House of Commons Hansard #55 of the 37th Parliament, 3rd Session. (The original version is on Parliament's site.) The word of the day was public.


Quarantine Act
Government Orders

12:50 p.m.

Thunder Bay—Superior North


Joe Comuzzi for the Minister of Health


That Bill C-36, An Act to prevent the introduction and spread of communicable diseases, be referred forthwith to the Standing Committee on Health.

Quarantine Act
Government Orders

12:50 p.m.

St. Paul's


Carolyn Bennett Minister of State (Public Health)

Mr. Speaker, it was a little over a year ago that Canada was confronted with a mysterious disease that would go on to claim the lives of 44 Canadians, temporarily cripple the economy of Toronto, and take an enormous toll on this country's public health workers and health care providers who worked valiantly to prevent the loss of more lives. What we came to know as SARS provoked a health crisis unlike any other we have seen in recent years. We made every effort to control the spread of the virus to protect the lives and livelihood of Canadians.

One of the first steps we took in the days immediately following the outbreak was to deploy Health Canada employees as quarantine officers to provide health assessments for travellers who appeared to be ill or who may have been exposed to the disease. We instituted health alert notices to advise travellers about its symptoms and the steps to take to protect themselves, as well as health alert notices with questionnaires to passengers on incoming direct flights from Asia where the disease originated. The health alert notices were also later available to rail and bus passengers in Ontario.

As effective as those measures were, we had to face the fact that our current legislation is outdated. The existing Quarantine Act has remained largely unchanged since the adoption of the first Quarantine Act in 1872, a time when automobiles and jetliners were the stuff of science fiction.

Needless to say, times have changed. We live in an age when people move from continent to continent in hours and days rather than weeks or months, often in airplanes and ships whose confined spaces provide a perfect breeding ground for highly communicable diseases to spread.

Infectious diseases move like wildfire across the planet today. Diseases do not respect borders, so we know that we will face repeated threats to public health in the future.

Among the hard lessons learned from the experience of SARS is the need to strengthen our quarantine legislation to help prevent the introduction and spread of both emerging and re-emerging communicable diseases.

We began that process last June. To address the immediate problems we faced, we amended the Quarantine Act to include SARS on the schedule of infectious and contagious diseases and to prescribe an incubation period of 20 days for anyone exposed to the virus.

As a result of the regulatory changes, quarantine officers were able to exercise the necessary control over people entering into or departing from Canada and suspected of having SARS but who were not taking the required precautionary measures. It was necessary to take these measures in several cases to protect the health of the public.

We knew, however, that much more had to be done to ensure we would be able to react quickly to other emerging, and often unprecedented, threats to public health. That is why we thoroughly examined the Quarantine Act. The quarantine provisions were included in a health protection legislative review, as part of a legislative renewal Health Canada had undertaken to achieve and maintain the highest standards of health protection for the benefit of Canadians, today and in the future.

We undertook extensive consultations this past winter with provincial and territorial government representatives, health professionals, industry, advocacy groups and members of the public, seeking their insights and advice.

We heard repeatedly that while the current health protection system has served Canadians well, the time has come to update and integrate our existing laws into a stronger, comprehensive and flexible public health system. That is precisely what Dr. David Naylor as well as the Senate committee which studied SARS recommended we do.

As a response to concerns about the spread of communicable diseases, we decided to move forward immediately with new quarantine legislation, while the remainder of the health protection legislation renewal continues as planned.

The legislation before the House today delivers on our pledge to court many of the problems brought to our attention by recent events such as SARS, which underscored how fast and how hard disease can hit our health care system. With Bill C-36 we will replace the outdated quarantine legislation with an improved and modern Quarantine Act so we can better protect Canadians from the importation of dangerous communicable diseases and ensure Canada can meet its international obligations to help prevent the spread of these diseases beyond our borders.

Where there are incidents of risk to public health, the act continues to allow for public health measures at Canadian points of entry such as: screening travellers entering and leaving Canada, whether by customs officials or detection devices; referring travellers to a quarantine officer who may conduct a health assessment, order a medical examination, vaccination or other measures, order the traveller to report to a public health authority, or detain anyone refusing to comply with measures to prevent the spread of the disease; requiring owners of public transport conveyances, such as jets or ships, to report an illness or death of a passenger before arrival in or departure from Canada; detaining either passengers or conveyances until there is no longer a risk to public health; and inspecting such conveyances and ordering their decontamination or destruction, if required.

As well, the modernized act we propose would provide the Minister of Health with additional powers. For example he could appoint screening officers, environmental health officers and analysts as well as quarantine officers; establish quarantine facilities at any location in Canada; take temporary possession of premises to use as a detention facility if necessary; and divert airplanes and ships to alternate landing sites. While these powers would only be used in rare instances where circumstances warrant, these changes are essential if we are to keep pace with emerging infectious diseases and protect the health of Canadians.

I want to assure parliamentarians that even though the legislation will allow for the collection of information for public health purposes, Canadians' privacy rights are guaranteed. While the updated act authorizes the sharing of personal health information, the authorization to do so is limited to what is required to protect the health and safety of Canadians.

