GOVERNMENT ORDERS

EMPLOYMENT INSURANCE ACT

SPEAKER'S RULING

Motion No. 9(a) cannot be proposed to the House because it is not accompanied by the recommendation of the governor general. Standing Order 76(3) requires that notice of such a recommendation be given no later than the sitting day before consideration.

The other motions will be grouped for debate as follows.

Group No. 2: Motions Nos. 1, 2 and 3.

Group No. 3: Motions Nos. 4, 5, 6, 200 and 201.

(1010)

[Translation]

Group No. 4: Motions Nos. 7 and 8.

Group No. 5: Motions Nos. 10 and 10A.

[English]

Group No. 6: Motions Nos. 17, 18, 20 to 25, 35, 36, 72, 73, 171, 173 and 189.

Group No. 7: Motions Nos. 75 and 76.

[Translation]

Group No. 8: Motions Nos. 80, 81, 92 and 93.

Group No. 9: Motions Nos. 111, 112 and 113.

Group No. 10: Motion No. 128.

Group No. 11: Motion No. 188.

[English]

Group No. 12: Motions Nos. 191 and 192.

[Translation]

Group No. 13: Motions Nos. 214, 215 and 219.

Group No. 14: Motions Nos. 216, 217 and 218.

Group No. 15: Motions Nos. 9, 11 to 16, 19, 26 to 34, 37 to 71, 74, 77 to 79, 82 to 91, 94 to 110, 114 to 127, 129 to 170, 172, 174 to 187, 190, 193 to 199, 202 to 213.

[English]

The voting patterns for the motions within each group are available at the table. The Chair will remind the House of each pattern at the time of voting.

[Translation]

Mrs. Francine Lalonde (Mercier, BQ) moved:

Motion No. 1

That Bill C-12 be amended by replacing the long title, on page 1, with the following:

``An Act to amend the Unemployment Insurance Act.''

Mr. Boudria Madam Speaker, on a point of order, in order to enable MPs as much as possible to speak to the motions, rather than listening to motions being read to us, there might be consent that all the motions whose numbers have been recited just now by Madam Speaker be deemed to have been moved, seconded and proposed to the House. If the House gives its consent to that we could spend our time debating the actual text of the motion rather than listening to the titles being read to us.

[Translation]

The Acting Speaker (Mrs. Ringuette-Maltais): Is there unanimous consent?

Some hon. members: Agreed.

Mr. Chris Axworthy (Saskatoon-Clark's Crossing, NDP) moved:

Motion No. 2

That Bill C-12 be amended by deleting Clause 1.

Motion No. 3

That Bill C-12, in Clause 1, be amended by replacing lines 4 and 5, on page 1, with the followingL

``1. The Unemployment Insurance Act is amended by adding the following to paragraph 6(2)(a):

``has, during the person's qualifying period, held insurable employment or insurable employments numbering at least the number of weeks''

2. The Unemployment Insurance Act is amended by adding the following to paragraph 6(2)(b):

``has had an interruption of earnings from his employment or employments''

3. The Unemployment Insurance Act is amended by adding the following to paragraph 6(3)(a):

``has held twenty or more weeks of insurable employment or employments''

4. The Unemployment Insurance Act is amended by adding the following to paragraph 6(3)(b):

``has had an interruption of earnings from his employment or employments.''

5. The Unemployment Insurance Act is amended by adding the following to paragraph 6(2)(c):

``less than fourteen prescribed weeks that relate to employment or employments''''.

(1015)

The Acting Speaker (Mrs. Ringuette-Maltais): In support of the Chair's decision, I would like to quote citation 246(3) in the fourth edition of Beauchesne:

246. (3) The guiding principle in determining the effect of an amendment upon the financial initiative of the Crown is that the communication, to which the royal demand of recommendation is attached, must be treated as laying down once for all (unless withdrawn and replaced) not only the amount of a charge, but also its objects, purposes, conditions and qualifications. In relation to the standard thereby fixed, an amendment infringes the financial initiative of the Crown, not only if it increases the amount, but also if it extends the objects and purposes, or relaxes the conditions and qualifications expressed in the communication by which the Crown has demanded or recommended a charge. And this standard is binding not only on private members but also on ministers whose only advantage is that, as advisors of the Crown, they can present new or supplementary estimates or secure the royal recommendation to new or supplementary resolutions.

Mrs. Lalonde: Madam Speaker, this excerpt from Beauchesne's explains the absolute limits to which the opposition is subject in a debate such as the one on unemployment insurance reform. Given the fact that you reject the amendment, your interpretation of the article just read implies that in no way can our proposed amendments have the effect of changing the amounts of charges and expenditures, even though the main point of the debate on the unemployment insurance reform concerns precisely this issue.

This extreme constraint means that the opposition can only refer to the current act, since the primary purpose of the bill is to lower contributions for workers earning between $39,000 and $42,400, to eliminate contributions from major corporations regarding such amounts, thus reducing the tax base, to increase the tax burden of

those who currently do not pay unemployment insurance contributions by making them pay such contributions, and to force these small earners who will now pay contributions to make up for the $900 million shortfall, for the gift that the government is giving to major corporations and workers earning between $39,000 and $42,000 per year. Indeed, the idea is to make up for this loss by making those who currently do not contribute pay premiums, that is people who work between one and fifteen hours per week, even though most of them will not be eligible for unemployment benefits. The rest of the reform provides for cuts, so as to meet the objective of $1.9 billion set out in the budget. You will understand that, in this context, the opposition is bound and gagged, utterly.

This bill, whose title shamefully refers to employment insurance, provides absolutely no assurance to workers that they will have a job even if they collect benefits, which is not a sure thing; in fact, no one is certain to collect benefits, because there is no right of appeal regarding employment benefits.

(1020)

The bill's title does not even correspond to reality. Moreover, we claim, and we have every evidence to support our claim, that not only does the bill not guarantee a job, nor promote job creation, but also that it is anti-job.

It does not promote job creation because it reduces interregional subsidization. It will make the poor regions even poorer. When I talk about regions, I mean the regions with seasonal work and high unemployment rates. I mean the Gaspé peninsula as well as the Atlantic provinces in general, but also the Montreal area.

I would like to read from a brief submitted by some very important people, Robert Morrissey, the minister of economic development and tourism, and Jeannie Lea, the minister of education of Prince Edward Island. Their brief states: ``In Prince Edward Island, the net loss in unemployment insurance benefits would thus add up to over $15 million and increase to $24 million by 2001-2002. Such large losses have a major impact on an economy as small as ours, although Prince Edward Island ranked first for job growth in 1985''.

Even though the cuts are somewhat reduced by the amendments, cuts are the hallmark of this bill. They will have an impact on the whole economy. If the minister of the economy in Prince Edward Island, a province that ranks first in job creation, can claim his province cannot cope with $15 million in cuts, what could be said of cuts in the Montreal area, where they will represent $500 million if the 1994 cuts are taken into account?

This is the equivalent of the definitive closure, in just one region, of dozens and dozens of businesses. The impact on the economy will be staggering, and the social impact will be just as severe, because those who are excluded, many of whom do not get benefits, will be forced to make greater contributions.

That is what they told us time and again. They also expressed their opposition through demonstrations and sometimes desperate protests. We can say one thing: If the government felt it had to make minor amendments, to the tune of $365 million on total cuts of almost $2 billion, it is because of the despair expressed in those demonstrations.

We should not forget that those who were able to take part in demonstrations were people who were organized and could see the immediate impact on a whole area. Isolated individuals who have unstable jobs, who fear for their job or are already unemployed, and those who are on welfare, feel helpless in their isolation and do not know how to join in demonstrations. What we have here is a far cry from an employment insurance plan.

That is why we, in the Bloc Quebecois, want and urge the minister to take the time to develop a real reform that will not attack those already in trouble, like Prime Minister Chrétien used to say-I am sorry, I should not be using his name-the former Liberal Leader of the Opposition, who was Jean Chrétien, the present Prime Minister, about a previous reform that was much less drastic than this one, this so-called reform that has already made $2.4 billion in cuts in unemployment benefits since 1995.

(1025)

Thus we will show the Prime Minister and the Minister of Human Resources Development how they should take great care of that instrument, which was most effective during the 1981-1983 recession and the most recent one, but which will be less and less so because its stabilizing effect will be less and less effective. This is true of the economy as a whole, but even more so of individuals.

How many people in our society do not even have minimum security? Their only security is unemployment insurance, which allows them to continue hoping to get another job. Therefore, we have no right to change overnight this essential instrument of social and economic stabilization.

[English]

Mr. Geoff Regan (Halifax West, Lib.): Madam Speaker, I rise today to speak on the bill regarding employment insurance.

Over the past two years, the government has carried on extensive consultations in relation to matters of social policy, in particular the question of the unemployment insurance system which will now be called employment insurance.

It is very fitting that the new name of the system is employment insurance. We do not talk about having death insurance although we only get that insurance when we die. It seems reasonable not to call it unemployment insurance since the idea to be reinforced is that of people having employment, not unemployment. We want to assist people in achieving employment, which is what this bill is all about.

The bill is about helping people to get jobs. It is also about strengthening work incentives. I do not believe this bill is perfect which is why I am glad that the human resources development committee over the past number of weeks has had a chance to look into the bill, to hear witnesses and to discuss possible ways to change it.

Two other members and I have brought forward amendments. There are over 200 motions to amend the bill. I believe many of them will go through and will improve the bill substantially. It is important that fairness is ensured in the system through these changes.

This bill will also help workers adjust to changing economic times. One of the most important changes to the employment insurance system will be the process of counting hours of work rather than counting weeks of work. That seems to be a more reasonable and accurate way to measure work. Most people work according to the number of hours per week.

In Atlantic Canada this change will mean that the vast majority of workers, for example, those in seasonal industries who often work more than 35 hours a week-some as much as 70 hours per week-will now get full credit for the hours they work. That is a very important change that will benefit people in Atlantic Canada.

It is also important to realize that under the new bill every hour and every dollar counts toward people's benefits. That is a change from the past. Before, whether you had 16 hours a week or 80 hours a week, it meant the same thing. That is surely not an accurate way to measure work or what will be insured. The new system will improve on that substantially.

For example, consider a person in the construction industry, which is usually a seasonal industry. During the summer months, the heavy months of work, people will often work up to 70 hours a week. People in that sector will benefit from these changes. A week in which they work 70 hours will mean the equivalent of 2 weeks toward eligibility.

One of my original concerns about the bill was the way it dealt with the divisor. The divisor is the number of weeks by which people's income is divided to determine what is their income.That is then multiplied by 55 per cent to determine what their benefits are.

(1030)

The problem I had with that was that under the original bill in the highest unemployment regions people were required to work three or four weeks beyond the eligibility period. Let us say it was the equivalent of 12 or 14 weeks. In the 12 week areas they would have to work the full 16 weeks, and about 17 weeks in the 14 week areas in order to get the full benefit, whereas in the areas of lowest unemployment where it would be easiest to get additional work they would have to work no further weeks of work.

It is similar to saying that in the areas where it is toughest to get additional work, that is, the areas of highest unemployment, an incentive is needed to get additional work and there is supposedly no need in the areas of highest employment where it is easier to get additional work. It would have meant hardship for the people in Atlantic Canada and in other high unemployment regions across the country. I felt it was very important that we remove that kind of hardship from the bill.

By the same token, there were various groups, even unions in some cases, who came forward to say that it was true that there were some people who, after getting their 12 weeks of eligibility, would stop working. They would arrange to get themselves laid off or whatever. I do not think it is a big number of people but they exist. We have been told by those people and others that an incentive is needed for people to work a little extra, to ask them to stretch a bit but not to ask them to go off a cliff.

I put forward the idea that instead of having the addition of four weeks in the highest unemployment areas and the addition of zero weeks in the lowest, it should be a flexible eligibility plus two weeks period for the divisor.

This is a complicated subject. Many people will find it a little complex and hard to understand. The point is that it will be fairer across the board for all Canadians. It will mean that the divisor period will follow the rate of unemployment.

As the unemployment rate in an area goes down and it becomes easier to find work, people will have to work a little longer to get their full benefit. As the unemployment rate in an area goes up and it gets harder to get those extra weeks of work, they will have fewer weeks to work, maybe one or two, obviously depending on the nature of the unemployment rate, to get that full benefit.

That is an important measure. It will have a cost to it. It will mean $95 million will go back into the economy. It is a very important measure particularly in the areas of highest unemployment which would have been unduly harshly impacted on by the bill as originally written.

I am delighted the government has accepted my proposal. The minister has put forward an amendment which requires a royal recommendation since it involves the spending of funds. He has also put forward proposals by my friend from Fredericton-York-Sunbury and by one of the members from Toronto.

He put forward an amendment in one case regarding the gap or the question of weeks of zero employment. This would have been very problematic in some areas. There was another relating to exempting people in low income families from the intensity rule. That is a very important measure. The other measure will give people who are working while on UI a credit toward their next term on UI and a credit in relation to the intensity rule.

Those are very important measures which will substantially improve the bill. I do not claim that this system will be perfect. I have never seen a government system that is perfect. I once heard someone say that the thing about all human institutions is that they have human failings. We are probably never going to create a perfect institution.

The idea is to improve the situation as much as possible. Certainly, the change from a weeks based system to an hours based eligibility system will dramatically improve the employment insurance system for the majority of people who are claimants in my region. That is very important.

There was another thing that was very important to me about this bill. When I first learned about the proposals on this bill last summer, one of my biggest concerns was that there was a reduction in the amount of funding going toward this. I recognize that there was an increase in the cost of the program from $8 billion 10 years ago to $20 billion today.

