Mr. François Langlois (Bellechasse, BQ): Mr. Speaker, I appreciate your giving me the floor so early. Our proceedings are moving faster and faster, exactly the reverse of what we are used to from the government.
Regarding this bill, before oral question period, I was listening to my colleague, the member for Portneuf, with whom I share the same views on the negative consequences of unemployment insurance. At the end of my speech, I will have the opportunity to be more specific as to its impact on the area I represent, namely the south shore, the area of Bellechasse.
Obviously, when we talk about unemployment insurance, it always brings us back to the history of the Canadian Federation, to
the constitutional background of this whole issue. I will go back to a time when my father had just turned 30, in 1938, and a new session was starting; 10 years later, I had the pleasure to be born, coming into a world of unemployment insurance. I will read something I wrote several years ago.
In 1938, at the start of the new session of Parliament, the government mentioned in the throne speech that it was seeking the co-operation of the provinces to amend the British North America Act to give the Canadian Parliament the necessary power to implement a national unemployment insurance plan.
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The governor general added:
[English]
``My ministers hope that the proposal may meet with early approval in order that unemployment insurance legislation may be enacted during the present session of Parliament''.
[Translation]
That was in 1938. In fact, as early as November 5, 1937, the federal government had contacted the provincial governments and asked them their views on the principle of an amendment to the British North America Act that would give unemployment insurance to the federal authority.
It must be remembered that there was no amending formula at the time. We will see the somewhat twisted and strange way in which the federal government acted to take over control of unemployment insurance.
So, in 1937, a detailed proposal was submitted to the provinces; in March 1938, the provinces of British Columbia, Saskatchewan, Manitoba, Nova Scotia and Prince Edward Island had totally agreed on the amendment proposed by the federal government. As for the Government of Ontario, it had given its agreement in principle without expressing its views on the text submitted by the federal government. Only Alberta, New Brunswick and Quebec had refused to agree to the constitutional amendment.
It must be remembered that in 1938 the Union Nationale government, under Mr. Duplessis, whose favourite theme was respect for provincial autonomy, was certainly not about to agree to such an amendment. The Government of Quebec was undoubtedly willing to assume responsibility for unemployment insurance in due course, according to the wishes of the voters.
However, after the provinces in question rejected its proposal, the federal government did not go ahead with its plan. According to the statements made by the then Prime Minister of Canada, Mackenzie King, especially in 1938-39, although the federal government did not want to enshrine in a constitutional agreement the principle that constitutional amendments should be approved by the provinces, it was not willing to go ahead with its proposal as long as there was provincial opposition to it.
What happened? On June 25, 1940, Prime Minister Mackenzie King made the announcement in the House of Commons that all nine Canadian provinces had finally approved the amendment proposed by the federal government. Quebec had elected a new government, the Godbout government, in 1939. Ernest Lapointe, the minister, got involved in the election campaign, saying that the Liberals were the only guarantee against conscription. As members may recall, they did not keep their promise, giving the green light to conscription for Quebecers and ignoring the results of the 1942 plebiscite. Even today, in 1996, our questions to the government remain unanswered: Would it respect Quebecers' democratic vote on the same issue today? The question remains unanswered, as it was in 1942, when the plebiscite results were ignored.
The Government of Quebec at the time paid dearly, losing the 1944 election, which saw the Union Nationale return to power. The government paid the price, but it was already too late. No amending formula, no public ratification. How did this happen? Through telephone calls-or telegraph messages at the time-or simply through an exchange of letters.
In eight out of the nine provinces-as members may recall, Newfoundland was still a Dominion at the time, a status which Newfoundlanders may or may not regret-only the cabinet had conveyed its approval in a simple letter. A two cent stamp to say they agreed with a constitutional amendment. Only the British Columbia legislature formally approved the amendment. In only one out of the nine provinces was the amendment voted on by members of the legislature.
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Then there was a letter most likely signed by the clerk of the executive council that said: ``Yes, let us amend the Canadian Constitution''. In a strong position because of this letter, the House voted an address to the Imperial Parliament asking for some amendments to the Canadian Constitution. It is important to note however that, following a decision made two years earlier, on June 17, 1936, this was one of the rare occasions where the Supreme Court of Canada stated 1936, that the employment and social insurance act was ultra vires the powers of the federal Parliament, hence recognizing provincial jurisdiction over this area. The decision of the Supreme Court was sanctioned by the Privy Council in 1937, on January 27, 1937, to be specific.
These dates have to be mentioned, because in constitutional matters, as we have often heard and as my grandfather used to say, the Supreme Court is like the leaning tower of Pisa, it always leans the same way. Nothing has changed. It was the same in the 1930s, it was the same at the beginning of the century, and it all started in 1875, when that court was first established.
To come back to what the Minister of Justice said earlier, when he told the House that he wants to intervene in litigation dealing with Quebec issues and with the fundamental right of Quebecers to self-determination, I sure hope that the last word over the future of the people of Quebec will remain in the hands of those, in Quebec, who have the right to vote. The right to self-determination is a question of legitimacy that cannot be restricted by any outside influence.
Following this brief overview-I have many more pages I could read on this, but I will refrain from doing so-of the situation in an area like mine, that goes from the Beauce region to the beautiful riding of Kamouraska-Rivière-du-Loup, from the St. Lawrence River to the Maine border, I can tell the House that the legislation before us will hurt. The same as in all the regions. The regions will be hit hardest. Members who represent other areas have also expressed their point of view.
It will be tough on seasonal workers, and there are a lot of forestry workers in my riding who, because of the production calendar in this industry, work a limited number of months every year and will be hard pressed to work the required number of hours to become eligible for UI benefits. They will then have to resort to welfare. Once workers get a taste of welfare, it is hard to get them all back to work.
In general, people in my area are not very rich. They are poor financially, but their wealth is in their heart, in their fundamental values. These are people who want to work, who like to work, who do not complain for no reason but who want to enjoy the same benefits as other Canadians do. However, these are people who, because of what I would call the unemployment insurance map, are included in regions that are not to their advantage.
When I see that, for unemployment insurance evaluation purposes, the people of Sainte-Apolline, in my riding, a community of less than 1,000 people where unemployment is high, where there is a forest management co-operative, are in the same group as the people of thriving communities such as Saint-Jean-Chrysostome or Saint-Romuald, in the riding of Lévis, I can say there is a problem with human resources development in Canada. We should look at this and draw up a new map that reflects reality.
People who live in the RCM of Montmagny and in the RCM of L'Islet have a lot more in common with people who live in the RCM of Kamouraska than with those who live in the RCM of Desjardins or of Chutes-de-la-Chaudière, which do not have the same dynamic and the same prosperity.
We have to be careful with statistics. What do we do when we want to get statistics? We interview people. We ask them questions about their income, about their employment status, about their employability. We make sure to come by when people are not around, when young people are not around. I have to say that in several parishes in my riding, especially in the southern part, near the state of Maine, the employment rate among young people is extremely low and these people have left that part of the riding in droves. And the ones who come back are almost sure not to find a job.
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So we have to look closely at these numbers. I agree with the views expressed by my colleagues in the official opposition and I will vote accordingly on the proposed amendments at report stage.
Mr. Benoît Sauvageau (Terrebonne, BQ): Mr. Speaker, as you have seen, this debate has injected some passion into our Liberal and Reform friends. We have seen the number of people who have risen to take part in the debate.
But, more seriously, it is with some surprise that we note that even with a debate as important as that on unemployment insurance reform, which, in several ridings represented by Liberal MPs, has led to very large demonstrations, these MPs, who were elected, let us not forget, to represent their constituents, nonetheless remain silent, probably to toe the party line yet again.
These MPs are remaining silent in the face of a bill that will hurt all, or many, of the inhabitants of their ridings, especially the MPs representing remote areas, those representing the Atlantic provinces, those who should be aware of what is going on and of the demonstrations that have taken place in their ridings.
I am very surprised to see how quiet these MPs are, but I would like to say ``well done'' to the members of the Bloc Quebecois, including the member for Mercier, who did an excellent job in bringing to the public's attention the hidden agenda, the effects of which would have been felt by the people of Canada and Quebec in a few weeks or months.
I think it is thanks to the work of the hon. members for Mercier, Kamouraska-Rivière-du-Loup and Lévis, to name but a few, that we can now discuss here in the House, for one day or several, a bill the government tried to sneak by us. But thanks to the work of that committee, we have the opportunity to discuss it here.
To start off, I would like to quote from a brief submitted to the committee, a brief Liberal members most likely wanted to shelve quickly. It was written by Jean-Guy Ouellet and Georges Campeau, who are not professional agitators or bad separatists, but lawyers specializing in social law, respectively lecturer and professor in the legal sciences department of UQAM.
They say in this brief, and I quote: ``The bill on employment insurance-already the name is somewhat strange, and I will explain what I mean by that later-is part of a policy aimed at
using the unemployment insurance fund to finance an increasing number of activities other than benefit payments. Not only is this policy to the detriment of the right to benefits of an increasing number of contributors to the system, but-and this is the most important thing-its constitutionality-as my colleague from Bellechasse was saying earlier-is far from being certain. By using unemployment insurance premiums, a surplus fund of $5 billion, to finance more than benefit payments, the federal legislation is de facto transforming these premiums into a regressive tax. Because of the capping of maximum yearly insurable earnings at $39,000, such a use of the unemployment insurance account is not only inequitable-the authors repeat-but its constitutionality is doubtful''.
