Bill C-269 (Historical)

An Act to amend the Employment Insurance Act (improvement of the employment insurance system)

This enactment makes a number of amendments to the Employment Insurance Act. Specifically, it
(a) reduces each qualifying period by 70 hours;
(b) increases the benefit period;
(c) increases the rate of weekly benefits to 60%;
(d) repeals the waiting period;
(e) eliminates the presumption that persons related to each other do not deal with each other at arm’s length; and
(f) increases the maximum yearly insurable earnings to $41,500 and introduces an indexing formula.

Speaker's Ruling

[The Speaker, Peter Milliken]

I am now prepared to rule on the point of order raised by the hon. Government House Leader on Thursday, September 21, 2006, concerning the requirement for a royal recommendation for Bill C-269, An Act to amend the Employment Insurance Act (improvement of the employment insurance system), standing in the name of the hon. member for Laurentides—Labelle.

I would like to thank the hon. government House leader for having drawn this important matter to the attention of the House. I would also like to thank the hon. member for Winnipeg Centre, the hon. member for Mississauga South, the hon. member for Roberval—Lac-Saint-Jean, and the hon. member for Acadie—Bathurst for their contributions on this point.

In raising his point of order, the hon. Government House Leader listed five grounds on which Bill C-269 infringes the financial initiative of the Crown: it reduces the qualifying period for benefits; it increases the weekly benefit rate; it repeals the waiting period for benefits; it increases the yearly maximum insurable earnings and it extends coverage of the Employment Insurance Plan to the self-employed.

The Chair has examined the bill carefully and I have concluded that all of these elements would indeed require expenditures from the EI Account which are not currently authorized. I note as well that the summary of the bill lists three further ends which, at first glance, appear to me to involve other increases to expenditures.

Such increased spending is not covered by the terms of any existing appropriation. Funds may only be appropriated by Parliament for purposes covered by a royal recommendation, as explicitly stated in Standing Order 79(1). New purposes must be accompanied by a new royal recommendation.

I would like to address a second question raised by the hon. members for Winnipeg Centre, Roberval—Lac-Saint-Jean and Acadie—Bathurst concerning the employment insurance account. In their interventions, they asserted that the funds in the account are paid by workers and employers and do not constitute government funds.

As Speaker, I of course remain strictly neutral on matters of public policy. I would however like to remind the House of the current status of the Employment Insurance Account. As I stated in a ruling on June 13, 2005 at p. 6990 of the Debates:

Sections 71 to 77 of the Employment Insurance Act establish the operation of the Employment Insurance Account as part of the Consolidated Revenue Fund. Amounts are paid out of the Consolidated Revenue Fund and charged to the Account—

As Bill C-269 envisages the expenditure of funds from the Consolidated Revenue Fund, I must rule that, on the grounds just enumerated, Bill C-269 requires a royal recommendation. I will decline to put the question on third reading of this bill in its present form unless a royal recommendation is received.

Today's debate, however, is on the motion for second reading, and this motion shall be put to a vote at the close of the current debate.

It being 11:05 a.m., the House will now proceed to the consideration of private members' business.

Resuming debate, the hon. Parliamentary Secretary to the Minister of Veterans Affairs.

The House resumed, from September 21, consideration of the motion that Bill C-269, An Act to amend the Employment Insurance Act (improvement of the employment insurance system), be read the second time and referred to a committee.

Human Resources and Skills Development—Main Estimates 2006-07

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Mr. Chair, unfortunately, a question has been raised on a certain matter and the minister talks about something else.

I am not talking about older workers at all. There are also younger people who are unemployed. It seems the minister must verify that, as well.

Does the minister agree with the notion of increasing EI benefits, which are currently 55% of income earned, to 60%? Does she agree with this proposal in Bill C-269? Does she understand what I am talking about?

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Mr. Chair, I believe the minister is the only one who does not know that there is a surplus in the EI fund. This year, the total is $2.118 billion. Over the past 12 years, year in and year out, there has been an annual surplus of between $2 billion and $7 billion.

I urge the minister to familiarize herself with the situation. I understand that she does not want to promise here today to create a separate employment insurance fund. That would involve reneging on some campaign promises.

Since the minister does not know if there is a surplus and does not know what approach to take regarding the EI fund, I would like to talk about improvements to employment insurance.

The Bloc Québécois introduced Bill C-269, which would improve the EI system. Among other things, the Bloc proposed a minimum of 360 hours worked to be eligible for employment insurance. Do you agree with this number of hours?

Employment Insurance Act

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Mr. Speaker, the bill before us, I will recall for the benefit of the people watching us today, increases from 15 to 50 the maximum number of weeks during which benefits may be paid for illness, injury or quarantine. Actually part of the title of this employment insurance bill is “benefits for illness, injury or quarantine.”

I indicated a while ago that we are delighted that a Liberal member of Parliament has tabled this bill. This shows some progress concerning the understanding of the issue and probably the degree of compassion we may feel for people who are victims of illness, a work accident or quarantine for contamination or some other reason.

The Bloc has worked constantly with a view to improving the employment insurance program, as our colleague indicated awhile ago. Since 2005, many measures have been proposed in the House, most of which have been rejected, particularly by the government then in place. We were hoping for progress of course with this new government in order to improve the situation of people who have the misfortune of being away from work because of illness, accident or quarantine.

One of the proposed measures appears in the recommendations of the Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities, namely recommendation 27. It reads as follows:

The Committee recommends that the government study the possibility of extending sickness benefits by 35 weeks for those who suffer from a prolonged and serious illness.

In other words, with an extension of 35 weeks beyond the 15, we get the 50 weeks proposed by our colleague in his bill.

It is interesting to note, however, that the Liberals are suddenly becoming concerned about unemployment. I do not particularly wish to attack the member, because he took this initiative, but my earlier question was to this effect: how is it that once a party in government is defeated it suddenly becomes sensitive to such situations? Actually the context, that is, the workers’ situation, was the same barely a year ago, when we submitted this recommendation to the Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities.

