Hon. members across the way are asking when the minister said that. The minister has said it many times in this House. When the hon. member was a parliamentary secretary and sat closer to the minister he probably heard those things but now that he sits so far away perhaps it just does not get down that far.
The fact is that payroll taxes kill jobs and hon. members across the way know it. Unfortunately, they are ignoring their own advice and are bringing in payroll taxes on people who are the most vulnerable in the job market today: youth and women who work part time. This bill is going to be a job killer.
I want to draw attention to a television program that was on CTV a couple of weeks ago. The program spoke about the difference between the unemployment insurance systems in Canada and the United States. It considered two very comparable economies, those of New Brunswick and Maine. In both cases we are talking about economies with lots of seasonal work. In both places there is work in forestry during one period, work in fishing during another period, some construction work and maybe some type of handyman labour and those sorts of things. However, throughout the year there is not a lot of full time employment.
It was very interesting that in exploring the differences between these two economies it was found that in New Brunswick there was a very high level of unemployment. However, in Maine which had almost the identical economy there was a very low level of unemployment.
The reporter quizzed government officials and employers about the unemployment insurance systems. It was found that Canada's unemployment insurance system is much richer and provides much better benefits than the U.S. system. The result is that New Brunswick now has what I can only call structural unemployment as do certainly many other places in the country. In the United States, Maine has far less than half the unemployment rate for an almost identical economy.
When the reporter asked some of the workers in Maine what the difference was, they pointed out that not only did they have very few benefits as compared to Canada, but the system was more experience rated. For instance, if employers laid people off they would pay higher premiums next time around. What happened is the employers kept people on even in their down periods because they knew that if they did not, they would pay higher premiums. This is not exactly a great revelation. It makes perfect sense to me but somehow that logic has escaped the government.
It showed an example of a large department store in Maine where traditionally people would have been laid off in slow periods, but in this case they were painting, doing work around the store that as clerks they would not normally do because the employer did not want to pay the higher premiums. The point being the current system rewards employers who lay off people. That is ridiculous. It makes absolutely no sense.
Again I make the argument that although these reforms make the current system mildly better in so far as they do not provide a great a reward for laying people off, they still go in the wrong direction.
It is time to separate the unemployment insurance system from the idea of a social welfare scheme. We need a true insurance system. That is the way we must go. If we did that we would not have nearly the problems we have today. If that were done we would have a system that would reward employers for keeping people on the job and a system which would reward employees for staying on the job even when it sometimes looks like it may be more profitable to collect from a social program.
In this case if we had true insurance people would know that incentive has been removed and it would no longer be more profitable for them to go on to a government system. We very much disagree with the direction this legislation is taking.
Clyde Wells, the premier of Newfoundland, pointed out the current system had created a generation which has become dependent on unemployment insurance. The situation in Newfoundland is interesting and in another sense it is tragic because there is a generation of people who have come to rely on unemployment. I hope it is instructive for people in this place who are trying to design new systems that will lead to more employment.
The premier of that province acknowledged the system does not work. When we look at Newfoundland today and we see all those people who are on unemployment, has it not become obvious that no matter how good a hair dresser is in Newfoundland, no matter how much training they get, they simply will not get a job if there are no jobs available?
The finance committee heard from a person from the Gaspé region where there is 33 per cent unemployment, a social tragedy in the Gaspé region. Has it not become obvious the current system does not work when there are levels of unemployment that high? Is it not obvious that when people are kept in one place because of a system perhaps they are being denied opportunity, denying them the hope they deserve as Canadian citizens? That is absolutely ridiculous.
Clearly the solution is not in how we attempted to solve the problems of the past. That caused the problems. The solution is something different. It is time to move forward and get away from this system and go to a true insurance system.
In the 1930s many people in Alberta had to leave the land. There are special areas in the province where people had to abandon their farms because there was simply no way they could grow anything.
They left because it did not make sense to stay anymore. They went where the jobs were. That makes absolute sense to me.
However, the current system acts against that natural impulse. People naturally are drawn to where there are jobs. If we pay them to stay where they are, do not be surprised if they respond to that incentive. That is what this legislation does. It give them incentive to remain where they are. I do not blame the people for taking it. I blame governments for offering it in the first place. That is ridiculous.
We have that problem in my part of the country as well. Perhaps it is not as pronounced as it is in some parts of Atlantic Canada or Quebec, but we have the same problem.
The point is, no matter where the incentive is offered, people are people and they will respond to that incentive. Let us not continue to hold people back. Let us not continue to stifle their potential. Let us create an employment insurance program that is truly an insurance program, that is experience rated, that rewards people for continuing to be employed, that provides a disincentive for people to give up their jobs.
It is the responsibility of the government to create an environment for employment. One of the things the government decidedly has not done is create an environment for employment. It is little known but it is a fact that since this government came to power it has brought in revenue measures and tax increases amounting to over $10.5 billion. That is an amazing amount of money to take out of people's pockets. That kills jobs. That kills all kinds of opportunities for Canadians. That cannot continue.
Hon. members opposite are concerned about this. They should be. It is killing jobs. The hon. member opposite is obviously concerned about $10.5 billion coming out of the pockets of his constituents and Canadians generally.
The finance minister said payroll taxes kill jobs. I will expand on that. All taxes kill jobs. The more money taken from the taxpayers, the less they have to save. Those savings would ultimately go to creating new opportunities in the form of new business. The less money they have, the less money they have to spend on goods and services. Therefore there are not as many jobs for people in those industries. The hon. member opposite is complaining that his government is raising taxes. I do not blame him.
The finance minister the other day said "we did not raise any taxes in the last budget". If we stick to the letter of the law he was right. He raised some after it. He raised all kinds of revenue through various measures which amounted to billions of dollars. The new GST changes will exact approximately $1 billion from people in the form of a new tax or the removal of the input credit on used goods, something that constitutes $60 billion to $80 billion a year in the economy. That will take money out of people's pockets. That kills jobs.
There are all kinds of things the government can do to stop killing jobs and to start creating jobs. It has to stop raising taxes. It has to start moving toward a balanced budget, and not at a snail's pace. It has to announce a date. All the provinces have either balanced their budgets or at least have a plan to balance their budgets. The federal government has not even announced a date. It has not even acknowledged there is a problem.
If people judge the strength of the finance minister and the government by their ability to wrestle down the deficit, these guys come in dead last. They are weak kneed. They cannot meet the challenges.
We say to people to get on the government. Tell it that it has to balance its budget. Tell it that it has to start dealing with the deficit and debt.
One of the things that has to happen when the budget is finally balanced is that the government will have to start lowering taxes. Ontario is lowering taxes. Alberta is lowering taxes. Saskatchewan and Manitoba are lowering taxes. All the provinces are lowering taxes. They are creating jobs. What is the federal government doing? It is killing jobs. It is raising taxes. It is destroying opportunity.
The bill is only the tip of iceberg. Not only is the bill a bad piece of legislation, we say the government has not done the other things which need to be done to create jobs.
We say to the government that its challenge is not to tinker with Bill C-12, its challenge is not to tinker with unemployment insurance, its challenge is to fix it. Quit fooling around and create an employment system which will actually provide incentive for people to go out and get jobs instead of killing incentive. The government's challenge is to balance the budget and to lower taxes. That is what Canadians want and that is what they deserve.
