Mr. Speaker, I want to begin by making it very clear that our Conservative government is determined to make sure unemployed Canadians get the help they need during these tough economic times.
As members know, the global economic crisis has not spared Canada. As far back as 2007, our government could see storm clouds on the horizon, and it began positioning Canada to cushion itself against the economic storm.
We reduced taxes on Canadians by over $200 billion to reduce the burden that families and small businesses bear.
This past week we learned that under our Conservative government tax freedom day for Canadians now comes 19 days earlier than it did under previous Liberal governments.
We have also provided the Bank of Canada with additional powers to respond to recessionary times and introduced even greater accountability and liquidity into our banking system. The result is that the World Economic Forum has declared Canada's banking system to be the safest in the world. Canada is expected to be among the first countries to emerge from the world economic crisis.
More recently, as the world recession deepened, we have made unprecedented commitments and investments to help laid off workers through these tough economic times and give them the training they require to return to the labour market.
That is why I cannot support the bill before us.
As members know, the EI system was designed to replace a loss of employment income. When people lose their jobs and their income dries up, they rightfully expect to receive some benefits under Canada's employment insurance program.
However, and that is a big however, there are situations where individuals lose their job but receive severance payments from their employer to carry them for a period of time after termination of employment. In other words, there is no immediate loss of employment income. In those cases, EI benefits should not kick in until the period covered by those severance payments is exhausted.
Today I received an email from the sponsor of the bill, and the email suggested that severance is like savings. I am here to tell the House that severance is not savings in most cases. Severance replaces lost income for a period of time that is required by the courts and by legislation for the employer to give notice to a terminated employee.
Let me talk about my personal experience.
In my previous life as a lawyer, I counselled clients in the area of severance. From time to time, I would represent employers. On other occasions, I would represent employees. We would negotiate severance settlements between the employee and the employer.
Each of our provinces has legislation that fixes the minimum amount of notice that an employer has to give to an employee when the employee is terminated without cause. Then there is the common law, which provides enhanced notice requirements in our court system.
When an employee is terminated, the employer does have to give notice of that termination. If the employer wants to terminate the employee right away, the employer has to provide compensation in lieu of that notice requirement. That may be two weeks, it may be a month, it may be a year. It can in some cases be up to, or even more than, two years of notice or compensation in lieu of that notice.
What is that compensation commonly called severance? That is simply compensation in lieu of the earnings that the person would have earned during the notice period that the employer is required to give. These are earnings on an ongoing basis for a period of time.
The bill before us suggests that even though an employee might be terminated and receives severance payments, in other words, earnings for a period of time, that on top of those earnings the employee should be entitled to receive unemployment benefits under our employment insurance program.
Employment insurance was never intended to be a windfall for employees. It was never intended to be double dipping, which would be at the cost of taxpayers. It was intended to be an insurance against loss of earnings.
The Employment Insurance Act talks about termination of earnings as triggering employment insurance benefits. That is why the current system does not pay EI benefits on top of, and simultaneously with, severance payments.
However, under the EI Act, workers who receive pension, vacation pay and severance payments can have their benefit period extended by each week for which separation or severance moneys are paid. That can run up to a maximum of 104 weeks. In other words, if people are entitled to receive employment benefits because they have worked long enough and paid in enough, once they exhaust their severance payments they can still collect EI.
Just to make it very clear, when a worker loses his or her job and does not receive a severance package, only the normal two-week waiting period would apply. Such individuals understandably do not have to wait as long to receive benefits.
The bill before us is deeply flawed. Not only would it allow some individuals to benefit unfairly from our employment insurance program, there are also a number of ambiguities in the bill which are created by redefining the term “earnings”. For example, it is not all clear how the redefinition will affect the term “insurable earnings” under the act.
Furthermore, the bill completely fails to take into account how much this bill would increase the cost to taxpayers, employers and employees. What is clear is that the impact would be substantial. To begin with, by no longer requiring laid-off workers to take into account and use the resources from a severance payment, which is again in lieu of future earnings, the bill would add another $130 million in EI costs per year, costs which have to be raised through EI premiums. Who pays those increased EI premiums, one might ask? It is the employers and the hard-working employees who pay for that.
During these very challenging economic times, the very last thing we need is imposing new financial burdens on employers and employees alike. But then, we recently heard the news that the Liberal leader has admitted that he intends to raise taxes on Canadians, so it is not surprising to hear his Liberals are now supporting increased EI premiums. Like so many other schemes concocted by members of the NDP and supported by their Liberal and Bloc coalition partners, they neglect to consider the financial burden they are imposing on other Canadians.
There is another crucial point and that is the fact that this government has taken significant steps to provide additional income support to unemployed workers facing transitions during this recession. These new moneys are over and above the benefits I already described. For example, let me remind my colleagues in the House our recent economic action plan provided for an unprecedented improvement to our EI system. For the next two years we have extended EI benefits by an extra five weeks. We have also increased the maximum duration of benefits available under the EI program.
We are also supporting training for long-tenured workers. These are people who worked for many years and have not made significant use of the EI program. We want to help these individuals acquire new skills so they can get new well paying jobs. We are providing income support for the duration of their training and this change will benefit a further 40,000 workers across Canada.
We are also going to allow earlier access to regular EI benefits for eligible workers purchasing their own training if they invest all or part of their severance package resulting from a layoff. Both of these measures are to be implemented in partnership with the provinces and territories.
That is not all. Our government is providing the provinces and territories with an extra $1 billion over two years through existing labour market development agreements to provide more skills training to laid-off workers. We are also extending the work sharing agreements to 52 weeks for the next two years. The first people to call me after we tabled our economic action plan were from a company called Columbia Kitchen Cabinets from Abbotsford, B.C. Officials phoned me to thank me for recognizing the challenges they face and that they would make significant use of the expanded work sharing program. They were already using the program at that time. This just provided them with an opportunity to provide their workers with more options to continue working.
We are getting the job done. The bill does not do what it is supposed to do. It is unfair to workers and unfair to employers.