The Bloc Québécois has always been in favour of a substantial improvement to the entire employment insurance program, which of course includes amendments to the number of weeks of sick leave for absences caused by illness, accidents and quarantine.

The following is a history of the last two years. I want to remind the House briefly to provide some context.

On November 15, 2004, our colleague, the hon. member for Trois-Rivières, introduced Bill C-278 proposing those improvements to the system. The party in power at the time, the Liberals, opposed royal assent.

On December 13, 2004, Senator Pierrette Ringuette, a member of the Task Force on Seasonal Work appointed by the Prime Minister of the time, issued her dissenting report entitled “Dissent and Distress”, a very meaningful title in view of the situation facing the unemployed.

On December 16, 2004, the Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities issued the first part of its report with the recommendations I just mentioned. This report was completed on February 15, 2005 and contained 28 recommendations.

On February 23 of the same year, the then Minister of Human Resources announced three minimal new measures to try to mitigate the problems facing regions that suffer from what is commonly called the seasonal gap or black hole.

Finally, on April 15, 2005, the Bloc Québécois introduced Bill C-280, An Act to amend the Employment Insurance Act (Employment Insurance Account and premium rate setting) and another Act in consequence, which my colleague from the Basse-Côte-Nord sponsored. The purpose of this bill was to create an independent employment insurance fund.

I remember the Conservatives promising during the last election campaign to create this independent fund, but they still have not done it.

In May of this year, the Bloc introduced Bill C-269, An Act to amend the Employment Insurance Act (improvement of the employment insurance system), to change employment insurance. I hope that our colleagues will vote in favour of this bill, and I hope that the Conservatives will not invoke royal assent this time.

More recently in October, this week in fact, we introduced Bill C-344, An Act to amend the Employment Insurance Act (Employment Insurance Account and premium rate setting) and another Act in consequence to create and establish an independent fund.

As can be seen, the Bloc has never stopped demanding improvements to the independent employment insurance fund. But all we have ever received are systematic refusals from each succeeding government.

I would like to return to how much we need the bill we are discussing and describe the situation in which people find themselves when they must be absent for the reasons covered by the bill.

In 2004 and 2005, the number of applications for sickness benefits increased by 0.1% to reach 294,350. Total sickness benefit payments increased by 4.5% to reach $813 million, while average weekly sickness benefits were $285. Hon. members talked about the costs earlier, although they have not changed very much.

People do not live very comfortably and do not go to restaurants very often on this amount of money. There was a 1.7% increase in comparison with 2003 and 2004. The average number of weeks over which sickness benefits are paid has remained relatively stable over the last few years.

During the years I mentioned, claims for sickness benefits have decreased among men. This is interesting to note because it allows us to see who ends up in certain situations and who has to stop working because of an illness or an accident. Those who are most vulnerable—either in terms of the insecurity of their employment or their working conditions—are women and older workers. During that time frame, this decreased by 1.2% in men and increased by 1.1% in women, even though the proportion of women who filed claims for sickness benefits remained relatively stable in 2004-05.

Women continued to file the majority of the claims for this type of benefit, at 59%. Claims for sickness benefits decreased by 2.8% among young people 15 to 24 and by 2.9% among workers 25 to 44, whereas they increased by 3.5% among workers 45 to 54 and by 7.1% among workers over 55. This confirms what I just said: certain categories of workers are more vulnerable than others because they are put in more precarious situations to do their work.

In closing, since I have just two minutes remaining, I want to reiterate that the bill currently before us is important. I am calling on the Conservative Party, which is now in power and whose attitude toward workers has been consistently insensitive, to take the next step.

This time, at least let the House vote on this bill without demanding a royal recommendation.

Hazardous Materials Information Review Act

[Marcel Lussier, Bloc, Brossard—La Prairie, QC]

Mr. Speaker, I am especially pleased to speak to Bill S-2, since the area of hazardous materials was my concern for several years in my career as a health and safety engineer for Hydro-Québec. I even brought with me the guide my colleagues and I prepared on managing hazardous materials.

The Hazardous Materials Information Review Act is governed by a board. This large board is made up of 18 members, including 2 workers, a supplier, an employer, a federal government representative and 4 to 13 representatives from the provinces and territories.

This large board is part of the framework of WHMIS, which stands for Workplace Hazardous Materials Information System. WHMIS participants and stakeholders can be divided into four main categories. First are the suppliers and manufacturers. Next are the workers who handle the products. Third are the employers or industries that purchase the products. Finally, there are the provincial, territorial and federal governments that monitor the system.

WHMIS, the information system, must provide workers with all the health and safety information they need to handle hazardous materials without any risk to themselves, their neighbours, friends or colleagues, and in order to avoid all dangerous situations for pregnant women.

Information on the use of hazardous materials in the workplace is provided in two ways. First, information appears on the label. All containers must have an identification label. If a label identifying a product is damaged, covered or illegible, the worker has the right to refuse to handle the container and its contents, and can have the contents verified by the manufacturer, if the manufacturer is identified on the label. Otherwise, the product is disposed of in a safe manner.

The second is the material safety data sheet, which must be kept in a catalogue accessible to everyone at all times. It is important to emphasize “at all times”. Regular drills must be conducted to verify the storage location of the binder or catalogue. The MSDS must also be kept up to date and must be accessible to workers. This means the catalogue or MSDS cannot be locked up in a supervisor's office or someone else's office. All of these details must be discussed regularly during mandatory workplace health and safety meetings.

Careful attention must be paid to making new employees aware of health and safety regulations because they must know where catalogues are located and be familiar with all of the products they will be using in the workplace.

What information does the MSDS provide? First of all, it lists dangerous ingredients and, if applicable, toxic products. Second, it details the health and safety risks associated with using the product. Third, it describes product-handling precautions. Fourth, it recommends the first aid to be given in cases of accidental exposure, such as ingestion, skin contact or inhalation.

