Proceedings of the Standing Senate Committee on National Finance
Issue 24 - Evidence
OTTAWA, Thursday, February 18, 1999
The Standing Senate Committee on National Finance, to which was referred Bill C-43, to establish the Canada Customs and Revenue Agency and to amend and repeal other acts as a consequence, met this day at 10:45 a.m. to give consideration to the bill.
Senator Terry Stratton (Chairman) in the Chair.
[English]
The Chairman: I would like to thank Minister Herb Dhaliwal and his assistants for being here this morning. Please proceed.
Mr. Herb Dhaliwal, Minister of National Revenue: Unfortunately, the deputy minister and assistant deputy minister could not be here this morning. However, I would like to introduce the officials who are here with me: William Crandall, Associate Deputy Minister; Robin Glass, Assistant Deputy Minister, Human Resources; and Sherry Moran, Director, Agency Legislation. They will be able to answer any technical questions that you may have.
The Chairman: We have a concern with requests for access to information, which was brought to my attention by Ken Rubin, who is an Access to Information consultant. Last April, he requested information from Revenue Canada, and received it yesterday evening, well beyond the timeframe. The Information Commissioner of Canada wrote to Mr. Rubin and stated that their investigation determined that Revenue Canada had failed to respond to the request in a timely manner and, as such, is deemed to have refused access to the requested records, pursuant to subsection 10(3) of the act.
Mr. Rubin was originally told that he would receive the material as of February 18, but picked it up very late yesterday afternoon. You have stated that, as minister, you will have control of the situation. Once you determine that this agency will be at arm's length -- in other words, apart from government -- with you directing the action, what confidence can we have in what you are about to embark on? As soon as there is a difficult issue, stonewalling takes place and there is great difficulty in obtaining information. Our concern is this is not consistent with what you are saying. Would you please respond to that, sir?
Mr. Dhaliwal: Mr. Chairman, I cannot comment on this specific example of providing information in a timely fashion. Sometimes it depends on the type of request and the type of information. However, we want to make certain that we do it in a timely fashion.
If it is brought to my attention by the Information Commissioner that the agency is not providing information in a timely fashion I, as minister, could give a directive, just as I can now, to the department to make sure that we have sufficient resources available to fulfil our commitment and responsibility in providing a timely fashion for access to information. I can provide that directive to the board and ask for an update in future years. I can instruct the board to add more resources, if the problem is that we do not have sufficient resources.
The Information Officer will still come to us and review, just as they can now. They can report to the minister as to whether we have improved. If we have not, I can provide a directive to the board to provide more resources to that function. The board cannot reject that. They would be required to follow those directions. Our department is putting more resources into ensuring that we provide information in a more timely fashion.
The Chairman: That does not give me very much confidence that what we are about to embark upon is going to create more control. I feel it will give less control.
You are doing things with the provinces now in a successful manner. You have made agreements with provinces and have successfully carried out work with them. What can you not do under the current system that you can do with a new agency?
Mr. Dhaliwal: That goes to the heart of the question. Presently, we collect taxes for the provinces. That collection amounts to very little for some and as much as 80 percent for others.
At the present time, a province that wants us to collect taxes for it goes to the finance minister and the taxes are collected under the Tax Collection Agreement. When taxes are collected under the Tax Collection Agreement, the cost is borne by the federal government. Last year, had the province of B.C. asked us to collect only its provincial sales tax, we would have told the province to go to Finance. Finance would have said, "If you want to harmonize, come and talk to us." As you know, many provinces do not want to harmonize.
We want to create an option where a province can say, "We do not want to harmonize, but we recognize that there are tremendous advantages in having you collect our provincial sales tax." The clients are the same. There is an overlap of GST clients and provincial tax clients. I was in business most of my life, Mr. Chairman, before I entered politics. Does it serve any purpose to have three auditors -- one for GST, one for provincial sales tax, one for WCB -- checking the books, asking the same questions and taking up a business person's valuable time? The provinces understand that. We are creating a vehicle that will create new options to work in partnership with the provinces.
Some provinces are saying, "You are collecting a lot of our revenue, up to 80 per cent of our revenue. We want to have some input into that." In fact, when we signed the harmonized taxation with the Atlantic provinces, they wanted to make sure that we moved to an agency to which they would have the opportunity to nominate someone on the board. This is creating new options that do not exist now; it is creating new partnerships that are not possible now. This is about recognizing that with a single tax administration, we, as a country, would be better off. We would reduce the cost of tax collection. All politicians and all governments would rather have resources spent in areas other than tax collection. If we can reduce the compliance cost to businesses and make them more competitive, we can create a more competitive and productive economy.
The Chairman: I am still from Missouri on this one, but I will follow up with questions later.
Senator Bolduc: Mr. Minister, you have put a lot of emphasis on increased efficiency as the ultimate value in public administration. As a matter of fact, I have the impression that the increased efficiency of an agency would be accomplished by an administrative head instead of a minister. You decide that you are going to create a corporation. An administrative head would be more efficient than a minister.
Mr. Dhaliwal: What we are saying is a new structure that will be flexible where human resources is concerned, that will be more responsive to the needs of Canadians; a new structure that brings together partnerships with the provinces and where federal participation will be more effective. Also, a new structure that will be more accountable.
Let me give you an example, senator. When I was in business, I was very hands-on manager. I have travelled across the country and visited our centres. As I was going through one of our tax service offices -- and I had my business hat on also -- and saw that a third of the processing centre was not being utilized, I asked, "Why is this space not being used?" They said, "We are in a peaks and valleys business, Mr. Minister. We are at peak during the tax time, and then it slows down. So we don't need this area." Thinking as a businessman, I said, "We have to pay for heat and lights, so why don't we rent out a section of this space. We would save money?" They looked at me and said, "It doesn't affect our budget, Mr. Minister. It is not really something we are accountable for." I asked them why not, and they said, "Public Works provides this space for us. We don't pay for it."
The agency will have greater fiscal accountability. When people are in business, they have to make judgements as to costs and whether they are using their facility in the most efficient way. Accountability is spread out now. Under the proposed agency, there will be greater accountability. So those are areas in which management will be able to make more decisions.
The big savings are in the compliance costs. If you talk to business people today, they are saying, "You governments get your act together. You governments work together." In the tax collection area, we have a great opportunity for governments to work together to create in the long term a single tax administration in which we could save a huge amount of compliance costs. There is a study that was done by the Public Policy Forum that says that there are big opportunities to save both on the tax collection side and on the benefit side.
Let me give you the example of the B.C. Family Bonus. In order for them to deliver that bonus, they would have to set up all the computers and all the infrastructure. We have that infrastructure in place already. It is the same thing with the tax collection -- the infrastructure is there. Why not utilize that infrastructure and create a vehicle for us to work together with the provinces?
Senator Bolduc: Outside of the business compliance costs, where you may have a case for maybe $100 million or more, the other aspect is the participation by the provinces. Suppose they do not participate?
Mr. Dhaliwal: Senator, I have travelled throughout the country to meet and talk with finance ministers. In a Finance Committee meeting two years ago, we provided a set of guidelines as to what taxes the agency would collect. All the finance ministers were there. They had an opportunity to talk about the agency. They agreed with those guidelines. We have five working groups across the country that say, "Yes, we think it is a good idea. Let's look at the taxes you can collect. We are willing to look at it."
In Nova Scotia, we signed a service agreement. The Canadian Federation of Independent Business said, "This is what we have been talking about. We would like to have the WCB premiums paid through our normal payroll payments. It will save us millions of dollars." This is a step-by-step process. We did not go to the province and say, "The day we create the agency, please sign on so we can collect all your taxes." We have to prove ourselves; we have to earn the business. The provinces are ready and willing to see what opportunities we can experience.
Senator Bolduc: Not all the provinces, I can tell you.
Mr. Dhaliwal: Quebec is not interested.
Senator Bolduc: The federal government is not in charge of the Quebec compensation commission.
Mr. Dhaliwal: You are right, Quebec is not interested. I agree with you there.
Senator Bolduc: I would like to come back to my main argument. You postulate that the federal government's administrative policies, which were developed over the years by Treasury Board and the old Civil Service Commission, are inefficient, so let us get out of that and we will be efficient. That is what you are saying, is it not?
Mr. Dhaliwal: We do have a very good working relationship with the provinces. We do a lot of work for them. But there are tremendous more opportunities that exist, with a vision to creating a single tax administration in the long term, creating more options for Canadians.
The other example I would give is electronic commerce. There is going to be a huge opportunity and more and more business is going to be done via electronic commerce. Goods will be sold from one province to another using electronic commerce, representing billions of dollars of commerce. Who will be responsible to collect the taxes for products sold over the Internet in Quebec and B.C.? Who will collect the provincial sales tax? A national tax collection system can do that. We are building a platform that will cost $140 million to take advantage of this new technology. Why are we doing that? We are doing that so that your corporate tax return can be sent electronically. Twenty-five per cent of T2 tax returns are electronically sent to us. We want to move forward so that people can send their tax returns through the Internet. If we can build a platform, then we can take advantage of that.
Senator Bolduc: Who needs an agency to do that? You can have an agreement with the provinces.
Mr. Dhaliwal: The provinces want a say if they want to give more and more of their tax administration to us, just as the Atlantic provinces are saying, "You are collecting 80 per cent of our taxes. We want to have a say." We want to create new options that do not exist now. At the present time, if they want us to collect taxes, it is done under the Tax Collection Agreement, which means harmonization. Some provinces do not want to harmonize. That is fair enough. We are there to provide a service for them and to be responsive to them.