(1035 )

My constituents have said that people should not be making high incomes year after year and also drawing as much as $10,000 in UI year after year. People are very strongly against that. I told the Minister of Human Resources Development it seemed to me that if we were going to change the system, the way to do it was to take it out of the high end, not the low end.

The result is that people in low income families will end up getting about 14 per cent more because of what has been brought forward with the family income supplement. It is a very important progressive measure in the bill. It will mean that those low income families who depend on unemployment insurance will get a boost, a little more than the regular 55 per cent that others will get.

It also means that for the vast majority in the middle the system will be maintained in a very positive way. But the fact is, for those who make $50,000 or $60,000 a year there will be a reduction because the employment insurance benefits of those people will be clawed back. The vast majority of Canadians will strongly support that change. It is one I certainly support. This is a very progressive measure.

We saw changes to the unemployment insurance system by the previous Conservative government which simply slashed and cut. It increased the number of weeks required to work and cut the amount of benefits and that was it. That was not the proper approach. The system needed vast reform which we have done. It will be a very strong and much better system.

Mrs. Jan Brown (Calgary Southeast, Ref.): Madam Speaker, this bill which has come before the House probably represents one of the most technical of all the pieces of legislation we have had to deal with in this session to date. Indeed, the social and fiscal implications for same will be felt for many decades to come.

Certainly the amendments the Reform Party of Canada is bringing forward will add a positive element to the debate. In terms of reasoned amendments, we have put forward 10. I mention that because I do hope members on the government side will look at the amendments we bring forward in the true spirit of co-operation, but also with the intention of participating in the debate with some reasoned thought and proposals which we feel do have validity in today's workplace.

I would like to read into the record some elements of the definition of unemployment insurance, as our party sees it. The whole definition of unemployment insurance has changed radically under the bill. We have moved away from the notion of true insurance based principles. It is important for us to acknowledge that fact.

The employment insurance bill which we continue to debate today has taken us very far away from what UI was intended when it was originally designed. Today, as we have heard from hon. members on the other side of the House, EI is thought of as an income supplement and not as an insurance.

The Liberal minister of labour in 1940 when he was supporting the concept of individuals caring for their own unemployment situation, quoted from a report that went way back to 1919 when Manitoba Chief Justice Mathers said:

We recommend to the your government the question of making some provision by a system of state social insurance for those who, through no fault of their own, are unable to work, whether the inability arises from a lack of opportunity, sickness, invalidity or old age. Such insurance would remove the spectre of fear which now haunts the wage earner and make him a more contented and better citizen.

I do agree with the sentiments of the then labour minister who was concerned that UI be used to get people from one job to another, to support them for that short transition time before they went into the other job.

(1040 )

The minister of labour at the time was also concerned that UI would never become a way of life for people and that measures would be taken which would indeed avoid people becoming heavily reliant on that kind of subsistence. To make his point he quoted from a report by the Civil War Workers of Great Britain who said:

-how much unemployment there will be and over what period it will last is impossible to forecast. But, whatever it be, there must be a great deal of unemployment which can only be dealt with in one of two ways: either by a considered scheme of insurance-or by state doles, hurriedly and indiscriminately issued when the moment of crisis arrives.

There can be no question which is the better way. State doles may lead straight to pauperization. A well devised scheme of insurance preserves the self-respect of the worker and assists and encourages them to supplement it by provision made industrially through an association.

For many in Canada today, UI has indeed become a way of life. For too many people UI is that dole to which the then labour minister referred. With the new changes to UI the Minister of Human Resources Development has announced there are over $1 billion of training programs for areas of high unemployment. This is exactly the kind of dole that history in the past has repeated and cautioned us to not endorse.

As I was reading the executive summary of the bill, I was struck by a number of elements. The first one that made me certainly question the relevancy to unemployment insurance and work was the statement that ``income support is provided in a way that reinforces work''. I have asked questions on that statement many times and there is no one who has suggested or has even come close to explaining exactly how income support can provide a way to reinforce work. To me they are two discrete and very different things.

The executive summary went on to say: ``It also permits simplification of the reporting requirements for employees and premium collections''. I am going to read from a very real life example which is from the Canadian Restaurant and Food Services Association. We are seeing that indeed simplification is not on when it comes to this industry.

The result of the change with respect to the conversion to an hours based system from a maximum weekly insurable system has major financial implications for employers and especially part time employees in Canada's food service industry because so many of our part time students work in this area.

Using the 1996 premium rate of .0413, human resources development officials have estimated the cost to this one industry alone, the food service employers, to be $35 million. This is certainly higher than what the Canadian Restaurant and Food Services Association had originally estimated. It represents a 17 per cent increase on employer contributions of approximately $211 million.

Once again I ask: How does the statement ``it also permits simplification of the reporting requirements for employees and of premium collection'' really have any relevancy here when we understand that the impact of first dollar coverage on individual food service companies is going to fluctuate substantially depending on the percentage of part time employees working less than 15 hours per week? The nature of the reporting has become so complex that an analysis of this indicates that the employer is going to actually see an increase in employer premium costs from 15.7 per cent to 72.6 per cent.

That conversion to an hours based system not only alters the cost structure of some companies disproportionately, it also results in competitive distortions within the industry. It also creates a huge backlog of extra effort administratively for these businesses. That is something which I believe requires a great deal of clarification on the part of the Liberal government.

(1045)

I understand my time is coming to an end, but there is another contradictory statement here. We look at two terms here: wage subsidy linked with reduction of dependence on income support. Those two statements are made in the same paragraph in the executive summary. I hope that over the course of this debate I will be able to come back to these elements of the executive summary because they are not the same thing. They are contradictions in terms. They also have great implications for the unemployment insurance scheme as it has been developed by the Liberal government.

On that note, for this time, I will close.

Mr. Robert D. Nault (Parliamentary Secretary to Minister of Human Resources Development, Lib.): Madam Speaker, I am very pleased to have the opportunity to participate in the debate on Bill C-12.

I would like to make some comments at this stage on the changes proposed to the original bill and in particular to the costs associated with the changes.

It is important to focus on the amendments which were made in committee. They are based on all the hard work that the committee has been involved in, going back two years when the committee of human resources development was sent across the country to hear the views of Canadians, then when the bill was introduced in its

first phase to where we find ourselves today. It is some 140 days since we have had hearings and went clause by clause in committee. We find ourselves in the House today dealing with amendments at report stage of this bill.

The increased costs of the three main amendments to Bill C-12 that have been accepted by the government will be offset by adjustments in other areas. The amended bill will still mean that a total of $1.2 billion will be saved by the year 2001-2002 which is a gross savings of $2 billion minus the $800 million that will be reinvested in re-employment measures.

Hon. colleagues should by now be familiar with the amendments proposed because the members who have proposed them, at least from the government side, have been very up front with them, have sent them across the country and to their own constituents.

The first amendment is the provision to lessen the impact on workers in all industries who have gaps in their work and earning patterns. The fixed period for calculating benefits under the original proposal was considered to be too harsh for workers in this situation.

Now all claimants will be able to use a full 26-week period prior to making a claim to calculate average earnings. Average earnings over this period, excluding gaps, will determine the level of benefits. What it means is that workers could have several weeks of breaks in employment during this 26-week period without having their benefits reduced due to these gaps in employment. This change will increase benefit payouts by about $246 million for workers with unstable work patterns.

The second amendment changes the way the average is arrived at and the way the benefit is calculated with those with only the minimum number of weeks. My colleague in the Liberal Party spoke to that issue which is what we call the divisor.

Under the original proposal the divisor was set at three or four weeks above minimum entrance requirements in high unemployment regions and between zero and two weeks above in low unemployment regions. Therefore, individuals in high unemployment regions with the least opportunity for finding additional work exists would have been greatly penalized by these measures.

However, the purpose of having a divisor that is higher than the minimum qualifying requirement is to encourage people to take extra employment and try to work more than just the minimum required to qualify.

However, a balance between providing incentives and ensuring fairness had to be found. With the amendment of my colleague which is supported by the government and the Minister of Human Resources Development, I believe we have been able to do that.

Consequently, the government has agreed to an amendment that will set the divisor at only two weeks plus the minimum number of weeks necessary to qualify in all regions, that is, a minimum divisor which ranges from 14 to 22 weeks depending on the unemployment rate in the region. It will thereby retain the incentive to work, but will be fairer for those in truly difficult situations. People will have a 26-week period in which to find the weeks needed to maximize their benefits. This proposal will have a positive impact on benefit payments for workers in high unemployment regions and little impact elsewhere across the country. The new divisor will increase benefit payouts by about $95 million.

(1050)

The third main amendment is the new intensity rule. Under this rule people who draw on the system year after year will see a modest reduction in benefits. All future claimants who have received 20 or more weeks of regular benefits within a five-year period, beginning with the new bill when it is passed into law, will have the weekly benefit rate of their next claim reduced by 1 percentage point, from 55 per cent for every 20 weeks they have been on claim. The maximum reduction will be 50 per cent of weekly earnings for someone who has received more than 100 weeks of benefits over a five-year period.

The amendment the government has accepted is to exempt from the intensity rule those individuals with very low incomes who have children. That threshold has been set at $26,000 or less. Approximately 350,000 claimants qualifying for the family income supplement will not be subject to this rule. We should keep that in mind when some 2.4 million Canadians collect unemployment insurance each year. This exemption of the intensity rule for some 350,000 people is a significant improvement. It is a way for the government to ensure that the poorest of the poor are not affected. Quite frankly, they do not need an incentive to work. Being poor, I am sure, is enough incentive for anyone to try to find a job.

While the intensity rule will reduce weekly benefits somewhat for those who use the system frequently, those with the lowest incomes who are most in need are protected. It will increase benefit payouts by about $24 million for 188,000 claimants in low income families who otherwise would have been affected by the rule.

Taken together, the three amendments will increase the payouts to individuals under the employment insurance program by roughly $365 million over what was proposed in the unamended Bill C-12. That shows how important committee work is. When members make proposals, even though they have a significant cost factor, when proven to be fair to the people we are trying to help and protect, the government has reacted very favourably.

Now for the other side of the ledger, the changes that will be made to tighten up the system to reduce expenditures to offset the

increased payouts I have just mentioned. Those have to be put in perspective.

The scope of potential cost reductions is very wide. For example, if 50 per cent of EI claimants collect just one week fewer benefits the savings would be $300 million in one year. Think of it. One week with no benefits for individuals who happened to find an extra week of work would save the system some $300 million which could be used in other areas.

What the government is planning to do is tackle three longstanding problems of the old system in order to reduce costs and to make the operation of the system fairer for all those who contribute to it. One of the major problems is that there has been an inefficient early use of all means available to help claimants get back to work as quickly as possible. In too many cases there is a tendency to simply fill out the forms and mail out the cheques without a concerted effort to ensure that the individual claimant has help to find other employment. That will no longer be the case in employment offices across the country. Now the question will not simply be: ``Where do we mail the cheque?'', it is going to be, ``What do we need to do to get you back into the workforce right now?''

In addition to other services provided to those who are looking for work, a new and ongoing series of group information sessions will be provided to claimants in specific categories. These include claimants in demand occupations. For example, those who have skills that employers are looking for, repeat claimants, past fraud claimants and those affected by structural changes who may face long periods of unemployment.

(1055 )

At these sessions claimants will be informed of all the services available to help them get back into the workforce rather than remain on benefits. These include the electronic hiring hall, which we have all heard about, and will include the computerized job search system which was introduced in the last number of years.

Approximately 400,000 unemployed workers every year will qualify for a very flexible and innovative series of new measures which will help more people get jobs. These include wage subsidies, income supplements, self-employment assistance, skills, loans and grants and community job partnerships.

These changes in the bill are intended to save a significant amount of money. It is estimated by the year 2001-2002 if we get more proactive in helping people find a job, we can recoup the finances put back into the system with the three amendments that the members have made and the government has accepted.

That is the rationale for these amendments at this point. I hope to speak more on those amendments as the day goes on.

[Translation]

Mr. Paul Crête (Kamouraska-Rivière-du-Loup, BQ): Madam Speaker, we have finally made it. We still had not had the opportunity, four months after the introduction of the bill, to examine this issue in detail, but we will now be able to do so thanks to the Bloc amendments included in the first group of motions. How can the bill before us be entitled an Act respecting employment insurance in Canada, when all it provides for really is a lot of amendments to the Unemployment Insurance Act?

Let me try to explain. During the 1993 fall election, voters told us that they thought employment should be the first priority of the federal government. They wanted seasonal workers to have the opportunity to work during the winter, they wanted workers between 45 and 50 years of age affected by technological change to have access to other jobs thanks to productivity gains, and they wanted female workers to be able to make the most of their potential and skills.

The government took the message the Canadian voters sent it and turned it into what is now improperly called an Act respecting employment insurance in Canada. As we have heard this morning, some members believe that this bill will encourage people to work a bit longer. They started with a bill and said: ``We will call it employment insurance''. An employment insurance ought to help everyone get some work and help workers who lose their jobs find another one as soon as possible, so that their full potential is used.

Instead, what we have is a bill where workers who lose their jobs get their knuckles rapped, since they are told they will be encouraged to work longer, because if they do not, they will get no unemployment insurance. This is a punitive approach that is out of step with the current employment situation in Canada.

This title was given to the bill in answer to the public's expressed wish to make full use of human potential, but the bill is just a smoke screen, since its content has nothing to do with reality. The reality is that this reform bill offers no guarantees in terms of jobs. It also denies the workers the benefit of an income between jobs.

Unemployment insurance was established in 1935. I would like to quote what Prime Minister Bennett said about it in a speech: ``A series of measures that are part of a comprehensive plan aimed at reducing the present social and economic inequities and at distributing more equitably the benefits of capitalism between the different groups in our society and the various regions will be submitted to you''. This is the basis of the UI program as we know it today.

