GOVERNMENT ORDERS

[English]

EMPLOYMENT INSURANCE ACT

Mr. Robert D. Nault (Parliamentary Secretary to Minister of Human Resources Development, Lib.): Mr. Speaker, the employment insurance system set out in Bill C-12 is not just another version of the old UI program. It is in fact Canada's employment insurance system for the 21st century. It supports the government's agenda for jobs and growth. It is a system that Canadians themselves have helped to define and shape for the future.

As we have mentioned in this House before, we have had extensive consultations not only on Bill C-12 but on the whole question of social security reform over the past year and one-half. Over and over again Canadians from all walks of life, from every possible kind of business, occupation or organization repeated one message loud and clear: the best form of security is a job.

We have listened to that message. Employment insurance first and foremost is about jobs. It is about jobs in a very simple and direct way. It will make it easier for people to work longer and encourage employers to keep people in their jobs longer. It will help employers hire more workers. It will create more work and more jobs for Canadians. It will help increase the earned income of Canadian workers. Every part of this bill is focused on that goal. Let me give some examples.

With EI insurance premiums, the tax on jobs will be lower. The premium cut and reduced maximum insurable earnings will save workers and employers over $1 billion in premium payments in this year alone. Streamlined administration and reporting requirements will save employers another $150 million and some 300,000 small businesses will get a special temporary rebate so employers can afford to hire more workers.

This system will support job creation instead of perpetuating unemployment. Income benefits are structured to make it easier for people to work longer removing the barriers that sometimes keep people from accepting the jobs they need. This system is pro

employment and makes work pay. Active employment benefits are there for those who lose their jobs and need help getting back to work.

We will be reinvesting $800 million in the tools which help people help themselves and create employment opportunities for Canadians. As well, we are investing another $300 million in a transitional jobs fund to kick start employment in areas of high unemployment. Some 15,000 jobs for Canadians will be created as a result of this initiative.

When the measures described in this bill are fully implemented, there will be 75,000 to 100,000 more jobs for Canadians. That is just part of the story.

Employment insurance is an integral part of the government's broader vision for jobs and growth in this country. It is a growth agenda that sees economic growth going hand in hand with the best social security system in the world. Our agenda is based on creating a healthy economic climate for growth. We brought inflation down to its lowest level in 30 years. We are meeting and exceeding our deficit reduction targets. Our agenda recognizes Canada can compete with the best in the world.

Over the past 14 months the government's Team Canada approach to international trade has brought $20 billion worth of new deals for Canadian exports. Every $1 billion in exports means 11,000 jobs for Canadian workers. It can be seen that our agenda is beyond all doubt working. More than 600,000 new jobs have been created in this country since November 1993.

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As jobs and our economy grow, we must ensure that our social safety net keeps pace. That is the fundamental message in the government's budget. We are taking action to ensure that Canadians can continue to rely on a strong social safety net that is affordable, effective and in tune with the future.

The bottom line is clear. This government is totally committed to bringing Canada into the 21st century with a strong and growing economy and the best social programs of any country in the world.

Bill C-12 is part of that commitment. We want to make sure that employment insurance is not only pro employment, but balanced and fair for all Canadians. That is why we have listened very carefully to the comments and advice from Canadians throughout the hearings on this bill.

We heard tremendous support for an insurance system that is truly focused on jobs and employment. We also heard some real concerns that the system would not be flexible enough to reflect the real job opportunities that exist in different parts of Canada. We listened to those concerns and we have taken action.

We recognize the need for a number of important amendments to the bill. For example, people from all parts of the country, from the New Brunswick Federation of Labour to the National Action Committee on the Status of Women to the Kativik Regional Government argued that the method proposed for calculating benefits was too inflexible.

The amended divisor used to calculate benefits fixes that problem. As a result, EI will be more responsive to monthly changes in local employment conditions. That is a change that makes sense. It is a change that deserves our support.

Many groups, especially those representing the concerns of workers in seasonal industries and students expressed serious concerns about the effects gaps in work would have under the new system. Under the amended system, EI claimants will have a longer reference period to put together the required weeks of work and gaps will not affect the outcome. For example, a person who needs 15 weeks of work to qualify can look back over 26 weeks and ignore up to 11 empty weeks if necessary. Again, this is a change that makes good sense.

Many people were concerned that the intensity rule which reduces the benefit rate for repeat users would be particularly hard on the most vulnerable and those in most need. In the amended system, people who receive the EI family income supplement will be exempt from the intensity rule. This will safeguard a basic level of EI income for low income claimants with family responsibilities.

We will also take steps to address concerns about potential fraud and abuse of EI with stiffer sanctions and penalties for claimants and employers who break the rules in order to get benefits they are not entitled to.

In all of these cases, we have listened closely to what Canadians are saying. The employment insurance system will be better as a result. It will be more flexible. It will be fairer. It will meet our savings targets. It will focus more effectively on our number one priority which always has been getting Canadians back to work.

Jobs, economic growth, a strong and affordable safety net: these are priorities every Canadian shares. They are priorities we are resolutely committed to as a government. Employment insurance is one part, an important part of the action plan Canada needs to achieve those goals and to move with confidence into the next century. I urge all members at the end of today to support this bill. The fundamental changes in it are going to be good for Canadians for years and years to come.

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[Translation]

Mrs. Francine Lalonde (Mercier, BQ): Mr. Speaker, I will begin by saying that today, May 14, 1996, the day Bill C-12 will be passed, unless the government finally comes to its senses, will be one of deep shame for the Liberal party.

This party helped give Canada a social security system, not the best in the world, it must be said, no, because overall we are a long way from the social measures generally available in Western Europe, but in North America, our system was the envy of many. Increasingly, this party is aligning its social measures with less progressive measures in the United States.

Bill C-12, this deceptively named act respecting employment insurance, is an attack on the unemployment insurance system so appreciated by most Canadians and Quebecers, as we were reminded by an Angus Reid poll at the very beginning of the new Liberal reign, when it was setting out on what looked like a reform of social programs, a reform to improve social programs. That was before the first budget.

This Angus Reid poll said that 70 per cent of Canadians and Quebecers, almost 80 per cent in the case of Quebec, wanted to keep this unemployment insurance system, and at the same time feared that the announced reforms, despite all the fine talk, were going to hurt those in the greatest need. Canadians and Quebecers were right.

Although it will not be pleasant, I would like to remind members that, in his maiden speech, the Minister of Human Resources Development said that what was needed was a particularly Canadian formula so that, when the social program reform had achieved its goals, Canadians would be proud to be Canadians. He repeated this expression ad nauseam.

Well, what we can say this morning is that, far from being proud, Canadians must be worried, deeply worried, except perhaps for those who have a steady job, who are working over 35 hours a week. But all the others, Canadians and Quebecers must be worried and anxious to hear what form this new system will take.

It must not be forgotten that this bill, which is supposedly about employment insurance, comes in addition to a so-called reform from 1994, Bill C-17. That was a bill implementing the first Liberal budget since their return to power. That budget, that bill, slashed the unemployment insurance scheme by $2.4 billion starting in 1995, of which $735 million were to be cut in Quebec, and $630 million were to be cut, starting in 1995, in the Atlantic provinces.

The effects of this new reform are in addition to those of the first reform. Once again, the word reform loses its meaning. ``Counter-reform'' would be more appropriate, because in most people's minds, a reform is something that improves a situation.

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In the two cases in question, the reform is no improvement. Far from it, it brings cuts. It cuts into the only little bit of security some people in Canada can count on, those who are not so fortunate as to be among those who enjoy total security or who are rich enough to be able to depend on investment profits and do not need to work. For every one else, unemployment insurance represents a bridge, rather a narrow one sometimes, and one that is not as long as it might be, but a bridge nonetheless, between two jobs.

These cuts will total $4.4 billion, if we add up the $2.4 billion and the additional $2 billion of this ``new'' reform. This will make the Liberal Party of Canada look good the next time they seek a new mandate. They will be able to boast to Canadians and to Quebecers ``Look, we have cut UI benefits by $4.4 billion since 1995, and Quebec-I am using the department's figures here-will lose $1.271 billion''. Keep in mind, now, that this is the department's evaluation of the figures involved in the amendment. By the way, no one but the department has any figures, so we have to rely on them. According to the department's numbers, by the time the plan matures in the year 2000, the Atlantic provinces will be $806 million worse off than before, every year.

Adding up the two-this is interesting since the Atlantic provinces and Quebec together account for about one third of Canada's population-we get $2.1 billion of the $4.2 billion. And if we look at the portion of the cuts affecting the Atlantic provinces alone, $806 million out of $4.4 is quite a chunk.

These cuts in benefits will mean less money going to the high unemployment areas. This means that one of the objectives when the plan was created after the 1929 depression, which was to have interregional adjustments, has more or less come down to nothing now. In the case of Quebec, Quebecers will figure out what it means, at some point. In this case of the Atlantic provinces, I trust they will draw some political conclusions. In many cases, I think it will be a considerable shock.

I speak as a Bloc Quebecois member, but on this issue, as on many others we worked in opposition on behalf of all of the people of Canada. What is unacceptable about this change is that Canadians and Quebecers see this as a significant alteration to what they consider the role of unemployment insurance to be.

Instead of discussing the disappearance of this interregional adjustment-which academics are demanding, saying that there is none in such and such a country because their constitution does not allow it-the government has decided to forgo discussions, to hold no debate whatsoever, just chopping it completely.

Since this move on the part of the government was obviously in the books, when I was in Toronto during the initial consultations I asked representatives of unions whose membership were in high pay brackets whether they were not fed up subsidizing workers in the Atlantic provinces. They did not say: ``Yes, we in Ontario are fed up with paying for the Atlantic provinces''. People in Canada, and I think I understand, realize the need for support among the regions. I repeat, this is what the Bloc Quebecois is saying. This example, like others, illustrates that there were no major debates on this reform.

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This reform, with even its name looking like some sort of camouflage, means open season. Calling it employment insurance camouflages it. Instead of bringing the unemployed, particularly the unemployed in regions with high unemployment, closer to a job, this reform will move them away from one.

As this is the first opportunity we have had the time to give a decent speech in this House, I will use it to point out that the official opposition was prevented from playing its role at each stage. Here again, I can understand. The government doubtless did not want Canadians to be informed. All the same, a survey in Quebec indicates that the people have not been fooled by what is going on. This will be the subject of my conclusion.

I wish to speak to all of Canada. I want to say that the first reform hit the Atlantic provinces hard. The second one is going to be even harder to swallow. I keep saying that the regions with high unemployment will be the ones hit.

I would like to quote the tourism and economic development minister of Prince Edward Island. The province has a population of about 170,000 and is well placed to observe its labour market. So what does the minister of economic development have to say? He says, on the subject of financial repercussions: ``The previous stage of the unemployment insurance reform, which surely was not on the same scale as the present bill, has already had a significant impact on our province. In 1995, with the rate of unemployment such as it was, a person who qualified after 12 weeks' work received benefits for 32 weeks, making a total of 44 weeks. There were still, however, eight weeks where the person received no income''.

The first demonstrations in the Atlantic provinces were not against the new reform, but against the implementation of the previous reform, which hit them hard. As a consequence of this first so-called reform, people did not have enough weeks of unemployment insurance to get through the year. They had to turn to welfare, which is very complex, because, if you are on welfare, sad to say, it is very hard to return to work.

What does this brief say? It predated the amendments, but if we take off a few millions, a lot of what it says is still true. It says: ``In Prince Edward Island, the net loss of unemployment insurance benefits will thus reach $24 million in 2001-2002''. So, if we take off the maximum, let us say $8 million-I am being very generous, very conservative-there would be $16 million less.

