Monte Solberg

[Employment Insurance, June 1st, 1998]

Mr. Speaker, Canadians have been hearing about the EI surplus for some time now. I wonder if the Minister of Human Resources Development can tell us where this $15 billion in cash is sitting.

Is it in a bank account? Is it invested somewhere? Maybe it is under someone's mattress. Exactly where is our $15 billion EI surplus?

[Supply, June 1st, 1998]

Madam Speaker, I thank my friend across the way for the question.

Of course there is a line somewhere in the budget that says employment insurance account, but it is empty. My friend knows it. It is the actual account itself, the money in it, that is the myth. There is no money there.

My friend suggested there are various types of programs. I think he called them partnerships and strategies. I think sometimes the strategies are tragedies because we know very well that after 30 years of all types of strategies and partnerships and all kinds of programs unemployment is chronic in many parts of the country. We know in Atlantic Canada we have unemployment in some cases of 20%.

I simply ask in return how well have these worked, all these strategies and partnerships that have left us with 20% unemployment.

[Supply, June 1st, 1998]

Madam Speaker, I point out to the member that the Reform Party has done fairly well. It did displace eight Liberals in the west in the last election. The old Reform Party functioned fairly effectively as well as the new Reform Party does, as the member puts it.

It is safe to say Reformers believe very strongly that we need to reduce EI premiums. That was part of our election platform in the 1997 election. We also point out the government should hold the line on spending instead of engaging in $11 billion in new spending initiatives and cooking the books to try to run up a big surplus. If it would hold the line it would find it would have ample money to both reduce EI premiums and reduce personal income taxes and to start the process of paying down Canada's behemoth debt of $583 billion. Being a little disciplined opens up a world of options for the government.

[Supply, June 1st, 1998]

Perhaps, who knows? Maybe it went to Italy. We do not know.

All we know is that it went into the consolidated revenue fund. We also know that the government is proposing to spend another $11 billion in the next few years. So we have a situation where the money that has allegedly come into the EI fund does not exist. We also know the government is going to spend $11 billion in the next few years.

We can only conclude that money is going to all kinds of things that workers and employers did not ask for and do not want. The government says “We have a better idea. We will spend it for you because we think we know better”. It speaks to the government's unspoken assumption that people do not know as well as the government does how to spend taxpayers' money.

We have a situation now where the government is going to start to spend this money away. I would argue this is wrong headed. It is a much better approach to say to employers and employees “Why do we not allow you to run this fund? Why do we not take this fund off budget? Why do we not get workers and employers to decide between them which is the appropriate level of premiums to pay and what are the right benefits to pay”.

Ultimately there will be a system where both parties will have their vested interests at the table and they will come up with a compromise that will somehow suit both parties. That system is in place in other countries so we think it is a very plausible way to go. We would argue that if we did that we would have a fund that would actually be there for people when they need to draw upon it.

My friends would say that in the past the government has honoured its IOUs. Fair enough. But in this case, if we go into a recession in the next couple of months, if as an example the economy suddenly turned down because the Asian crisis hits Canada in a hard way, we would be in the situation that because the government did not prudently set aside the $15 billion, we would have to go $15 billion into the hole. We would have to start running deficits once again. That is the effect of not putting that money aside.

Who would pay to get out of that deficit hole again? It would be the workers and employers because as the government has done over the last four years, it would raise taxes to get out of the deficit. We would see workers and employers paying twice to get out of the soup.

We argue that instead of perpetuating the myth that there is a fund, as my friend did a few minutes ago, why not be honest with Canadians? Why not tell them that the money has been spent away? Why not resolve not to do it again by setting up a separate account, hiving it from the actual budget and letting employers and employees run the account themselves? That would be a much better plan.

There is another issue associated with this. The other day the finance minister was before the finance committee. Regrettably I was unable to be there. He spoke about the EI surplus and was asked some questions about it. One thing he said which was rather strange was that cutting EI premiums would not create jobs. I found that very strange. When the government cut EI premiums by so very little a few months ago, it issued a press release in which it said that cutting EI premiums would create jobs.

Which way is it? Does the finance minister believe that cutting EI premiums will create jobs as he said a couple of months ago, or is he saying now that it will not, as he said on Thursday? The government should make up its mind. One day it will create jobs, the next day it will not create jobs. The finance minister better talk to some of the people in his own department and get it straight.

Canadians want to see some cuts to EI premiums. I think they have made that very clear. We know the Canadian Federation of Independent Business has been after the government for years. We know that the Reform Party has been after the government for years. We ran in the election campaign on lowering EI premiums. The finance minister had better get his act together and quit trying to engage in this type of doublespeak where he tells what he thinks they want to hear at different times.