Let me give you one more example. A real-world example helps in this situation. The Minister of Finance from B.C. phoned and said, "I am going to change the amount of my cheque I think something is wrong on the invoice." They pay for the program. I said, "No problem, I will do it." I phoned our deputy and said, "The B.C. Minister of Finance wants this minor change." He says, "We cannot do that. We will have to go to the Minister of the Treasury Board; it will have to go to the Minister of Public Works." Something that should take me a week to do took us three months. If we want to perform, we have to be responsive. We have to be able to respond to their needs, otherwise they are going to say, "We do not want you to collect our taxes."
If we are more responsive, instead of having to go through two other ministers to make a minor change on a cheque, we will ensure we get more work from the provinces.
Senator Bolduc: I am sure you can give us a few examples where some understanding between the provinces and the federal government might be useful in terms of tax collection.
You did not answer my second question. As a minister of the Crown responsible for administrative policies at the federal level, including federal service commission regulations and Treasury Board regulations, how can you say if we get out of that system we will be more efficient? If it is good to do that for 30,000 people at the proposed new agency, why is it not good for the 200,000 people in the civil service?
Mr. Dhaliwal: The government has an umbrella for 80 different departments. It works for some departments. It does not work as well for other departments. We are a large department and we think that, with the type of needs we have, we need those flexibilities. You are not often able to make changes in a huge organization. It is not that easy to make changes. We could say, "We cannot make it under this huge umbrella, because many people have tried. Perhaps we can do it in an organization where the needs and flexibilities exist." If human resources flexibility were the only reason, you may have an argument. But it goes beyond that. It is about working with provinces, creating a vehicle where they can be on board, creating a structure where we can respond to their needs. That is what we are talking about.
Senator Bolduc: What you are telling us is that an administrative head of the agency will talk more efficiently with the provinces than you can as minister?
Mr. Dhaliwal: I am saying that we want to create a structure that is more responsive.
Senator Bolduc: What you are doing here is a terrible blow to the government system.
Mr. Dhaliwal: I beg to differ with you, senator. We are trying to create a structure that can be flexible and responsive to the provinces. If you say the provinces are not on board, I can tell you that the provinces are not very shy when they do not like something the federal government is doing. They will let you and members of the committee know if they do not think this is a good concept for them or if they do not think we are going the right way.
Senator Bolduc: May I go on, Mr. Chairman?
Senator Cools: Mr. Chairman, just a point of information that may be useful to Senator Bolduc. I have been listening to the exchange, and it is very interesting indeed.
If one were to look at the bill, clauses 6 through 13 inclusive speak precisely to the questions that Senator Bolduc is raising.
The Chairman: Please. We gave you unfettered opportunity yesterday evening. We did not interrupt. Senator Bolduc has his points to make, and the minister is perfectly capable of responding. I would ask that you please be patient with us and allow Senator Bolduc to proceed.
Senator Bolduc: Mr. Minister, I would like to deal with another aspect. In article 54 you say:
No collective agreement may deal with matters governed by the staffing program.
I can understand that in one way, because under the civil service regulations and the Public Service Employment Act, all those matters were referred to the old Civil Service Commission as guardian and promoter of the merit system. However, we do not see any basic principle of staffing in one aspect of the public service -- a very important aspect -- and that is collecting the taxes of the people. This troubles me in terms of a guarantee that there will be a merit system, even though it is a distant agency.
In terms of promotion of employees, I do not see anything that will give them an opportunity to make an appeal if there is some patronage or something of that sort in the management. Even though the deputy head or the head may be well-intentioned, it is quite possible that some supervisors will make what I will call local patronage. That is troublesome.
This is a big organization in the federal government -- something like 30,000 people -- like Transport used to be. There is a weakness in that area. Moreover, I understand that the employees will not be able to have a say in that. Do you think it is fair to do that? In the private sector, they negotiate and discuss internal management. I am not talking about recruitment. I am talking about promotion and all the other aspects of staffing.
Mr. Dhaliwal: The agency will still be part of the public service. The public service staffing is negotiated.
In terms of looking at the larger question of the human resources framework, the employees themselves said that the present human resources framework is not working. We need to develop a new human resources framework. We are working with the employees to develop a that framework to ensure that it works, not only for the agency, but also for the employees.
The Public Service Commission can come in and see if those principles are compatible with theirs. Also, in terms of our human resources framework and the way we deal with recourse, that will be transparent. This will be part of the submissions we make to Parliament. It will be well known; it will be open. We want something that works and responds. If we want to hire people, we do not want to have to take 12 months to do that. If we want to make promotions, we want to be able to make those promotions. It is in our interest to have a human resources framework that works. It is in our interest to make sure that it works for both the employer and the employee. The Public Service Commission will have an opportunity to look at it. We have said that a third party can come and review it as well.
Some unions have been working with us. We have said that we want them to be a part of it as well. They are very important.
Senator Bolduc: Mr. Minister, yesterday in your statement you spoke of your collaboration with various groups in society except the civil servants who are working in that department. The union will be here in one hour to explain that point of view, and I am afraid it will not be the same as what you are saying.
Mr. Dhaliwal: I am sure they will have different views, but we have been working with the employees. We have design teams, which are very much a part of developing the human resources framework that we think will work for them as well as the agency, a responsive one, a transparent one, an open one, where the Public Service Commission can have look to see if it is compatible with their principles. If we do that, we will build a very good modern, responsive, human resource framework that will be looked upon as moving forward.
Senator Bolduc: I would like to quote from the Auditor General's report on human resources. It says:
One of the driving factors has been that present staffing, classification and compensation systems are too unwieldy and inflexible. The government needs to ensure that the rush to "get outside the system" does not divert attention from "fixing the system."
Do you not think that that is the basic problem that you have? We do not have any guarantee that it will improve because a classification plan is a long process. It is a matter that is not easy to handle. If you say that you are going to work for various agencies across Canada to collect taxes, those specific taxes need specific qualification for the employees. If you collect a tax from the province of Quebec, it will not be the same thing as another tax in the Northwest Territories or Manitoba.
The classification system that you have to establish, which is based on specific position requirement, is such that I do not know how you are going to get out of it.
Mr. Dhaliwal: I see it, senator, as an opportunity to take a system that is not working, and everybody agrees is not working, and to make a system that is modern that can really respond to the needs of the organization and employees. I see a great opportunity. I see it quite differently from the way you see it.
This is a golden opportunity. Not too many large organizations get together with their employees and design the type of human resources framework that can respond to their needs. There will always be problems. In the version that you have read, we have 44,000 employees, and there are only 200 people in that international directorate, which is a very small percentage. But if management had the tools to respond to this, they can respond a lot better. If we have a framework that can respond much more quickly, we will deal with the human resources needs much better.
The Chairman: Mr. Minister, I would like to ask a supplemental question. There seems to be a pattern evolving with this government, insofar as Bill C-29 took Parks Canada outside government and took NAV CANADA outside government. Now it is taking Revenue Canada outside government. It is a disturbing pattern. Where is this going to end? If you have done this with Parks Canada, NAV CANADA and now Revenue Canada, where will the next shoe fall? What is the next group of civil service to be taken out?
If there is something fundamentally wrong with the system, as there appears to be from the evidence, then why are you not doing something with the system, rather than plucking things out wherever you can? This is not solving the problem, in my view. How would you respond to that?
Mr. Dhaliwal: You cannot compare NAV CANADA with Revenue Canada. NAV CANADA is privately held; it has stakeholders. Revenue Canada is still a federal agency with a minister fully accountable to Parliament. There is a big difference.
What we are doing goes beyond having human resources and managerial flexibility. It is developing a structure where we are trying to include the provinces, to bring them on board. The provinces nominate people to the board, and then we appoint them. We want to ensure that we can move to a higher relationship because we do not want a situation where every province decides to collect all its own taxes. As a businessman, I can tell you that that is disastrous.
We want to build a single-window tax administration so that business people can have one number instead of five numbers, so that they can deal with one organization. Instead of filling out five forms, they can fill out one form. We are trying to go beyond that. Human resources flexibility is important, but developing a structure where we can work in partnership with the provinces and serve the needs of Canadians is also very important. That is why we need a vehicle that can respond to their needs and respond to some of their concerns.
Senator Bolduc: I have the impression that you got carried away with your efficiency criteria. You want to have a single administration for taxing. The health minister is all over the place in health. Last year you had the fellowship for education. Can you seriously imagine the Province of Quebec accepting that type of situation with the provinces? They do not have any jurisdiction. Somehow the federal government is in everything. This is not good for Canada. It will lead to balkanization of the country. If that is what you wish, then it is not a problem. But I do not feel comfortable with that at all because I am a federalist and a Canadian.
Mr. Dhaliwal: This is strictly voluntary. It does not force Quebec or any other province to become a part of it. It is voluntary for them.
Let me examine your view. I know that some colleagues in the House have said that the province should collect other taxes on their own. Just imagine if I were in business and every province collected all their taxes in their own way. I would have to write ten cheques if I were doing business in all the provinces. I would have to fill out ten forms. It would be an absolute nightmare; it would be an absolute disaster.
The compliance costs to business would be huge. Business already spends $3.4 billion dealing with tax collection. Senator, we would escalate that. We are trying to bring that down. We are trying to build a more productive economy in order to reduce the cost to business. There is already a huge burden on business. We can move to a single tax administration and reduce the mountain of paperwork that governments want business people to do, in order to build a more productive and more efficient economy and to reduce the compliance costs to business. Nobody thinks it is efficient to build parallel structures across the country. Canadians do not want parallel structures built across the country. Canadians want governments to work together. This is about listening to Canadians. I have been out there listening to them. I have been on the other side doing paperwork. In fact, I lost a lot of hair doing paperwork in my dealings with governments. It is about time we did something about it. That is what this is all about.