The minister went on to say: ``The economy of Prince Edward Island is, nevertheless productive. We are tops in Canada in job creation and we cannot absorb such a loss''. In other words, for all the regions that are not the top job creators in Canada, this reform will be devastating in macro-economic terms. It will widen the gap between the regions where people are relatively well off and the regions where unemployment is high, despite the fact that jobs may be created, but where there is less industry or business.

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I talked about the regions, I now want to talk about individuals. Added to the previous reform-which leaves many seasonal workers with too few benefit weeks, forcing them on welfare for the rest of the year-cuts provided for by the present reform create a desperate situation for some.

The workers who came last week from the Gaspé and Magdalen Islands sounded desperate. They were talking about their region, saying that they will no longer be able to keep young people. They are the ones who are leaving and when young people leave, the regions fall apart. The same is true in every region with a high unemployment rate. When young people leave, fewer services are provided. There is a shift in demo../graphics and soon, only aging people are left, villages and towns die. This is what people came here to scream and cry about, saying that it did not make any sense.

When I hear one of my colleagues laughing I think that either he has no heart, which I do not believe, or he has not studied the impact of this bill. It saddens me because people are going to be hit hard. It will affect many people. The impact will be felt by many other than seasonal workers, in spite of the amendments and what the government is claiming. The amendments speak volume about the original bill.

It will affect all workers in the tourism sector, all those for whom one hour of paid work means many hours of unpaid work. They are legions in our society. I am thinking about all adult education teachers, this is true in every region, and all those who, in cities, towns, and villages, entertain, educate or instruct people who, for one reason or another, need such training.

Usually, they are paid by the hour, without any firm contract and, without any exception, they will find themselves in a very precarious situation. Women will also be affected. The Fédération des femmes said that, yes indeed, 5 per cent more women working part time would be covered, but being covered means that they will be paying, but as far as being entitled to benefits, that is a different

story. On the other hand this bill will be very harmful for 25 per cent of those who now work 15 to 34 hours a week.

And I have not yet mentioned artists, artisans and all those who barely survive on government programs, as well as pilots and flight attendants. There would not be time enough, 40 minutes would not suffice to name all those who will be affected.

It is a radical transformation we are witnessing here and that transformation is contrary to the intention which prevailed when the unemployment insurance program was created. I would like to quote part of the speech Prime Minister Bennett made, in 1935, when he first tabled that bill. He said: ``To meet new needs, we will have to modify our capitalist system-we were just coming out of the great crash of 1929-and make it into a more useful instrument for the people. You will be studying measures creating a global plan which will reduce the present social and economic inequalities and distribute the benefits of the capitalist system more equitably among the various classes of our society and among the various regions of the country''.

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Since the 1971 reform, we have witnessed a continuing reduction of benefits. I must say that it started under the Conservatives and the most serious change was cutting the system off from the consolidated revenue fund. That was bad enough.

Researchers came before us and told us that an unemployment insurance system has an important stabilizing effect and we realize that when we look at others around the world. It has an economic stabilizing effect benefiting society as a whole, and it also has a redistributing effect. Over time maternity benefits and health benefits were added to the system. They are now adding in this so-called reform training benefits, which will no longer be paid from the consolidated revenue fund, but by the unemployment insurance fund. When we consider all of this, we wonder, we do not understand why the government reduced the maximum insurable earnings.

It is not difficult to understand. It means that from now on, workers who make over $39,000 a year, will no longer contribute to unemployment insurance after that limit. They will pay on the first $39,000, but nothing after that. This is totally illogical. This is exactly the reverse of what we are doing with income tax.

With income tax, the more you earn, the more you pay. For unemployment insurance contributions, the more you earn, the less you pay. Companies which are able to pay salaries of $39,000 or more are the ones receiving this gift. A gift of some $500 million a year is not inconsequential. Which employees and businesses will pay for the equivalent of this gift? Employees who work from one to 15 hours per week and small businesses.

It is not surprising small businesses are against these provisions. They agree with the reduction of maximum benefits, and we can understand their viewpoint, since a social viewpoint is something else. But this reduction of maximum insurable earnings does not make any sense.

Many researchers came to tell us as well that this did not make any sense. It does not make sense because it reduces the pool of contributors. It does not make sense either because, while the government is making a huge gift to big businesses-a gift that totally eliminates premiums when salaries are over $39,000-it reduces by 0.05 per cent the premiums of contributors as a whole.

If we look at what this means in concrete terms, for a small business, it will mean about $7 less per month for each worker if his salary is $200, while the gift to big businesses is total elimination of premiums. That goes against common sense, as is the case for a major part of this bill.

Mr. Speaker, could you tell me how much time I have left?

The Acting Speaker (Mr. Kilger): Fifteen minutes.

Mrs. Lalonde: There is so much I could say about this bill.

Researchers came to tell us this is a leap in the dark, because if you ask one economist to examine the effect of this measure, he will tell you one thing, but if you ask another economist to examine the effect of this measure, he will tell you something else. At least, Mr. Audenrode of Laval University said clearly: ``It is not so much any specific measure that concerns me but the extent and complexity of the proposed reform. If one can easily imagine the impact of a specific modification to one aspect of a given system, it is almost impossible to imagine the consequences of a reform as far-reaching as the one being proposed''.

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He went on to say: ``I am unable to give you even an indication of what would be the impact of the proposed reform, and I honestly think that no economist can do so''.

When I asked senior officials what they thought of that statement, they told me: ``We in the department have an enormous file but we, of course, built this proposed reform on an econometric model''. That is the problem. What is the hurry? Why take the chance of seriously hurting regions and people, when there is no hurry? Why is there no hurry? Because the $5 billion surplus that is forecast for the end of this year without the reform would be less if the reform goes ahead. It would go down to $4.5 billion, so there is no hurry.

The Minister of Finance cannot say: ``Hurry, Hurry, Hurry. The deficit is at stake''. That is not true. This year, the reform will reduce the surplus by $1 billion. This figure comes from the Department of Human Resources Development itself. I even took the trouble of confirming it with the actuary, to make sure I was reading it right.

On page 6.6 of the most recent summary of the unemployment insurance account, it says that, as expected, revenues from current contributions for 1996 amount to $19.801 billion. Note 2 adds the following that since premiums are collected on the basis of the maximum weekly insurable earnings-reduced without having passed any legislation to that effect-the government currently collects less money than what the act provides. Consequently, expected premiums should reach $18.806 billion, or one billion less.

So, this year, the reform will result in a $1 billion shortfall. Why hurry to take such an enormous risk? As the researcher mentioned, it is a leap in the dark.

He adds: ``All these financial estimates are made by applying the new parameters to existing patterns''. However, as he points out, these patterns will change. For example, I do not agree with the fact that people who currently work up to 15 hours per week are not covered by an unemployment insurance system. Yet, from now on, these people will have to pay premiums, unless they earn less than $2,000-and I will get back to this-but will not be entitled to benefits.

What will restaurant owners do? It is true that a large proportion of their peak hours staff works less than 15 hours. We all know how things works in a restaurant. Albert the waiter gets a phone call: ``Come. Stay home. The restaurant is full. It is quiet''. When restaurant owners will have to do all the related accounting, do you think they will continue to hire students? No. This is why the student federation asked for an exemption.

We have to realize that even though those who earn less than $2,000 will get a refund for their premiums, this repayment will only take place the following year, when they file their income tax returns. Students can no longer get an exemption. Their tuition fees are increasing, but they will be deprived of an amount equivalent to the unemployment insurance premiums they will have paid. They definitely do not need that.

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Behaviour will change. Some jobs will disappear. We can hope that weekly wages will go up, but one very important thing is that it will be at a cost. Why has the time not been taken? There is no rush. Or are they in such a rush to reduce benefits from $445, the present amount, to $413, which is what they will be when the new act comes into force.

Are they in such a hurry that they must take the risk they are taking? Let us not forget that the unemployment insurance system is the best way to stabilize the economy. What is stabilizing about it? The benefits, the premiums, play no small role, according to Peter Duncan, associate professor, Department of Economics, University of Toronto. It is an excellent stabilizer, better than income tax, much better than income tax. The benefits have a stabilizing effect. What does the government do? I repeat, it reduces benefits by $4.4 billion over a period of five years.

Why is the government lowering the maximum insurable earnings. Many researcher said they were worried about this change. Is it because the government wants to leave the lucrative market of workers earning over $39,000 to the private insurance sector? is it because, as the deputy minister told us, of these $900 million paid by workers and businesses for those earning between $39,000 and $42,400, a very large portion remains in the Fund?

The deputy minister had the nerve to say that those earning over $39,000 were less likely to lose their job and that they would withdraw only $200 million of the $900 million paid. It is good that those who have higher and more stable earnings contribute to the general economic and financial balance, while at the same time paying their share for maternity leave, educational leave and so on.

This unemployment insurance plan is the only mechanism carrying people over from one job to the next. With this bill, the government is making it twice as hard for those who are already on the labour market to qualify, and three times as hard for young people, women, immigrants, the sick and anyone who is not already on the labour market.

Why make access more difficult? Why divide the applicable earnings by a fixed divider or by the number of weeks worked, which can only have the effect-the effect sought by the government, it said so itself-of reducing benefits? Why reduce benefits? Why reduce the number of weeks? Why make access more difficult when already less than 50 per cent of the unemployed are covered by this plan?

Is it not obvious that this is messing up not only the stabilizing effect it has on the economy as a whole, but also whatever little protection enjoyed by those who are not rich or do not have the armour-clad job security public service employees have? It is the only protection they have; they have nothing else.

As you know, between 25 and 30 per cent of all Canadian workers rely on the unemployment insurance system each and every year. This bill will affect millions of people.

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Why is the government in such a hurry? Why did it gag the opposition as it did? We did not get to debate the bill in second reading. Six 10-minute speeches. We were gagged at committee stage, and again at report stage. All the time we have for third reading is one day and, on the government's side, since they are

gagging us instead of having the decency to let us speak, they are taking their sweet time. That is disgusting, because there is no rush.

Why are they in a hurry? There is something fishy, do you not think? Why do you think they are in such a hurry to cut contributions and benefits, when all those concerned, all the groups at various levels are protesting and asking that they not go so fast, but rather take the time to consult them and to develop a real program? What is the rush? Why are they in such a hurry to cut $1 billion in contributions? Why are they in such a hurry to see minister Martin reduce his deficit?

Whether the reform takes place or not, next year more will be added to the $5 billion surplus already accumulated in the unemployment insurance fund. This can certainly not explain the government's haste.

We must however note that, having done everything it could, up to and including using its parliamentary powers to the limit, the official opposition did not succeed in making government listen.

It should be pointed out that there have been demonstrations like we had not seen in a very long time. These protestors, in Quebec and especially in New Brunswick and Nova Scotia-considering all the demonstrations, the 40,000 postcards we tabled, the petitions, the number of people who have expressed their opposition largely exceeds 100,000-succeeded in slightly softening the blow, because what was totally disgraceful has been slightly changed. However, the total package remains unacceptable.

Throughout the day, my colleagues will focus on measures like this one. Indeed, those with two jobs will be able to take all their hours of work into account, but should be wary of voluntarily leaving one of their two jobs because they would then lose all the insurable weeks of work accumulated until then. This is a measure that totally contradicts the spirit the government claims is behind this reform.

