an acceptable proposal, in my opinion, and the Bloc Quebecois will vote against it. A $3,000 basic exemption does not appear relevant, to begin with, for the purposes of the program.

To me, what is more important is the symbol. The fact is that, today, on this last sitting day of the House, we are debating the employment insurance program, when, for three years now, the government has had the unanimous report of the Standing Committee on Human Resources Development on a complete overhaul of the program.

The work has not been completed. After the members made their recommendations, the government simply blocked them as systematically as possible, thus going against the will of the people, as expressed in the 2000 election.

We will recall that, during the 2000 campaign, a number of elected members in this place, and several of those who will be running again in the upcoming election, made a commitment to undertake a complete overhaul of the employment insurance program to restore its original objective, which was to allow people to have a decent income when they lose their jobs.

Instead of that, this week, the government hurriedly announced three temporary changes. The first change concerns seasonal workers. In regions with an unemployment rate greater than 10%, the current program will be extended by one to five weeks. This means that seasonal workers in other regions will not be covered. They are still in seasonal industries and are faced with the same reality, but they are not getting the same benefits.

In the regions affected, of which mine is one, the workers were expecting the federal government to go ahead with a real EI reform, which would have afforded them real protection, dignity and recognition of the status inherent in the seasonal industry. That is not what we are seeing in the government's proposal.

Especially since the amount allocated for these three measures—they say $125 million or so per year—represents three one-thousandths of the surplus accumulated in the past 10 years. The government is therefore giving back three one-thousandths of the $45 billion stolen out of the pockets of the unemployed, workers and employers to cover the deficit and pay off Canada's debt. It is giving it back to the workers and unemployed—the very people who contributed the most to fighting the deficit. These people did not get tax reductions. When a person earns $20,000 a year, there are no reductions.

But these people contributed 100% of their salaries, because premiums are paid on income up to $39,000 or $40,000. They are not paid on income beyond that—people earning $50,000, $60,000 or $70,000 do not pay. Thus, they have not contributed to fighting the deficit on this salary. Let us admit it: we members of Parliament do not pay EI premiums; therefore we have not done our part to fight the deficit, as the unemployed, the workers and the employers were asked to.

It is absolutely unacceptable that the federal government has now decided to put just three transitional measures into the system in order to bridge the gap until the election is over and try to lull the electorate, but this time it will not work.

The reaction all over Quebec and Canada has been something to see. People thought it was irresponsible and unacceptable. If the government had proposed a real reform, we would not be debating my colleague's motion today. We would have already done all that and we would have a new system.

What is still missing? There is still discrimination against new, young workers and women who return to the labour force after some being out of it for a while. A young person is asked to complete 910 hours of work, while anyone else in a region like mine can requalify with 420 hours, which means that, if the young person has worked 800 hours and tries to get the other 110 hours in Montreal, Quebec City or elsewhere, he or she will not return to his own region. At that point, the region has lost a resource in which it has invested. That is one reason young people leave the rural regions for the cities.

There also needs to be a real support program for older workers. The measures announced this week include renewing pilot projects for training people who lose their job and can be retrained. There are people who cannot be retrained. These are people who are 55 or 56 years old, who have worked 20 or 30 years for the same company, such as Whirlpool in Montmagny, which has just closed its doors. These people systematically paid their premiums and never collected employment insurance. At the end of the day, they are told they will get 40 weeks of employment insurance and that is all.

When they see that a $45 billion surplus was accumulated in the fund, they think that it does not make sense, that it is unfair and dishonest of the current government simply to have transformed their employment insurance system into payroll taxes. They are unhappy about this.

Seasonal workers are also unhappy. The protection they are being given is like a slap in the face. It is transitional and temporary and will benefit the government during the election. Basically, the government is telling them that it is going to try to buy their votes. People will not be bought by these motions, especially since they are not significant.

