Proceedings of the Standing Senate Committee on
Social Affairs,
Science and Technology
Issue 26 - Evidence - Afternoon Sitting
OTTAWA, Monday, April 21, 1997
The Standing Senate Committee on Social Affairs, Science and Technology, to which was referred Bill C-66, to amend the Canada Labour Code (Part I) and the Corporations and Labour Unions Returns Act and to make consequential amendments to other Acts, met this day at 2:45 p.m. to give consideration to the bill.
Senator Mabel M. DeWare (Chair) in the Chair.
[English]
The Chair: Honourable senators, our next witnesses on Bill C-66 are from the Air Canada Pilots Association. Please proceed.
Captain Tom Jerrard, President, Air Canada Pilots Association: Madam Chair and honourable senators, thank you for the opportunity to make this presentation. With me is Captain Yves Filion, who represents pilots in Montreal.
The Air Canada Pilots Association, commonly referred to as ACPA, was certified in November of 1985. We represent approximately 2,000 pilots and we are the largest Canadian-based pilots' union in the country.
We left our previous union, the Canadian Air Line Pilots Association, CALPA, because we felt that the Air Canada pilots' representational rights were not being adequately taken care of by that union. There was a history of eight or nine years of what we felt was interference in our affairs. Just to illustrate some of that, when we left, we represented 40 per cent of the pilots while paying 50 per cent of the dues into CALPA and having about 20 per cent of the vote.
ACPA's duties are to represent the Air Canada pilots in industrial relations matters, and in matters concerning air regulations and flight safety.
Currently, as you may know, we are involved in a single-employer application in front of the Canada Labour Relations Board. That application was brought by the Air Canada connector pilots in March of 1996 and is ongoing. We are due to resume hearings here at the end of April for four weeks. This application was brought to support the seniority demands for the connector pilots and, if resolved in favour of the connector pilots, we believe it will destroy the careers of hundreds of serving Air Canada pilots.
Our concerns lie with Bill C-66. In general, we support the bill and its principles. However, we have two main concerns, which involve an unproductive negotiation process and the board's power to impose seniority rules, which is a new power under this bill.
You will see in our brief, as detailed under Part 4, our recommendation for amendment to the bill.
Our first concern revolves around unproductive negotiations. We are seeking that proposed section 18.1(2) be changed to improve and to clarify the process in determining the bargaining unit structure, and determining other issues that arise after the bargaining unit has been determined.
Currently under Bill C-66, the proposed section 18.1(2) creates an unwieldy process. It requires that all parties bargain at once, and try to negotiate what the units are to be, what unions represent those units, contract rules and seniority rules.
We see several disadvantages to this. In that regard, I refer members of the committee to page 4 of our brief and, in particular, points 2.1, 2.2 and 2.3.
Those disadvantages involve all these parties negotiating issues before the bargaining unit is determined. They involve multiple unions having to agree on complex issues prior to a bargaining unit being declared, and involve having parties in this process with no continuing legal interest after these issues have been determined. We believe this process is doomed to failure and will elicit much more intervention on the board, with the board being required to impose solutions.
We see a potential for employees of subsidiaries using the single employer issue to demand seniority rights at the main companies. This will create a problem with the board's processes.
We see a potential here for parties involved in a process like this believing they will have an advantage with an arbitrated or imposed settlement. We fear that they will tend not to want to negotiate but, rather, have an arbitrated or imposed settlement.
We are proposing a two-stage process to address this issue. One would be a determination of the bargaining unit among all the parties. We see this as a process which is already commonplace with the board now and which has jurisprudence to back it up.
We see the second stage occurring once the bargaining unit is determined, with the successor union and successor employer negotiating a more simplified process, with fewer parties involved.
The end result is that there will be more agreements that make labour-relations sense. With those agreements, of course, there will be fewer imposed solutions.
Our second concern revolves around seniority. In the bill, the proposed section 18.1(4)(d) would give the board an expanded power to amend seniority rights. We believe this intrudes into the free collective bargaining process and moves the new board out of the realm of being an ombudsman and into the realm of being a bargaining agent.
Seniority is extremely crucial to airline pilots. As Air Canada pilots, we see it as being part of our lives and a principle which we want to see remain as an item negotiated between ourselves and our employer. It is a very complex issue.
At this point, I will ask Captain Filion to give you an overview of the Air Canada pilots' seniority concerns.
[Translation]
Mr. Yves Filion, Captain, Air Canada Pilots Association: Madam Chair, I want to outline briefly for you the reasons why seniority is such an important issue for pilots, particularly Air Canada pilots. First of all, everyone who wants to become a pilot starts out the same way. They begin by flying small Cessnas et then eventually, gain experience piloting aircraft for small airlines. One day, if they are lucky, they become an Air Canada pilot.
We believe Air Canada is the best airline in Canada and we are very happy to be associated with this company. To become an Air Canada pilot requires skills and experience, and also a bit of luck, because the process is a lengthy one.
And once a person becomes an Air Canada pilot, he still has quite a way to go. A pilot's career follows somewhat the same path, regardless of the world airline for which he works. The first job often involves low levels of responsibility. In my case, I was a second officer. You may recall that in older aircraft, there was a third pilot sitting in the back. That is where we start our training and later, we move on to become a first officer, that is the co-pilot who is seated to the captain's right. We get to co-pilot smaller aircraft and as our career progresses, we get the opportunity to serve on a larger aircraft. One day, we become the captain of a small plane. The ultimate goal of most pilots is to one day captain a Boeing 747.
That is the career path that almost all pilots around the world follow. At Air Canada, seniority determines when we get to pilot a 747. Seniority also has a clear effect on our monthly working conditions because it determines which group of pilots will fly on weekends and which will leave at six o'clock or at twelve o'clock.
Seniority governs all aspects of an Air Canada pilot's job. It determines not only vacation time, but also the routes we fly. It determines whether we will have a stopover in Paris, or one in Saskatoon. That is what is important to us and during the course of our career, seniority will be the most important factor in our lives.
As I said, seniority is extremely important to us and we want to ensure that we retain the privileges that we currently enjoy and which we have worked hard to get. If we look at what is happening elsewhere in the industry, for example at Canadian International, we see that pilots there follow the same career path. They join Canadian after working for smaller airlines and once they are hired by the larger airline, they move up through the ranks in similar fashion. The same is true of American and of other airlines around the world. This principle is an industry standard.
The issue of seniority is crucial to us. Seniority, experience, training and responsibility help us to eventually obtain better salaries and benefits.
[English]
Mr. Jerrard: The Air Canada Pilots Association is proposing a change to the bill to remove the power to amend seniority. Again, I refer you to Part 4 of our amended proposal. We believe that an imposed settlement is not a satisfactory settlement and that a mutually acceptable agreement between the successor employer and the successor union will lead to a more stable situation in labour relations.
In conclusion, ACPA supports procedures that are clear within the code, settlements that are negotiated, and Bill C-66, with the changes we have proposed.
Senator Maheau: Thank you for your presentation.
The House of Commons Standing Committee on Human Resources Development amended Bill C-66 to address many concerns, especially with regard to provisions that gave the board a too broad authority to amend substantive provisions of collective agreements.
At that time, no one came forward to discuss the proposed section 18.1, or the proposed powers of the board to resolve issues such as seniority where the parties themselves were unable to agree. I do not think it is a novel provision. Many provincial boards have similar powers to amend agreements concerning seniority rights provisions.
Could you comment on why you believe the board would always work against your desires with regard to the seniority provisions?
Mr. Jerrard: Our research has shown that there are five provincial boards in the country that do not have provisions such as this. This would be a new provision for this board. We believe that it provides an opportunity for other employees who are making seniority demands, from their subsidiary up to their parent company, to go after those demands through a single employer application. That is why we believe these rules should not be here in this bill.
It is much better if there is a negotiated agreement. We believe that the issue of seniority should be between the union, the employees and the employer and that it should be resolved at that stage.
We are a new union. It was probably due to a mistake in our processes that we did not have the opportunity to appear before the other committee. We are here today to express our views and we thank you for the opportunity to do that.
Senator Maheau: ACPA has been sending dozens of letters in support of Bill C-66. The impact of the amendment, as it now stands, would not be limited to the current ALPA and ACPA dispute. It would affect the ability of the board to resolve labour relation issues with respect to any application under section 18.1, and this applies generally to all employers and employees subject to the Canada Labour Code.
Have you thought about the fact that it does not apply only to you? I am still wondering whether it may not be an advantage.
Mr. Jerrard: You are correct when you say that it does not apply only to us, senator. The Canada Labour Code applies to everyone. However, we see here a process which is not clear in its procedures and which will lead to what we believe will be an unproductive process in terms of all the parties being in one room trying to resolve these issues. If any party feels they would gain an advantage by going to an imposed solution which they do not feel they would get through negotiations, they can stonewall the process and drive it to an imposed solution, which is less acceptable all around for labour relations.
Yes, it does apply to everyone, but in the way it is presently proposed I think it will end up applying in a negative sense. We are proposing this amendment to clarify the procedure which would apply to everyone.
The Chair: Were seniority rights usually decided upon through your collective agreement, or arbitration or whatever it took to get a settlement?
Mr. Jerrard: Yes, seniority rights are spelled out in great detail in our contract, including how the pilot can exercise those rights and how they get the seniority to begin with when they join the company. It is through negotiations with the company that we have been able to resolve those issues.
If the connectors win what they are asking for, they would jump the queue, which would impact greatly on the flow of seniority.
The Chair: That would sort of filter into the system you have in place now, and not start at the bottom.
Mr. Jerrard: That is part of their demand, namely, to come into an integrated system, which is contrary to normal industry standards.
The Chair: I understand that you have already appeared before an arbitrator of the Canada Labour Relations Board to sort of finalize your binding resolution to the seniority dispute and that you are displeased with the findings. You are attempting to change Bill C-66 in order to avoid the consequences. More specifically, the removal of the seniority rights under that clause of the bill would solve your problem. You were before an arbitrator, were you?
Mr. Jerrard: It is true that there was an internal CALPA resolution dispute mechanism employed. That mechanism, which brought in an arbitrator, was an internal process to CALPA and has no legal binding effect outside CALPA or on the employees of Air Canada or on the employer.
It is correct that that occurred. What has not been mentioned is that Air Canada's pilots, for a period of time before that, voiced their concerns about that and indicated, through two polls and other indications, that they were not happy with that process and wanted it stopped prior to that mechanism being invoked. I think that was in the fall of 1994. No one paid attention to these pleadings at CALPA and that process continued against the wishes of the Air Canada pilots.
The Chair: You say that was in 1994 and you did not become certified until 1995; is that right?
Mr. Jerrard: Yes, we became certified in November 1995.
Senator Cogger: How long has the case currently been going on before the board?
Mr. Jerrard: The case before the board was filed by the connector pilots in March 1996. There were three days in June to set up procedures concerning how the case would proceed. We got into witnesses in November of 1996. I think we had approximately 12 days in November of 1996, and we are due to resume one week from today. There are 16 days scheduled.