Senator Bolduc: I can imagine, Mr. Minister, that some money might be saved in having a collaboration in tax collection, but it is peanuts by comparison to the high rate of taxation for corporations. That is where the money is and you did not change that in the last budget. I am surprised that two businessman like Mr. Martin and yourself are so insensitive to the costs, to the productivity problems of Canadian corporations, particularly in the manufacturing sector.
Mr. Dhaliwal: Unfortunately, senator, there was a big mess to clean up from the last government. The move to reducing taxes has started that in this budget. It is a start.
Senator Bolduc: I have been in the game for a long time, and I remember the story of the Canadian economic system and Canadian fiscal policy from 1976 to 1984. I know the situation that existed in 1984. I remember the MacEachen budget and all the others after that.
You have missed one aspect. They did not increase the expenditure. Only the debt services were increasing because of the load that we inherited.
Mr. Dhaliwal: I am sure we could spend a lot of time on that one, sir.
Senator Bolduc: Be cautious when you talk about that.
The Chairman: I was not satisfied with an answer that you gave earlier. When we talk about the spinoff of parts of government, Parks Canada, now Revenue Canada, I have to say again: If this is occurring and has occurred twice, in the privatization of NAV CANADA, what I see inherent in all this is a structural problem within government that forces you into doing this. There are many stories that could be told as to why you are doing this, such as to get you out from under all the constraints of staffing, of unions, so that you can start from square one. That has been said, and it will be reinforced by the unions. This is really to get you to be more self-sufficient; you will get out there and be able to charge your clients for work performed and develop income.
The fundamental issue is that, if we are doing this in three situations now, surely to goodness the government should be looking at why this is occurring. Why are we not looking at the apparent structural problem in government?
Mr. Dhaliwal: Mr. Chairman, I can speak about my own knowledge. When I was appointed in 1997 as Minister of National Revenue, I picked up this file and evaluated it. When each minister takes on a file, they have to look at whether they can take on a file that was there prior and whether they can live with that.
From my experience, being someone who has not been in politics as long as many of the other honourable members, who have been here a lot longer -- I was elected in 1993 -- I had to make a decision on my own. Is this something that I can live with? Is this something that in the long term is for the benefit of Canadians? I had a choice either to pick up the file or to say, "No, I do not think it is the right thing." I gave this a lot of thought.
From my experience as a businessman, I strongly believe that a single tax administration will be a great benefit to Canadians in terms of services provided. It will greatly reduce our compliance costs. I have given you many examples of that. That is why I continued the process. Mind you, I have changed it substantially, Mr. Chairman.
If you look at the first progress report, it is quite different from what we first started with. We started with an arm's length agency, with talk of even not having a Minister of Revenue, to where I have drawn it back in to making it a federal agency with strong ministerial accountability.
I can only speak of the area that I am involved in. You are speaking about a larger picture of government in terms of what may happen in other departments. I looked at how this affects revenue. I am convinced that in this area we are doing the right thing. I cannot tell you about other departments, in the larger picture of government. We put this forward in the Throne Speech. I evaluated it myself to see if this was the best direction. From my experience and from what I have seen, that is the best direction. But certainly I cannot comment on other government ministers' views or the larger agenda in terms of other privatizations. But this is not a privatization. This is a strong federal agency with a minister.
You have to look at what is appropriate for each area. We started with a different vision. When we consulted Canadians, when we talked to Canadians around the country, they gave us some very good advice. We listened, we learned, and we made the changes. That is what you have before you.
The Chairman: I would like you to take the message back that this appears to be a larger problem. If it is happening with you and it has happened with Parks Canada and NAV CANADA, then there would appear to be something more than that.
Senator Callbeck: My question concerns my own province of Prince Edward Island. This morning, you commented about how provinces can simplify tax collection by using this new agency. Last night in your comments, you talked about certain provinces where you were already collecting specific taxes and other provinces looking at the feasibility of using the agency.
My province was never mentioned. What is the position of Prince Edward Island on this new agency?
Mr. Dhaliwal: I did meet the Treasurer of PEI over a year ago. At that time, I made her aware of the agency, the progress we were making and where we were. We have made the information available to all the provinces.
I have had the opportunity to meet with the Premier. He came to Ottawa and we had a discussion about it. He was very interested and supported the concept. Frankly, there is not a discussion going on as to what we can do in that province. What we thought we would do with Nova Scotia is look at the WCB area, and if that concept went well there, we could then transport it to other provinces.
There may be opportunities to look at smaller provinces and to do a pilot project. Part of this is learning. Participation is voluntary. Some provinces are more enthusiastic than others. Nova Scotia is very enthusiastic. They want to explore what opportunities exist. Manitoba and Saskatchewan have been very interested. We have to look at pilot projects and build slowly, on a step-by-step basis. When provinces see that it is successful in one area, I am sure others will come on. When we started the family B.C. Family Bonus, Alberta, Nova Scotia and New Brunswick said, "That makes a lot of sense. Why do we want to build a computer system? Why do we want to take all the information you have in your computers and put it in this one and then decide that you can already do it? You can deliver it a lot faster and a lot quicker. We do not want to build all this infrastructure again. You do it for us." We did it for B.C. Alberta wanted to do it, New Brunswick wanted to do it, and Nova Scotia wanted to do it, because there is a huge saving to be gained and we can deliver the service better.
In terms of the B.C. program, when we answer our telephones we say, "B.C. Family Bonus." We do not even say "Revenue Canada." We are providing a service for B.C. I am sure there will be opportunities across the country to work on a pilot project. If it works, we can go to the other provinces. But this will be a step-by-step process. We have to earn their business. We have to earn their confidence. This is a partnership that we want to work on. I hope there are some opportunities in PEI, as we have explored in other areas, as well. We are certainly open to looking at them.
The Chairman: Minister, you have been more than patient with us, and we appreciate that very much. One final message from me. We have just completed a study on remuneration and retention in the civil service. As you know, there is a problem with an aging civil service. Seventy per cent of them are going to be eligible for retirement in the next five years. We discerned a morale problem, at least in the evidence that we heard. I would like you to recognize that, with the spin-offs of Parks Canada, NAV CANADA and Revenue Canada, there is a great unease according to the folks we have talked to of what is transpiring.
Canada prides itself on its civil service. It prides itself on the integrity of it. It is a well run organization. They are suffering right now because of morale, because of the kinds of things that are going on with Parks Canada and now Revenue Canada. That is a concern that I think you should take into consideration when you are dealing with your staff.
Mr. Dhaliwal: Mr. Chairman, I want to thank you and all honourable senators for their excellent questions. Certainly I will take that message back. I recognize how important our human resources are. We have over 40,000 in Revenue Canada. I have attempted, as minister, to go out and meet with them and talk to them because they are our most valuable resource. We want to make sure that we have a human resources framework that responds to their needs. We want to work with them and the union as well to build a modern, transparent, open human resources framework and an agency that we can all be proud of.
The Chairman: Our next witness is David Flinn, National President of Union of Taxation Employees.
Mr. David Flinn, National President, Union of Taxation Employees: I would like, first of all, to thank the honourable senators of this committee for your courtesy and consideration in having invited us to appear before you today on this very important issue.
The Union of Taxation Employees is the largest within Revenue Canada. We represent over 18,000 Revenue Canada employees. Our members provide both the administrative backbone and the public face of the department across Canada.
We appreciate that this committee -- and the Senate in general -- faces a charged agenda and a wide variety of important issues. I would, nonetheless, suggest that the Canada Customs and Revenue Agency Act is deserving of particularly close scrutiny. Bill C-43 is far from a simple administrative matter. We are dealing with the transformation of fully 20 per cent of the federal public service into a very different service delivery model.
Senior Revenue Canada management would have you believe that the agency initiative is widely supported by employees. Over the course of today's testimony, you will hear from the unions that represent 90 per cent of Revenue Canada's 43,000 employees. You will learn that we are united in our opposition to Bill C-43 as it is presently drafted. I want to stress that the opposition did not flow from hidebound resistance to change -- we have been accused of that by some senior Revenue Canada people; that is not the case at all -- or from a refusal to accept the need for reform. Quite the contrary.
Initially our union had supported the concept of the Canada Customs and Revenue Agency. We were prepared to work with senior management to create an entity that would serve the interests of Parliament, the taxpaying public and Revenue Canada employees alike. In the early days of the agency's development, I wrote to the deputy minister, asking that he allay our legitimate fears over a variety of labour relations issues. No reassurance was forthcoming. I repeatedly placed our members' concerns before Mr. Wright in face-to-face one-on-one private meetings, only to be rebuffed.
We were initially willing to entertain agency status on the basis that it would be a win-win-win situation for management, employees and the public alike. Unfortunately, as event have unfolded, management has run roughshod over the bargaining agents' legitimate concerns. We are very concerned that this arbitrary, unidirectional approach to organizational "reform" will become the standard operating procedure when and if the CCRA is legislated into existence. It is to this end that the three major unions at Revenue Canada are jointly proposing four labour relations amendments to Bill C-43. I sincerely hope that you will agree that they are both sensible and balanced. They are designed to ensure that the managerial rhetoric of workplace partnerships attains at least a modest level of reality.
Our position in "the other place" was that Bill C-43, as currently drafted, is poor public policy and is seriously flawed in a number of areas. We urged the members of the House of Commons Standing Finance Committee to have Bill C-43 withdrawn and redrafted to deal with deficiencies pointed out by such groups as the Canadian Taxpayers Federation and the Certified General Accountants Association of Canada. However, as we must realistically accept that the government is not prepared to withdraw C-43, our responsibility as bargaining agents demands that we do all we can to ensure that our members do not lose existing rights in the transfer to the agency. We are not talking about adding anything to what we have. I want to emphasize that we are talking about protecting existing rights.