Anyone who cares about the environment will be careful when disposing of large quantities of these products and will know how to respond appropriately in case of accidental spills in sewer or storm drains or in sensitive environments, such as lakes and reservoirs, wetlands or other vulnerable ecosystems.

Bill S-2 proposes three changes. I have read the speeches given by the senator and other senators during debate in the Senate. I hope that there will be no questions insinuating that I have cribbed from the senators.

Trade secrets represent the first major change. In my opinion, there has to be a certain balance between the right of workers and employers to have complete information about the use of hazardous products and the industry’s right to protect trade secrets, patents, contents and components, which competitors could use to their advantage.

The Hazardous Materials Information Review Commission will therefore have the power to grant exemptions to protect genuine trade secrets of manufacturers and distributors of hazardous products. The commission will review claims for exemption. As well, the required health and safety documents will be filed, and manufacturers will also be asked to provide documents of an economic nature. Those measures will protect the confidentiality of the information and will also eliminate the financial consequences of disclosure of the documents.

The second amendment to the existing act allows for voluntary correction of material safety data sheets and labels where the Hazardous Materials Information Review Commission determines that they do not comply with the act. This is a new procedure. There is also a third amendment proposed in the bill, to improve the appeal process.

The Bloc Québécois supports the principle of Bill S-2 and believes that when it comes to hazardous materials it is crucial to keep worker safety in mind. We also believe that this essential effect must be the basis of all decisions made. The Bloc Québécois notes that there is unanimous support for the amendments to the Hazardous Materials Information Review Act set out in Bill S-2 among the members of the commission’s governing council, that is, among the participants I identified earlier: industry, workers and governments.

The Bloc Québécois supports Bill S-2 so that the amendments that the leading stakeholders in those groups have called for can be enacted. In everything it does, the Bloc Québécois seeks to protect working men and women, and that is why it has introduced Bill C-257 to ban the use of replacement workers. There is also a bill on preventive reassignment on the order paper, the purpose of which is to provide women in Quebec who work in undertakings under federal jurisdiction with the same benefits in respect of preventive reassignment as other working women in Quebec.

A third bill, Bill C-269, to improve the employment insurance system, is one such law that affects working men and women. I would remind you that the Bloc Québécois also had the throne speech amended to incorporate an income support program for older workers.

The Bloc Québécois will be supporting Bill S-2.

Employment Insurance Act

[France Bonsant, Bloc, Compton—Stanstead, QC]

Mr. Speaker, it is important to amend the Employment Insurance Act, for this legislation has been hijacked from its primary purpose. Employment insurance is no longer the insurance it was originally supposed to be: it has instead become a disguised tax by successive governments. The Bloc Québécois bill is therefore designed to amend the Employment Insurance Act and make it true insurance, insurance for people who really need it.

In my riding of Compton—Stanstead as elsewhere in Quebec, working-class groups, unions, employers, citizens, and all stakeholders want to improve access to employment insurance and improve the system.

Here is an example. The passage of this bill would remove the two-week waiting period between the loss of a job and the start of employment insurance benefits. This waiting period is unnecessary and above all unfair to employees who are not responsible for losing their job.

In December 2004, in my riding, many employees had a nasty surprise when they saw their jobs go up in smoke—literally—because the Cabico plant in Way's Mills burned down. Those employees, victims of a disaster, were forced to wait two weeks with no income, sometimes for both of a family’s providers, because that is what the waiting period required. Those workers from Coaticook, Magog, Barnston, Way's Mills, Sainte-Catherine-de-Hatley and the other neighbouring villages never saw it coming, but they had to pay the price. They could not foretell that fire would take away their jobs, but they had to face this waiting period which nothing can justify.

Those Cabico employees are not the only victims of the system who wait two weeks before receiving employment insurance. For all EI claimants have to wait, and those two weeks are often too long.

Think for a moment of the young single mother who has to figure out her budget to the dollar when she has no income for two weeks. Think also of those seasonal employees who in addition to having a few months’ income during the year also have to wait two weeks without pay. Think of the workers on minimum wage who live under the poverty line and on top of that go through the waiting period after losing their job. This sort of job, which depends on the low wages it pays, is the most uncertain and the quickest to disappear when the economic situation gets tougher. These are the people for whom the Bloc Québécois is working; it is for them that we want to abolish the waiting period.

Eliminating this waiting period is not the only change proposed in the bill. To ensure an appropriate redistribution and a more suitable income for the unemployed, the Bloc Québécois wants to raise the weekly benefit rate from 55% to 60%.

In the Eastern Townships, no fewer than 10,000 industrial jobs have been lost in the last three years.

The employees of CS Brooks, now CSBS, in Magog, must fervently hope to keep their jobs during these difficult times for their venerable company because a drop of 45% in purchasing power is a very hard blow. These men and women know that the cost of their mortgage or of their groceries will not drop in the same way. That is the case for the employees of CSBS, but it is also the case for many other workers in my riding.

I want to return to those workers who are earning the minimum wage. Imagine trying to live on 55% of eight dollars an hour, Mr. Speaker. In Quebec that amounts to about $600 a month for an unemployed person. After paying the rent, there is not much left for food, for survival, for paying the hydro bill.

The weekly employment insurance benefit rate for these people should be increased by five per cent. At 60%, they would not necessarily live in luxury. At least, in the opinion of many employment experts it is a step towards finding a balance between responding to the needs of eligible unemployed workers and providing an incentive to work.

Providing an incentive to work also means giving an incentive to return to the labour market.

To do that, we must stop putting obstacles in people’s path. Bill C-269 seeks to eliminate the distinction between a new entrant and a re-entrant to the labour force.

At present a new entrant or a re-entrant to the labour force must accumulate 910 hours of employment to have access to employment insurance. It takes a long time to accumulate 910 hours for people who have often contributed to the welfare of our society in ways other than employment.

