Mr. Speaker, I appreciate the opportunity to speak today on this legislation. In particular, before I go into my speaking notes and through a more detailed assessment of the bill, I want to begin with a personal story, so I am changing slightly what I was going to talk about.
I was listening to hon. members discuss the situation in their ridings and across the country. I thought it might be helpful for the House to remember just how employment insurance works and how it actually impacts people, not just the unemployed, but all Canadians.
Before I became a member of Parliament, and I realize as one of the younger members of Parliament that is not as far back as it is for some people, I graduated from high school and worked for a year overseas as a volunteer. When I came back, to earn money for university, I began to work in a bakery. I started with the 4 a.m. to 12 noon shift. Working for a minimum wage at those hours, I was really motivated to get a quality education and one that would help me be productive.
I cut bread for two hours in the morning and usually ended my day by doing dishes for two hours. I was the baker's assistant. I worked for some people who had been there much longer than I had. They had only planned to be there for a few years and then move on. For me, it was only one year before I started doing what became ultimately a geophysics and economics degree at university.
Again, we were all working for low income wages, minimum wage and as bakers' assistants, which was not much in a small town bakery. It was not a large chain. However, we all paid unemployment insurance. Let us remember not what was deducted from our wages but what our employer paid because as a small business person he was not able to add that onto our wages, that really came from our wages too.
The people working were mostly older ladies in their forties, fifties, and even sixties. They were older to me because at that time I was 18 or 19 years old. They paid into EI but they would never be able to draw money out. We lived in an area of rural farming with low unemployment. As one book on the House of Commons described a federal riding in that area, the riding of Yorkton—Melville was the land of the working poor.
I bring up this story to remind everyone that this money that is paid into EI does not come from somewhere up in the sky, not from a magical pot, but it comes from ordinary working Canadians, people who are paying in by working in minimum wage jobs year after year, going to work every day, secure jobs but not jobs that pay great.
People who are earning $6, $7, $8, $9 or $10 an hour are not getting rich and this is a tax that they will often never receive. That should be remembered every time we talk about increasing benefits or changing the benefits because it is these people who will be paying for it. It is not rich corporations somewhere. It is ordinary working Canadians because it is their money which we must protect.
When I think of those people, I also think of other places where I have worked such as tree planting in the summer as a university student. We cry for the needs of university students to help them out after summer work but all summer long they pay into EI but cannot receive it, so university students whether they work or not, aid does not always make a difference. Those who work often do not get the benefit from EI.
We see this in rural Saskatchewan where farmers are ineligible to receive unemployment benefits. Why? Because they farm during the regular season, but in the winter when they only haul grain and they live off the farm income to try to support the farm during the rest of the year, they are ineligible. They pay in when they work for small manufacturers such as Morris in Yorkton and Bourgault in St. Brieux. They work jobs in the oil patch and they continue to pay in.
Before I begin my speech, let me remind the House that no matter how compassionate the motivations may be, ultimately when we take these benefits and expand them, we are taxing hard-working Canadians. We are taking often from the working poor. It is those people whom we should remember before we get too far into legislation to hand out benefits everywhere.
I will now get into the main body of my speech. The bill seeks to introduce a flat 360 hours of work entrants requirements to qualify for EI benefits regardless of regional unemployment rates.
With respect to having flat entrants requirements across regions, it is important to point out that variable entrants requirements ensure that as unemployment rates increase, entrants requirements are lowered and the duration of benefits increases. Adopting a flat entrants requirement would actually be of more benefit to those living in low, not high, unemployment regions.
That is why to ensure relative consistency across the regions entrants requirements are adjusted as employment varies. This helps areas where there is higher unemployment, parts of Quebec, parts of Newfoundland, etc. For example, if one lived in a region with an unemployment rate of between 13% to 14% and worked 420 hours during the qualifying period then one is entitled to 26 weeks of EI benefits.
With respect to the duration of EI benefits, evidence continues to indicate that the length of these benefits is meeting the needs of most Canadians. On average, individuals use less than two-thirds of the EI entitlement before finding employment. In fact, only a small percentage of claimants entitled to 45 weeks of benefits use them in their entirety. The duration of EI benefits is clearly sufficient for the majority of the claimants.
In this bill it is proposed to increase benefit levels. Again, I remind the House, a 55% benefit level aims to provide a balance between adequate temporary income and maintaining work incentives. It is there to be a help, not a solution for everything.
In addition, measures are in place to ensure that those in low income families with children are provided for by enabling them to receive up to 80% of their insured earnings through the family supplement.
Another feature of the bill proposes to increase the yearly maximum insurable earnings, one of those technical government terms, to $41,500 from the current $39,000 by introducing a new indexing formula. I say a new indexing formula because section 4 of the EI act already contains an indexing formula under MIE.
Under this formula, the MIE is linked to average weekly earnings and calculated annually, and since 1996 it has remained at $39,000 while average industrial wages have increased to an equivalent level.
In October the chief actuary actually reported the average wage had increased and surpassed the MIE. This means that the MIE at $39,000 is already rising. There is an index formula that is working. It is bringing it up to $40,000 for 2007 providing Canadians with access to increased insurance and higher benefit rates. It means the system already works.
There are several other aspects of the bill and one I will note which is the two week waiting period that the bill proposes to repeal. First of all, the current two week waiting period allows for efficient verification of claims. It allows for the administrative aspects of the claims to be processed and most importantly it upholds the insurance aspect of the program. While employees bear the cost of the two week period, this is in some ways offset by the fact that they pay lower premium rates, though I remind the House, in an economic sense, all costs come from the worker.
This adjustment would add a $700 million cost to the program, a cost, as I noted in my early story, that ultimately comes from the working poor.
Canada's government is committed to providing opportunities for all Canadians to participate and succeed in Canada's growing economy. It has done this through many ways, not just to unemployment but to increase the economic activity through policies that build this country, through policies that create wealth.
That is why I will vote in opposition to the bill.