What is most dangerous and difficult is hearing hon. members opposite brag about this reform. What I understand, and what some are happy about, is that they managed to modify certain measures so that they are no longer totally disgraceful. They are quite happy with that, although the total package remains unacceptable. They could have carried out a real reform. They could have maintained the maximum insurable earnings or increased them. They could even have made a distinction between maximum benefits and maximum insurable earnings, as is done in the tax system and in other areas. It is not because people some will contribute more that they will be entitled to receive larger benefits in various areas. But they did not have the right to sabotage something Canadians and Quebecers care about, their security, which they are willing to pay for.

The poll results that appeared in this morning's Le Devoir are extremely interesting, despite the trouble we had breaking through the sound barrier. To the question: ``Who will benefit the most from UI reform?'', 79 per cent of respondents answered ``the federal government itself''. To the other question: ``In the case of Quebec workers, would you like the UI program to be administered by the Quebec government?'', 74.5 per cent answered yes.

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People now understand that a true reform is possible and that, with this one, Quebec workers are being deprived of the much-praised ``Canadian spirit'' of sharing the disadvantages and consequences of unemployment.

Quebec workers, like their counterparts in Atlantic Canada, understand that this reform will reduce interregional adjustments and impede efforts to reduce the gap between the haves and the have-nots. Quebecers value the system, as the poll showed, and I think that if we put the same questions to Canadians, we will get the same results: Canadians value the system. Quebecers value it and they feel the best way to avoid its deterioration is to take it over.

Personally, I regard as a failure the fact that members opposite refused all discussion. They failed to save what deserved to be saved in this country we want to keep as a partner.

[English]

Mr. Ian McClelland (Edmonton Southwest, Ref.): Mr. Speaker, as I was listening to the speeches of my hon. colleagues from the government and the Bloc, I was struck by the chasm that exists in our country. Essentially the Bloc looks at this legislation as a welfare scheme or as a guaranteed annual income, but the notion of employment or unemployment insurance is secondary to income support.

The government, represented by the parliamentary secretary to the minister, the member for Kenora-Rainy River, who, on introduction of third reading of a bill of such import and magnitude, was exceedingly brief in his comments. He managed to say nothing in 12 or 13 minutes while the member representing the Bloc was able to say it in 40 minutes.

This unemployment or employment insurance creature has been flopping around in the body politic for years and years. It took its early form, the revision of unemployment insurance, in the now famous Forget report. The Forget report, as everyone realizes, is collecting dust somewhere in the murky, musty archives of Parliament. Forget said it would not be a bad idea if unemployment insurance was just that. That was the idea behind employment insurance in the first place.

This new government decided that the cornerstone of its renewal of social programs would address employment insurance. It would do what it had to do and return unemployment insurance to its lofty ideals of being employment insurance.

What do we have here? We have half a loaf. What we really have is an abdication of leadership, an abdication of responsibility, an abdication of the necessity on the part of people elected to Parliament to speak honestly, to lead, to do what is right for the country and for future generations.

What is this all about? I can best describe this by referring to the most obvious change in this legislation. For years in Canada we have had unemployment insurance. Unemployment insurance was supposedly insurance paid for by employees and employers to protect those who were without jobs on a temporary basis while they were looking for new jobs.

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What do we do? We change the name. Did we change anything else? Perhaps. What is the cornerstone? `Poof', we change the name from unemployment insurance to employment insurance.

This name change is to put the emphasis where it should be, on employment, and `poof', magically all the problems are to disappear. Guess what? They will not disappear. They will stay right where they are, festering in the middle of the body politic in Canada because we are not addressing them honestly. We are not dealing with the real problems. All we are doing is skirting around the politically correct edges.

Once again we have the opportunity to actually do something. Once again we do not. First and foremost, the responsibility for training, for unemployment insurance, is a provincial responsibility, not a federal responsibility. It should rest closest to the people. It should rest in the provinces.

What is the responsibility of the federal government? The responsibility of the federal government is to look at our nation and ensure that where employment opportunities exist in one part of the country, it is possible for people to get there. We remove barriers for the movement of people. Jobs do not go to the people, people go to the jobs. Water does not run up hill, water runs down hill.

During the course of human history, when has it ever worked that someone would reverse the natural dynamics of nature and have it work in the long term? That is not the way it works.

Let me give an illustration. Over the past six or so years, 87 per cent of the new jobs created in Canada were created in the two western most provinces, British Columbia and Alberta. Yet those two provinces have only 22 per cent of the population.

Ontario and Quebec combined in the same period created 14 per cent of the new jobs, yet they have approximately 67 per cent of the total population of the country.

Let us figure this out. If British Columbia and Alberta over the past few years have created and accounted for 87 per cent of the new jobs created in Canada, and generally speaking Alberta and B.C. are not areas of high unemployment and therefore do not get the benefit and their citizens have to work longer in order to qualify, what is it about the current system enhancing a situation in which the provinces with the lowest rate of employment, the maritimes, continue to suffer?

Are we creating dependence? It seems the evidence is very clear. It has been clear since the 1970s, since some muddled thinking that somehow we can evolve through a situation of the equality of circumstance. The bottom line is we have the equality of opportunity. Circumstance is earned. It is regrettable but true that if someone lives in a part of the country that does not have an employment base and has not had an employment base, it is very likely it will not have an employment base.

If someone wants better for their children, it is evident the children or the family will have to make whatever adjustments to their lives are necessary in order to see that better future. That is the way it has been on earth since the beginning of time.

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How does one suppose we came to Canada in the first place? Does anyone believe my ancestors came from Ireland, Scotland or wherever because things were good? Of course not. They came to Canada for a better opportunity for themselves and their children. Why does anyone think people moved from one part of the country to another? It was for the opportunity for themselves and their children.

While we try to create a situation in which water will flow up hill and we see from evidence that it does not flow up hill, we see that by creating dependence all it does is foster the need for more independence, why should we be surprised when we keep coming back to these same problems time after time?

In his opening remarks the member for Kenora-Rainy River referred to the introduction of this act, changes to unemployment insurance, as part of the social program envelope. That is the problem. Employment insurance is not a social program. Employment insurance is no more a social program or should be no more a social program than automobile insurance is a social program; insurance is insurance.

Employment insurance should be exactly that, employment insurance. The premiums should reflect the risk. The insurance paid should reflect the amount of money paid in and the period of

time over which that money has been paid in. It should have some bearing somewhere on reality.

If we are not using the unemployment insurance system for anything other than unemployment, how do we go about getting money to those Canadians who must have it? If that means we will have a guaranteed annual income, that we will call it welfare and that we have to do whatever we have to do but deal honestly and do it, that is how this debate should be framed and that is what we should be talking about.

However, to put together a program called unemployment insurance which is paying out, as members from the Bloc have pointed out, this year alone about $5 billion more than is being taken in into general revenues, that is nothing more than a tax. That is a top line payroll tax that goes right into the federal treasury which is a job killer of the first magnitude.

Why do I say it is a job killer of the first magnitude? It is because in my past and real life I am an entrepreneur. I have had to live with licence fee increases for the cost of being in business. Unemployment insurance has absolutely diddly squat to do with the profitability of a business. We are not paying these taxes based on how profitable we are. We are paying these taxes based on how many people we employ.

In a certain circumstance where a business is barely hanging on, like that proverbial cod fish on the Grand Banks, by its fingernails, as many small businesses are doing on daily, monthly basis, when the cost of staying in business goes up because the government imposes yet another tax that has nothing whatsoever to do with profitability, what does an employer do?

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Employers look at the books and say this will end up costing us $30,000 a year in payroll taxes. For them to get $30,000 a year they will have to increase their sales. If they make a 5 per cent or a10 per cent profit on their bottom line, that means they will have to increase their revenue by 10 times or 20 times to accommodate the increased taxes. In many cases that does not work out to a 1 per cent increase in gross sales but to a dramatic increase in gross sales in order to get enough profit to trickle down to the bottom line in order to pay yet another tax.

What do they do? They do not simply get up in the morning and say ``I see my costs have gone up and so I will raise my prices''. The trouble is they cannot raise their prices. Most businesses are not suffering from a lack of competition. There is no price elasticity in the vast majority of businesses.

What happens? The only thing that can possibly happen. If their costs have increased by $30,000 they will have to reduce their expenses by $30,000. Can they reduce their rent? No. Can they reduce all the other fixed costs? No. What is the variable? Employees. Another full time job is lost. They could have more part time workers. They are paying the payroll taxes but instead of having a 40 hour work week, everybody will get paid on an hourly basis for the hours they actually work. It is a vicious circle. There will be more part time employment.

That this is not as obvious as the nose on the face of the government is a reflection that the vast majority in this place have never signed a paycheque. They do not have a clue as to how our economy works or why it works. That is what keeps getting us into this mess time after time. To take $5 billion a year out of the economy on a payroll tax so the government can look better on its deficit projections is wrong. It is wrong for the country. It creates a vicious circle. There will be less employment, not more.

How does the current unemployment system work? Will this change anything? Many employees in the system do not look at being on unemployment insurance as a temporary transition measure. It is not considered wrong to use unemployment insurance as a transition method to go from one job to another. If a person does not like their job they will go on pogey until they get a new job.

Employers use the system to lay people off. It is easier to say to someone ``we will lay you off. I do not want to fire you and have a confrontation. We will get busier again in the summer. Maybe we will hire you again and maybe we will not''.

Unemployment insurance today is misused by employers and employees. People working on a full time basis in a job that does not pay significant income, which encompasses virtually all of the people in the service sector in our country, may find themselves in a catch-22 situation. They may be earning around $15,000 a year and paying unemployment insurance to subsidize those who work on a seasonal basis and may earn $30,000 or $40,000 a year.

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If someone is earning on a seasonal basis twice as much as someone working on a full time basis, is it appropriate for the lower paid person to be subsidizing the incomes of those higher paid people? It does not seem right to me. As a matter of fact, it seems kind of dumb to me.

If unemployment insurance were put on the basis that had been envisioned, it would be insurance paid by the employee and a tax on employers. If the premiums reflected the use of the program, that is, the number of times people dipped in and came out of the program and how much they took out of it, it would be the kind of program it was intended to be.

Another concern has been raised by the changes in the bill. How do Canadians who need to get into the employment base get training? Where does the money come from? As it stands, one cannot access programs delivered by UI unless one has an attachment to the labour force. What about all the people who do not

have attachment to the labour force? How do they go about qualifying for these programs?

We have to look at our responsibilities as a nation and figure out how we can best provide entrepreneurs and businesses with a population well educated and highly trained in a diverse range of skills. How best can this be done in harmony with the provinces? How can we address the needs of training, upgrading and the provision of skills to those Canadians most in need?

I speak now specifically of persons with disabilities. They are totally left outside the loop on this. How can they be provided with the tools which will allow them to be trained and retrained in the workforce leading into the 21st century and what will be the nature of the work?

We will have to decide whether we are going to address issues honestly. As the nature of work changes, the skill level required to be able to participate in a meaningful way and to make a good income is going to require consistent change, training and retraining. A good number of workers who through no fault of their own, or through misguided promises by people in political office, will find themselves on the outside looking in.

As we look to the nature of work there will be fewer and fewer people making more and more money. The middle class will continue to erode and there will be a polarization, which is already taking place today, between the haves and the have-nots in our society. It is because of the changing nature of work.

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If we accept this premise to be true-there are those who would say that it is not true-then we will have to wrap ourselves around the notion that it is our responsibility to consider ways to ensure a minimum level of income for all Canadians. This would ensure dignity and provide a foundation so the immediately affected generation and future generations would not get caught in the spiral of ever-increasing dependency, of intergenerational dependency on others for their self-respect or their sense of well-being or their daily bread.