Further along in the text, we can read: ``The federal Parliament's jurisdiction in the unemployment insurance sector is to collect premiums in order to compensate people in case they become unemployed''. Not to meddle into all provincial programs. Not to try to reinvent programs sponsored by the Council for Canadian Unity. It is, I repeat, to collect contributions to cover those who are insured in the event of unemployment. This is the principle of fire insurance, of theft insurance. Not reinventing the wheel, not reinventing numerous programs.
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The conclusion reads: ``It is therefore appropriate to wonder if this new direction the plan is taking, with its discriminatory effects on certain disadvantaged groups such as young people and women, does not also run counter to the equal rights protected by the Constitution''. First the authors question the constitutionality of Bill C-12, and second they question whether it does not infringe upon the equal rights protected by the Constitution.
In closing they say: ``Instead of denouncing unemployment insurance fraud, the Minister of Human Resources Development would be well advised to check out the constitutionality and legitimacy of his bill before announcing it and passing it openly''. I believe this article clearly demonstrates the immoral nature of the bill presented by the Minister of Human Resources Development.
A few years ago, the present Prime Minister himself condemned the unemployment insurance reform bill when it was introduced by the Conservative government of the day. Let us keep in mind that the bill in question was far more difficult and far more harmful to workers than the one introduced now by the Liberals. However, they call it employment insurance, but this is not the case. It is not employment insurance, it is still a piece of legislation that will mostly penalize seasonal workers, along with young people and women seeking first jobs. What should be done is to set a maximum percentage of unemployment that is acceptable, and that is not done here. In this bill we should specify pro-job creation measures, and that is not done here.
I will give you an example of the way it not only does not encourage jobs creation, but it contributes to increasing the number of people unemployed or on welfare and wastes public funds. As you will recall, not so long ago, six or eight months perhaps, the government decided to redistribute, reorganize employment centres across Canada. Only a few weeks before, not months but weeks, the Terrebonne employment centre, in my riding, had moved into brand new offices in order to meet federal standards. The federal government, through the Terrebonne employment centre, had to pay huge costs for moving, a ten-year lease, purchase of material and furniture. How much? Thousands or even millions of dollars? We do not know.
Even before the official opening of the employment centre people there received a letter saying: ``Sorry, but we moved you a bit prematurely; the centre will be closing soon, but we do not know when exactly''. You can imagine the atmosphere these people in my riding who want to help people find jobs must work in. Instead, their morale is undermined by a letter informing them that in six months, eight months or a year the centre will be closed and they might have to move to Sainte-Thérèse, Saint-Jérôme or God knows where. Many of them could even lose their jobs. This is the kind of motivation this government is giving to its civil servants, who are asked to help people.
I believe that if we want to help people find jobs, to reduce the unemployment rate, to find work for every Canadian, we should first make sure that government spending-I was about to say waste-is a little more effective and efficient.
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A small business with an annual turnover of $100,000 is supposed to have a business plan, which means a government should have one too. I will never accept that a government which is wasting money to take an employment centre, move it elsewhere while telling the employees concerned that their centre is to be closed after hundreds of thousands of dollars were spent on it-and ruining the atmosphere they work in-I will never accept that such a government introduce a bill that is harmful, dangerous and unfair for Canadians.
I say again for young people who, some day, will have to find a first job: if they unfortunately have to turn to unemployment insurance, the present system requires them to have worked 15 hours a week for 20 weeks to be eligible. The bill introduced by the Minister of Human Resources Development requires that people work twenty-six 35-hour weeks.
In other words, a message similar to the one sent to officials of the Employment Centre of Terrebonne is being sent to a number of students. It tells them: ``Go to school, get an education but, let us warn you right from the start, if you have difficulty finding a job after, do not count on the federal government to help you, you will
be on welfare. We will never help you with our new laws and our new standards''. Given today's job insecurity, it is almost impossible for a student to work a minimum of 35 hours weekly for 26 weeks in his first job.
Therefore, on behalf of young people, of women, of people from the various regions, my colleagues in the Bloc and I oppose Bill C-12.
[English]
Mr. George Proud (Parliamentary Secretary to Minister of Labour, Lib.): Mr. Speaker, I rise today to take part in this report stage debate on the employment insurance bill, Bill C-12. It is something I have great feelings about.
We have talked about this bill for many months, some people longer than I have. Many people on both sides of the aisle have spent many long days, weeks and months getting this piece of legislation to where it is today.
The government believes the object of the exercise is to make all aspects of the new employment insurance system fair and balanced. We have listened to the concerns raised in hearings by the parliamentary committee on Bill C-12 and we have responded by fine tuning the legislation to better respond to the reality of different job markets.
Over the last number of months one of the very important issues that has arisen is how to deal with individuals who have gaps or breaks in their employment. For example, there are individuals whose work patterns consist of some steady weeks of work interrupted by some weeks of not working, and then more weeks of work. For these individuals setting a relatively short consecutive period of weeks worked on which to calculate possible benefits could mean very low benefits.
The number of people affected is not very small. Approximately 35 per cent of all claimants who apply for income each year are affected by these gaps. That means some 850,000 Canadians with irregular work patterns who deserve access to the same protection against job loss as do those in regular jobs fell into this category.
Ten per cent of all claimants have gaps of four weeks or more. The average gap ranges from 2.9 weeks in New Brunswick to 4.8 weeks in Manitoba. We feel it is not fair to those who, through no fault of their own, have not had that steady work prior to becoming unemployed. That is why the employment benefit will be calculated in a new way. It will allow all individuals to count back 26 weeks to find their required weeks of work when calculating average income for employment insurance benefits.
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This will enable individuals to have gaps of between four and 12 weeks without affecting their benefit levels. However, benefits will still be based on how much they earn in the 26 week period. This compromise of maintaining a fixed period of 26 weeks will maintain one of the central objectives of the new legislation, which is to increase work incentives while at the same time ensuring a better relationship between benefits paid and the normal pattern of earnings.
The 26 week period helps workers with irregular work patterns in every region of the country and in all industries from construction to the service sector. We feel that this is very important. Hundreds of thousands of Canadians in all industries suffer this problem of gaps in their employment income. They work several weeks and then are off for several weeks. The government believes that individuals should not be unfairly penalized because of this. In seeking a solution the government has had to find a balance between these two objectives.
First, a change had to be made to the old system so that there would be an incentive to work additional weeks if the work was available. In too many cases following the minimum weeks worked, an unemployment insurance claim was the first step toward finding replacement income rather than the last.
Second, many individuals in very high areas of unemployment who work in seasonal industries simply do not have the employment opportunities which would provide them with the steady work necessary to claim an adequate benefit.
It is doubly unfair in some cases. Many individuals who can only find the minimum number of weeks to qualify also have gaps due to the nature of their work, be it construction, the fishery, et cetera. Therefore, while all their hours worked would be counted in qualifying for benefits, some of their earnings would not be counted in determining the size of their weekly cheque.
Bill C-12 will allow individuals to count every dollar they have earned over the last 26 weeks prior to their claim to determine their benefit. The amounts of their employment insurance cheques will be calculated by averaging the amount earned over this period.
For instance, individuals in high unemployment areas will need 420 hours, or the equivalent of 12 weeks at 35 hours a week over the past year, to qualify. To maximize their benefits they will require two more weeks of work to get the full 55 per cent of their weekly wage. An individual in a low unemployment area will need 700 hours of work, or the equivalent of 20 weeks at 35 hours a week over the past year. To maximize their cheque they will require 22 weeks of earnings over the 26 week period.
The government believes this is a fair and balanced approach which strengthens the incentive to work while at the same time providing equal treatment for those workers with gaps in their income. It also recognizes that individuals in low unemployment areas have more opportunities to fill the gaps with alternative work.
In moving to the hours based system of calculating eligibility and benefits for unemployed Canadians, the government wants to ensure that every hour of work counts and that it pays more to work longer where the work is available. That is very, very important.
The new system is much fairer for those who work part time and in seasonal industries. For example, those who work less than 15 hours per week will now have their work insured. Under employment insurance, 90,000 workers in part time and seasonal jobs will now be eligible for benefits. Many will qualify sooner, for longer periods and will be able to insure more of their income than before. We think this is a great improvement.
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Entitlement for benefit and duration of the unemployment benefit payable will be based on the number of hours worked in the last 52 weeks. Those in areas of high unemployment require 420 hours as I have said. About 270,000 workers will qualify for an additional three weeks of benefits because they will be given full credit for all the hours they worked.
Many people still have the problem of gaps in their employment. They work a few weeks, are off a few weeks and are back at work again. Addressing the issue of these gaps was one of the most important areas we dealt with and was a major concern of the committee and the government. The solution in the amended Bill C-12 is to allow all claimants to count back a full 26 weeks to find the required weeks of earnings.
In closing I feel, as I know my colleagues do on all sides of the House, that we have come a long way and we have made many great improvements. Many people appeared before the committee. Even though many were opposed to the bill in general, I believe that after listening, talking, and participating in open-line shows they have seen we have done a great justice especially to the seasonal workers in bringing these amendments forward.
I salute the people who brought the amendments forward. I thank the committee for all of its work. I look forward to the bill becoming law and to getting on with the process for the people who through no fault of their own have to use unemployment insurance.