Let me take the example of a self-employed person. I have a sister who is the owner of a business. If she sells the business, she will certainly return to the labour force but she will have to accumulate 910 hours of work before having any kind of access to employment insurance. Even if she is in her late 40s, all the years she worked before acquiring her business will count for nothing. Yet, she has been a member of the labour force for more than 35 years. It is for people like her that we must eliminate the distinction between new entrants and re-entrants to the labour force.

The problem is the same for mothers. When a woman who left her employment to raise her children returns to the workforce, she must again work 910 hours before she is eligible for employment insurance. Under current legislation, it is a bad idea for a young mother to accept seasonal or part-time work only to return home to look after her child, when she knows that, in the end, she will not be eligible for employment insurance. The $100 a month offered by the Conservative program is certainly not nearly enough for a young mother to meet all of her own and her children's needs.

The members of another age group are also adversely affected by this discriminatory legislation and that is young workers. Statistics clearly show that the majority of people returning to the workforce are young people and women, and they must accumulate 910 hours of work before they are eligible for employment insurance, although EI requirements vary between 420 and 700 hours for other workers, depending on the area.

Lastly, the Bloc Québécois is proposing Bill C-269 so that employment insurance might no longer be a hidden tax, but rather a bona fide source of insurance once again.

As we all know, the previous government dipped freely into the EI fund to accumulate a considerable surplus. The current government is continuing in the same vein. It is using money that belongs to the unemployed to invest in priorities that have nothing to do with employment, particularly weapons and defence.

The surplus in this fund has been increasing constantly since the legislation was reformed in 1996. Since then, fewer contributors are now eligible for the program if they lose their jobs. Under current legislation, just under 40% of contributors today are eligible to receive this so-called insurance if they lose their jobs.

I would invite everyone who has some heart, who thinks of unemployed individuals in remote areas, to look into their hearts and their ridings, and to vote in favour of Bill C-269, introduced by my colleague from Laurentides—Labelle.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, Canadians should ask themselves when is insurance not insurance. The answer is clear: when it does not insure anything. For too many Canadians, that is the brutal reality of employment insurance.

For years the Liberal government let the system fall apart. It treated EI like tax revenue, let the burden grow, and at the same time began neglecting the benefits. We now have a system that is failing workers and failing the economy.

The United Nations has slammed Canada for this and so should all Canadians. Employment insurance today is a scam, pure and simple. It is a scam and a sham for most workers.

In Canada today, employment insurance is not insurance at all for the vast majority of workers who pay for it. In Canada today, employment insurance is a penalty. It is a burden. It is a cost with no return for most workers.

Over two-thirds of workers who lose their jobs are not eligible for benefits. They can pay the penalty as long as they are working, but cannot collect it when they need it. It is like telling them to pay for a house insurance policy, but if their house burns down, it is too bad. They will not get any insurance, they will not get anything back. That is a scam.

If an insurance company operated like that, we would expose it as a scam and close it down. The Government of Canada has been operating a scam and it is up to this Parliament to fix it. The people who get hurt the most by this insurance scam are the ones who can least afford it. They are the breadwinners whose children depend upon them, single parents, people who are trying to break the cycle of poverty, low-paid workers in service employment, young people who are trying to pay off their student loans, and older workers who have a tough time getting back into the workforce.

It should concern every member of this House, including the 80% of members who happen to be male, that women are very hard hit by this insurance scam. These are women who all too often have to work part time in low-paying jobs, women who pay the penalty but too often are not eligible for benefits two-thirds of the time. They pay the penalty and pay through the nose for child care, if they are lucky enough to find any. Yet, they get nothing in return if, heaven forbid, they lose their jobs.

Those who need the most get the least. This makes no sense at all. We are pushing people onto social assistance, onto welfare, rather than paying them what they are due.

Just today, I wrote to the Minister of Human Resources on behalf of a constituent, a citizen who lives in my riding of Trinity--Spadina. This man has a serious blood disorder which has prevented him from working since the end of June. He is finally getting a sickness benefit, but that will only cover him until the middle of October. If he still cannot work, he can apply for an extension, going through all the paperwork again and providing the medical evidence, but even then the maximum he would get is 15 weeks and after that, nothing at all.

This constituent told me very clearly that his medical condition is really serious. It is unlikely that he will be able to work for an extended period of time, but all he can get is sickness benefits, not even regular benefits. Why? He needs to accumulate 665 insurable hours to be eligible for regular benefits. This man did his best, with his ailment and against all odds, and made it to 639 insurable hours, just 26 hours or three working days short. That means it is too bad, he will get no regular benefits. He is unlikely to ever string together enough working days at a time to be eligible.

He made a contribution to the economy by working, paid his EI and taxes. We take whatever we can and give him a few weeks of sickness benefits, and then what? What will the government do?

At the end of the day he will probably be accused of being a burden on society. This is like his house being burned down or his car getting smashed and not having insurance coverage even though he paid for the policies. It is just adding insult to injury. It is a scam and it is really unfair.

What does the employment insurance program mean, every member of the House should ask? We either give coverage to workers or we do not. If we give insurance coverage, let us ensure that everyone gets the benefits. That is what insurance coverage is for. Let us stop penalizing workers who need employment insurance and pay their dues. Let us start supporting them by making good on the insurance coverage. That is what all workers need, the safety net of insurance. These people are not asking for a handout. They are asking for a payout on the insurance coverage.

We should stop this scam, this extra penalty on workers, because it is unfair, unjust and unethical. If the House fails to pass this private member's bill and allows this practice to continue, then the government should probably be closed down and sent packing for conducting an insurance scam. That is what it is, a scam.

We have the opportunity to start reforming the system with this bill today. We can start fixing the system and providing benefits for workers who lose their jobs or become incapable of working through no fault of their own. That is what we have to do. EI payments should never be seen as a handout, just like house insurance or life insurance is never seen as a handout. The policies were paid for completely by hard earned dollars from working Canadians. Governments have been raking in this money in shovels full and we should not ask the people to grovel for it.