Senator Cogger: Has anyone in the department or the minister's office given you any indication as to what would happen to that case assuming Bill C-66 were passed into law?
Mr. Jerrard:If the case is unresolved at the end of these hearings in May and Bill C-66 comes into effect, then the entire board will be replaced. Thus, the panel hearing our case will then be replaced. To satisfy natural justice, with the appointment of a new panel, we would have to start the case all over again and we would have to pick dates to get that process under way.
Given the evidence that still must be put in front of the panel and the witnesses who are due to be called, I do not see this case ending in May but probably by the end of this year, with the current panel.
Senator Cogger: You are aware, are you not, captain, that there is a possibility that this bill could come into force by the end of this week?
Mr. Jerrard: We are quite aware of that, yes.
Senator Cogger: We will have the minister here later, when we might ask him what he intends to do about the case.
The Chair: Is the seniority subject the only thing that you have before this board?
Mr. Jerrard: The filing is a single employer filing, which involves a review of the bargaining unit. We believe that the filing is to support the seniority demands of the connector pilots and nothing more.
Senator Cools: You made an interesting point almost as an aside. I forget your exact words, but you said that certain provisions in this bill, as proposed, drivewill be driving the board from being a board into the position of becoming a bargaining agent. Do you recall saying something to that effect?
Mr. Jerrard: Yes.
Senator Cools: Could you expand on that, please?
Mr. Jerrard: We believe it would take the board away from being an ombudsman and place it into the role of bargaining agent. In other words, instead of adjudicating over an issue and saying, "This is the bargaining unit, go out and bargain", the board will be in a position to impose those things that would normally be bargained for by a bargaining agent.
Senator Cools: You are saying that the board will not have an adjudicating purpose but, instead, will become almost partisan, is that right?
Mr. Jerrard: Yes, to a certain degree. It takes them out of the realm of being an adjudicator and puts them into the realm of being a bargaining agent.
Senator Cools: In your opinion, which side would the board be coming down on?
Mr. Jerrard: Do you mean with regard to the present case in front of the board?
Senator Cools: Yes.
Mr. Jerrard: We believe the evidence we have is compelling to rule in favour of Air Canada. In other words, the units or the company should not be put together.
Senator Cools: That is an interesting concept, namely, that the board is moving from being a board into being a bargaining agent.
Senator Cogger: Perhaps I could ask a question of the senators around the table. Under the provisions, the new chairman may appoint an old commissioner to continue with its hearings. Presumably, under those rules, the person would have to assess the case being heard under the new act. You then change the rules of the game halfway through a hearing. Let us say a hearing starts under one set of rules. You continue with those hearings but now the board must dissolve. There are certain provisions but you say, "No, continue." The same person returns, but with different rules.
Senator Maheu: You can, perhaps, bring that up with the minister as well.
Senator Cools: That is a very profound observation.
Senator Cogger: It is a weird legal concept to say the least. Is that the way you understand it, Mr. Jerrard?
Mr. Jerrard: That is correct. With the new board coming in, under the new law, the new rules will apply from that point forward.
Senator Maheu: A new person may be assigned, though.
Senator Cogger: That does not make any sense.
The Chair: Thank you, gentlemen. I appreciate you coming before the committee today. We will certainly take up some of your concerns with the minister.
We have with us now the Honourable Alfonso Gagliano, Minister of Labour.
Welcome, sir. Please proceed.
The Hon. Alfonso Gagliano, P.C., M.P., Minister of Labour: Madam Chair, honourable senators, I want first to address a number of the important changes which will result from Bill C-66. However, before I do that, I would like to give the committee a sense of the level of consultation that went into creating this bill. This is an important detail since virtually every amendment contained in Bill C-66 has come about as a result of grassroots consultation.
One of the things made obvious by this consultation is that modernizing our nation's labour code is also important to those whose labour regulations are regulated by it.
Everywhere across Canada, we found enthusiastic support from labour and management for the collective bargaining process. There was widespread agreement that the Canada Labour Code has served the country well over the years and that this review was designated to make a good system better.
Going through this process was not easy because every individual group finds something that is not what they wished to have. However, I would say that, from the beginning, there was consensus. Despite initial differences, representatives of management, labour and academics all found the bill well balanced. Everyone encouraged us to pass this bill into law because it goes forward and it will naturally help labour-management relations.
[Translation]
The consultation process was piloted by the members of the Sims Task Force, a three-person panel of labour experts chaired by Mr. Andrews Sims, and including Ms Paula Knopf and Mr. Rodrigue Blouin.
Numerous trade unionists, employer representatives, academics, labour law administrators and other experts and citizens participated in the process. Consultation continued during the debate in the House of Commons, where further improvements to Bill C-66 were made.
In the time I have today, I would like to focus my remarks on the amendments which will have the greatest impact on labour relations in Canada. If there are some areas that you would like more information on, we can deal with those in the question-and- answer session.
[English]
Bill C-66 contains a number of important innovations which will result in a new streamlined conciliation process. For example, the current two-stage conciliation process will be replaced by a single stage to take no more than 60 days. The right to strike or lock out will be subject to the holding of a secret ballot vote within the previous 60 days. There will be a further requirement that 72-hours' advance notice of a strike or a lock-out be given. Parties involved in a work stoppage will be required to maintain services necessary to protect public health and safety.
All these changes represent new elements designed to improve our labour code. It is noteworthy that all of them, and many others, were accepted by the interested parties, management and labour.
[Translation]
Of course, while consensus was achieved in many areas, unanimity was not possible on the question of replacement workers. The long-standing difference of opinion between labour and management on this question meant that this was one of the areas where the Sims task force's labour-management consensus group could not agree. In fact, not even the Sims task force was able to find unanimity on this contentious issue.
The replacement worker provision of Bill C-66 has been drafted with the objective of capturing the narrative of the task force majority recommendation. Essentially, we are saying that there should be no general prohibition on the use of replacement workers. They can be used for the purpose of pursuing legitimate bargaining objectives. Replacement labour cannot, however, be used by employers to achieve a non-union workplace.
If it is found that replacement labour was used to undermine the union's representational capacity, this will be declared an unfair labour practice, and the new Canada Industrial Relations Board will be empowered to order the employer to cease using replacement workers.
I think our amendments represent a balanced approach to a difficult and sensitive issue. Employers will still have the right to use replacement workers, but this right will be limited by two important considerations: first, employers will not be able to use replacement workers for illegitimate purposes; secondly, they will have to rehire striking or locked-out employees, in preference to those who have replaced them, once a work stoppage is resolved.
[English]
Madam Chair, I would like to consider briefly the changes affecting grain exports in Canada. On this question, we are proposing amendments that would require parties in the ports to continue providing services to grain vessels in the event of a work stoppage. In other words, from now on, all grain that is brought to port will have to be moved, regardless of work stoppages in other dockside activities.
This amendment is very important to the people of Canada. The shipment of grain is a multi-billion-dollar industry. We export to over 70 countries. The livelihoods of over 130,000 farmers and their families depend on our reputation as a reliable supplier and exporter. The importance of grain exports to Canada's economy, particularly the economy of the prairie provinces, cannot be overemphasized. In fact, the grain industry has been declared to be for the general advantage of Canada under the Constitution.
Another advantage of this particular amendment is the contribution it will make to labour-management relations in the ports. We all know that, traditionally, when grain exports are interrupted due to work stoppage, Parliament has intervened quickly to end and resolve ports' disputes which threaten grain exports. As a result, the participants have come to expect parliamentary intervention. This removes responsibility from the parties to address and to resolve their own problems. It enables them to blame Parliament for any adverse consequences. This is contrary to our commitment to fostering constructive, positive labour relations.
Madam Chair, my time is running out and I have barely scratched the surface of the changes contained in this bill. In conclusion, I would just like to reiterate that this bill is part of our government's efforts to lay the groundwork for job creation and economic growth. In the global economy, Canadian companies need to perform at peak levels of efficiency and effectiveness. The improved labour relations that will result from the amended Canada Labour Code will lead to higher productivity, improved job security, and increased worker participation in workplace decisions. Clearly, both labour and management stand to gain from the amendments that the government is proposing.
Indeed, all Canadians will benefit from the changes contained in Bill C-66 as they will benefit from changes planned for other parts of the Labour Code. I look forward to working with all of you as we make a good Labour Code even better.
Senator Bosa: Mr. Minister, I am sure your officials have briefed you on what has happened at these hearings. We have heard from many witnesses. Some have expressed serious concerns about certain parts of the bill. I am very glad you are here to clarify for all of us some of the objections that have been voiced.
For instance, we have heard great concerns about the replacement workers' provision. Could you clarify that? I am sure you know what has been said about replacement workers.
Mr. Gagliano: This is the most controversial issue. As I said, even the Sims task force was not able to come up with a unanimous recommendation. As a matter of fact, it is the only non-unanimous recommendation in the whole report.
After the Sims report, I, personally, had ministerial consultations across the country. I heard from both sides about the same issue. It all depends on where you sit. Naturally, management wants replacement workers at any time with no conditions attached. The union would say that, in a strike situation, there should be no replacement workers.
I took the recommendations of the Sims task force, which clearly state that management, in the case of a legal strike, can have replacement workers. They can continue the operation as long as they do not hire replacement workers to undermine the union representation. If the union disputes this, then they can go before this new, representational board, and make the case that management is undermining their representation. The board can then judge. If they believe there is a case, then the board can ask the employer not to use replacement workers.
After hearing the two sides, and seeing that they were completely apart, it was my duty, and I took this occasion given to me by the Sims report, to address the issue. It is not something I invented. The text is the recommendation of the task force.
Every group sees or interprets the report as they want; however, the interpretation is what the Sims report addresses. The Sims task force report is well documented and well explained.
If the new industrial labour board will have to hear a case, I am sure it will refer to that report. For me, it is clear. I have been talking privately to both management and unions, saying, "Do not try to say something more than is there." What is there is the Sims report.
Senator Bosa: A number of witnesses have suggested that they do not know what it means, they do not understand it. They have said that it can be interpreted in many different ways.
Mr. Gagliano: They know what it means. They are saying that it means something that might suit them. What it means is exactly what is in the Sims task force report.
In my 14 years in Parliament, I have never seen a report whose language is so clear. Any group or individual who wishes to interpret what "replacement worker" means, I refer them to the Sims report.
The moment management tries to undermine the representation of a union, they have to go before the board to make their case. Then the board can decide. Again, management and labour must make the case before the board.
Senator Bosa: We heard from the Privacy Commissioner earlier. He expressed great concerns about the privacy of the individuals involved. Are you satisfied that the privacy of individuals is protected?
Mr. Gagliano: I also had concerns in that area. Therefore, I reflected seriously on the issue to ensure that the privacy of individuals is protected. Instead of putting in the bill language which states that the party may go directly to the board, we have said that they could have access only if they justify each application.
The board must look at all the privacy issues before it renders a decision. It is not stated in the bill that they may have direct access to an outside worker's address. Before you have that access, you have to go to the board and make the case. Each time you have to go before the board. With that provision, it is secure. I feel very comfortable with it.
The Chair: The Privacy Commissioner's concern was with regard to the proposed section 119(1) of the bill.