We must have a country in which our interdependence is built on a foundation of independence. A foundation of independence cannot be established in a country that fosters the notion of the equality of circumstance.

Our responsibility is to ensure that people have opportunity by providing education and training. It is up to the individual to make use of that education and the training. If individuals are not prepared or are incapable of doing that, then we would not have the equality of circumstance. The thinking of the sixties, no matter how utopian the ideal is, cannot be delivered. It is not honest to suggest that it can be delivered because it cannot. To my knowledge, never in the history of the modern world has any regime been able to deliver on that promise.

I would like to reflect on the importance of this bill and how it made its way through the parliamentary system and on the effect of closure.

Closure may have a more insidious potential in the body politic than just getting legislation through the House or just preventing members from having the opportunity to get on their feet and say a few words about it. It is my opinion that items such as this bill or anything which comes through the ministry that is responsible for this bill, which accounts for the vast proportion of all the discretionary spending on the social side of the envelope, is by far the most important side.

Last week we dealt with Bill C-33 concerning sexual orientation. It was explosive. It was a sad day for many people on both sides of the House. It went through in very short order and now it is over and done with.

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However, the legislation we are talking about today really speaks to the kind of society we will have in a pluralistic sense. With this bill and others that come through HRD, we talking about how we can fashion a society that rewards entrepreneurship and initiative, but at the same time looks after those who are less able to look after themselves. That is the measure of a society. The worth of a society is measured by how it looks after the weakest, not the strongest.

As these debates take place we must be cautious of what we are doing. The foundations put down today are the ones that will allow the economy to grow and prosper. It can be done, in my opinion, by ensuring that nothing robs individual Canadians of the responsibility, the ability or the desire to provide for themselves, their children and their future. As a society we should recognize our responsibility to the common good to look after those who need help and make the distinction between wants and needs. We look after those in need. Those in want must look after themselves.

Mr. Nault: Madam Speaker, a point of order. I would like to let the House know that throughout the rest of the day on third reading of this bill, members on the government side will be sharing their time equally, 10 and 5.

Mr. Stan Dromisky (Thunder Bay-Atikokan, Lib.): Madam Speaker, I appreciate the opportunity to discuss Bill C-12, the legislation to bring into being Canada's new employment insurance system.

Of the many improvements brought about by Bill C-12, the most important is its impact on Canada's young people. Youth is a priority concern for the government's job and growth agenda and Bill C-12 neatly reflects that concern.

The employment insurance legislation not only provides more effective treatment for young workers in terms of benefits, but also provides positive, active measures to help young people get and

keep good jobs. For young people a great problem with the current UI system is that it often fails to recognize their actual working effort.

UI measures work in terms of weeks which is a very poor measure of time spent on the job, particularly for part time workers and multiple job holders.

Within the hours based system provided in Bill C-12, part time workers earnings are insured and four out of ten part time workers are under 25 years of age. Another inequity under UI has been the employer's tendency to limit part time employment to less than15 hours per week per person in order to avoid having to pay UI premiums. For many young people this has meant not only do they get less work, but that their earnings are not insured.

Employment insurance eliminates this 15-hour trap. All hours will now count toward eligibility. More young people who enter the labour market after leaving school and who must rely on a number of small jobs to earn a living will now have insurable work.

Further, an impact which particularly benefits young people is the fact that employment insurance also reduces the risk of workers developing a dependency on employment insurance. Far too many young people come into the labour market and end up on UI benefits before completing their education. Then they find themselves in another sort of trap where they work long enough to qualify for benefits then go without work for as long as the benefits last.

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The new employment insurance system will discourage this behaviour pattern. It will in fact encourage young people to complete their education rather than dropping out to take short term, often low paying work that does not lead to career advancement.

Higher entrance requirements under employment insurance encourage young people to develop a stronger attachment to the labour market. We have heard loud protests from the opposition about the concept of higher entrance requirements. Far from being draconian, these very measures have been recommended to the government by many many groups.

For example, two recent reports were quite specific. The report of the Standing Committee on Human Resources Development recommended longer qualifying periods to encourage young workers to remain attached to the workforce longer and to improve their career prospects. The working group on seasonal work and unemployment insurance also recommended stiffer entrance requirements for young people.

In the process of designing this legislation, the government listened to the concerns of Canadians in all regions and all walks of life in more than two years of consultations. Town hall meetings, seminars and policy workshops were held. Phone lines were opened and the Internet was put to work. Through these and other channels including open line radio shows, Canadians told us what they wanted. It was social security reform.

The minister invited the Standing Committee on Human Resources Development to further examine ways to improve the legislation. More than 100 witnesses from across the country were heard and nearly 150 briefs were received, analysed, digested and studied very carefully by members of the committee. The purpose once again was to listen carefully to Canadians' views on fine tuning the employment insurance legislation to ensure that the system is fair, to be sure that the system is balanced and reflects the varying labour market conditions across the regions of Canada.

In this process the work incentive provisions of the bill have been strengthened. Changes have been made to make the system fairer to youth, fairer to women, fairer to the low income families and fairer to workers in seasonal industries.

There are other ways in which Bill C-12 will benefit young people. Contributions to EI for example will have minimal impact on young people. For instance a student working 14 hours a week at $7 per hour would pay less than $3 per week in premiums. The hours will now be insured which will help meet entrance requirements when entering the labour market full time. Premiums will be refunded to about 625,000 young people, 49 per cent of all of those who receive rebates. Of the total young people receiving rebates, 400,000 will be full time students.

Again let us look at the benefit side. Total benefits paid out under EI will be less and benefits paid out to young people by the year 2001-02 will decrease by 6 per cent. This is considerably less than the forecast overall decrease of 9 per cent.

We should not forget that EI is a two pronged program: income support for the unemployed coupled with employment benefits to help people get back to work and to get productive work. Targeted wage subsidies for example will help young people who qualify for employment insurance benefits to get needed work experience to qualify for more stable or permanent jobs.

The government has recognized the problems facing Canada's youth and has set in motion a process leading to a national youth strategy which will be announced this fall. The member for North York has been appointed chairman of the ministerial task force on youth which is now holding consultations to gather public input for such a strategy.

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The task force is now holding town hall type meetings across the country hosted by local members of Parliament and senators. Such a meeting is to be held in my riding of Thunder Bay-Atikokan on May 23. In this way we can participate directly, solicit the views of our constituents and our young people and shape an effective

strategy to permit youth to fulfil their vital role in our future asa nation.

Bill C-12 and the government's initiatives for young people aim at giving young people hope, hope that they will be better equipped to take their rightful and productive place in the future of our country.

[Translation]

Mr. Yvan Bernier (Gaspé, BQ): Madam Speaker, I will have the opportunity to rise several times today to ask a question or make a comment.

There is something bothering me in what the hon. member just said. Could he tell me how seasonal workers will benefit from the so-called training tools that he raved about at the end of his speech and that are supposed to be included in this bill?

There seems to be an inconsistency in the member's speech. First, Quebec has always maintained that manpower training should come under provincial jurisdiction. Therefore, I cannot see how the federal government could boast about promoting manpower training. Second, I represent a region that relies heavily on seasonal industries. It is not our fault if the water is frozen in the wintertime and we cannot fish. The same logic applies if you plant or cut trees in the bush.

These workers have noble occupations too. They do not need additional training to do their work. Sure, they learn and improve their skills every year, but this in itself will not extend their season. The purpose of training is to increase the work period. How does the bill before us, and on which we will vote this evening, benefit people from these regions?

[English]

Mr. Dromisky: Madam Speaker, I appreciate the interesting question the hon. member raised. The areas of concern he presented have been discussed time and time again. There is nothing new as far as the answers are concerned.

We know that training is going to be the responsibility of the provincial governments. We know that the federal government will become a partner in any model the provincial governments develop. They will get the full support of the federal government.

The federal government in this bill definitely recognizes the responsibility of the provincial governments in programs for retraining, for the development of new skills, for the development of new avenues of hope with our young people and even our more elderly people who are searching for new careers. There is provision in the bill for the opportunity to create new models for those in seasonal employment situations, whether it be a supplement or whether the individual who is unemployed takes another type of job and receives a lower income which will be topped off with supplements.

There are avenues available for the creative mind. All we have to do, and the bill permits us to do it, is sit down in partnership and come up with solutions in which all Canadians in these different situations will benefit.

[Translation]

Mr. Gilbert Fillion (Chicoutimi, BQ): Madam Speaker, I have a short question for the hon. member. First, I remind him that there are many people who are unemployed in this country, and many more, perhaps twice as many, who are on welfare. In the answer he just gave to my colleague, the member essentially said that the federal government should continue to do what it is doing, namely to dump its responsibilities onto the provinces and let them fend for themselves.

The government wants the provinces to provide job opportunities to the unemployed and welfare recipients, through their programs. However, it reduces its transfers to the provinces by $7 billion.

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Does the hon. member agree that the federal government should constantly offload onto the provinces the problems that it cannot solve?

[English]

Mr. Dromisky: Madam Speaker, it is no shock to me the kind of question that is being raised. The member from the Bloc party is advocating that all responsibilities should be passed on to the Quebec provincial government. Then when we do give more responsibilities to the provincial government we hear complaints that we are abdicating our responsibility from the federal level. You cannot have your cake and eat it too.

Mr. Andy Scott (Fredericton-York-Sunbury, Lib.): Madam Speaker, before I get into my own comments, I want to commend you on the many interventions you have made on this bill on behalf of the people in Madawaska-Victoria. I did not want that to go unstated.

Every time I get up to speak to this bill and talk about some amendments we have proposed I seem to get distracted. I must admit to being distracted again.

My colleague from Gaspé in putting a question to my colleague from Thunder Bay asked what this bill does for seasonal workers. Very specifically, the bill puts value on their work rather than on their week. Someone who works more than 35 hours a week benefits from this bill. Even the CLC, which has not been an ardent supporter of this piece of legislation from the beginning, acknowledged that.

I am sure the economy in the riding of my colleague is not significantly different from that of the province of New Brunswick.

I am prepared to acknowledge and have acknowledged weaknesses in the bill where they exist. However, I would also expect that we have to acknowledge the existing strengths in the bill.

I believe the member specifically asked whether the government expected to extend the seasons. No. What we need to do is to extend the value of work. People who work 70 hours in a week because they work in a seasonal industry should get the benefit of those 70 hours of work. Those hours of work are very common in the kinds of industries in the communities we represent. With this bill, a 70 hour work week, based on conventional applications of UI, is worth two weeks. It is that simple.

In my own constituency generally the result will be that someone will get in with one and one-half fewer weeks of work because the value will be on hours and they will get as much as two weeks more of benefit. I accept the fact that if someone has not been a part of the labour force it is going to be tougher. However, we have to recognize where the value is.

I have mentioned the value of the shift from weeks to hours. In our case I believe that 85 per cent or 87 per cent of the labour force in the province of New Brunswick works more than 35 hours a week. That speaks to how many people will be advantaged by this.

Another benefit is the low income supplement. Very specifically, if the family income is less than $26,000 the benefits that will go to that family will increase by up to 13 per cent. For a single person that will not happen and I accept that, but let us recognize the strengths in the bill where they exist.

Finally, with the human resources investment fund, people who have not had access to programs before will have access to programs because there is a reach back. I am sure the member for Gaspé knows exactly what I am referring to. In the past, people who were not eligible for benefits were not eligible for the program. Now if someone has been on UI for the past three years or on sickness or maternity in the last five years they will be eligible for employment benefits. That is a significant improvement in the program.