Actually, it is worse than a scam because people have no choice. They cannot shop around to get another employment insurance company somewhere else. They are stuck with the Government of Canada, the only game in town, so let us start by honouring those commitments and providing the protection we need. Let us support Bill C-269 and amend the Employment Insurance Act.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I am pleased to participate in the debate on Bill C-269 which would amend the Employment Insurance Act in very substantive ways. Let me address a couple of things raised by the member for Acadie—Bathurst relating to royal recommendation.

As the member is aware, on May 31 the Speaker announced that this bill, along with nine other private members' bills on the order paper, would require a royal recommendation and that in the absence of a royal recommendation or approval from the government, there would not be a final vote at third reading, although the bill could proceed through all stages. On this bill a royal recommendation has been flagged as being very likely. Under the very strict rules, appropriation of government revenue requires a royal recommendation. On that basis, we would have to amend the BNA to get around it. This bill is not reparable in its same form.

Having said that, the bill is an important instrument of this Parliament. Questions have been raised for many years by many members throughout the House through private members' bills and in other debate.

Members will know that during the Brian Mulroney years of government, the EI fund was really a fund. Moneys contributed by employers and employees were actually put into a separate account. The premiums went in and the benefits went out and there was the balance. The rules of the game also specified that two years of surplus were required in the account to deal with a possible recession which could use up two years' worth of premiums. That is why this benefit was established.

If we look at the history we would find that the EI fund went into a $12 billion deficit. More benefits were paid out than premiums were paid into the account to provide benefits. The government basically had to finance it on the side.

The Auditor General basically said that these were government programs. Revenue was coming in from employers and employees for insurance. Revenue was coming in for a service which would provide some level of protection for employees. The Auditor General said that the government could no longer have this separate fund, which at the time was called the unemployment insurance fund. It was the same with the Canada pension plan which was also separately dealt with from government revenues.

The Auditor General said that this thing went all over the place. Because government programs can change for benefits under EI, the EI fund had to be put into the government's general revenue fund and it would be included in the determination of surplus or deficit in the government's fiscal year. Basically it was said that this was government revenue and these were government programs.

The member for Acadie--Bathurst and others have basically said that the government has no money of its own, that it really is taxpayers' money and those who pay premiums. We understand that. It is also, in terms of consideration, providing services that the Government of Canada is supposed to provide. The member may want to look at his own income tax returns. The premiums that an employee pays on EI are also eligible for a non-refundable tax credit. The government subsidizes it, similar to the CPP.

The member is shaking his head “no”. I can tell the member, as a chartered accountant, that he does get the same non-refundable tax credit that he gets on the basic personal exemption on the premiums paid for CPP and EI. Additionally, corporations which have to pay 1.4 times the EI premiums get to deduct the premiums they pay. It is part of the cost of doing business.

The Government of Canada in fact is also subsidizing the moneys paid by the employers. So it is not fair to say it belongs totally to the employees and the employers. The Government of Canada in fact has subsidized them through the tax system. Let us get that straight.

The legislation that guides the EI program provides that if there are more than two years of surplus there is a committee that recommends annually the premiums to be set. The legislation that guides this notional EI fund is still kept track of, but there is no separate bank account. It is in the general reserve. It says that there are two ways of dealing with the surplus in excess of the two-year surplus. First, is to reduce premiums; and second, to improve programs.

I can say for my own selfish reasons and advise the House that we raised the period of maternal and parental leave to a full year from six months and that was my private member's item. I am very proud of it because a lot of moms and dads have taken advantage of this opportunity especially during the first year of a child's life which we all know is very important.

There are ways to deal with this and this is the time to do it. Because of the robustness of the economy and the employment sector, no matter how much we are reducing the premiums and introducing programs, we still have to be responsible. The EI fund continues to remain at high levels. Now is the time since there is a royal recommendation requirement on this bill.

I would encourage all hon. members to support this private member's bill to go to committee, to hear from the officials and the experts about our strategy to deal with this, and why it is that we cannot enhance the benefits as proposed by the member? What would it cost?

The member does not have the tools to cost out such a complicated reconfiguration of the benefit program of EI, but the department has the resources. Why do we not find out what those are? Let us find out what this kind of thing would actually cost and let us find out if it would allow the retention of at least two years of surplus on a sustained basis so that we do not run afoul of the legislation of the land.

This issue that is facing us is important to Canadians. It is important to businesses, it is important to workers. It is important to parliamentarians as well for the simple reason that within our communities there are people who need the benefits of the programs.

We also know that the vast majority of employees who pay into the EI program through their entire working careers never collect one cent of EI benefits, and that is a good thing. It is actually the vast majority of people who have funded the EI fund who are never going to get a benefit out of it and they are very happy not to have to draw benefits.

However, there are people within our system, whether they be seasonal workers, whether they be people who are in industries which have run into distress, whether it be people who have lost their job because of downsizing or whatever it might be. We know that those employees need the help and that is why this EI program is so extremely important to Canadians because it really does help those most in need.

I believe that the debate should be carried on. Private members' hours are two hours of 10 minute speeches. That will not do this subject matter justice. I encourage all hon. colleagues and I am certainly going to encourage my own caucus colleagues to support Bill C-269 at second reading and get it to committee, so that we have the time to hear from appropriate witnesses and to fully express the positions of all of the parties.

[Lynne Yelich, Conservative, Parliamentary Secretary to the Minister of Human Resources and Social Development]

Mr. Speaker, I welcome the opportunity to discuss the employment insurance program and examine the issues raised by the member for Laurentides—Labelle.

Before commencing, however, I would like to point out that many issues raised in Bill C-269 were raised in the Standing Committee on Human Resources, Skills Development, Social Development and the Status of Persons with Disabilities report, for which the government will table its response in the very near future.

The government is committed to ensuring that its programs respond to the realities of the Canadian labour market. In this regard, it is important that program changes, including those to the EI program, be founded on sound analysis of evidence.

Equally important, is that careful consideration be given to labour market impacts and the costs of individual measures.

To inform decision making on any potential EI changes, the government draws upon extensive monitoring, assessment and evaluation of the program.