Senator Cogger: He talked about two clauses.
The Chair: That clause concerns draft reports by any members or persons appointed by the minister, any provision in the act, notes, draft reasons or reports prepared by the board.
Senator Cogger: The witness echoed the concern of the minister.
Senator Maheu: I want to cover one point concerning the preoccupation with the proposed section 18.1 by the pilots, ALPA and ACPA. The concern is that if we are dealing with a board which does not have the necessary experience in the transport domain, then we could have an Air Canada co-pilot with a certain number of years experience bumped by a B.C. Air or Air Ontario pilot who has experience on Cessnas but who does not have any large aircraft experience. Could you explain to us how you feel the board, if given the ultimate decision on deciding how seniority will be treated, could or would handle a situation of that nature?
Mr. Gagliano: First, let me say that this issue is before the board right now, so I should be careful, I might get into trouble.
Senator Cools: No, you would not, not here you would not. I promise you.
Mr. Gagliano: The new board will be a representational board. It will be a different board from what we have now. The people sitting on the board will be from different groups with different experiences. They can handle all the cases.
Also, let us not forget a provision of the new board which will allow part-time members. Therefore, in the case of technical or specialized cases, part-time members can be appointed, if necessary.
We will be appointing members from management groups and union groups. I am sure there will be a vast experience in all the federal jurisdictions and members will be knowledgeable in the transport industry.
When we look at labour, we see that telecommunications and transport are the two sectors with which we are really dealing. We will have members from those specialized fields.
Mr. Michael McDermott, Senior Assistant Deputy Minister, Legislative Review, Part I of the Canada Labour Code: The idea of seniority in labour relations does not stand alone in skilled professions and trades. I am sure the pilots who are in the room will acknowledge that they are members of a skilled profession. You have seniority on the one hand, but you must have the aptitude and the qualifications to do the job, whether it is plumbing or flying a DC-9. Clearly, common sense is brought to bear.
As the minister said, the board will have access to specialist advice and members who have specialist knowledge.
Senator Cogger: Minister, thank you for coming and taking the time to be with us.
I want to take you back to the matter of the concerns of the Privacy Commissioner for a minute. You indicated when this position came to your attention, you had concerns. You addressed those concerns. By putting the matter in the hands of the board you were satisfied.
Unfortunately, we are also told you did not bother to consult with the Privacy Commissioner in terms of his concerns. Perhaps yours are no longer there but his are very much there. What are we to do?
Here is a man who reports to Parliament on behalf of all Canadians. His duty is to ensure that the legislation does not harm the rights of every Canadian under the Privacy Act. He said to us an hour ago, "Wait a minute, this does not work." Not only that, this bill has the single distinction of raising the hackles or the concerns of not only the Privacy Commissioner but the commissioner in charge of access to information who, coincidentally, wrote to us setting out his concerns. His letter to us is a matter of record. We have two separate commissioners, both of whom report directly to Parliament, both of whom have a special responsibility and duty to protect certain parts of Canadian life, and both of whom are telling us that the bill ought to be amended.
Mr. Gagliano: Let me make a few points here, senator. First, the amendments contained in the bill are as a result of the recommendations in the Sims report, and follow two years of consultation with all the groups involved.
Second, when we drafted the legislation, I had concerns and I asked the Department of Justice if the way we wanted to proceed with the bill was proper. My concerns were answered.
Third, I think the commissioner wrote us a letter and we answered his concerns in writing.
Senator Cogger: Which commissioner?
Mr. McDermott: Mr. Phillips wrote on another issue, the notes issue. Clearly, he had the bill in March. He never once raised a problem with the proposed section 109.1. If it is such a serious issue, one would have thought he would have noticed it.
Senator Cogger: With all due respect, Mr. McDermott, Mr. Phillips looked at the other clauses because I asked him to do so last week.
He claimed today, sitting where you are, Mr. Minister, that, unfortunately, he had not been consulted. He does not have the staff to chase after every department. He wishes he did and he wishes he could.
What are we to do? We are going to say, "Here is a faulty bill. Canadians, your rights to privacy have been seriously impeded because of a piece of legislation. However, it is only because Mr. Phillips did not wake up in time. Sorry. We are late in the game, there is an election to be called and we do not want to amend the bill."
Mr. Gagliano: With all due respect, we are not saying that. What we are saying is that all the provisions were sent to the Department of Justice. We asked them to analyze them and to scrutinize them. They said we were on the right track. The commissioner might disagree. The one matter he brought to my attention, on which he had some concern, we answered. If he raises other items here, we will look into them.
When we moved on this, I was very concerned. We asked the Department of Justice to look into it to ensure that citizens were protected. We were told, yes, they were protected.
Senator Cogger: Which opinion evidently is not shared by the commissioner.
Mr. Gagliano: It is a matter of opinion, I believe, at this point.
Senator Cogger: What about the other gentleman, the Information Commissioner?
Mr. Gagliano: This is the first time I have heard anything about that.
Senator Cogger: His letter was filed with us earlier this afternoon.
Mr. Gagliano: We will look at it and give an answer in that regard. We asked Justice to ensure that everything is in order.
Senator Cogger: He says that this broad secrecy provision constitutes an unnecessary modification to the rights of access currently set out in the Access to Information Act. What are we to do?
Mr. Gagliano: I will invite my official to clarify this.
Mr. McDermott: This goes to the substance of the court case discussed this morning, senator, does not it?
Senator Cogger: I do not know that. There are a couple of cases referred to. My English is not all that good but I can read it. It discusses the non-disclosure of information, even in cases where the Supreme Court has ruled that there should be disclosure. That is what we are about to do in this bill. We are about to prevent disclosure where the Supreme Court says there should be.
Mr. McDermott: This very issue of whether notes should be disclosed, notes of the Canada Labour Relations Board, which will be succeeded by the Canada Industrial Relations Board, was the subject of that trial that was mentioned this morning. In no uncertain terms, the Privacy Commissioner's objections were not sustained. The case is going to appeal. My understanding is that the Justice Department, the Attorney General, will be supporting the substance of the decision of the Trial Division. There may be some objections to some parts of the decision but not the actual substance which this clause addresses. I think it is something that will be before the courts.
There is no impediment, however, that we are aware of, that stops a statute from being amended while a legal proceeding is going on, particularly where the first stage, what we are putting in the statute, has been sustained.
Senator Cools: Senator Cogger, I am not following you. Are you saying that the other commissioner was not permitted to come before this committee?
Senator Cogger: I am not saying that.
Senator Cools: Why do we not bring him here? He should have come.
Senator Cogger: I am in favour of that. Let us call the Information Commissioner. He will know what we have in mind. He wrote to us. Apparently, we are operating under severe time constraints here. I have the time.
Senator Cools: If he had concerns, he should have been allowed to put them before us.
Senator Cogger: Mr. Minister, those two matters are not minor. I do not know of another piece of legislation which has the singular distinction of drawing the attention of not just one but both of these important officers of Parliament. I think it is worthy of our attention.
Perhaps I could go back to the question of temporary workers. Minister, you say people read into it what they want to read into it and that there seems to be confusion. I think your deputy was here when we heard from the very mouth of the deputy chairman of the Canadian Labour Congress. Referring to the clause concerning temporary workers, she said, "We do not know what this position means. Nobody knows."
I have looked at the Sims report, Mr. Minister. I suppose every witness has looked at it. Everyone seems to have difficulty with the wording which, under the guise of being new and different, seems to be unsupported by a current body of jurisprudence. Only time will test it. Some have suggested that the bill should be amended to change the words. The words are not all that clear. If I may quote to you your own words a few minutes ago, you said replacement labour cannot be used by employers to achieve a non-union workplace. Then you talked about what would happen if it is found that replacement labour was used to undermine the union's representational capacity.
I suggest to you that undermining the representational capacity does not mean the same as achieving a non-union workplace. If they mean the same, perhaps we should know. I suggest to you many things can be done to undermine representational capacity without achieving a non-union workforce altogether. One seems to be the ultimate aim to a much greater degree.
Mr. Gagliano: I believe that you are referring to the evidence of the vice-president of the Canadian Labour Congress. She knows very well what it means because she was part of the consultative committee of the consensus group that we have with management and labour.
As I said from the beginning, it naturally depends on everyone's vantage point. Management believes there is too much in there and the unions believe that there is not enough. However, one thing is clear: We can debate what representation is, but if an employer uses a replacement worker to negotiate in bad faith, then the union must go before the board in order to make its case.
We must remember that the main purpose of this bill is the reform of the Canada Labour Relations Board. The board will be comprised of a member from government, a member from management, and the chair, who will be appointed by the government. They will have to prove their case.
I understand that some management groups have a problem with this legislation. Some of them may prefer to have no Labour Code. The unions would like to dictate from morning to evening what employees should do. This is a good, balanced piece of legislation.
The majority of the witnesses we heard said that although there were certain provisions of the bill which they did not like, they accept the bill as a whole because it is an improvement on what we currently have. I do not think we can produce a perfect piece of legislation.
You have raised very important questions, about which I have concerns, but I think this is progressive legislation which will improve the current situation.
Senator Cogger: Mr. Minister, I am not suggesting that there is nothing good in this bill; quite to the contrary. However, I have yet to see a piece of legislation which cannot be improved. I think there are problems with two officers of Parliament.
If we are true to history, this legislation will not be reviewed for another 25 years. Perhaps we should take the time to get it right now.
Senator Forest: Mr. Minister, when the vice-president of the Canadian Labour Congress was here, she said that the bill is part pragmatism and part compromise and that she is very much in favour of having it passed because she thinks it will be an improvement.
In the west, we have real concerns about the stoppages in grain transportation because of the work stoppages and the demurrage charges. The bill seemed very good in that regard. Then we heard a number of witnesses, including representatives from the petro-chemical industry in Alberta, who say that it is not fair.
As you say, it cannot be perfect, but what is your response to those concerns?
Mr. Gagliano: Naturally, once we give the provision to grain, potash and all the other commodities would like to have it as well. If we extend it to everyone, we take away the right to strike. Here we are not taking away the right to strike. The grain handlers keep their right to strike. Under this legislation, if the grain handlers are not on strike and another group or groups in the ports are, then the grain will move, but it will not take away the right to strike. It is good for the grain industry.
In our consultations, and as indicated in the Sims report, some unions said that they were ready to move the grain even if they were on strike. They said that they would not stop grain from moving. So there is a consensus among those parties involved in moving the grain, but not all the port industries are happy, not because the provision is not good, but because they would like to have it for the other commodities.
However, the result of that would be that we would take away the right to strike in any port activity.
Senator Forest: Again, it is pragmatism and compromise.
Mr. McDermott: By way of information, senator, between 150 and 200 members of the longshore bargaining unit might work grain, and that in a bargaining unit in excess of 3,000 on the West Coast ports. So it is quite a small number of people who would continue to work.
Senator Losier-Cool: Is it because of that number that the grain provision is there?
[Translation]
Senator Losier-Cool: Senator Forest is from the west and I am from down east. Could the same thing not happen, or is it that the demand for grain is higher there?