Now, let us look at the content of the employment insurance bill, to see if it still meets that goal. Canadians and Quebecers can be proud of that goal. Experts who appeared before the committee told

us that the UI program is the best program to stabilize the economy during a recession.

The amendments to the UI program being brought in by the government will do exactly the opposite: they will reduce this stabilizing effect and it will be a step backward that will eventually lead us to a situation similar to that of the Depression of the 1930s. The UI program was established at that time to help us overcome the crisis and to soften the effects of recessions. I will give some examples of the adverse effects of this bill.

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The first thing that is not good for job creation is the lowering of maximum insurable earnings. We are encouraging businesses, big corporations in particular, by giving them a present, to hire people who can earn more than $39,000, who can do lots of overtime, because above $39,000 businesses will not pay premiums anymore. So given the choice between hiring someone at $39,000 and asking him to do more than $10,000 worth of overtime in one year and hiring a part time worker, what will the company choose? To realize economies of scale, the big corporation will say: ``Instead of paying $10,000 to 10 part time employees, we will pay overtime instead, which will make for corresponding savings in terms of unemployment insurance premiums we will not have to pay''.

When a gouvernment suggests such measures in a bill, it cannot call it employment insurance. In fact, it is an anti-employment bill. We cannot give such a title to a bill. At least, the government should have had the decency to consider it as a series of amendments to the Unemployment insurance Act, and let us determine whether or not they are in accordance with what the people want.

Another significant element is that everybody will have to pay premiums from now on, starting with the first hour of work. The principle of making everybody insurable can be interesting, but it means that many people, including students, will pay premiums.

We heard representations by restaurant owners associations, people who are responsible for McDonald's franchises and others, throughout Canada, and who cannot be accused of not trying to protect the economy. They told us it would have a major negative impact on student employment. Once again, there is a negative impact on employment. So, we cannot say it is an employment insurance bill.

The other element, maybe the most tragic one, at least in my riding, is the way they are killing regional economies. Next year, in my riding, the changes will take away $10 million from the economies of Kamouraska, Rivière-du-Loup, Témiscouata, Les Basques and the surrounding area. In Lower St. Lawrence, it will be $20 million.

And you would have me believe that those cuts will create employment? How could that be? How can the government guarantee that these savings will be used to create new jobs? There is no way it can because it is using the UI fund to supplement its budget. It is using it to show the world that Canada's deficit is not that high, but that does nothing for job creation. So, it is not an employment insurance bill but an anti-employment bill, a bill representing a step backwards for all unemployment insurance rules. I for one think it is unacceptable.

Another example of the negative impact of the so-called employment insurance bill, which is just an amendment of the Unemployment Insurance Act, is the rule prescribing 910 hours of work for new entrants to the labour force. Just think, previously, a new entrant needed 300 hours of work to be eligible, that is 20 weeks at 15 hours a week. From now on, it will be 910 hours.

What effect will that have on new entrants, on young people entering the labour market? After trying for a year to accumulate 910 hours, young people who just graduated from school in applied ecology, in animal health, in tourism, in recreation or in any other field related to seasonal industries will realize that this 910-hour requirement cannot be met. By imposing such a requirement, the federal government is encouraging those people to do clandestine work and is forcing them onto welfare.

Do you think you are encouraging high school, college or university students to work when you tell them that the job they will get after graduating will lead them straight to welfare? This situation is unacceptable, and it is totally misleading to say that this legislation is about employment insurance.

What should the government have done instead? It should have introduced a true reform and not seize this opportunity to tighten all eligibility requirements for unemployment insurance. For this to be a real employment insurance bill, the government should have included in it the right or the obligation to set a goal for reducing unemployment, just as it did for the reduction of the deficit. It said: ``We will bring the deficit down to a certain percentage of the GDP''. If the government really wanted to address the problem of unemployment, should it not have included in this bill a goal for reducing unemployment so that all government action could be geared toward this goal? There is no such thing in the bill.

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Are there measures in the bill to encourage job-sharing? Are there employment oriented tax incentives? No. All the government has come up with is a technical committee to evaluate the effects of taxation on employment. Before you know it, we will be in the next recession and we will still not have found any solution, although we will have had the opportunity. If the object was to come up with an employment insurance bill, to define and produce rules such

that businesses are encouraged through taxation to keep employees, to train them, to ensure that they will continue to work for them rather than leave.

It should also have included incentives to reduce overtime. But the opposite is true, as I explained with respect to maximum insurable earnings. Here again, there is nothing favouring job creation, in particular by reducing overtime.

Another thing that could have been done was to increase the effectiveness of training. This means doing the right things in the right places. Why can the government not understand that people throughout Quebec are saying that the waste in this sector is outrageous, that the fact that both governments are operating in the same sector is unacceptable?

Madam Speaker, you are indicating to me that my time is up. I will conclude in one minute by saying that this bill is not an employment insurance bill, but a bill to amend the Unemployment Insurance Act, unfortunately for the worse, as the basic criteria are no longer even met. The result is that unemployment insurance is becoming a luxury in our society.

Mr. Antoine Dubé (Lévis, BQ): Madam Speaker, I was expecting to speak a little later today in this debate. But seeing that our friends across the way, and those next to us, have decided to pass, I shall jump in now.

It is somewhat strange to see the Liberals, now they are in power, adopting an attitude so completely opposite to their attitude when in opposition. Without going over all of them we could say this is unkept promises week.

It would be worthwhile repeating a certain number of points relating to unemployment insurance. First of all, I would like to quote the present Minister of Human Resources Development, during the debate on the Borrowing Authority Act on May 1, 1989. He said: ``The point I am trying to make, which many of us will have to look at seriously, is the whole notion of trust and credibility. Canadians are prepared to share the burden, if they think it is being done fairly. Unemployment insurance, family allowance, and old age pensions are a sacred trust. We must not allow the trust of Canadians to deteriorate to a point where they become cynical. I have listened to people talk about New Zealand, the United States, and about other countries and how they do it. This country is very special in how it deals across the board with men and women in every part of the country. There are basic standards, basic programs, universal programs, and programs that allow people to deal with their future with some degree of security''. Those are the words of the present Minister of Human Resources Development.

Better yet, I will read from a 1993 letter addressed to the Mouvement Action-Chômage by the present Prime Minister, who was the Leader of the Opposition at the time. I think the whole thing needs to be read.

Thank you for your fax indicating your opposition to the legislative measures taken by the government to change unemployment insurance.

You have my assurance that the Liberal Party shares your concerns about this attack on the unemployed, and we also do not believe that the recent superficial amendments change the fundamentally unfair nature of these measures in any way.

In light of the gravity of this crisis, the Liberals have called upon the government-Conservative at the time-to take steps to encourage economic upturn and job creation. Yet, according to the Minister of Finance, he will not only continue the same taxation, monetary and trade policies which have plunged us into this recession, but will also dump on the unemployed under the pretext of reducing expenditures. . . .

Liberals are appalled by these measures. By reducing benefits and penalising even more workers who voluntarily quit their jobs, the government shows it cares very little about the victims of the current economic crisis. Instead of addressing the problem at its core, the government picks on the unemployed. Besides, these measures will have disturbing consequences because they will discourage workers from reporting harassment cases and unacceptable labour conditions.

Finally, rest assured that Liberals will continue to demand that the government withdraw this unfair bill. As Leader of the Opposition, I appreciate your taking the time to let me know your position on this issue.

This letter is signed by the current Prime Minister. It was signed, it is not something he said on television. As we know, the Prime Minister is rather inconstant in that regard, but it is there, he signed it. I do not know if I can call him by his name. I cannot, but the letter bears his signature.

I also reread several speeches. I could, for instance, talk about the speeches the current chairman of the human resources development committee made in the House. If I may, since you are now in the chair, Madam Speaker, I would like to refer to a statement you made in February, when you said that if the bill remained in its present form you would not be able to support it. You are now in the chair. I simply wanted to mention it.

If you felt uneasy about this bill I can tell you that many members from the maritimes were-

The Acting Speaker (Mrs. Ringuette-Maltais): I would remind the hon. member that the Chair is not to be involved in this situation. Please continue your debate.

Mr. Dubé: Madam Speaker, I wanted to take every precaution, but if it still creates a problem, I withdraw my words if that is necessary.

Nevertheless, even after the amendments, I question the members opposite because, last week, we had 40 hours of debate in committee, three quarters of which concerned the motion on time allocation we opposed. We opposed it because we wanted to use all

our time to study this important bill. I recall especially clause 2, which contains the definitions.

To prove the merit of our point of view, I pointed out that a number of clauses required more than five minutes just to read them. I did not go very far. I chose clause 5 to make the simple point that it took over five minutes to read it. In fact, it took me 12 minutes to read clause 5. So we fought over this and that was the end of it.

This is the second time in this legislature, under this Liberal government, that the work of a committee has been gagged. Here we are at report stage. Unfortunately, we were told that the opposition was not making any amendments. Out of the considerable number of small amendments we submitted-I just want to point this out-, only one-I know because it was mine-on ``community agency'' was agreed to, despite all the hours we spent trying to respond to the minister's invitation to present amendments. All the amendments by the member for Mercier and the member for Kamouraska-Rivière-du-Loup were defeated.

Obviously, all the government amendments were accepted. My amendment concerned only two words. The three amendments presented by the Liberals have a budget impact; we are told that there are $365 million in improvements. I say, so much the better. However, a half measure is a compromise. Something that is unacceptable is unacceptable.

Just to make a point-you cannot be half pregnant. You are either well and truly pregnant or you are not. When a measure is unacceptable, it is not by improving it somewhat that you make it more acceptable. You just make it a little less bad, that is all.

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So this is more or less what we were offered. I also remind the House of what was done last week, concerning another bill, to make the maritimes accept the GST agreement. A $960 million goodie was given to offset GST, in the hope of making the maritimes support the bill.

I could quote speeches of present government members when they were in opposition. There are many of them and I could as well remind them of all those who came before the travelling committee and submitted briefs. I even call on Liberal Party members to ultimately reconsider their project. Since I have only 30 seconds left, it is important to recall the Prime Minister's letter. Please read it again and think about it while there is still time. This is an unfair, regressive and anti-job measure.

Mr. Yvan Bernier (Gaspé, BQ): Madam Speaker, this is a sad day. The debate on the Unemployment Insurance Act-now called employment insurance by the government-is coming to an end. I am trying to find out exactly where in the documents before me, in Bill C-12, the way jobs will be created is defined.

I cannot see it anywhere. That is why I cannot understand why they want to change the name. I think the purpose of this bill is rather to change the old Unemployment Insurance Act. To call it employment insurance is deceitful. I have publicly and repeatedly proclaimed that this has nothing to do with employment insurance. Rather, this bill-whose real purpose is to reduce operating costs, benefits, the number of beneficiaries, who are the victims of the lack of jobs-is a kind of deficit insurance for the government.

Let me explain. I have certainly said so before, but I will say it again. Sometimes, when you say something often enough, people in this House eventually understand. With the serious-and hidden-cuts it has made, the government is going to save nearly $5 billion on the backs of victims of the lack of jobs. The governing party was rather straightforward about it. The purpose of this bill is solely financial. They should have called it deficit insurance. I think Canadians would understand that, they would see that the government is trying to address the deficit. Instead they save money at the expense of the unemployed and call it employment insurance. This is not making much progress.

Yet, as my colleagues have often pointed out many of the members across the way used to be form the opposition. I suppose they were closer to their constituents then. I suppose they listened more then. So, what happened the night of October 25, 1993? If I am allowed a joke, should not the members opposite carry the warning ``best before October 25, 1993'' since these elected representatives are making cuts on the back of their constituents?

I am saying that because I feel a little sad. I am looking at the members from the maritime provinces, I know that many of them were paid a visit by their constituents during the holidays. I can see a few smiles, but I know that things got pretty rough some evenings, and these members were not smiling then. I fear for them when they go back to their constituencies for the next recess. People watch TV, listen to the news and they can see that not too many changes have been made to this bill. They can see that the much criticized irritants are still in there for the most part. I cannot understand why it remains so.

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I would like to mention something which just came out in the media-since he is no longer a member of this House, I can mention his name. Mr. Brian Tobin, the former fisheries minister, is said to have made the following statement: ``The reform of Unemployment Insurance, which is aimed at reducing benefits paid out to claimants, deals a severe blow to Atlantic Canada where thousands of fishermen, loggers and other workers are relying on this federal program to supplement their seasonal income''.

I have not had the time to read the whole thing yet, but we know how high and mighty Mr. Tobin can sound; I am happy to see that

he has now come to his senses and appears ready to stand up for people in his province. Is he now going to preach common sense?

He has acknowledged that people who go on UI have to do it to supplement their income because there is no other way. Naming a few noble occupations, he recognizes that in the maritimes people cannot work year-round at their job.

Madam Speaker, you and I, since we are stuck here in Ottawa, we cannot fish to feed ourselves. We cannot cut our own firewood. Somebody else has to do it for us. Why is it that these people are being hurt? Will each one of us here think about it when we light a fire in our fireplace tonight? Will each of us think about that the next time we buy fish? Will we think about those who will be bludgeoned by this bill and, as fellow Canadians and consumers, will we say: well, fish was not too expensive today and the federal government is really picking on fishermen.

I want to warn all consumers and all fish eaters, especially now that spring is back and that the lobster season is upon us. I like to give the following example: the next time you go out to buy lobster or fish, would you be ready to pay five times the current price for the product? If you are not ready to do so, I warn you that there will be serious social upheaval. Those who agree to catch and sell the fish, those who cut the wood for your fireplace, are limited to about ten weeks of work in the year, not because they are lazy, but because nature makes it so.

