Madam Speaker, I am pleased to speak on the report stage of Bill C-12, an act to amend the employment insurance act.
I want to speak on the intensity rule. The government believes steps had to be taken to protect the integrity of the employment insurance system, to ensure the millions of workers who contribute premiums continue to have confidence in a system which is both equitable and sustainable.
In seeking a solution which is fair and balanced I have proposed two very necessary amendments to Bill C-12. I am pleased to stand before the House today to report on these two amendments and to encourage opposition support for these two necessary amendments. These amendments will increase fairness and will help those people most in need. Those are the people the opposition members also should care about.
The first amendment I proposed would exempt claimants in receipt of the family income supplement from the intensity rule. This would affect claimants and families with annual earnings of $26,000 or less.
The second complementary amendment would see the provision of a credit to those who receive a reduced benefit as a result of working while on claim. An example of this would be if individuals claimed benefits for 24 weeks but due to working while collecting benefits their actual benefits are reduced by 50 per cent. These individuals would then be assumed to have accumulated only 12 weeks of benefits for the purpose of the intensity rule. Therefore the next time they file for employment insurance benefits they would not be affected by the intensity rule.
When considering this legislation we examined carefully ways to introduce reforms that are fair to people facing hardships. We tried to maintain incentives that would encourage people to take work when it is available, while at the same time ensuring all regions in the country are treated fairly and equitably.
It is worthy to note that to achieve this balance and fairness minimal cost is involved. We sought a way to ensure this legislation would help those people most in need. Other amendments to Bill C-12 will bring changes to the gaps in earnings, to the divisor, which will mean people with low incomes and in high unemployment regions are not punished for circumstances often beyond their control.
As a part of this package of amendments, my colleagues agreed with me the intensity rule change was necessary. I believe that rule was treating too harshly low income families, particularly those living in high unemployment regions. Under the original proposal the intensity rule would reduce the benefit rate by 1 per cent for every 20 weeks of regular benefits collected in the past five years up to a maximum of 5 per cent.
The family income supplement will benefit 350,000 Canadians. I consider this supplement to be one of the many positive features of this legislation. It will ensure that claimants most in need of assistance will have the means to fulfil their family responsibilities. It will mean that low income claimants, perhaps with young families, will be able to obtain employment insurance benefits worth up to 80 per cent of their work income instead of the 55 per cent normal benefit rate.
Having fought for and won the inclusion of this basic income benefit level for low income families, I did not want to see this value undermined. We did not want to subject vulnerable members of our workforce to an intensity rule that would erode the value of their benefits by as much as five percentage points.
Studies show that 188,000 claimants, ,or 54 per cent, receiving the family supplement would be affected by the intensity rule.
While accepting the importance of maintaining the integrity of our employment system, it is important that we exempt family supplement recipients from the intensity rule, therefore protecting those Canadians most in need. To my mind, any family living on an income of under $26,000, which is the threshold for the family income supplement, has because of its difficult circumstances, sufficient incentive to take whatever work is available.
The object of this reform is to help Canadians find and keep work. By exempting them from this rule, these claimants would on average see their total benefits increase by $128. Overall benefit payouts would increase by $24 million.
The family supplement, by providing a somewhat larger benefit to low income claimants with children, will mean a bit of extra money available for those individuals to spend on such things as child care, in order to participate in employment benefits or to take additional training that would lead to a good job.
We have also recognized the intensity rule is meant to provide an extra incentive for people to work as much as they can. It is a reality that many people work while they are collecting insurance benefits. Over a period of time claimants on EI may collect half of what they are entitled to because they may have earnings from part time work or small jobs.
Under the initial bill, if a claimant collects 50 per cent of what the claimant is entitled to collect while on EI for 24 weeks, the entire 24 weeks would count when the intensity rule is applied to this person's future claim. We have agreed this part of the intensity rule is not only unfair but is an unintended disincentive to work. My Liberal colleagues have agreed with me on this.
My second amendment to Bill C-12 would give people credit for work while on claim. By changing the intensity rule to account for work while on claim, we are encouraging claimants to accept whatever work is available, whenever it is available. This recognizes the principle that no matter how little or how much work is actually available, it has to pay people to work.
The vast majority of people would rather be working than receiving benefits. I see this change to the intensity rule as a positive and fair measure. Claimants subject to the intensity rule who work while on claim will earn work credits which will be prorated to reduce the impact of the intensity rule on future claims.
This amendment will encourage a trend toward a greater work effort creating more jobs for Canadians.
These amendments agreed to by my Liberal colleagues show that if we fix the gap, if we adjust the divisor, if we change the intensity rule, we will have a better bill. We will do something for Canadians.
I am encouraging support from my opposition colleagues. We will come a long way to increase fairness in the employment insurance system both to individuals and to regions, to provide additional incentives to work, recognizing the lack of work opportunities in high unemployment regions.
An amended Bill C-12 with the gap, the divisor, the intensity rule all amended will create a system that will help create more jobs, that will help get more people back to work, that will support the federal job strategy. An amendment to the intensity rule will, most of all, create a system that is fairer for those in the workforce and for those who are not.
I urge my colleagues to please support these amendments, which will make this a fair and equitable bill for all Canadians in the workplace.