Mr. McDermott: No, what I said was that only a minority of members of the bargaining unit work grain. During the second stage of bargaining, most of the time will be taken up discussing maintaining the volume of all other commodities. Only a small number of people will be required to continue working. Therefore, bargaining or free association rights are maintained.
[English]
The Chair: Mr. Minister, the pulp and paper industry, representatives of the chemical industry and the mining industry were before the committee in the last two or three days. They are all very concerned about this topic. They believe that when they negotiate trade with other countries, one positive element they have to offer is that we have safe ports from which to transport our goods and from which they can guarantee delivery.
Their concern now is that it will be guaranteed for wheat but not for them. We may not be able to convince you to change your mind on that.
The Sims report suggests offering them something else. The "something else" was to include in the act that they could go to final offer selection when they got down to the final decisions. Did your department consider that when you were drafting this bill?
Mr. Gagliano: We considered everything. There was an inquiry into the West Coast ports, which the Sims report looked at as well. Grain is the most important commodity we have. The history of strikes at West Coast ports shows that grain has been used as a bargaining chip. Because of its importance, Parliament legislated workers back to work right away. Therefore, Parliament was doing the negotiation instead of the collective bargaining system which we have and which works so well that it is the envy of the rest of the world.
We are trying to address this commodity. After consultations, we realized that there was a will by the parties to address it. This is something that we believe will work. We believe there is a disposition by the parties to make it work. However, as I made clear when I introduced the bill for second reading, if it does not work and we go back to a regular strike and force Parliament to intervene, we might have to look at the recommendations of the inquiry, which I understand go further than this.
When I was in Vancouver consulting with them, they told me that they were not happy. Again, this is a special commodity. Concerning most of the port strikes, in the past, we had to settle the strikes with back-to-work legislation because of the importance of moving grain.
The Chair: Senator Bosa asked you about off-site workers. On an application by the trade union, the board may, by order, request the employer to give the names and addresses of his employees for the purposes of collective bargaining or unionizing. It also says that the board may order an employer to allow the trade union to use any electronic communications system that the employer uses to communicate with them. This means that the union now would have the opportunity to communicate directly with their other off-site employees.
One of the recommendations made to our committee was that the board would have the names and the board would be responsible for contacting the employees to see if they were interested in being contacted by the union. I know that complicates things, but it seems as if there would be more privacy or that it would be safer that way.
Mr. Gagliano: We considered all that, but there must be a way to do it. Our concern was to ensure that, before rendering the decision and allowing the union to go ahead and contact the workers or their members, the board satisfied the privacy concern and that it was answered on a case-by-case basis. I believe we made that clear. I also made that clear on presenting the legislation, too. That is why I feel comfortable with it.
I believe in the new structure of the board and the competency of the board. Privacy matters will be their concern, as it is my concern, and as it is your concern here today.
We will have to look at where we are now and where we are going. Because of the global economy, technology and downsizing, the workplace is becoming a very small unit. Many people are working at home. Many people are not necessarily working in a place of business. This is a new way of life that we must accept. At the same time, we must ensure that the privacy factor is protected and that workers feel that his or her privacy is not invaded. We did not specify how it should be done in the legislation because then it would involve a general provision. We said that the board, the case-by-case study and the privacy factor are key factors in any decision.
The Chair: I am sure you will hear from someone if it is not.
On page two of your brief you state that, essentially, you are saying there should be no general prohibition on the use of replacement workers. I am sure if you started off the act with that paragraph, you would not be having the problems you are having with it now. That should have been the introduction to this section of the bill.
Senator Cools: However, that cannot be in the introduction because the intention of the clause is the opposite. The intention of the clause is a general prohibition.
I commend you for your two-year long consultation across the country. I make a plea with you, as with every minister, to give the Senate two weeks, or even three, to consult with us as well.
I remind you that two years ago you pleaded with us -- with me, especially, and this very committee -- to pass a bill because it was so urgent that it be passed, and if we let it go, you would fix the problems. Minister, you still have not fixed those problems. I remind you about employment equity.
Having said that, I should like to raise with you questions which that I think are quite serious and that seem to be unfolding more and more as we hear from the witnesses speak to us. I should like to refer to clause 42 of the bill, which would amend section 94 of the act. At page 2 of your remarks you state that, "If it is found that replacement labour was used to undermine the unions representational capacity, this will be declared an unfair labour practice."
That is not what your clause says. As a matter of fact, your clause basically lays out a general prohibition and does not tie it at all to unfair labour practices. The finding of an unfair labour practice is the first finding that should be made. The subtitle of that clause read, "Prohibition relating to replacement workers". The intention of the clause is quite clear. It is not ambiguous. It is quite clear that it is a general prohibition. Therefore, it cannot have a preamble which says there shall be none. It then continues, "No employer or person acting on..." You can then continue with the read this very vague phrase, "...for the purpose of undermining a trade union's representational capacity...".It is has an enormous blanket power. As you stated in your remarks just now, it does not attach itself to unfair labour practices, which is the point that the CPPA made. In point of fact, the finding of an unfair labour practice has been severed from this.
This is a very serious problem. I should like you to clarify it, if you could. You say that you are capturing the narrative of Mr. Sims' recommendation but the result, as articulated in this clause, is rather remarkably different from the language of Sims' recommendation and even the spirit and the intention of it.
Mr. Gagliano: I believe the spirit of Mr. Sims' recommendations are there.
With respect to "unfair practice" and section 94, it states that no employer or person acting on behalf of an employer shall participate or interfere with the formation or administration of a trade union or representation of employees by a trade union.
Senator Cools: I think your drafters have gone further than you may have intended. Perhaps we should look at it. What you have described to us in this submission is not what this clause is saying. It will not have the effect that this clause will have. Your drafters may have been a bit overzealous.
Mr. McDermott: Section 94 of the current code deals with a series of unfair labour practices prohibited for employers. Section 95 deals with a series of unfair labour practices that unions are prohibited from perpetrating. It fits into section 94, which deals with an employer's unfair labour practice. It will be a subsection of that section. It is an unfair labour practice.
The terms used by the task force were "representational capacity" and "undermining representational capacity". As I mentioned the other day, Andrew Sims chaired the Alberta Labour Relations Board. Paula Cnopff sat on the Ontario Labour Relations Board as the vice chairman and Rodney Blouin is a professor of industrial relations and labour law at Laval.
They know what representational capacity means; it is the raison d'être of a union's presence in the workplace to represent employees on the basis of majority support in determination of their working conditions for collective bargaining and in representing them in grievance procedures as well.
It is a well-understood concept in industrial relations circles. I do not think it should go before an experienced labour board with expertise problems.
Senator Cools: Perhaps I did not make myself clear. I will try again.
Mr. Sims' recommendation said very clearly that there shall be no general prohibition on the use of replacement workers. The Clause 42 in the bill begins very clearly by stating that there shall be a general prohibition.
Then Mr. Sims' recommendation continues. Minister, this is very important. I see in your eyes that you are puzzled. I am hoping, Minister, that I am bringing you some new information and that you will look at the matter and treat it with some seriousness. This clause has been raised numerous times by numerous witnesses today alone. Mr. Minister, I am asking you to give it your full attention.
Mr. Gagliano: I am trying to read the same clause that you are reading.
Senator Cools: I am reading from the Sims report at page 131 and from the bill at page 32. Drop right down to the bottom of the page and compare the clause as drafted with Mr. Sims' recommendation. The difference will reveal itself.
Mr. Gagliano: I have answered a numbers of letters. I know from which side the concern comes. We have been trying to explain exactly what we mean. We have been comparing this to the Sims report. I think the Sims report is clear. The wording may be stated in a different way, but the meaning is there.
For example, I have heard objections from the Chamber of Commerce and from other groups who may have appeared before you. Again, we are saying, yes, an employer can hire replacement workers as long as they do not undermine the representation of the union.
Senator Cools: Yes, but Mr. Sims' whole point is that one would have to show that there is an unfair labour practice. It is quite different.
Mr. Gagliano: Undermining the union is an unfair labour practice. They must go to the board and prove the practice.
Senator Cools: I will try again. Mr. Sims is very clear. He speaks of the use of a replacement worker when it is demonstrated to be used for that purpose. That is quite different from the burden of proof which is in your clause.
Mr. Gagliano: The burden of proof is on the party. It is a complaint that goes before the board.
Senator Cools: You do not see the difference?
Mr. Gagliano: No. From the beginning, especially from the management side, that interpretation has been put forward. They have been writing to me and talking to my colleagues in cabinet. There is a big lobbying effort to amend it. If we take the amendment that they propose, we might just as well remove the clause completely because it would have no more meaning.
Senator Cools: Sorry, did I understand that you will take it out?
Mr. Gagliano: If I were to accept the amendments put forward by the Canadian Chamber of Commerce and of their affiliates, then the meaning of the clause would be reduced to nothing.
We are saying here that, yes, in case of a strike, an employer can use replacement workers. If the union feels and believes that the employer is acting unfairly, they can go before the board to make their case. If the board finds that the union is right, then the board can instruct the employer not to use replacement workers. Only then will replacement workers be prohibited. They must make their case before the board.
This is a very balanced position. We had two choices. There is the British Columbia or the Quebec way. In Quebec or in British Columbia, if you are on strike, you are on strike. In the other option, there is no protection at all for workers. I used a clause which gives some protection to the worker and, yes, allows businesses to continue to do business, if they act in good faith and do not undermine the representation of the union. That is what we are saying and what we have been saying from the beginning. This is a contentious clause.
Senator Cools: If that is your intention, that is not what that clause will do. That clause is pretty lofty and gives arbitrary powers.
Mr. Minister, regarding the proposed section 99(1), the board may certify a trade union despite a lack of evidence of majority support. I find this clause to be very troubling in an era of respect for democratic rights, especially the right of individuals to choose their representation. I find that particular clause to be disturbing. Perhaps you could persuade me that I should not be disturbed by it.
Mr. Gagliano: This clause follows word for word the recommendation of the Sims report. Five provinces have a similar statute while five others do not.
Senator Cools: What was the basis on which you agreed with the five provinces thatwho do have it?
Mr. Gagliano: It is a Sims recommendation. In changing the labour legislation in Canada, we have established what we call a client consensus working group, which is represented by the major employers' groups in the federal jurisdiction and the major unions. This is one of those recommendations.
Mr. McDermott: This is the balance of the report.
Senator Cools: I have a problem with a board being able to appoint representatives without any evidence that those many individuals agreewant it. Your words here are "despite a lack of evidence of majority support."
Mr. Gagliano: At the bottom of the page, you will see clause 99(1) states:
the Board is of the opinion that, but for the unfair labour practice, the trade unions could reasonably have been --
Senator Cools: That makes it worse.
Mr. Gagliano: It continues:
-- expected to have had the support of a majority of the employees in the unit.
Senator Cools: That makes it worse. That does not bring me any comfort. As a matter of fact, that heightens my anxiety.
Mr. Gagliano: Five provinces have the same or similar provisions.