This is what citizens clearly want. They want the assurance that we are taking every possible precaution to prevent the spread of communicable diseases that could put their personal health and the welfare of their communities at risk.

The updated Quarantine Act will give us an additional layer of protection by providing strong, flexible up to date regulations that will allow us to respond more effectively to ongoing and future health risks while ensuring adequate protection for human rights.

My colleague, the Minister of Health, and I are extremely proud of the legislation, a critically important first step forward in a series of improvements the Government of Canada is making to strengthen our public health system.

As hon. members know, in addition to the new health protection legislation, we are moving on multiple fronts, including the creation of a new public health agency for Canada, the appointment of the first ever chief public health officer, and the development of a pan-Canadian public health network founded in five regional centres of collaboration across the country.

These innovations ensure better communication and collaboration among partners and will build on the expertise and strengths we already have in many areas of public health and communicable disease control to ensure Canadians are safeguarded by a seamless public health system throughout the country. Taken together, they will help ensure that Canadians are fully protected from outbreaks of emerging diseases such as SARS and whatever else awaits us in the future.

Given that we cannot predict what the next infection will be or when it may surface, we need to be ready, so we need this improved legislation now. By introducing a new and modern Quarantine Act, Canada will be better positioned to respond to any and all potential threats to the health and well-being of our citizens.

It is clear that the health and safety of Canadians is a priority of the government. Canadians expect no less. With the passage of the progressive legislation we are debating today as part of the larger public health strategy, I am confident we will not let them down.

With the passage of the progressive legislation we are debating today as part of the larger public health strategy, I am confident we will not let them down. Thank you for your attention.

Quarantine Act
Government Orders

12:55 p.m.

Canadian Alliance

James Lunney Nanaimo—Alberni, BC

Mr. Speaker, this is important legislation and I think we all appreciate that. The response to last year's SARS outbreak was of great concern to Canadians and caused a great disruption to society. The public is expecting the government to respond appropriately.

We have had the Naylor report. We are promised the new Canada public health agency, headed by a new chief public health officer. We understand the minister is moving to establish that new agency. We hear it will be in Winnipeg, and that is good. We need to centralize our information gathering and coordinate our efforts in this regard.

We are still waiting to hear on the appointment of a new chief public health officer, but it has been some time in coming together. I think that Canadians will probably welcome those developments. Hopefully they will fall into place soon.

It is surprising that legislation as important as this would be tabled on what probably is the last day of the 37th Parliament.

There are some members protesting, saying that they do not know. For the skeleton crew that is left defending democracy here, it seems quite clear that we are on the edge of an election.

We had a request come forward from the government side that perhaps the legislation might be considered as having come from committee, as if it had been through second reading and returned from committee without amendment. I can assure everyone that we are not prepared to make such a rapid response on legislation as important as this. It is very complicated legislation and it would give extraordinary powers to health authorities and health officers to detain, to hold up equipment, to quarantine and isolate people for extended periods of time on a suspicion that they may be carrying something, even if they are healthy.

There are some very alarming components to this. Under the proposed legislation, people have the right to be examined again by an independent doctor within seven days if they have been put into quarantine and then again in another seven days. However, there is no provision for compensation. People have to pay for their own medical examinations. I do not know if there is any discussion in the legislation about who will pay for the accommodations where people are quarantined.

An aircraft, for example, can be put it into isolation, or quarantine or some place for disinfection. The government proposed that it would be willing to compensate the aircraft carrier for the damages to its equipment, but there is no compensation for the loss of that equipment, which may be millions of dollars for who knows how long. There are some serious issues associated with the regulations. We will want to talk about some of the provisions in a cursory way because it is far beyond what we can discuss in the limited time available.

I want to raise another issue relative to this. It comes out of the fact that the quarantine act was part of a comprehensive health legislation review that was promised by the government, which included radiation emitting devices, the Food and Drugs Act, the quarantine act and the Hazardous Materials Information Review Act. We understand the need for urgency on a quarantine act, but I want to protest on another aspect of this.

We had six years of work going into revisions on the Food and Drugs Act to create a new third category for natural health products. We worked all those years on this program to bring in regulations for natural health products, an issue that is important to many Canadians and that affects the whole range of building health and bodies, including one's ability to respond to infectious disease. Yet when the government brought in all these regulations on natural health products in January of this year, it used as a pretext for the reason that there was this new comprehensive review coming of health legislation for not creating a third category in the middle for natural health products. Therefore, it was not practical or possible to provide the simple change to the Food and Drugs Act that would have created a new third category for natural health products so they would be regulated not as food and not as drugs.

On the one hand, Canadians were led to believe, after six years of review and promises to Canadians, that a third category would be created in law so natural health products would be regulated not as food and not as drugs, but as physiologically active agents, natural components that promote health. However, they would not be regulated as drugs. The government reneged on that promise because this comprehensive legislation was coming. All of a sudden it can pull the quarantine act out and in one day bring in legislation and expect it to go through the House.

It is disappointing for Canadians, certainly the ones who are interested in natural health products, to feel embarrassed and betrayed by a government that does not want to give them the legislative framework that would allow natural health products to take their rightful place, but it can fire in a quarantine act on the last day of Parliament which has extraordinary powers to isolate Canadians and take them right out of circulation, even if they are not sick.