Someone who works 420 hours—in other words, 35 hours a week for 12 weeks—will receive 21 weeks of employment insurance. With the measure and the transitional measures, that person will get 26 weeks. The number of weeks calculated at the start, plus these 26 weeks, does not allow the person to put in his time or to look for work the following year and still continue to have an income. There will be 10 to 15 weeks a year during which he will not have an income. This is unacceptable.

All this because we have a system that the government has set up to suit itself. People who contribute to the program are employers and employees. The government does not pay. So, when I see a Liberal colleague, as I did earlier, who says that he is opposed to the Conservative member's motion, I think that this is a little hypocritical.

Indeed, the federal government, which has not been contributing to the program since 1990, has made extensive use of it to build up the surplus. This is why today, when we should have changes or improvements to the program, the government cannot make up its mind. It would have to get the money from elsewhere because it has already spent all of it to pay off the debt.

This system was implemented under the finance minister, who is now the Prime Minister. He does not intend to loosen his grip. For that grip to loosen, the people will have to send a very meaningful message in the next election. They will have to elect as few Liberal members as possible to get across the message that citizens are not being fooled. They do not accept the proposed changes. They are trivial, inadequate and do not provide what was needed and expected.

It is not true that, in a government which has all the bureaucratic means available, the Department of Human Resources and Skills Development could not evaluate the 17 recommendations and put on the table the ones that it would have really liked to see implemented. This would have enabled us to examine the whole issue and have a truly reformed program. I think the public will judge the government's behaviour harshly.

On this last day of sitting, I invite those who are listening to us to question their member of Parliament on this issue, to put questions to the candidates during the election campaign and to see which ones are proposing the measures that they really want. When they elect their member of Parliament, will they be sure that this person will represent their riding in Ottawa, as opposed to representing Ottawa in their riding?

I think that people are fed up with candidates who get elected and who, the next day, begin to parrot the ideas of a government that does not want to change anything. We had this with the 1993 reform, when Prime Minister Chrétien had pledged to change the program. We also had it in 1997 and in 2000, with the promise to set up a parliamentary commission. Today, there is still nothing that has been done about these commitments.

I am sure that, after the election, the message will have been heard. The next Parliament will see real employment insurance reform. That is my wish for that system, which makes Quebeckers and Canadians proud, among other things, and was put in place to ensure the social pact between resource regions and industrial regions is maintained, to become again what it was intended to be.

The government must stop dipping into the surplus in the EI account and the EI contributions to pay off its debt. It is essential that the election result fundamentally change the current situation, where the government is unable to meet its commitments.

[John Maloney, Liberal, Erie—Lincoln, ON]

Mr. Speaker, I would like to thank the hon. member for Vancouver Island North for bringing forward Motion No. 300. The government always welcomes an opportunity to discuss the employment insurance program and seeks ways to improve it. I find it very interesting that the member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques went on at great length but failed to address the debate on this motion.

I know that all members in the House appreciate the importance of employment insurance in providing a key element of Canada's social safety net for more than 60 years. The government is committed to ensuring that it will continue to be there for workers who need it and that it will continue to serve Canadian workers in the best way possible.

That is why in 1996, following extensive consultations with Canadians, the Government of Canada replaced unemployment insurance with employment insurance to reflect the changing needs of the economy, the labour market and workers. Further, the Employment Insurance Commission committed to monitoring the impacts of the program on people, communities and the economy.

As a result of this annual monitoring and assessment, the government has adjusted the program from time to time to make it even more responsive. This has involved the following actions: enhancing parental benefits; making small weeks a permanent and national feature of EI; repealing the intensity rule; modifying the clawback provisions; modifying the undeclared earnings rule; and just this year, introducing a new six week compassionate care EI benefit for eligible workers caring for a gravely ill or dying parent, child or spouse.

Overall, the employment insurance system works. It is there for the people for whom it was intended.