Senator Cools: However, this is a department of the Government of Canada, and if some of the provinces are erring, then it is certainly not our job to follow them in their errors. Certainly, it is our duty to set them straight.
Mr. Gagliano: Not at all; however, this amendment was the fruit of two years of consultation. The consultation group which went there looking for consensus recommended as such. If you read the Sims report, it is almost word for word.
Mr. McDermott: Employers who play by the rules do not like employers who do not play by the rules. It is something in the form of unfair competition. This was part of the Sims report that was accepted as a package. It did not give rise to major comment during the consultations held by the minister across the country from either side.
Senator Cools: However, it has given rise to some here. I have a few problems with Parliamentus putting into statute a provision which basically says that we can deny people primary rights of choice. Would it not be dandy if a bill could pass the Senate without a majority vote? This is what you are proposing here, Minister.
Mr. Gagliano: It is the board again. It is a representational board, it is not a union doing that or the management.
Senator Cools: No, but you are neglecting the employees. This is fascinating. We can convince ourselves of anything, but I read that clause as saying that we are setting new and dangerous ground. Every single institution in the country will start to say that they can have a representative chosen ignoring the democratic rights of people to choose otherwise. I would ask you, Mr. Minister, to consider that very seriously. It is very bad.
The Chair: On that note, I will thank the minister very much for coming before the committee today. If you had used the Sims recommendation on replacement workers you would not have any difficulties with that clause today.
Mr. Gagliano: My officials will try to give more explanation on individual points for senators to consider. If there are other questions, they will be here to answer them. I apologize again for not being here at the beginning of your hearings.
Senator Phillips: Madam Chair, I have a suggestion arising out of the questions asked by Senator Cogger. He referred to the Privacy Commissioner and to the Information Commissioner. The minister, in defence, was saying he had consulted with the Department of Justice.
Madam Chair, I wonder if we could have our Law Clerk appear before the committee at our next hearing to indicate to us who should guide the committee, officers of Parliament or the Department of Justice.
I find it confusing that we have these officers who report to Parliament telling us one thing and the minister justifying his point of view by saying that he consulted with the Department of Justice. I should like to have some direction in that regard. Can we hear him from Mr. Audcent first thing in the morning?
Senator Bosa: There is also a court case heard before the Federal Court which dealt with the issues raised by Mr. Phillips.
Senator Cogger: With one of the two issues brought up by Mr. Phillips.
Senator Bosa: One of the two issues, yes.
We have the evidence before us. We had the letter that was sent by the Federal Court.
Senator Cogger: Senator Bosa, it is clear that the concerns of Mr. Bruce Phillips, the Privacy Commissioner, were twofold. One dealt with clause 50 and the other dealt with clause 54. The court case to be decided upon is covered under clause 54.
Regardless of the outcome, the commissioner's concerns under clause 50, that is, the divulging of the names and addresses of off-site workers to the unions, remains whole and unanswered. When the minister was asked about it, he said that he consulted with the Department of Justice.
Senator Cools: I have not given it that much thought. However, we the committee should bring our own Law Clerk before the committee and put those questions to our own Law Clerk him for his legal opinion. Let us see what is the difference.
Senator Maheu: I should like to ask Senator Phillips a question. Our Law Clerk has not had time to study the issue. May I assume that through this tactic of asking him to voice an opinion on something he has not had time to study that we will in fact be scuttling the bill? Why do we not be honest and say that is what we are doing?
The Chair: Could we not hear him first thing in the morning?
Senator Cools: Could we not hear him tonight?
Senator Phillips: Tomorrow is what I had in mind. I agree that he should have the opportunity to study the bill.
Senator Maheu: Will he need time to study the bill?
Senator Cools: Some of these issues he should well know. His business is advising senators. I expect he is quite up to scratch on much of this.
Senator Cogger: According to the minister, we have not looked at this legislation for 25 years. We can take another day. There is no big rush. June 2 is not a sacred day.
The Chair: Let us say tomorrow morning at 9:00 a.m.
I thank the panel for coming.
I want to welcome our witnesses from the Business Council of British Columbia. Please proceed.
Mr. Tim McEwan, Senior Policy Analyst, Business Council of British Columbia: Madam Chair, by way of background, the Business Council of British Columbia, established in 1966, is an association representing approximately 150 large- and medium-sized businesses. Our members are active in all major sectors of the provincial economy, including forestry, manufacturing, construction, retail, mining, oil and gas, utilities, financial services, agri-food, transportation, telecommunications, petrochemicals, health care, education, and the professions.
Taken together, the corporate members and the associations affiliated with the Business Council of British Columbia account for approximately one-quarter of all direct employment in British Columbia. Included within our membership are 24 federally regulated companies engaged in telecommunications, financial services and interprovincial and sea-bound transportation.
Since its inception, the business council has been active on labour relations issues in B.C. It often acts as an intervenor on behalf of the business community before the B.C. Labour Relations Board. In addition, the business council has, as one of its core functions, monitoring and reporting on the status of collective bargaining and negotiated settlements on a monthly basis.
The business council is pleased to make a submission to the Standing Senate Committee on Social Affairs, Science and Technology on Bill C-66. The business council participated in the deliberations of the Sims task force review on the Canada Labour Code during 1995. The business council also participated in the Minister of Labour's round table discussion on selected aspects of the Sims task force review report entitled "Seeking a Balance".
In our previous submissions and representations on reform of the Canada Labour Code, the business council has advanced the proposition that the code generally has worked well for federally regulated businesses and trade unions. Enterprises within the federal jurisdiction generally enjoy very mature collective bargaining relationships which do not require much regulatory overlay -- that is, labour-management relationships within the federally regulated sector generally do not require much micro-management by the state through interventionist labour legislation.
The quest for balanced labour legislation is a key theme of the Sims task force review. The business council was generally pleased with the overall balance which the task force achieved in its recommended reforms to the Canada Labour Code. The need for balance within the code is very important given the nature of the undertakings covered by the legislation and industries which are key to the competitiveness of the Canadian economy.
Federally regulated enterprises have a major impact on the larger Canadian economy as they provide much of the general infrastructure for other important wealth-generating businesses, including those of a local or private nature regulated by provincial labour legislation.
The balance sought and achieved by the Sims report did not flow through to the draft legal text of Bill C-66 in many cases. In other instances, matters within Bill C-66 were not dealt with conclusively and, in some cases, not at all within the Sims report. Regrettably, the Minister of Labour chose not to consult with interested parties on these matters immediately prior to tabling Bill C-66 in the House of Commons. Moreover, the House of Commons Standing Committee on Human Resources Development denied many interested parties, including the Business Council of British Columbia, an opportunity to appear at the hearings on Bill C-66 in December.
The business council wishes to address a few key aspects of Bill C-66, including the special treatment accorded grain in the event of labour disputes; the draft provision relating to prohibited use of replacement workers; provisions relating to successive contracts for services within the air transportation sector; and provisions requiring employers to provide the names of off-site workers to trade unions following a determination by the Canada Labour Relations Board. In relation to the latter point, and in the interest of time, we will refer you to our submission and we will cover off the other points.
Before turning to each of the three initial concerns we have with the bill, we believe that the substantive policy thrust of each of these areas is fundamentally at cross purposes with other positive initiatives of the federal government. The government's central policy priority since its election in the fall of 1993 has been to create opportunity by, among other things, providing the private sector with the tools to become more competitive and through aggressively pursuing expanded trade links abroad.
The Team Canada trade mission to Asia earlier this year is the most recent manifestation of the government's aggressive strategy to grow export markets for Canadian-produced goods and services and thereby enhance domestic job creation and retention. This should help spur, in our view, increased domestic goods production and demand for rail, trucking and sea-bound transportation services, further building upon three solid years of export growth.
In a similar vein, the Open Skies agreement has brought up a considerable amount of economic activity. Within our own backyard, it has furthered the quest of the Vancouver International Airport Authority to become a major hub for air passenger and cargo transportation. Telecommunications businesses also have tremendous opportunities under the government's globally oriented trade policies.
Yet, against the positive backdrop of the government's jobs and growth strategy, are provisions within Bill C-66 which, if implemented, will work at cross purposes to this agenda.
The potential consequences of the three main concerns we have as they are presently constituted within Bill C-66 must not be understated. There is very real potential for existing jobs to be exported and for prospective jobs for Canadians not to be realized.
Turning to our first concern, which deals with the special treatment provided to grain in the event of a strike or lockout, specifically the proposed section 87.7(1), we believe that this clause provides special treatment for grain in the event of a strike or lockout. We wish to go on record before your committee as opposing this measure in the strongest possible terms. While grain moves through British Columbia ports in sizeable volumes, it is eclipsed economically by forestry, mining and metals, machinery and equipment and energy exports by a considerable margin.
I would at this point refer you to table A on page 5 of our submission which details the relative importance of grain as a Canadian export commodity.
If there is a case for ensuring that a given commodity continues to move through the ports system unfettered by strike and/or lockout activity, then the privilege in our view should extend to all commodities, not exclusively grain. Failure to ensure equality of treatment for all commodities will likely lead to destabilized labour relations. As the incentive for longshore workers to engage in responsible collective bargaining is removed, it may lead to lost export opportunities and hence protection and enhancement of job creation opportunities. Potentially, it may lead to lost Canadian-based customer-supplier linkages as firms reroute products and/or services through the United States. Experience shows that once jobs are lost to other jurisdictions in a labour dispute, it is very difficult to get them back.
A further unintended consequence of this provision is that it may pit one region of the country against another given the lesser significance of grain relative to other commodities produced within British Columbia. This is depicted in table B, which is on page 6 of our submission.
If you look at the commodities listed in table B, between solid wood products, pulp and newsprint, you will see that comprises over 60 per cent of the economic input in the province of British Columbia. At this point, we must ask what special treatment means for the forest industry and other sectors operating in British Columbia.
In our estimation, honourable senators, it suggests that the policy makers value the contribution of these industries to the Canadian economy less than grain farmers operating in Alberta, Saskatchewan and Manitoba. We do not think that federal policy makers would intentionally do this. Yet, by allowing the proposed section 87.7(1) to proceed, policy makers are saying, even if unintentionally, that forestry and other sectors are of lesser importance to grain.
In effect, commodity producers in British Columbia will bear the brunt of a strike or lockout at West Coast ports as a direct result of the continued export of grain. In our respectful submission, this is unacceptable.
The business council recommends that this proposed section 87.7 be removed from Bill C-66.
Our second concern relates to successive contracts for services within the air transportation and other sectors. This provision, as you probably well know by now, imposes an obligation on airports and air carriers to ensure that federally regulated contractors providing services to their operations are compensated at the same rate of remuneration as a former contractor who is covered by the Canada Labour Code Part I. Effectively, this provision represents de facto elimination of the open tender process within the broad air transport and services industry.
The provision also has no substantive basis within the Sims report. In fact, to our knowledge, such a policy was never discussed with the airports, air carriers and other service providers within the industry. Again, in our respectful submission, this is patently unreasonable.