The government has perpetuated the myth for a long time that this fund is solvent with billions of dollars in it and it will be there when it is needed in the event of a recession. That is clearly not the case. I hope my friends across the way would quit perpetuating this myth, as my friend from Prince Edward Island did a couple of minutes ago, and start to give Canadians the honest truth. Only then when we have the complete truth will we all be able to sit down together like adults and solve these problems.

[Supply, June 1st, 1998]

Mr. Speaker, it is a pleasure to rise today to address the motion from the Bloc Quebecois. Because time is so limited I will try to focus on one aspect of this motion. I wish to address the aspect of the EI fund.

A couple of minutes ago I asked my friend a very direct question about the EI fund. I said that I hoped the government had stored away this money very carefully and that workers and employers who have contributed more than $15 billion into the fund, which is more than they have received back in benefits, would want to know that it had been stored away very safely, that it had been invested and put away in a vault somewhere. My friend provided an answer that was a little evasive, a little less than direct. My friend said in his speech that the government has been ensuring that the EI fund is there so that we can go into the future, or some bromide like that.

The EI fund is a myth. The EI fund does not exist in any real way. There is no fund. It is a fairy tale. It is not exactly one of the brothers Grimm fairy tales but it is a very grim fairy tale. Just like leprechauns, unicorns and the fairies of the woods, the EI fund does not exist. It never has existed.

We have a situation where the government runs around telling people “If we mandate that money is taken off your cheques and sent to us, it will go into some fund”. It is very much like the Bre-X disaster of a couple of years ago. Somebody told people “Invest in our company. We have millions of dollars of gold reserves in the jungles of Indonesia that we will soon be drawing upon. We just need a little money to get it out of the ground. Pretty soon it will all come back to you”.

Just like the Indonesian goldfields, the EI fund is a myth. It does not exist. There is a note in the consolidated revenue fund, an IOU to the workers and employers who have contributed to this fund. A $15 billion IOU.

My friend who was talking in a rather evasive way about the fund should be more direct and admit that the EI fund does not exist. There is no money in there. People who have been paying into it for years and years have been misled. We see this happening often in a government that is armed with the ability to tax and to spend.

We see it as well in things like the Canada pension plan. For years people were led to believe that all the money they paid in premiums was going into an account and it was building up for their retirement, only to find out that it was being lent to the provinces at below market rates of interest and there really was not any money. We see it happening with the federal superannuation pension fund.

Whenever there is a fund of money, the federal government cannot wait to get its greedy little fingers on it. No matter where it came from, no matter under what premise it was taken from people, in the end it never ever uses it for the purpose it was supposed to be used for. This is another example of that.

Where did the $15 billion go? It is a great mystery.

[Supply, June 1st, 1998]

Mr. Speaker, my question will be very brief. I wonder if my friend can tell workers and employers where the $15 billion EI fund is. Is it in a vault somewhere? Is it invested? What exactly has happened to that $15 billion fund? I think workers and employers would like to know that it is stored away safely.

[Budget Implementation Act, 1998, May 27th, 1998]

Mr. Speaker, I appreciate that. Now that my colleagues across the way have agreed to that I am afraid I am going to have to be less than charitable about why we need to do that.

Bill C-36 is about a number of things. It is the budget implementation act. It is about things like the millennium fund and all kinds of measures the government discussed in the budget.

The first issue I want to talk about is that the government has moved closure on this bill. Therefore my colleagues and I are forced to split our time so that we can speak at least twice on the third reading of Bill C-36. Otherwise we simply would not have the chance to do that.

When these government members were in opposition they routinely chided the Conservative government of the day for the times it moved closure. But now the Liberal government has actually exceeded the former Mulroney government in the number of times it has moved closure. I think it is 41 times since it came to power just over four years ago.

The hon. House leader for the government said when he was in opposition “I am shocked. This is just terrible. This time we are talking about a major piece of legislation. Shame on those Tories across the way”.

A member from Kingston said “What we have here is an absolute scandal in terms of the government's unwillingness to listen to the representatives of the people in the House. Never before have we had a government so reluctant to engage in public discussion on the bills brought before the House”.

We throw that back at the government and say when in opposition this was completely unacceptable. As members pointed out, on major pieces of legislation there should never be closure. We should be allowed to debate these things.

We are now talking about the budget. We believe that citizens, through their representatives, should have the ability to call the government to account for some of the things it has decided. We are talking about decisions to spend hundreds of billions of dollars. To move closure so that we have a scant two hours to debate the budget implementation act at third reading is unbelievable and completely anti-democratic. The government should be ashamed.

In order to talk about the millennium fund, I am afraid I have to go back in history a few years. When the government was running to be the government in the 1993 election, the current Prime Minister, then the leader of the Liberal Party, said in the leaders debate that he would not cut transfers to the provinces for health care and higher education. He told the leader of the Reform Party that if it were up to him he would raise the transfers to the provinces.

