Skip navigation links (access key: Z)Library and Archives Canada / Bibliothèque et Archives CanadaSymbol of the Government of Canada
Français - Version française de cette pageHome - The main page of the Institution's websiteContact Us - Institutional contact informationHelp - Information about using the institutional websiteSearch - Search the institutional - Government of Canada website

Archived Content

This archived Web page remains online for reference, research or recordkeeping purposes. This page will not be altered or updated. Web pages that are archived on the Internet are not subject to the Government of Canada Web Standards. As per the Communications Policy of the Government of Canada, you can request alternate formats of this page on the Contact Us page.

Graphical elementGraphical element
Alone at the Top
The Path to Power
Leading Canada
Private Life
Graphical element
Graphical element
Banner: First Among EqualsRichard Bedford Bennett banner

Speech before the House of Commons, January 29, 1935


[page] 297

. . .

Mr. McINTOSH: Mr. Bennett thereupon moved for leave to introduce Bill No. 8, to establish an employment and social insurance commission, to provide for a national employment service, for insurance against unemployment, for aid to unemployed persons, and for other forms of social insurance and security, and for purposes related thereto. He said: It may be useful to make some explanation of the bill that I am about to introduce; or possibly the house is sufficiently

[page] 298

seized of its subject matter to dispense with any such statement. I am entirely in the hands of the house.

Some hon. MEMBERS: Go on.

Mr. BENNETT: The matter of course has been discussed for many years in this chamber. It has been the subject of discussion in provincial legislatures as well. Some of the provincial legislatures have expressed by resolution their approval of unemployment insurance; in other cases no action has been taken except the discussion from time to time. The whole problem of social legislation has, I think, engaged the attention of all the provinces from time to time, as well as of this house. It is now nearly four years since I stated that if this government continued to exist it would submit a measure of unemployment insurance for the consideration of parliament.

The question of jurisdiction I do not propose to deal with at greater length than I have already done this afternoon. It is my judgment that the parliament of Canada has jurisdiction with respect to this matter for the reasons I indicated. Those reasons spring from the duty which rests upon us to discharge our obligations under treaty to Canadian labour. They rest also upon the right of this parliament to legislate for peace, order and good government. They rest also upon the fact that legislation of this character affects international and interprovincial trade, and the maintenance of equitable relations between the provinces is undoubtedly affected by such legislation. In addition to that, if one were driven to it, the power to impose taxation is involved in the question of contributions. On all these grounds, and others that need not be discussed, I am clearly of the opinion, having regard to the decisions in the aviation case and the radio case, that this proposed legislation is intra vires. I might mention particularly the radio case in which there was a summary of the effect of all the decisions, notably the decision reached by the judicial committee in 1929 in the case from British Columbia, in which certain propositions were enunciated by the judicial committee which were approved, as I have said, in the latest decisions of that committee upon the cases argued there during the last few years. Therefore I do not propose to spend any further time in discussing that question.

On the broad problem of unemployment insurance it is hardly necessary to say to a house that is so well informed upon the subject as this that in the first instance the trades unions undertook the responsibility of providing unemployment benefits for their members. The out-of-work members of trades unions were provided with benefits from the union funds. I shall not waste the time of the house to go into that at any length beyond saying that as far as our records show, the amount thus disbursed by the unions in 1933 to members out of work was $198,490, a small sum. These arrangements of course were made between members of unions themselves. Apart altogether from these voluntary arrangements that had been made for many years by trade unions with their members, we have two other main classes, so we are informed by the books on the subject, the first being voluntary insurance based on what is generally known as the Ghent system because it was first successfully organized in that city. Under that system the government made a contribution to the trade unions; the trade union unemployment funds were thus supplemented by contributions from either the state or local authorities. Distribution to those out of work was under the control of the employees themselves, further sums being sometimes obtained from the employers to supplement their resources.