[Translation]
Mr. Jean H. Leroux (Shefford, BQ): Mr. Speaker, the Minister of Human Resources Development come up with a bill entitled an act respecting employment insurance in Canada. I would suggest, as mentioned in the amendments, that it be called an act to amend the Unemployment Insurance Act because, outside of an election campaign, can the government promise that this bill is going to create jobs? I do not believe it will.
I would like to talk about the people in my riding, the citizens of Shefford and Granby, the two main cities I represent. I am always quite surprised to hear that the federal government intends to work in co-operation with the private sector and the provinces to collectively invest in job creation. You may have recognized an excerpt from the throne speech.
This point is directly connected with the promises made by the federal government to strengthen the Canadian economy and the regions by withdrawing from programs aimed at helping businesses and by making deep cuts to the unemployment insurance program. In a way that is just as contradictory, in its last budget, the federal government announced plans, for 1996-97, for an unprecedented reduction of transfer payments to the provinces, and drastic cuts in social programs, especially unemployment insurance.
In its last throne speech, the government said that the economic situation was not as bad as it seemed in this country, and that if it was not much brighter it was the fault of private businesses. In my area, 6,000 people signed a petition circulated by the Granby board of trade, asking this government to keep the employment centre in Granby open. The government ignored it. We also have organizations such as the regional development council, trades and merchants associations, which are working very hard, and I believe it is unfair for the government to be blaming these people.
Since the unemployed, students and welfare recipients have already been hurt by the reforms contained in last year's budget, the government should find other ways of getting money.
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When will the Liberal government admit frankly that it made a mistake in choosing to pick on the have-nots of our society and that now it is leaving it up to the more affluent classes to determine what they will contribute to the overall sacrifice. How will the government force the wealthy to do their share, now that the small taxpayers are overburdened?
For 1996-97, the shortfall under the Canada health and social transfer will represent, for Quebec alone, $765 million in lost revenues for education, manpower training and other social programs. The unemployment insurance reform will cost Quebecers another $534 million in 1996.
This represents a total of $1.3 billion that Quebec will not receive. The reduced unemployment insurance benefits mean less money for low income taxpayers. We all know that these benefits only pay for food, rent and other basic needs of life.
When the federal government says it will work in agreement with the private sector and the provinces, what does it mean? How will the government do that? What practical measures, what action will be taken? Will it simply impose on the private sector and the provinces its own rules and national standards?
Let us take my region for example, and more specifically the case of Granby, the largest city in the federal riding of Shefford. Granby now receives $30,700 in lieu of taxes for federal offices. It is quite simple, if there were no federal government, things would not change much in my riding since Granby receives only $30,700.
Saint-Jean-sur-Richelieu, with a population slightly smaller than that of Granby and a much slower growth rate, receives $5 million from the federal government in lieu of taxes. The amount is $643,000 in Saint-Hyacinthe. Imagine, $643,000 in Saint-Hyacinthe, and $30,700 in Granby. That is what the federal government means in our region.
Not only do Granby and the region receive very little from the federal government, but now the government wants to cut a whole series of services and programs. Among other things, in Granby, the employment centre would be replaced by a service point. If this trend persists, there will be practically no federal services left in our region. Where is the rightful share of Granby and its region in the redistribution of wealth?
The taxpayers of the riding of Shefford are tired of paying and getting nothing in return from the central government. However, Ottawa is right on one point: from now on, we have to rely on ourselves, on the energy and resources of our own regional business community, without any help from the federal government. That is already what we are doing. We are not relying on the federal government which is gradually pulling out.
In the next few months, the action plan from Ottawa for the riding of Shefford will reduce by more than three quarters the number of employees in the Granby employment centre. It is ironic, but it is the truth, and I think it should be condemned here. Shortly, the majority of employees in the employment centre will be out of a job. The closing of this employment centre is an irrational, even indecent, decision. That situation is unacceptable. People and organizations in the area, including the Chamber of Commerce and the various municipalities in the riding, will never accept this situation.
Soon, the city of Granby, the regional capital of my riding of Shefford, with more than 67,000 constituents, will have only one post office and one RCMP detachment left, plus two or three other points of reduced services.
I will give the House another example, to show to what extent Ottawa is pulling out despite its promise to stimulate employment.
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In 1994, $386,488 were allocated for job creation for students in Granby and the area. In 1995, these funds from the Department of Human Resources Development dropped to less than $207,000, that is a budget cut of almost half in less than a year. This year, prospects for students are a little more generous, $257,000, but we are far from what we had before.
So, when Liberals promise to do more and better for the economy, they could not do worse. The federal government's apathy in Shefford is blatant. Even the Chamber of Commerce of Granby has proved it by circulating a petition, as I said earlier. It collected 6,300 signatures of people asking for that the employment centre in Granby be maintained, and that was refused. The petition was tabled here in the House and the response was negative. For this government, Granby and Shefford no longer exist, do not exist.
The only thing Ottawa managed to do was to unite all social and economic stakeholders, no matter their political allegiance, against the federal government's reforms and especially against the proposed unemployment insurance reform. People in Shefford have a long memory and will remember this Liberal government that does not recognize them.
Mr. Nic Leblanc (Longueuil, BQ): Mr. Speaker, I know that members of the Bloc Quebecois are joining together in defending this style of management, which goes against the interests of the people of Quebec in particular.
Mr. Leroux (Shefford): And of Canada as well.
Mr. Leblanc (Longueuil): And of Canada as well. But I, Mr. Speaker, am more interested in Quebec and not as concerned about what is happening outside Quebec.
In my opinion, employment insurance is a kind of smoke screen put up by the government to show that its proposal will create more jobs than good old unemployment insurance. When one knows that the purpose of manpower training is to create jobs, one realizes that the federal government has no real intention of withdrawing from this area.
I submit to the House that this bill allows the government not to create jobs but to create a new tax. In fact, the secretary of state responsible for finance stated a few weeks ago here in this House that the new UI fund will be much bigger than in the past, since premiums are higher and benefits lower. This fund will grow significantly. There is talk of billions of dollars within five years. The secretary of state even said that this fund would be used to reduce the deficit. This would make it a new tax, would it not? Let us be clear. We-at least in the Bloc Quebecois-are intelligent enough to understand this kind of thing.
The secretary of state added that premiums were now higher so we can meet UI needs during hard times. May I remind members that we are living in hard times. I wonder how much the government will collect during good times. It should be quite a haul.
The free trade agreement with the U.S. and the rapid technological changes of the last few years have turned employability and job requirements upside down.
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This means we must act very quickly in setting rules so that people can upgrade their skills in light of the new requirements resulting from technological change and free trade with the U.S. and other countries. This bill, this new UI reform, does not really address these issues.
The other reason I disagree with this bill is that the Liberal government has never had much credibility, especially now, and we have a hard time believing in it. I was here in this House when there was a UI reform proposal and the Liberals were in opposition. I heard Sheila Copps and the ``rat pack'' condemning that UI reform proposal roundly. Yet, unlike today's reform, the one back then had it all over this one, as far as being just and fair is concerned.
For these reasons, I think the government has no credibility whatsoever to manage the system. As employers and unions have said in the past, I say to the House that the government should partially privatize the management of UI and manpower training. A private UI system, like any private insurance company, should manage the UI fund, which, in fact, comes entirely from employers and employees.
The board of directors would manage the system, and part of the training would be managed jointly by management and union representatives.
Let me explain why we should proceed that way. Given that only employers and employees contribute to the UI fund, they should be responsible for managing it. This only makes sense. There would be much less waste, there would be much less grandstanding. Like any other insurance, it would be aimed strictly at protecting employees and meeting their needs.
Here is another reason. If we make employees and employers more responsible, there is a chance they will manage everything better, otherwise they would have to bear the consequences and be forced to collect higher premiums.
Currently, there are employers who tend to lay off employees too quickly. The minute something happens, they say: ``No problem. We will let them go. The unemployment insurance system will look after them''.
If an employee misbehaves, if he is late a few times, if his wife is sick and he does not show up for work, his employer is sometimes quick to fire him. This, unfortunately, often happens too easily and too quickly. Why? It is because employers count on the government or the unemployment insurance system to look after employees who are laid off.
The same is true in the case of an employee who decides to not go to work because he feels he does not have enough holidays, because he is a little tired, or for any other trivial reason, or an employee who does not work well and does not care because ``if I lose my job, I can claim UI benefits''.
By contrast, if the employee and the employer had to meet all the costs involved, they would be more responsible, if only to avoid having to pay increased premiums. And if they did have to pay more, they would be more careful in the future. Indeed, an employer would then think twice before firing an employee for a trivial reason.
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So, we could adjust more quickly and effectively if employees and employers could manage a private unemployment insurance fund, as well as part of the manpower training required to truly meet the needs of businesses, given the current and rapid technological changes, and given the free competition, particularly in North-America but also worldwide. This would result in an improved economy, something that is necessary, considering that way too many people are unemployed and live on welfare.
For these reasons, I feel that we should soon set aside the unemployment insurance program and replace it with an insurance similar to any other type of insurance, whether it is private medical care insurance, life insurance, etc., particularly since unemployment insurance meets a daily need.
Again, for these reasons, I strongly suggest to the minister that, if he wants a true unemployment insurance reform, he should withdraw from this program and give employers and employees the responsibility of managing their own unemployment insurance fund.
