House of Commons Hansard #47 of the 40th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was tax.

Topics

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

4:40 p.m.

NDP

Niki Ashton NDP Churchill, MB

Mr. Speaker, I would like to thank my colleague for the compliment. I think that it would be great if we had more opportunities to discuss motions in French. I will work on that.

This is what I think about why the government is doing these things. I would really like to know why it has made a number of these decisions about harmonization and equalization. I think that it is a real problem. It is a problem because this is a federation. We have to bear in mind the issue of equality and promises made about equal treatment of the provinces, all the while recognizing that there are differences, of course.

However, we have to consider the issue of equality when we are talking about taxes. I have often questioned the government's lack of good faith in decision making. I mentioned employment insurance, credit cards, motions in which the House supported a decision and said that it would support Canadians, face the challenges and help people. The government is supposed to support its citizens. I am not so sure that it does, and in Quebec's case specifically, I have often heard that the government wants all kinds of support from the province. When I see that kind of action and reaction, I have to keep wondering. I do not know.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

4:45 p.m.

Conservative

Rob Clarke Conservative Desnethé—Missinippi—Churchill River, SK

Mr. Speaker, during her speech, the member talked about first nations and how the Quebec harmonization would be similar to first nations in Manitoba.

I am a first nations. I am trying to figure out what first nations pay taxes on reserve. I think she needs to do a little more research.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

4:45 p.m.

NDP

Niki Ashton NDP Churchill, MB

Mr. Speaker, if the member had heard what I had said in French, I noted that first nations did not pay taxes on reserve. However, when first nations people go to urban centres like Thompson, which is my hometown, they do. My research is just fine.

We also need to realize that the realities that first nations face in terms of challenges and being unable to pay for goods and services in urban communities, because they face 90% rates of unemployment or because they are among the poorest people in Canada, is something we need to recognize. I understand many of us in the House are trying to do that.

When we talk about things like tax, we need to look at the bigger picture. We need to encourage leadership from the government to respond to the reality that first nations face, which in many ways is very different from other Canadians.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

4:45 p.m.

Liberal

Keith Martin Liberal Esquimalt—Juan de Fuca, BC

Mr. Speaker, I have two brief questions.

First, does the member not think that one of the best things the government could do would be to scrap the Indian Act and work with first nations communities to develop the structure that would allow them to develop their lands?

Second, does she not also think there are opportunities to change our RRSP structure to enable seniors to use moneys in their RRSPs for their basic needs? Right now they need to have that asset liberated. The government could really do some innovative things to allow tax-free RRSP moneys to be used by seniors. In doing so, it would be an innate stimulus package that would be very effective.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

4:45 p.m.

NDP

Niki Ashton NDP Churchill, MB

Mr. Speaker, with respect to governance and first nations, one of the principles that needs to guide the future decisions in that area is consultation. I know it is a popular word used by many but practised by few. Whether it is post-secondary education funds, treaty land entitlement, health or employment, consultations with first nations needs to be at the forefront of the way we move forward. Specifically governance is a huge area.

Over the years, the Government of Canada has invested a great deal of money in consulting, in figuring it out and it is time—

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

4:50 p.m.

Conservative

The Deputy Speaker Conservative Andrew Scheer

Resuming debate, the hon. member for Nanaimo—Alberni.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

4:50 p.m.

Conservative

James Lunney Conservative Nanaimo—Alberni, BC

Mr. Speaker, I have been following today's debate with a lot of interest and appreciate the opportunity to respond to the Bloc motion concerning taxes, specifically the harmonization of taxes, and the province of Quebec potentially following the lead of the Atlantic provinces and Ontario to enter into a harmonized sales tax framework with the Government of Canada.

In response to some of the comments made during the debate, Quebec has not fully harmonized its sales taxes. Even the Quebec government has admitted such, recently admitting that there was a major difference between the QST and the GST and that the province was ready to agree to make the necessary adjustments for full harmonization.

Quebec currently administers the Quebec sales tax and the GST in Quebec on behalf of the federal government. The federal government compensates the Quebec government for doing this. In 2007-08, approximately $130 million was paid to Quebec to administer the GST.