As we understand it, the provision seems to flow from a 1988 agreement between the Minister of Transport and the Air Transportation Association of Canada to provide minimum pay rates for persons employed in airport security screening. Airports and air carriers have a multiplicity of contractual arrangements with federal contractors to provide other services. These contract services relate, among other things, to the following: aircraft maintenance, trucking, refuelling services, catering and cargo handling services. The requirement under this section that the same rate of pay flow through to a new contractor seriously undermines the ability of air carriers, airports and other service providers to engage the most cost effective providers of contracted services. We question the advisability of this provision, given increasing competition within the airline industry, and with the advent of the Open Skies agreement. We also question the advisability of this provision given the demonstrated need for cost relief and restructuring within segments of the Canadian airline industry in recent months.
Perhaps more fundamentally, the proposed section 47.3 is at odds with the free collective bargaining process. A basic underpinning of the collective bargaining process is that both parties, employers and employees, have a role in negotiating terms and conditions of employment suited to their workplace. This provision effectively thwarts an employer's flexibility to make trade-offs between the provision of wages and benefits, and other issues at the bargaining table.
Many federally regulated businesses continually search for the means to reduce costs, in many cases through contracting out services. Removing the ability of federally regulated contractors and contractees to develop innovative wage options raises the prospect that many federally regulated businesses may have diminished competitiveness relative to operators in the United States and elsewhere.
The business council believes that this proposed section sends very negative signals to prospective investors from the United States and elsewhere. Investors seek certainty in regulatory policy. However, certainty in contractual arrangements may be illusory as the proposed section 47.3 effectively imposes a wage cost structure not of a contractor's own choosing.
What then, we must ask, is the policy purpose behind this provision. In our view, there is simply no legitimate or justifiable public policy purpose behind this section.
Another aspect of this section warrants comment. Under subsection (1)(b), the Governor in Council, on the recommendation of the Minister of Labour, can designate that other industries engaging federally regulated contractors be obliged to pay remuneration not less than that of the previous contractor. This effectively allows the Minister of Labour to suspend collective bargaining and to open tendering within the broad federally regulated contractual sector. It is simply not reasonable in our view that the Minister of Labour be allowed the authority to predetermine an employer's wage cost structure outside free collective bargaining and the competitive tendering process.
Fundamentally, federally regulated enterprises should not be inhibited from contracting with quality, least cost service providers, if their cost structure dictates that this is necessary.
At this point, I should like to turn over our presentation to Ms Shuttleworth to deal with the matter of the prohibition relating to the use of replacement workers.
Ms Judy Shuttleworth, Business Council of British Columbia: Honourable senators, I have worked for the last 32 years at BC Telecom, 26 of those years in labour relations. I say that by way of trying to make some sense of the language used by the minister who indicated that all labour relations practitioners understand this language. I will be one of the first to say that I am having difficulty, even after 26 years, understanding the proposed language.
In my opinion, there is no question that the replacement worker review has been the most controversial of all the Sims reviews. I think that was evident when the minister was here today. We heard people around this table asking for clarification in that regard. When you have legislation about which immediate clarification is asked, you see that it is a means of disturbance between labour and management. During negotiations we try to spend an awful lot of time drafting language that both parties understand and can live with.
If, at the beginning, we say, "Do you understand the language?" and the answer is, "No. Do you?" then you are asking for problems.
I am here today to ask that we look at the language being proposed and to go back to what the minister said. I was quite encouraged to hear him today because, in effect, he said that he fully supports the Sims report. He said that he felt that it was a complete balance. I agree with that. From a business perspective, while we did not like everything in the report, we said, on balance, it was acceptable. However, it was acceptable with the language that Sims had drafted. The reason why it was acceptable to us is because we understood what it meant.
When that language was changed, as it is in the proposed language, we do not understand it. In fairness, we should be looking at the Sims language. The minister used an interesting word. He said there is a reference in the proposed language to "legitimacy". I am sorry I do not have the exact words, but I think he said "legitimate purposes". There are no words in the proposed language which say "legitimate" anything. If you look at the Sims language, you will see it talks about "demonstrated and legitimate".
Philosophically, when I was listening to the minister, I did not think we had a disagreement. Where we disagree is in the draft language.
If that is our only disagreement, why is it that we cannot go with the language that the minister himself says he agrees with? He said, "I agree with Sims." If he agrees with Sims, as do business and labour, then let us go with what Sims says.
Sims and his task force are the ones who spent all their time in the discussions with business and labour in the public forums. I ask you to support the language of Sims and support what labour and management understand. Therefore, hopefully, we will have less ambiguity and less need for adjudication on what that language says. That is all we are asking.
We are not here to argue that we should have the absolute right to use replacement workers at the detriment of the union in order to rid the companies of unionization.That is language from the 1920s. I am not here to ask that. I am here to ask for the proper language as was drafted by Sims, and that you support that.
Senator Bosa: Madam Chair, there were several issues raised here by the witnesses. Let us deal with Mr. McEwan first. Do you have anything good to say about this bill? You seem to have complained about it from every possible angle.
Mr. McEwan: I do not think we have said anything completely different from what others who have appeared before you have said. What we are saying is that the Sims report represented to the employer community a fairly decent piece of work on the Canada Labour Code.
The grain issue was canvassed within the Sims report, but there was no express recommendation for the continued export of grain during strikes and lockouts.
With respect to the air transport issue, that was not contained in the Sims report at all. With respect to the issue raised by Ms Shuttleworth, there is an incongruence between the wording of the Sims report and what came out in the proposed section 94(2.1).
Senator Bosa: Let us go back to the criticism that you voiced about the preferential treatment of the transportation of wheat to the detriment of other commodities. Wheat is a perishable good. If you leave it out in the open for a long period of time, it goes to waste, whereas coal and other commodities do not have such a problem.
Furthermore, if the minister had to incorporate all the commodities in the same way that he is dealing with the transportation of wheat, would that not destroy the bargaining process between union and management?
Mr. McEwan: Last week, I believe you heard from the B.C. Maritime Employers Association. What employers and ourselves argued at the time of the industrial inquiry commission into West Coast ports was for final offer selection arbitration, so that grain and other products would continue to move through the ports. What we are saying here is that it seems that one commodity has been singled out for special treatment versus others produced within the province of British Columbia.
Senator Bosa: But there is a very good reason why wheat is singled out. They always depended on Parliament to put them back to work again.
Mr. McEwan: Again, I would refer you to BCMEA's submission of last week. Not all disputes within the federal sector involved grain in the ports. I have read that submission. I will just leave that thought with you.
Senator Bosa: As far as competition is concerned, you say that we might lose out to competition. For instance, somebody might choose to go through the Port of Seattle rather than the Port of Vancouver. Do they not have the same problems that we have? They have the same problems, such as wage increases, work stoppages and labour relations, as we have in Canada. They have them in the United States as well. They do not have any advantages that we do not have.
Mr. McEwan: Within the Canadian context, Senator Bosa, and the West Coast experience in British Columbia, if you look at what the government's agenda has been, you will see they have done some excellent work in growing export markets. We think this provision raises the prospect of more labour disruptions, not fewer, simply because you have provided to the unions a bit of an economic weapon in that they can continue to draw some income while the rest of the port is out on strike.
The last issue is one we raised earlier, the issue of inequity of exports. You are singling out grain for special treatment, yet within the province of British Columbia, forestry is the number one industry. What does that say to forest-dependent communities when their products do not get to markets while grain does?
Senator Bosa: How are forestry products treated at the present time as opposed to what the bill proposes?
Mr. McEwan: Can you clarify that, senator?
Senator Bosa: We have legislation on the books now, and Bill C-66 proposes to make some amendments to that legislation. How would forest products be treated differently under the proposed amendments to that law as compared with how they are treated presently?
Mr. McEwan: It is simply because grain is not singled out in the former legislation.
Senator Bosa: You are not answering my question. It is only wheat that is getting some preferential treatment, for the reasons that I have mentioned. Under the present legislation -- I am not including Bill C-66 because it is not yet law -- how are forestry products treated now?
Mr. McEwan: They are treated the same as every other commodity.
Senator Bosa: How can you say that this bill discriminates against forestry products or other commodities when there is no change in that area? It just gives preferential treatment to one commodity which is a perishable good.
Mr. McEwan: Senator, in the singling out of grain and giving it special treatment, there is the prospect -- it is hypothetical, admittedly -- that that provision, because of the volumes of grain that move through the port -- and I am not talking dollar value but volumes -- may have the effect of prolonging, not shortening, work stoppages.
Senator Bosa: Only with respect to wheat or other commodities?
Mr. McEwan: Other commodities. Within the longshore industry, it will prolong the longshore strike while you have certain employees engaged in delivering services to grain vessels.
Senator Bosa: We have had assurances that it would not. You are entitled to your view.
Madam Chair, I do not want to monopolize the meeting, if there are other senators who wish to ask questions.
Senator Forest: We heard from many different groups last week and again today. We understand that the grain industry has been given constitutional backing since day one, and that that is one area of difference. Senator Bosa has pointed out that wheat is perishable. It is also a food product. We are talking about losing business and exports and so on. I have been involved with the railways for a number of years and the charges being charged to prairie farmers because the ports are not handling their grain has been substantial over the years. In many instances, they feel that they are not a part of the problem, yet they have been held hostage on many occasions by disputes that did not involve their grain handlers at all. That is their concern.
Mr. McEwan: Senator Forest, I hear that concern and recognize it. I think there is considerable validity to it. However, forest products companies in the interior of British Columbia, where I am from originally, have also been held hostage to the same kind of labour disputes within the longshoring industry. What we recommended to both the Sims task force review and the industrial inquiry commission into West Coast ports was simply the choice of policy instrument B, method of form of final offer selection arbitration, because of the prime importance of port facilities to the entire British Columbia and Western Canadian economy. I am not here to beat up the commodity of grain.
Senator Forest: I understand that.
Mr. McEwan: I am agreeing with you. I am merely suggesting that I think there has been the wrong choice of policy instrument.
Senator Forest: I have dealt with final offer arbitration in other areas, such as at the university, where it has worked very well. What was the response of the Sims report in connection with that? Did they address that issue at all?
Mr. McEwan: Sims did address that issue. They did not come up with an express recommendation, however.
There is no express recommendation at the end of it. It did suggest that the Minister of Labour consult with interested parties. To my knowledge, the minister did that. He did not consult with us on that issue.
Senator Bosa: Miss Shuttleworth, you said you have worked for your company for 32 years.
Ms Shuttleworth: Yes.
Senator Bosa: Did they hire people at the age of eight?
Ms Shuttleworth: I thank you for that compliment.
Senator Bosa: I have heard your concerns regarding the simplicity of the language in a clause that is not very well understood. You said that you were here when the minister testified before the committee. You might recall that I asked him the same question, because I had the same concern. He gave me an answer with which I just cannot argue. He said that they are aware of that.
Furthermore, you mentioned the Sims report. In addition to the Sims report, the minister went back to the community from coast to coast to try to bring together certain clauses that would be agreeable to the opposing sides. Apparently, in connection with this particular matter, the Sims report was disregarded in favour of different language.