Mr. Réginald Bélair (Cochrane-Superior, Lib.): Mr. Speaker, I too am pleased to speak to Bill C-12, which will surely have an impact in rural communities of Canada and in a riding like mine.
I would like to focus on two topics: seasonal workers and the number of hours they work, and the monitoring program that will be provided, first for the implementation of this new act and then, after its implementation, for evaluation of the results of this true reform of the unemployment insurance system.
[English]
The old Unemployment Insurance Act had not been revamped for 25 years. Of course with changing times and an economy which
is taking some very different turns making it very different from what it used to be, it was a must for the Government of Canada to modernize the act.
Thousands of Canadians today are working long, hard hours without protection at all under the existing UI program. Why? Because they are working those hours for different employers and as far as UI is concerned, those hours do not count. Workers cannot get insurance unless they work at least 15 hours per week for a single employer. That is under the old system.
The new employment insurance bill changes that. It bases eligibility on hours worked and not on weeks worked. Whether a person works 36 hours a week for one employer or two or more employers makes no difference. An hour worked is an hour worked.
For example, seasonal workers often work long hours during peak season. Under this EI bill, about 270,000 workers will receive an additional three weeks of benefits because they will now be credited for all the hours in weeks they could not have used as qualifying weeks under the old system. It is a simple common sense change which is long overdue. Work patterns are changing in this new economy, which will be the second part of my presentation.
Bill C-12 is a result of a lengthy and inclusive consultation process. The government listened to what Canadians had to say about income support for unemployed workers and the kind of employment benefits that would help people get back to work. EI is indeed a result of this.
The government also relied on substantial amounts of research. Experts have looked at all aspects of how the old UI system worked. They know it can affect the behaviour of employers and workers in ways Canadians do not accept any more. It can lead people to turn down available work. It can lead employers to cycle people in and out of jobs. It is not because people do not want to work but because the system does not always work well.
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This new bill is designed to reward work effort. It strengthens work incentives and insurance principles. It also ensures fairness by ensuring an adequate income for those in need. We are talking about those people who make less than $26,000. They will receive a supplement.
Research gives us good reason to believe that the EI approach will be successful. People who have criticized the bill have not been able to point to the same kind of thorough, objective analysis. Now we will go a step further with a thorough, vibrant process designed to tell us if our expectations are being met in practice, if behaviours are changing as much as we expect or even more.
We will look at how the new system works in a dozen communities chosen to represent a range of labour market environments all across Canada, that is, towns with different workplaces, disciplines and domains which will ensure a good cross-section of employees and employers and the kind of work they do for a more precise analysis. The Employment Insurance Commission will do its own research to monitor how individuals, employers, communities and local economies are adapting to the new Employment Insurance Act. We will see those results annually. Surveys of individuals, employers and community representatives will provide a third monitoring approach.
These processes will give us the required feedback to adjust the program if the evidence shows that we need to. The commitment to monitor the impact of EI is yet another example of the government's goal for a system that is fair and effective in every sense of the term.
[Translation]
I am pleased to take part in the debate and especially to speak in favour of seasonal workers who, in the past, did not fully benefit from the unemployment insurance system as it had been established. Many people were working long hours, but for short periods. This meant that they did not have the required number of weeks, but this new employment insurance legislation will deal precisely with this serious problem since, after July 1, the date this new act will come into force, every hour worked will count for unemployment insurance purpose. That will benefit some 270,000 Canadians. It is extremely important that this figure be clearly pointed out in the House.
Mr. René Canuel (Matapédia-Matane, BQ): Mr. Speaker, first of all, I would like to thank the hon. member for Mercier, as well as my colleagues from Lévis and Kamouraska-Rivière-du-Loup, for the excellent work they did on this issue. Never before, during the last two years and a half, have we put so much work into a bill. Of course, we worked hard on other pieces of legislation, but particularly on this one. We did so for two main reasons. First, this legislation affects all the citizens from coast to coast, and especially the people in Quebec. Second, Bill C-12 goes directly after the poor and the destitute.
That is why the Bloc Quebecois has focused all of its efforts to try to reason with the government. We used some very solid arguments. I will not go over them again, we have mentioned them often enough. We have shown that this is not a good reform proposal. Today, I want to try to reach the hearts of my colleagues, and I hope they have some compassion left. In a democracy, the people are represented by those they chose to elect. But they have taken to the streets.
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They do not want a mini-reform, they want this employment insurance bill, as it is called, to be completely withdrawn. The people who have taken to the streets are not beer drinkers, not professional agitators and certainly not cowards. Quite the opposite, these people are responsible citizens. But mostly, although these people want to work, they cannot find work year round. These are outstanding citizens. Some people in my riding and elsewhere have heard of Nelson Pilote, from Saint-Alexandre-des-Lacs, who is a tree harvester. In the summertime, he gets up at 4 a.m., brings
his chain saw with him to the forest and works until 5 or 6 p.m. He works hard. He has a nice family, five young children.
While he receives UI benefits, from the premiums he and his employer paid, he does not do any moonlighting. What does he do instead? Volunteer work. He coaches hockey and several other sports. He teaches young children and gives them a fresh outlook on life. He is not necessarily a PQ or a sovereignist partisan, but he puts his heart into it and he wants to live a decent life.
In Amqui, he gathered, not by himself, of course, but with the help of a few unions, 5,000 people, who came to demonstrate and ask for the withdrawal of Bill C-12 now before the House.
Also, I have a friend who is a bishop in Gaspé. He is not involved in politics either. He too joined the workers to ask, on behalf of his flock, that this bill be withdrawn because he knows that in Gaspé as in Matane and in Mont-Joli as well as in Amqui, people want to work but it is not so simple. Come and try to create jobs in our region! You will see that it is more complicated than you think.
Members are also aware that forestry jobs are the least costly to create. The Canadian government cut its $6.5 million a year grant to the East Plan, which created jobs, good jobs. They cut it. They also want to cut funding for the Maurice Lamontagne Institute, where year after year researchers make discoveries that are published throughout the world.
It seems to me that the government is cutting funding everywhere: for researchers who give hope to the young and for the most disadvantaged people, the poorest of the poor. And for women in our areas, especially the rural areas. Women who have seasonal jobs will suffer as well as seasonal and part-time workers.
I do not want to go over all the arguments again. Members know quite well that in our areas as elsewhere in Quebec and in the Atlantic Provinces, it is almost impossible for someone who enters the workforce to accumulate 910 hours of work. Only a few will be able to do it.
Yes, I appeal to my colleagues. Let us hope that our arguments will at least touch their hearts, if not their minds.
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It is not easy for people who want to work and who will no longer be entitled to this employment insurance, that back home we call poverty insurance, because that is right where it will lead. Someone said to me: ``Do you know that if this employment insurance comes to our regions, people will be worse off in a few years than they were during the '30s''? They will turn to welfare, of course, but they do not want to. People want to work.
You know, it is very hard on a person's morale to rely on welfare. I have known many men with families who, having lost their jobs and been on unemployment insurance for a year, have then unsuccessfully sought work and become completely discouraged. The whole family was affected. It is extremely hard for the children, and it then becomes society's problem. It is not just the individual's problem, the family's problem, but the community's or society's problem.
This is why I am appealing to my colleagues. There is still some time left. They can still vote against Bill C-12. I ask them with all my heart to think about their constituents. There were demonstrations in the Atlantic provinces as well. If we want to represent our constituents properly, how can we not listen to what they have to say? I find this tragic.
Of course, they can always say that if we do not listen to them, two years, six months down the road, they will throw us out. As you well know, Madam Speaker, in four or five years, a government in power can do a lot of stupid things, and you know that they have done their share. They are about to do it again. I think that this will be the worst yet, a terrible mistake, and it is workers, young people, women, in other words, the poorest members of our society, who will suffer the consequences. It is not just the individual who is affected, as I was saying earlier, but families, parishes, all of society. When apolitical people say that it does not make sense, I ask my colleagues across the way to sit up and take note.
Mr. Pierre Brien (Témiscamingue, BQ): Madam Speaker, I, too, am pleased to take part in this debate on Bill C-12 to express a viewpoint which resembles that of my colleagues, of course, and also that of a lot of people in the riding of Témiscamingue. In fact, next Saturday, people will hold a demonstration in the streets of Rouyn-Noranda to show their opposition to this legislation, which will affect many of them.
We have to ask ourselves some questions. This legislation is called the Employment Insurance Act. That is awfully close to being false representation because it does not deal with employment in any way. The government wanted to change the name of the old unemployment insurance plan to show that it was proposing a reform involving significant changes. There are two ways to criticize this bill. It can be criticized for what is included in it, and for what was left out of it. Let me say at the outset that nobody can oppose the idea of modernizing our social programs, of adapting them and adjusting them to the reality of the 21st century.
I will have the opportunity, in the second part of my speech, to talk about the measures that could have been included in this bill to undertake a true unemployment insurance reform for purposes other than those of the finance minister. But even that is not very clear.
The first question I ask myself is, what is the real purpose of this reform? We know that after the first cuts made in the 1994-95 budget, there was a $5 billion surplus in the unemployment insurance fund at the end of the year.
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There must be no mistake, the fund is not in a state of catastrophe. There are revenues of $5 billion more than there are expenses for unemployment insurance. Obviously, people will say there were years when there was a deficit. If we look cumulatively at it, since its inception and as we know it today, the unemployment insurance fund has a surplus of about $1 billion. In 1996, another $5 billion will be added to this surplus.