On this motion, the Minister of Finance has been clear. He has spoken to Quebec's new finance minister about this issue and he is open to discussions with the new minister on this matter. As outlined in an op-ed in the Montreal Gazette, the new Quebec finance minister is “--prepared to sit down and discuss the issue”.

The previous Quebec finance minister, who recently stepped down, was also very content with the stance of the federal government on this issue. An April 2009 press release states:

The Minister of Finance and Minister responsible for Infrastructure, Monique Jérôme-Forget, welcomed the openness shown by the federal government regarding fair treatment for Québec with respect to the harmonization of sales taxes.

We notice something here, though. These negotiations will not and cannot involve the Bloc, for the Bloc, as it has shown in its nearly 20 years of perpetual opposition, cannot obtain results for Quebec or for Quebeckers, just debate. In a little over four years, our Conservative Quebec caucus has managed to do more for Quebec than the Bloc MPs ever can or ever will do.

For instance, total federal support for Quebec in 2008-09 was $16.8 billion, an increase of $4.5 billion or 37% since 2005-06 under the old Liberal government, including increased support for health care, post-secondary education and for infrastructure. In 2009-10, Quebec will receive over $8.3 billion in equalization alone. That is a huge increase of over 70% since 2005-06 levels under the old defeated Liberal government. That is nearly as much as was transferred to all provinces for the program in 2003-04.

In terms of background, the harmonized sales tax framework involves Canada and the province harmonizing its sales tax with the GST under a federal-provincial comprehensive integrated tax coordination agreement. Such an agreement would include the following key elements: the provincial portion of the harmonized sales tax being imposed under federal legislation; a tax base essentially mirroring the GST base with the provincial portion of the tax not applying to the GST; provincial revenues paid according to the HST revenue allocation framework; and finally, federal administration by the Canada Revenue Agency and the Canada Border Services Agency of the federal and provincial components of the harmonized tax.

The HST framework is simpler and less costly as it involves only one tax rate, one substantially harmonized tax base, with no need to track and report tax on a by-province basis, and one level of tax administration.

I would like to take this opportunity to congratulate the Liberal leader and the Liberal Party for finally unveiling the Liberal's very own economic action plan. While it was months after the actual budget and it only contains one idea, it is great to finally see the Liberals bringing a plan forward, and what a plan. It is a plan that really speaks to what Canadians expect of Liberals. It is a plan that speaks to the type of Liberal thinking Canadians have become all too familiar with. It is a plan that we know will be met with the reaction it so richly deserves when fully exposed to the public.

In the words of the Liberal leader, under the plan, and this is all of it, “Federal taxes must go up.... We will have to raise taxes”. I note that the early reception to the Liberal plan has not been as favourable as the Liberals would have liked. Almost everyone has suggested that this is perhaps the last thing the Canadian economy needs right now. Almost everyone agrees that the Liberal plan will only serve to stunt economic recovery or to bleed more jobs.

Unfortunately for the Liberal leader, some commentators were particularly displeased. A Windsor Star editorial noted that:

Perhaps the last thing that Canadians want to hear during a recession is a politician talking about tax increases. But [the] federal Liberal Leader...has said he won't rule out a tax hike....

Those comments should be setting off alarm bells with taxpayers.

The Canadian Taxpayers Federation said that “Canadians....find the idea of raising taxes now or after the recession subsides 'scary'”.

Even TD economist, Don Drummond, joined in on the act pointing out that:

The federal government can get back to budget balance if they apply a dose of spending restraint once the economy begins a sustained recovery. ...tax increases will not be required. Nor would they be appropriate.

Nevertheless, we understand that the Liberal leader may be providing further details about his economic action plan shortly. We understand that items under consideration include a 1% or 2% GST tax hike to ensure fixed income seniors, working families and others pay more to the government when they can afford it the least.

Furthermore, Canadians may once again feel the sting of that old favourite, the regressive carbon tax.