In addition, EI pilot projects can be utilized to assess the labour market impacts of new approaches before permanent changes are considered. Currently, a number of pilot projects are in progress testing the efficiency of measures to address many of the issues referenced in Bill C-269.

Bill C-269 proposes fundamental changes to the Employment Insurance Act, changes so fundamental that they would represent a substantial program expansion, requiring considerable preparatory work and sound analysis. Before contemplating such extensive measures, it is important that we examine each of these proposals individually and, most important, look at their overall impact.

Bill C-269 would reduce the number of hours required to qualify for EI to a flat 360 hours of work, regardless of the regional unemployment rate.

The EI program's variable entrance requirement is designed to help provide adequate program access across the country and is adjusted monthly to reflect unemployment rates by region. The higher the unemployment rate is in a particular region, the more difficult it is to obtain work and to accumulate the necessary hours to qualify for EI.

Evidence indicates that the variable entrance requirement, as compared with a fixed entrance requirement, as proposed in this bill, has played an important role in equalizing the percentage of individuals who meet EI entrance requirements across unemployment rates.

While I would not presume to speculate on the reasoning behind the proposed fixed entrance requirement, some have argued that the qualifying period should be reduced because they claim that fewer than 45% of unemployed receive EI benefits in some parts of Canada.

This is a misleading way to look at the statistic and is a flawed measure of EI access across Canada, for this statistic includes those who have not contributed to the EI program by paying premiums, such as individuals who have never worked or who are self-employed.

For the record, 80% of unemployed people who pay into EI and who become unemployed, through no fault of their own, are eligible to receive EI benefits.

It is important also to remind the House why there is a 910 hour entrance requirement for new labour market entrants and those re-entering the workforce after an extended absence from the workplace.

The objectives of these measures are to ensure that those accessing insurance based income support have demonstrated significant workforce attachment as to prevent a cycle of reliance on EI while also strengthening the relationship between hours of work and benefit entitlement. I would note that this requirement does not apply if an individual has worked at least 490 hours in the year prior to the qualifying period of this claim.

According to successive monitoring and assessment reports, the objects of this policy are being achieved as these reports suggest that the current entrance provisions are encouraging workforce attachment.

Nevertheless, in areas of high unemployment, a pilot project was initiated to test the labour market impacts of reducing the hours of work new entrants and re-entrants required to qualify for EI benefits from 910 to 840 when linked with employment programs.

With respect to the bill's proposal to substantially increase EI benefit entitlements, overall evidence continues to indicate that the duration of EI benefits is sufficient for the majority of claimants. On average, individuals use less than two-thirds of their EI entitlement before finding employment. Even more telling, only a small percentage of claimants entitled to 45 weeks of benefits use all the weeks available to them.

Observers have noted, however, that certain individuals in seasonal industries may face an income gap when their EI claim runs out prior to returning to their seasonal job. Consequently, this past June our new government announced the extended EI benefits pilot project. The pilot project provides access to five additional weeks of benefits to EI claimants in high unemployment regions, up to a maximum of 45 weeks. The pilot project will test whether providing additional benefits has adverse labour market effects and whether it effectively addresses their income gap.

Bill C-269 also proposes to increase benefit levels by raising the maximum insurable earnings, or MIE. In 2001, it was determined that the annual MIE would be frozen at $39,000 until the average industrial wage increased to an equivalent level. The impetus of this decision was the fact that the MIE was substantially higher than the average industrial wage and, as such, could act as a disincentive to work. The same rational applies today.

The bill before us today also proposes raising benefit rates from 55% to 60% of average weekly insurable earnings. The current 55% EI benefit rate is designed to strike a balance between providing adequate temporary income while maintaining work incentives. Evidence indicates that the current benefit rates meet the needs of unemployed workers and in fact only 12% of those who become unemployed show a drop in household spending one year after a job separation.

Bill C-269 also proposes to eliminate the two week waiting period. The waiting period of the co-insurance feature of EI is similar to the deductible of other insurance plans in that it serves to eliminate short claims that individuals are able to cover and makes sure that insured persons absorb some of the costs of the employment interruption. While employees bear the cost of the two week waiting period, this is offset in that they pay a lower premium than their employers.

Turning to the issue of arm's length employment arrangements between relatives, section 5 of the EI act states:

Insurable employment does not include

(i) employment if the employer and employee are not dealing with each other at arm’s length.

This provision ensures that conditions of employment in family businesses are similar to those who have only an employee-employer relationship. We should recognize that in the overwhelming number of cases 92% of family member claimants are able to meet this requirement.

To summarize, Bill C-269 proposes fundamental and far-reaching changes to the EI program, changes that could potentially cost over $2 billion annually. Even more important than the financial considerations is the fact that Bill C-269 could very likely reduce work incentives at a period when the overall labour market is robust and, indeed, in many sectors there are significant labour shortages.

While the government shares the member's concerns for the unemployed, the evidence at hand suggests that supporting Bill C-269 would not be a prudent course of action. For this reason and for the points that I have outlined, we cannot support Bill C-269. I can say, however, that the government is committed to ensuring that the EI program continues to serve Canadians in an effective and timely manner as we continue to monitor and assess the program.

[Johanne Deschamps, Bloc, Laurentides—Labelle, QC]

Mr. Speaker, I thank the Conservative member for his question. It is quite pertinent. I would also ask the Conservative members if they support Bill C-269.

Not only is this the reality in Quebec, but it is representative of the experience of workers throughout Canada.

My colleague, who sits on the Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities, carried out consultations across the country. He heard from all groups and associations that advocate for and support workers, the unions and the Canadian Labour Congress. They all agree that the current Employment Insurance Act absolutely must be overhauled.

Whether Liberal or Conservative, we must concern ourselves with the fate of our workers in our ridings.

[Johanne Deschamps, Bloc, Laurentides—Labelle, QC]

moved that Bill C-269, An Act to amend the Employment Insurance Act (improvement of the employment insurance system) be read the second time and referred to a committee.