Before addressing our four suggested amendments, I want to touch briefly on a number of our public policy concerns with the Canada Customs and Revenue Agency. These extend from key issues of parliamentary oversight and public accountability to the lack of provincial support and the concentration of personal client information. Bluntly stated, the agency, as proposed, fails to meet every business test set forth by its creators in the senior management ranks of Revenue Canada.
The agency was originally set up to harmonize the PST and the GST and, therefore, eliminate the GST. As the minister said earlier, three Eastern provinces bought into that proposition. No other province is interested in that proposition. We all know -- and the minister has said this himself -- that Quebec will not buy into this agency and will not buy into harmonized taxes. The agency is supposed to coordinate and then administer tax policy and collection with the provinces. Yet, with the exception of a minor taxation matter with Nova Scotia, not a single letter of intent with any province has been signed to date. We have been repeatedly asking to see letters of intents, but we have not seen one yet. Quebec is opposed to the agency on constitutional grounds. As for Ontario, suffice to say that Minister Dhaliwal has tried in vain for some two years to secure a face-to-face meeting with his Ontario counterpart to discuss the agency question. Indeed, Ontario, Manitoba and Alberta have all indicated -- this was in the press over the last few months -- that they are looking to establish their own personal income tax system and to move away, and not towards, administrative integration. There is, at best, lukewarm support among the remaining provinces.
The minister said last night <#0107> and he reiterated it this morning -- that the idea is to set up the agency and the provinces will ultimately buy in, viewing the agency as a viable operation. That is yet to be seen. It is not a good idea to set up a company and have your customers tell you that they are not interested in your services but hope that they will buy in somewhere down the road.
The agency was supposed to benefit business. However, recent departmental reforms, such as the Business Identification Number and the so-called single window service, have satisfied most business concerns and have shown that Revenue Canada is very capable of reforming from within as a government department. The major employer lobby groups and associations did not even bother to appear before the Commons Finance Committee. There is no reason to think that any further improvement could not be carried out within the current departmental status.
As well, a Public Policy Forum poll of business, undertaken in 1997 for the department, showed that only one-third of business respondents saw any cost advantage to the new agency. Those cost advantages were in the order of $160 million a year. In fact, far from saving money, the agency will likely prove more costly for taxpayers. It will be even more bureaucratic in structure than the existing department. Relationships with Treasury Board and other departments will be maintained while, at the same time, new layers of bureaucracy will be created to support the planned board of management and administrative services offered to other jurisdictions. Ominously, Bill C-43 permits the imposition of user fees, where they do not exist now.
The agency will also be removed from meaningful political oversight, an issue of great potential concern to every parliamentarian. The minister will have far less involvement in the agency's operations, as is now the case with a government department. The enabling legislation proposes a full parliamentary review only five years after the agency has been up and running.
With its intent to collect taxes at the municipal as well as the provincial level, the agency would concentrate an incredible amount of personal information in one place. We share the concerns of civil libertarians over the privacy and confidentiality issues inherent in a super agency.
For all these public policy reasons, we felt strongly -- and we continue to feel -- that the status quo is preferable to this ill-conceived agency initiative. We sincerely believe that the deputy minister and the department's senior management have sold the minister and the government a bill of goods. In their rush to build themselves a bureaucratic temple and enhance their power and status, the mandarins have thrown the interests of parliamentarians and the public to the wind.
Having asked your indulgence while reiterating our public policy concerns against Bill C-43, I would now like to address the amendments that the department's three major unions are placing before you. All four of these amendments directly address labour relations issues. Their adoption would go a long way to bolstering workforce morale and repairing a strained union-management relationship, as we look ahead to the crucial first months and years of the agency's operation. You may wish at this time to consult the amendments we have appended to your copy of my remarks. They are presented in a standardized form that notes the issue, the current wording of the relevant Bill C-43 clause, the perceived problem with the bill as now drafted, our proposed amendment and a capsule rationale for our amendment.
The first amendment deals with the issue of third-party review of staffing actions undertaken by agency management. The relevant clause of the bill is 59. As now drafted, Bill C-43 removes the right to external third-party redress that agency employees now have under the Public Service Employment Act and under Part I of the Public Service Staff Relations Act. Under agency status, the workforce would lose the right to the current appeals process available in situations where there is the appearance or reality of an improper staffing action. We are concerned with the impact this would have on the "merit principle" as it currently applies to Revenue Canada staffing measures inside the federal public service. I am sure we all realize that the merit principle is the fundamental principle of the staffing process.
Left unamended, Bill C-43 would deny employee recourse to external, objective third-party review of managerial staffing decisions. Agency managers would sit in judgement of the staffing actions of their friends and colleagues, which is a clear conflict of interest. Given the relative autonomy and reduced oversight inherent in the agency concept, we feel it is patently unfair to deny an existing mechanism that would ensure that competence and merit remain the cornerstones of the staffing procedures. Accordingly, we have proposed a new subsection 59(1). We have renumbered the former subsection 59(1) as subsection 59(2) and have added a requirement that the agency make a full assessment of its recourse measures available upon request. This addition is made to further enhance the accountability of the agency. As it stands now, there is only the requirement that Parliament receive a summary of the assessment as part of the agency's annual report. We view this as clearly inadequate, given the reduced political oversight of the agency's operations.
Our second amendment deals with the carryover to the agency of existing employee protections covered by agreements reached between the federal government and its bargaining agents at the National Joint Council. The relevant clause of the bill is 51. The National Joint Council is a consultative and deliberate body that brings together the federal government, in its role as employer, and the various federal public service bargaining agents. The NJC arrives at numerous binding agreements affecting workforce rights and benefits. These technically form part of our collective agreements with the employer. Unless Bill C-43 is amended, agency employees will lose protections now enshrined in existing bargaining agent collective agreements with Treasury Board. Due to the silence of the bill on this critical matter, provisions of the Financial Administration Act mean that NJC provisions will cease to apply to agency employees at the moment the agency becomes operational. This termination of NJC agreements, as set forth in the Financial Administration Act, was meant to apply to situations where federal public service workers were transferred to the private sector, rather than to a quasi-government special operating agency status.
NJC agreements cover many administrative matters, including but not limited to health and safety, travel, transfer/removal, job security and northern allowances. These are matters that will have to addressed in any case by the agency. For example, the travel directive talks about the amount of mileage you get, per diems and those types of things. The agency, when it opens its doors, will have to have rules to govern that process. As the situation is right now, those directives will not carry over and there will be nothing in place to replace them. Our amendment -- adding a new subclause (3) to clause 51 -- simply allows for a common sense continuation of existing mutually acceptable agreements on a number of administrative matters.
Our third amendment deals with Bill C-43's explicit prohibition on the negotiation of a staffing regime for the new agency. The relevant clause of the bill is 54. As now drafted, Bill C-43 will provide senior agency management with total and arbitrary control over staffing matters. Proposed subsection 54(2) prohibits the agency and its bargaining agents from negotiating a staffing regime and having this negotiated regime incorporated into collective agreements. Bill C-43 places an extraordinary amount of discretionary human resources power in the hands of the agency commissioner. These powers undermine the perception, if not the reality, of the merit principle that lies at the core of the ethical delivery of public services.
It is our proposal that proposed subsection (2) be deleted. It cannot be stressed too strongly that this amendment would not obligate the negotiation of a staffing regime. Rather, by removing any specific prohibition, it simply leaves the option open for the agency and its bargaining agents to pursue the matter. We are not asking that you open a door for us, or even unlock it. We are asking that you not let Bill C-43 place a permanent brick wall where a rightful door belongs. It will be up to the parties subsequently to decide if and when the door is to be opened.
We would like to note that staffing is a fully negotiable item in the vast majority of unionized private-sector and para-public-sector workplaces. If the new agency is to have the perceived advantages of a para-public environment, we believe it should also have concomitant responsibilities. Equally noteworthy, this prohibition of a negotiated staffing regime is not contained in the enabling legislation for two other special operating agencies brought forward by the government -- the Canadian Food Inspection Agency and Parks Canada. We wonder why Revenue Canada was singled out for an item in the legislation that locks the door on us being able to negotiate staffing. We agree that the current federal public service staffing regime is in need of serious overhaul. That is why our union is prepared to sit down with senior management and work out a new staffing process that contributes to a positive and progressive climate of labour relations. We ask only that this process be one of bilateral negotiations, not unilateral dictation. The Employment Act is 30 years old and needs to be reformed. We are not disputing that. However, we are questioning allowing management of the agency to make all the changes that they want.
Our fourth and final amendment deals with the issue of bargaining agent representation on the new agency's board of management. The relevant clause of the bill is 14. The board of management is responsible for overseeing the organization and administration of the agency and the management of its resources, services, property, personnel and contracts. All of these issues are of interest to agency employees and most of them directly impact our working lives. However, C-43 currently does not provide for employee representation on the board, therefore denying the agency's administrative body direct access to invaluable labour relations experience and expertise.
Under Bill C-43's current wording, only 13 of the board's 15 positions are explicitly spoken for. The federal government has the discretionary power to fill the remaining two positions with whomever it believes can best bring added value to the board's deliberations. It is our suggestion that clause 14 be amended to provide for one director jointly nominated by the agency's bargaining agents. We believe that the reassurance of knowing their concerns could be addressed directly at the highest level of the new agency would enhance employee morale. Such a move would also be seen as tangible proof of senior management's commitment to openness and transparency in dealing with its workforce. It should be noted that employee representation on corporate boards is a growing trend. The CCRA should be setting an example and exploiting an opportunity.