Maybe I should read some of the language. Clause 29(2) states:

The quarantine officer shall provide the traveller with the opportunity to undergo a medical examination by a medical practitioner at least every seven days after the day on which detention begins.

Going back to clause 21(1), it states:

A quarantine officer who, after a health assessment, has reasonable grounds to believe that a traveller is infested with vectors may require the traveller and their clothing to be disinfested.

If someone is required to have this examination, clause 23(3) says:

The examination must be at the traveller’s expense and conducted in the place where the traveller is detained.

Clause 26 of the act states:

If a quarantine officer, after a medicalexamination, believes--

I do not think that is proof, it is believes and is kind of open to interpretation. It goes on:

--on reasonable grounds that the traveller has a communicable disease or is infested with vectors, or has recently been in close proximity with a person who has acommunicable disease or is infested with vectors, the quarantine officer may order the traveller to comply with treatment or any other measure for preventing or controlling the spread of a communicable disease.

It does not define how this belief is arrived at. It may be that someone has a fever. I am rather concerned that the Minister of Health considers that anyone with a fever is a danger to public health. I do not imagine there is anybody in this room, either in the gallery or in the chamber, who has not had fevers multiple times in their lives. It is the body's normal defence mechanism. Everybody has had a fever, a mild febrile event. It does not define that. Is a fever 98.8


or 99


, or 99.5


or 100


? It is not defined.

The parliamentary secretary is suggesting it is 37


. We are going to centigrade here and that is another debate.

Whether it is centigrade or Fahrenheit, it does not define where that fever begins. That leaves it subject to interpretation. Is everybody who has a mild flu or sniffle going to be declared a public health threat? Are they therefore going to be vulnerable to being put in a slammer for seven days? That might be an inconvenience to someone going on their honeymoon or on a trip they have been planning perhaps for a lifetime.

There are some very serious aspects to the bill that impose on the civil liberties and the right to travel of Canadians. I think the health committee will want to look at these provisions very carefully. I hope that along with these discussions of public health, we will look at other measures to improve public health and air travel and improve the security of aircraft.

I hope somebody is talking to engineers of aircraft about how they might, for example, install an aircraft duct ultraviolet light, which might eliminate pathogens in circulation. That could be a good public health measure and reduce the risk to all air travellers. I hope somebody will talk about more practical means and not just about incarcerating people with a mild fever.

There are some serious issues associated with the bill. We will want to look at it closely. I am sure the health committee in the new Parliament will examine this in detail. I hope to have an opportunity to be on that committee. It will be a very interesting discussion I am sure.

I hope for the sake of Canadians that all avenues of approaching these things will be looked at very carefully before we commit to what can amount to very draconian measures. If they are applied the wrong way, they could be a terrible infringement on the rights of Canadians. It will need to be examined carefully by the health committee. I am sure there will be a call for amendments on this very complicated legislation.

Quarantine Act
Government Orders

1:05 p.m.


Mario Laframboise Argenteuil—Papineau—Mirabel, QC

Mr. Speaker, today, on what appears to be the last day of the session in the House of Commons, I am pleased to speak on Bill C-36, to prevent the introduction and spread of communicable diseases.

Mr. Speaker, for your benefit and that of Quebeckers and Canadians, I would simply point out how cynical it is to be debating this bill on our last day in the House. When they read in the title of the bill “to prevent the introduction and spread of communicable diseases”, people will conclude it is very important, and I agree that it is very important to make regulations to prevent the spread of contagious and communicable diseases such as SARS and the West Nile virus.

But was there any urgency to introduce this bill? Not likely, for the simple reason that the SARS crisis in Canada is more than a year old, and the same it true of the West Nile virus. So, there was no urgency. If there had been, the bill would have been introduced much sooner.

There was no urgency because, in Canada, the protection of public health is a provincial responsibility. It is as simple as that. Can we blame the provinces for reacting poorly to the SARS crisis or the West Nile virus? No we cannot. I think the provinces had what they needed to cope with such situations. Things like this happen and we have to react. We are glad we got through them, but there is still the threat of a recurrence.

Why does the federal government want to debate this bill today, the last day? This bill repeals and replaces the Quarantine Act. Its purpose is to prevent the introduction and spread of communicable diseases in Canada. It is applicable to persons and conveyances, such as planes or boats, arriving in Canada. That is why it was called the Quarantine Act. That was the federal government's only responsibility.

Why change the title of the act? Is it for good press, to look good, to say that they have legislation to prevent the introduction and spread of communicable diseases? Public health safety is a provincial responsibility. What the government is doing today—before calling an election in a few days—is trying to look good and get good press in case something terrible such as another SARS crisis happens during the campaign, in which case it will be able to say that it did something.

The only thing the federal government has done since SARS and the West Nile virus is to support the provinces, which is its responsibility. It did what it had to do. The problem is that when it wants to discuss these matters on the international stage with other countries, it is not Canada that is responsible for public health, but the provinces. Such is the harsh reality.

This is why we are debating in the House today, at the last minute, a bill that tries to tell those who read it that it aims at preventing the introduction and the spread of communicable diseases and that the responsibility for doing so will rest with the federal government, when all of this is completely false. In reality, public health is a matter of provincial responsibility. This is how things work in the Canadian federation.