It cannot be said that the unemployment insurance plan was in a catastrophic state. However, the Minister of Finance made sure, in all sorts of ways, that he could take out this surplus and use it to lower his deficit. With most of his other reforms not giving any results, apart from his cuts in transfer payments, the minister decided to use the surplus in the unemployment insurance fund to provide a certain amount of revenue to reduce his deficit in the short term.
People have not got the time to put a magnifying glass to every government program. However, the unemployment insurance fund is supported by contributions from employers and employees. The Minister of Finance puts no money from the consolidated fund into it. It is paid for by employers and employees. So, to use this surplus is to steal from the unemployment insurance fund, it is to impose a sort of tax on employment. If that is what they want to do, let them say so. Let them cut contributions and add an employment tax to pay stubs. Let them explain the real things, because that is what is happening.
We could discuss the surplus for a long time, but I also want to speak of one measure in particular which goes against the present trend. Many people wonder about the way the job market is divided up. Many workers do a lot of overtime, while many people who could work are unable to find a job. How could the work be divided more fairly? Such a thing will not happen unless the government takes a number of courageous steps, sending out very clear signals that this is what it will support.
In this bill there is one measure which reduces maximum insurable earnings from $42,000 to $39,000. Concretely, this means that when people earning more than that do overtime work, the employee and the employer-but particularly the employer-will not have to contribute anything to unemployment insurance.
Put yourself in the employer's shoes. You have a job to be done, and you have a choice between paying a new employee, who will have to pay into the unemployment insurance fund-as will you-and paying someone who already works for you and for whom you will not have to make a contribution, if the work is done in overtime. If all of the social responsibilities of employers are defined in this way, there is a very clear message: Get people to do overtime, do not hire anyone new, it is more cost-effective that way.
The objective of people in business-legitimately and understandably so-is profit, personal accomplishment and so forth. If there is no clearer guidance, if they are not helped to discipline themselves a bit in this area, they will never of their own accord say that they are ready to divide the available work. It is our responsibility as legislators to ensure that policy orientations correspond to our realities.
This bill could have provided a good opportunity to modify contributions in the opposite direction, making sure it was more advantageous to hire new people than to pay a lot of overtime, too much in some cases. It must be understood that, in the medium term, employers would notice that those working slightly fewer hours were less tired, with fewer work-related accidents, and thus lower worker compensation contributions, and so on. But this requires a signal, something to set them off in the right direction, and there is no such thing in this reform.
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I referred to the things that are lacking in this bill. I remember that during the debate over the free trade agreement-which I wanted, promoted and strongly believe in-there was a lot of talk about the adaptation it would necessarily bring about. For weeks, years now, we have heard about massive layoffs, job cuts in many companies. Often they are people who had held the same job for 15, 20, 25 years and who now, at 40 or 50, are unemployed, with many productive years left in them; as members of the labour force, their everyday life would be more stimulating and they could contribute to society.
Why are these people, who held a job for a long time before losing it now when we are entering a new era where technology is becoming more specific, not treated differently? Why not consider longer training or rehabilitation programs for these people and why not keep them much longer on UI?
I do not mean for the federal government to put in place its own training programs, far from it. Another thing lacking in this bill is the transfer of this area to the Quebec government and to the provinces wanting it, such as Quebec where the consensus is very obvious, and lengthening the entitlement period. You cannot go overnight from the textile industry to computer science, 25 to 30 weeks are not enough.
We must be realistic. I say it again, nothing in this bill guarantees that our unemployment insurance plan will be better adapted to the realities of the years 2000, namely changing jobs often, many human tragedies for those who had held a job for a long time and who will have to work in new sectors. There is nothing to this effect in the bill.
During the minute and a half I have left, I would like to go back to manpower training because I find nothing more frustrating than seeing someone come to my office and say: ``I am unemployed, I would like to take a course. I read in the paper that the unemployment insurance, or some other organization, was offering a course''. To know whether he is eligible or not, I have to ask him 56,000 questions: ``Are you on UI? Have you ever been on UI? Are you on welfare?''
This situation is due to the fact that there are two levels of government with their own structure giving their own courses according to their own criteria. Obviously, since it is managing the unemployment insurance program, the federal government's objective is to target the unemployed. For its part, the Government of Quebec, which is responsible for social assistance, gives priority to welfare recipients. And in all of this, people without any income are nobody's priority.
That is a major problem that we will not be able to resolve as long as there are more than one level of government responsible for this matter. In Quebec we resolved this problem a long time ago. We decided that it would be the Government of Quebec, but some people here are stubborn, as they say; they have a hard time getting the message, which is very clear in Quebec and which was repeated during the last socio-economic summit.
So, for all these reasons, we cannot support such a bill, absolutely not, and I conclude by inviting the people back home in Abitibi-Témiscamingue, the Témiscamingue riding, and especially those from Rouyn-Noranda-where there will be a demonstration this Saturday-to come and join us in condemning this manipulation of the unemployment insurance account and this bill, this so-called reform totally lacking in vision for the future, for the years 2000.
[English]
Mr. John Murphy (Annapolis Valley-Hants, Lib.): Madam Speaker, I am pleased to have the opportunity to rise today and speak in support of Bill C-12.
I do not think anyone in the House would argue that to maintain the status quo is a non-issue. I believe the modernizing of our employment insurance system is a crucial part of the government's job and growth agenda.
The changes we as a government have brought forward more accurately reflect what works best in today's economy. EI will continue to provide Canadians with basic income protection, as it does under the current system. It will also include a range of new employment measures to help people find work more quickly. In short, it is a system designed more effectively to meet the needs of Canadians.
I will focus my remarks today on how the bill will affect those who work in the seasonal industries. Bill C-12 will ensure that up to 500,000 part time and seasonal workers who were not covered under the old rules will now be insured. About 45,000 seasonal workers who currently are not eligible for UI benefits, despite paying premiums, will become eligible under the new hours based scheme. Some 270,000 workers in seasonal industries will receive an additional three weeks of benefits.
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Bill C-12 also commits to a number of important active employment measures, including wage subsidies, earnings supplements, self-employment initiatives and job partnerships.
In my riding of Annapolis Valley-Hants seasonal workers make up a large and very important part of the local economy. Those employed in seasonal industries work extremely hard. If members were to talk to any one of the people in my riding I have spoken with they would say that if there were work year round they would be glad to take it. The reality, however, in many rural communities is quite different. Through no fault of their own people do not always have access to full time year round employment.
I have had the opportunity to meet with many groups and individuals in my riding to discuss this issue. In our conversations they expressed to me some serious concerns about how employment insurance would impact those who work in the seasonal industries. They asked me to bring the message to Ottawa. They said we as a government must ensure any changes are fair and do not unduly target those employed in seasonal industries.
I, like many of my Atlantic caucus colleagues, brought that message to Ottawa. I am pleased the Minister of Human Resources Development has listened and responded positively to these genuine concerns. The end result is a system that is both fair and balanced, a system which will allow more seasonal workers to qualify more quickly for more weeks of benefits.
One of the most serious concerns I have heard in recent weeks was how will the government deal with individuals who have gaps or breaks in employment, those whose work patterns consist of some steady weeks of work interrupted by a few weeks of unemployment and then more steady weeks of work.
For constituents in Annapolis Valley-Hants this is a real concern. For instance, the agriculture sector is the backbone of our economy. However, this means for many people there will be
plenty of work available in the spring and fall but there may be gaps in their employment during the summer months.
I have also heard similar concerns from constituents who work in the fishing industry. For these individuals, setting a relatively short consecutive period of weeks of work on which to calculate possible benefits could mean very low benefits. The number of people who would have been affected is not small. It is approximately 35 per cent of all claimants who apply for income benefits each year. That means nearly 850,000 Canadians with irregular work patterns deserve access to the same protection against job loss as do those with regular jobs.
In my home province of Nova Scotia the average length of gap is over three weeks. Therefore it is not fair to those who through no fault of their own have not had steady work prior to becoming unemployed. I am pleased the minister has adopted the recommendations of the standing committee to count back a full 26 weeks to find the required weeks of work when calculating average income for EI benefits.
This will allow individuals to have gaps of between four and twelve weeks without affecting their benefit levels. Benefits will still be based on how much one earns in the last 26 weeks.
This compromise of maintaining a fixed period of 26 weeks will maintain one of the central objectives of this new legislation. It will increase work incentives while at the same time ensuring a better relationship between benefits paid and the normal pattern of earnings. This 26-week period significantly helps workers with irregular work patterns in every region of the country and in all industries from agriculture to the service sector.
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Many people in seasonal industries earn relatively low incomes. As well, they may live in communities that offer relatively few opportunities or have relatively few skills that would lead to better paying work. I believe that the new EI system will more effectively respond to their needs.
Strong efforts have been made by the government to protect low income workers in seasonal industries by focusing on higher income workers for the savings that are essential to EI. Low income people in these industries will also benefit from a new system that focuses on helping people get work and creating incentives for people to take all the work that is available. Simply put, every hour worked will increase an individual's eligibility for benefits.
A key feature of the new system is the family income supplement. This supplement is meant to top up benefits in order to reflect family circumstances. It will bring total insurance benefits up to as much as 80 per cent of a person's average insured earnings. Across Canada, 350,000 claimants in low income families with children will be eligible for the supplement. Many will be in the seasonal industries and many will be in my riding. In Atlantic Canada alone the family income supplement will benefit 54,000 low income families.