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I would like to get back to some of the comments by the member from Edmonton. He spoke of the need for an honest debate. He very nicely positioned himself and his party in terms of this debate. Basically he said if one cannot find work in Cape Breton or northern New Brunswick or in Quebec, move. They should where the work is.

I find that an unacceptable solution. We have a larger obligation than that. I have a lot of respect for the member from Edmonton and we share similar views on many things, but we do not share similar views on that.

He spoke of the need for a national guaranteed income. I have supported that concept for many years. What would he say to those people who say a national guaranteed income will create dependency? Basically they will throw his argument right back at him on that question. I would not throw that argument back at him. I agree with those concepts. I agree we have a larger collective responsibility to each other.

The hon. member referred to the fact that very often people take UI just because they do not like their job. It has been my experience that it is not the case. People on UI would much sooner be contributing premiums than drawing benefits. As an Atlantic Canadian, because from time to time that argument is thrown back at us, I take great exception with the suggestion that people for the most part are on UI as a choice. I do not know of very many people who would not prefer to pay premiums than draw benefits.

There was a reference by the member about water running up hill and something to the effect that there is no point in trying to impose our political will on the natural order of things which would see Canadians move to those places where the jobs are and that is a natural law and cannot be affected. I draw a different analogy.

Essentially what the member was saying was that people are on their own. Basically we have equal opportunity. They can go to school and they can do all of these things. Fundamentally when all is said and done they make their own way in this world.

I see it as the same analogy as throwing a baby off a boat into the ocean as a way of teaching them how to swim. I do not see it that way. I accept the challenge of the member that we should have an honest discussion about this. I am certainly prepared to do that, for that is not the way I see a country proceeding in a civilized way.

There was a reference to the fact that some parts of the country do not have the economic base. They do not have the jobs. They do not have the same economic viability as other parts. The reference was they never have, they do not and they never will. That is not the case.

Our part of the country which right now benefits from these programs at one time had one of the most booming economies in the world. We joined Confederation. Early in Confederation our part of Canada was very affluent, very successful and by being part of the broader country and buying into national policies basically changed our trading patterns from north-south to east-west to help develop the country. Consequently we paid a price for that.

For anyone to suggest somehow we are inherently non-viable, I have a great deal of trouble with that. It is very shortsighted. New Brunswick right now is on a bit of a roll. It is recognized in Canada for getting its act together. Its economy is starting to grow.

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However, if the government moves too quickly on these programs it will close down the economies of the region. That is why I felt so strongly that we had to pursue the amendments we were able to accomplish. We cannot close down the economies of our regions by moving too quickly on these programs. That is the reason for the amendments.

I thank those who have contributed to the honest debate.

[Translation]

Mr. Antoine Dubé (Lévis, BQ): Madam Speaker, I was listening to the hon. member for Fredericton-York-Sunbury, who is true to form, since I got to know him in the human resources development committee, and I know that he was sincere in what he just talked about. He seemed even to move you, Madam Speaker, because the points he made related to an area that you come from too.

In spite of all that he had a somewhat easier task today since he was speaking after a Reform Party member who was obviously attacking the unemployment insurance system head on. He found himself in a somewhat awkward position, almost in the opposition, and I would say to my hon. colleague from Fredericton-York-Sunbury that I think he would feel more at ease with us on this side of the House than on the other side.

Things being what they are, however, he is still sitting opposite, on the government side. I know he made some efforts, and he put forward a particular amendment. I am giving him a chance to talk about his amendment because we are in the House and, after all, are here to inform people. I know beforehand what he will say. I know that the three amendments he put forward for the Liberals do seem, at first glance, to soften a little the blow of the $365 million cuts, but nevertheless the budget goal remains the same: to find $2 billion.

In order to compensate for the $365 million forgone because of his three amendments, the government will have to go after abusers and repeaters even more relentlessly, and the hon. member for Fredericton-York-Sunbury knows it. Abusers are abusers, and all members agree that abuse should not be tolerated. But repeaters, according to the government, will be those who are on UI for five consecutive 20-week periods. They will get a one percentage point penalty each time.

People who will be affected are seasonal employees in the hon. member's area and in the Acadian peninsula we visited last year. People asked us not to do that. I remember it vividly. Both the member for Fredericton-York-Sunbury and I were deeply moved by these representations.

Today is a sombre day, because this bill provides for $2 billion in cuts, even after amendments to soften the blow. Benefits will be cut because the basic principle is still there. The one-week waiting period has been abolished, but the reduced earnings week principle remains. That will encourage more people not to report those reduced earnings. Obviously, this is a golden opportunity for abusers.

I have a question for the hon. member. He stood for the unemployment insurance plan, and he fought tooth and nail to have the minister make his bill less drastic. The hon. member managed to get a few amendments in to soften the bill's impact, but despite these amendments, this bill will take millions of dollars out of the economies of the maritimes and of eastern Quebec. Is the hon. member comfortable with this bill, sitting as he does on the government side?

[English]

Mr. Scott (Fredericton-York-Sunbury): Madam Speaker, I now sympathize with my friend from Edmonton when my friend from Lévis suggested I should be on the other side. We are always saying he should be on the other side. I have an understanding as to how confusing that might be.

The shift from weeks to hours will be beneficial to our region. With our amendments to fix some of the mechanical problems in the bill I believe it will be good for our region.

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I recognize we will be taking a net $1.2 billion out of the system. I know the member is aware that there are many people who regularly draw benefits. I am not talking about fraud or misuse. I am talking about the fact that a program was put forward which allowed people who could not make enough money in a year to live on to supplement their income. That is what a part of the program is about. There are people who draw on the system who cannot make that argument. We may disagree on how many.

As the member knows, $800 million is going back into employment programs which will affect the income levels of people in the system. Therefore I believe we can take $1.2 billion out of the system and not negatively affect the program.

I have been engaged in the debate to make sure it happens at the top, not at the bottom. That is what the amendment is all about.

[Translation]

Mr. Yvan Bernier (Gaspé, BQ): Madam Speaker, I want to thank you for recognizing me on such a sad day. This is for the official opposition the last chance to rise in this House and speak against a reform that will affect all Canadians and all Quebecers.

A lot of things have happened in this House, including the unilateral patriation of the Constitution in 1982. Some of the members of government at that time are still here and are about to deal a severe blow to regions like mine. This will hurt not only my riding, but also all the workers who now have the chance to work. They stand to lose their jobs and be hard hit, if their businesses were to go through a rough patch or the economy were to take a downturn.

It is with an aching heart that I rise today in this House to say again, loud and clear, what my constituents from the Gaspé area came here to say, last week, in front of Parliament. These people took a 32- hour bus ride at their expense, because the round trip takes 32 hours. They came here to ask very peacefully to meet with the Prime Minister in order to express their grievances, because nothing in this bill gives them hope for a brighter future after July 1, the day on which this infamous bill comes into force.

Where can we find the strength, maybe it is born of despair, to ask the government to understand their point of view and to postpone this bill, because I think this is the night we will be asked to sentence regions like mine to death? So, I rise today in a last-ditch effort.

I will review all of the issues, one by one. First of all, I want to mention the title of this bill, which is misleading. They call it employment insurance, but nothing in this bill guarantees that jobs will be created. On the contrary, it is more like deficit insurance. The people on the other side have started to admit that they hope to get more money out of the unemployed and to be able to set aside $5 billion at the expense of the jobless. It is outrageous, it is a disgrace. Five billion dollars.

There was a joke we used to tell when I was a kid. ``If someone steals some chips in a store, he is called a thief''. But if someone steals $5 billion, what is he called? A politician? I am not proud to be a part of Parliament on such a tragic day.

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I would also like to mention three new irritants that will strike directly at people in the regions. I am talking about the eligibility rule, the rate of benefits rule and the intensity rule.

What does the eligibility rule provide for? A minimum of910 hours of work. We talked about this throughout the debate, but each time, we were subjected to time allocation, that is, in other words, we were gagged. What does the 910 hours eligibility rule mean when one works in the regions and according to the seasons? It means twenty-six 35 hour weeks. To my knowledge, there are not many seasonal jobs that make it possible to work that long.

And what of the rate of benefits rule? They try to make us believe that the irritants are now fewer. Does putting a plaster on a wooden leg reduce the pain? No, it does not. The bill, as introduced in the House after prorogation, provided for the dividing of consecutive work hours. This is not true any more. Now the work hours will be divided by the higher of the following: with the unemployment rate in our region, 14 weeks, or if one is lucky enough to live in a region with a lower unemployment rate, a greater number of weeks or the period worked. But what is the most vicious, I would say, is that this will have to be within a 26 week period. This bill, once passed, will compel people to concentrate their hours of work.

What will the construction worker tell me, in February, when I ask him to go over to my house to repair the door knob, while I am in Ottawa? He will tell me that he would prefer to see my door knob break in May because May is included in his 26 week period of work, and because he would then have the opportunity to group together his weeks and to concentrate his hours of work. This was just another example. Fishermen and lumberjacks are not the only ones who will be affected. This is an important point.

The intensity rule is another measure that strikes directly at those who work in regions. In an effort to soften this intensity rule, i.e. the 5 per cent penalty, a limit was established and it was decided that those with family earnings that are less than $26,000 in total will be exempted from this rule. But I will come back on this issue later.

How can someone who earns $26,000 and has a family of four believe that he will have a decent life? He will only survive. Therefore, I think the intensity rule will once again hit hard those regions that depend on seasonal work.

It is sad, but I would like to remind our viewers that the official opposition, in spite of its goal to promote sovereignty, has tried by all acceptable and recognized parliamentary means available to do its job and represent the people, to support victims of the job shortage. But, every time we tried, we were prevented from doing so. Every time we tried, we were gagged.

I tried in vain to extend a helping hand, to say that we need to build a partnership, that we need to build a relationship based on trust because I think the government needs the public's trust to be able to implement such changes. Unfortunately, the members opposite did not understand.

It is appalling or, should I say, frustrating for a parliamentarian like myself who has tried to use all available tools. However, I would like everybody in this House to know that it is much more appalling and frustrating for the victims of the job shortage, who will see their benefits reduced as of July 1.

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I fear the public's reaction. I am scared. I am even afraid, since we do develop relationships in this House, that some of our Liberal colleagues will have a very hard time when they go back to their ridings after the House adjourns for the summer. Each one of these

members will have to face his or her constituents. I hope they will remember what happened on May 14. I sure hope so.

In closing, I would like to tell the government that, if it wanted money, why has it not decided to get it from those who have large salaries? As mentioned by the member for Mercier a few moments ago, the maximum is being brought down from $43,000 to $39,000. I would like to add that, while we are doing our job, people are waiting.

Why have MPs not been asked to contribute to the fund? Why have senators, who, I think, do not work much sometimes, not been asked? The government could have taken contributions from their salaries to give that money back to people who do want to work and who do not sleep on the job.

[English]

Mr. Robert D. Nault (Parliamentary Secretary to Minister of Human Resources Development, Lib.): Madam Speaker, Ontario puts a significant amount of money into the system. For every $1 working men and women in Ontario put in, we receive 76 cents back.

In 1993 Quebecers received $1.29 for every $1 they put into the system. Under the new EI system they will receive $1.32 for every $1 they put in. Based on how shameful the member feels it is, can he explain to me what is so disgusting that for every $1 Quebec puts in it gets $1.32 out of the system? Is that not fair? Is that not equitable? Is that not compassion?

That is an important question to ask because coming from Ontario where we get only 76 cents for every $1 we put in, we think we are being very fair. We are trying to make the system work for other regions that are have not. I would certainly like to know the response of the member when we look at the raw facts and the numbers. From 1993 to 1996 the amount Quebec is receiving has gone up, not down.

