Mr. Speaker, the devastating changes that were made to EI back in 1996 have really starved a lot of rural communities and ridings like my own, Winnipeg Centre. The changes made to the EI system in my riding alone pulled $20.8 million per year of earnings out of my community. That is money that will not be spent in my riding.
The member for Acadie—Bathurst pointed out that this has an effect on small business. Every dollar spent gets spent four times before it finds its natural state of repose, usually in some rich person's pocket, but it gets circulated in the community. This has a huge impact on areas like mine which are economically depressed.
There is one riding in Newfoundland where the changes to EI pulled $57 million worth of benefits per year out of that riding alone. It is no wonder the government is enjoying this incredible surplus, this incredible revenue generating machine. It is like a cash cow that I think the government has become addicted to. It is like some provincial governments become addicted to gambling revenues. This government has become addicted to the revenue generating ability of the EI fund.
I started out by saying that there are two things in Bill C-2 of which we approve. Those are doing away with the intensity rule and raising the clawback provision threshold.
What the government failed to face were the two fundamental problems with EI. One is the eligibility issue. The bar is set far too high to qualify. The second is the method with which it calculates the benefit that a claimant will receive or what we call the divisor rule. It failed to address those two key fundamental issues. As a result less than 40% of unemployed people actually qualify for unemployment insurance.
What kind of an employment insurance program is that? What if we had a house insurance policy that we were forced to pay into but if our house burned down, we would have a less than 40% chance of getting any benefit whatsoever? We would think we had just been cheated or hosed by some fraudulent insurance salesman. That is what the EI system is doing to unemployed workers today.
There is a gender issue here too. If the individual is an unemployed woman, she has less than a 25% chance of collecting any benefit whatsoever. If the individual is an unemployed youth under the age of 25 he or she has a 15% chance of collecting even though the person is forced to pay into this insurance program.
I firmly believe that if we deduct money from people's paycheque for a specific purpose and then use it for something completely different, it is a breach of trust because we have developed a trust relationship with them when we told the them that if they paid into this insurance fund and were unlucky enough to become unemployed, we would pay a benefit. That was the promise that was made. Yet that is only true for less than 40% of Canadians, so it is a breach of trust. In the best light it is a breach of trust. In the worst light it is out and out fraud. We have deceived Canadians into thinking they have an income security system in their employment insurance system but we are denying them the very benefits.
If the government were serious about improving the unemployment insurance system, it would have listened to the 60 presenters who came to the standing committee from all walks of life. We had people from municipalities, chambers of commerce, labour groups and employer groups. All of them found serious flaws in an insurance system that generates revenue for the government to the tune of $750 million a month, not per year. Every month the employment insurance system pays the government $750 million in dividends. That money goes directly into the general revenue. It is not even dedicated for any specific purpose.
I actually heard the House leader of the ruling party once stand up and give us this logic. He said that if the employment insurance system ran into a deficit, the government would have to pick up the loss and pay. Therefore, when it was in a surplus position, the government should keep the surplus.
We did some mathematics. We added up all the times that the EI system has been a deficit situation. The total, cumulative, aggregate amount of money that was ever paid into it when it was in deficit was $13 billion. The total surplus is now $35 billion, predicted to be $43 billion by the end of this year. Even if we accepted the government's logic, what about the other $25 or $28 billion? Take back the $13 billion that was paid in and use the rest for income benefits and maintenance for the people for which the program was designed.
There are only two designated uses for EI money in the act. One is income maintenance for the unemployed and the other is apprenticeship and training. We are not supposed to build highways with it, or paydown the deficit with it or give tax breaks to the wealthy with it. That is not a designated use as contemplated under the act. That is why I say when money is deducted from a person's paycheque for a specific reason and then it is used for something completely opposite, essentially that is a breach of trust in the very best possible light.
The hon. member for Acadie—Bathurst raised another point. Where does the government get off claiming ownership of that money at all? In 1986 the federal government stopped paying into the UIC program. That money is solely and exclusively contributions by employers and employees. It used to be one third, one third, one third paid by the government. It does not pay anything into it anymore. Where does it get the proprietary right to any surplus? Where does it get the right to dictate what the contribution rate would be?
Frankly, the government should have no say whatsoever. It should take a small administration fee for administering the program. The program should be run by those who are actually involved in it, which are the employers and the employees.
It has been enormously frustrating in my whole career, first as a union leader and now as a member of parliament, to wrestle with a dysfunctional program such as employment insurance and to see the failure and mismanagement of a program. Now it has gone beyond mismanagement. I figure it is out and out abuse because it is using it as a revenue generator, which it was never intended to be. It was there to provide income maintenance to people who were unfortunate enough to fall into a situation where they lost their job.
The whole EI program seems to be some kind of a tough love attitude now. We are going to force these people to pull up their boot and get back into the workforce by starving them. It seems to be based on the premise that most people would rather sit on EI than work. I find that offensive. As a working person myself, I find that an offensive attitude.
This came up in 1987 when I think the Forget commission toured the country looking for amendments to the Employment Insurance Act. It studied the UIC system. One labour leader came before the commission and said that the government was always trying to find people who were ripping off the system or who were committing fraud in collecting unemployment insurance. In actual fact, there are more federal government cabinet ministers convicted of fraud, on a per capita basis, than there are EI recipients convicted of fraud.
At that time, I believe seven or eight of Brian Mulroney's cabinet ministers were busted, caught and convicted of fraudulent activities. In that same year only 200 unemployment insurance recipients were caught and busted for fraud. Out of a million some odd people collecting EI, only 200 people were found to be actually committing a crime. Out of 30 some odd cabinet ministers, eight or nine of them were convicted of fraud. It is good to keep it in perspective sometimes.
One amendment the government could have made, a very small cost factor and a change demanded by industry, was the issue I asked the hon. member for Acadie—Bathurst about. When apprentices were in the community college portion of their training, their eight-week community college instalment, whether plumbers, electricians or carpenters, the government started penalizing them with a two-week waiting period, as though they were unemployed.
Apprentices are not unemployed when they are attending community college. They still have jobs. They still have attachments to the workforce. They are simply going through the steps of the community college portion of their education and training. Why then are apprentices being penalized this two week waiting period?
We asked the government to consider that at the committee stage. I personally asked the minister if she would entertain a friendly amendment to the act to give satisfaction to the many apprentices who are involved with this. I even pleaded the case by pointing out that a lot of apprentices were choosing not to go on to their training component of their education because they could be without that two weeks' income. A lot of apprentices were dropping out of the apprenticeship system.
That is just one example of how the government did not listen to what Canadians were telling it was wrong with the EI system.
It is a regrettable day. We are backed into a corner. We are going to vote in favour of Bill C-2 to get through the few details that we would like to see go through. However the government missed the mark. It did not hit the nail on the head at all.