Thanks to the efforts of the members of the Standing Committee on Human Resources Development, I am pleased to say that those who are receiving family income supplement will be exempt from the intensity rule. I believe this is consistent with the government's overall efforts to redirect assistance to those who are most in need. This is the Liberal way.
These are just a few of the many positive elements of the legislation. I am pleased that the concerns of seasonal workers have been positively addressed in the legislation. I believe that Bill C-12 will be good for seasonal workers, good for the people of the riding of Annapolis Valley-Hants, and good for Canadians.
[Translation]
The Acting Speaker (Mrs. Ringuette-Maltais): It is my duty, pursuant to Standing Order 38, to inform the House that the question to be raised tonight at the time of adjournment is as follows: the hon. member for Kamouraska-Rivière-du-Loup-Manpower Training.
[English]
Mr. Herb Grubel (Capilano-Howe Sound, Ref.): Madam Speaker, I have a long attachment to questions of the economics of unemployment insurance.
I was one of the first scholars in Canada to produce evidence that the imposition of generous unemployment insurance benefits raises the rate of unemployment.
All through the post-war years until the early 1970s, American and Canadian unemployment rates moved very much in unison. They never diverged by more than one-half of a percentage point. But in 1972 the system in Canada became much more generous with respect to the amount paid when people became unemployed relative to the wages they were earning, the number of weeks necessary in order to become eligible, the number of weeks paid after one became unemployed. Our system was one of the most generous in the world.
Studies have been done to explain why these differences between the Canadian and U.S. unemployment rate developed in the early 1970s and have since widened and now have settled at approximately 3 to 4 percentage points. It is not possible to explain these differences by differences in monetary policy, fiscal policy, exchange rate policy, any of the traditional measures.
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The one that dominates the results of attempts to explain these differences is the generosity of our unemployment insurance system. This generosity has reduced an enormous amount of lost output. The idea of having a generous system is very laudable. There is no denying all of the arguments made by the speakers from
the Bloc Quebecois. The more generous the system is the better off are the people who are receiving the money.
As people who are concerned with the welfare of all Canadians, what are the consequences of these generous benefits and the resultant increase in the unemployment rate? I have estimated that as a result of this increased generosity, a 3.5 per cent higher rate of unemployment existed than would have been if we had stayed at the levels at which we were in 1972. Then our national output would be over $11 billion higher.
The tax take alone on that $11 billion higher income would be $3.5 billion. The deficit would be cut substantially and a lot of workers who are now unemployed would be employed.
When looking at reform of the unemployment insurance system it is necessary to do something in addition to what the Bloc members have been saying in all of their speeches. If unemployment insurance benefits are cut, if the cost of being unemployed is raised, certain people will be hurt. That is true. However, if that is done benefits are provided to all Canadians. The most obvious one is that the unemployment rate would be lower. Another is that output would increase and taxation revenues would go up.
What has to be done is consider adjustments to the present system which would bring about these gains in output and reductions in unemployment at a cost which would not be too high. I have four measures which I believe would be widely and readily acceptable to Canadians in order to gain these benefits.
The first and most obvious is that the system can be made less generous. Maximum benefits equal to 53 per cent of previous wages offered by our system now are at or very near the top of benefits paid by all industrial countries. However, generosity over the UI system also depends on the ease with which workers become eligible, how long they can receive benefits, what industries are covered, and so on.
It is interesting to note that in recent years the system's generosity has been reduced substantially. That was one of the conclusions reached at a recent conference held here in Ottawa. Some analysts suggested that it may now be no more generous than it was before the 1972 reform.
The pre-1972 levels are not necessarily ideal and further cuts in generosity should be considered as long, and I emphasize this, they do not impose undue hardship on the neediest.
The second measure I believe that Canadians would accept and which would bring huge benefits involves tougher measures against fraud. I have always treated with some scepticism the results of internal audits made by the system which found fraudulent claims to be about 1 per cent of all benefits paid. How did the investigators discover what are deliberately hidden practices? What incentives do they have to show that their bureaucratic and political bosses are running a system that permits lots of fraud?
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There is evidence that my scepticism may be warranted. In the equivalent of a social science experiment, five U.S. states recently introduced systems for the positive identification of people making welfare claims. It is difficult to forge ID cards in numbers tracked by computer. They found that fraudulent claims were between 8 and 15 per cent of welfare payments according to a letter published by the Globe and Mail on April 8, 1996.
I have a question on the Order Paper for the Minister of Human Resources Development. In the spending estimates of the national accounts, I discovered that last year the amount of money recovered from fraud in the insurance system rose by about 3.5 percentage points or several million dollars.
I have asked the minister to explain why, in one year, there was such a dramatic increase. Was it because new measures were undertaken? What was the cause? Certainly it could not be explained by people suddenly becoming 3.5 per cent more fraudulent than they were before.
The third measure I would recommend is the elimination of specific types of abuse. I am very careful not to call them fraud. I talk about abuse.
All of us have heard about entire school boards announcing in April that the teachers and other employees of the school board would be laid off in June after classes stop. As a result of this, eligibility for unemployment insurance is established. In September, these people get rehired. That is an abuse of the system. It was never intended.
We know the story that the former Minister of Human Resources Development was bringing forward all the time. Automobile workers were constantly negotiating contracts that involved unemployment insurance benefits in their pay package. Those kinds of things can be made illegal completely and directly.
Finally, for those people who see this program and would like to have a more elaborate explanation of what is going on, there are measures available for reducing gradually the abuse that is taking place by permanent transfers to seasonal industries.
It makes no sense that the rest of Canadian workers, some of them poor, in areas other than those benefiting, that seasonal workers should be receiving, consistently year after year, six times the amount of money that they pay in premiums.
I have some ideas on how to do this. The paper is available. Please write to me at the House of Commons.
Mr. Joe McGuire (Egmont, Lib.): Madam Speaker, it is a pleasure to address the House on Bill C-12.
This bill is the culmination of a two-year effort on behalf of the government to change, to clarify and to improve, hopefully, the unemployment insurance system of this country. It has been a very long time coming.
The people of Canada had their first look at this bill last December. Some parts of it were greeted with a great deal of anger in some areas. One of the things that really upset members of Parliament and seasonal workers in particular was the calculation of benefits and what became known as the gap. They were also upset with the divisor rule, which reduced their benefits a great deal, as well as with the intensity rule, which would penalize people who worked in seasonal industries.
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It is unfortunate that in Canada we have winters. We do not fish or farm in the wintertime. Neither do we have much of a tourist industry in the wintertime. Most of our nation consists of seasonal industries manned by seasonal workers. They are full time workers in seasonal industries. To penalize them, which was the message they received last December, would be a very unfair way to treat them.
With the change in the cabinet, the new minister undertook to rectify those situations. The minister of HRDC comes from an area which has seasonal labour, whether it be fishing, forestry, mining, tourism or whatever. A large percentage of the workforces in New Brunswick and in P.E.I. consists of seasonal labour. In my riding of Egmont almost 50 per cent of the labour force is seasonal. To penalize them, as we would have been under the bill which was introduced in 1995, was unfair and the new minister recognized that.
The minister and the Standing Committee on Human Resources Development put a lot of work into improving the bill. They worked very long hours. There are a lot of amendments which came from members of the Atlantic caucus and also from members of the Ontario caucus, the Manitoba caucus and the B.C. caucus. As I said earlier, the country is made up of seasonal industries due mainly to its geography.
I compliment the hon. member for Fredericton-York-Sunbury. He put an enormous amount of time and concern into rectifying the bill. I also compliment my colleague from Malpeque who made an amendment which will be introduced later on that will improve the bill.
The main problem with the old bill was the gap. When a seasonal worker applied for unemployment insurance they had to count back consecutively 14 straight weeks to calculate their benefit. Oftentimes there was no work at all. Even though an individual qualified to apply, they did not have 14 consecutive weeks. In an extreme case a person could have one week and 13 zeros. That is how ridiculous the previous proposal was.
We tend to ignore or forget that there was quite a protest against these parts of the bill. Whether it was in P.E.I., New Brunswick, Quebec or Ontario, people came out to help us make these changes in the bill. I was glad to see them demonstrate their support for the changes we were proposing. They made sure we held to our word that we would change the gap, the intensity rule and the divisor.
Once a person's seasonal employment is finished, whether it is in August or October, they can go back 26 consecutive weeks. If their 14 weeks, or their 12 weeks in the case of Prince Edward Island, is within that 26 week period, they will receive full benefit for the contributions they have made.
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This will take care of the vast majority of seasonal workers. There will be a few who slip through the cracks. As with any new legislation there is always improvements that can be made. Even though they may not be made in this bill, in the future amendments can be made to protect those people who fall through the cracks.
There may be a year of adjustment for some people who apply in July for unemployment insurance benefits. When they take the previous fall's work weeks, coupled with the spring work weeks and then apply for unemployment insurance in July, these people will be left out. They will have a year of adjustment which may be tough.
On the intensity rule, it is not a perfect solution. However, if we had all kinds of money to apply to every problem we have I suppose we would never get out of debt or never get our deficit under control.
We have to credit the minister for going back to cabinet and securing funds which will take care of the cost of the gap, the cost of the intensity rule and the cost of the divisor rule. When we add it all up there is about an extra half billion dollars put into the bill over the past month.
