Mr. Speaker, I am pleased to speak today to Bill C-12, concerning the unemployment insurance reform. This bill has been shamefully entitled an act respecting employment insurance in Canada.
Through this bill, the government claims, and has clearly said so, to be pursuing two goals: first, to promote job creation, and, second, to improve the system's fairness. However, we will see that this bill will do exactly the opposite and that, here again, the government is about to increase the unfairness of the system, as was pointed out by my colleague who spoke just before me.
First, there will be no job creation. Why? As we all know, the Prime Minister has been repeating ad nauseam for a few weeks that the government is not there to create jobs. With the massive layoffs in the public service, the privatization of ports, airports, railway lines and bridges, and now the disposal of railway cars announced in Bill C-31, where at least 10,000 railway cars will be sold, it is clear that, instead of creating jobs, the government is organizing a gigantic closing sale.
The Prime Minister is perfectly right in saying that a government does not create jobs. However, the Prime Minister says: "Government does not create jobs. I urge the private sector to join with us to make that job growth happen; the private sector will create jobs".
Again, this is only partly true, because it is not large companies that create jobs. In fact, these companies are the ones laying off the largest number of people, this at a time when their profits are higher than ever before. General Motors made profits of $1.39 billion, but laid off 2,500 employees. In 1995, Bell Canada made profits of $502 million, but laid off 3,200 employees, in addition to the 8,000 that had already been let go since 1990. Petro-Canada, which sort of belongs to us since we paid for it, made profits of $196 million, but laid off 564 employees. Shell made profits of $523 million in one year, but laid off 471 employees. Imperial Oil made profits of $514 million, but laid off 452 employees.
And, last but not least, the five major Canadian banks, which made total profits of $4.9 billion. This means 5,000 million dollars in profits. Still, these banks laid off 2,800 employees.
Do not tell us that major companies create jobs when they make profits. Do not tell us, as the Prime Minister did, that private companies are the ones that will create jobs.
The presidents of these banks are paid incredibly high salaries. Jeffrey Simpson, from the Globe and Mail , recently wrote a very good article on this issue. He said the situation was totally unacceptable, because these undue benefits and enormous salaries are not related to performance. Just remember Canary Wharf, in which Canadian banks lost hundreds of millions because they made bad investment decisions. The banks do not always make the right decisions. Yet, not one of these bank presidents had his salary cut. There is no connection between performance and salaries. Their salaries go up each year, while employees are being laid off. This is what is happening.
If, as the Prime Minister says, it is not the government that creates jobs, and if, as we can see, it is not large companies either, then who will create jobs? It is small and medium size businesses, it is, as Mr. Parizeau said, the "tiny, tiny businesses". They are the ones creating jobs; yet, they are also the ones that will be penalized with Bill C-12, as we shall see.
Under the old system-I use the word "old" but I should say "current"-workers and employers start paying unemployment insurance premiums after 15 hours of work or $163 in earnings. The amount earned is called the insurable earnings. This is what the current system provides for.
But with the changes being introduced, employees and employers will pay UI premiums from the very first hour of work. Who usually hires people for less than 15 hours a week? Not large corporations, not Bell Canada, not General Motors, not Petro Canada; small and medium size businesses do. What will it mean for them?
Previously, people could work for up to 15 hours a week without either the employee or the employer having to pay UI premiums. Now, as soon as a person works an hour, both that person and the business will have to pay premiums. That means that the whole payroll is covered, from the first hour of work, which directly hits small and medium size businesses.
This new grab for premiums will bring close to $1 billion into the unemployment insurance account, and that huge amount will come from low wage earners and from all small businesses, which are the only ones creating jobs in Canada. And they talk about job creation.
Meanwhile, what is happening at the other end of the system? They are lowering the contribution ceilings. Previously, people were contributing into the UI account up to maximum earnings of $42,380. This meant the worker contributed up to that amount and the employer was also paying his or her share up to that amount. That ceiling is now being lowered to $39,000 and both workers and businesses will pay less.
Therefore, that billion dollars will be taken from the small business sector, the one that creates jobs, which will allow for the same amount of savings for large corporations that are laying off people in droves. So, Bill C-12 will not create, but kill jobs.
It is easy to understand. Here is an example. Under the present plan, if a company has an employee who earns $40,000 a year, both the employee and the company contribute to the UI fund on those $40,000.
Since the earnings ceiling is $42,000, contributions would be paid on the whole amount. But under the new plan, if the company has a surplus of work, it will be much more profitable to have the same employee work overtime for $30,000 or more, with his annual earnings going up to $70,000 a year or more, because there are no contributions for the earnings over $39,000.
Instead of hiring another employee to do the work, it is much better for the company to have its existing workers work overtime. This bill will not accelerate, but slow down job creation. We talk about work sharing, but it is obvious that this bill does not deal with this issue at all.
We have also been told that greater equity was another goal. That was their second argument. But the bill will actually make things more unfair. High income earners will pay $900 million less in premiums.
With Bill C-12, high income earners and big companies, which do not create jobs, will get a $900 million cut in contributions. That is a nice little gift. But to compensate that, low income workers and small businesses, which do create jobs, will have to pay more. That is what is happening with Bill C-12.
I remind the House that 82 per cent of all spending cuts across federal programs are in unemployment insurance. Needless to say, Mr. Speaker, as you are indicating that my time is almost over, that with Bill C-12, the government not only breaks its promises to create justice but also balances the budget with the workers's money. This is a collective salary grab of $5 billion, since the money in the UI fund is not the government's money but has been contributed by workers and businesses, and the government is using this money to reduce its deficit.
In our view, this bill will stimulate poverty instead of employment.