Then of course we have what we are now familiar with and have been discussing at some length this afternoon, namely compulsory unemployment insurance. This form of insurance implies contribution from employees, employers and the state. I discussed at some length this afternoon and will not traverse again the point that the very word "insurance" implies, that a sum is paid by some person or persons for the purpose of providing benefits. The extent of the payments to be made to secure the benefits depends of course upon the number that will claim upon the fund, having regard to the average number over a period of years, and to the sufficiency of the moneys that are provided from the sources indicated to meet the form of indemnity or benefit indicated in the terms of the contract with the persons who pay the premiums. The first great step in that direction as far as we are concerned was in Great Britain. The first mentioned system, however, still has its supporters; that is the system by which the state makes its contributions to the trade union funds and the trade union officers become responsible for the distribution of the moneys and benefits that accrue to the workers. For instance I find that in Belgium, Czechoslovakia, Denmark, Finland, France, the Netherlands, Norway, Spain, Sweden and Switzerland they

[page] 299

still have in vogue the system I have referred to as the first mentioned, that is with contributions by the state or community, whether the local community, a canton or a province, or the federal or national government, and the benefits disbursed by the trade union officials.

Compulsory unemployment insurance schemes are now in operation in Austria, Bulgaria, Germany, Great Britain and Northern Ireland, Irish Free State, Italy, Poland, Queensland (Australia) and Switzerland.

On this continent we have had one experiment tried on a rather comprehensive scale. It will be recalled that the state of Wisconsin a short time ago enacted an unemployment statute by which reserves are to be built up by contributions from the employers and their employees, administered by the state. That law came into force last year and is still in force. The Queensland scheme, to which the hon. gentleman referred this afternoon, I can pass by because I can add nothing to what he has already said. In Austria  --  and all these it will be noted have come into force since the war  --  wage earners, except those employed in agriculture or forestry, domestic servants, workers employed by several employers at a time, middlemen, workers in rural districts, except in building trades or establishments with more than five workers, rural workers temporarily engaged in public works, and apprentices, were insured. Employers and workers contributed to the fund equal amounts, while the federal and provincial authorities contributed to an emergency benefit fund. A benefit which varies with the wage class and family responsibility may be paid for thirty weeks and an emergency benefit subject to a needs test.

I need hardly direct attention to the fact that the unemployment insurance measures in force in European countries largely owe their origin to conditions that came into existence since the great war. It was not until 1925 that Bulgaria enacted a measure in which the employers and the workers and the state contribute. The benefits were provided for only twelve weeks in a year. In the Irish Free State they had a system somewhat akin to that in Great Britain, the employer paying ten pence, the worker nine pence and the state less than six pence a week, benefits being fifteen shillings a week with allowances for dependents.

As was said by the hon. gentleman, in Italy they put forward their scheme and passed it into law in 1919. But it was not until 1924 that Poland adopted a scheme calling for a contribution of one and a half per cent of the wage roll by the employer, half of one per cent by the worker and one per cent by the state. Benefits were paid for thirteen weeks or one quarter of a year, and went up to as high as thirty per cent of the wages, with allowances for dependents. I mention these countries, of which of course we have but little knowledge, because since the war they have found it necessary to depend upon this form of social aid to enable them to grapple with the problems that have beset them as a consequence of the great war.

In Great Britain, as has been pointed out, the first statute was passed in 1911. That was the first compulsory unemployment insurance plan and, as has been said, it was limited to certain industries selected for experiment as being subject particularly to unemployment, namely, construction, shipbuilding and engineering. In 1916 the system was extended to cover workers in a number of war industries, including metal, leather and India rubber workers and the chemical and munition trades, as it was feared they might suffer from unemployment at the close of the war. In 1920 a new measure was enacted extending compulsory insurance to all manual workers and non-manual workers earning less than £250 per annum. Certain classes were excepted, the most important being agricultural labourers, domestic servants and certain persons in permanent employment such as permanent civil servants, school teachers and, by certificate of the Minister of Labour, permanent employees of local authorities and railway companies. The reason for that, of course, is fully apparent. They all have their own plans or schemes which have been developed under actuarial direction, and it was therefore felt that they need not be brought within the operations of the act.