The intensity rule now is that if someone is a repeater but their household income is $26,000 or less they will not be penalized. Depending on their dependants, they may be able to qualify for an extra amount of money because they are a low income earner. Those with higher incomes will be penalized 1 per cent a year for five years, which is still money and still a penalty. I believe it should still be recognized that $26,000 in this day and age is not a great amount of money and these people should not be penalized.
UI was never designed to support somebody who is making $60,000 or $70,000 net income. With the clawback that situation will be rectified to an extent where in five years' time someone making $48,000 will still be eligible to draw UI. Over that they will not be able to draw UI. I do not think anybody can argue with the fairness of that stipulation in the bill.
I know there are a lot of other things that can be said about the bill. I compliment the committee again for all its hard work, especially the members in my province, the members for Malpeque and Hillsborough, who have devoted a lot of their time to improving the bill.
[Translation]
Mr. Réal Ménard (Hochelaga-Maisonneuve, BQ): Madam Speaker, I am very pleased to speak to the amendments proposed by the Bloc Quebecois. I am pleased to speak to these amendments because I have always thought that in politics, especially when talking about social programs, words are not meaningless.
I do not think we will have many opportunities to see, in this Parliament, a word as daring and as inappropriate as the one proposed by this government which, with its inflated ego, with all the superlatives and the artificial pride it is capable of and with the strength of its weight, has the audacity to call this bill that is before us today, and that has been before us for a number of weeks, the Employment Insurance Act.
Can you imagine that Canada, a country which, if we look at the statistics, has a dismal unemployment rate and where poverty is a problem-the National Council on Welfare reminded us of that last month when it encouraged us to invest $15 billion to fight against poverty-can you imagine that Canada is talking about employment insurance?
The government is talking about employment insurance with a kind of impudence that is unacceptable for parliamentarians. What we are saying is that we will talk about employment insurance when and only when the government has finally set the stage for job creation.
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And what do we see today? There have never been so many unemployed people. There have never been so many people wanting so much to work than at this time, and we know many in our ridings.
Each of us has a public voice. Each of us represents people. I represent the riding of Hochelaga-Maisonneuve. This riding is in the Montreal area, which has a far higher unemployment rate than the national average. Yet, today, the government would like the Bloc Quebecois to be part of this play on words. But we are vigilant, we know what these words mean and we will not support a bill that, even in its title, could suggest conditions are there to create jobs. We do not accept that and we will never accept that as long as we live.
Let us look at the premise on which the debate started. Did the government ask the human resources development committee to suggest ways to develop a number of strategies leading to full employment, with what that implies in a system where there are two levels of government? That is not the premise on which the debate started. The debate started with a $2.3 billion cut. We cannot forget, when we analyze this bill, that it aims first and foremost to rationalize, that is, to balance public finances. Of course, we are not against balancing public finances, but we are not convinced it must be done at the expense of the unemployed.
We are in the presence of a government that, with a quite appalling regularity, it must be recognized, has tried over the last few years-since the Liberals have been in power for almost three years-with each of the successive budgets the finance minister has tabled in the House, to make cuts that were aimed at people in our society who need help.
You know what the views of the hon. member for Mercier are in this regard, how she and our colleagues who worked with her on the human resources development committee propose to put people back to work. That is what we should be talking about. But the premise we must start from is not a sense of brinkmanship, a burden of $2,3 billion. This is not the way to hold a successful debate that will allow us to set the stage for full employment.
I do not know whether you had the opportunity to read the Fortin report. I did. According to Mr. Fortin, since 1990-I must be honest with you-the various attacks against unemployment insurance, which limit access to benefits, have exerted pressures in the order of $1 billion on Quebec's public finances. This statement was not made by the hon. member for Mercier, the hon. member for Hochelaga-Maisonneuve or the hon. member for Verchères. The economist Fortin-who is not known for his support of sovereignty, who is not a friend of the Bloc Quebecois-tabled a report saying that repeated attacks against unemployment insurance by restricting eligibility to the program had exerted such pressures on Quebec's public finances that the Quebec government had to spend another $1 billion.
What is happening? I am surprised that this government does not understand. It is refusing to hold a debate on the real question: How can we create jobs in the conditions that will prevail in the year 2000 and the year 2005? How can we set the stage for full employment? Some countries have succeeded.
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True, those are not continental countries. True, those countries are not as vast as Canada. True, those countries do not have two levels of government obstructing each other. But the question remains. The real issue we face in each of our ridings, whether in the scenic Lower St. Lawrence region, where you may be thinking of spending your next vacation, the riding of the Minister of Immigration, or the riding of Hochelaga-Maisonneuve, is that people are looking for jobs. And what is this government proposing to them? You may nod in agreement, but the fact remains that there is nothing in the bill before us that would help create jobs.
Again, what the opposition finds unacceptable is that there should first have been a debate on the way to overhaul social programs and to set the stage for job creation, but not with a sword over our heads, not with the burden the Standing Committee on Human Resources Development had to carry: cutting some $2 billion beforehand. This is not the end of the fiscal year.
It is as though a CEO trying to determine what human resources he will need in the coming years was told he had to juggle with a $250 million burden in taxes of all kinds.
The exercise was flawed from the beginning and the official opposition cannot accept that even the title of the bill is confusing to the point of suggesting to people that this legislation includes measures to stimulate employment.
Let us talk about the philosophy of the bill. Madam Speaker, I know you like philosophy. Let us take a look at the philosophy underlying the bill. Do you think that consideration was given to the fact that there are honest people out there who are actively looking for work? How do you explain that the government targeted in a blatant and totally inconsiderate manner the so-called frequently unemployed, as if life was like a career plan, and as if people, over the last five years, had deliberately chosen to put down on their resume: ``I collected unemployment benefits on two, three or four occasions''.
What is the logic behind the idea of penalizing people because they used a program which they funded without government assistance? Indeed, all those who are listening must know that, in 1992, the government completely withdrew its financial support to the unemployment insurance fund.
This is quite the paradox. The government wants to limit eligibility. It tells people: ``If you are frequently unemployed, if, in the last five reference years, you had the audacity of collecting unemployment insurance benefits for more than 20 weeks, it is just too bad. For each multiple of twenty, the benefits to which you would otherwise be entitled will be reduced by one per cent''.
Madam Speaker, you are telling me my time is up, but let me say I am still quite upset by all this and I hope to speak again on this issue.
[English]
Mr. Francis G. LeBlanc (Parliamentary Secretary to Minister of Foreign Affairs, Lib.): Madam Speaker, it is a pleasure to say a few words this afternoon on Bill C-12, the legislation to create an employment insurance system in Canada.
I have been associated with the efforts to modernize and reform Canada's unemployment insurance system for some 12 years. I was a civil servant between 1984 and 1988 in the department which preceded the human resources development department in the area that was working on unemployment insurance reform. For the last eight years as a member of Parliament I have represented a constituency in which unemployment insurance is a very important part of the local economy. I have been associated with many of the efforts to reform the UI program and changes that have been made to that program over the last eight years.
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Most recently, as the chair of the human resources development committee I travelled across the country examining the views of Canadians on the reform of Canada's social security system. I had a chance to talk to many Canadians about the need for UI reform and the direction the UI reform process should take.
Bill C-12 has gone through a great deal of study by the Government of Canada, by both the current and previous ministers responsible, as well as members of the House, notably the members of the Standing Committee on Human Resources Development. It represents a major step forward in the difficult task of reforming Canada's system for insuring Canadians against unemployment, for providing Canadians with support and creating conditions for stable employment and job security in a rapidly changing world.
While the changes which are represented in the employment insurance bill do not completely provide the kind of employment insurance we will need to confront our problems in the 21st century, they do go a very long way toward improving and modernizing the present unemployment insurance system. Let me make a few brief important points about what the legislation does.
Basing the new system on hours and not on weeks will create a much more flexible employment insurance system which, in today's job market, will entitle people to employment insurance much more readily than in the past. It will be fairer to seasonal workers. Many of them have concentrated weeks of work in a short time of the year. If they do not acquire the 12, 13 or 14 weeks under the existing system whether or not they work long hours during those weeks, often they do not qualify for unemployment insurance.
Changing the formula to hours allows seasonal workers easier entitlement and in a shorter period of time. It will also allow workers who can only get part time work to use those hours to build toward their entitlement. Previously in many cases if workers did not work 15 hours a week, they simply did not qualify for unemployment insurance.
It is an improved system because it will provide a much broader coverage for the labour force. It covers every hour worked, not just for those individuals who work a minimum of 15 hours a week. Providing broader coverage not only allows more people access to the employment insurance income benefits which are part of the
program but it also allows more people to have access to the tools for re-employment which are also part of the legislation.
Those tools for re-employment are now only available to people who are getting unemployment insurance benefits. That has created a great deal of confusion and distortion in areas where people would like to take advantage of training programs but do not qualify for unemployment insurance. They are unable to access that benefit. Under this new system those benefits will be more broadly available. More support will be provided for individuals to take advantage of those tools to get back to work.
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This new system introduces the notion of allowing people to accumulate and build their entitlement. That is a very powerful incentive to creating more stable and long term jobs especially in those parts of Canada where it is more difficult to create jobs.