No wonder many Canadians are demanding more fulsome answers on what the Liberal plan actually involves. Which taxes will the Liberals raise? Will they implement the carbon tax? Will they hike the GST? Will they do both? By how much will the Liberals raise taxes and when will the taxes rise? Canadians want to know.

A recent editorial in Waterloo's The Record states:

Canadians deserve to know in clear, unambiguous language the Liberal leader's stand on a tax hike.

Again, the Liberal leader was unequivocal and clear when he unveiled his own economic action plan last week and said, “Federal taxes must go up.... We will have to raise taxes” . It sounds to me like that is plural taxes, which clearly suggests that there is more than one tax to be raised under the Liberals' economic action plan.

We already know that the GST will likely be raised under the Liberal plan from an earlier statement made by the Liberal leader when he said, “Let me be clear here...you can't exclude tax increases.... So I'm not going to take a GST hike off the table”.

Having uncovered that, we demand, on behalf of Canadians, that the Liberals reveal the details of their hidden tax-and-spend agenda.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

4:55 p.m.

Cambridge Ontario

Conservative

Gary Goodyear ConservativeMinister of State (Science and Technology)

Mr. Speaker, in his great speech, the member went into the taxation issue. I do know that in the mid-1990s the Liberals cut $442 million from science and technology. I have not done the math for 2009 dollars, but in 2007 dollars that alone was almost $1 billion cut from science and technology. At the same time, they also raised taxes on Canadians.

Now we are hearing this promise by the Liberals to raise taxes on Canadians. I am concerned that they will also gut science and technology. Hopefully, that will never happen because Canadians will not vote for raising taxes.

Would the member be kind enough to share with us some of his thoughts on how raising taxes would affect Canadians and, in particular, Canadians in Quebec?

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

5 p.m.

Conservative

James Lunney Conservative Nanaimo—Alberni, BC

Mr. Speaker, I think the Minister of State for Science and Technology correctly points out that Canadians should be alarmed by the prospect of tax increases. We remember that when the Liberals actually formed the government way back in 1993 they had claimed that they would slay a huge deficit. However, that was a period when we came through terrible deficit financing. It was the Conservative government that took initiatives to slay that deficit.

We remember when the Liberals promised to get rid of the GST. That was their promise in the election but, gosh, they forgot about that. They kept the tax and reaped the $35 billion in tax benefits that came into the government that helped reduce the deficit of the day.

It seems to me that the Liberals also campaigned against free trade and wanted to renegotiate that, which was the other initiative brought in by Brian Mulroney that actually contributed to slaying that deficit.

The Liberals' contribution to slaying that huge deficit in that day was to take $25 billion out of the health care funding which created a crisis for the decade to follow in terms of health care funding for the provinces.

I think the minister's concerns about science and technology funding are certainly well placed to remind us that the Liberals cut the science and technology funding in the same era. We think that by making our investments in the kind of infrastructure at a time when the country needs investment to create jobs and get communities going right across the country and lowering taxes at the same time with personal exemption increases for 2010, lowering taxes for all--

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

5 p.m.

Conservative

The Acting Speaker Conservative Barry Devolin

Questions and comments, the hon. member for Brome—Missisquoi.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

5 p.m.

Bloc

Christian Ouellet Bloc Brome—Missisquoi, QC

Mr. Speaker, I would like to ask my Conservative colleague whether he thinks it is far better to lower taxes, add the full cost of the recovery plan to the debt and have the next generation pay for it, instead of leaving taxes as they were and having those who can afford it pay for the recovery plan. In other words, is it better to lower taxes and raise our debt or keep taxes as they were and not have any debt?

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

5 p.m.

Conservative

James Lunney Conservative Nanaimo—Alberni, BC

Mr. Speaker, part of our stimulus package is reducing the taxes for all Canadians. When Canadians are not sending money to government, they have more money in their pockets and have more money to invest. Therefore, part of our stimulus package includes lowering taxes.

We are also ensuring that the stimulus investments we make, at a time when the country is hurting and when jobs are in transition, are in the kinds of infrastructure that will create jobs locally, infrastructure such as roads, bridges, buildings and community centres that will benefit communities for many years to come and will create the employment that people need right now.