The scheme covered between eleven and twelve million persons; as was said this evening it did in fact, I believe, touch almost thirteen million workers in Great Britain. These contributions were shared about equally between the employer and the employee, and the state contributed approximately one quarter of the total amount contributed by the other two parties. It will be recalled, in connection with the cost of administration, that it was found that administration costs were somewhat higher than had been anticipated, and advances were made by the state to enable the administration costs to be cared for. Under that act  --  and bear in mind the length of time that has elapsed since the first experiment was made  --  benefits for fifteen weeks could be drawn in any one year, with

[page] 300

not more than one week's benefit for every six contributions. Provision was made that an industry, with the approval of the Minister of Labour, might withdraw from the general scheme and set up a special scheme. I suppose readers of old country papers are aware that in many of the large industries in England there are schemes which have been set up by the employers and the employees, and the operations of the general act no longer apply to those particular industries at those particular points.

Mr. GRAY: Might I ask the Prime Minister if that privilege will be maintained in this act?

Mr. BENNETT: Whether the bill will meet just such a case as has been dealt with in England I think may be open to doubt, but it is desired that the opinion of the house should be expressed with respect to that, and if it is thought desirable that something should be done in order to conform to the action taken in England, we should be glad to do so.

In Great Britain, since 1911 when the statute was first enacted, it has been closely linked, of course, to what you might call employment exchanges. It is quite true, as was said this afternoon or this evening, that it would be very difficult if not impossible to think of transporting or transferring labour from Halifax to Vancouver. The conditions which obtain in a closely settled country such as the United Kingdom, as compared with the conditions existing in Canada, make it too clear to be open to argument that we could not use the same facilities for transferring labour in Canada as are used in Great Britain. Nevertheless these exchanges have played a tremendous part in the success of unemployment insurance operations in Great Britain, and in this country it is proposed to maintain the employment offices that have been subsidized, shall I say, by federal aid and that have been maintained under the control of the provinces and the dominion so that the administration of the act may be close to the people concerned, and the employment exchange offices in the various centres will be in a position to undertake a large share of the responsibility for the administration of the act. That has been found in practice to be an invaluable adjunct to the operation of unemployment insurance in Great Britain.

The British act of 1920, it will be recalled, was based on an average unemployment rate of about six per cent, but of course the grave industrial depression that came about in Great Britain increased that rate of about six per cent to 17 per cent in the first year of the operation of the act. The average from 1921 to 1927 was 12.4 per cent. In 1932 the average was 22.1 per cent and the number of unemployed persons in insured industries, as reported by the British Minister of Labour at the end of January, 1933, had reached nearly 3,000,000, the highest ever recorded.

The act was again amended to provide for the payment of what are described as uncovenanted benefits, to persons whose right to ordinary benefits had been exhausted. I touched on that this afternoon. Dependents allowances were provided, and the rates of contribution were raised. Again in 1924 the act was amended and the benefit rate was raised, but the insurance fund being unable to cope with the demands made upon it, the borrowings from the treasury by the fund amounted to the enormous sum of £115,000,000 sterling.

In 1925 the then Minister of Labour, Sir Arthur Steel-Maitland, appointed a departmental committee under the chairmanship of Lord Blanesburgh, a member of the judicial committee of the privy council, to consider, in the light of the experience gained in the working of the unemployment insurance system, what changes if any ought to be made in that system.

That was a very comprehensive inquiry. It involved the discussion of many matters incidental, shall I say, to the main issue that was referred to Lord Blanesburgh's committee. It happened that, while that committee was sitting, a member of our bar and myself happened to be in England attending the privy council, and we were asked certain questions as to the practice in Canada in connection with certain types of employment. Lord Blanesburgh asked us if we would mind expressing those views to his committee, and Mr. Rowell and myself gave to the committee such evidence as we could make available to enable them to deal with one of the problems they were considering. That was a matter arising out of certain forms of employment and the engagement of certain officials in public activities.