The notion of allowing people to accumulate entitlement is in various parts of the bill. It starts with the basis of hours worked rather than weeks worked as a unit of account. The intensity rule is a very astute amendment by the member for Etobicoke-Lakeshore. It allows for people who are repeat users of benefits and who would have their benefit levels reduced through the intensity rule, that by working more hours during that period of unemployment they can build back up their entitlement thereby delaying the effects of the intensity rule.
A number of features in this program are directly suited to people with low incomes. It will give them an opportunity to have more than the 55 or 57 per cent of their earnings replaced through this new system. Through the family income supplements which are part of the new employment insurance system, people with low incomes will be able to have a larger portion of their incomes replaced. That is one of the progressive features of the system.
The new system recognizes the regional differences and the fact that in many parts of the country jobs are much harder to find. The system is regionally differentiated in order to take that into account. The important thing we all have to know in this House is that the fundamental purpose of this legislation has to be to create the conditions for jobs and job creation especially in those parts of Canada where jobs are difficult to create.
The unemployment insurance system cannot be a barrier or obstacle to creating jobs. If it does that, and the old system has done that, then we are fighting against ourselves. We are working at cross purposes and we are not providing the environment Canadians want and need in order to have the jobs that will provide secure incomes for the 21st century. That is why this system is an important improvement to the existing unemployment insurance system in Canada.
[Translation]
Mr. Osvaldo Nunez (Bourassa, BQ): Madam Speaker, I am pleased to speak to Bill C-12, which is of great importance to everyone, and to support the amendments proposed by the Bloc Quebecois. I would like to take this opportunity to congratulate our three colleagues from the Bloc Quebecois, the members for Mercier, Lévis, and Kamouraska-Rivière-du-Loup, for their extraordinary handling of this issue.
Throughout Canada, throughout Quebec, when I meet with ordinary people, with unions, they congratulate the Bloc Quebecois for the extraordinary work we have done on this very important subject. When I meet with unions in which I worked for 19 years, they are proud of the work done by our party.
It goes without saying that I am strongly opposed to this regressive, discriminatory, anti-employment, anti-worker, anti-union bill. I do not have words to describe it. It astounds me that the government remains completely insensitive to popular demonstrations and to the potential for indignation mentioned earlier by my colleague for Hochelaga-Maisonneuve.
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I think that we have not yet seen the full potential for indignation and revolt of the people of Canada and of Quebec with respect to this bill, which will mean unprecedented reductions in UI coverage in Canada.
Yesterday, this bill was described as organized theft, because it would tighten eligibility requirements, reduce benefit periods, lower benefits, and, at one point as well, we saw increased penalties for infractions. We know, for example, that the initial penalty for voluntary termination of employment was not what it is today. Today, anyone who leaves their job voluntarily pays a heavy price under the Unemployment Insurance Act.
The United Nations has declared this international year for the elimination of poverty, but I know of no initiative by this government to fight poverty in Canada and in Quebec. On the contrary. Poverty is growing rapidly in most sectors of society, because I think the government's tendency is to listen only to business. This bill is a poverty creating bill.
In my riding of Bourassa, approximately one third of the population is unemployed. This is a much higher rate than in the rest of Canada, much higher than in Quebec and Montreal Island generally. Sometimes, I wonder if it would not be better if the unemployment insurance fund were to be managed by some other organization.
I lived three years in Belgium. The unemployment insurance system in that country is managed by the unions. It did not cost the
state anything. Benefits are much higher. The benefit period is much longer than in Canada. I think that, in Canada, businesses and unions could manage at least part of the system, since employers and employees are the ones who pay into the fund.
Since 1990, the government has not paid a penny into the unemployment insurance fund. However, it uses the surplus, now reaching $5 billion, to help reduce the deficit. In my view, the trend nowadays in the unemployment insurance area is to cut, to get in line with the United States, where the system is much less generous than in Canada or other countries that have signed NAFTA.
I think it is important not to pass this bill. Yesterday was May 1, International Workers Day, but let me tell you that no one in Canada and even in the world was in the mood to celebrate.
In Sainte-Thérèse, Kenworth just closed down: 900 jobs lost. What did the federal government do? Nothing. On the other hand, the Quebec government is prepared to provide financial assistance to this company to upgrade the Sainte-Thérèse plant and to develop the training program for the employees.
The CAW, the union, is prepared to sign a collective agreement and agree to labour peace at least for five years.
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I take this opportunity to salute the labour federations in Quebec, the CLC and all unions for the extraordinary job they have also done on unemployment insurance.
Yesterday, naturally, people rose up against this bill. They are furious with the government, which is endlessly cutting everywhere, in social programs and especially in the area of unemployment insurance. Bill C-12 hits part time workers particularly hard. Most part time workers are women; sixty-nine percent of people working less than 35 hours a week are women.
This bill discriminates against women. I am pleased women in Canada are reacting against this, as they did last year in Quebec. They are organizing a march from Vancouver and the Atlantic provinces. It will begin May 14 in Vancouver and May 19 in Saint John, New Brunswick. They will reach Parliament Hill June 15, and I think all Bloc members will be there to support the legitimate demands of women: an increase in the minimum wage, the continuation of social programs and funding for day care.
Bill C-12 also discriminates against immigrants. You know, sometimes when immigrants come here with a temporary work permit they are not entitled to unemployment insurance, because they are not residents of Canada. However those who have just immigrated here must work 910 hours before being entitled to unemployment insurance and not 300 hours as before, despite their willingness to work.
For all these reasons, I strongly oppose this bill and I ask the government to declare war on unemployment and not on the unemployed, as is the case at the moment.
[English]
Mr. Andy Mitchell (Parry Sound-Muskoka, Lib.): Madam Speaker, it is a pleasure today to talk about the reforms to the unemployment insurance program and the development of the new employment insurance scheme.
Now would be a good time to reiterate that this reform is based on a number of broad, general principles to which the government is appropriately adhering. No doubt the best social security program a Canadian can have is a job. We have to keep that in mind in everything we do. At the end of the day the best way to ensure the security of individual Canadians is to ensure they have jobs.
We have to realize, as we certainly do in my part of rural Canada, we need to create an environment within which the small business sector can create wealth and employment.
This program goes a little further than that. There are proactive measures within the employment insurance program to help with the creation of jobs. We see proactive measures such as wage subsidies, the self-employment assistance program, which I have seen work well in my riding of Parry Sound-Muskoka, the earning supplement and job creation partnerships.
Job creation partnerships are of particular importance in a rural riding like mine where we have an opportunity to marry the need to provide experience for individuals who are temporarily out of the workforce with programs that will pursue economic development within our communities.
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This combination of providing experience for people while they work on projects to help develop the economy of my rural part of the country, although applicable across the country, is an excellent approach to achieving the principle of maintaining support for individuals who find themselves unemployed. At the same time, it creates the infrastructure and the environment where long term jobs can be created and people will be able to find sustainable employment.
One of the things we have come to realize in dealing with reforms to the unemployment insurance program is that the situation is very different today than it was 30 years ago. At that time much of the employment created was of a temporary, cyclical nature where because of a downturn in demand for a short period of time an individual might find himself unemployed for two, three or four months.
Today that has changed significantly. Much of our employment is not the result of a temporary decline but because an industry or a job may no longer exist.
The need for a properly operating employment insurance program goes far beyond creating income support. It needs to address the whole issue of creating long term employment. Obviously this assists by working on infrastructure and by helping communities develop long term economic development goals.
The program deals directly with the small business community. In my riding of Parry Sound-Muskoka it accounts for almost all the jobs. It accounts across Canada for most of the new job creation.
It is important that we realize components in this reform program will assist the small business men and women who work every day in the riding to create wealth and employment for my constituents. The whole idea of creating a surplus in the UI fund is so we can have a stable UI rate and do not end up with a recession.
There is at least one economist in the House now who knows full well the very wrong thing to do during a recession is increase premiums to pay for the increased demand on UI.
What makes far more sense is to ensure we have a surplus so that when there is an extra demand during an economic downturn we will not have to exacerbate that demand by increasing UI premiums. This happened during the last recession.
We have also helped small business men and women with a number of other measures connected to this plan. We have a far more simplified system. Small business people become very frustrated, and rightly so, when they spend more time on paperwork and on adhering to regulations than they do doing their jobs and what they do best, creating wealth and employment.
This program, particularly the conversion to an hourly rate from a weekly rate, significantly reduces the administration cost to the small business community. This is a very positive step.
We saw a decrease in the premium rate business will have to pay. This is a positive step. Those types of taxes are job killers. It is positive that we are able to modify that rate, as is the whole idea that the maximum insurable earnings rate will give a break in terms of taxation to the small business community.
It is clear what we are trying to do with this reform. We are recognizing absolutely that the world of the 1990s is very different from that of the 1960s. It is not only an issue of income support, although that is very important and this program deals with that. This is an issue of making sure long term job creation occurs.
We are doing that by providing individual workers with a number of tools in this program. The committee had an opportunity to review those and we enunciated many times in the House that they are very positive initiatives. They will help individuals acquire the skills and experience they need to move into areas of employment that are long term and sustainable. On the other hand, an economic environment has been created that will allow the small business community to create wealth and those jobs which unemployed individuals need.
This is an excellent reform. The members of the Standing Committee on Human Resources Development have worked hard on this bill over the last few months. I congratulate them and I look forward to seeing it passed in the House.
[Translation]
The Acting Speaker (Mrs. Ringuette-Maltais): It being5.30 p.m., the House will now proceed to the consideration ofprivate members' business as listed on today's Order Paper.