As the 2003 monitoring and assessment report found, EI continues to perform well with 88% of individuals in paid employment being potentially eligible for benefits if they were to lose their jobs. Eligibility rates for women and men in full time employment are identical at 96%. For part time workers, women have a 16% higher eligibility rate, 57% compared with men at 41%.

Clearly, the government has adjusted the EI program as required where evidence warrants adjustment. We want to ensure the program is fair and protects those who are most vulnerable. Let us look at the main idea put forward in Motion No. 300, which is to save premium payers money.

The government is all in favour of this principle and our actions on EI prove it. We have reduced EI premiums for the past 10 consecutive years, from $3.07 in 1994 to $1.98 in 2004. This reduction will result in savings for this year of as much as $6 billion for employers alone compared to the 1994 rate. And in fact, forecast premium revenue is expected to be balanced with forecast program costs as a result of these reductions.

As a responsible government, we must ensure that the program is sustainable. I know the employer community respects arguments that are based on sustainability and good economic sense.

This is why the Government of Canada is working closely with labour unions, employers, provinces, territories and sector councils to develop a workplace skills strategy. Key issues will be to examine and improve apprenticeships, literacy training and essential skills upgrading for workers and employer based training.

As an immediate measure, our recent budget pledged to support the workplace skills strategy by providing new resources for union-management training centres. A three year pilot project will address a growing need to replace outdated equipment and simulators. Through the pilot project, $15 million will be used in the first two years to match employer and union investments in new machinery and equipment in selected training centres.

The hon. member's motion may seem like an attractive proposition on the surface but I think we owe it to employers and workers to look deeper and to see what possible repercussions there could be if Motion No. 300 were adopted.

As I mentioned earlier, when we undertook EI reform, we carried out extensive consultations. We examined all the issues and one of our key findings was the importance of covering all paid employment from the first dollar earned.

Perhaps the member for Vancouver Island North forgets under the old system those who worked fewer than 15 hours a week and their employers did not pay premiums, nor, and this is extremely important, were these employees covered by the insurance system. The result was that the very people who were most likely to need EI support, part time workers, predominantly women, were not eligible for benefits.

Studies of the insurance system further indicated that some employers limited their employees' hours of work to avoid paying premiums. Thus, employees could be caught in a double bind. First they could not obtain more than 15 hours of work in any one job and were thus forced to hold multiple jobs. Even though they may have worked the equivalent of full time employment, they still were not eligible to pay premiums or obtain benefits since none of these jobs provided more than 15 hours of employment.

Since converting to first dollar coverage with the introduction of employment insurance, evidence indicates this obstacle has been eliminated. Employers are no longer inclined to limit hours of employment based solely on the employment insurance system. We now have a system that responds to the labour market.

If we were to adopt Motion No. 300 and exempt the payments of EI premiums on the first $3,000 of income earned by all individuals, we could reintroduce a problem that we have so successfully vanquished.

This motion would roll back some of the key labour market policy objectives addressed through the 1996 EI reform. One of these objectives was to increase coverage and access to the EI program. An additional 400,000 part time workers became eligible for EI for the first time with the shift to first dollar coverage. Who can argue with that?

In fact, on April 30, 2004 the C.D. Howe Institute released a paper written by David M. Gray entitled “Employment Insurance: What Reform Delivered?” What did the paper have to say about the hours based system? The report highlights that there has been extensive research and the findings suggest that the change from a weeks based system to an hours based system was warranted. The report also indicates that an hours based system eliminated the incentive to create jobs with very short employment spells and reduced inequalities on access to EI.

The present EI system is fair and balanced. This motion, as well intentioned as it might appear at first glance, would create some unintended problems. For example, this motion would put into question the fundamental principle embodied in the EI legislation, that claimants must have paid premiums during a recent attachment to the labour force to be eligible for benefits. Under this motion, claimants would not have paid premiums for work that may later be used to calculate benefits.