I have no problem talking about it. The problem is that we want to skip all the steps in the discussion of this bill. However, to look good and to get good press, we still need a consistent text. The government has given itself new powers in these areas, and this is precisely what concerns us, the very fact that it is doing so.

I will quote the short preamble to the bill which says in its penultimate paragraph:

It contains provisions for the collection and disclosure of personal information if it is necessary to prevent the spread of a communicable disease or, under certain circumstances, for law enforcement purposes.

We are talking about the collection of personal information. This prompts us to react. We must be sure that the bill does not violate the charter of rights and freedoms. We do not mind personal information being collected, but we have to remember the whole debate on security in air travel that took place in committee and the long list of witnesses we had to hear in order to end up with a respectful piece of legislation. We should not forget either the statements made by the Privacy Commissioner, who expressed a lot of concern. Once again, we are talking about the collection of personal information.

Yet they want to get this bill passed without even any discussion in committee, without any chance to hear the new privacy commissioner comment on whether what the bill calls for meets his expectations in terms of the protection of rights and freedoms.

The last paragraph of the summary reads as follows: “It also provides the Minister of Health with interim order powers in the caseof public health emergencies and enforcement mechanisms to ensurecompliance with the Act.”

Of course, all interim orders have been thoroughly scrutinized by the Bloc Quebecois for the pure and simple reason that they have the same power as a regulation.

This means that there is no need to go before the House of Commons, before the members, for a minister to adopt such a measure. As result, this confers extraordinary powers on a minister, particularly where public health is concerned. These powers include acquiring drugs and vaccines and obliging people to take these drugs and be given these vaccines. We have always been opposed to this aspect.

Do hon. members recall the error made by the former health minister in requisitioning non-patented drugs, supposedly because of the urgency of the situation. There was no measure like this in place at that time. As a result, we were able to bring it to this House and rap the minister across the knuckles for making such a decision without consulting Parliament and complying with the legislation in place, namely the Patent Act of the Parliament of Canada.

With these measures, a Minister of Health could, in an emergency situation, acquire all manner of drugs for purposes deemed worthwhile by himself. He could break all existing laws because these interim orders take precedence over any other legislation in place.

Because of this, measures were added to the airline safety legislation, as well as some relating to emergency security, to ensure that at least some measures would go through Privy Council in order to ensure compliance with the Canadian Charter of Rights and Freedoms and the legislation in place, including the legislation governing orders in council.

You will have understood that the Bloc Quebecois does not agree with the fact that the government is introducing this bill at the last minute, without wanting to send it to committee. However, we agree with the principle of the bill. Nevertheless, it must be sent to committee to ensure that Quebeckers and Canadians do not see their rights and freedoms violated by this bill and to ensure that there will be no involvement of ministers that might compromise the situation that they are in now.

There is still a filter that we must respect. This bill must be introduced and sent to committee to have witnesses heard. As I said, we would like to hear the privacy commissioner, community health groups and provincial representatives. Of course, the government is giving itself new laws.

I have no objection with the fact that the government has called this legislation the Quarantine Act. However, it is replacing the Quarantine Act. This is what this bill is all about. Indeed, the enactment repeals the Quarantine Act and replaces it with another. It was a federal responsibility, but the protection of public health is a provincial responsibility.

We simply want to ensure that we do not find ourselves, yet again, with duplicate jurisdictions and that the government is not going to create another administrative level that will cost money and do what is already being done very efficiently in each of the Canadian provinces.

I want to go back to my initial point: is this legislation important? The answer is yes. Is this act so urgent that we have to pass it without referring it back to a committee? The answer is no. Because ultimately, if this legislation had been so urgent, it would have been passed immediately after the SARS crisis, or after the discovery of the West Nile virus. The government would have said “Are there measures that we cannot take, but that a bill would allow us to take?”. This is not the case with this bill.

Canada reacted as it should. The provinces did their job. They looked after the public's health, as they should under the Canadian Constitution. Everyone did what they had to do.

As regards quarantine, I agree with the government which, is indeed responsible for quarantining people who come to Canada by plane or by ship. There are also other ways to enter the country. Travellers can then be quarantined. I am not opposed to modernizing the Quarantine Act.

However, it must be done in compliance with the Canadian Charter of Rights and Freedoms. We must not give to public servants or ministers unwarranted powers.

That is the only issue here. That is why the Bloc Quebecois feels that, when a bill which is important but not extremely urgent is before the House, we should give it proper consideration and send it back to committee to hear witnesses. Some of these witnesses might consider the bill violates our rights and freedoms. As I said earlier, we could hear from the privacy commissioner and other stakeholders and very important witnesses. Community health officials from the various provinces could come and tell us if they see any amendments the federal government could make. That could easily be done.

The problem is that the government has not been governing in the past six months. This bill could have been introduced as soon as the Prime Minister took office. However, all the government has done in the past six months is try to find the right election date. In the meantime, consideration of all the bills was postponed. We should have addressed this bill. We should have been told more about such an important bill even if it is not extremely urgent. It has to go through all the legislative process and be sent to the committee so that we can hear witnesses to ensure that the public is well protected. That was not done.

