Mr. Speaker, I welcome the chance to speak to Bill C-12 and to comment on how the changes being put forward will improve the climate for doing business in Canada.
The simplified new approach to the calculation of premiums and the streamlining of the reporting process this legislation puts forward will substantially reduce the administrative costs and paper burden associated with the old UI program.
This is especially important to small business. We have heard often from the business community, especially from the small business community, about the high cost of administering the old system of UI, the so-called UI paper burden.
It is fair to say there has been a good deal of paperwork associated with administering that antiquated plan. Under the current UI scheme employers have to keep track of employee earnings by week. They need to make sure, for example, the weekly earnings, dollars earned, are above the weekly minimum set by UI legislation.
If the earnings are too low, the employer must also check to see whether the hours, the time worked, exceed the weekly minimum. The employer must also check to see if employee earnings are more than the weekly maximum.
Once all these tests are applied, the employer then must calculate the premium payment for each employee and the corresponding employer's premium payment. Does it sound confusing? Obviously.
In some cases this complicated system has to be repeated through each and every week for each and every worker. Imagine the administrative complexities here, even for a small business, to keep people on staff to do these very tedious jobs.
The new system will do away with this complicated process. Premium payments will be calculated beginning with the first dollar earned and there will be no minimum hours or dollars to qualify. It will be easier for the employee to understand as well.
As it is now, it is difficult for an employee to know if the employer has made accurate premium calculations unless the employee goes through the same complicated record keeping exercise and keeps a cumulative personal record of UI premium payments.
A system based on first dollar premium payments for those making less than $2,000 to have their premiums refunded will be simplified, straightforward and easy to keep track of. At the same time as we are simplifying the process we are extending it so more workers will be covered, and that means more businesses, especially small business, will now be included in the plan.
Concerns have been raised about the potential impact of these changes on the payroll costs of small business, particularly in the service sector where many part time workers who had previously been excluded from UI would now be eligible under the new program. Here are some answers to the concerns.
Under the new plan about two-thirds of the small businesses currently contributing to the UI program would pay less or the same as before. If premium rates are reduced, as we hope they will be when the first dollar coverage kicks in, that number would go up so that about 77 per cent of the small firms would pay less or about
the same as before. This would still leave 23 per cent that might be subjected to an increase.
The aim of the legislation is to improve the system, not to raise the payroll costs for small business. The bill includes a transitional premium refund plan, a plan which will provide small businesses that face premium increases of more than $500 in 1997 and 1998 with a refund. The maximum refund will be $5,000 per year. It is estimated this will provide transitional relief to about 300,000 small businesses whose employees will now be participants in this EI program.
Thus we believe the bill strikes a reasonable balance between opening up the employment insurance system to the tens of thousands of part time workers who will now face the 15 hours per week constraint to developing the necessary earnings history to qualify for benefits and adding incrementally now to the cost for some employers.
We also believe the streamlining and reform of the old UI system and the many cost savings and reductions and the paper burden that will result will be very welcome in the business community.
These reforms will also produce significant administrative efficiencies in cost savings for the Government of Canada. As many as 2,000 employees of the Department of Human Resources Development are now involved in handling the administration for the existing record of employment forms. If the forms are simplified and the reporting process streamlined there will be substantial efficiencies to be gained from the simpler, easier to administer system in government as well.
The second major area of opportunity the bill opens up relates to enhancing the employability of workers through the employment benefits in part II of the legislation and the act of employment benefits in particular. From the perspective of the business community this is an important part of the legislation, for it will help to better integrate the needs of workers and employers in order to create meaningful employment experiences.
These measures will reinforce the value of work. The employment benefit measures are designed to strengthen the work incentive and to help employers and workers alike adjust to economic changes and take advantage of new opportunities.
For example, benefits in the form of wage subsidies will encourage employers to hire people who need experience on the job but who cannot make a full contribution to the enterprise immediately. This will allow employees to bring new people on board and let them grow into the job without being an undue economic burden.
Targeted earning supplements will be available to top up wages of eligible workers as an incentive for them to take paid employment, even low paid employment, instead of insurance payments. This will help address the concerns we have heard that small business often finds itself competing with UI employees.
It is important to note on that score alone that a recent survey in Atlantic Canada found that 45 per cent of the employers in that region voiced their concern that they were competing with the Government of Canada insurance system and felt they could offer jobs to Atlantic Canadians if there were changes made to the underpinnings of the system.
The new legislation will allow us to continue to pursue job creation partnership programs in co-operation with the provinces, local communities and business organizations in order to create jobs consistent with local economic development objectives. We already have some good examples of highly effective job creation projects with partners in the private sector. We know this approach is needed and will work.
The new employment insurance plan will be good for business. So do many of the business people we heard from. The Canadian Federation of Independent Business indicated to the Standing Committee on Human Resources Development that employers are supportive of the overriding purpose of the bill to help encourage unemployed Canadians to get meaningful employment. The present UI system is more of a disincentive for people to get back to work.
The Business Council of British Columbia sees Bill C-12 as a more positive initiative. The president of the Quebec Chamber of Commerce believes a streamlined program will be a more effective program. The executive director of the Canadian Council for Human Resources in the environmental industry has said the new employment insurance strategy working with the national sectorial council has the potential to help Canadians find and keep jobs.
That is what the government wants to do, help Canadians find and keep jobs. The new employment insurance legislation is an essential and integral part of that new vision leading into the year 2000.