How many times will we have to repeat it? I can only feel sorry. How come people dare to say the truth only when they get out of the House, out of government? Who is the real boss in this business? Who? How come, when people cross over to the other side of the House, they do not see things in the same light? When will Canadians and Quebecers have representatives in this place who will use common sense and listen to the population, whatever happens?

All the people we heard, the unions, said: ``Yes we recognize that something should be done''. They were willing to lend a hand. I acknowledge that as opposition we protested, but we also tried to lend a hand. What is truly missing is the partnership, the spirit of co-operation, which is necessary for a far reaching reform. The government needs co-operation, the government needs everyone to believe that the program is being changed for the good of everybody.

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To participate, people need to see a spark. They need to know that they will be listened to. They have to feel that, at the end of the process, they will not be scorned, that maybe the government will succeed in meeting part of its objectives and, as for themselves, they will see something in the bill that they recommended. But such is not the case now.

Therefore, you will understand that on each and every motion I will get up in this House, as long as the government will allow me, and express my disagreement loud and clear. I hope that eventually people across the floor will understand. Between individuals of good will there is always the possibility of an agreement. I will continue to play the parliamentary game, to hold out my hand, but eventually the people will remember what is going on and they will let the members on the other side know when the time comes.

Mr. Michel Guimond (Beauport-Montmorency-Orléans, BQ): Madam Speaker, I am pleased to speak to the important Bill C-12.

Before I start, I would like to give sincere congratulations on behalf of the members of the Bloc Quebecois caucus. I would like to congratulate my colleagues, the hon. members for Mercier, Lévis and Kamouraska-Rivière-du-Loup for the remarkable work they have done and continue to do in denouncing this bill.

I am not telling you anything new by saying these colleagues have worked day and night. Day and night, that is saying something. Indeed, they were subject to the insult of the guillotine by this federal government.

What we are talking about here is once again the credibility of a government. With all the outcry surrounding the GST across Canada, which has led to Sheila Copps' resignation, we see once again that, depending on whether you are in opposition or in government, the language is different. About us, you could say: ``You, of the Bloc, we could give you exactly the same attribute''. No, Madam Speaker, because we, of the Bloc, were elected here to defend the interests of Quebec, and that is why we present candidates only in Quebec, in order to play our role of representatives of the interests and defence of Quebec.

We will not be able to contradict ourselves once we are in opposition and once we are in power, because we will always be in the opposition for the time we are staying within Canada.

I would like to go back to some statements that were made earlier by members of the Liberal Party. On February 18, 1993, the hon. member for North York, while in opposition, was protesting against the first unemployment insurance reform by the Conservatives and mentioned in a speech he made here, in the House of Commons, a demonstration that had taken place in Montreal at minus 25 degrees. ``Those were not lazy, freeloading people. They were not sitting home watching videos or skiing in the Laurentians. They were demonstrating against an unfair government that does not have a plan to help them get back to work.''

To continue quoting the hon. member for York-North: ``We were shown the real world that day at the demonstration, a world of frustration, anger and hopelessness. The government's response has been scornful and insulting. The government called the demonstrators separatists.''

The last person who called demonstrators separatists was Sheila Copps, the former member for Hamilton East. It is therefore obvious how scornful this government is. This was doubly evident in the statements made by the present Minister of Human Resources Development, then Minister of Transport, at an official dinner in West Park, when he commented on the whole issue of railway labour negotiations. Today, this same person is expected to protect the interests of the unemployed and, to some degree, the financial interests of workers. He stated:

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[English]

Railway workers with grade eight or nine education cannot be blamed for negotiating excessive labour contracts.

[Translation]

This same person is now Minister of Human Resources Development. Is this not edifying? This statement was an insult to the 62,000 railway workers in Canada. This same minister was in opposition on May 1, 1989. It was an insulting thing to say. After that, should one wonder why Canadians have lost faith in politicians and politics? Why are Canadians so fed up? Well, faith and credibility must be deserved, they cannot be bought. Deserving them takes years, but they can be destroyed in a few moments. Ask Sheila Copps, she knows something about it.

This same Minister of Human Resources Development said on May, 1, 1989, and I quote: ``The point I am trying to make, which many of us will have to look at seriously, is the whole notion of trust and credibility. Canadians are prepared to share the burden, if they think it is being done fairly. Unemployment insurance, family allowance and old age pensions are a sacred trust. We must not allow the trust of Canadians to deteriorate to a point where they become cynical. I have listened to people talk about New Zealand, the United States, and about other countries and how they do it. This country is very special in how it deals across the board with men and women in every part of the country. There are basic standards, basic programs, universal programs, and programs that allow people to deal with their future with some degree of security''.

After that, how can we have faith in this minister, who is responsible for getting this reform through and who has the effrontery to call it employment insurance, when no encouragement is given to employment.

I do not want to use the time of my colleague for Québec, who is our critic on women's issues, but I remind her of what appeared in the daily Le Soleil this morning. I am sure she has read it. On page A-10, on the subject of unemployment insurance reform, the title reads: ``Women get it''. The article goes on to say: ``A coalition of women's groups is criticizing the unemployment insurance reform on the grounds that it would put part time workers-primarily women-at a disadvantage. The new method of calculating eligibility for benefits would limit these workers' access to the plan, according to the coalition, at its press conference held on May 1. According to a spokesperson for the Fédération des femmes du Québec, people working fewer than 35 hours a week and women seeking maternity benefits will lose out''.

In conclusion, I would like to say that the Bloc Quebecois is not opposed to social program reform. It defends the consensus reached in Quebec to the effect that the province alone must be responsible for manpower and job training. In order for it to do so, Quebec must take control of all manpower policies and budgets. They must be the responsibility of the Government of Quebec-unconditionally.

Until there is political sovereignty in Quebec, our party will continue to call for the withdrawal of this anti-worker, backward and anti-development legislation.

Mrs. Christiane Gagnon (Québec, BQ): Madam Speaker, I am pleased to rise this morning to speak to Bill C-12. I have done so on several occasions and I would have liked the government to accept the amendments proposed by the Bloc Quebecois to improve this piece of legislation.

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No later than yesterday, in a committee, I met the Secretary of State for the Status of Women; she told me this bill was good for women, sensitive to people working part time and that they were going to benefit more from UI.

I welcome this opportunity to speak this morning because, as my colleague for Beauport-Montmorency-Orléans said, yesterday, women, major women groups in Quebec and Canada, the Fédération des femmes du Québec, the National Action Committee on the Status of Women, the Canadian Daycare Association, the National Association of Women and the Law condemned this unemployment insurance reform. These women came to tell the government this bill was going to penalize women. Why? Because 69 per cent of women have part time jobs. Of these 69 per cent, 40 per cent could not find a full time job and 20 to 30 per cent have family responsibilities. They are the ones who are going to be penalized.

The Secretary of State responsible for the Status of Women claimed to be very sensitive to women's economic situation. She cited alarming figures on women's poverty, on equality between men and women, since we know that it is men who hold full time jobs, who usually work more than 35 hours a week and who will

receive UI benefits. Linking benefits to the number of hours rather than the number of weeks will penalize this category of working women-and working men since young people are included.

Second, part time employees working the same number of weeks will receive benefits for a much shorter period. Their benefits will be reduced and they will have to work for longer periods.

What about women who work less than 35 hours a week? For women working in part time jobs for 15 weeks, one year will not be long enough to qualify for unemployment insurance. Part time workers will pay the same premiums as full time employees, but their benefits will be only half of those received by full timers.

This government should be ashamed of introducing this bill; it does not care about women's economic situation, about the situation of women who work part time, about the situation of women who had to spend several years away from the workplace. What will they have to do to qualify? What will these women and young people going back to work or looking for their first job have to do? They will have to work harder in an economic context where jobs are scarce.

Those who work part time may do so by choice, but they may also be unable to find full time jobs.

What about those who will have to change jobs periodically because they cannot get full time employment? They, too, will be penalized. Why? Because they will not be lucky enough to hold full time positions.

This bill would create two classes of workers. That is why women are outraged by it and want to condemn it. This is a major setback for the status of women. Requiring people to work twenty-six 35-hour weeks makes it twice as hard for them, and women will not be able to meet that requirement; it will mean 910 hours of work a year, at a time when, as we all know, it is hard to find a full time job.

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Quite often, people will have to work for more than one year just to qualify. That is why I am very pleased to see that other organizations besides the Bloc have made the same analysis, organizations that the government might find more credible than us and that will be able, we hope, to convince the government that its bill, in its current form, will not help to improve the fragile financial situation of both women and young people.

I would also like to remind the government of the loss of the Canadian advisory council on the status of women, which could, on a day like today, point out to the government that it is going in the wrong direction. In fact, I reminded the minister as recently as yesterday that it was her government that abolished this major advisory council that could recommend government priorities on the status of women.

There are two categories of unemployed workers. Members of the first one who often claim unemployment insurance benefits will be penalized. Their benefits will be reduced by 1 percentage point for every 20 weeks. So, they will have to work longer for less. In the meantime, the government is setting aside for itself a very generous $5 billion fund at the expense of contributing employees and employers. Employees thought they were insured, but that insurance no longer exists because the federal government, which does not contribute to the unemployment insurance fund, is keeping these $5 billion to reduce its deficit or to give out a few small grants as it pleases in order to make its presence felt in the provinces.

The government is also insensitive to the consensus in Quebec to regain control over the budgets for manpower training. In fact, it used the name employment insurance to interfere even more in job training and policy control. This is exactly the opposite of what was requested by Quebec's social and economic community, and that includes not only the Bloc Quebecois, not only sovereignists, but also federalists who want a true employment policy.

To create a true employment policy, one must have the necessary budget. This government increases its spending power, which is a shame since unemployment insurance is funded by the provinces but it is the federal government that tells the provinces what kind of programs and what kind of measures must be implemented to help those who cannot find a job.

I would like this government to respect the purpose of unemployment insurance, which is to ensure that workers will receive benefits while they are without a job. In tough times, we should do the opposite. If we did not have any money, if we did not have a surplus, I would understand why the government would want to establish such criteria, but not when it is keeping $5 billion to spend as it pleases.

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[English]

Ms. Jean Augustine (Etobicoke-Lakeshore, Lib.): 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.

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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.

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Mr. Dale Johnston (Wetaskiwin, Ref.): Madam Speaker, here we are again discussing Bill C-12, a bill which in committee was subjected to time allocation, or at least limited debate. I would not be very surprised if we came up with another time allocation motion some time today to speed this bill along.

The name has changed. I suppose that was thrown in as a sort of an appeasement to the Reform Party. We kept saying unemployment insurance should be more like employment insurance. It should be more like insurance.

The Liberals said ``maybe we will just change the name and that will give the illusion that we have actually made an insurance policy out of this, that the emphasis now will be on employment rather than on unemployment''.

Insurance means insurance whether it is called unemployment or employment insurance. That is perhaps the reason the bill should go back to the drawing board. Maybe we can get it right. In its present form it does not really resemble insurance in any way.

Let us talk about insurance in the manner with which most Canadians are familiar. If you operate a motor vehicle, for instance, provincial law requires automobile insurance be purchased and maintained. If you have accidents regularly or if your car is stolen and you have to utilize insurance, you will find your rates will be increased according to the compensation paid by the insurance company.

If it were a true insurance policy, why would it include training programs and make work programs that really are not make work programs at all? Anybody who benefits from the make work programs as they stand now are the bureaucracies.

As far as training, we have heard from our colleagues in the Bloc they are most anxious to take over the manpower training provincially. If the government were to seek this, it would find the provinces agree that job training would be an area in which all provinces would be interested.

When I asked the minister of HRD last December about changes to the delivery of the training programs, he said we really should be transferring resources to the people, to the private sector, to communities.

If the minister agrees with that philosophy, if the provinces are willing to take on the training, if the private sector is willing to get involved, what is the stumbling block? The opposition certainly is not holding the government up on this. Why does it not go ahead and transfer these properties to the provinces where they would readily be accepted?

How does the minister reconcile the department's continued involvement in training programs when the Prime Minister announced that labour training programs would be the sole responsibility of the provinces? This is very difficult for me to understand.

A group of people in the fast food industry in my constituency wrote to me. They were very concerned about some of the provisions in this bill. One constituent basically said his costs will increase significantly if Bill C-12 becomes law. It is well on its way to becoming law.

This operator employs around 90 people, many of whom are students, part time workers. They are still going to school. Part of the idea is that they earn enough money to defray part of their university tuition. He said: ``My customers are very price sensitive. I will have no choice but to cut back on employee hours and reduce the number of new hires in my business''. He went on to say that implementing this payroll tax runs counter to the government's job creation objectives and is inconsistent with its position that payroll taxes kill jobs. As a matter of fact the government's position is that by reducing the premiums by five cents per $100 of wages earned that thousands of jobs would be created.

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In light of the fact that the fund is predicted to increase to an $8 billion surplus this year, why will the government not reduce the premiums by $1 per $100 and create millions of jobs? I am using the government's map here. If one reduction of five cents per $100 will create so many jobs, why not create 20 times as many jobs? Why not go that route?

The Minister of Finance and other members of the government have admitted that the real killer of jobs is high taxes. Taxation is the killer of jobs. This gentleman who runs a fast food business in my constituency agrees with that statement but he cannot understand why the minister, the committee and the government does not see fit to reduce payroll taxes even more, bearing in mind that there will a huge surplus in this fund.

What possible reason could the government have to maintain such a high surplus? It says that times are not going to stay as good as they are. Perhaps the government is just creating a cushion for the downturn in the economy and the resulting jobs that may be lost. I do not know about that. Perhaps some creative bookkeeping is going on there. It seems to me that there never is a time when there is a surplus that one can actually put one's finger on. These surpluses seem to flow back and forth, and mostly forth into general revenue.