This committee was made up of representatives of workers, employers and employment committees and others who had a recognized position in connection with the administration of the poor law in Great Britain. It did not report until 1927, and by one of those fortunate circumstances that sometimes arise they made a report that was the basis for very excellent legislation. The report says:

We have found in all quarters a general agreement that the risk of unemployment should

[page] 301

be insured. Nobody has suggested to us that the principle of unemployment insurance should be abandoned. It has been recognized by all who have appeared before us, and we ourselves share the view, that an unemployment insurance scheme must now be regarded as a permanent feature of our code of social legislation.

That was in 1927. Many of those recommendations were immediately embodied in legislation as amendments to the existing law. These included, for instance, the abolition of the distinction between standard and uncovenanted benefits, to which I referred; the scrapping of the rule of one week's benefit for every six contributions, and the substitution of a provision whereby a claimant was entitled to benefit if he had paid thirty contributions in the preceding two years and was "genuinely seeking work." A new class of insured persons, as the hon. member for East Hamilton (Mr. Mitchell) mentioned, came into being, namely those between the ages of eighteen and twenty-one years, for whom lower contributions and lower benefits were prescribed; then the minister's power was abolished to make special schemes, although the two already established were allowed to continue in operation, and authority was given to the Minister of Labour to make grants out of the unemployment fund towards an approved course of instructions for unemployed juveniles of sixteen to eighteen years of age. That was to endeavour to provide some form of additional technical training for those who would subsequently become insured under the act itself. It was in 1930, however, some five years ago, that the "genuinely seeking work" condition was abandoned and the rules for receipt of benefit were altered to enable the claimant to receive benefits if he had paid eight contributions in the two preceding years, or thirty at any time.

In the fall of that year, 1930, perhaps some hon. members will recall that a new commission was set up under the presidency of Judge Holman Gregory, who, by the way, I suppose many of you met when he was in Canada. This commission was appointed to inquire into the working and provisions of the unemployment insurance scheme. Several reports were made. The interim report of June 1, 1931, recommended:

  1. A limit upon the period for which benefit might be paid of twenty-six weeks within twelve months following the date of application.
  2. An increase in the rates of contribution to nine pence per week for adult men and appropriate increases for other classes.
  3. A reduction in the rates of benefits averaging about 11.5 per cent.
  4. The application of a rule that applicants for transitional (uncovenanted benefit) should show eight contributions during the two preceding years, or thirty in the preceding six years.
  5. The application of a needs test to certain classes.

I believe there must be some within sound of my voice who recall the circumstances connected with the making of that report. Gross abuses had grown up in some localities, and after the closest investigation it was the opinion of the commission that in certain instances the needs test should be applied in addition to the limitation of benefits which had been payable, for the very reason which was mentioned here this afternoon, namely that because of certain conditions which prevailed with respect to other forms of assistance it paid not to work. Therefore there was an increase in some cases and a curtailment in others of the benefits which were granted.

It will also be within the memory of hon. members that before the final report of the commission appeared, the committee on national expenditures, which was appointed in February, 1931, to make recommendations to the chancellor of the exchequer for reductions in expenditures for supply services, recommended an increase in insurance contributions and a reduction in benefits by twenty per cent, and the application of a needs test to all persons applying for benefit who had exhausted their insurance rights. That of course was the prelude to the legislation which was enacted to provide for the lessening of public expenditure. It brought about the noteworthy protest from the judges; it brought about difficulties in connection with other branches of the service, but it was carried through, and reductions were made in every branch of the civil service of Great Britain. This was carried into effect.

Mr. POWER: May I ask the Prime Minister the difference between a needs test and a means test? It seems to me the means test is important.

Mr. BENNETT: In this instance I have used the words that are used in the report, namely "needs test."

Mr. POWER: What is the distinction?

Mr. BENNETT: I am not sure whether or not the words are used interchangeably.

Mr. MACKENZIE (Vancouver): The words used are "subject to a test of need."