Ms Shuttleworth: With respect, senator, I was involved in the round table discussion in Vancouver where the Sims report was discussed. I certainly was not aware of that new language at that time. That new language was drafted after the minister travelled the country, so I do not think that is quite right.
With respect to the minister, I think that language is very ambiguous. To rephrase what I said, if the minister supports the Sims report, as he says he does, why do we need a change to that language when the language indicates that the dispute must be demonstrated to be for the purposes of undermining union representative capacity rather than for the purpose of legitimate bargaining objectives?
All of that language has been taken out. The language now just says "for the purpose of undermining a trade union's representative capacity". The minister says he understands it, and I respect that, but I do not understand it, nor do my colleagues. We truly believe that it has changed the initial context.
If we all felt so strongly about it, why do we not just leave it?
Senator Bosa: That point has been made by others. Because of these explanations, I decided to ask the minister for an interpretation, and he gave us one.
Ms Shuttleworth: Yes, he did. I am sure he sincerely believes that, but if his constituents, who are labour and business, are saying that they do not understand it, that it is open to interpretation, that it is ambiguous, then let us do something about it.
Senator Bosa: Senator Forest reminded the committee of what the vice-president of the Canadian Labour Congress said.
Senator Forest: We asked why the Canadian Labour Congress would agree with this and Nancy Riche said that the bill is part pragmatism and part compromise and that on the whole they agree to go ahead with it.
Ms Shuttleworth: Business agreed with the report because there was a quid pro quo for it, the language that was drafted by Sims. That was for business where there was some demonstration that they were out to "break the union". That is fair. On the other hand, the union's protection was that replacement workers could not take the jobs and that replacement workers could not be certified without rulings from the board.
The workers are protected. Where is the protection for business? It has to be that we can run our businesses economically until it has been demonstrated that the reason we are continuing to run them is to rid ourselves of a union. I think that is a fair deal. I am a business person. I agree with that.
Now we are taking out the demonstration. It no longer has to be demonstrated, it just has to be interpreted that I am doing that to the unions. I think we are just taking it one step further than what Sims said. I am saying that in the balance of fairness it has to be balanced for both of us. I believe that the balance is in Sims.
Senator Forest: I see your point. I want to go back to the business of final offer. It says in the Sims report that it is this effect which leads some to describe FOS as the one-armed bandit of labour relations and that in their view neither conventional arbitration nor FOS offers an attractive substitute.
It seems that they were not really in favour of it either.
Senator Bosa: Ms Shuttleworth, you are very convincing. I like the way you articulate the issue. However, the Sims report was just a reflection of the situation. It was not expressed in legal language, as it needs to be, and that is the reason it was changed.
Ms Shuttleworth: I have 25 years of experience in drafting labour language. I looked at Sims. That is legal language. It is often not lawyers who draft language which applies to labour. I am not a lawyer and the people with whom I deal in the labour movement are not lawyers. We draft language, we ask each other what it means, and we come to an understanding.
I have no problem with who drafted this language, but I do not think it means what it was intended to mean. If it is ambiguous now, imagine what will happen over the next 25 years as we use this language.
Senator Bosa: Twenty-five years was mentioned before. It is not cast in stone.
Ms Shuttleworth: No, but it usually takes a long time to change language. Once it is in there, it stays. I agree with whoever said that we should get it right up front. If it has been 25 years, it does not hurt to take another few days to get it right.
The Chair: Senator Bosa, if you have read all the information you have received, you will know that most people are saying that if they had just used the Sims language they could agree with that section.
Senator Bosa: We also had the benefit of the officials telling us that the reason it was changed was because it had to comply with precise legislative language.
The Chair: On the other hand, someone tells us that this language has not been used in any other piece of labour legislation.
Ms Shuttleworth: That is true.
Senator Bosa: What you say makes sense, if we were to deal with one another. Sometimes we just shake hands instead of putting things into a contract. However, this has to apply from coast to coast to everyone. Therefore, it must be drafted in a way that it can be interpreted in the way it is intended to be.
Ms Shuttleworth: I say it is not interpreted in the way it was intended when I hear what the Minister of Labour said. These words do not match what he said. He used the word "legitimate". The word legitimate is not in there. If words are supposed to be there, let us put them in. That is all I am asking.
Senator Forest: We have heard a lot of concerns on this issue and it needs consideration.
The Chair: Thank you very much for appearing here this evening and for giving us your perspective. We are glad to hear that you sat on the task force which helped to draft this bill.
Ms Shuttleworth: Thank you very much for hearing us out.
The Chair: We have one more witness this evening from Vancouver.
Mr. Renwick, please proceed.
Robert J. Renwick, Chairman, Western Canadian Shippers' Coalition; Transportation\Logistics Consultant to the Council of Forest Industries: Madam Chair, we sent our brief to you about 10 days ago. Today, we will try to answer any questions you have.
With me is Kevin Doyle whose company Sultran Ltd. of Calgary, Alberta transports all the sulphur mined and produced in western Canada to ports on the West Coast. Kevin is also a member of the British Columbia Maritime Employers Association and, as such, has a great deal of information on what happens in negotiations between the International Union of Longshoremen and Warehousemen in the Canadian area. He can share with you some of the things that will happen in the event of negotiations for a new labour contract if the grain exemption continues.
We also feel that, perhaps, we can give Senator Bosa a little clarification on the questions he was asking of representatives of the Business Council of British Columbia. I can share with you, as someone who has been in the pulp and paper industry in British Columbia for the better part of 40 years, that there is a profound and extremely costly effect on the forest industry when there is a longshore strike.
We do not have the expertise to discuss the other controversial items in the act. We have confined our remarks in our presentation and today to the issue of the exemption for grain.
We believe this bill is retrograde legislation. We suggested in our brief that we felt an answer to that was final offer arbitration selection. There may be other answers. After Mr. Doyle says a few words, we will take your questions.
Mr. Kevin Doyle, President and Chief Executive Officer, Sultran Ltd.; Member, British Columbia Maritime Employers Association: Honourable senators, we appreciate that we are last and we will therefore try to be mercifully brief. We really have one issue on which we want to focus.
We are here as producers and exporters and not as labour relations people. We are addressing one issue which we think is of paramount importance to us. That issue deals with the proposed section 87.7(1) as currently proposed in the legislation.
This provision affords an unprecedented preferential treatment to one export cargo -- grain -- over all other export cargoes handled on the West Coast at Canadian ports. About 70 per cent of the tonnage handled through West Coast ports is non-grain. Only about 30 per cent, in tonnage terms, represents grain.
This proposed section 87.7(1) will require the longshoring industry to provide employees to tie up, let go and load grain vessels in the event of a labour dispute between the employers and longshoremen. That is discriminatory to all other export and import cargos.
Most West Coast ports are manned by longshoremen, ILWU employees who are in a monopoly position in the ports where they work. They bargain collectively as one through their Canadian area umbrella group. The employers have responded to this by bargaining through their umbrella group as one. That organization for longshoremen is the BCMEA which has appeared before this committee. For the longshore foremen, it is a group referred to as the WFEA.
There is a balancing of power in this approach between the employers and the longshoremen on the West Coast of Canada. The proposed section 87.7(1) will destroy this balance. Longshoremen, who are all dispatched daily from a dispatch hall, will spread the work on grain around so that most, if not all, longshoremen will earn some wages from grain during a strike or lockout. In effect, grain will subsidize the port labour disruption. Undoubtedly, the effect of that will be to extend any labour disruption on the West Coast of Canada.
Further, grain will be forced to participate in any cost increases that result from the labour dispute settlement. When the employers in the longshore industry reach a settlement, as they inevitably will, with or without the help of the Government of Canada, that cost will be passed on to those longshoremen who work on grain.
Grain, through this exemption, will both subsidize the disruption and will participate in any costs that result from the settlement.
If the intent of the exemption of grain is to keep grain working through disputes, why are the railways, grain handlers, PSAC and other unions not included in this? Why is it only longshoring?
It is a fact that in the last 10 years, since 1986, grain has suffered six labour disputes, involving a total of 91 days, that had nothing to do with longshoremen but that stopped the flow of grain through the West Coast ports. During that same period, there were four longshore disputes involving a total of about 25 days. Whether they feel they are being used or not, the big problem for grain in their disruptions for exporting has not been longshoring; it has been other unions which are not addressed in this legislation at all.
The proposal contained in 87.7(1) to exempt grain will not accomplish the intended objectives. However, it will seriously upset labour relations in longshoring for all other commodities. The cost of that will be shared by grain.
Grain is important. We are not here trying to suggest to you that it is not. However, it needs to be put into some perspective in terms of employment. It certainly does not represent employment of 30 per cent of those people who work in western Canada. The exports through the West Coast of Canada certainly do cover something closer to 60 per cent or 70 per cent of the employment in Western Canada.
In terms of dollar amounts, exports other than grain are even greater than the 70 per cent represented in terms of tonnage. Grain is important but so, too, in terms of jobs and wealth creation and markets, are all the other commodities that we represent in the group we represent here today. It is not fair to single out one commodity for the special treatment that is proposed in the Canada Labour Code amendments.
If the exemption for grain is allowed to stand as presently written, its eventual effect will be to drive other commodities to seek non-Canadian alternatives.
The potash industry, as some of you may be aware, has erected and will have in operation fairly shortly a terminal in Portland, Oregon, for some of their potash from Saskatchewan. If this exemption goes through and if the effects are as we suggest, it will make them look like geniuses. That sends a clear message not only to the rest of us who produce and export non-grain commodities, but it will say something very loud and clear to our customers around the world, too, whom we try to supply in a reliable and dependable way. It sends a message which I do not believe is intended nor that the Canadian government would want to send.
The interesting thing is that there is probably no other commodity which has as many alternatives as grain does in terms of where they might ship. Grain by virtue of rail capacity, by virtue of terminals and handling capability, can move through the seaway, through east coast ports, through the Gulf, and through the U.S. west coast. Most other commodities, either in terms of economics or specific facilities, do not have those kinds of flexible arrangements and are therefore locked in on the West Coast.
The one commodity that probably has more flexibility than any other is grain and, oddly enough, it is singled out for this exemption. It is difficult to understand.
We would propose that if there is genuine concern about longshore labour disputes, and it is justifiable to have that concern, that the exemption be extended to all commodities and some form of final offer arbitration be instituted. Failing that, we would ask that the exemption for grain in the proposed section 87.7(1) be removed.
Another alternative could be that any action be deferred on this bill so that there can be some second thought at a later time to deal with the complex issues proposed in this legislation.
The Chair: Would you tell us why grain has the flexibility that the other commodities do not to travel south?
Mr. Renwick: In many cases, for exports, it is a question of terminal facilities. In other words, it is the ability to have your products discharged from rail cars and loaded on to ships because those transhipment facilities do not exist or do not exist in sufficient quantity to handle the volume of products that there are.
In the forest industry, to some extent, it is a question of geography. The rail infrastructure is based on moving forest products through Vancouver. There are rail lines that exist to take forest products to some of the U.S. west coast ports. However, there is not a sufficient supply of rail cars to maintain that. After about four or five days, the industry runs out of rail cars.
