Madam Speaker, I would first like to point to something very important. The bill was introduced in the House before and got to second reading. Then an election was called, and Canadians gave us the mandate to continue along the same path. This is why we are bringing forth the bill again.
It is very important to put things in perspective. The establishment of the new employment insurance system, in July 1996, was the first major reform of the program in 25 years.
The old unemployment insurance system had served Canadians well, but it had become obvious that it no longer met the needs of the active population. When reforming a system as old as the unemployment system, one has to expect that adjustments will become necessary later on. This is why the government is putting forward the legislative amendments before us today.
We are not going back to the system that existed prior to 1996, as some of my colleagues suggested earlier. The 1996 reform original objectives remain unchanged. The government still wants to bring more fairness to the system, to reduce dependency on benefits, to assist low income families, to reduce the costs associated with the program and to give greater priority to active measures to help some workers get back to work. These objectives are as important today as they were in 1996.
As my hon. colleagues in the House know, the government has reviewed and assessed the effects of the 1996 reform. Our studies show that most of the elements of the employment insurance scheme, like the divisor and the hours based system, are working well, but that some elements need to be changed.
On the whole, the employment insurance scheme is up to its raison-d'être, which is to act as a security net for workers temporarily out of work. We are constantly reviewing its implementation, and we find that it is indeed the case. However, it is not perfect. Perfection is hard if not impossible to achieve.
This does not mean, however, that we should not be making adjustments. That is why we are putting forward these proposals to the House. This is not the first time changes are being made to the employment insurance scheme. We have changed elements in the system before. For example, in 1997, we launched a pilot project on shortened work weeks, which help ensure that people whose income is low at times do not see their benefits cut.
The close monitoring of the implementation of the new system and the analysis of the opinions expressed by workers directly affected by certain provisions now allow us to make new adjustments.
Regarding the intensity rule, we have to admit that it is a measure that did not work as expected. Because it did not result in the work effort increasing while dependency decreased, and because it is seen as having a punitive effect, we propose to eliminate it.
On the other hand, the clawback provision, or more specifically the benefit repayment provision, is a different matter. That measure was introduced to deter high income earners from frequently relying on employment insurance. The majority of middle income earners pay premiums for many years without ever claiming benefits. Since the purpose was to deter repeated claims by high income earners, first time claimants should not be affected, because they are certainly not abusing the EI plan.
We are suggesting that all first time claimants should be exempted from the clawback provision.
I am sure hon. members will agree with me that the clawback provision should not apply to Canadians who get benefits because they are too sick to be working or because they stay home after the birth of a child to take care of a baby. That is why we are suggesting that claimants collecting special benefits also be exempted.
We are deeply convinced that the clawback provision should apply only to high income earners who rely frequently on employment insurance, and not to middle income earners.
We have realized also that rules governing re-entrants should take into account the extremely important role of the parents in the early development of their children. Nothing is more important than the responsibility to raise the next generation. Those who do assume that responsibility ought not to be penalized if they choose to withdraw from the work force to do so.
This is why the government proposes to adapt the rule that applies to people returning to the work force. We propose to make it easier for new parents to qualify for regular benefits if they lose their job after re-entering the work force after a prolonged absence raising children.
Thus, the increased requirements for eligibility for regular benefits will not apply to people who have returned to the work force after drawing maternity or parental benefits in the four years prior to the present two-year period of retroactivity.
The bill before the House includes a recommendation on maximum insurable earnings. This is an important figure, because it determines maximum benefits under the program, as well as maximum contributions. The present bill proposes maintaining insurable earnings at $39,000, until the average industrial wage exceeds that figure.
Once it does, we propose that there be an annual adjustment in maximum insurable earnings according to the average industrial wage in subsequent years.
Until 2006 the Canada Employment Commission will continue to monitor and assess the effects of the new employment insurance program.
The changes we are proposing, and the vigilance of the commission, will ensure that the EI program conforms to its objective of meeting the needs of Canadian workers in need of a temporary source of income when they are between jobs. The commission will also help us to determine how the EI program is responding to labour market changes.
Canadians know their government is attentive to their needs. We are determined to make the employment insurance program one of the best of its kind in the entire industrialized world.
Of course, the best guarantee of financial security is stable employment. That is why the Government of Canada will continue the work undertaken with the provinces and territories, with business and local leaders in order to help create an economic climate that provides employment opportunities to all Canadians.