Mr. BENNETT: That is the reason the words "needs test" were used. The words describing the test were "needs test," because

[page] 302

it said the needs should be the basis of the right to obtain payment. I think the expression "means test" might have been used in old age pensions cases rather than in cases of unemployment insurance. That is my impression, that the use of the words " means test " was more applicable in connection with old age pensions, and the expression "needs test" was the one used for the purpose of unemployment insurance. That is my present memory of it, but I stand subject to correction, of course.

I was about to say that these economies were carried into effect, because the National Economy Act of 1931 authorized during the period of one month the making of orders in council for the purpose of effecting economies in certain specified services, including unemployment insurance. It will be recalled there was some conflict of opinion on previous occasions as to the action taken by the British authorities, because in their economy act of 1931 they limited the time within which the king in council could pass orders in council providing for economy in all the services. The objection taken by the judges was as to the manner in which their salaries had been reduced. However, as a result of this legislation the provisions of the Unemployment Insurance Act were modified, the rates of contribution were raised to ten pence per week, and there was a reduction of ten per cent in the rates of benefit. The benefits themselves were limited to twenty-six weeks in twelve months. Transitional benefit payments were abolished and transitional payments subject to a needs test were substituted therefor.

The final report of the Gregory commission was not made until November, 1932. It is signed by all the members except two labour representatives who submitted a minority report. This report is said to be  --  and I believe upon perusal hon. members will agree  --  one of the most comprehensive documents on the subject ever issued, because it analyzed the economic causes which contribute to unemployment and the reasons we have for the conditions which exist. I think the report will be found in the library, and if any hon. member desires to read a very comprehensive review of the whole problem connected with unemployment insurance he will find it in that report. They found that the greater part of the unemployment from 1923 to 1929 was not due to trade depressions, but to causes that were not transient, including loss of competitive effectiveness, dislocation of employment caused by labour saving inventions and other technical changes, and the divergent movements of prices and costs. That is, the difficulty of any form of international exchange had brought about such a divergent movement of prices and costs that employment and unemployment were difficult to figure upon from week to week. The conclusion was that while unemployment insurance was an appropriate way to deal with intermittent and occasional unemployment, it was quite inappropriate for dealing with chronic and continuous unemployment, the problem of the letter being one of relief coupled with measures of assisted transfer and training.

That was the report, and it is that report which in times past I have desired and endeavoured to make clear should be always kept in mind, as there is a distinction between what you might call unemployment resulting from the conditions of today or tomorrow, and that growing condition in which the individual requires assistance. One is to be placed in the category of relief and the other comes within unemployment insurance. One is something for which the payment of a given premium may insure the payment of certain benefits. The other is something which from time to time may be considered adequate for the purpose of insuring a benefit because a condition that is growing does not yield to any system which may he based upon the necessity, for actuarial purposes, of definite figures or averages.

They went further. A dual system of insurance and relief was proposed and the commission recommended that an independent commission be appointed to act as an advisory body to the minister. The age of entry to insurance was to correspond to the school leaving age, and the limit of income was to be raised from £250 to £350.

With respect to the conditions relating to benefits, the commission recommended in general the retention of those conditions in effect, but favoured the principle of relating the period of benefit to the record of recent insurable employment. They proposed that the maximum period of benefit for workers with a good record would be thirty-nine weeks, and that the benefit period should range from thirteen to thirty-nine weeks, instead of having a uniform limit of twenty-six weeks. In other words, it was found by experience that the premium paid on the average would warrant the benefits being paid for a longer number of weeks than it had heretofore been paid, and it was extended to a maximum of thirty-nine weeks instead of the twenty-six weeks which was the limit at that time.

[page] 303

There was further reference made to the cases I mentioned this afternoon where the individual had a long record of continuous employment without making any claims upon the fund. In adjusting the benefit period account would be taken of contributions paid and benefits drawn in a period of the past five years, and the assistance scheme was to be administered by local authorities. That is, as distinguished from insurance which was a national matter, the assistance or relief was to be dealt with by the local authority, assisted by a body in the form of a statutory committee called the unemployment assistance committee, to determine the rate of payment to be made to the individual for assistance in each case, and to cooperate with the Minister of Labour in providing occupation and training for persons in receipt of assistance.