Of course, the other part of the stimulus package is helping those people who are displaced and ensuring they get the EI benefits they need and the retraining they need to be successful in the new economy that will come out after the recession.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

5 p.m.

Liberal

Keith Martin Liberal Esquimalt—Juan de Fuca, BC

Mr. Speaker, I am truly amazed that the member and the Minister of State for Science and Technology were able to carry on that discussion with a straight face because it was such a blatant act of historical revisionism.

The fact is that when the Liberals came into power in 1993, they were, in many ways faced with a similar situation that Mr. Obama is facing in the United States. Mr. Obama was faced with a Republican Party that left Americans with a huge, massive, monstrous debt. When the Liberals came to power in 1993, what did they have? They had a monstrous debt.

If we go back in history and look at the facts, because we like to follow the facts, it shows that Tory times are tough times. What does that mean? It means debt and it means deficit.

When we were defeated in 2006, we left the Conservatives with a $12 billion surplus. What did they do with that surplus? They burnt through it. They spend and reduce taxes, the same kind of voodoo economics that Mr. Bush did south of the border resulting in a catastrophic economic problem in that country.

I will give the member a chance to change his tune and say that the right thing to do is to follow the Liberal economic plan that was done in the 1990s and follow our economic plan that will get Canadians back to work and our economy will be strengthened, rather than the kind of voodoo economics that the Conservatives are pursuing.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

5:05 p.m.

Conservative

James Lunney Conservative Nanaimo—Alberni, BC

Mr. Speaker, I appreciate that the member for Esquimalt—Juan de Fuca, when he was first elected in 1993 as a Reform MP, would have remembered very clearly at the time how he would have been standing with the rest of our colleagues of that era reminding the Liberals of their promise to get rid of the GST, the entire 7% GST that they campaigned on getting rid of. Of course, they simply forgot to do that.

So talking about political revisionism, it is now very interesting to hear him adhering to the Liberal talking points and Liberal revisionism, because of course they created an ideology that actually they slew the deficit, which never was true. It was actually the policies implemented by Brian Mulroney and free trade, which brought in billions of dollars in cross-border trade. It was a huge benefit to Canada, in the view of even the unions, the labour leaders who were alarmed about it at the time, such as Ken Georgetti, who has admitted that free trade was a great asset to Canada. It brought in tremendous revenues, along with the GST with all its revenues, and that is what slew the deficit. But I thank the hon. member for the question.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

5:05 p.m.

Liberal

John Cannis Liberal Scarborough Centre, ON

Mr. Speaker, I want to put on the record:

Through hard work, foresight and good fortune, we have come together to make our vast country one of the most successful the world has ever seen.

The Government is proud of what Canadians have accomplished so far....

These were the words of today's Prime Minister, the member's leader, right after he took over from the Liberals. Does the member agree or disagree with his leader, the Prime Minister?

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

5:05 p.m.

Conservative

James Lunney Conservative Nanaimo—Alberni, BC

Mr. Speaker, I appreciate the way the member framed the question. Of course I would agree with the Prime Minister. We are very proud of what Canada has accomplished, but it is wrong to construe that as the period of Liberal rule in the country. Of course we are very proud of Canada, the best country in the world. We are very proud to be Canadians.

I know we are the envy of the world. That is why so many people want to live in our country. We are blessed with freedom and prosperity, and even though the entire world has spun into a time of economic uncertainty, transition and economic restructuring, Canada has been better positioned. That is why we were later coming into recession than any of the other developed nations. That is why we are very hopeful as signs are encouraging even now that we may be starting to pull out of it. Canada has been resilient. Canada is a tremendous country, and we are very proud to live here and to represent the people of Canada. We are proud to be Canadians.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

5:05 p.m.

Bloc

Thierry St-Cyr Bloc Jeanne-Le Ber, QC

Mr. Speaker, I must say that I am a bit surprised to see how much the Liberals have digressed from the issue since this debate began. Of course, the Conservatives have as well, but we expected that, because they are going to vote against the Bloc Québécois motion. What is surprising is that the Liberals are going to support the motion, yet they are talking about things that have nothing to do with the issue before us today.