As I noted at the beginning of my remarks, we trust that you will agree that our proposed amendments are neither radical nor contrary to the spirit and intent of the proposed legislation, nor would they impose any undue financial or administrative burden. We are simply asking to preserve existing rights that we have now under the current staff relations legislation. Unilateral imposition of labour relations matters will undermine workforce morale and employee trust and confidence in management at a time when the agency should be making every available effort to rebuild badly strained relations with its principal bargaining agents. Failure to restore existing, necessary and reasonable checks and balances will bequeath the new agency a rancorous and negative labour relations climate. Such a situation benefits neither management, nor the workers, nor the Canadian public.
Honourable senators, there are many who question the purpose and worth of our Red Chamber. We are not among them. You possess the wisdom, the power and the independence to act in the best interests of the country, and those are the citizens who are directly impacted by this legislation. We are not here to ask for a so-called sober second thought. In the case of Bill C-43, what is called for is a sober first thought. The House of Commons has failed in its duty to block or amend an ill-conceived and grievously flawed piece of legislation. I particularly appeal to the government members of this committee to exercise your legitimate constitutional prerogative as senators. In the name of our 38,000 members, therefore, we respectfully ask that you support our efforts to improve Bill C-43.
I will be pleased to answer any questions you may have.
Senator Bolduc: In your brief you have raised public policy concerns and you have asked for four amendments. We have asked the minister about provincial cooperation because he was telling us that many people will be knocking at the door to get agreement or to get the tax collection in the provinces done by the federal government. He said it would be good for business. I told the minister that perhaps it will not work that way. I am pleased to note that you have the same view. You say up to now they have only one small agreement with one province and that Ontario does not want to hear anything about it.
On the municipal level, the agency is offering services to the municipalities all over Canada to collect their taxes. I have difficulty seeing the City of Montreal having its property tax collected by the federal government. We have been carried away by our own efficiency criteria that I was talking about with the minister.
Let us deal with the four amendments. The first amendment is that you are asking for a member on the board of management. Let us now discuss the four amendments. First, you ask for a member on the management board. However, as I understand it, this is not your first priority.
Mr. Flinn: In the short term this would be fourth on our list of priorities. In the long term, however, a union presence on the board of management would help.
Senator Bolduc: Do you have some other examples of a North American, not European, type of tax administration where the employees or the unions are represented on the management board or within management?
Mr. Flinn: Not in the area of tax administration and, I might add, that North America has only two bodies, the IRS and Revenue Canada. We are not represented within management.
Senator Bolduc: What about, for example, Minnesota, which is a progressive state? Do they have anything like that at the state level?
Mr. Flinn: I do not know if they do. Large corporations such as Chrysler, Ford and GM include union representation on their boards. I do not know about public administrations.
Senator Bolduc: This topic would not, then, be your first priority.
Let us turn to clause 51. You used to have a joint council which would discuss administrative policies with management.
Mr. Flinn: Yes, everything except staffing.
Senator Bolduc: Is it correct that you did not discuss staffing with them at all because of the civil service regulations?
Mr. Flinn: Yes.
Senator Bolduc: You say that we no longer have that.
Mr. Flinn: The legislation that creates special operating agencies specifically provides that any national joint council agreements cease to exist the day the agency opens its doors. As of whatever date the agency opens its doors, the national joint council agreements are gone. We want to ensure that they remain in effect until such time as they are replaced.
We have been working with Revenue Canada to try to have a smooth transition so that they would have a national joint council agreement in place that would deal with the agency. There is no way that will happen now.
Senator Bolduc: In other words, the day the bill passes, all your agreed processes would disappear.
Mr. Flinn: Yes, either then or on the date the agency is officially scheduled to open its doors.
Senator Bolduc: Do you do not have a letter from the deputy minister indicating that this will be changed?
Mr. Flinn: We have asked him to put that in writing, but he has told us that he cannot give us the letter. He has provided no reason for that. We want to make sure that these important council agreements carry over.
Senator Bolduc: What priority would you give that amendment?
Mr. Flinn: I would place it second.
Senator Bolduc: By "order of importance" I understand that clause 59, then, would be first?
Mr. Flinn: Yes, that is correct.
Senator Bolduc: Let us turn now to clause 54.
If the government agreed to include a simple sentence in the bill stating that the merit principle would apply to matters of recruitment, and promotion would be determined on a competitive basis, how would you react to that?
Mr. Flinn: It would be better than what is there now.
When the three unions were part of the steering committee, we told Revenue Canada and the deputy that we had many concerns. Job security is gone because we do not have a job security pretext in the collective agreement. Another concern was staffing. We asked the deputy minister not to close the door. If the legislation is silent on staffing, as it is with Parks Canada and the Food Inspection Agency, and somewhere down the road we decide that union staffing should be negotiable, as it is in other collective agreements, the door would be open. We told him that we were not asking for something that we do not have now, because staffing in the public service is not now negotiable. You cannot get an arbitration award on staffing.
The deputy minister and the minister have slammed the door in our face. We are saying that is not necessary because management can say they will not negotiate staffing with us at all. They have the final say. We find it extremely offensive, on an issue where management has the control anyway, for them to slam the door in our face.
Senator Bolduc: What I am trying to suggest here is that there is a correlation between clauses 54 and 59.
Mr. Flinn: There is a correlation, yes.
Senator Bolduc: In your opinion, you are heading towards a labour relations climate that will not be good in the new agency.
Mr. Flinn: That is what we are very much afraid of. For months we have been asking for reassurances from the deputy minister on a number of things.
Senator Bolduc: I am given to understand that you have received nothing; is that correct?
Mr. Flinn: We have nothing. We have had no reassurances. On August 27, the three unions sent a memorandum of understanding to the deputy minister asking him to give us guarantees on simple things like retroactivity when the pay issue was finally settled, and retroactivity on the collective agreement, as well as staffing and job security -- the whole nine yards. The response provided no guarantees. On staffing it is important to us that the door be open. In the first round of negotiations with the agency, we do not expect to be negotiating staffing. That is not what we want. It is the door being shut permanently that bothers us.
Senator Bolduc: As the bill is drafted, there is nothing about the merit system as a principle of recruitment, nothing about competitions for promotion, and nothing about rights of appeal or a right to file a grievance related to the staffing process. Is that correct?
Mr. Flinn: Yes, that gets us back to clause 59, the recourse mechanism. That is our first priority.
Right now, the Public Service Employment Act governs the staffing process in the public sector. It covers the merit principle and many other areas. It provides an appeal process where a person employed by the Public Service Commission can review a staffing action and determine whether or not management did a good job. We make good use of that appeal process now because Revenue Canada does not have a good track record of handling competitions in the proper manner.
Part I of the Staff Relations Act, if someone is fired for incompetence or incapacity, they can go to adjudication by an outside third party. When we move to Part II, which we will on the day the agency opens its doors, we will lose that right. Management could fire someone for alleged incapacity or incompetence and never be subjected to scrutiny by a third party. That is very dangerous.
There have been cases, not in Revenue Canada but in the federal public sector, where people have been fired and never given a reason, and an adjudicator has decided that he has no jurisdiction because it is a non-disciplinary determination.
We are very concerned about losing the two rights of appeal on staffing and third-party recourse if someone is fired because of incapacity or incompetence. That is our highest priority.
Senator Bolduc: In the last two hours I have seen, on the one hand, a minister who is dealing in good faith and is optimistic about the improvement of the administrative process. He says that he has a good relationship with the employees. On the other hand, we have a witness who is telling us that it does not work and it has not for the last year. I am a little puzzled. I do not know if the minister is naive or shrewd or what.
Senator De Bané: Mr. Flinn, I should like to be as candid with you as you have been with us.
From what I understand, the regime that exists today applies to 80 federal departments and agencies. It is so cumbersome that it takes six to 12 months to staff a position in a department. The minister realizes that, as long as central agencies establish policies and controls for 80 departments, that cumbersome structure will make it impossible to hire competent people and to have a dynamic agency. I think we all agree that the main asset of a large organization is its people.
It seems that the present system is detrimental to the morale of the people. We need only read the newspapers to learn about that. Today, everyone is competing to hire people knowledgeable about computers, and the government, with its cumbersome structure, cannot handle that.
Here we are talking about an agency which will have people from the private sector on its board of management. Those people will provide the agency with a wealth of experience in managing large organizations and they will try to have the most progressive, forward-looking formula for human resources management.
As the leader of the union, it should be exciting to be part of a new agency where you are not dragged down by another 79 agencies which always have the same excuse: Mr. Flinn, we cannot do that because Treasury Board says no. You will negotiate with management and, as your people will have the expertise and the most attractive opportunities, you will be able to greatly improve the conditions of your people. It will no longer take six to 12 months to staff a position because you will be able to negotiate collective agreements based on the priorities of the people and no longer will management be able to hide behind Treasury Board or another central agency.
Do you not think that, far from being a threat, in such an agency you will be able to negotiate between equals and extract working conditions and remuneration commensurate with the market conditions that exist today in which we must offer much more to those who are computer literate?
I see many opportunities for your people.
Mr. Flinn: I agree with much of what you say. As I indicated initially, our approach is that the agency could be very positive. There is no doubt that the staffing process under the Public Service Employment Act is 30 years old and out of date.
Perhaps we can focus on the problem that exists. Outside recruitment is not a problem. Outside recruitment is not subject to any kind of recourse mechanism. When someone is hired off the street, no one can appeal. That can be done very quickly. That is not the issue.
The issue is internal promotions where employees do have the right of appeal. Many do appeal, and sometimes the appeal process can go on for a long time. We challenged a competition in Halifax about five years ago and it is still in the Federal Court. We have won all the way along, so we are doing all right with that one.