We are confronted today with over 200 amendments. If we debate those amendments one at a time, it is certainly going to take a lot of time. However, it will be time well spent. We should be able to debate this bill so that we actually dissect it. Eventually we will wind up putting it back together in a form that will be acceptable to Canadians, not only to the people who have to use UI from time to time but to those people who are employing the workforce of Canada.

[Translation]

Mr. Maurice Godin (Châteauguay, BQ): Mr. Speaker, I rise to speak today with great regret and sadness at the direction being taken by Bill C-12, an act respecting employment insurance in Canada.

First of all, I would like to speak about this government. The federal government has brought in time allocation, allowing only 10 hours to study these numerous amendments to a regressive, anti-employment, poverty creating bill whose effects are complex.

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This government wants to rush its reforms through on the backs of workers and the poor, while relieving the more fortunate members of our society of the social and financial burden. Its often arbitrary measures, which do not respect the democratic right of opposition members, make it more difficult for us to do the job for which we were elected.

I would also like to draw attention to an excellent article that appeared today in Le Devoir, that is a very good analysis of the situation that Bill C-12 will create. This article says that the reform is part of a policy that consists in using the unemployment insurance fund to finance a growing number of activities other than the payment of benefits.

I invite the public to take the time to read it. It will give them a very good idea of what Bill C-12 is going to mean for us.

The article can be broken down into eight sections: 1) constitutionality; 2) federal jurisdiction; 3) federal disengagement; 4) the federal government's financial participation; 5) the disadvantaged; 6) a regressive tax; 7) the provinces' responsibility; and 8) the conclusion.

I will read parts of the article to give members an idea of what it is about. First of all, this article was written by lawyers specializing in social law, meaning that we can easily use it as a reference. On constitutionality, the article says: ``The employment insurance bill is part of a policy which consists in dipping into the unemployment insurance fund to finance a growing number of activities other than payment of benefits. Not only is this injurious to a growing number of contributors' right to benefits, but its constitutionality is far from certain as well''.

In the second part of the article, to which I would give the title ``federal jurisdiction'', we can read the following: ``In 1940 when the provinces consented to having this social insurance scheme placed under federal jurisdiction, as an exception, the constitutional amendment was to be precisely worded so as to turn over to the federal level only the creation and administration of an unemployment insurance plan''.

The third part deals with federal disengagement. It speaks of ``disengagement of state responsibility with respect to the unemployed, coupled with a growing use of the unemployment insurance account for purposes other than payment of benefits''.

The fourth part deals with financial participation: ``In 1977, various measures relating to job sharing, job creation and training were introduced into the legislation, and these were funded from the financial contributions of the federal government to the UI fund for the purpose of paying for those measures in future''.

Succinctly, what the article tells us is that the federal government sloughed off its responsibility at some point. Initially, it was paying for the measures it imposed upon us, while now it no longer contributes to the UI fund. Only the employers and employees do.

On the subject of the disadvantaged, we can read as follows: ``Moreover, a 1990 study commissioned by the Quebec department of manpower and income security concluded that female single parents were particularly affected by these legislative changes to the unemployment insurance program. A large number of these women would have to go on welfare''.

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Regarding the regressive tax, they write: ``By using UI premiums to pay for things other than benefits, the federal legislation turns them into a regressive tax due to the fact that the maximum pensionable income is $29,000 a year. With regard to provincial responsibilities, not only does the federal government interfere in

areas of exclusive provincial jurisdiction, such as manpower and social assistance, but it does it with money collected as UI premiums, and not through its spending power. When it comes to unemployment insurance, Parliament's responsibility is to collect premiums in order to compensate insured workers should they be become unemployed. It cannot use this money for other things, thus depriving contributors of the protection they are entitled to''.

The conclusion reads as follows: ``This new direction taken by the plan is more harmful to certain members of society. From now on, some will be excluded from the plan, among them a majority of women and young people. Because of their precarious position at the bottom of the labour market scale, women and young people are especially affected by the current restructuring of the labour market, which has resulted in higher unemployment. Any decrease in basic UI coverage, especially tightening the eligibility criteria, is particularly harmful to these groups''.

In short, these experts, these lawyers specialized in social law, give a very good summary of all the elements, all the cases brought to your attention. The bottom line is that Bill C-12 will do much more harm than good.

This sums up the many hours the Bloc Quebecois spent questioning the government. Why? Why introduce a bill aimed at cutting benefits, a punitive bill that does not take the new labour market into consideration? Why reduce the insurable maximum earnings from $42,380 to $39,000, at a cost of $900 million to the fund? Why? Why should workers earning $39,000 or less and their employers be the only ones sharing costs between them, especially since the surplus is being used to reduce the deficit?

Why introduce this fixed period mechanism to determine earnings, if not to cut benefits? Why introduce the intensity rule, if not to penalize workers whose jobs are not permanent and who are having a hard time making ends meet by working on contract or taking temporary, part time or, again, seasonal jobs? Why cut insurable weekly earnings and annualize premiums?

This unfair, regressive, anti-employment bill creates poverty and discriminates against women and young people. It creates a strong tendency to increase overtime and cut wages at a time when the social and economic impact will be devastating. It completely overlooks the strong growth in self-employment. If the bill changes the system's name from unemployment to employment insurance, why is the $5 billion surplus being used for something else than job creation?

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In conclusion, this bill is a faithful reflection of this government. It touches on everything yet solves nothing.

[English]

Mr. Wayne Easter (Malpeque, Lib.): Mr. Speaker, I rise at this time because of what I see are points raised by members opposite which are off the mark especially relative to manpower training. I want to set the record straight as it relates to Bill C-12.

The Government of Canada does recognize that labour market training is a responsibility of provincial governments, linked to their responsibility for education.

The proposed employment insurance act, Bill C-12, provides for a range of employment measures which opposition members well know are to help unemployed Canadians find and keep work. These measures could include: wage subsidies, income supplements, support for self-employment, partnerships for job creation and skill loans and grants. In line with the government's commitment to training, skill loans and grants will only be implemented with the consent of the province concerned, including Quebec.

This bill is a major step beyond the path of the UI program of the past. It focuses on jobs in providing unemployed workers with the tools they need to get back to work. One of the great strengths of the bill is that it clarifies more than ever before federal responsibilities in this area. It commits the federal government to work in concert with the provinces and territories to help people find jobs.

With employment insurance, the federal government will phase out training purchases, apprenticeship programs, co-operative education and workplace based training. Any employment measure that involves training such as skill loans and grants to individuals will only be used in a province with the province's consent.

The Government of Canada will seek formal agreements with each province on the design and delivery of the new employment benefits to harmonize these with provincial programs and eliminate overlap and duplication. These agreements might take many different forms depending on the priority of each province. If a province wants more control, the bill allows the federal government to delegate administration of federal employment measures to a province or even to fund provincial programs in place of federal ones if they achieve the same results.

Results are what really matter to Canadians, no matter who delivers the employment benefits. Flexibility, co-operation and partnerships are the key to getting results.

Employment insurance through Bill C-12 allows new partnerships to develop and evolve for the future. It will lead to a more effective labour market development better matched to local market realities. It will get rid of wasteful overlap and duplication. It will focus all our resources and energies on the real challenge at hand, helping Canadians find and keep jobs. That is the important purpose of manpower training. It is to give people the skills so they can have the skills in place to attract business to their province and

regions, and then have the opportunity to take on those new jobs in the marketplace of the future.

Canadians want their governments to work together. Employment insurance reflects the commitment of the Government of Canada to work with the provinces, a commitment to a federalism that will work for all Canadians.

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[Translation]

Mr. Gilbert Fillion (Chicoutimi, BQ): Mr. Speaker, I listened to the hon. member for Malpeque, but I did not understand the allusion he made to the bill at the beginning of his comments. I will simply remind him that, when his government formed the opposition and the former Conservative government proposed an unemployment insurance reform, Liberal members made a big fuss to show that they could not support the Conservative government.

Today, this bill includes just about the same measures. Today, the Liberals feel that these changes are appropriate, while before they fought them tooth and nail. This is a case of double standard; the Liberals' outlook changes depending on where they sit in this House. Such is the true face of this government.

When legislation is introduced, it should apply to all concerned. However, this bill will not apply to all jobless people in this country, since more than half of them will not be eligible for unemployment benefits. More than half are excluded. What will happen to these people?

These 50 per cent will find themselves in pretty dire straits, and will include people from all groups, including young people, women and single parent families. Again, what will happen to these 50 per cent of unemployed people who will not be eligible for unemployment benefits? They will end up on the welfare rolls, of course.

And who will have to pay for this reform? The taxpayers in every province concerned. Consequently, in Quebec and elsewhere in Canada, governments will have to increase social assistance budgets to deal with this new problem.

If the bill is passed, it will be disastrous for the country as a whole. Year after year, my region and my riding win the prize for the highest unemployment rate in the country. On behalf of my constituents, I have to say that enough is enough. We can no longer tolerate this situation.

The unemployment insurance issue has much more to do with the current lack of jobs. Did the members opposite propose programs, initiatives or ways to create jobs? No. The government prefers to introduce measures such as this one, which, incidentally, will not cost it anything, since employers and employees are the ones making direct contributions to the unemployment insurance fund.

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Of course, all the money collected does not necessarily go to those to whom it belongs, the people who contributed. A fair proportion of it is even used to reduce the deficit and the debt of our country. That is something the people in my riding will not put up with. What the people want most is a bill or programs that will create jobs. The bill before us does not deal with the real challenge we face concerning our social programs. The real challenge is, of course, to create jobs.

How do you expect our young people to complete their education in a decent fashion if we do not make it possible for them to find a good job when they graduate, not a precarious and low paid job like we see too many of these days, but a worthwhile job? They should be able to get jobs that will allow them to work enough hours to earn a decent salary, enough to pay back their student loans and live normally. By that I mean being able to take on new responsibilities, such as having a family of their own and being able to provide for their children's education. I do not mean having children just for the sake of having children and not giving them anything, or just leaving them with a debt and deficit; I mean giving them the collective tools they need to grow and prosper.

In my region, this bill has been criticized by community, humanitarian and social groups, by workers, by unions, by less organized people, by everyone. Does the government not hear all these people? Despite what the government would like the public to believe, these people are not all extremists, they are not all militants and they are not all lazy. They are not all separatists either. There are federalists who have opposed this legislation.

Why are we unable to reach those people across the way? Why do they not listen to their hearts instead of engaging in a reform that will involve so many technicalities that the most experienced officials will have difficulty finding their way through them? They will have difficulty solving problems that are submitted to us on a regular basis. We are the ones who deal with people who have problems and who do not know where to go to be treated fairly.

In closing, I would like to share with you an experience from the Saguenay-Lac-Saint-Jean region. Alcan workers there have implemented a formula that creates jobs, and I urge the government to take advantage of that experience. It is a job sharing formula that will create, in the short term, close to 110 jobs and, of course, many indirect jobs.

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If the job sharing formula initiated by Alcan workers was applied to all businesses of 20 employees or more in Quebec, it could create 120,000 direct jobs.

The government could follow this example and implement a job sharing formula without dipping into the unemployment insurance fund. We could then spend the unemployment insurance fund surplus. I am sure all Canadians would support such measures which would help us create jobs.

Mr. Yvan Loubier (Saint-Hyacinthe-Bagot, BQ): Mr. Speaker, I am pleased to speak at report stage of Bill C-12 concerning unemployment insurance, or, if you prefer, to use the government's misleading terminology, the bill concerning employment insurance.

At this stage, I would like to remind you of the Bloc's position concerning unemployment insurance reform and its transformation, as if by magic, into an employment insurance program. Like the majority of Quebecers, like the majority of Canadians who have already demonstrated their dissatisfaction with the planned reform throughout the country, like the witnesses who appeared before the human resources development committee, 75 per cent of the witnesses, 75 per cent of the briefs submitted to the committee, we are strongly opposed to Bill C-12.

We are asking, and we will continue to ask until the last possible minute, because that is what Quebecers and Canadians want, that this bill be withdrawn, scrapped, and that there be a real unemployment insurance program, a real program concerning the job market, a real comprehensive policy combining the income security needed by men and women who may find themselves unemployed, which can happen anytime to anyone, with job training and active employment measures.

In other words, it is important to come up with a real unemployment insurance reform corresponding to the present job market, and to ensure that people who find themselves in this unfortunate situation are able in the short or medium term to re-enter the job market with lasting results.

What the reform presents us with is not really that. We are faced with an unfair bill. A regressive bill. An anti-employment bill. We are faced with a bill with the potential to create more poverty than it alleviates.

Changing a bill's name from unemployment insurance to employment insurance is easily done, but the reality is that employment has never been a concern of this government. The precarious job situation has never been the focus in any way of this government's concerns, nor has the unemployment situation been the object of any really serious efforts by this government.

How can this government have any real credibility, when even the Prime Minister stated some months ago to a select audience in Toronto that he considered Canada's unemployed to be lazy beer-drinkers?

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How can we think that this government can focus in any way whatsoever on the situation of the least advantaged in society, when only a few weeks ago the Minister of Human Resources Development told us that those demonstrating their displeasure with the government were extremists, separatists? I would remind you that such displeasure was being shown even in his own riding, that there were demonstrations in his riding, unless of course his constituents include sovereignists and separatists, or were supported by them.

But for him it boiled down to that: people were extremists because they would not stand still to have their legs chopped off, as Bill C-12 proposes, or separatists, or what the Prime Minister called lazy people who ought to be out working instead of demonstrating. So that is the vision of this government as far as the most disadvantaged members of society are concerned.