She said, Mr. Speaker, it is a great privilege for me to debate Bill C-269, a bill that I introduced in this House in May of this year.

The purpose of this bill is to improve the present employment insurance system, which the Conservative and Liberal governments have gradually distorted into a complex, unfair program that bears increasingly little resemblance to an insurance plan.

Enacting this bill will provide a lifeline for all workers in Quebec and Canada. That is why the government must have the political will to update the system before it does any more damage. It has ample resources to do this.

We should recall that, until 1990, the Canadian government contributed to the unemployment insurance fund. In 1990, however, Brian Mulroney's Conservative government destroyed that equilibrium by terminating the federal government’s contribution to the fund, leaving the entire funding of it to employers and workers. The withdrawal of federal funding created a major deficit in the fund at that time.

The government then tried to solve the problem by slashing the coverage that the system provided, cutting the benefits paid to unemployed workers and tightening the eligibility rules for workers. The effect of this was to reduce the number of people covered by the system by half between 1989 and 1997 and to create enormous surpluses in the fund. The federal government turned it into a slush fund that has accumulated over $48 billion dollars to date on the backs of workers and employers.

For more than 15 years, workers and employers have been the only contributors to the fund, and every year, the surpluses in the fund are swallowed up by a federal machine whose appetite knows no bounds.

In its present form, the employment insurance system is no longer a worker assistance program, it is a disguised tax, a tax picked from the pockets of the workers and employers of Quebec and Canada. The system was initially supposed to assist the workers who paid the premiums. It was an insurance policy, just like fire insurance, theft insurance, disability insurance.

The regions are suffering economically from plant closings and mass layoffs. Imagine what the effect on them will be when the employees who are laid off are also receiving no assistance from the system.

Add to that the millions of dollars in premiums paid by employers and employees. That is money Ottawa removes from the regions. We can understand the dire economic situation they are in at this time.

The government, be it Liberal or Conservative, manages the EI fund money as though it were its own. Do we need to remind that the surplus money comes from cuts made by the federal government?

Today, about 40% of people who lose their jobs manage to qualify for EI. That is 4 workers out of 10. The people the most affected by the federal government's reforms are the women, the young and the seasonal workers. Of course, they are the same persons who are the most dependent on the program because they occupy precarious and unstable jobs.

It is a shame. Older and seasonal workers, women and young workers who lose their jobs have contributed to the fund but will never receive one penny from it.

While workers get poorer because they do not have access to EI benefits, their families and their regions also get poorer. Depriving the unemployed workers of benefits for which they paid premiums during many years is also depriving the regions of Quebec and Canada of several million dollars.

In her November 2005 report, the Auditor General of Canada, Sheila Fraser, said there was an accumulated surplus of more that $48 billion. She also declared that the federal government had the obligation to respect the Employment Insurance Act and added that:

For the past six years, we have drawn Parliament's attention to our concerns about the government's compliance with the intent of the Employment Insurance Act, with respect to the setting of employment insurance premium rates and its impact on the size and growth of the accumulated surplus in the Employment Insurance Account. The accumulated surplus in the Account increased by an additional $2 billion in 2004–05 to reach $48 billion by the end of March 2005.

What is the government doing to respect this law and end the suffering afflicting thousands of workers in the regions?

Will the Conservatives care about redressing the injustice suffered at present by the workers, or will they also be tempted to help themselves to the fund as the Liberals did before them?

Will they put their American priorities ahead of their social responsibilities?

During the last election campaign, the Conservatives made a commitment to put in place an independent employment insurance program and to create an autonomous fund administered by employees and employers.

The House will recall that in the past the Conservatives agreed that any surpluses from the plan should be used to increase benefits and that the plan should be better adapted to the needs of Canadian workers.

They also supported the recommendations of the human resources committee whereby the plan would be reserved for the sole benefit of workers.

So, if they are consistent and true to their promises, they will support the Bloc Québécois’ bill, which everyone has been calling for for a long time.

Quebeckers and Canadians have the same expectations as far as the Liberals are concerned. If one day they hope to resume power, they should prove they are worthy of it and that they are listening to the people.

Perhaps the fact of finding themselves in the opposition will make them more attentive to the hardship faced by workers in their ridings.

With my colleague fromChambly—Borduas and the human resources and social development critic for the Bloc Québécois, I am visiting several regions in Quebec to hear, understand and better grasp the daily realities being experienced by those who have been hard hit by the present system.

I am talking obviously about the areas of Abitibi-Témiscamingue, Mauricie, Saguenay-Lac-Saint-Jean, Côte-Nord, Gaspésie-Îles-de-la-Madeleine, Bas-Saint-Laurent and Laurentides.

Some citizens from Mont-Laurier, in my riding, told me that, because they had to wait so long between the time they applied for benefits and the time they received their first cheque, they had to go to food banks or even sell some of their belongings in order to pay their regular expenses, such as rent, groceries and hydro bills.

A Côte-Nord agency said that from 70 to 75% of seasonal workers are women and that most of them have a hard time qualifying for benefits.

Seasonal workers, part-time workers, casual workers, on-call workers and contract workers are increasing in numbers, especially among young people and women.

All these categories of workers have increasing difficulty accumulating the hours needed to meet employment Insurance requirements.

Others told us about the fact that some voluntary departures are actually the result of employer harassment and that these people are not only psychologically shaken but face a loss of income as well.

In the Saguenay, all who spoke to us wanted the older workers assistance program back.

They said as well that in some parts of their region, it is impossible for people to accumulate more than 360 hours because of all the seasonal jobs in agriculture, forestry and tourism.

The system we had in the 1990s is no longer suited to today’s realities. That is why reforms are needed to help working people. It is time to give contributors what is due to them and stop looting the fund.

Contrary to what we might think, the statistics show that the unemployment rate has gone down since 1996, but in actual fact, it is the number of eligible claimants that has gone down.