In the case of the member for Scarborough Centre, it is even more pathetic. He raised a point of order a bit earlier today because members were going off topic. Yet he just asked a question that has nothing to do with the motion before us.

I am going to talk about this motion, because it is crucial and very important to Quebec. I would like to draw the attention of the House to a motion adopted unanimously by the National Assembly of Quebec—our National Assembly of Quebec—on March 31, 2009, not so very long ago. I will not read the entire motion, because unfortunately, I do not have time. I will just read the last paragraph.

Be it resolved that the National Assembly ask the Federal Government to treat Québec justly and equitably, by granting compensation that is comparable to that offered to Ontario for the harmonization of its sales tax with the GST, which would represent an amount of 2.6 billion dollars for Québec.

I would like to remind this House that this unanimous resolution by the National Assembly was not proposed, defended and adopted by the Bloc Québécois alone. The Minister of Public Works and Government Services says he will not negotiate or talk with the Bloc Québécois. The Bloc Québécois represents unanimous positions in Quebec.

There were two sovereignist parties that supported this resolution. There was Ms. Pauline Marois and the members of the Parti Québecois and also the member of Québec Solidaire, who know very well that sovereignty is the only solution to the ongoing constitutional wrangling. So they obviously supported it. But it was not only sovereignists—those the evil “separatists”, with for or five s's at the end, that we sometimes hear about in this House—who supported it. It is not just the sovereignists who are calling for this. There are two federalist parties—well, we are not sure what one of them stands for. There is the premier of Quebec, Jean Charest, who can definitely not be accused of being a sovereignist. He was once a member of a Conservative government. He is a good friend of Paul Desmarais and company and a strong federalist. He supported this resolution. Not only did he vote in favour of it but he supported the initiative of his then finance minister, also a federalist. Therefore, it is not a Bloc Québécois fantasy. There is clearly a consensus in Quebec.

What does this consensus say? First, we want to continue administering our own sales tax. If it must be harmonized, administration of this tax by the federal government is clearly out of the question. The opposite should prevail, as is presently the case. The federal government should allow the Government of Quebec to administer the tax, in return for appropriate compensation. That is the most logical thing to do and that is what is being done already.

Second, in the interest of equity and justice, compensation must be provided on the same basis as it has been to the other provinces. In addition, a quarter of this compensation from the federal government is paid by Quebec taxpayers. Thus, we are not to be treated any differently.

The motion before us speaks to all this. I found it unfortunate that the Conservative Party attempted, unsuccessfully, to propose an amendment to the motion that would delete the second part. This second part calls on the government to “provide $2.6 billion in compensation to Quebec for this harmonization, and that Quebec continue to administer these harmonized taxes.” This amendment would have weakened the motion, the consensus of the National Assembly and Quebec. Who moved this motion? Was it a member from Ontario, a province that will be receiving $4.6 billion in compensation, which Quebec has not received?

Was it a member from the Maritimes? Was it a member from the west? No, it was a member from Quebec who rose in this House to undermine Quebec.

It makes me sick to my stomach, as a Quebecker, to see such a thing in this House. The member could have simply toed the party line and rose in this House when it was time to vote. But, no; instead, he acted as their puppet and rose in this House to undermine Quebec.

He did the same thing that the Liberals did with the budget. Some members from Newfoundland, if I am not mistaken, or from somewhere in the Atlantic region, were permitted not to support it. They were told they could vote against the budget because their ridings were being fleeced. However, even though everyone knew that the budget was bad for Quebec, the members from Quebec had to be good little soldiers and fall in line behind the Liberal Party leader. They had to betray Quebec.

That is why I am very happy to be a member of the Bloc Québécois. At least when I come here to work and I rise in this House, I never have to betray my own people. My only loyalty is always to Quebec, and I can always be proud to be here, to stand up and have the honour to defend the interests of Quebeckers.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

5:10 p.m.

