NEWS RELEASE  

February 28, 1995    For Immediate Release 

LIBERALS MISS ANOTHER OPPORTUNITY TO OVERHAUL THE UI PROGRAM  

"Government ignores their own studies which show UI keeps thousands unemployed."  

Ottawa - Garry Breitkreuz, MP for Yorkton-Melville criticized Finance Minister Paul Martin for continuing the pattern of failure perfected by Human Resources Development Minister Lloyd Axworthy. Breitkreuz said, "The UI program is so poorly designed that somewhere between 64,000 and 448,000 workers are unemployed because of it. Reports prepared by Axworthy's own department show the UI program causes unemployment. Using the range of estimates provided in the government report, it means that instead of a current unemployment rate of 9.7% it should be somewhere between 9.2% and 6.2%. 

Axworthy failed to address this problem and clearly Martin is following Axworthy's bad example. Both Ministers chose not to follow the advice previous Royal Commissions and the Auditor General's 1994 report to remove or reform the elements of the Unemployment Insurance Program that are creating dependency on the system and costing Canadian taxpayers billions. 

Breitkreuz compared the Liberal plan with Reform's Taxpayers' Budget released last week, "In this budget, the Liberals are promising to have a plan in place no later than July 1, 1996 which will reduce the overall size of the unemployment insurance program by a minimum of 10%. The government estimates that this half-hearted measure will save a measly $700 million in 1996/97 out of a program which costs almost $18 billion a year." 

The Taxpayers' Budget on the other hand provided both a short-term plan to dramatically overhaul the UI program to return it to a true insurance program and a long term plan to replace UI with a Registered Personal Security Plan. Breitkreuz described the short-term changes proposed by Reformers, "We believe the UI fund should be administered by the employees and employers who pay the premiums and non-insurance related functions would be removed from the UI program such as paternity and maternity benefits. Regional differences in benefit structures and eligibility criteria would be eliminated. Qualifying periods would be lengthened and benefit payouts reduced. The maximum period for collecting UI benefits would be reduced from the current 50 weeks to 25 weeks. Repeat users of UI would face declining benefit payouts for each additional claim they submitted. This is how you eliminate dependency on unemployment insurance," exclaimed Breitkreuz. "Not by half-hearted, half-baked plans that are doomed to fail because they lack courage and vision." 

Breitkreuz continued, "UI premiums and CPP premiums are two of the biggest job destroyers in this country because they tax payrolls, workers and jobs. Reformers proposed in their budget to apply any additional savings from the restructuring of UI be passed on to workers and employers in the form of premium reductions which would create jobs. Liberals propose to put more money into make-work projects and institutionalized training programs which have proven to be as big a boondoggle as the flawed Unemployment Insurance program," pointed out Breitkreuz. 

"Reformers are prepared to also consider equalizing UI premiums so employees and employers pay the same premium rate rather than have employer's paying 40% more than the workers they employ. This would create jobs not destroy them as the current UI program does," said Breitkreuz. 

"The greatest failing in Martin's budget is that he repeats Axworthy's mistake by failing to lay out a long term plan for the reform of the Unemployment Insurance Program. The MacDonald Commission, the Forget Commission and the Auditor General have all described in painful detail how the system has to be reformed. Instead of ignoring these reports, Reformers have accepted this challenge and propose to investigate the possibility of replacing the UI program with a Registered Personal Security Plan(RPSP). Under this innovative plan, UI premiums could be redirected into a personal security fund similar to an RRSP which could then be withdrawn in periods of unemployment. The major advantage of this type of system," explained Breitkreuz, "Is that funds would remain with individual workers for their own benefit and would not disappear into government operations. Funds in each worker's RPSP would be rolled into retirement funds when the holder retired." The table below shows how many more weeks of unemployment protection workers could receive by investing in their own future security program. 

Breitkreuz encouraged all Canadians to closely examine and compare the Liberal Budget with "The Taxpayers' Budget. "I ask all Canadians to make up their own minds about which budget best reflects the long term solutions necessary to balance the budget, put Canada back in business and Canadians back to work." 

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For copies of both budgets please call: 

Yorkton: (306) 782-3309 

Ottawa: (613) 992-4394