In England the practice is, at least under this statute, for the person out of employment to register at the employment exchange and then apply to the local authorities for assessment of the rate of payment, or for what may well be described in this country as relief, and payment will be made by the local authority or by the exchange acting as its agent.

The two labour members signed a minority report; they found that the provisions for a dual system were unsound. The hon. member for Winnipeg North Centre (Mr. Woodsworth) argued this afternoon that insurance and relief should be made part of the same measure. I submit to the house that that is an unsound proposal. That was the view of the majority report, but the two labour members thought it unsound to divorce the one from the other for reasons that were apparent and that need not be discussed. They proposed a scheme administered by the Minister of Labour through the employment exchanges and covering all manual workers and all salaried workers earning less than £350 per annum, and that these persons should be included in the scheme so long as they remained unemployed and complied with the conditions. Obviously such a condition as that could mean nothing but national bankruptcy, and the majority could not agree to it.

This last year, 1934, it will be recalled that the British government introduced a new bill consolidating the existing acts and modifying to some extent by amendments to the old legislation the principle upon which they had heretofore acted. That bill amended the Unemployment Insurance Acts of 1920 and 1933, and provided a new act, the act of 1934. It reconstructed the whole scheme, and it embodies many of the recommendations of the royal commission. I fancy it is the statute which the hon. member for Vancouver Centre (Mr. Mackenzie) has before him at the moment, and from which he read a moment ago. It embodies in the main the recommendations of the royal commission.

I leave it at that because before this bill was prepared I thought it desirable to communicate with the British authorities and discuss the matter with them in the light of their wide experience. I asked one of my secretaries who is with me at the moment to make the necessary arrangements to confer with the British authorities in connection with their proposed legislation which has since been introduced and passed, and they were good enough to make it possible for us to avail ourselves of the bill which they were preparing and to give us the benefit of their wide experience by way of suggestion and otherwise in connection with the legislation that is now before the house. I shall not do more than mention that, because when the bill is before the house it will be found that many sections are sections taken entirely from the act of last session in Great Britain, so modified as to be applicable to the conditions of a country such as this where you have relatively so small a population scattered over so vast an area.

The German statute I shall not go into at length, except to say that as it now stands it was enacted in 1927. It provided an entirely different scheme, involving a levy of three per cent on the payrolls of industries covered by it. In other words, you covered the scheme by industries, and the fund was created by a flat three per cent levy on the payrolls. It will be within the memory of most members that at least one, if not two, of the provinces have a form of raising revenue for purely local purposes by making a tax upon the payrolls, and that of course, if this scheme were adopted, would mean a double tax upon the payrolls. While the scheme has worked out fairly well in Germany it has been found necessary to increase the percentage levy in order to meet the demands upon the funds. In the first three years of its operation, the scheme ran greatly into debt; in fact, at the end of three years it owed the treasury of Germany 1,410,000,000 reichsmarks. The rate of contribution was therefore raised to six and a half per cent, and in the years following 1931 deficits have been turned into a surplus. Contributions as well as benefits in Germany are on a percentage basis. Equal contributions are made by the employers and by insured persons. The state does not contribute to the cost of regular insurance benefit, but may

[page] 304

advance money by way of loan. The insured persons are grouped in eleven wage classes, according to weekly wages, and a basic rate is fixed for each class upon which contributions and benefits are calculated.

The waiting period under the German scheme is fourteen days for persons without dependents, seven days for persons with not more than three dependents, and three days for persons with four or more dependents.