The real problem is that managers do not understand the staffing process. Many times they do things according to the merit principle. They often promote who they want, and it becomes very transparent. Our members have the right of appeal, and they use it. It is the appeal process, which takes time, which upsets many managers at Revenue Canada.
A better solution to the problem is a new staffing regime with the merit principle or some method other than the archaic system of competitions, writing tests and being interviewed. There is a better way to do it and the unions fully support that.
The people running the competitions must be trained to do so, which is not happening now. We win appeals. Sometimes we withdraw an appeal because the appellant got what he or she wanted and management does not want to be on the record as having lost. We get what we want but we do not have a record of it. The system must be reformed.
You mentioned collective agreements. We cannot negotiate staffing in a collective agreement. If we could negotiate staffing in the same way as we can negotiate leave, salaries, and so on, we would have a much better system.
With the new agency, they want to get out from under the Public Service Employment Act, which is the law. It is a reference point. If we do not like what is going on, we can go to a court and ask for relief. The agency wants to have a company policy, rather than a law, which can be amended by the company at any time.
We have talked about the public policy issue. The agency does not appear to be needed. Revenue Canada has made some reforms as a department. As I said earlier, the agency was set up to harmonize the PST and the GST. That did not work. The next idea was to collect taxes for the provinces on a cost-recovery basis and save them money. That has not worked either.
We believe that the real rationale for setting up this agency is to get away from the acts that govern staffing, classification and other things, and to let management have a free rein. We have tried to talk to the deputy minister in an effort to have our concerns resolved. We want guarantees that we will not lose everything we now have. He has not given us those guarantees. That is why we fought this in the House of Commons and the court of public opinion, and why we are fighting it here. We think we will be big losers.
We tried hard to work with the deputy minister. If he had given us any reasonable guarantees, we would probably now be saying that this is a good idea.
However, we are very much afraid that the agenda for the management of the agency will be to streamline the process so they can do whatever they want, and we will not have an opportunity to challenge any bad decisions they may make. Those are our concerns.
Senator De Bané: I am not an expert on labour relations, as is Senator Bolduc. On the one hand, Mr. Flinn, you say it is true that the staffing is archaic and things must change. On the other land, you say that there is no level of confidence between the staff and the management. Did I hear you properly?
Mr. Flinn: Yes.
Senator De Bané: This is very sad because, from what I read in the official papers, it appears that, under the present structure, Revenue Canada has approximately 32 different classification groups. Staffing processes related to movement between groups makes shifting personnel to areas where there is a demand for service a cumbersome and time-consuming process.
We all agree that, in a large organization of 50,000 people, the morale of that staff is paramount for the success of that organization. Policies should be put in place to ensure a high level of morale. One of the ways to do that is to pay them very attractive salaries; otherwise, we will loose them.
I understand the gist of your testimony. On the one hand you say the system is archaic and, on the other, you say there is no level of confidence in management.
Mr. Flinn: The deputy minister is saying to the unions, "Trust me because I will look after you." We do not trust him. It is as simple as that. He has not earned my trust. He has not given me anything concrete to let me say, "Yes, Mr. Wright, I have faith that you will not take away what we have now." We are not fighting for more. We are just fighting for what we have now. We are totally prepared to look at other contexts or other ways to do things. We simply do not want to lose the rights we have now.
Senator Carstairs: You reiterated over and over again that you tried to talk to the deputy minister, but I understand that teams are designing various aspects of the human resources system for the new agency and that the union has refused to participate in any of them.
Mr. Flinn: Yes.
Senator Carstairs: Can you explain why?
Mr. Flinn: It is very simple. There were at least seven design teams, and two of the issues they were dealing with -- the national joint council and employment equity -- are issues that we must consult on under legislation.
The deputy minister insisted on having a three-party consultation process -- union, management and the employees. We represent the employees. We felt that consultation, as required by the collective agreement, would be management and union only, without the employees. As long as the employees were there -- and we represent them -- we felt that we could not participate in that process and give it legitimacy when we wanted true management-union consultation involving two parties, not three.
Senator Carstairs: You raised in your presentation the issue of user fees and the big bogeyman of potential user fees.
Clause 60(2)(b) is clear. It says that this clause only allows the agency to spend fees collected on the related program. It is not an authority to set fees.
Mr. Flinn: I did not say it was. I said that, if there is authority to use the proceeds of the fees, there must be another structure in place. I understand it requires an Order in Council and cabinet approval. The fact that the legislation states that the agency could spend the proceeds of these fees leads us to believe that there will be an expansion of the fees down the road.
Senator Carstairs: The bogeyman, quite frankly, does not exist.
My final question deals with the privacy issues you raised. What in this legislation makes you think the privacy protections that are presently in place -- and which I think most Canadians would say are darned good -- would be diluted by this legislation? This legislation will be subject to exactly the same privacy laws in the future as it is presently.
Mr. Flinn: It is a matter of managing vast amounts of personal information. Right now, the information is divided between Revenue Canada, the provincial tax regimes, property tax assessment roles, and so on. If the goal of the agency were 100-per-cent fulfilled and Revenue Canada were collecting every tax in Canada, including municipal property taxes, which is clearly the direction, there would have to be an enormous amount of information in one spot. Anyone will tell you that, if that is the case, the chances for someone using, abusing, or compromising that information when it is being transmitted electronically is greater when it is centrally located than when it is in a number of places.
I also find the budget troubling. There is a clause buried in there somewhere that says Revenue Canada can share information related to the administration of the WCB Act with the Province of Nova Scotia. That is an example which demonstrates that tax information and information collected by Revenue Canada will go to a place where it does not exist now. With respect to information collected by Revenue Canada in Nova Scotia, under the budget that was tabled on Tuesday by Paul Martin, they would now be entitled to certain income tax information. Those are the types of concerns we have.
Hopefully it will not happen, senator. I agree with you that it is vital and important information. Our employees and members do everything possible to safeguard that information. They are subject to severe penalties if they ever divulge income tax information. The more information we pass around and collect in one spot, the more often those safeguards will break down.
Senator Carstairs: Mr. Flinn, I was concerned with one of the statements in your presentation concerning my province, Manitoba, so I contacted someone there. There is no indication that they are the slightest bit interested in setting up their own tax collecting union.
Mr. Flinn: You better speak to someone at The Globe and Mail, senator, because they ran an article on that about two or three weeks ago.
Senator Carstairs: I spoke to officials at the Department of Finance in the Province of Manitoba.
Mr. Flinn: My information comes from The Globe and Mail, the national newspaper that some believe as they do the Bible. The paper featured an article that stated Manitoba and Alberta were considering having their own tax return system.
Senator Butts: I have a question about the general tenor of your brief. I have a problem with the fact that at least twice in the paper you talk about poor morale and badly strained relations. Yet, your amendments are all about keeping what you are losing as opposed to getting something new. In fact, you just said in answer to one question, "We are just fighting for what we have now." Is that not a problem with your presentation?
Mr. Flinn: I think it will be difficult to maintain what we have now. If we were trying to get something more, we would have an even bigger problem.
Down the road, there is a positive aspect to the agency in terms of negotiating collective agreements. We will be negotiating, not with the Treasury Board, but with the employer, the agency. That is where we would seek to make gains in a collective agreement atmosphere.
I have been around Revenue Canada since 1965, which was when I started with them in Halifax. In those days, it was a privilege and an honour for me to come out of Saint Mary's University and get a job with the federal government. It was a plumb job. In talking with people today, I know that the morale is bad. People do not want to work for the federal government. Anyone with computer skills or skills that are marketable on the outside are not working for the government. Much of it concerns how they have been treated over the years by management. I am on the labour side, so I am bound to tell you that. However, I have seen it for almost 35 years now and am very disheartened about it. I would like to find a way to improve morale, but I can tell you that this agency will not improve morale at Revenue Canada.
Senator DeWare: This is a new agency. Will there be a transfer of employees from the department or will they all be new employees?
Mr. Flinn: The bill contemplates that everyone will be automatically transferred to the agency, and for anyone who wants to opt out, there is an opting-out provision of three months. Everyone that is employed by Revenue Canada the day before the agency opens up will transfer automatically.
Senator DeWare: Everyone?
Mr. Flinn: Yes, including term employees, those in indeterminate positions, and people who are not permanent. Everyone will transfer over. We are not concerned about losing jobs from the day the agency opens up its doors. That is dealt with in the legislation.
Senator DeWare: It is just a new heading.
Mr. Flinn: It is changing the name from Revenue Canada to the Revenue Canada Agency.
Senator DeWare: What about the people who are hired on a contract basis? We know there will be people hired to do a specific job. If they start to get the contracts that they think they will get, they could be contracted in and hired for two years until they finish their job and then they would be let go. Is that handled under your policy?
Mr. Flinn: No. Contract employees are not unionized employees. They are not members of our union. There is a provision in the Public Service Employment Act now that deals with that. I would assume that would carry over to the agency, but we have not had any detailed discussions with management as yet on staffing.
Senator DeWare: Your biggest concerns are job security and the promotion of employees to certain positions?
Mr. Flinn: Job security was our concern. I am only speaking for union taxation employees now. You will hear other witnesses who have a different problem.
When any agency is set up, there is a two-year employment guarantee in the legislation that sets up the alternate service delivery agencies. For two years from the date the agency opens up its doors, you have a job guarantee. After that there is nothing. The Public Service Alliance of Canada and Treasury Board recently negotiated a job security appendix that is now in the collective agreement. The collective agreement for the PSAC union taxation employee members will carry over to the agency, and we will have job security protection. Our concerns about job security are lessened now because we have an appendix that will cover the employees of the agency.
We are concerned about downsizing. Other agencies have downsized. However, our concerns about having no job security have diminished quite a bit because we have the appendix.