It is being introduced today on the eve of an election. Once again, we worry that another public health crisis might occur, one for which the government has done anything since the last crisis, that is since SARS.

Quarantine Act
Government Orders

1:20 p.m.


Dick Proctor Palliser, SK

Mr. Speaker, it is always a pleasure to have an opportunity to speak in the House, even in the dying minutes of the 37th Parliament of Canada in all probability.

I am pleased to speak on behalf of the New Democratic Party caucus to put a few things on the record with regard to an act to prevent the introduction and spread of communicable diseases.

I note that the purpose of Bill C-36 is to protect public health by taking comprehensive measures to prevent the introduction and spread of communicable diseases while ensuring respect for the Canadian Charter of Rights and Freedoms as well as the Canadian Bill of Rights.

To that end, the bill aims to prevent the introduction and spread of communicable disease in Canada. It is said to apply to everyone as well as conveyances, travelling both out of Canada as well as entering the country.

The legislation that is introduced here today is described as an update of the Quarantine Act to address new issues as a result of the spread of new communicable diseases that have come to public light in recent years.

I am thinking of course of SARS which had such an impact a year ago in Canada; West Nile virus, which seems to affect Saskatchewan more than any other provinces in Canada or at least it did last year; and indeed, the avian influenza that is ravaging the Fraser Valley in British Columbia.

This bill is also being described as the first step in a series of legislative initiatives to establish a framework for public health including the creation of a public health agency for Canada.

I suggest that this is certainly long overdue legislation. We note that the Quarantine Act dates back to 1872, a very long time ago, upwards of 160 years. Certainly, it needs to be updated in view of these new diseases that have been identified in recent years and undoubtedly are the forerunner to more and new interesting things that will impact on us in the coming years.

Under the proposed legislation the minister will gain the power to appoint screen officers, quarantine officers and environmental assessment officers; establish quarantine facilities at locations in Canada; take temporary possession of premises to use as a detention facility when required and necessary; and divert conveyances, airlines, cargo ships, et cetera, to alternate landing sites.

The stakeholders in all of this include of course the provincial and territorial governments, as the member from the Bloc Quebecois noted in his remarks a few moments ago. It also includes health professionals, industry advocacy groups and members of the Canadian public. We are told they have been consulted on the proposed legislation during the health protection legislation consultations held last year and earlier this year.

However, it is important to stress that provincial and territorial public health officials have a significant role to play. They, along with other stakeholders, will continue and need to continue to participate in the consultations that will follow on Bill C-36.

The updated Quarantine Act will add an additional layer of protection by providing strong, flexible and up to date legislative tools that will allow us to respond quickly to prevent the export of communicable diseases. It is also more focused on airline travel rather than marine travel, so we are told.

Just as an aside, I believe that it was the government of Mike Harris in the Province of Ontario that, a few years ago, eliminated most of the public health officers in that province and said that they were not required any more; that we did not need public health officers in this modern new day and age. We found out, to our chagrin and regret, that it is not the case as a result of pandemics like SARS and West Nile virus.

I do not mean to pick on the former government because generally, I think there has been a diminution on public health over recent years across the country. We have come to realize that we should not have let our guard down, so to speak, in this important area.

Provincial and territorial governments are now seeing the mistakes that have resulted because of that and are ramping up support and finances to ensure that we have a strong public health sector in this country.

I am optimistic that working together with the provinces and territories we can rebuild public health and take it back to where it once was, but also modernize it so we are up to speed to deal effectively with these potential outbreaks when they come along.

Some measures, such as those contained in the bill, are obviously needed. Considering the act has not been changed since the late 1800s, some updating is required to reflect the global characteristics of travel that we are coming to see. I am sure the world will continue to become a smaller place in the years to come.

Another positive point in the proposed legislation is that it recognizes the threat to public health and proposes a way in which to prevent the spread of a communicable disease in Canada as a result of international travel.

There are also a couple of negatives in the bill that need to be identified. Although the legislation seems to be sound in principle, it does have the potential of leading to abuse of power by officials. We have some concern with regard to the level of authority the bill would appear to give to quarantine officers and screening officers. For example, people suspected of having an illness could be held for an indeterminate period of time. It is not clear from the legislation what kind of compensation would be available for people thus affected.

There are also gaps in the proposed legislation around the authority to act by the screening and quarantine officers and that needs to be reviewed closely. That includes the right to place travellers in isolation for an indeterminate amount of time.

Provided that these safeguards are put in place and adequate clarification is provided, we in the NDP consider it reasonable to support the bill. It is long overdue. We do note, as the Bloc Quebecois and the Conservative Party have also indicated, that it is the 11th hour of this 37th Parliament. One cannot help but wonder about the depth of commitment from the government opposite in bringing forward this legislation at such a late date.

The New Democratic Party caucus supports the principle of the bill. We would favour referring it to the health committee for further study and clarification.

Quarantine Act
Government Orders

1:25 p.m.

The Deputy Speaker

It being 1.30 p.m., the House will now proceed to the consideration of private members' business as listed on today's Order Paper.

Employment Insurance
Private Members' Business

1:30 p.m.