Conservative

The Acting Speaker Conservative Barry Devolin

It being 5:15 p.m., pursuant to the order made on Monday, April 27, 2009, all questions necessary to dispose of the opposition motion are deemed put and a recorded division deemed requested and deferred until Wednesday, April 29, 2009, at 3:00 p.m.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

5:15 p.m.

Conservative

Rob Clarke Conservative Desnethé—Missinippi—Churchill River, SK

Mr. Speaker, I am sure that if you seek it you will find agreement to see the clock at 5:30 p.m.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

5:15 p.m.

Conservative

The Acting Speaker Conservative Barry Devolin

Is it agreed?

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

5:15 p.m.

Some hon. members

Agreed.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

5:15 p.m.

Conservative

The Acting Speaker Conservative Barry Devolin

Accordingly the House will now proceed to the consideration of private members' business as listed on today's order paper.

Employment Insurance ActPrivate Members' Business

5:15 p.m.

NDP

Malcolm Allen NDP Welland, ON

moved that Bill C-279, An Act to amend the Employment Insurance Act (amounts not included in earnings), be read the second time and referred to a committee.

Mr. Speaker, it gives me great pleasure to debate my private member's bill today on the issue of severance and vacation pay for those who may receive it for pension income.

The EI act looks at moneys in certain ways. It sometimes takes it into income and sometimes it does not. Sometimes it treats it in a different manner. In the case of severance pay, which is due employees upon their termination of employment, it treats that income differently, as if they were actually collecting employment insurance and out in the workforce.

At this moment in time, the gross up provision, which is an anomaly in the act, says that individuals can earn 40% of a claim up to $179 while on a claim. The act takes severance and deducts that dollar for dollar from their claim and leaves those individuals with less because they have severance rather than if they had actually taken on part-time work and deducted that in a different manner. This is really an inequitable system.

The nub of all this is that severance pay is really about pay for time that has gone before. In other words, in some situations individuals would get paid a week for every year that they may have been employed.

There are two parts of the act that talk about earnings as paid and payable. I would suggest that we ought to look at severance pay the way we did some 20 years ago when it was not used as a calculation for unemployment insurance. It was deemed to have been paid because it really was for the time that individuals spent prior to their termination because that is how it was generated in the first place. Severance pay is not paid on a go forward basis in the sense that individuals would be paid for what they might have worked. They are actually being paid for the time they did work.

At some point the act was changed to have those moneys deducted. Severance was seen to be as if someone was working but clearly they were not. That is why they were given severance pay. The reason it is called severance pay is because the individual was severed from employment.

What happened? What transpired that changed the system? We have to go back some 20 years and look at the changes that started to come into effect during the latter part of the eighties and well into the nineties under the leadership of two previous governments. The Conservatives enacted some changes in the 1980s. During the nineties, the Liberal government made a wholesale change of the system, reducing the number of people who qualified from a high of nearly 86% back in 1990 to the lows we see today, which is less than one in two, just slightly under 50%.

Why did that occur? What situation was so dramatic that the unemployment system needed to be changed wholesale?

The first question we need to ask is whether or not the system had enough money. The obvious answer to that is, no, because we know the surplus in the EI system during the nineties and into the early 2000s was approximately $54 billion. That money rightfully belonged to workers who had paid into the system, who were rightfully entitled to receive benefits from that system, and who saw the system actually become denigrated to the point where they were no longer able to collect from that system.

The obvious question to ask is, what happened to the $54 billion? Some of us are still asking that question today. It seems as if that money has vanished. In fact, some say it has been absconded. Some say it went to the surpluses of the Liberal government that preceded this Conservative government. Liberals wracked up those great surpluses talking about economic management. What the Liberal government actually did was take it from those who paid into the system and then denied them entry into the system. One has to wonder, what if we had left the $54 billion in there, would we need to drawback the severance pay of those who, at this point in their lives, need it?

This reminds me of the story of a young woman in Oshawa who received a severance package when she was laid off. She no longer lived with her parents, who had been laid off before her. Her father asked if she could assist them because they were going to lose their house because they were going to default on their mortgage. He was still waiting for employment insurance. His severance pay was basically gone because he had to use it up before he qualified for EI. She agreed to turn over her severance pay to help them keep their house. That is what families in this country do for one another.