This bill which, among other things, raises the number of hours worked required in order to collect UI, while decreasing the amount of benefits considerably, ought to simply be withdrawn. The government must admit that it has made a mistake with this. It needs to get back to the drawing board, to rework a real employment insurance plan, one which suits the work force's needs.

The other day, I was listening to the Minister of Economic Development for PEI, Robert Morrissey. He said that for Prince Edward Island alone, the loss of revenue for the 1996-97 fiscal year would be $15 million. This is a disaster for such a small province.

I was discussing this issue with my colleague from Kamouraska-Rivière-du-Loup and, according to him, the Lower St. Lawrence area, where under-employment is most serious, will lose $20 million this year if the minister's bill is implemented.

I remind the House that last year this government had already deprived Quebecers and Canadians of about $2,4 billion by shamefully slashing UI funds, benefits paid to the most needy in our society.

Bill C-17 we considered last year was less harmful than the reform proposed today, so you can imagine the results if it is implemented. I remind members that, in Quebec alone, some 46,000 people were totally excluded from the labour market last year because of the policy of restraint already announced in the finance minister's budget.

I find unacceptable that a government which ran on the promise of job creation and supposedly on the basis of a social vision for the most disadvantaged, could take 46,000 people out of the labour

force with the stroke of a pen, by adopting brutal measures that did not meet the needs of the most needy of our society.

Meanwhile, this government prides itself on having built up surpluses in the UI fund. It boasts about accumulating a minimum of $5 billion annually from employers' and employees' contributions. What is this government doing with this $5 billion, when it has dipped into Canadians' and Quebecers' pockets, literally robbed them of more than $2 billion since last year along with another several hundred million dollars this year with new measures? During this time, it takes an accumulated surplus of $5 billion annually to reduce its deficit so that the Minister of Finance appears to be a good manager by controlling the course of the deficit. This way of operating is unacceptable.

And when things start to heat up, and the lid on the pot is lifting, the government has three courses of action. It tries to buy people, just as the Minister of Finance did recently with the three maritime provinces when he offered $961 million for a pseudo reform of the GST, which has really left his government squirming of late.

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When buying people does not work-I hope the people of the maritimes will not be foolish enough to swallow the GST reform, take $961 million in compensation and permit a reform that will spell catastrophe for their community in the coming years-this government becomes cynical, gets carried away and tries to trick people as to its intentions or its actions.

We heard all that was said by the Minister of National Defence in response to questioning on the many scandals in his department and by the Prime Minister in an attempt to convince us, Quebecers and Canadians, that he had resolved the problem of the GST, when the problem remains intact, even with the resignation of the Deputy Prime Minister. And when that does not work either, the government has a third approach to getting or trying to get people to swallow what it is pushing and that is by gagging the opposition and this Parliament.

Since last week, we have been gagged three times and thus prevented from debating, until basic issues like Bill C-12 die.

The first gag was applied to this bill, and the time for members' debate in the House of Commons was limited. This time serves to help Quebecers and Canadians, who are being had by this government, understand that it says one thing and does another. The second was applied to Bill C-31, which included a section on the scandalous agreement between the federal government and the three maritime provinces on the GST. The third was applied to human rights, and a gag was also imposed on that debate yesterday.

This way of operating is unacceptable and we are voicing, through this analysis at report stage of Bill C-12, our dissatisfaction with the intentions of the government in its shameful reform of the unemployment insurance system.

[English]

Ms. Paddy Torsney (Burlington, Lib.): Mr. Speaker, I am pleased to speak on this bill and have an opportunity to correct the record. I feel it necessary also to reflect on the comments of my colleague opposite. At some point all discussion has taken place. Canadians expect government to get on with the business of doing business. I do not think closure in this case is an unacceptable measure.

Some questions have been raised about why the government is funding employment measures through the employment insurance fund. It is important that people recognize that these are active measures that help Canadians prepare for, find and keep jobs. These measures are a long term investment in the reduction of unemployment which I believe are a legitimate way to spend contributions collected from employers and employees.

The federal government is mindful of the responsibility it has to safeguard the EI fund. Therefore there are some legitimate eligibility requirements. There is access to the fund. Ceilings to the fund will be put in place, and checks and balances to make sure there is an accountability framework to ensure monitoring of the results. Some of the consolidated revenue fund moneys will be available for groups or individuals who may not be eligible for EI funded measures such as youth and aboriginals.

There are two other areas I will speak on, the issues that have been raised with regard to the new employment insurance system, and how it will impact on women and low income parents. A great deal of misinformation has been spread on this issue.

Let us set the record straight and get some facts on the table. Mothers and low income people will benefit from the employment insurance system the government is proposing to put in place. Employment insurance is much more inclusive than the old system. Under EI, all part time work will now be insured, which is a major boost to women who comprise nearly 70 per cent of the part time workforce.

For the first time about 270,000 women who hold down part time jobs of fewer than 15 hours each will have their work insured. Under EI all the hours count toward a claim. Consider women who work at several jobs, perhaps three jobs of 13 hours a week each. Their take home pay would be based on 39 to 40 hours. They will be fully insured if they suddenly become sick or they take parental leave or should they lose one or two of those jobs. For those women who just work 13 or 14 hours a week that income is critical to the

success and the livelihood of their family. They too if they lose that job will have EI benefits. That family will continue to have a source of income while she goes out and looks for a second job.

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EI provides opportunities for women to increase their work by lifting that 15 hour glass ceiling. Some people want to work more than the 15 hours but some employers restrict part time workers to fewer than 15 hours to avoid having to pay premiums. That is not acceptable.

EI provides special help for mothers and low income parents. It recognizes the importance of providing income protection to women who are raising families. The family income supplement for low income families with children will raise weekly benefits up to 80 per cent of average earnings. By the year 2001 when EI is fully implemented, they will receive 12 per cent more than they do today.

The changes which I am going to discuss next are as a result of one of the backbenchers who has made a difference here in the House, the member for Etobicoke-Lakeshore. She brought in several worthwhile amendments at the committee stage and she should be commended for her work on that front.

Because of the amendments of the member for Etobicoke-Lakeshore the intensity rule will not apply to 108,000 women who receive the family income supplement and have a history of past use. The intensity rule reduces the benefit rate by 1 per cent for every 20 weeks of regular benefits claimed over the past five years.

Because of the amendment of the member for Etobicoke-Lakeshore single parent families, most of whom are headed by women, with incomes below $26,000 will receive an average of 13 per cent more benefits under EI. More women will be able to continue working while on claim. All claimants will be able to take temporary work and earn at least $50 a week without reducing their benefits. We provide that encouragement to people to add to their family income.

Women who earn $2,000 or less a year will have any premiums they pay refunded through the income tax system which is another important change.

EI will mean that more mothers and low income families will be eligible for employment benefits to help get them back into the workforce. I am constantly faced with cases in my riding where people cannot get back in. They do not have access to those opportunities because they were not receiving in the past.

Women who return to work after caring for children will have access to EI special employment benefits if they have collected parental benefits or maternity leave in the past five years. Under EI women who have exhausted an EI claim within the past three years will be eligible for help through these active employment benefits. About 45 per cent of social assistance recipients currently in Canada will meet these eligibility requirements. These will make a difference for people. EI's employment benefits will help low income Canadians and women re-entering the workforce to acquire the skills that they need to find work.

Jobs for Canadians is the fundamental objective of our federal job strategy. We campaigned on jobs and growth. We are trying to create an environment where businesses can go out and create jobs, where people can get themselves skilled so they can be the best employees and they can find meaningful work.

These employment benefit measures that we are talking about have been field tested with great success. They are proven to help women who have been unemployed for long periods to get back into the workforce and increase their earnings. The best social security system we have in this country is a job. These tools will help women to boost their earnings. They will contribute to their job stability and blaze new trails in non-traditional occupations.

For example, the targeted wage subsidies to employers can help level the playing field for people facing disadvantages in the workforce, like women. Studies show that this approach does work. It can mean an increase of $5,000 a year on average in earnings. Of course child care support will be available for women receiving employment benefits. That is something I welcome as great news.

One of the things we talked about was the employment benefits and how this new system will help people get jobs. About 400,000 unemployed workers each year may qualify for new employment insurance benefits, things like these wage subsidies or self-employment assistance, things that have been tested and proven to help people get back to work.

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Part II of Bill C-12 sets out the basic principles for these employment benefits and measures but they will be highly flexible. They will be easy to use. They will be easy to adapt to an individual's needs and circumstances. They will focus first and last on getting results no matter how they are delivered.

That is something all members of Parliament face every day in their constituencies. Some remarks from people are: ``I am just falling through this system. I just missed this eligibility requirement. If only I had this, then I could take this program. I am taking a program that is completely unspecific to what I want to do in the future but it is the only thing I am qualified for and my family needs this income''.

These EI changes will make a difference to them. The old programs as I have implied are rigid, inefficient or just do not work. They will be eliminated. Instead, we will have a simpler set of tools designed to work at a grassroots level.

Importantly, and I think constituents are looking for this kind of co-operation, we are putting the old turf wars behind us and concentrating together with the provincial governments on getting Canadians back to work. Bill C-12 commits the Government of Canada to work in concert with provincial and territorial governments in delivering employment benefits to Canadians.

New partnerships in delivery arrangements will match employment measures to local labour market needs and will eliminate the overlap and confusion over delivery by different levels of government. That will mean more effective help for unemployed Canadians. Is that not what we are here for?

Bill C-12 also sets the foundation for a better, more effective national employment service, the information and advisory service that currently helps about two million Canadians a year. A stronger, automated job information and labour exchange will tell people where the jobs are. More effective job search services will help insurance claimants return to work as quickly as possible.

This is the kind of employment insurance system Canadians want and it is the kind of system they need. It is more active. It will get results. It is what Canadians have been asking us for. It is an affordable, stronger, modernized system that focuses on jobs. It will do a better job of helping Canadians. It will help to keep Canadians working. Surely that is the fundamental objective of the federal government's jobs strategy and something all of us should be committed to.

I urge my colleagues to pass this bill with great speed.

[Translation]

Mr. Michel Daviault (Ahuntsic, BQ): Mr. Speaker, I am pleased to take part in the debate on this bill at report stage and also to join forces with the Bloc members who worked so courageously on the Standing Committee on Human Resources Development.

This appears to be ``forget about past promises week'' for the government. After the GST and after a free vote on such a fundamental piece of legislation as the one adding sexual orientation as a prohibited ground of discrimination, when the government had promised a party vote and instead let its members vote freely on the bill, now we are asked to swallow hard and let this unemployment insurance reform be rammed through the House.

I am pleased to join in the debate because, on April 9, I held a special information day in my riding on UI reform. About fifteen organizations took part in this review of the reform, based on government material. Most groups told us that this reform could in no way be considered a possible basis for changes to the plan.

As usual, the government would have us believe that it is driven by the determination to reform social programs. However, this was not part of its election platform. Sometimes, you have to read between the lines instead of only looking at broken promises such as the scrapping of the GST; the Prime Minister does not seem to know that scrapping does not mean harmonizing, he remains the only one to believe he is right when his own finance minister and deputy prime minister, under public pressure, have made amends.

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Besides, a very interesting statement of the Minister of Human Resources Development was quoted in La Presse of March 16, 1996. The article said: ``The Minister of Human Resources Development is willing to consider all the women's groups' concerns about the unemployment insurance reform, but he warned everyone that any amendment to the plan would have to be implemented within the existing financial framework''. There you have it: what counts is the financial framework and not the reform. The article went on to say: ``The government intends to fully respect the financial parameters set for the unemployment insurance reform''.

Before I talk about unemployment insurance as such, I would like to say a few words about the five proposed measures which will replace the 39 back to work programs.

All the organizations I have consulted reminded me that there is a certain amount of cynicism, if not hypocrisy, in this amendment. In the throne speech, it was said that the federal government was committed to transferring the responsibility for vocational training back to the provinces.

We reminded the government about the consensus in Quebec and about the minister who, at the Quebec conference on economic development, tried to call the Quebec organizations to order, even saying that the Conseil du patronat du Québec was not part of the consensus. The consensus is very real and it applies not only to all vocational training measures but also to all active unemployment insurance measures.

Therefore, it must be said again that, first of all, the official opposition and all interested parties in Quebec want Quebec to have exclusive jurisdiction over all vocational training and manpower training policies.

All the organizations consulted said it is clear that the purpose of the reform is to cut a further $2 billion, and that this government is behaving exactly like the previous Tory government: it is cutting social programs in order to reduce the deficit.

When he announced $300 million worth of changes in the amendments, he said that would be offset by stronger re-entry measures. If he had so much confidence in his measures for re-entry into the labour force, why would he cut unemployment insurance? The number of unemployed would go down by itself and so would program costs. But no. He has so little confidence in his measures that he will cut the program anyway, to be sure to

save $2 billion. These measures are not fair and should be condemned.

As to the insurance program, it is clear to us that it is a social program reform done at the expense of the neediest in our society, that is the unemployed, welfare recipients, the young, women and new entrants. On the whole, the unemployment insurance reform, as proposed, is unfair, regressive, job-killing and poverty-inducing. Eligibility requirements have been tightened. In order to be eligible to the program, people now have to work 420 and 700 hours, instead of 180 and 300 hours, more than double what it was.

For their part, new entrants to the labour market will need three times as many hours of work, that is to say 910 hours, to be eligible for the program. There are therefore two categories of unemployed: ordinary unemployed and frequent unemployed. And it no only applies to the regions; it also applies to people in Montreal, to self employed workers and part time workers.

I started in the labour force in a weekend corner store job to pay for my studies, and I feel affected by that. We are not talking only about workers in the regions, Montreal will also be affected by these measures.