Canadian Alliance

John Duncan Vancouver Island North, BC


That, in the opinion of this House, the government should establish a Yearly Basic Exemption (YBE) within the Employment Insurance program whereby the first $3,000 of earnings is not subject to Employment Insurance premiums, similar to the YBE of $3,500 allowed by the Canadian Pension Plan program.

Mr. Speaker, this appears to be the last day of Parliament and I am up on the last piece of private members' business. It might be appropriate for me to state at this time that what happens so often in life is that we save the very best for last.

Motion No. 300 reads:

That, in the opinion of this House, the government should establish a Yearly Basic Exemption (YBE) within the Employment Insurance program whereby the first $3,000 of earnings is not subject to Employment Insurance premiums, similar to the YBE of $3,500 allowed by the Canadian Pension Plan program.

This is not a new proposal. It has been proposed or endorsed by groups including: the Retail Council of Canada, the Hotel Association of Canada, the Canadian Tourism Association, the Canadian Federation of Independent Business, and the Canadian Restaurant and Foodservices Association.

This proposal is known as the yearly basic exemption for the EI program. It has been studied by the all party House of Commons Standing Committee on Finance and the Standing Committee on Human Resources, Skills Development, Social Development and the Status of Persons with Disabilities, both of which recommended that the federal government consider implementation of this concept.

The main reason why I believe that the yearly basic exemption would be a very positive measure for government to take is because excessive payroll taxes are recognized to have a serious detrimental effect on job creation, business expansion and economic growth. The service and hospitality industry is labour-intensive and is a major factor in job creation. Anything we can do to reduce payroll burden, particularly for these entry level jobs, is positive.

The YBE targets payroll tax benefits to those most punished by current EI levies. These include lower income workers and labour intensive businesses. Universal application of the yearly basic exemption makes it fair to all and simple to administer. The way it stands now, employees earning less than $2,000 per year can apply for a full refund of EI premiums. Employees earning more than $2,000, but less than $3,000, cannot apply for a premium refund despite the fact that they have virtually no chance of qualifying for EI benefits due to the number of hours required for eligibility.

It is a fact that it is highly unlikely that those earning less than $2,000 per year will qualify for employment insurance. The minimum number of insured hours required to qualify ranges from 420 to 700 hours, depending upon the rating for the economic region within Canada.

For retail, service and hospitality industry jobs, it is likely that $3,000 in earnings will still not be based on enough hours to qualify for EI benefits. These same individuals are allowed an EI premium refund on their first $2,000 of income, but the reality is that one-third or more of these eligible individuals never apply for it and therefore never receive it.

This premium refund, when it is given, applies only to the employee contribution and not the employer contribution, so essentially what we have is a hardship on low income earners with no benefits, and an increased burden on the business which creates no gain for their employees and is a cost burden to them.

The yearly basic exemption for EI is consistent with the yearly basic exemption which is already in existence in the CPP and QPP programs. Surely, if it works for the Canada pension plan program, it will work for the EI program. The yearly basic exemption for EI refers to the annual earnings within which premiums are not applied, and I am recommending that this be only for the first $3,000 of earnings.

The implementation of this yearly basic exemption requires no change in the calculation of EI benefits and the $3,000 exemption should be included in the contribution base.

Who would be the major beneficiary of such changes? Students, part time workers and new entrants to the workforce, including immigrants. The latter is a group who the government has an obligation above all else to treat fairly and not to penalize as they are the least well armed and well prepared to deal with government bureaucracy and government forms and complexity.

I think government should remove the necessity for students and other low income earners to pay premiums in the first place, rather than have them claiming them at tax time.

Some people argue that unscrupulous employers might terminate employees as they approach the yearly basic exemption threshold of $3,000, as this would add a payroll burden to their costs. However, this same argument is applicable to the CPP and QPP programs, and in that case employers are paying a much higher rate per $100 after the minimum threshold of $3,500 is reached. Yet, this phenomenon has not been a concern and the advantage of the exemption for simplicity of administration has been recognized.

The Canadian Restaurant and Food Association has been the main proponent of the EI yearly basic exemption, believing that this policy change would increase the disposable income of low income Canadians who also have the highest propensity to spend, while increasing the ability of labour intensive businesses to retain staff.

People in the business only predict positive outcomes. Predictions of increased staff turnover are incorrect and staff turnover would actually decrease. Most employers in the hospitality and service industry recognize that staff retention, training and upgrading would all benefit from this policy change, and would be a net benefit to the business and the overall industry.

The 2002 Standing Committee on Finance report predicted that the cost of the yearly basic exemption for EI would be about $2.2 billion annually, which at that time would still have led to annual surpluses in the EI program.

Since then, the government has added parental and compassionate leave benefits via the EI program. The government has funded the parental and compassionate leave program from the EI program to blunt criticism of its string of surpluses, which has grown to almost $45 billion in a straight line since 1995.

I would have much preferred to see the parental and compassionate programs funded on their own merit, rather than from an EI program designed to protect workers from unanticipated job loss.

The yearly basic exemption for EI may not be sexy, but it would have major positive consequences for job creation, business expansion and growth of the economy, and it is still something the government should adopt.

