Mr. Speaker, before I begin, I would like to advise you that I will be splitting my time with the member for Mississauga South.
I am pleased to speak today to the motion that has been introduced by the NDP in regard to the employment insurance working while on claim pilot project. It would be nice to get some facts on the record instead of just fearmongering.
While the opposition parties continue to pursue their misguided economic policies, such as a 45-day work year or a $20 billion carbon tax on everything, our government remains firmly focused on jobs, growth and economic prosperity. That is why we are aiming to help Canadians be better off working than not, with our changes to the employment insurance program. In economic action plan 2012, we introduced a number of improvements to the EI system, which I must remind folks is a temporary income support for Canadians who have lost their jobs through no fault of their own.
The measures we announced ensure that the employment insurance system is better adapted to the needs of Canadians, and is more flexible and fair. These measures also ensure that the system helps Canadians remain active in the labour market and find a job more rapidly.
A new national approach to calculating EI rates will come into effect in April of next year to replace the old “best 14 weeks” pilot project, as it was known. Building on and learning from that pilot project, as we always try to do, the new approach will finally mean that regions with similar employment levels will be treated similarly. That only makes sense.
We are also stepping up our efforts to better connect Canadians with jobs that are available within their range of skills in their local area and to clarify their responsibilities while on EI. In addition, we announced a new working while on claim pilot project, which came into effect on August 5. As I have said all along, this pilot project aims to increase how much Canadians can work and earn while collecting EI. After all, we truly are facing significant skills and labour shortages in every part of this country, even in areas with high unemployment, and we need all of our talent at work.
We need to encourage Canadians to work, not discourage them. We know that the previous pilot project did discourage people from accepting more work because of the low-level cap that was placed on how much they could earn and still protect their EI benefits. Therefore we made efforts to change that, and it has been proven in study after study that people can find a permanent job much more rapidly if they continue to be active in the labour market. That part-time work, I should point out, often leads directly to full-time work for them. Our intention with the working while on claim pilot project is to promote workforce attachment by encouraging people to accept available work while they are on EI. That only makes sense.
I remind hon. colleagues that this pilot project provides the opportunity to test measures designed to encourage unemployed Canadians to work more while on claim. I will explain.
Under the system's previous provisions, employment insurance claimants who found a part-time job or occasional employment saw their benefits reduced by $1 for every dollar earned, once they earned the equivalent of 40% of their benefits or $75. The maximum applied. Everything they earned after that had to be given back to the government.
From a financial standpoint, it was not advantageous to them to accept work that paid more than this threshold.
Essentially, this meant that after one day of work while on claim, working additional hours or days did not pay at all. In fact, in many cases, the worker incurred expenses such as travel for putting in that extra work effort. No wonder then that workers were reluctant to take part-time work when this often led them to being no better off than they were before.
The opposition loves to use examples regarding this project, so let me use one.
Take Tracy, a salesperson who gets laid off and receives $264 in EI benefits per week, which represents 55% of her previous salary. Tracy finds three shifts of work that pay her $12 an hour, around minimum wage, for a total of $288 per week. Under the old rules, Tracy could earn the equivalent of 40% of her weekly EI benefits before having her pay clawed back dollar for dollar. This meant that despite having found a job that could pay $288 a week, Tracy had no incentive to earn more than $106 a week, or 40% of her weekly benefit. Why? Because her EI would be deducted dollar for dollar after that amount. Therefore, her combined income from temporary employment and EI would come to a total of $370. Under the new rules, Tracy gets to keep 50% of every dollar she earns. Using the same example, her combined weekly income would be $408. That is $38 more than under the previous regime.
If they have the choice, Canadians would rather work. As I have said before, statistics show that those who stay connected with the labour market stand a much better chance of finding full-time permanent work than those who do not.
The opposition is against our efforts to help connect Canadians with jobs available in their regions. We know that the best way to fight poverty is to ensure people have jobs. This is why we are proud of the 770,000 net new jobs that have been created since the end of the recession.
Our overall strategy with this pilot, and with all of the measures that we have announced in budget 2012, is to strengthen the EI program as well as the economy. We will always work to ensure that our programs fulfill our goals. The working while on claim pilot makes it possible for Canadians to get more money working than they would if they were to collect EI alone.
We will continue to work to ensure that it is always better for Canadians to work than not.
What we will not do though is allow the NDP to impose a job-killing carbon tax that would ensure that Canadians would have to pay more for their heat, their gas and their food. That will not make them and their families better off.
This pilot though is a perfect example of how we are making things better, better for recipients, better for their families and better for their communities.
This measure encourages Canadians to remain active in the labour market and eliminates factors that deter people from finding a job.
That is why our government will not be supporting this flawed and misleading motion.