However, under this present system, she has signed herself into poverty. The fact that she gave the severance package to her parents does not negate the fact that she will have to wait an equal amount of time of that severance pay. It would be exhausted out before she is eligible to qualify for EI. And if she qualifies subsequent to that, she would then collect.

For ease of example, if she is entitled to eight weeks worth of severance and she gives it to her parents, she will have no income for the next eight weeks. Employment insurance will not pay her one thin dime because of that. She will wait out those eight weeks and the two week waiting period for a total of 10 weeks. She will fill out a report for the next two weeks, perhaps on the third week, which will now take her to week 15. If she is extremely lucky and the system works the way it is supposed to, she will receive her first cheque on week 16. In the meantime, she has no source of income because the severance pay that has been allocated for her has all but been exhausted because of her willingness to help her parents.

When we look at that, it tells us there is something wrong with the system. The system was never designed to take people's severance pay. Severance pay was never designed to be seen as earnings. It is for income tax purposes, but it was never designed to be a qualifier for EI. That is the way the act was initially.

This bill talks about the future, but it goes back to the past at the same time to recapture the days when the system actually worked for the unemployed. That is not the way it works now.

When it comes to the issue of why it should be changed, it begs the question of why it changed. We are still waiting for that answer. No one from either government, Liberal or Conservative, has been able to explain to us that it was changed out of necessity. One might posit the suggestion that it was changed to reduce the EI premium. I think if we went to workers and asked them if they really needed $2 or $3 off their EI premium every week, which is basically a cup of coffee and a doughnut, most would probably say, “No, thank you”. They would ask us to keep the premium the way it was and to keep that money in the system so that if they perchance get laid off, the system will be there to protect them.

Twenty years ago, individuals could collect more money on EI than they can today. Think about that. Twenty years ago, we could collect more dollar for dollar on EI, of course at that time we called it unemployment insurance, than we can today under the present employment insurance system because it used to be 66% of earnings. It as driven down to 60%. It has now been driven down to 55%. Unless we get changes, we are going to see more folks in poverty than we have ever seen in this country's history.

Because of the system that we pay into, those of us who work, those Canadians out there who toil every day, who are paying their premium on a regular basis in good faith expecting to qualify, are finding themselves thrown onto this heap. It becomes a maze for them and it becomes this whole system of inequity. For them, that is an injustice because it is their system. It does not belong to us. It does not belong to the House. It belongs to workers. Those are the folks who contributed. Those are the folks who built up the fund. Those are the folks who built up the surplus.

Those are the folks who expected to draw on a surplus in a time of need. Now, when they find an absolute time of need, what do they find? The surplus is not there. We are not sure where it went. There is some conjecture about where it went. They are not sure where it went. Their hard-earned money disappeared. They ask if they can get into the system. They want to be treated the same as others across this land and, indeed, they are not. We have workers in certain parts of this country who have to have more hours than others.

There is an easy fix to all of this. New Democrats proposed and received the majority approval of the House to make changes. We asked the government to do that. At this economic moment in time, Canadians who work hard every day, pay into the system, and play by the rules are telling the government to listen to what they are saying. They need change. They need the system to be modified the way it once was, when it protected them as workers when they were unemployed. That is all they are asking for. They are not asking for their taxes to be raised. They are not asking for a government handout. They are just asking for some of the money they put in back.

I do not think that is an unfair request. In fact, I would suggest that is a more than reasonable request because ultimately it was theirs in the first place. We collected for them as a government and as a Parliament and we administered it for them. They gave us their money in trust, not for us to do willy-nilly whatever the government wanted depending on the flavour of the day. Workers said to us, “Here is our hard-earned money, it is our insurance premium. We expect to collect our insurance when we need it”. What have they found now that they really need it? It is not there and now we have made all these rules to make sure they are excluded so we can push them aside, so we can tell them they just do not qualify in the system, sorry. Yes, they paid their premium, but we are sorry about the fact that they do not qualify.