Those who received payments in the past will see their benefits reduced from 55 to 50 per cent, in negative increments of 1 per cent for each 20-week period of benefits previously received. On the one hand, we are told that every hour of work will count, even the first 15, to allow these workers to have access to unemployment insurance but, on the other hand, we are making eligibility rules so tough they will not have access to the program.

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It says that the first $2,000, those who earn $2,000 and less during the year will be able to receive a tax refund. The weakest, the neediest in our society will have to finance the federal government for one year. How nice. People will have to work longer to receive less benefits and for a shorter period. It is the low income people who will suffer the most from the implementation of these measures.

As for setting maximum insurable earnings at $39,000, that is another nice measure. The workers who earn the most will be given a tax cut because they will no longer have to pay premiums above the $39,000 threshold, but the people who work 15 hours or less will be taxed. Strangely, the premium cut for some people is roughly equivalent to the new premium for others. That is strange. And to top it all off, this measure is being called a job creation measure.

The hon. member for Kamouraska-Rivière-du-Loup has said it well; business people would do well to have employees earning more than $39,000 work overtime, because they will no longer have to pay premiums, rather than hiring a part time worker for whom they would have to pay premiums. That is regressive and anti-employment. The more the worker will earn money, the more his premium rate will decrease, because he will no longer pay any premiums after reaching $39,000. That is a gift from workers who earn more than $2,000, but who are unable to qualify because of the number of hours and of the other measures, to workers who earn more than $39,000. A real nice gift.

The cap of $39,000 on maximum insurable earnings is also a gift to capital intensive businesses, at the expense of labour intensive businesses. It is more interesting to have fewer employees than to have more. Finally, small businesses are being penalized.

The reform encourages people to do overtime. The idea is to reduce the work week to reinforce job creation. This bill goes totally against the current. The unemployment insurance reform will put undue pressure on the reform of employment, which is already precarious. Jobs, jobs, jobs, a lot of jobs will be cut. Nice program.

The new measures, by reducing the benefit rate, by taxing workers starting from the first hour, by establishing more stringent eligibility criteria while making certain people ineligible, are also contributing to an increased transfer of the unemployment insurance clientele toward social welfare. And the government is dumping its responsibility in the provinces' backyard, as it did for transfer programs. The Liberal government is not taking its responsibilities. This is ``forget about past promises week'', the week of consummate hypocrisy. Good show.

Mr. Yves Rocheleau (Trois-Rivières, BQ): Mr. Speaker, I am pleased to take part in this debate on the amendments to the former Unemployment Insurance Act which, ironically, as everyone knows, will now be called the Employment Insurance Act. This in itself is indicative of the government's cynicism, a government with a long experience in that area. This is a textbook illustration of how supposedly serious and responsible commitments made by this government during the 1993 election campaign were never fulfilled. Indeed, this is another perfect example of the Liberals modus operandi.

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Before going any further, I want to congratulate my fellow Bloc colleagues who worked very hard on this issue, particularly the hon. member for Mercier, the hon. member for Kamouraska-Rivière-du-Loup, as well as my friend and colleague, the hon. member for Lévis, who worked literally day and night to fight this cynical bill, which goes against public interest.

Several members have already said, and so will others, that this is an unfair, regressive and anti-employment measure. It has

nothing to do with employment insurance. It does not promote job creation: it promotes poverty.

This measure is quite simply patterned on what the Conservatives intended to do, had they remained in office. It is based on the most petty neo-Liberal movement, a movement that targets the poor and excludes an increasing number of people, not only in Quebec, in Canada and in America, but all over the world, a movement that must be scrutinized, analyzed and criticized, because a measure such as this one, given what is involved, will be followed by others, even though it goes against public interest, or the interest of humankind, as Victor Hugo said.

We can never overemphasize the fact that this is a cynical change. My comments will deal more specifically with one aspect of this major overhaul that is not only of local interest, in fact it is more of a technical nature. I am referring to the restructuring of the employment centres network, more specifically the UI and employment offices in my own region of Mauricie. My speech is for my constituents in the riding of Trois-Rivières who are the victims of an arbitrary, irresponsible and indefensible measure, all this because of the fluke election of the Liberal candidate in the riding of Saint-Maurice, who is now the Prime Minister of Canada and who was before the member for Beauséjour.

The member for Beauséjour, who was Leader of the Opposition at the time, back in March 1993, wrote to a movement for the defence of the poor in the Montreal region, regarding the attitude of the Conservative government, whose example he now follows. The letter, dated March 26, 1993, had the official letterhead of the office of the Leader of the Official Opposition:

Liberals are dismayed by these measures. By reducing benefits and penalizing even more those who voluntarily quit their job, it is obvious that the government cares little about the victims of the economic crisis. Instead of going to the root of the problem, it targets the unemployed. Moreover these measures will have disturbing consequences.

If you look at the Notice Paper, you will see that I asked four questions on this issue. I will read these questions, regarding which I hope to get an answer soon.

The first one is: ``Can the Minister of Human Resources Development indicate what recommendations were made, by the

committee analysing the restructuring of service points in Quebec, on the advisability of locating the regional Canada Human Resources Centre in Shawinigan or in Trois-Rivières?''

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Here is the second, No. 21 in the Order Paper of March 12, 1996: ``Can the Minister of Human Resources Development tell me whether representations or interventions were made by officers, employees or other persons from the Privy Council or the Office of the Prime Minister to officers, employees or officials from Human Resources Development Canada, in order to ensure that the regional Canada Human Resources Centre would be located in a municipality in the constituency of Saint-Maurice rather than in Trois-Rivières?''

Question No. 22: ``Can the Minister of Human Resources Development tell me whether, as part of its restructuring of service points in Quebec, Human Resources Development Canada carried out comparative studies on the advisability of locating the regional Canada Human Resources Centre in Shawinigan or in Trois-Rivières and, if so, what where the findings of those studies?''

And fourth and last, Question No. 23: ``Can the Minister of Public Works and the Minister of Human Resources Development tell me the rent and rent-related costs of the Human Resources Development Canada premises in the Bourg-du-Fleuve building on rue des Forges in Trois-Rivières, as compared with the anticipated costs of the Department's moving to, arranging, and settling into new premises to be located in the Shawinigan area according to the government's plan?''

According to what I have been told, the government will be answering these questions in the next few days. We would hope that, upon receiving these questions, both political and administrative staff understood that the government's proposal to locate the human resources centre in Shawinigan rather than in Trois-Rivières is contrary to the public interest, that this decision is unfair and shameful, and that this project is cynical and shameful.

Not only was it made without consultation, but also it is contrary to the opinion of every group that reacted to it in our area. The mayor of Trois-Rivières has fought a good fight, followed by the Chamber of Commerce, the Federation of Senior Citizens and the regional federation of caisses populaires. Moreover, some 25,000 citizens indicated their disapproval of that project in writing. Based on the information at its disposal, the public service union also decried this project. It does not make any sense, it goes against the best interests of the public, it is a disgrace, and we will continue to condemn this project.

Particularly as the hon. member for Saint-Maurice was kind enough to tell his voters last week, in his latest householder, that

the new regional centre will open its doors in his riding, but more precisely in Shawinigan-Sud. Those of you who are familiar with the area will know that it will also serve residents of the Saint-Maurice riding. Because the focal point in that riding is Shawinigan and not Shawinigan-Sud, constituents of the hon. member for Saint-Maurice will have to go from Shawinigan to Shawinigan-Sud without adequate public services to get them there.

We believe, and the minister responsible for regional development in Quebec also knows it full well, that this decision is unjustifiable. The minister also knows this is a totally arbitrary decision that does not take into consideration the history of the area or the travel pattern of residents. We will never stop decrying what we believe is still only a project, because we still hope the final decision has not be taken yet.

According to the information we have, officials are not aware that a decision has been taken. Everyone believes this is still only at the planning stage and we hope the government, and the Prime Minister who is behind all of this, it is pointless to try to deny it, will see reason and make a sensible and wise decision. Given his age and his vast experience, he should be able to set things straight and see to it that the people of the Mauricie region have access to all the services they are entitled to.

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[English]

Ms. Margaret Bridgman (Surrey North, Ref.): Mr. Speaker, I have a procedural concern. The bill has gone to committee and yet it still comes back to the House with a horrendous number of amendments. I believe there 220 amendments, which gives one cause to wonder when a bill is not a bill and whether the House of Commons is actually rewriting the bill. It makes one wonder what actually happened in committee to resolve some of these difficulties which would have provided a more streamlined bill for the House.

I am also concerned with the name change of the bill. I have two concerns. The first is about changing the name from unemployment to employment. I also question the term insurance. If changes were to be made, why was the term insurance not included?

With regard to the contents of the bill, we have started in practice to move away from the concept of insurance. The insurance policies of today are sophisticated tontines, things from our past. This does not seem to be a true insurance policy as was originally conceived to address the needs of the unemployed. It was originally intended to get us over that period of time until we could get back into the world of employment. I question whether we are actually discussing an insurance concept.

The change in terms from unemployment to employment reminds me of the health care realm in which we have a health care insurance policy. I am very pleased to see it is still addressing the concept of illness. When I am ill I know I have a health insurance policy that will allow me to get the kind of treatment I need. When the concept was changed in health care from an illness to a wellness approach, it was specifically applied to the department, not necessarily the actual insurance component of the health care regime.

The same principle is being used here, but it is not being applied to the department; it is actually encroaching on the insurance program or a program of the department. By changing the term from unemployment to employment we are expanding the parameters of this jurisdiction. We are getting more officially into things like education and health care. We have already tended to move that way with training programs.

We may be going further down the road toward duplicating services that should be provided by other jurisdictions. The health component involved when a person is unemployed should be under the health care organization.

I have some difficulties in changing the term unemployment to employment. It could be interpreted in ways that lead to a great expansion of services under this insurance act. This would take us further away from a true insurance policy.

Another concern I have is with premiums. We tend to establish categories based on geographic location or income, and we address those in need, which takes me one step further. Regardless of financial position, when we are suddenly employed there develops a need. When we work we develop a lifestyle our income will support. When that income is gone it has an effect on our lifestyle. We become in need to maintain it. I do not think that is what we are talking about here.

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We should maybe look at Maslov to identify what needy means. I tend to think of needy as the basic principles which come out from Maslov such as food, shelter and clothing. These are essential to all people. When it comes to looking at benefits, this is the classification that should be front and centre. When we speak of needy, what is immediately conjured in one's mind is that somebody is needy in one of those three area, versus just saying needs. Whatever our income, we develop an appropriate lifestyle and when the income is no longer there, we are in need to maintain that lifestyle. That is a totally different issue than what we are talking about here.

It is becoming extremely technical. I am still struggling with my income tax. It is at a point now where I am not capable of doing it myself and I have to shop around for the best deal in town. We are beginning to get a similar process here by coming up with various categories, conditions in various areas of the country, income and so on. There are all these different categories. We should be

looking at the elimination of some of these categories, not the creation of more, while addressing the basic needs of the unemployed.

One category that jumps to mind immediately is the regional category. Obviously there is a financial difference, depending on the area of the country, for example north-south. It is more much more expensive to meet the basic needs of food, shelter and clothing in the north than it is in the south. I am sure if we address that in relation to the benefits, obviously there would be a monetary difference.

We can look at maternity benefits before and after birth. I do not see the rationale of differentiating between a natural parent and an adoptive parent. A baby is a baby, and it does not matter whether a baby is adopted or born of natural parents. That child still has the same needs. I was under the impression that these maternity benefits were originally applied to address those needs of the child because the mother is in the working world. That does not change if it is an adopted child. The baby still needs the adoptive mother just as the natural mother would be needed.

I would like to get back to the insurance component. I looked at the auditor general's report of 1994. He quotes from a study the Department of Finance. He refers to unemployment insurance as a disincentive to employment.

I do not see anything in this act which would really discourage people from going on unemployment insurance. I agree with the auditor general and I would like to see some of the amendments pass. Some definitely address this issue. We could stand here all night and illustrate various examples where the unemployment insurance act has been taken advantage of.

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There are some major concerns. The name change is one. By going from unemployment to employment we are expanding the parameters of what is to be provided under that. A rose is a rose by any other name; I may be misquoting, but it is still unemployment insurance no matter what we call it.

[Translation]

Mr. Philippe Paré (Louis-Hébert, BQ): Mr. Speaker, I am pleased to have the opportunity to rise today, not to say that this is a good bill but to give some support mainly to the three Bloc members. I am talking about the hon. members for Mercier, Kamouraska-Rivière-du-Loup and Lévis, who, for almost two years now, have been fighting long and hard on behalf not only of their constituents but also of all the people of Quebec and an important part of the people of Canada, for those who will fall victim to this unemployment insurance reform.

This is totally absurd. We are faced with a government that is not living up to its promises, as we have seen many times this week. Liberals had promised to scrap the GST, but they did not deliver. The Minister of Justice and the Prime Minister promised to vote as a party on the issue of sexual orientation as a prohibited ground of discrimination, but they did not keep their word.

On the one hand, they do not keep their promises and, on the other other, they do things they did not promise to do. Among other things, they are undertaking a reform of the unemployment insurance system even though, as mentioned by my colleague for Trois-Rivières, the Prime Minister, when in the opposition, fought against the unemployment insurance reform proposed by the Conservatives.

The Bloc Quebecois' fight goes back to the fall of 1994 when the Minister of Human Resources Development started a huge consultation process throughout the country on a reform proposal.

We could speak of reform then because we did not know yet what would come out of these consultations or what kind of a bill would finally be introduced in the House of Commons. So Canadians were consulted. Our three colleagues travelled across Canada with the Standing Committee on Human Resources Development. In the end, 80 per cent of the witnesses heard by the committee were against the reform proposal as it was then formulated. More eager to please the government than the people, the standing committee prepared a report, which, of course, was not in accordance with what the people consulted had said. That is why the Bloc Quebecois presented a dissenting report.