The finance committee report had some further important points to make. For example, the yearly basic exemption would reduce administrative complexity and ensure that all individuals, not just those who apply for a premium refund by filing an income tax return, are treated equally.

The report also noted that the YBE would not only be fairer to workers with low earnings but also to employers because as it is now they continue to pay premiums for those lowest income employees who do end up filing for and receiving a refund for their premiums. Some of them actually do.

Another observation made to the committee was that the yearly basic exemption will provide a financial incentive to create a bias for full employment because employers will save money by reducing hours instead of reducing the number of employees during recessions. They will also have a natural incentive during good times to save money by hiring rather than relying on overtime. For this reason, the finance committee recommended that the EI Act be amended to create a yearly basic exemption to stimulate consumer spending and employment creation.

The Standing Committee on Human Resources Development studied the subject of employment insurance in 2001 and summarized its objectives by saying that the EI program should provide adequate access and income support to unemployed workers while maintaining incentives for individuals to secure jobs and invest in skills required in the workplace. Of equal importance, EI should be fair to all premium payers.

In terms of fairness to ensure that everyone is treated equally, the all party Standing Committee on Human Resources did recommend an EI yearly basic exemption, which would make the EI program progressive in the same way as CPP or QPP. The committee report suggested that the yearly basic exemption be set at $2,000 to be consistent with the current refundable level. The committee clearly saw the benefits to retaining the money in the employee's hands and the employer's hands and simplifying administration.

Rather than argue whether the yearly basic exemption for EI should be $3,000 or $2,000, I think the principle is what is important to establish and this motion urges the government to consider this positive change.

The Standing Committee on Human Resources Development did recommend that since the $2,000 limit fails to capture many individuals, especially students, who earn more than $2,000 a year but are unable to obtain enough hours of insurable employment to access EI, the government should consider increasing the current earnings threshold for an EI premium refund to $3,000, as well as to consider converting this refund to a yearly basic exemption.

These recommendations from the two standing committees and from many other groups are now several years standing. I think at this time the merits of such a program are obvious and I do believe it will occur. I hope to bring some light to this issue and to urge the government into action rather than inaction on this very important and fiscally smart change that could be adopted with very little in the way of complexity.

I will be interested to hear what the government spokesperson has to say on this motion.

Employment Insurance
Private Members' Business

1:45 p.m.


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

Mr. Speaker, I listened to my colleague's speech with great interest. When I read the text of his motion, what I understood was that he wanted to give everybody an exemption for their first $3,000 of earnings. Currently, the act provides for an exemption and a full reimbursement for those who earned under $2,000.

Is he really proposing that all the contributors be given a premium holiday on their first $3,000 of earnings? That is my first question.

As for my second question, does he not find it curious that the government, which has had a unanimous report before it for three years, has nothing more than badly developed and temporary proposals to make?

Employment Insurance
Private Members' Business

1:45 p.m.

Canadian Alliance

John Duncan Vancouver Island North, BC

Mr. Speaker, this is an issue that I find very interesting when we had so many people proposing this and so much buy-in from two all party standing committees in the House of Commons that the government has actually chosen not to adopt this measure.

There is a suggestion that when it comes to designing programs, to avoid the embarrassment of the EI surplus, the government had choices to make and it chose, first , not to reduce rates to the degree it could have reduced the rate. If it is going to design differences in the way EI applies, the compassionate leave and parental leave programs actually harvest more votes. It targets a group to the point where the government thinks it is more likely that it is going to get some credit for doing this as opposed to following a principle, which I think is more important, which would benefit the entire economy. I think that is the motivation behind how we got to where we are.

In terms of the current $2,000 refundable limit, the point of the yearly basic exemption is that the government never would have retained this money and so there would be no need to obtain a refund, but once people had reached the $3,000 level of annual earnings, contributions for all would be based on all of their earnings. It is not a holiday for the first $3,000 worth of earnings for those earning more than $3,000.

Employment Insurance
Private Members' Business

May 14th, 2004 / 1:45 p.m.


Murray Calder Dufferin—Peel—Wellington—Grey, ON

Mr. Speaker, let me begin by applauding the hon. member for Vancouver Island North for his concern for the welfare of unemployed Canadians.

Given the economic setbacks experienced in the member's home province, anything from softwood lumber to SARS and avian flu, I know how important the employment insurance program is to the citizens of British Columbia.

As well-meaning as my colleague's private member's motion may be, however, I think it is essential to point out the potential damage it could do to unemployed workers who are already coping with the challenge of losing a job.

While it may appear that Motion No. 300 is in their best interests, a closer examination reveals that it may not be. There is a very real concern that some of this country's lowest income earners, often part time workers, many of them women, could be really hurt if the motion were adopted. It could actually undo much of the good that we have achieved since reforming the EI program back in the mid-1990s.

I remind the House that our purpose in updating the legislation was to increase coverage and Canadians' access to the program. Prior to 1996 many part time workers were unable to access EI. Anyone who worked less than 15 hours per week was not insured. That is one of the reasons we shifted to the hours based system. It means that every hour of work now counts toward entitlement. This improvement has benefited seasonal workers and part time workers, many of them women who take time away from the labour force to raise young families. The shift to the first dollar coverage has extended the insurance plan's coverage to an additional 400,000 part time workers.