The eligibility requirements are so strict that ever fewer workers qualify, and that translates inevitably into a reduction in the unemployment rate.

The rising number of independent and part-time workers also tends to falsify the results.

In my riding of Laurentides—Labelle, the economy is based largely on the forest industry, tourism and agri-food.

In the regional municipality of Antoine-Labelle alone, 62% of the people in the primary sector work fewer than 49 weeks a year, in comparison with 41% in Quebec as a whole.

The employee turnover rate is especially high, largely because the jobs are unstable and seasonal.

Another reality that must be factored in is the exodus of young people. Too often they must leave their home regions in order to pursue their education in large centres, and not many decide to return. The Bloc Québécois has always made employment insurance reform one of its priorities. Bill C-269 is intended to restore some fairness for workers in the way employment insurance benefits are delivered.

This bill aims in particular to:

reduce the qualifying period to a minimum of 360 hours regardless of the regional unemployment rate—this will eliminate the inequities between regions on the basis of their unemployment rates;

increase the benefit period from 45 to 50 weeks—in this way, we will be able to limit the effects of the gap or black hole, which currently leaves the unemployed suffering for sometimes as long as 10 weeks;

increase the rate of weekly benefits to 60% of insurable earnings rather than 55% as is currently the case—unstable jobs are generally the least well paid and these changes would provide claimants with a bare minimum;

eliminate the waiting period between the time when people lose their jobs and apply for benefits and the time when they receive their first cheques—workers should not be penalized for losing their jobs and their financial obligations continue, even if the money is late arriving;

eliminate the distinction between a new entrant and a re-entrant to the labour force—this practice is totally discriminatory, especially against young people and women whose work situation is typically less stable;

eliminate the presumption that persons related to each other do not deal with each other at arm’s length—it is not up to workers to prove their good faith when they lose their jobs, but it is up to the system to investigate if there is any doubt;

increase the maximum yearly insurable earnings from $39,000 to $41,500 and introduce an indexing formula—the current contribution formula is actually a regressive tax that affects low-income earners the most. It is worth noting that the maximum was once $43,000;

calculate benefits based on the 12 best weeks so as not to penalize seasonal workers who sometimes work small weeks; and finally,

extend program coverage to the growing number of self-employed workers in the labour market who have no coverage should they become unemployed.

In closing, I would like to remind the House that workers' and employer's groups, the Auditor General of Canada and the Bloc Québécois, and now even the UN, have criticized the federal government and its employment insurance program.

In an article that appeared in La Presse on May 23, it was reported that the UN Committee on Economic, Social and Cultural Rights

recommends that the State party reassess the Employment Insurance scheme with a view to providing greater access and improved benefit levels to all unemployed workers.

I feel I must emphasize the words "providing greater access", "improved benefit levels" and "all unemployed workers".

In closing, I would like to challenge the Conservative and Liberal members of this House to tell me in all sincerity that there is neither unemployment nor poverty in their ridings.

Can they truly say they do not believe there is any need for Canada to have an employment insurance program worthy of their fellow citizens, workers and employers?

Private Member's Bill C-269

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, regarding Bill C-269, one hopes that when you are taking this into consideration you would keep in mind that the money being talked about here is not the government's money. It may well be that Bill C-269 would constitute spending more of the EI fund in terms of benefits, but that money is solely money from employers and employees. The federal government stopped paying into the EI fund back in the 1980s under the old Tory government as it used to be. It is not the government's money that will be spent under Bill C-269.

I hope you can keep this very clear point as your primary consideration when you rule on this matter, Mr. Speaker. If it were government money, I would agree royal assent would be necessary, but in this matter the EI fund has no government money in it. It is 100% employer and employee money. Therefore, it should not need the type of royal recommendation being talked about.

[Rob Nicholson, Conservative, Leader of the Government in the House of Commons and Minister for Democratic Reform]

Mr. Speaker, on May 31, 2006, you invited members to comment on whether Bill C-269 would require a royal recommendation. Without commenting on the merits of this private member's bill, it is the government's view that this bill does in fact require a royal recommendation. This is because the bill would increase spending beyond that authorized by the current Employment Insurance Act and the royal recommendation which accompanied it.

In particular, the bill would change the authorization in the royal recommendation for the act by: one, reducing the qualifying period regardless of the regional rate of unemployment; two, increasing the weekly benefits rate from 55% to 60%, which would increase the costs of the program; three, repealing the two week waiting period, which would result in additional costs due to an increasing number of very short claims; four, increasing maximum yearly insurable earnings. Removing the link to the industrial wage increase in the original statute in favour of a flat rate, would increase government spending in a manner that is different than provided for by the original royal recommendation. Finally, it would add coverage for the self-employed who are not automatically insured against job loss under the EI program.

The financial issues for Bill C-269 are the same as for Bill C-278 from the 38th Parliament for which the Speaker ruled on December 14, 2004 that a royal recommendation was required. The Speaker ruled:

The improvements to the employment insurance program envisioned by this bill include the required minimum number of hours worked in order to qualify, lengthening the period that one can receive benefits, and, as well, increasing those benefits.

It is clear that such changes to the employment insurance program would have the effect of authorizing increased expenditures of public revenue. Inasmuch as section 54 of the Constitution, 1867, and Standing Order 79 prohibit the adoption of any bill appropriating public revenues without a royal recommendation, the same must apply to bills authorizing increased spending of public revenues. Bills mandating new or additional public spending must be seen as the equivalent of bills effecting an appropriation.

These arguments apply to Bill C-269 with respect to the provisions I noted earlier. Accordingly, I would similarly urge you, Mr. Speaker, to find that Bill C-269 also requires a royal recommendation.

Employment Insurance

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Mr. Speaker, in its February 2005 report, the Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities recommended an overhaul of the employment insurance program. In response to those recommendations, the Bloc Québécois introduced Bill C-269, which will be reviewed today in this House, in order to improve the employment insurance system.

The minister must realize that passing this bill would provide a permanent solution for real reform of the employment insurance system. Will she support the bill?