Since then, especially since the 1995 budget speech, we have seen a series of government measures aimed at pulling the government out of fields of activity where it had been present for many years. In many cases the Bloc Quebecois supported such measures, and I am thinking in particular of the privatization of airports and air traffic control. We agreed on the principle.

In the present case, the government is doing exactly the opposite. It has not contributed one cent to the unemployment insurance fund since 1991. So if there were one sector the government could privatize and where it could say to employers and employees: ``Since you are the only contributing to it, we are asking you to manage the unemployment insurance program'', it is this one.

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Why is the government doing the opposite in other sectors, for example with navigation aids? The Coast Guard is trying to get users pay the bill. Why did the government not do the same with unemployment insurance? For a very simple reason, the government discovered, following the 1995 budget, in which there were important cuts to UI eligibility and benefit payment criteria, that

unemployment insurance has become an extremely productive cash cow. Therefore why privatize such a cost effective program?

It will even further reduce benefits so that claimants will receive lower payments, and make it more and more difficult to receive unemployment insurance by imposing stricter conditions. Furthermore, it will make sure that everybody pays into it, even those who do not have the slightest chance of receiving benefits one day.

Realizing this was an extremely important revenue source, the government would have us believe it is reforming the unemployment insurance program. But what is it truly doing? It is in fact draining the UI fund in order to reduce the deficit.

This bill will have extremely harmful results. Because it is afraid Canadians will discover more harmful features, the government decided to limit debate. A time limit was imposed on the Standing Committee on Human Resources Development so the government could steamroll passage of this bill.

The bill will have extremely negative consequences particularly because it is going after the people most in need, those who are most vulnerable. It is an attack against seasonal workers and part time workers, which necessarily means women because they represent a high percentage of that category. It is an attack against entrants and immigrants who have been here for a few years and who, for cultural or other reasons, obviously have more difficulty than others entering into the labour force.

The most vulnerable workers will be affected the most. They will be forced to contribute to unemployment insurance from their very first hour of work. This, in itself is not bad. We could even say it is a good measure had the government not already raised the eligibility criteria. These people are forced to contribute from their very first hour of work, but the eligibility notch is raised so high that we can be sure many contributing workers will never be eligible-some say one million of them.

Making part time workers, students and so on contribute will bring $900 million into the unemployment insurance fund, and what makes that measure so perverse is that it will allow the government to give that money to the richer workers. We must remember that maximum insurable earnings, which were set at $42,500, will be lowered to $39,000. That means that the government took $900 million in the pockets of the poorest workers in order to give it to the wealthiest, when it could have raised that maximum instead. It was at $42,000. Why not set it at $50,000 or $60,000? It chose not to. It preferred to take the money from the poorest workers, those most vulnerable. For that reason alone, this bill is a perverse and antisocial measure and, unfortunately, if it is passed, we will have to pay a social price for it in the years to come.

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[English]

Mr. Larry McCormick (Hastings-Frontenac-Lennox and Addington, Lib.): Mr. Speaker, I am very pleased to speak on this bill which will help many Canadians help themselves. There are going to be very positive results.

When members speak about employment insurance, sometimes I do not think we tell enough. It is not just workers who will be affected by this new income support system. The business community will also be affected. From the testimony before the standing committee we know that for the most part business is quite supportive of employment insurance.

I would like to take a few minutes to explain to the hon. members some of the implications of EI for people in business. Employment insurance is one component of the government's job strategy. The government has made it abundantly clear that its number one priority is to create a positive economic climate in which the private sector can generate growth and create jobs.

There are a number of strategies to fulfil that commitment. Among them are some of the provisions in Bill C-12. Since it is the business community, especially small business, that creates jobs in this country, it is vital that EI measures enable business people to do just that.

The government has heard on more than one occasion that the effect of escalating UI premiums discourages job creation. Business has seen increased premiums as a tax on jobs, a tax the government imposes during a recession, which is obviously the worst time that this could happen. However, it has no choice. It is obligated by law to pay benefits when the UI account is running a deficit. That same obligation will apply with the passage of Bill C-12.

The answer is quite clear. When the economy is doing well a reserve will be built in the EI account. In that way funds will be available to pay for benefits during a downturn in the future and premiums will remain stable. Premiums will not have to rise when business can least afford them because there will be a cash reserve to draw on.

Some members opposite have criticized the government's plan to build a reserve in the EI account. They come up with bogus and misleading statements about how the government is going to use the reserve to pay down the deficit, which is not true because the reserve has no impact on the deficit over the long term. Insurance funds can only be used for purposes spelled out under the act: insurance benefits, employment benefits and their administration.

There are positive signs for the business community. When economic indicators are positive, business is better able to preserve jobs during tough economic times and create new jobs when there is an upswing in economic activity. In the future we must ensure that these fundamentals are always there.

I hope all members agree that we want a stable premium rate for the new EI program. Let us look at the implications of the proposed new rates which is down from $3 last year to $2.95 this year. With this rate, more than two-thirds of small firms will pay the same or less in premiums during 1996 compared to 1995.

While a decision is yet to be made, when EI brings in first dollar coverage in 1997, and premium rates are reduced further, the impact on small businesses will be even more beneficial.

While the Minister of Finance has assumed a $2.90 rate in 1997-I hope it is much less than that-for planning purposes in the last budget, the actual rate will be set at the end of this year.

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As well, as stated by the Canadian Federation of Independent Business, about 30 per cent of their membership, small and medium sized businesses, will also benefit from the premium reductions associated with the reduction in the maximum insurable earnings.

The government has not forgotten these small business people who will experience some adverse affects because of this new legislation. These hard working men and women will be helped to adjust to EI through a two-year premium relief program. The program will begin in January 1997. It will coincide with the introduction of first dollar coverage and the calculation of MIE earnings on an annual basis. Here is how it will work.

An employer whose UI premiums in 1996 are less than $30,000 will be eligible for a premium rebate. Employers who face an increase of more than $500 can have up to 50 per cent of the increase rebated in 1997 and up to 25 per cent in 1998 to a maximum of $5,000 a year rebate. This measure will provide premium relief to about 30,000 small businesses. This year the reduced premium rate and the lower maximum insurable earnings will save business $730 million in premium payments.

As well, individual employers will pay $520 million less in premiums in 1996, enabling them to retain more of their income which also helps the business community. It gives people more spending power. Those are significant savings and members opposite should give them due consideration.

The business community is also pleased with the proposed employment insurance system because it goes a long way toward reducing the administrative burden of the current UI structure.

Beginning in 1997, premiums will be collected based on total earnings and total hours from the first dollar and the first hour. That means employers will no longer have to track weekly wages and hours and maintain very complex files in order to determine when, and how much, premiums are payable each week.

As well, business people describe the record of employment as an absolute nightmare to administer. I have spent many hours late at night filling out ROEs. I would probably make a small mistake on some line and whether I did or not, the government always seemed to be sending them back.

The present system has been a real nightmare. The one-page form comes with a 35-page instruction manual. The weekly reporting system often means that employers must report earnings differently than their own pay periods. It has been a jungle.

Under the EI, the record of employment will be more like an employer's payroll. Employers will only have to report an employee's first and last days of work, total earnings and total hours. As well, the ROE can be used for post-audit verification.

With the changes I have outlined, plus the other provisions of Bill C-12, it is estimated that once fully implemented, the new employment insurance system will reduce administrative costs for businesses by between $100 and $150 million annually. That is a lot of money that could be used to create sustainable employment.

I am absolutely certain that once people get through a period of adjustment, employment insurance will prove to be one of the most productive pieces of legislation that this House has ever passed. It will be good for business and, in turn, it will be good for Canadians who are striving to become self-reliant, contributing members of the community.

To close, I would like to quote Tim Reid, president of the Canadian Chamber of Commerce, during his appearance before the standing committee: ``We are pleased to see that the government's overriding goal in revamping the unemployment insurance program is very much in line with the Canadian Chamber's business expansion and jobs for Canadians''.

I encourage the opposition parties to quit misleading Canadians on the benefits of Bill C-12. I encourage them to get behind this progressive legislation.

[Translation]

Mr. Pierre de Savoye (Portneuf, BQ): Mr. Speaker, I am pleased to speak today to what the government is calling employment insurance, which I consider not only unemployment insurance, but, alas, an unemployment guarantee. Let me explain why.

One element of the bill before us proposes to lower maximum insurable earnings from $43,000 to $39,000.

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This will have major macro economic effects, which I have never heard mentioned either in this House or in committee. You are no doubt aware that people earning more than $39,000 but less than $43,000 will have more disposable income, whereas at the other end of the spectrum, the low wage earners, who in the past were not insured, now will be. But, they will be because they will be contributing to unemployment insurance.

Their disposable income will shrink. When we look at individual cases, this seems insignificant. However, when we look at the big picture, at the figures as a whole, we realize we are talking about hundreds of millions of dollars, indeed billions of dollars coming out of the pockets of low wage earners and going into the pockets of high wage earners. This will mean macro economic consequences for retailers, businesses and industry. Let me explain.

The low wage earners, with less disposable income now, will spend less, not for luxuries, they never had the means anyway, but for life's basic necessities. The high wage earners, with more disposable income, generally, will be able to buy luxury items.

What does this mean? How will this flow of money affect Canada's economy? Very simply, the economies of provinces with more low wage earners will centre on immediate need products, whereas in the economies of the provinces with higher wage earners, business and industry will develop around luxury items. Regions will become polarized based on people's average salary.

What this bill is doing is shifting wealth, and we have to face the fact, because incomes are not equal coast to coast. There are regions in Canada, in Quebec, less well off than others, where there are more low wage earners than in other regions where there are high wage earners.

With this new plan, the government if transferring several billions of dollars from areas with only low income earners to areas with high income earners.

I ask you: What do you think this is going to lead to in three, five or ten years? Poor areas will become poorer and the rich ones will become richer. The laws of macro-economics are that simple and obvious. You cannot play with these numbers and believe that the results will be simple and easy to arrive at.

I have never seen in a committee, or in the House, someone showing us an econometric model of the consequences of the implementation of this system. One should not rush into such a decision. This is not the kind of decision you want to make hastily, and yet this is exactly what this House is going to do with this bill. There will be consequences.

(1350)

The government is going to push some regions into poverty to the benefit of others which will get richer. When a country creates poor and rich regions, eventually it does not maximize its potential. It will eventually have to pay a price for it because rich areas will have to help keep poor areas economically active. The law of consumption, the great law which allows businesses to sell goods to consumers, will be faced with an impossible equation.

You see, if people can no longer afford to consume, how will businesses be able to produce goods and make a profit? Somebody forgot that businesses cannot afford to be only profitable, efficient and productive, they also need a market. Their market is made up of people like you and me, people who are listening to us and who have to earn a living day in and day out, and be left with enough money to be able to treat themselves to some of the niceties of life. And yet, what we are doing with this bill is transferring billions of dollars from the pockets of the poor into the pockets of those who are better off.

Let us imagine for a moment that the government is implementing one of the recommendations made by the Bloc Quebecois and that everybody contributes to the UI fund regardless of any maximum insurable earnings. We would then be able to keep the UI fund in the black and provide adequate benefits to those in need, while reducing premiums and correcting inequities between the haves and the have-nots, between prosperous regions and disadvantaged regions. This solution would not be nearly as harmful and may even have a positive impact, while those who introduced this bill clearly did not assess its potential negative consequences.

I would also like to talk about seasonal work. Seasonal industries represent an important component of the Canadian economy from coast to coast. If you attack the seasonal industry in a region or in all regions, you will weaken-not you personally, Mr. Speaker, but the government, which I am addressing through you-the country's economy as a whole.

The bill before us may well undermine seasonal work. Any weakening of seasonal work would have negative consequences for the regions affected. Preventing this essential component of our economy, which provides us with fruits and vegetables at certain times of the year and offers us winter sports, from running properly would hurt the Canadian economy as a whole.

As consumers, seasonal workers who can no longer support themselves throughout the year will have less to contribute to the Canadian economy. As a result of this reduced consumption, a business somewhere will be stuck with surplus inventory and forced to cut production and then to lay off non-seasonal workers.

We see what this could lead to. Sooner or later, attacks against seasonal work will become attacks against permanent jobs.

(1355)

We are falling into a bottomless pit. It is not the first time this government and the previous one have committed basic errors in strategy. I will not talk about former minister Lalonde's national energy policy, a catastrophe for which we are still paying the price today. I will not talk about those policies which, year after year, have led us into a hole that is $560 billion deep.

I will talk about what we are doing here today, which is gambling with a sum of about $16 billion. In essence we are gambling because, until now, no other country in the world has dared take the measures we are about to take, that is to estimate insurability not based on the number of weeks worked, but based on the number of hours. What will be the consequences? I do not know, nobody here knows, and not only does it concern me, I find it totally unacceptable.

Before going any further with this bill, the government should have the decency to build a comprehensive econometric model to measure the consequences of this legislation. Then we could make the necessary adjustments or the necessary change of course, as the case may be, to achieve the desired results.

Only 40 per cent of unemployed Canadians are covered by the unemployment insurance plan, which is not much. It is not an employment policy. In a case like this, I can only wish the government not only withdraw its bill, but that it withdraw from the area of employability and transfer this responsibility to the provinces, especially Quebec which has been waiting for that for a long time. It is ready to assume this responsibility with policies that will be beneficial not only to Quebec, but to the rest of Canada as well.

[English]

The Speaker: It being 2 p.m. we will now proceed to Statements by Members.

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