[Translation]

Mr. Bernier (Gaspé, BQ): Madam Speaker, it is unfortunate that on the last day, on a day I should perhaps call a national day of mourning for the people of one region, someone has the nerve to stand up in this House and provoke us by comparing people from different regions and making distinctions between people from Ontario, from Quebec and from New Brunswick. Does he mean that there are second class citizens in Canada?

I can hardly control my anger, but my anger is nothing compared to what awaits them if they dare visit some parts of Canada where people believe that their occupation is a noble one. If those people are told that they must compare their situation to what Ontario got-Madam Speaker, how is it that when the Department of Industry allocates its research and development funds it is always the same who receive the lion's share?

And they say that they paid to much in unemployment insurance. This is shocking and appalling. There are words that I do not want to use because I want to follow rules and because I want to be here to vote against the bill.

Speaking about comparisons, we can say that we were had last Thursday. The Minister of Fisheries chose to publish his new fee schedule exactly at the time the Quebec government was bringing down its budget. Unfortunately, the parliamentary secretary did say: ``Yes, it is true that in Quebec you are going to pay a little more for the navigation aids that the Coast Guard will offer''. When time comes to do some Quebec-bashing, they do not hesitate, but they deny it. They do it when the media's attention is on something else in Quebec City. But when times comes to face the facts, they prefer to hide.

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How can we make them understand? I wanted in good faith to work here. I wanted to make them understand, but, on the last day, they want to make a comparison. If they want to compare apples, let then let us compare apples, but when we are speaking of money and remuneration like that, I wish they would put everything on the table. This is not the case presently. They are making comparisons about people who want to work but who, since there are no jobs, need that economic stabilizer that unemployment insurance is.

I will conclude with the following point. Can you cut firewood in downtown Toronto? Can you fish lobster and other species in downtown Toronto? No. Tell us if we are not welcome there, and if that is the case, so long, folks.

Mr. Gilbert Fillion (Chicoutimi, BQ): Madam Speaker, from here on, all those speaking on behalf of the Bloc Quebecois will limit their speeches to 10 minutes.

Following on my colleague, the member for Gaspé, I would also like to add the voices of the constituents of Saguenay-Lac-Saint-Jean to this debate. It is true that today is a sad day for all Canadians and Quebecers. It is also sad for the regions.

This is the last time we will be able to express our views about this plan to reform unemployment insurance. I am therefore speaking from the heart, but I do not expect to be any more successful than my colleagues, who worked tremendously hard on the human resources development committee, in getting the government to budge. I realize that our cries are falling on deaf ears.

I must simply say to you that there is no need to rush at this time. We could-and I implore the parliamentary secretary-we could take the time to review the whole issue of unemployment insurance.

For my region, it will mean approximately $25 million less in the economy annually. And yet, we still have the highest rate of unemployment in Canada, and have had for years. I must tell you that this reform is unfair towards a region such as mine.

This is not what we need in the region. We do not need a blow like this. What we need is help finding a solution. People from my region are proud people who are not afraid to work. We want to find a solution.

This reform is a direct hit on students, women, and seasonal workers. And yet, they made their opinions known, they were consulted, they even sent petitions here. What became of these consultations? All across Canada, these consultations were just a sham. No attention was paid to them, and why not? Because the reform was based on preconceived ideas, on false principles.

They said to themselves ``Now then, we are going to reform the system, for too many people are taking unfair advantage. There are people who are cheating the system. We find it hard to understand, there are jobs out there but nobody to take them''. Instead of looking at this situation, the decision was taken to try to get at everybody, yet it is not true that everyone is out to cheat the system.

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Moreover, at no time in the Standing Committee on Human Resources Development, and even less so publicly, has the government laid its impact studies on the reform out on the table. They have been incapable of telling us what the effects of the reform would be on students, on young people. There has been nothing to show what the effect will be on seasonal workers.

It is only when the thing comes into effect that we will see that perhaps somebody has goofed, that this might not have been the way to go, but by then it will be too late. Far too many people will have had to pay, and to pay through the nose, for this unjust reform.

My colleagues in the Bloc Quebecois have said that, yes, reform was needed, a review was needed, but the review needed to be fair and honest and to allow everyone to benefit from it. That is why my colleagues in the Bloc have moved amendments, amendments which I am not even sure have been looked at properly.

I sat through six hours of the committee's meetings, and from what I saw, the folks across the way paid no attention to what my colleagues were saying. The apparent attitude was ``No problem, we will just wait and see how it turns out. We have a plan, and that is the way we will go''.

I think that they are on the wrong track, for this reform does nothing more than to encourage people to hold down more than one job, and the jobs involved are mainly precarious ones. This reform will also bring pressure to bear on wages, not upward pressure, but downward. This gives you an idea of what can happen.

Under the old system, seasonal workers, for example, had to try to accumulate the required number of weeks in order to become eligible. Under the new system, they will have to negotiate a number of hours of work with their employer in order to reach the required minimum. You can imagine easily what will happen in small industries, in small and medium size firms where there are no unions. This will cause serious problems between employers and employees. This will have a negative impact on the reform as a whole.

This piling on of salaries will inevitably lead to the creation of ``McJobs'' all over the place. They will say to someone: ``I offer you ten hours of work this week, but do not come in next week. Then the week after that you will again work ten hours''. This vicious circle will prevent many people from becoming eligible.

The result will be that people will hold simultaneously an increasing number of jobs. One ``McJob'' here, one ``McJob'' there, a better one in order to accumulate a sufficient number of hours. This situation will lead to family unrest, since there will be a social impact, because of irregular work schedules for instance. This new work pattern or work schedules will force people and families to adjust. Children and the mother are often the ones who have to bear the consequences of such changes.

Since you are telling me that my time is almost up, I will conclude by saying that this is a sad day, considering that we are going to vote on this bill tonight.

I would like to tell you about three workers from back home who recently explained their situation to a reporter.

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These people said, and I will be very brief: ``Instead of taking it out on the unemployed, the government could come up with much more effective decisions. It could take the surplus from the unemployment insurance fund and try to create jobs, provide better training and so on, by creating legislation prohibiting overtime for example. Workers at Alcan have shown the federal government that, with less overtime, jobs can be created. In this case, the government must get involved, because the system has to get started.

The workers at Alcan did it. More than 200 jobs were created, and that is not counting indirect jobs. Moonlighting as well must be monitored. The federal government missed the boat in failing to keep its promise to create jobs.

[English]

Mr. Wayne Easter (Malpeque, Lib.): Madam Speaker, I am pleased to speak on third reading debate of Bill C-12, the employment insurance act.

I feel most privileged to have worked on the human resources development committee examining the bill. I enjoyed the thrust of debate with members opposite as we strove to improve the bill for the benefit of all Canadians. I sincerely believe the bill and the process undertaken speak well for democracy.

In my experience as a farm leader I appeared before many parliamentary committees and in my experience as a parliamentarian I have never seen such substantial changes made to a bill in the interest of the people from whom we have heard. Improving the bill to address the concerns of people is what this process was all about. It has been a very long process.

The green book on social security reform was tabled a little over two years ago. When that paper came down I held a couple of public meetings. People were very concerned about the direction that might be taken by human resources development in terms of social security review. A committee went all across the country with members from all parties in attendance. The committee heard over 600 presentations. It heard a lot of concerns about the two tier system and where we might be going on UI. It came back with what I think was a wonderful report, on which part of this legislation is based.

A seasonal industry task force was set up. Its report mentioned how important seasonal industries are, that seasonal industries do not work only during one season but create economies downstream. They create full time jobs in industries other than their own in terms of the products and services they need within the seasonal industries. Seasonal industries are made up of full time workers who are highly skilled and much needed in those seasonal industries. The government took that to heart and took those issues into account in terms of the preparation of the final stages of Bill C-12.

When Bill C-12 was introduced I held public meetings in my riding, as did many of my colleagues. We expressed as members of the government our concerns internally and publicly on the bill. We said publicly that there was a problem in terms of some areas as they impacted on the seasonal industries, and we moved to correct those changes.

We also recognized some very good points in the original bill. It is an hour based system. It gets rid of the 15 hour job trap. The part II benefits include $800 million for reinvestment in such programs as wage subsidies, earning supplements, self-employment assistance, job creation partnerships, skill loans and grants. Those are important points.

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I have made it clear from the very beginning that scrapping the bill was not an option. We are dealing with the realities of the turn of the century. We need improvements to the bill and we will try to achieve them. We must work as members of Parliament toward improvements. The former minister and the current minister agreed and showed an openness for change.

We heard concerns. One was from Jacinta Deveau:

At a time when corporations are making record profits and yet still laying people off, now is not the time to start increasing qualifying times or decreasing benefits particularly for those people who must resort to applying for benefits, must do so for longer periods of time and in greater numbers; add this to the competition for fewer and fewer numbers of jobs sought only not by those people caught in the corporate downsizing and adjustment but those in seasonal and non-full time job occupations and you have a recipe for disaster in the Atlantic region generally and P.E.I. in particular.

We did not take the position to scrap the bill. We listened and moved to make improvements. That is very different from what I have heard from members opposite.

The hon. member for Mercier, the critic for the Bloc, talked about the lack of debate. On the night of the filibuster those of us sitting on the government side wanted to debate the substantive issues to see if there were other areas of improvement. Is the hon. member asking us to do away with the employment measures which will help people to get jobs? Is the hon. member asking that we scrap the benefits for low income families? Is the hon. member asking us to go back to a system which had within it a 15 hour job trap that trapped mainly women in part time jobs? This bill improves that situation. Members opposite should recognize that.

I will list some of the other improvements we have been able to accomplish through this debate. Members on the government side have fixed the gap, the dead weeks. We have managed by making amendments to the legislation to take out of the calculation base those weeks that would have been considered as zero earnings. We have fixed that gap to the benefit of seasonal workers and of workers generally.

We have changed the divisor to make it more uniform across the country. It will be the regional rate plus a divisor of two. That does two things. It sets some stability and it ensures for business that there is an incentive out there for people to find work instead of simply going on UI.

We have fixed the intensity rule to a great extent. We have ensured the intensity rule does not apply to low income families with dependants. There will be a method of receiving an intensity rule credit for those who work while on unemployment.

This is in part based on the concerns raised by some of the people who have been demonstrating. In order to ensure that these good amendments that Liberal members have made are secure into the future, the power of a future minister to change the divisor by regulation has been deleted from the bill. In the future changes will be made in the House and not by the executive.

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I am pleased with what has been accomplished. I will admit that one good amendment was moved by members opposite. We supported and it was incorporated in the bill. It goes to show what can be done if the opposition is more co-operative instead of saying ``scrap the bill''. We really do not want filibusters. We have made great strides forward.

The minister said that the bill is not perfect, that there are some areas of concern. However, as a government we do listen and we make changes to meet the needs of people.

In closing, I would like to quote Alice Nakamura. I think she is right on target:

You have proven wrong all those who told me this reform effort was a waste of time. Bill C-12 tackles the serious problems with our present UI program, making use of the best available research about how our labour markets and social programs function. And it is a bill that pays careful attention to the real life problems of transition. It strikes a careful balance between the desperation of people who cannot find enough work and have depended on the income from UI benefits and the desperation of economic analysts who recognize the threat which trends in our present UI program pose for our economy and the future employment prospects for Canadians.