In most cases, wood pulp in particular, which is a mainstay in Alberta and British Columbia, is a perishable product. It cannot stand outside, particularly in winter weather. It has to continue to move. If it cannot be moved, the production unit has to shut down. That is a full stop.
The Chair: It is similar to grain, in that grain has to move as well.
Mr. Renwick: I grew up on the prairies, in Saskatchewan. In poor sales years, the farmers certainly stockpiled an awful lot of grain when they could not sell it. There is some deterioration, I accept that. However, when we are looking at a period of disruption and if grain is treated like everything else, then it is short term. However, that short term can be very devastating to a pulp mill in the central interior of British Columbia or in northern Alberta where it has no place to put its product.
As Mr. Doyle said, we are not suggesting that grain should not have some exemption. We are suggesting that if it has an exemption, then so should the other products. There should be some other solution to solving the West Coast longshore labour disputes.
Senator Bosa: Did you mention that Saskatchewan has chosen or is in the process of providing a different route to reach ports in the State of Oregon?
Mr. Doyle: Yes.
Senator Bosa: American longshoremen go on strike, too. Perhaps somebody could enlighten me. I have never heard that Congress has legislated longshoremen or other unions back to work.
The Chair: Except the air traffic controllers.
Senator Bosa: I remember that. Thank you for reminding me.
Mr. Doyle: Longshore workers go on strike in the United States, of course, although less frequently than they do in Canada.
The efficiency and productivity of longshore workers on the U.S. Pacific west coast is generally considerably higher than it is, for instance, in Canada. That is part and parcel of the bargaining process, the kinds of agreements, terms and conditions that are put in the contract between the employer and the workers.
Canadian longshore employees are generally historically less efficient. While they do strike on the Pacific U.S. west coast, they strike less frequently. They work more efficiently and they strike at different times, if there is a labour disruption.
Senator Bosa: However, if more traffic were directed to that part of the state, would that not cause the unions to take advantage of it to ask for bigger increases?
Mr. Doyle: It is possible. It is possible that they will look at the increased work opportunity and respond favourably in that sense. There is a fair degree of competition between the U.S. and the Canadian West Coast on containers and other commodities.
As I understand it, both the employers and the longshore workers in Portland have looked favourably at the idea of handling Canadian potash. They have responded very positively.
Senator Bosa: I sympathize with what you say. I know that a strike is costly and devastating. I have read about the consequences of strikes not only in British Columbia but in other areas as well.
To extend the same privilege that we will have under Bill C-66 to forestry and other areas, would that not destroy the bargaining process?
Mr. Doyle: It is debatable whether there is much of a bargaining process at the present time. As a result of the very large public interest that was involved in the shut down of the West Coast of Canada, Parliament has felt compelled to intervene over the years. It is a very difficult issue.
Final offer arbitration may not be a very satisfactory solution but, in many ways, if you look at the history of longshoring on the West Coast, that is what has happened any way. Any time there is a dispute, the Canadian government is compelled to intervene in the national interest.
If there is final offer arbitration does a great deal change? Frankly, it does not. If final offer arbitration is that unacceptable, that might encourage the parties to bargain and to try to reach a settlement that avoids that particular process.
There are no simple or easy solutions to the problems on the West Coast of Canada. If there were, I wish I could propose them. Again and again, the Canadian government has been forced to intervene for legitimate reasons. They will probably be required to intervene in the future.
If grain is removed from this process, then the political hot button disappears and the rest of those commodities that are very important to Western Canada, which represent much more employment than grain, may well be forced to sit and languish for a long period of time. The producers, who are more concerned about keeping their operations going, may well then force very unreasonable settlements. It will be bad for Canada if that kind of process should evolve, which is what will evolve if this legislation is passed as proposed.
Senator Bosa: If the provision for wheat is removed through the proposed amendments to Bill C-66, do you think that union and management in other commodities such as forestry, potash, coal or whatever, would realize that Parliament will legislate them back to work? Consequently, would they not take the negotiations more seriously and attempt to reach a settlement as quickly as possible?
Mr. Doyle: If I believed that, I would support this exemption. I absolutely believe the reverse is true. There is history of longshore people with monopoly powers in other ports around the world, such as the United Kingdom, where basically they have put ports out of business.
With low value commodities such as grain, potash, sulphur, coal and so on, which are the majority of exports through Western Canadian ports, they cannot stand up to the high levels of increase that would result from what is being proposed in this bill. Those ports will become more uneconomic over time if this proposal goes forward.
Senator Bosa: It has been my experience that when one side goes overboard, something else comes into play.
Senator Cools: The other one usually falls.
Mr. Doyle: By way of example, in the U.K., sense did return, but it happened to take 20 or 30 years. In the meantime, many ports died away and practically went out of business. Is that what we want to happen on the West Coast of Canada in order to restore some sanity? I do not think so.
Senator Bosa: I can only say that the Sims report was generally acceptable from coast to coast, so there must be something good there.
Mr. Doyle: We are not challenging the Sims report, senator. It was pretty much silent in terms of recommendations on this particular issue. It did not recommend the exemption of grain. We are neither competent nor able to challenge, nor are we wanting to challenge, the Sims report.
Senator Rossiter: While there is this difference in efficiency between the two sides of the border, why have we not done something to increase the efficiency on our side? What can be done?
Mr. Doyle: If you look at West Coast Canadian ports, they have become more efficient over time. Most of that increase in efficiency has been on the basis of capital investment. We own and operate a terminal in the port of Vancouver, and we have become a great deal more efficient through that process.
In terms of becoming more efficient by virtue of what we can bargain across the negotiating table, there has not been much change in the past 20 years in Canada. We have become more efficient, but there are clearly limitations.
Senator Rossiter: It is not based necessarily on work problems and strikes.
Mr. Doyle: In part, but not entirely.
Senator Forest: You mentioned that if the longshoremen are allowed to handle the grain, then a large number of their union members will be working which could prolong the strike in other areas. I thought I understood from a previous witness today that the numbers would be very small.
Mr. Doyle: What I was trying to say, senator, was that there would be a rotation-of-work opportunity if grain was the only commodity working in a labour dispute. The spreading around of that work opportunity would provide enough income for most, if not all, longshoremen to extend any sort of a lockout.
The average longshore worker makes somewhere between two and three times what the average Canadian worker makes. You do not have to work long as a longshoreman in order to make enough money to put a few groceries on the table and carry on a labour dispute. I am not saying that all these people would earn their regular salaries, but there would be an opportunity sufficient for them to work a day or two days a week at very good wages. That would be sufficient, I believe, to extend a labour dispute for a pretty long period of time.
Senator Forest: Even though their numbers are relatively small. I understood that just a few hundred out of several thousand workers would be involved.
Mr. Doyle: I believe there are about 3,000 longshoremen on the West Coast of Canada. In grain, there are something in the order of a couple hundred. I do not have the exact numbers.
Senator Forest: I think those are the figures we received.
It is true that grain exporters might have more flexibility, but it is pretty difficult. They have the longest haul in the world. The problem of cars that you are speaking about for other industries applies to grain as well. Having had experience with the railroads, I know there is a real problem. To a degree, they may have a certain amount of flexibility, but it is a pretty difficult situation with a food product that is perishable.
Mr. Doyle: With respect to sulphur, coal, potash and most forest products from Canada, every one of them can claim precisely the same thing. We all have the longest rail hauls by far of any of our competitors around the world. That is a Canadian problem not just confined to grain.
Mr. Renwick: We would like to remind you that the people who make up the Western Canadian Shippers' Coalition represent basically all of the non-grain products in western Canada. They all have customers, too. They all have competitors. There is sulphur all over the world and potash in many places. There is coal in many places. If those people are cut off from serving those customers, then there will be some loss of business, perhaps some permanent loss.
The Chair: Customers will go somewhere else.
Mr. Renwick: Sure.
The same thing applies to forestry. When I first began in the pulp industry some years ago, Canada dominated the world pulp industry. When we set our prices, that is what was paid. That is no longer the case. We are price takers. Different wood pulps are produced in many countries now that did not have a pulp industry years ago. There is little supplier loyalty, but there does not have to be. If you lose those customers, you may never get some of them back. It is just as vital for members of the coalition who are in the export business to be able to service their customers as it is for the grain farmer to be able to service his clients.
The Chair: Your recommendation is to do away with the clause altogether. How would you feel if the minister said the government could not do that and gave all the other commodities a final offer selection?
Mr. Doyle: In briefs submitted to the Sims commission and the West Coast inquiry on port disruptions, a number of people on the West Coast have proposed exactly that. It is certainly not a perfect solution. I feel that under the circumstances, when in many ways there has not been much in the way of collective bargaining on the West Coast of Canada, it is not an unreasonable solution. If it is so unpalatable to both sides, then there is nothing to prevent us from bargaining and arriving at a collective agreement between the parties. Perhaps it might have exactly that effect. I think that is what everyone would wish to happen.
Senator Bosa: You referred to Canada's competitiveness in the international market as "dominating". Is it not reasonable to assume there is a natural evolution with respect to other countries producing pulp? We cannot continue to dominate the market.
Mr. Renwick: That is very largely correct. If you look at the history of wood pulp demand in the world, demand since the early 1960s has increased at a pretty steady pace of about 2 per cent per year. Canadian forest products probably could not have solved all that demand. Other countries have increased their production. If you go back to the 1960s and 1970s, there was no pulp production in Chile, Brazil, New Zealand or Australia.
Senator Bosa: Europe produces, too.
Mr. Renwick: Yes, that is correct. The Scandinavian countries have increased their production as well. Pulp is being produced in Portugal and Spain now, something which they did not produce before.
Senator Bosa: I suppose the same thing happened with wheat. India always imported wheat from us, and we taught them how to cultivate it. Now they are net exporters.
Mr. Renwick: I understand.
Mr. Doyle: I think that makes the point more than anything. We Canadian exporters have common problems, whether it is with respect to wheat, potash, sulphur or coal. The solutions lie in trying to find solutions and not trying to separate and divide. I believe that will create problems which I do not think were fully understood when the issues were proposed.
Mr. Renwick: The potash people who built this new terminal in Portland are members of the Western Canadian Shippers' Coalition. Their costs may be higher in fact to deliver potash to shipside in Portland than they are through a terminal in Vancouver. They took that decision and said they would spend that money because in the event of a strike in Canada, they will have an alternative. That production or that potash has now been lost permanently to the Canadian railways and to the longshoremen in Vancouver.
The Chair: We have potash mines in New Brunswick. Do they ship through that port?
Mr. Renwick: I do not think there is sufficient capacity to do that, particularly to serve the Pacific Rim markets. It cries out for going through a West Coast port.
Senator Doyle: The rail haul from New Brunswick would be very uncompetitive.
Mr. Renwick: Yes.
Senator Bosa: Would that not be a strong message to the unions?
Mr. Renwick: We hope it has been.
Senator Doyle: It would be. However, I hope that we can find solutions within Canada and through Canadian facilities using Canadian workers instead of workers in another country.
The Chair: Gentlemen, thank you very much for coming all this way to appear before the committee. We appreciate your attendance and your advice.
The committee adjourned.