I do not propose to deal with other plans at length because I fancy the industry of hon. members of this house has been such that they have read the standard authorities upon the subject and have gone into more of them than I think it perhaps is desirable to mention to the house at this time. But I do mention the Wisconsin plan in passing because Wisconsin has always been in the front rank of states dealing with social problems, and their scheme has only just gone into operation. Whether it will ultimately succeed in the way it was planned I cannot say, especially if the United States government carries forward its plan for a national scheme. In preparing the bill which I seek leave to introduce we have endeavoured to profit by the experience of all countries in which unemployment insurance has been made a part of their system. The international labour office at Geneva came into being, as is well known, not as a part of the League of Nations, but by reason of the provisions of the convenant of the League of Nations, and is maintained at Geneva by all the signatories to the covenant and by the members of the league as well. It has been contended that some may be actively interested in the work of the labour office although they are not members of the league, and notably is that so in the case of the United States of America, but the regulations of the league itself set forth that those countries that are members of the league must as a matter of necessity also be members of the international labour office. The international labour office, which is a clearing house practically of the thought of all the world with respect to questions of this kind, has gone into the matter from time to time with great care, so much so that, as is known, last year they formulated their ideas, as a result of sifting all the information they had received and the suggestions that had been made as to how legislation should be framed, into a convention, which doubtless many members of this house have read.

Now no country has had a genius for dealing with social problems to the same extent as Great British [sic]. They have known the times when to take occasion by the hand and make the bounds of freedom wider. They have had great success in dealing with these problems. I have heard men well able to speak with authority say that in their opinion the social legislation of Great Britain was responsible for the measure of tranquility that prevailed in that Kingdom during the darkest days of the depression when there was much agitation and difficulty in other parts of the world. Of course, to compare conditions in Great Britain with those in Canada is somewhat difficult. I do not desire to repeat what I have already said with respect to that unitary system of government with one parliament that deals with domestic problems, with local problems of the smallest character as well as with problems of the greatest magnitude, and with respect to whose enactments no question of constitutionality can ever arise, because there is a different condition to consider there from the condition in which you have nine provinces each enjoying exclusive legislative jurisdiction, under section 92 of the British North America Act, with respect, to many matters, and a parliament which is charged with responsibility for the maintenance of peace, order and good government throughout the dominion and which has exclusive jurisdiction with respect to the many matters specifically mentioned in section 91. Then you have the field in which there is concurrent jurisdiction, with the provision that when there is a conflict between the exercise of legislative power by the province on the one hand and the exercise of power by the dominion on the other, the dominion shall prevail. There is a vast distinction between the conditions that east in a country such as Great Britain and in a country such as this.

Relief, undoubtedly, as has been said often in this house by hon. gentlemen opposite as well as by members on this side, is primarily the concern of the local authorities, just as in England it is also the concern of the local authorities. There, with a single parliament, the extent to which the poor law shall be administered by grants in aid from the central treasury is a matter to be considered from time to time in the light of the necessities that arise and the requirements of the particular communities; and it is rather difficult to see how it is possible in that great parliament to deal with the smallest matter of poor law aid in some remote community where, with the aid of public spirited men acting in an advisory capacity, and usually if not always in an honorary capacity, they

[page] 305

are able to administer the most trivial detail of local necessity through the instrumentality of those local committees and the boards that are set up, and the central treasury at Westminster.

In this country we recognize the fact that the primary responsibility for relief itself rests with the local authorities, the local authorities being largely the creation of the legislatures of the provinces; and in extreme cases, where there has been something of a national character requiring assistance, then we find the dominion making either grants in aid, as has been done in times past on many occasions, or taking over the entire responsibility where you have a drought stricken area in which hundreds of thousands of men, women and children find themselves without any means whatever. There you find the federal authority undertaking the administration in these local communities of relief and assistance.

Now the examination of the report of the British royal commission will indicate at once the magnitude of the problem and the reasons why it is believed that a form of unemployment insurance is necessary. I think one of the speeches this afternoon or this evening sufficiently indicated why this is desirable. I think the hon. member for Lisgar (Mr. Brown) pointed out, what is well known to be the fact, that this is an effort on the part of parliament to provide that benefits shall accrue to certain named classes, they themselves contributing to the fund that insures the benefit and being assisted by the state; because it is believed to be in the interests of all Canadians that such a form of assistance should be given rather than that they should go on relief. That is true.