History shows that not only did the government not raise transfers to the provinces, it cut them by $7.5 billion, a 40% cut for health care and higher education. The impact of that was devastating. We saw people in the provinces rebel. The were extraordinarily upset. We saw people picketing and marching on provincial legislatures.

I think the people were misguided. They should have been on the lawn of Parliament Hill because when the provinces are faced with cuts of $7.5 billion they have no choice but to make cuts themselves in health care and higher education.

Unfortunately the government blatantly broke a major election promise and now it has chosen to introduce the millennium scholarship fund in the vain attempt to convince people across the country that it somehow cares about higher education.

When Canadians start to look at the details of the millennium scholarship fund they will be extraordinarily disappointed. They will find it helps precisely 7% of all students today trying to upgrade their skills so they can get a job in the modern workforce. But the government has carried on as though this is going to help everybody.

It could have helped everybody if it allowed the provinces to keep these transfers and the provinces could have given them to everybody in the form of lower tuition costs, and that truly would have helped everybody.

Now we have the government saying it is going to help 7% of the students who return to school. Granted, a lot of those students are part time but nevertheless they need skills upgrading to get a better job.

The government's argument is that this will help 100,000 people through scholarships to individuals. That is only 25% of the full time students, leaving 75% to be completely excluded.

This huge memorial fund to the Prime Minister is really going to help very few of the people who should be helped and could have been helped had the government allowed the money to stay in the pockets of the provinces and be used to reduce overall tuition costs.

The Reform Party and colleagues in the Conservative Party, the Bloc and the NDP brought forward a number of serious proposals to hold the government accountable on how the millennium scholarship fund would be used. Unfortunately when we brought these forward at report stage the government moved closure, cut off debate and these very serious helpful proposals never had a chance to be discussed.

Unfortunately again the democratic will of parliament was thwarted. I believe the democratic rights of Canadians to have these things discussed by their representatives were thwarted. We are in situation now where the government will completely ignore all the suggestions that came forward from the various opposition parties via the witnesses who will be most affected by changes brought about by the millennium scholarship fund. They will never find their way into legislation.

The moves to hold the fund more accountable will not be discussed. They will not be looked at by the government. The suggestion that the auditor general be the auditor in charge of the fund may not ever be accepted by the government. The suggestion that the millennium fund be subject to access to information will be completely ignored by the government.

That is what happens when a government moves closure on an important piece of legislation like a budget. It is absolutely ridiculous and it is an affront to people who believe in the idea of democracy. We are extraordinarily disappointed in how the government has dealt with this whole issue. But it even goes beyond that. Not only did the provinces take the heat when the government cut transfers back in 1995, all the heat for what the federal government had done, now the government is going to end up letting down all Canadians once again. I would argue it is going to let down many of the very students it proposes to help.

What students are going to find out when they graduate from universities, after having taken advantage of the millennium scholarship fund, is that many of the jobs they have been trained for simply do not exist in Canada, which is why we have a massive problem with brain drain today.

My colleagues in the Reform Party have spoken on this issue many times in the past. I know my colleague from Calgary Southeast has talked on this before. Many of their own family members have had to go across the border to the United States most often, also around the world, to apply the skills they have received because of the generosity of taxpayers in this country. These students take this subsidized education and go across the border. One of the best examples is the university class at the University of Western Ontario where I think it was one-third of the entire graduating class in computer sciences was scooped up by Microsoft.

Canadian taxpayers via the millennium scholarship fund end up subsidizing the richest man in the world, Bill Gates, because he is the one who benefits by all these people who earn their education at taxpayer expense. How much sense does that make? What point is there in putting together a millennium scholarship fund if we are only going to graduate students to send them south of the border and never have the ability to take advantage of all those skills within Canada and all the benefits that would bring to the economy? What is the point of that? I do not think it makes any sense.

The government has failed utterly and completely to deal with the demand side of the equation. It is taking faulty steps in dealing with the supply side by providing these funds, but it has done absolutely nothing on the demand side. These highly skilled people, doctors, lawyers, computer scientists, nurses, engineers, technicians, our brightest and best, are being driven out of this country by an economic regime and a tax regime that is simply too difficult to live with. Why would they try?

I received an E-mail from a young man, 23 years old. He has a wife and child. He at the age of 19 went to the United States to apply his tremendous skills as a computer technician at various companies. He worked in silicone valley in California, got tired of that and wanted to come home. He ended up taking a job for less money than he was making in the U.S. He was making $75,000 U.S. in silicone valley. He came to Toronto to accept a position for $65,000 Canadian.