The present system, founded on the first dollar coverage and EI benefits based upon the value of wages earned in the most recent 26 weeks, encourages workers to find additional hours of employment. This system fosters workforce attachment. Findings in the recent C.D. Howe report support this, saying EI reform has indeed encouraged a greater degree of workforce attachment.

Many of the supporters of this motion have said in the past that a yearly basic exemption not only helps business, but also could help low income earners. What they fail to recognize is that this element is already addressed through the family supplement. This is a progressive feature of the EI benefit structure, which allows individuals in low income families with children to receive a maximum of up to 80% of their average weekly earnings, rather than the 55% received by all other claimants.

The government recognizes that some people are not able to work enough hours to qualify for EI benefits. That is why we provide premium refunds for people earning less than $2,000 annually.

I am not saying the premium rate structure is perfect. Right now we are in the process of a rate setting review. This process is designed to create a new permanent EI rate setting mechanism for 2005 and beyond. The system will be based on extensive consultations that have been conducted. However, Motion No. 300 represents a step backward. With EI reform, we now have a system that is responsive to the changing nature of work while providing a benefit structure that strengthens insurance principles and encourages participation in the labour market.

The government will continue to monitor and assess the EI program to ensure that it continues to respond to the needs of working Canadians.

[The Deputy Speaker]

Seeing that no other member is seeking the floor, under right of reply I will give the floor to the hon. member for Vancouver Island North.

[John Duncan, Canadian Alliance, Vancouver Island North, BC]

Mr. Speaker, I do not think I will be taking my entire five minutes, which will make many of my colleagues very pleased on this Friday afternoon.

I would like to comment on the speeches by the two government members. The member for Dufferin--Peel--Wellington--Grey basically accused me of cynical motivation for putting forward my private member's motion. I actually do not think the member realized what he was saying in his prepared speech; otherwise I would have great difficulty with that statement, particularly since my private member's motion is clearly something that has been brought forward by many very credible organizations in this country plus two standing committees in the House of Commons. To accuse me of personal cynical motivation on this private member's motion I find to be most unfortunate and a very cheap shot indeed on this last day of Parliament.

I can understand that people may disagree with the motion. However, the disagreements that have been expressed by both government members tend to be in the category of defending the status quo and not really addressing the very significant issues, which are that there are employees who are paying premiums who will never be eligible to collect employment insurance.

Some of the most vulnerable, lowest income earners in the country are forced into applying for a refund of their EI premiums. Naturally of these most vulnerable of people, the least well armed, more than one-third of them are failing to apply for and receive the refunds. The government has an obligation and a responsibility to treat these people in a way that would give them the option of never having to pay in the first place. That is what this motion is about.

It is also about the fact that this would create simplicity for employers. It would also make it consistent with the yearly basic exemption provisions of the Canada pension plan. When the second government member who spoke said that this was a step backward, if the government believes that, then I can assume that the government will soon be changing the yearly basic exemption which it currently applies to Canada pension plan contributions. It works in exactly the same way as what I am proposing.

I do not think I am going to go into any more detail than that, other than to say that the government members did a good job of putting up what I call red herrings which did not apply to what I had to say. They totally defended the status quo. I never did suggest that the hours based system of EI, the changes that were made, were inappropriate. That is something to which we have accommodated ourselves, and it has absolutely nothing to do with the proposal for a yearly basic exemption for the EI premiums.

I will conclude with those remarks. This will probably be the last piece of business in this Parliament, Mr. Speaker.

[The Deputy Speaker]

We will soon know how good that prediction might be.

Pursuant to order made earlier today, all questions necessary to dispose of Motion No. 300 are deemed put and a recorded division is deemed requested and deferred until Wednesday, May 26, immediately before the time provided for private members' business.

It being 2:21 p.m., the House stands adjourned until Tuesday, May 25, 2004 at 10 a.m., pursuant to Standing Orders 24(1) and 28(1).

(The House adjourned at 2:21 p.m.)

The Third Session of the 37th Parliament was dissolved by Royal Proclamation on May 23, 2004.