Senator Callbeck: Mr. Flinn, in your brief you state that, far from saving money, the agency will likely prove more costly for taxpayers.
I understand an independent study done by the Public Policy Forum estimates that savings could be from $116 million to $193 million for Canadian business, and up to $62.5 million for the provincial governments, and that does not include Quebec. Have you seen that study, and have you analyzed it?
Mr. Flinn: Yes, I have seen the study and analyzed it. In the scheme of the overall budget for Revenue Canada, $116 million is pocket change.
Now that you have asked the question, I would make a comment about the Public Policy Forum. Revenue Canada paid $170,000 to have that study done. If someone were paying me that amount to do a study, I am sure I could come up with something favourable to the person who was paying.
Senator Callbeck: I would have to disagree that $116 million is peanuts. To me, that is a lot of money.
Mr. Flinn: In the scheme of Revenue Canada, that is not very much money.
Senator Callbeck: That is not how I look at it.
The Chairman: Thank you, Mr. Flinn. We appreciate your coming forward today.
Our next witnesses are from the Professional Institute of the Public Service of Canada. They are Mr. Steve Hindle, President, and Ms Susan Dorion, Vice-President.
Welcome, and please proceed.
Mr. Steve Hindle, President, Professional Institute of the Public Service of Canada: Mr. Chairman, I should like to point out that Susan Dorion, who is the Vice-President of the Professional Institute of the Public Service of Canada, has a full-time appointment as an auditor with Revenue Canada. I work full time for the institute while on leave without pay. While I was with the federal government, my employing department was Revenue Canada. Thus, you have before you two people who have some experience working within the department.
The Professional Institute of the Public Service of Canada, PIPS, is the largest union representing professionals, certainly in the federal public service, but we believe in the country. We represent a number of disciplines from veterinary medicine to human medicine, commerce, auditing, commercial computer systems, as well as a wide variety in the science areas. We represent close to 7,100 of the employees who will be affected by transfer to the Canada Customs and Revenue Agency.
While we share some of the concerns raised by the chairman this morning in his comments, we will not go into too much of the detail about the efforts of previous government to create separate agencies such as NAV CANADA and the Canadian Food Inspection Agency.
Our brief today is in two parts. I will concentrate on the first part which has to do with alternative service delivery and the Canada Customs Revenue Agency specifically.
We are prepared to answer any questions you may have regarding amendments to Bill C-43. Suffice it to say that our proposal on the amendments is the same as you heard this morning, which is why I will not go into the details.
As a concept, PIPS is not opposed to alternative service delivery. However, we believe that each and every proposal should be assessed on its merits and should be analyzed in terms of the impact on the public service and what Canadians will be receiving from it.
To that end, I should like to talk about the agency and our belief that the agency's only objective is greater administrative flexibility.
Shortly after the Speech from the Throne announcing the concept of the agency, three objectives were defined by Revenue Canada. First, the agency was to deliver programs and services in a more effective and efficient manner through greater autonomy and flexibility. Second, the agency was to improve services and reduce the cost of revenue administration and compliance by working with the provinces to eliminate overlap and duplication. The third was to strengthen the effectiveness of the federation and contribute to national unity by establishing the agency as an organization that provides Canadians with services that are both federal and provincial in nature.
When the second progress report on the proposed agency was released in January 1998, it became apparent that the second and third objectives could not be met. The first objective, namely, the delivery of programs and service in a more effective and efficient planner, is the only objective the agency has any hope of achieving. Revenue Canada, however, has not been able to demonstrate that this objective will be met with the creation of the agency.
A recent article on the analysis of the proposed agency published in the Canadian Tax Journal concludes that the proposed agency may only achieve a real, if modest, degree of success in promoting greater administrative efficiency and flexibility, and it does not materially advance either goal of reducing the perception of politicization and increasing federal-provincial integration in tax administration.
Similarly, in his recent review of the first ASD entity to be established since the 1996 budget, the Canadian Food Inspection Agency, the Auditor General of Canada claims that it is too soon to tell if that agency will use the new flexibility it has been given to meet the government's commitment to a new and better way of delivering services, and he issues a warning. The longer the agency takes to create systems and practices that reflect its powers, the more it risks falling into traditional ways of doing business.
The government has chosen to establish the Canada Customs and Revenue Agency as a separate employer under Part II of Schedule I of the Public Service Staff Relations Act, commonly called the PSSRA. This act is a 30-year-old piece of legislation which has never had a major overhaul. It is a regime which could be cumbersome for agencies since it allows only minor tailoring to meet specific organizational needs.
The PSSRA fits the context of bargaining in the public sector where broad public interest must be taken into consideration due to the nature of services being provided. It provides for mobility of staff and similar terms and conditions of employment across departments. This explains the restricted scope of collective bargaining, the right of the employer to designate positions for essential services, dispute resolution mechanisms to deal with potential strikes, and, until recently, the binding arbitration process.
For years, the institute has been on record as supporting the revision of the PSSRA. The institute is willing to join with government in working out means to inject greater flexibility into the existing system and statutory framework. This could be a speedier means of making government services more effective than the creation of large, new ASD agencies.
The institute is uneasy about the emphasis that is put on administrative flexibility when the government advances the concept of alternative service delivery. Collective agreements between the federal government and the institute or other public service unions are currently filled with clauses that give the government discretion and the ability to override provisions of an agreement for operational or other reasons.
We agree that there is a need in the federal public service for more flexibility in human resources administration, particularly with respect to staffing actions. Staffing actions and questions involving the determination of merit take far too long because of the current application of the Public Service Employment Act and the time required to take cases before the Public Service Commission. The institute does not agree, however, that the solution lies in creating ASD agencies which will not be covered under the PSEA, as is the case with the Canada Customs and Revenue Agency.
The Public Service Commission is currently addressing the need for staffing reform in the federal public service. Through its staffing reform initiative, the commission has already delegated substantial staffing authority to departments which significantly extends management rights and discretion in the areas of staffing. Furthermore, the commission believes that staffing reform can be achieved within the current legislative framework.
In its most recent annual report, the Public Service Commission states:
Staffing reform does not require changes to the PSEA. It does however, require that our human resources management partners be fully aware of the flexibilities that currently exist under the Act in order to make optimum use of them.
We are intensifying our efforts to help departments and agencies develop their own staffing regimes within the framework of the PSEA. In so doing, we believe that they will be better able to meet their business needs and to deliver high quality, affordable policies and programs to Canadians.
A June, 1996 joint union-management opinion survey of the 5,000 employees in the auditing group at Revenue Canada identified serious problems with the staffing system. For example, the majority of employees surveyed -- in this case, 74 per cent -- did not have confidence that staffing practices were objective and fair. The department was prepared to make the necessary changes within the existing framework but chose to put them in abeyance, pending the creation of the agency.
In the summer of 1997, the department decided to consult with 7,000 Revenue Canada employees for their views on a new human resources framework for the agency. Eight specific design teams were established to examine human resources issues such as staffing, classification and training, and development. It is our opinion that a new human resources framework for Revenue Canada could be designed and implemented without the creation of a new agency.
During the House of Commons debates regarding Bill C-43 on October 1, 1998, the Minister of National Revenue, the Honourable Herb Dhaliwal, stated:
...the new Agency will benefit from management practices that are characteristic of successful organizations outside of government.
The institute believes that Revenue Canada can adopt and should be expected to adopt new management practices without the expense of creating this new agency. Successful management practices are not dependent on organizational structure.
It is interesting to note that the Auditor General of Canada, based on his recent review of the Canadian Food Inspection Agency, cautions that other ASD initiatives should recognize early on that establishing a new human resources management framework as a separate employer is a complex task. A new framework requires time and resources to design and implement.
It does appear that there have been some discussions with the provinces, but it is also clear to us that there is confusion or reluctance on the part of the provinces to step forward and say, "Yes, this is what we want." I would put a question to you, Mr. Chairman and the members of your committee, as follows: If we cannot clearly indicate where the provinces have said no, they will not be on board, perhaps we should be asking which provinces have spoken in favour of Bill C-43. Did any of the provinces ask to appear before this committee or the House of Commons committee on Bill C-43 so that they could present their view in support of what the government is trying to do?
Moving on to the issue of delivering tax services more cheaply, a recent analysis of the proposed Canada Customs and Revenue Canada Agency published in the Canadian Tax Journal concludes that the tax savings projected by Revenue Canada are relatively modest and depend on the assumption that all provincial taxes in all provinces, or in all except Quebec, will be administered by a single tax authority. This article also notes that no estimate was made of any increase or decrease in costs to the federal government from conversion of Revenue Canada to an agency, nor was any account taken of charges that might be made by the agency to one or more provinces for collecting taxes that were not sufficiently harmonized with the corresponding federal tax to qualify for collection without charge.
We believe Revenue Canada has misled the Canadian government and taxpayers into thinking there are no costs associated with the creation of the agency. Revenue Canada documents have revealed that there is a $280-million shortfall this fiscal year for the first time in Revenue Canada's history. We believe that this shortfall is in part due to the millions of dollars that have been spent on the agency.
Revenue Canada has spared no expense with respect to the agency. The shortfall is having a negative impact on departmental operations. To address this shortfall, Revenue Canada's customs, trade and administration branch's operational budget has been cut by 10 per cent to 15 per cent and all tax services offices' operational budgets will be cut by an additional 2 per cent.
Thousands of employees have been diverted to work on the agency concept instead of administering Canada's tax laws in a fair and timely manner. Travel budgets have been cut across the country. Tax auditors, as a result, may be limited in their ability to visit taxpayers to conduct reassessments, and tax collectors are being restricted in their ability to collect taxes owing.