Instead we can reverse the system. We could go back to what it once was. We could go back to a day when 86% of those who paid into the system qualified within the system. We could go back to a day where 66% of earnings were qualified as insurable earnings and were paid. As members of Parliament, who live on a salary which is very commendable and very lucrative, I defy any of us to wake up tomorrow and say we are going to work on 55 cent dollars. In our case, if we were unemployed tomorrow, we would be collecting $435 a week and I would have a hard time thinking that most of us in the House would actually manage to live on that. But again, that is the high end. That is not the average. The average is close to $340 a week. Living on $340 a week before deductions, because people still pay income tax on that, and raise a family is impossible.

We know all of those things and the government knows all of those things. It talks about statistics of who qualifies and who does not. It tells us every day that it understands the needs out there. Ministers stand in their place every day and tell us they understand. If the government truly understands, it should change the system. We are not asking to reinvent it. It does not have to because we basically told it how to do it. New Democrats, with our friends in the opposition benches who voted for it, put a plan in front of the government so it did not have to go to the department to get it rejigged and all those marvellous things. It simply has to enact it. It could go back to 1993 and bring that act forward and implement it again. I am sure the Parliamentary Library has a copy. It would be dead easy. It will not be hard or difficult.

Canadians who are unemployed will be forever grateful, not just to the government but to all of us in the House because it is about all of our constituents. There is no constituency in this land that does not have someone unemployed. Not one of us has full employment in our area, so we are dealing on behalf of all our constituents.

It is an absolute crime if we are not willing to raise the hand that we are fully capable of doing in the House, raising that hand to our fellow Canadians who find themselves in a time of need through no fault of their own. Unemployment is not a choice. The rules are clear, if people quit a job they do not qualify. We need the will of the House to have the government implement what has been spoken from this side.

As we look at the situation, it never was lucrative to be on employment insurance. For those who think it was, they are absolutely misleading folks. If anyone had been on employment insurance, they would know it is not lucrative.

For the government, now is the opportunity to make changes. The NDP motion has shown how to mend a system that is truly broken. I ask the government to do the right thing and accept the NDP changes and correct an EI system that the previous Liberal government destroyed. Now is the government's opportunity to say that it knew better than the Liberals when they were in government and it has fixed it for workers. Workers will forever be grateful. Conservatives should not lose that opportunity.

Employment Insurance ActPrivate Members' Business

5:30 p.m.

Souris—Moose Mountain Saskatchewan

Conservative

Ed Komarnicki ConservativeParliamentary Secretary to the Minister of Human Resources and Skills Development and to the Minister of Labour

Mr. Speaker, I have listened to what the member has said. Some of what he has said makes good sense.

However, there was a provision for improvements to the EI system, which we put before the House for a vote. It included a five week extension that would help approximately 400,000 people, a work-sharing agreement that would help approximately 80,000 people and skills upgrading and training that would assist about 190,000 people. That was about a $4.5 billion stimulus injection through improvements to the system and the member's party voted against each and every one of those proposals.

How can the member justify that at this time in the economy? Why would he not have supported those absolutely positive initiatives to help a good number of people?

Employment Insurance ActPrivate Members' Business

5:30 p.m.

NDP

Malcolm Allen NDP Welland, ON

Mr. Speaker, I hate to sound like a broken record, but I have said this in the House about a dozen times now. Five weeks of nothing is still nothing. If someone does not qualify, five weeks makes no difference.

The Association of Universities and Colleges has said quite clearly that if the government does not provide somewhere close to about $1.5 billion to build spaces in community colleges, those apprenticeship programs will not mean a tinker because no one will have a seat to sit in. These are at the top end and there are no places for one to sit.

Yes, they need the added five weeks, and I congratulate the government for adding those additional weeks for those who qualify. However, what will the government do about the other 54% that do not? Just leave them out there with nothing? That is a typical attitude. Fifty-four per cent does not mean anything to the government. It is simply going to discard those people.

We say, no. It used to be 86%. The government has the opportunity to bring that other 30% back into the system.