Mr. Speaker, it gives me pleasure to address the issue before the House today.
It is clear to everyone but I suppose the Liberal government that 30 years of social engineering have failed miserably. The main reason social programs have become unaffordable and unsustainable is that they create greater and greater dependency on social programs. No matter how these programs are designed, the end result would always be the same. More and more people use the system and eventually it becomes unsustainable because the government can no longer afford to pay the huge sums of money needed to satisfy everyone's so-called needs.
This is why half the people on welfare today are described as employable. This is why our unemployment insurance program actually creates unemployment. Economists call this moral hazard and people in Saskatchewan call it plain stupid. This is something that must be addressed in the debate. The debt and the deficit seem to be issues that people do not even consider in the comments they are making in regard to this matter.
The Department of Human Resources Development issued a report in January 1994 which provided an even more damning indictment of the negative effect of the unemployment insurance program. I want to address most of my remarks to the unemployment insurance aspect.
The report examined over a dozen existing studies which concluded that the changes made to the Unemployment Insurance Act in 1971-72 resulted in an increase in the unemployment rate in the range of 1 to 1.5 percentage points. That is how much unemployment was raised because of the change. The report also noted two unpublished papers that produced estimates showing that the UI rate was as much as 3.5 percentage points higher than it should be. That is very serious.
Using the range of estimates provided in the government's report, it means that instead of the current unemployment rate of 9.7 per cent it should be somewhere between 9.2 per cent and 6.2 per cent. That is a huge difference.
The UI program is so poorly designed that somewhere between 64,000 and 448,000 workers are unemployed because of it. It has not helped that we have suffered through 30 years of incompetent government and a lack of leadership has brought us to where we are today: on the brink of bankruptcy. Now we have 44 per cent of the people in Canada doubting whether they will ever receive old age pension and 42 per cent doubting whether they will receive their Canada pension even though they have paid into it with their own contributions.
The government's incompetence in dealing once and for all with the annual deficit by balancing the books is directly responsible for the deteriorating lack of confidence in our social security system. Instead of adding to our personal security, the approach of the Liberals to social programs is adding to our insecurity. They think if they just tamper with them a bit-and my hon. colleague from the Bloc suggested that we should tinker with them-they can make them better.
We have tinkered for 30 years and now we are on the brink of bankruptcy. Not only have the Liberal social engineering experiments failed us fiscally and economically but they have also failed us socially. The number of single mothers is increasing dramatically, not because teenagers are not smarter than they were when I was young but because many provincial welfare programs will pay welfare to teenagers who leave home just because they have had a disagreement with their parents. It is clear to everyone except politicians that social programs are also destroying families.
Today I want to look specifically at how the registered personal security plan system we are putting forth might be used to improve the current unemployment insurance program. The Reform Party's policy with respect to unemployment insurance has been developed and approved by Reform Party members at a number of assemblies since 1988. Reformers believe the program should be returned to its proper role as a true insurance program to cover periods of short term unemployment and that it should be administered by the employees and employers who pay the premiums, not by some big government in Ottawa.
At our membership assembly held in Ottawa last October Reform delegates, the supreme governing body of our party, voted almost unanimously in favour of the following resolution:
Resolved that the Reform Party investigate the feasibility of replacing the compulsory, government operated, privately funded, taxpayer subsidized Unemployment Insurance Program with a voluntary, personally financed, privately administered, government regulated Registered Unemployment Savings Plan.
That is what we are bringing forward today as a suggestion that should be explored by the government.
Reformers are not alone in thinking that the RPSP concept might have applications beyond savings for our retirement. This is what the Canadian Institute of Actuaries had to say about the possibility of expanding the use of RPSPs to replace the existing UI program in its submission to the human resources development committee:
A well designed Unemployment Insurance Program would be one which would encourage and reward attachment to the workforce. A capital accumulation program would fulfil this role, as this type of plan could be set up to deposit employer and worker contributions into a registered unemployment savings trust account. This account would be tax sheltered and invested at the sole discretion of
the worker, similar to a group RRSP arrangement. This program would be compulsory for all workers and would replace the existing UI program. This could be co-ordinated with CPP/QPP to enhance retirement security.
While the Canadian Institute of Actuaries is saying contributions would be compulsory, Reformers have still not made a decision on whether the program should be compulsory or voluntary. The Reform Party is still investigating this concept and it will be a number of months before we will be able to make a final recommendation to our members.
The winning proposal selected in the Fraser Institute's 1992 economy and government competition estimated that replacing the current unemployment insurance program with the RPSP type program could save governments over $5 billion a year. The proposal also estimated the greatest positive impact came from replacing the disincentives to become hooked on UI with real incentives to work.
Another huge benefit described was the increased economic activity and job creation that resulted from having about $12 billion a year left in the hands of workers and employers instead of being sent to government to be wasted by spendthrift ministers and bungling bureaucrats.
Many other benefits were noted in the study including a $1 billion saving in government administration costs, a reduction in paper burden and red tape for employers and employees, more money in private hands for training and upgrading, and ending the duplication of effort between UI and provincial welfare programs. Surely everyone would realize that and support our proposal on that basis alone.
Based on our initial research and the positive reaction to the idea of RPSPs by economists, business leaders, the general public and even the media, Reformers believe the idea is one whose time has come. Reformers invite the government to support our motion Work with us to help complete our investigation of the feasibility and application of the RPSP concept. We want to work together with government members. They said they were going to co-operate. This is one aspect where we can.
Reformers will initiate extensive research effort in the next few months. We will use this background information to launch a far reaching consultative process to get public input. The concept will become part of the Reform Party's policy development process and will lead to discussion and debate in hundreds of constituency associations across Canada, culminating in a vote and a decision at our next membership assembly. If approved by our members the concept will form part of the Reform Party's election platform for the next general election. Reform will campaign using the RPSP concept, and if elected Reform will have the mandate to implement the changes we propose.
The Liberal approach is the reason many Canadians become cynical with traditional parties and old line politicians. They never say what they are really going to do and they never really do what they say. The Liberals are masters of old style politics more than anything else. Reformers came here to change the democratic system.
Voters under a Reform government would have real power as a result of democratic reforms which would include citizen initiated legislation, free votes for MPs, referendums, MP recall and a triple-E senate.
Reformers know the government started out to solve the problem but now government itself has become the problem. My goal as a Reform MP is to get the government off the backs of people and out of their pockets. The registered personal security plan is one that will help us achieve that goal.
That completes my presentation as I am willing to split my time with my colleague.