Mr. Antoine Dubé (Lévis, BQ): Madam Speaker, the member for Malpeque may have tried to console me a little bit by reminding me that the Liberal majority had approved an amendment introduced by the members of the Bloc. As the author of this amendment, I only want to point out that this amendment was about adding the two words community agencies, omitted by the Liberal majority, as entitled to federal grants in order to create jobs. I only wanted to ensure that they would not forget this important aspect.

Despite this modest amendment, the only one they deigned to accept out of some fifteen that were moved, one fact remains. Since the member mentions it, I want to remind him that the Liberal majority introduced 42 amendments in Committee. Those amendments have been approved, of course, since they have a majority. Those 42 amendments were introduced in committee-I remember-by various Liberal members, sometimes by the parliamentary secretary. When questioned on the substance of these amendments, I must say that, most of the time, in 75 per cent of the cases, it was public servants who answered. Why? Because these amendments were obviously written by public servants. What type of amendments were they? Technical amendments to reinforce clauses of the bill, whether some members like it or not, aimed-forgive my language-at catching more people red-handed and at reinforcing penalties against those who abuse the unemployment insurance system, but this is not said.

They say that they have improved the bill. Granted, but they do not say that the objective was to eliminate such abuses. The three amendments improve the system, but the three amendments presented to the House could only be moved by the minister. Everybody in the House knows it, but it is something we have to say for the record because people outside the House do not know this. We, in the opposition, have been criticized for failing to propose any amendment. We were told that we were criticizing the bill but had no amendment to propose. There is a parliamentary rule that says very clearly that as soon as an amendment involves changes of a financial nature, it amendment must be moved by a minister of the crown.

This is why the opposition could not move such an amendment.

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You will understand that, otherwise, we would have proposed quite a few amendments to eliminate the negative impact of the $2 billion in cuts which come on top of the $5 billion in cuts made as a result of the previous federal budget and Bill C-17. I wanted to make this comment.

Now, for my question. In her speech, to which the member for Malpeque listened, the member for Mercier reminded the House of a statement, to my knowledge the only statement, by the economic development minister of his own province, Prince Edward Island, who said how bad it was going to be for the economy of Prince Edward Island, which is a top performer in the area of job creation. I would say that in Prince Edward Island, apart for government services, jobs are only seasonal.

There is no farming in winter. He pointed that out. Fishing too is only in the summer. And as far as tourism is concerned, people who like PEI come mainly in the summer. Does the member agree with the statement made by the economic development minister of his own province, who said that this bill was bad? Also, does he agree with the government's figures according to which, from now on, Prince Edward Island, with a population of only 170,000, will lose $11 million every year?

[English]

Mr. Easter: Madam Speaker, the member is just about filibustering. The amendments that we accepted concerning community organization were important. We saw them as such. They are two very important words.

We did listen to the discussion of Bloc members opposite on the gap and we fixed it.

I want to get to the point-

The Acting Speaker (Mrs. Ringuette-Maltais): Resuming debate. The hon. member for Guelph-Wellington.

Mrs. Brenda Chamberlain (Guelph-Wellington, Lib.): Madam Speaker, the government has made jobs and growth a priority. That is the underlying theme behind the reforms of the new employment insurance system. Coupled with this theme is the need to create a fairer and more balanced system.

The people of Guelph-Wellington support the government's endeavours to encourage a greater effort to help find Canadians work and to achieve a system that is more affordable and easier to administer. They know that deficit reduction cannot be successful if it is accomplished solely on the backs of the unemployed. They also recognize the inefficiencies of the old system.

Reforms to employment insurance are a part of the government's efforts to restructure the federal government. This is a unique time in our nation's history. The federal government is responding to communities like Guelph-Wellington that have told us to make the system fairer and more balanced.

Let us look at the highlights of this legislation. Changes have been made to make the system fairer to youth, to women, to low income families and to workers in seasonal industries. Tough measures have been brought in to crack down on fraud and most important, work initiatives have been strengthened.

I am not happy with the level of unemployment in Canada. Just a few moments ago I was talking to a colleague from Quebec who is also not happy with those levels.

My own community's unemployment rate is approximately 8 per cent. I find that unacceptable. I know that people in Guelph-Wellington want to work. They want to provide for themselves and their families. From the outset I have encouraged the government to go beyond simply offering basic income support for people in my community who unexpectedly find themselves out of work. Unemployed Canadians must be given a better chance to get back into the job market.

This legislation addresses the fact that not every worker in Canada has uninterrupted weeks of work to qualify for maximum benefits. In this regard I have worked closely with construction workers. The building trades, by the very nature of their positions, work hard. The harder they work the faster they put themselves out of work. They have asked for changes to remove disincentives and changes to reward people for their work. They know that the previous system encouraged fraud and promoted the underground economy. Simply put, by encouraging people to work we can help drive the underground economy above ground. That is good news. It will encourage further government revenues and ensure that the workers are paid the wages that they deserve.

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This legislation also makes the system fairer to youth, to women and to low income families. We have moved to counting hours of work instead of weeks, a direction supported by the building trades. In my discussions with constituents it was clear that whether a person worked 15 hours a week or 50 hours, both were treated the same under UI. We needed to address the reality that Canadians no longer work a 9 to 5 day, Monday to Friday.

Many of my constituents are holding down several jobs with different employers or work on contracts for periods of time. The one measure of work that means the same to everyone is the hour. The hour is the very same. The hours based system better reflects the new economy. It will insure a growing segment of Canada's workforce that currently has no protection whatsoever. With this important addition, 500,000 part time workers will have their work insured for the very first time, a move that will benefit woman and youth in particular. I hope that my Bloc friends will agree with that move.

It means that women working part time or earning a living at several jobs will now qualify for maternity benefits for the first time, a move that will strengthen the value of family and work. This provision alone recognizes the importance of the household and the Canadian family.

The legislation also includes a family income supplement for families with children earning less than $26,000. Certainly this is good news for families in Guelph-Wellington and across Canada.

I appreciated the special significance of the seasonal industry. Under the hours based system 45,000 workers, who today cannot qualify for unemployment insurance, will now qualify to receive benefits. I am pleased to quote the building construction trades represented by the Canadian office of the AFL-CIO: ``We suggested a UI program where every hour worked and every dollar earned counted. The government has listened''.

No discussion of employment insurance can be complete without paying some attention to the issue of fraud. Regrettably there are those who take advantage of our system. The vast majority of Canadians that collect unemployment insurance are doing so because they need some assistance while looking for work. They do not want to be unemployed and they are anxious to return to work. They understand the dignity of work to which the Prime Minister so often refers.

This legislation sends a strong message that fraud will not be tolerated. This applies to both individuals and employers. Companies that knowingly defraud the system will face stiffer financial penalties. If the company cannot pay the price its corporate directors will be held accountable for the loss. These ideas are new and they are necessary.

I continue to raise concerns brought to my attention by individuals, business people and unions. I am pleased that the minister has recognized a need to monitor these changes. The government will measure the impact of these reforms on Canadians workers, businesses and communities. The minister has acknowledged the need to see how Canadians are adjusting. Quality control efforts will mean that the employment insurance commission will make an annual report to the minister through its examination of how Canadian workers, communities and the economy are making the adjustment. I urge them to pay careful attention to the underground economy. We must continue to ensure that what we do does not encourage its growth.

The government has listened and we will continue to listen to make a system that is fair and balanced, fair for users, fair for taxpayers and fair for business. Through these changes we have been responsive to the balanced approach of jobs and growth and deficit reduction. Unemployment affects all of us, everyone.

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We must continue to pay close attention to our core values as Canadians. These include fairness, balance and the dignity of work. Bill C-12 deserves our support.

[Translation]

Mr. Antoine Dubé (Lévis, BQ): Madam Speaker, our Liberal colleague showed us the true objective of this bill. It is called the employment insurance bill, but as you have seen, there was an underlying concern to all her comments; the purpose of the new measures is to fight against abusers or pseudo-abusers.

The new Minister of Human Resources Development, when he first appeared before the committee, indicated that he wanted to ease the rules, but when he appeared the second time, told us about an extraordinary discovery he had made. He said there were approximately 120,000 cases of fraud in Canada. In fact, there are 116,603. He was asked if that was an increase. No, it represents a decrease because there were 131,081 cases of fraud in 1991-92.

I will be brief, Madam Speaker. Figures show that the last bill allowed the government to recover $272 million and they hope to recover an additional amount of $345 million with this new bill.

But, out of those $272 million, figures submitted by the parliamentary secretary himself show that only $93 million resulted from real fraud. Three quarters of the remaining $179 million were due to errors made by the unemployment insurance commission. These were errors.

So instead of passing legislation that is an insurance plan designed at fighting fraud, the government should have drafted legislation to prevent errors, which sometimes cause serious trouble, because the commission can go back five years.

Does the member agree that we should take more time and draft this bill in such a way that it will help public servants prevent errors, which most of the time are made in good faith simply because the legislation is not clear? Does she think we will improve the bill with last minute amendments? There were 42 in committee one evening. What does she think about correcting mistakes before we attack the pseudo-abusers, the pseudo-defrauders?

[English]

Mrs. Chamberlain: Madam Speaker, I want to address a couple of things the hon. member spoke about.

One is the time it has taken the government to look at this bill. It has been close to three years now, since the beginning of the election. It is tremendous to recognize. I see the parliamentary secretary to the human resources minister. It is a tribute to him and every colleague who has spent the hours day and night looking at this bill to make sure that we addressed a lot of the concerns.

As I mentioned in my speech, the building and construction trades are happy that we have looked at the hour measurement of time. That is what they asked for. They said that the government has listened. That is very important.

Also, as the parliamentary secretary mentioned, this piece of legislation will allow Quebec for every dollar it puts in to get $1.32 out. It does not take a mathematics genius to figure out that putting $1 in and getting $1.32 back for people who need this program is significant and important. To vote against a bill that does such a thing is a travesty.

Mr. Robert D. Nault (Parliamentary Secretary to Minister of Human Resources Development, Lib.): Madam Speaker, I am not here to filibuster like my friend opposite.

I was going to raise a point of order and suggest that if he wanted to speak again we would let him. Some of us could ask questions of him rather than having him talk for five minutes instead of asking members questions.

However, I want to ask my colleague a question. The Bloc again has attacked the whole issue of the hours based system, which as the member has mentioned is supported by almost everyone who understands the system. I suggest that the Bloc does not understand the importance of going to an hourly system.

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The reason there is support is that there are 90,000 individuals who do not get UI today who under the new system which will consider claims on an hourly basis will be able to collect EI for the first time. Half of those workers are seasonal employees. I want to focus on the other half, part time workers. It hurts me to think the Bloc is not supporting this.

There are 45,000 part time and multiple job workers. For the first time they will be able to collect EI under this new system. Why would the member think that any party, whether it is a party that wants to break up Canada, which spends more time trying to break up Canada than worrying about workers in its own province, would be opposed to something that is good for 27 per cent of the population who are part time workers?

Mrs. Chamberlain: Madam Speaker, it is difficult to understand how any party, namely the Bloc, could vote against a bill that would increase the eligibility for part time and seasonal workers, that would help women, that would go to an hours bank and that unions and construction trades have asked for. They have asked for this piece of legislation. It is inconceivable.

I hope Quebecers are watching this debate. Quebecers are going to gain so much from this. For every dollar that is put in, they will gain $1.32. This is very important. I thank my colleague for drawing attention to these points.

We have to help women. We have to help part time workers. We have to look at this hour bank system.

Mr. Monte Solberg (Medicine Hat, Ref.): Madam Speaker, it is a pleasure to speak to Bill C-12.