One of the other important changes that we made to the program was to emphasize the necessity of a strong workforce attachment. This serves as a reminder that EI provides temporary financial help to unemployed Canadians while they look for work or upgrade their skills, while they are pregnant, caring for a newborn or adopted child, or while they are sick.

An unemployed worker can only benefit from EI if he or she has earned wages in the previous 26 weeks. The problem is that if we were to exempt the payment of EI premiums on the first $3,000 of income, we would not be able to provide benefits to that amount should anyone become unemployed. That is because the premiums would not have been paid on this income. People have to pay premiums to receive benefits.

More worrisome, if we agreed to a basic yearly exemption, we would effectively be penalizing the most vulnerable and potentially reverting to the 15 hour job trap that affected a previous generation of part time workers. Evidence indicates that the move to the first dollar coverage eliminated the incentive for employers to restrict employees hours to below the minimum insurability.

If Motion No. 300 moves forward, part time workers or people holding down more than one job, generally low income workers, would no longer have to contribute to the EI program until they had earned more than $3,000, but they could not draw from the insurance plan either should they lose their jobs.

Also, if my hon. colleague's intention is to provide a premium refund to low income workers, the motion comes a bit late. We already addressed this problem through the improvements to the program several years ago. As it now stands, employees earning less than $2,000 annually can have their premiums refunded. In 2001 we reimbursed some 859,000 individuals to the tune of approximately $17 million.

With all due respect for the hon. member of the opposition, it is hard not to be cynical and to question the real motivation behind this motion. Even though at first glance it appears to be altruistic, it seems the only beneficiaries would be businesses looking at ways to cut corners at workers' expense.

We do not see it as an either or proposition. I can assure the House that our focus in reforming EI has not been exclusively on workers. We have made equal efforts to address the concerns of Canadian business. One way has been to cut the cost of the program, as the private sector has requested. We have reduced premium rates by just under $10 billion, actually $9.7 billion in 2004, over the past decade. EI premiums have declined steadily, benefiting both workers and their employers.

As my colleagues are aware, our government is determined to do even more. Do not forget that budget 2003 launched consultations on a new permanent rate setting mechanism for 2005 and beyond. The results of these consultations are currently under review. As we reiterated in budget 2004, our intention is to introduce legislation to implement a new EI premium rate setting mechanism that better reflects the economy of the 21st century.

Until we determine what kind of changes we will make to the premium structure however, it would not only be premature but inappropriate to adopt Motion No. 300.

That is not all we are doing for business. Recognizing that small and medium sized enterprises are the key drivers of economic growth and job creation, the budget identified a number of measures to help them grow and prosper.

Industry Canada and its industry portfolio partners will administer a range of incentives and supports to business. For example, to enhance access to venture capital for promising Canadian firms, the government has set aside $250 million for an investment in the Business Development Bank of Canada.

It is expected that these additional investments will lead to over $1 billion in new venture capital investment in Canada. A further $5 million per year is being committed to the industrial research assistance program to strengthen its support for regional innovations and initiatives sponsored by the National Research Council.

We have also committed to work with small businesses to reduce the paper burden, understanding this is a serious concern for many firms. To identify and respond to other priorities, they may and we will seek the advice of the House of Commons Standing Committee on Finance to identify the best options for the future support of small business, taking into account limited fiscal resources.

Equally promising, the Minister of Industry, the Parliamentary Secretary to the Prime Minister with special emphasis on science and small business, and the new national science adviser have been tasked by the Prime Minister to study the commercialization situation in Canada. They will be recommending a long term strategy to put Canada at the leading edge of commercializing its intellectual property.

Therefore, there can be no question of the government's commitment to working with business to keep Canada competitive in the global marketplace. Nor is there any doubt that the motion is not the way to go to support either business, the business community or unemployed Canadians.

I remind the House that various proposals for a yearly basic exemption have been put forward in the past. The idea was debated when EI was developed in 1996 but rejected in favour of first dollar coverage.

As well, the Standing Committee on Human Resources Development and the Status of Persons with Disabilities recommended the same concept in 2001, but it was later concluded that this was not the best approach.

In fact, the 2003 EI monitoring and assessment report tabled on April 27 found that the core elements of the EI program such as an hours based system and the first dollar coverage are working very well.

I stand proudly behind EI, a pillar of the Canadian social safety net that has served Canadians well for more than six decades. I want to assure this country's workers that I will staunchly defend this vitally important program. I will do my utmost to ensure motions like the one proposed by the opposition member enjoy the same fate as previous efforts to introduce a yearly based exemption.

In the interest of fairness and dignity of all Canadian workers, whatever their working arrangements, I cannot with a clear conscience support the motion and I strongly urge others to reject it as well.

Employment Insurance
Private Members' Business

1:55 p.m.

Canadian Alliance

John Duncan 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?

Employment Insurance
Private Members' Business

1:55 p.m.

The Acting Speaker (Mr. McNally)

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

Employment Insurance
Private Members' Business

1:55 p.m.


Paul Crête 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.

Employment Insurance
Private Members' Business

2:05 p.m.


John Maloney 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.

Employment Insurance
Private Members' Business

2:15 p.m.

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.