With respect to another matter, the hon. member for Lisgar was entirely right when he said that in days of depression you cannot begin to operate an unemployment insurance plan. But, as I have pointed out frequently and again point out to-night, the idea is this that we are making a movement towards improvement, that we have already improved, that we shall continue to improve, and that we have learned from experience how desirable it is, at the very threshold of improvement, to take advantage of the possibilities of that improvement and to see to it there shall be adequate provision for self-support on the part of those who are so vitally concerned.

In no captious spirit  --  because I am not discussing this in any narrow party sense  --  in no captious spirit, I say, nor yet in any spirit of criticism do I say that if in 1922 this legislation had been enacted, between then and 1930 there would have been this peculiar condition  --  a continued increase in employment and therefore in volume of the fund and a continued lessening of demands upon the fund as employment increased, so that the reserve would have been very great. In other words, the more prosperous the community grew between 1922 and 1930, because of the great improvement that was going on throughout the world, winding up in the spectacular debacle of 1929-30, you would have had by this fixed assessment upon the employee's wage a very large fund accumulating; and because he was relatively so little out of work during that period throughout the world, and especially in Canada, there would have been a very large reserve available for purposes so much required.

I mention this because it is rather important to keep in mind that fact. That is the reason why at this time we believe it is desirable to prepare this legislation and submit it to the house. It is the reason why in 1931 I indicated to the house that in my judgment it should be done, and it is the reason why I still believe it should be done. Now I will give a few figures with respect to these periods of time. They are figures that have been supplied by the bureau of statistics and they have reference in the first instance to the fact that in the census that was taken we asked every individual enumerated whether or not he or she was out of employment. And you will recall that I gave you figures the other evening from Mr.Cudmore's memorandum as to the number that were wholly out of employment and the number out of employment part time.

It is not possible to arrive at any sound conclusion from one year or two years; you must, I submit, have some average whereby you will be able to draw a fair inference having regard to the general business cycles of the world. We have taken therefore for our actuarial computations the years from 1921 to 1931 inclusive,  --  that is, eleven years. In the nine years from 1922 to 1930, the number of workers corresponding to those covered by the bill which I now have the honour to introduce averaged 1,605,833 persons. That is, on the average, under this bill, there would be under its operation 1,605,833 persons. Now here is the amazing fact supporting what I have just submitted to the house. The number losing no time at all during that period, 1922-30, was the very large figure of 1,125,689. The number losing some time was 480,144. The percentage losing

[page] 306

some time was therefore 29.9 per cent. The average weeks lost by the idle was 18.4 per cent and the average weeks lost by all workers was only 5.5 per cent. The idle percentage for the period was 10.6 per cent.

The figures on which these actuarial calculations are made cover altogether an eleven year period, the years 1921 to 1931 inclusive. In 1921 the average percentage idle was 11.8 per cent and in 1931 it was nearly double that, being 22.5 per cent, the average over the eleven years being 12.5 per cent.

I believe it will be the wish of the committee to have before it the actuarial table prepared by Mr.Andrew D. Watson, chief actuary of the dominion, Department of Insurance, and Mr. Hugh H.Wolfenden, a consulting actuary, on which table we have acted in the preparation of the measure which we have submitted to the house. They are both Fellows of the Institute of Actuaries of Great Britain as well as of the Actuarial Society of America, and they enjoy an international reputation. While possibly there is no duty to have these reports printed, it might be desirable to have them printed between now and second reading of the bill so that every hon. member may have before him a copy of the information which has been compiled on the report of the bureau of statistics, based as I have said upon the reporting firms as well as upon the information derived from the census of 1931.

I realize that necessarily there are imperfections in a measure of this character. I do not for a single moment suggest that it is free from imperfections, but as we are all desirous and have expressed our willingness to enact such legislation I can only say that the government will view with the greatest pleasure and satisfaction constructive and timely suggestions from those who sit in any part of the chamber in order that the legislation when completed may serve to the very greatest possible extent the demands and necessities of those whom it is sought to benefit.

Return to top of page

Source: Canada. Parliament. House of Commons. Debates of the House of Commons of the Dominion of Canada. 17th Parliament, 6th Session. Ottawa: J.O. Patenaude, 1935.


Proactive Disclosure