It is amusing to hear the back and forth between the Bloc and Liberal members as they talk about the changes to unemployment insurance. It is particularly amusing to hear Bloc members complain about how much they will lose. I would ask them to consider how much they would lose if and when they decide to leave the country completely. It would certainly be a lot more than they could afford to give themselves considering the kind of financial shape they would be in on their own.

I will offer some constructive criticism of Bill C-12. People across the country are very concerned about the whole issue of employment, without a doubt. There is no question it is one of the most important issues in the country today. The government spoke about it during the election campaign when it promised to create jobs, jobs, jobs. It is a commitment Canadians are waiting for it to fulfil.

One of the main concerns we have with this legislation is that it goes in the wrong direction. Granted, it does not go as far as the previous legislation went in the wrong direction, but it is still going in the wrong direction. We have a concern about that.

We say that we should not treat unemployment insurance as a type of social program. Unfortunately, the current legislation does exactly that. We say that it is bad for the country. We say it is bad for employment prospects for people. We say it is bad because it does not give people the type of hope they need and deserve. We are very concerned about that.

It is time to change the complete direction of unemployment insurance, which I will discuss in more detail in a moment. I will talk about why we want to go to a different plan by looking at the history of unemployment insurance in this country.

Going back to 1971-72, that is when regionally extended benefits first came into being. I would argue it is not sheer coincidence that at the time those changes came in, unemployment began to creep up and up. Until about 1971 or at least the late sixties, Canada had about the same unemployment rate as the United States. It was very low, in the range of between 3 per cent and 5 per cent. Shortly after those benefits were introduced, those two unemployment rates began to diverge. The Canadian rate went much higher while the American rate stayed about the same.

As the finance department has borne out, my point is that quite obviously when there are rich benefits which essentially reward people for remaining idle, we should not be surprised if people respond to those incentives by becoming idle. Do not be surprised if they do not run out and look for a job. Do not be surprised if they stay somewhere where there is no work. For me that is absolutely sensible. I am not at all surprised it happens.

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I do not think we should be surprised when we bring in timid measures, such as we have today, that it will not really have an appreciable effect on unemployment. In fact, I do not think this legislation is going to create jobs at all. I would argue that this legislation will kill jobs.

One of the concerns we have with this legislation is that premiums will have to be paid by part time workers. People who work less than 15 hours per week will be paying premiums, as will employers.

Consider that one of the biggest job killers in the country today, which the finance minister has said over an over again, is payroll taxes. There are going to be payroll taxes for the very people who are feeling the pinch the most, those trying to get into the workforce. Young Canadians and very often women who work part time are the ones who are going to have their jobs threatened because the government is insisting on bringing in premiums for part time workers.

The finance minister has said repeatedly: ``That is a job killer, that is a job killer, that is a job killer''. Of course it is going to kill jobs. Absolutely.

Mr. Milliken: When did he say that?

Mr. Solberg: Hon. members across the way are asking when the minister said that. The minister has said it many times in this House. When the hon. member was a parliamentary secretary and sat closer to the minister he probably heard those things but now that he sits so far away perhaps it just does not get down that far.

The fact is that payroll taxes kill jobs and hon. members across the way know it. Unfortunately, they are ignoring their own advice and are bringing in payroll taxes on people who are the most vulnerable in the job market today: youth and women who work part time. This bill is going to be a job killer.

I want to draw attention to a television program that was on CTV a couple of weeks ago. The program spoke about the difference between the unemployment insurance systems in Canada and the United States. It considered two very comparable economies, those of New Brunswick and Maine. In both cases we are talking about economies with lots of seasonal work. In both places there is work in forestry during one period, work in fishing during another period, some construction work and maybe some type of handyman labour and those sorts of things. However, throughout the year there is not a lot of full time employment.

It was very interesting that in exploring the differences between these two economies it was found that in New Brunswick there was a very high level of unemployment. However, in Maine which had almost the identical economy there was a very low level of unemployment.

The reporter quizzed government officials and employers about the unemployment insurance systems. It was found that Canada's unemployment insurance system is much richer and provides much better benefits than the U.S. system. The result is that New Brunswick now has what I can only call structural unemployment as do certainly many other places in the country. In the United States, Maine has far less than half the unemployment rate for an almost identical economy.

When the reporter asked some of the workers in Maine what the difference was, they pointed out that not only did they have very few benefits as compared to Canada, but the system was more experience rated. For instance, if employers laid people off they would pay higher premiums next time around. What happened is the employers kept people on even in their down periods because they knew that if they did not, they would pay higher premiums. This is not exactly a great revelation. It makes perfect sense to me but somehow that logic has escaped the government.

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It showed an example of a large department store in Maine where traditionally people would have been laid off in slow periods, but in this case they were painting, doing work around the store that as clerks they would not normally do because the employer did not want to pay the higher premiums. The point being the current system rewards employers who lay off people. That is ridiculous. It makes absolutely no sense.

Again I make the argument that although these reforms make the current system mildly better in so far as they do not provide a great a reward for laying people off, they still go in the wrong direction.

It is time to separate the unemployment insurance system from the idea of a social welfare scheme. We need a true insurance system. That is the way we must go. If we did that we would not have nearly the problems we have today. If that were done we would have a system that would reward employers for keeping people on the job and a system which would reward employees for staying on the job even when it sometimes looks like it may be more profitable to collect from a social program.

In this case if we had true insurance people would know that incentive has been removed and it would no longer be more profitable for them to go on to a government system. We very much disagree with the direction this legislation is taking.

Clyde Wells, the premier of Newfoundland, pointed out the current system had created a generation which has become dependent on unemployment insurance. The situation in Newfoundland is interesting and in another sense it is tragic because there is a generation of people who have come to rely on unemployment. I hope it is instructive for people in this place who are trying to design new systems that will lead to more employment.

The premier of that province acknowledged the system does not work. When we look at Newfoundland today and we see all those people who are on unemployment, has it not become obvious that no matter how good a hair dresser is in Newfoundland, no matter how much training they get, they simply will not get a job if there are no jobs available?

The finance committee heard from a person from the Gaspé region where there is 33 per cent unemployment, a social tragedy in the Gaspé region. Has it not become obvious the current system does not work when there are levels of unemployment that high? Is it not obvious that when people are kept in one place because of a system perhaps they are being denied opportunity, denying them the hope they deserve as Canadian citizens? That is absolutely ridiculous.

Clearly the solution is not in how we attempted to solve the problems of the past. That caused the problems. The solution is something different. It is time to move forward and get away from this system and go to a true insurance system.

In the 1930s many people in Alberta had to leave the land. There are special areas in the province where people had to abandon their farms because there was simply no way they could grow anything.

They left because it did not make sense to stay anymore. They went where the jobs were. That makes absolute sense to me.

However, the current system acts against that natural impulse. People naturally are drawn to where there are jobs. If we pay them to stay where they are, do not be surprised if they respond to that incentive. That is what this legislation does. It give them incentive to remain where they are. I do not blame the people for taking it. I blame governments for offering it in the first place. That is ridiculous.

We have that problem in my part of the country as well. Perhaps it is not as pronounced as it is in some parts of Atlantic Canada or Quebec, but we have the same problem.

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The point is, no matter where the incentive is offered, people are people and they will respond to that incentive. Let us not continue to hold people back. Let us not continue to stifle their potential. Let us create an employment insurance program that is truly an insurance program, that is experience rated, that rewards people for continuing to be employed, that provides a disincentive for people to give up their jobs.

It is the responsibility of the government to create an environment for employment. One of the things the government decidedly has not done is create an environment for employment. It is little known but it is a fact that since this government came to power it has brought in revenue measures and tax increases amounting to over $10.5 billion. That is an amazing amount of money to take out of people's pockets. That kills jobs. That kills all kinds of opportunities for Canadians. That cannot continue.

Hon. members opposite are concerned about this. They should be. It is killing jobs. The hon. member opposite is obviously concerned about $10.5 billion coming out of the pockets of his constituents and Canadians generally.

The finance minister said payroll taxes kill jobs. I will expand on that. All taxes kill jobs. The more money taken from the taxpayers, the less they have to save. Those savings would ultimately go to creating new opportunities in the form of new business. The less money they have, the less money they have to spend on goods and services. Therefore there are not as many jobs for people in those industries. The hon. member opposite is complaining that his government is raising taxes. I do not blame him.

The finance minister the other day said ``we did not raise any taxes in the last budget''. If we stick to the letter of the law he was right. He raised some after it. He raised all kinds of revenue through various measures which amounted to billions of dollars. The new GST changes will exact approximately $1 billion from people in the form of a new tax or the removal of the input credit on used goods, something that constitutes $60 billion to $80 billion a year in the economy. That will take money out of people's pockets. That kills jobs.

There are all kinds of things the government can do to stop killing jobs and to start creating jobs. It has to stop raising taxes. It has to start moving toward a balanced budget, and not at a snail's pace. It has to announce a date. All the provinces have either balanced their budgets or at least have a plan to balance their budgets. The federal government has not even announced a date. It has not even acknowledged there is a problem.

If people judge the strength of the finance minister and the government by their ability to wrestle down the deficit, these guys come in dead last. They are weak kneed. They cannot meet the challenges.

We say to people to get on the government. Tell it that it has to balance its budget. Tell it that it has to start dealing with the deficit and debt.

One of the things that has to happen when the budget is finally balanced is that the government will have to start lowering taxes. Ontario is lowering taxes. Alberta is lowering taxes. Saskatchewan and Manitoba are lowering taxes. All the provinces are lowering taxes. They are creating jobs. What is the federal government doing? It is killing jobs. It is raising taxes. It is destroying opportunity.

The bill is only the tip of iceberg. Not only is the bill a bad piece of legislation, we say the government has not done the other things which need to be done to create jobs.

We say to the government that its challenge is not to tinker with Bill C-12, its challenge is not to tinker with unemployment insurance, its challenge is to fix it. Quit fooling around and create an employment system which will actually provide incentive for people to go out and get jobs instead of killing incentive. The government's challenge is to balance the budget and to lower taxes. That is what Canadians want and that is what they deserve.

Ms. Marlene Catterall (Ottawa West, Lib.): Mr. Speaker, the hon. member was complaining about tax increases during previous federal budgets. He is right. We have eliminated some tax breaks and subsides to business.

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We responded to demands from Canadians for more fairness in the tax system and more balance. One in particular is generating a lot of revenue. The hon. member may remember that Canadians were quite incensed that at a time of a depressed economy, at a time of dropping employment the banks were recording record multi-million dollar profits. He may recall one of the tax increases of which he is complaining was a surtax on those very bank profits.

Perhaps the member will remember as well the difficulties small businesses have been complaining about in their dealings with banks and service charges which consumers are complaining about. He may wish to tell Canadians whether the Reform Party does or does not support the surtax on multi-million dollar bank profits.

Mr. Solberg: Mr. Speaker, I thank the member for her question. The member raised the issue of surtaxes on banks and in the same breath spoke of service charges.

I wonder if the hon. member can tell me if she thinks the surtax raised service charges for small businesses or lowered them. Did the proceeds from that surtax get passed on to Canadian taxpayers or did they simply go to fund ever rising interest payments on the debt?

In both cases the consumer got nailed. Those surtaxes came back to people in the form of higher service charges, higher interest rates. That is how the banks made up the difference. Because the federal government has been so slow to pay down its debt and allows anything that comes in in the form of revenue to simply be spent right away, we are paying more because it has waited so long to deal with the debt and the deficit problem.

The Speaker: There are a couple of minutes left and the hon. member can take another question after question period. It being about 2 p.m., we will now proceed to Statements by Members.

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