The structure proposed for the new agency adds an additional level of bureaucracy in the form of an appointed board of management and secretariat. Time, money, and staff will have to be provided for the board and its staff.
It will cost millions of dollars to reprint thousands of forms, publications, letterhead and business cards; to change signs on all taxation and customs offices and border crossings; to change identification of customs' uniforms and vehicles and to modify the computer systems.
As a small inkling of what the department has spent, you made reference earlier, Mr. Chairman, to Mr. Rubin's difficulties getting information from the department. We are one of Mr. Rubin's clients. What he has been able to furnish us so far indicates that at least $800,000 has been spent in contracts to help the agency come to fruition. They have spent that money on things such as seminars to prepare people to appear before parliamentary committees.
Bill C-43 will create a new 15-member board of management; one chair, one commissioner, 10 provincial and one territorial nominees, and two as yet unspecified. This bill creates a new commissioner, a new patronage position to be appointed by the government. The agency will have carte blanche with respect to contracts and with respect to the management of property, material and information, as well as technology. With limited outside oversight, the appearance of favouritism and abuse of power by bureaucrats is very high.
There was one remark in particular the minister made this morning that I should like to address because it shows the attitude which the unions have faced. This arose in the questioning with the minister as well as in the questioning with Mr. Flinn. The minister makes no secret of the fact that they have been going out and talking to employees.
At the outset, the institute and the other unions had hoped to be participants and we had agreed that we would participate as the legal representatives of employees in Revenue Canada. We then made a decision, as is our right, to withdraw from those consultations. That did not seem to bother Revenue Canada or the minister. They went around the unions and went directly to the employees.
I put it to you that that shows the contempt that this minister and this government have shown for the unions, the legal representatives of their employees in the public service.
I am willing to take questions at this point in time.
Senator Bolduc: I see that the proposed amendments are the same as those presented by the other union.
Mr. Hindle: Yes, they are.
Senator Bolduc: I should like to ask you the same question that I asked earlier about priority. If we were to go through with two amendments, what would your priorities be?
Mr. Hindle: I would suggest the order that they appear in our brief would be the order of priority for us.
Senator Bolduc: The first one I can understand, however, the second one, which relates to clauses 51 and 54, embarrasses me a little.
Mr. Hindle: The second one is an attempt to continue the same terms and conditions of employment upon creation of the agency as currently exist, as Mr. Flinn explained this morning.
The other two are a wish list. These are the things that we would like to be able to do in the future at some point.
Senator Bolduc: The minister was quite optimistic this morning about the three objectives. However, your brief indicates that perhaps the first one will be partly met but the last two will not. Could you make some additional comments about that?
The minister's view was quite optimistic about this. If one of the major objectives was to have a single tax administration outfit in Canada I cannot see that happening. In fact, I would fear that because of the massive amounts of information that would be concentrated in one place on each individual. For example, suppose that I were against a project and I hid as much information from the minister as I could. What is there to stop someone from looking at Mr. Bolduc's file in detail to see if there is any provincial information in there? That is embarrassing. It is an Orwellian fear I have.
Mr. Hindle: The minister was quite optimistic when he was speaking this morning. It brought to my mind the phrase, "If you build it, they will come." That is more or less what he said and it is interesting to note. That quote is from a movie called Field of Dreams. While I appreciate that people should have dreams and it is noble to have dreams, this is a dream that will be a long time in the making. A single tax administration agency in this country, which the minister as much admitted this morning and as we have indicated also, is unlikely.
Quebec, in the foreseeable future, will not be part of any federal or national tax administration. They already collect their own individual income tax and corporate tax. They collect the GST for the federal government through an agreement with the federal government, at the same time as they collect their provincial sales tax.
At the outset, that is one strike against the creation of the agency. They will not achieve the dream of having all the provinces on board. It is becoming more and more obvious that other provinces are reluctant to step forward and agree that this is what they want and this is how they will participate.
It is interesting to note that the minister and his officials have come up with instances where they have been able to work with the provinces. The family bonus in British Columbia was done as a federal department. Granted, the minister indicated that they had some difficulties when the province wanted changes, however, what the minister did not elaborate on are the consequences of doing things too quickly with very elaborate and complex tax systems.
I am not just talking about the legislation, I am also talking about the computer system. That is the area where I work. I know the consequences of doing something too quickly and making a change without adequate testing. The consequences can be quite embarrassing, not just for the person who made the mistake but for the government itself. There must be some recognition that you need to exercise some prudence in the administration of the tax system, and you need to consider the consequences of making changes too quickly. While you do want administrative flexibility, you must ensure that you have adequate controls over the processes that are in place in your own department or agency.
The Chairman: I wish to go back to the comments made by the minister this morning. I tried to understand him, however, I could not understand the point that he made that you must have this agency in order to do what they want. I still have doubts as to why that cannot occur within the existing system.
Do you have any comments to make on that?
Ms Susan Dorion, Vice-President, Professional Institute of the Public Service of Canada: I should like to respond to that. We attended a briefing on their proposals regarding a staffing regime for Revenue Canada. It did not take long to realize that, what was laid out on a wall-to-wall flow chart was probably a pipe dream. However, as I looked at that flow chart, I realized that there was nothing in there that could not be done under the existing system. With the Public Service Commission delegating staffing authorities to the departments, I asked them to explain to me what was in the flow chart that could not already be done. There was no answer to that because there was nothing.
I believe that when you talk about fixing something to make it more effective and more efficient, you do not make something more effective and more efficient by throwing out the rule book and saying that now that we have no rules, everything will be wonderful. Reality has proven, many times, that throwing out the rule book and leaving no checks and balances, especially in a department and an organization that is so important to the tax-paying public of Canada, is not a chance that the government should be willing to take.
You must realize that, as Bill C-43 is drafted, there will be no assessment of the staffing system within Revenue Canada until it has been in operation for at least four full years.
What if you have a staffing regime in a large organization like that -- one of the only revenue-generating departments or organizations for the Government of Canada -- and its staffing regime is in a mess for four years?
Mr. Hindle: I have difficulty believing people cannot simplify the tax system when they tell me they can simplify the collection of the taxes.
The Chairman: Why are they doing this if not for the reasons stated?
Ms Dorion: Because they believe that, if they have total unilateral control over all staffing and classification issues, that will result in things working better. The concept of "working better" depends on one's perception. I still do not believe that is the way to do it. An abuse of power can easily occur in that scenario.
The Chairman: When you create an agency such as this, it almost seems inevitable that they will impose more user fees on the Canadian public. That is my sense, at any rate. That is what traditionally happens. In order to find different ways of raising moneys, governments want these agencies to be as financially independent as possible. Do you see that as a real problem or concern for Canadians?
Mr. Hindle: We expect it will become a problem. Undoubtedly, at the outset they will be able to create this agency without instituting user fees beyond what is in place already. A few years down the road the government will be running into difficulty in regard to operating the tax system with the amount of money that has been appropriated through the Treasury Board process. They will be asking for as much as $75 million to administer tax programs and will be told, "No, you have your program. If you need to establish user fees, come back to us with a proposal." They will then return with a proposal to implement user fees. I can guarantee you that, somewhere down the road, that will happen.
The Chairman: The concern that I have, ultimately, is about the system as a whole. I made the comment to the minister this morning that we have had NAV CANADA, Parks Canada, and now we have Revenue Canada.
Has any government agency or minister approached the unions saying, "Look, this is broken and it cannot be fixed. We have to start from scratch to simplify the system because it is busted "?
Mr. Hindle: A number of ministers and their officials will acknowledge that the system is broken. It does not work as well as it should. It probably has not worked very well for a number of years, yet they continue to express reluctance at even approaching the job.
First, which minister is actually responsible for the public service? Is it the minister who is responsible for the Public Service Commission, which is Mrs. Copps? Is it the minister who is responsible for the Treasury Board, Mr. Massé? Can they even agree on what needs to be fixed? Is there any political will to actually chang the legislation that is causing the problem.
On a number of occasions we have expressed our view that the public service and the legislation under which it works is part of the problem. As much as we think the current regime is a problem, we much prefer the broken system to an unknown system where we have fewer rights.
It is curious that the impetus for this had to come from the employees. Several of the public service unions have banded together and have an agreement from Treasury Board to have a public policy forum consider legislation that applies to public service employees in jurisdictions other than the federal jurisdiction.
I do not have a significant amount of hope that the government will be in a position to act on this problem during this mandate. What I am hoping will come from this is a somewhat impartial examination of the legislation and some of the things that we have been saying too see whether or not what we are saying actually holds true.
Are we working under an antiquated labour legislation regime that puts too much emphasis on prescribing what will be done, as opposed to putting together a framework that allows the parties to come to an agreement on what is appropriate in the circumstances? That has long been the opinion of the institute; namely, that the Public Service Staff Relations Act was ancient legislation even when it was introduced in 1967.
Senator Bolduc: I have a question about "accountability," a word the minister used this morning. I have difficulty with the fact a minister in charge of a ministry talks about additional accountability when he is no longer responsible, and that the agency is left somewhere up the air. How can he speak of more accountability than what would be the case when a minister is directly in charge? What is your opinion about that?
Mr. Hindle: We also have concerns about the accountability to Parliament for the actions and activities within the new agency. We are more comfortable with what we have now than we were with the original proposal, as he clearly outlined. It was much more arm's length when initially proposed.
With the current set up, we do not see how the mechanisms will be strengthened. If anything, we see that there will be a weakening of the relationship and the accountability of the agency to Parliament. Parliament can continue to hold the minister accountable. I have no doubt about that, but just how much control will the minister be able to retain over the agency as it gets up and running?
The Chairman: I wish to thank you for assisting us this afternoon.
The committee adjourned.