He sent me the E-mail when he received his first paycheque and had a look at the government tax bite. That is the problem this government has consistently failed to address. Now this young man with his tremendous skills is considering whether he really does have a future in Canada after all. He is considering taking his family and his tremendous skills and all the benefits that will reap for the economy and moving back to the United States. I think that is a terrible indictment of this government and this government's failure to deal with the huge economic problems that people in this country have to face every day.

That young man is extraordinarily lucky. He has these abilities and these skills and he has I gather a tremendous natural talent. He is able to parlay that into all kinds of job offers. But not everybody has that. So we have a different set of problems for people who do not have those skills and do not have those abilities, who have not had the chance perhaps to get an education. Those people are in a situation that is far worse than my friend the computer programmer.

They are in a situation where they are competing with hundreds of thousands of other people who do not have very many skills for jobs.

We have an unemployment rate of 8.4%. Today in question period I heard the finance minister boasting about the 8.4% unemployment rate. I would not boast if I were him because we simply need to look across the border to the United States to see that it has an unemployment rate about half what ours is, 4.3%. Here we are, economies that share a tremendous amount of trade, very similar economies, except its economy is far more efficient than ours. Its puts hundreds of thousands of people to work whereas hundreds of thousands of our people have to sit on unemployment insurance and welfare. That is a human tragedy of tremendous scope.

When a budget is brought down, one of the first things to be done should be to address issues like unemployment and high taxes that cause unemployment. I know what my friends opposite will say. They will say they did bring in tax relief. They will point to the cuts they made to the surtaxes.

What they fail to point out is that according to their own budget papers, the cut in income taxes through the reduction of surtaxes in this budget year will be more than erased by the phenomenon of bracket creep.

Right away taxpayers are still worse off this year. In other words, taxes are still going up this year compared to last year. That does not even take into account the whole issue of Canada pension plan premiums which are marching inexorably upwards 73% over the next six years, the largest tax hike in Canadian history. Where does that leave workers? It leaves them looking for jobs on the unemployment line. That simply is not acceptable.

I turn now to the issue raised today not only by members of the opposition but by the premier of Ontario and by Statistics Canada, the EI surplus.

I point out to my friends opposite that the employment insurance fund is there to ensure that in the event of a downturn there are adequate funds set aside so that the fund can provide benefits to unemployed workers. That fund is now at about $15 billion, way more than is necessary to take workers through even the toughest recession. In the next several months that fund will continue to grow.

The government does not actually have that money sitting in an account. It has essentially spent it, so there is an IOU. In other words, if there is a downturn in the economy they will have to borrow $15 billion. We should be very clear about that. This is another example of the government's so-called prudence.

The government is now using the overage, the extra premiums, coming in not for unemployment insurance, not for benefits, not to give back to the workers who are supplying it, including the small business people, the very people who create jobs. It is keeping it. What will it do with it? It is putting it away to use it for its election slush fund down the road. I think that is completely unacceptable. That is a breach of the deal that was made implicitly between governments and workers.

The deal was that money should be returned to them in the form of lower premiums so that they can keep it in their pockets, so they can use that money for the things they want to use it for, things like providing for their education, providing for their retirement. Unfortunately the government thinks it knows better.

We are in a situation today where the finance minister could not bring himself to say that we are going to start to reduce payroll premiums in a serious way so that workers are not so heavily burdened.

I also point out the impact that high payroll taxes have on business. The Canadian Federation of Independent Business points out regularly that payroll premiums are a job killer. It points to the government's finance department economists who say that payroll taxes like EI premiums are a job killer. Joe Italiano is one of the people I will point to. We qutote him in our document which we have made widely available to the public. My friends across the way laugh when I say that but it is a fact. When we have 8.4% unemployment we should have the government taking steps to deal with those sorts of issues.

This government has failed completely to deal with the issues that are the most important to Canadians. It has failed to deal with the issue of taxes and debt. It has done nothing about the debt issue. Instead it has tried to blind people and mislead them with all this talk about the millennium scholarship fund. I do not think Canadians are buying it. I encourage my friends around the House to vote against Bill C-36.

[Budget Implementation Act, 1998, May 27th, 1998]

Mr. Speaker, I begin by seeking unanimous consent to split my time with the member for Calgary Southeast.

[Employment Insurance, May 27th, 1998]

Mr. Speaker, this really does not have to be. The fact is the finance minister has kept premiums artificially high, milking business people and workers and all the while ending up killing hundreds of thousands of jobs in the Canadian economy. That is what payroll taxes do.

Canadians want a date. They want to know when they can expect real cuts to EI premiums, not the nickels and dimes the finance minister just mentioned. When are we to get real cuts?

[Employment Insurance, May 27th, 1998]

Mr. Speaker, the Premier of Ontario said he obtained the money through very questionable means. How much longer will Canadians have to pay to fatten the finance minister's election fund?