Proceedings of the Standing Senate Committee on
Social Affairs,
Science and Technology
Issue 14 - Evidence - June 10, 1998 (afternoon sitting)
OTTAWA, Wednesday, June 10, 1998
The Standing Senate Committee on Social Affairs, Science and Technology, to which was referred Bill C-19, to amend the Canada Labour Code (Part I) and the Corporations and Labour Unions Returns Act and to make consequential amendments to other Acts, met this day at 3:30 p.m. to give consideration to the bill.
Senator Lowell Murray (Chairman) in the Chair.
[English]
The Chairman: Colleagues, first, let me express my warm appreciation to Senator Kenny for having presided over yesterday's meeting in my absence.
Before we proceed to hear our first witnesses this afternoon, there are a couple of important housekeeping matters that I want to draw to your attention. As you know, we had scheduled a good 15 hours of hearings on this bill, over four meetings, beginning yesterday and ending on Wednesday, June 17, a week from today. Earlier today, it was represented to me by the two government members on the steering committee, Senator Maheu and Senator Kenny, that we needed to hear witnesses from one other organization. Hence, we agreed, during a telephone conference call of the steering committee today, that we would schedule another meeting to hear four witnesses actually, but in particular, witnesses from the Business Council of British Columbia who needed to be heard separately, or so it was represented to me, and we scheduled that for when the Senate rises on Friday.
A moment or two ago, someone informed me that the Senate will not be sitting on Friday. Senators, we had better decide right now at what time on Friday this committee will meet. These people from British Columbia have had to rearrange their lives rather considerably to be here on Friday, so Friday it is. I am advised that they cannot be here before two o'clock. Therefore, on Friday from 2:00 to 4:30, in room 705 in the Victoria Building -- our customary meeting place -- we will hear from the Business Council of British Columbia and several other witnesses.
Is that agreed?
Hon. Senators: Agreed.
The Chairman: I take it that the Senate is sitting on Monday night. As such, during the conference call of the steering committee today we agreed that Monday afternoon at 4 o'clock is the only time we can have an in camera meeting to proceed, perhaps to conclusion, to consideration of our draft interim report on child support guidelines. We have had a lot of meetings on that subject since Christmas and we do want to put in an interim report before we go home for the summer. Therefore, we will meet Monday afternoon at four o'clock in camera, in room 705, on the child support guidelines.
Colleagues, we are here today to resume consideration of Bill C-19, to amend the Canada Labour Code (Part I) and the Corporations and Labour Unions Returns Act, and to make consequential amendment to other acts.
Senator Kinsella: Mr. Chairman, on a point of order, I have a request for the researcher of this committee. At yesterday's meeting, we heard from Mr. McDermott, the Assistant Deputy Minister from the Department of Labour. In the course of his testimony, we had a discussion on the certification matter around clause 46 of the bill. Mr. McDermott stated that there were a number of remedies that the Industrial Relations Board would have available to it and went through a list, which finds expression, no doubt, in the bill. My request would be that the research staff prepare, for all members, a one-page report, to give us an outline or a list of the remedies that are available to the board if there is an apprehension of an unfair labour practice.
The Chairman: Is that agreed, colleagues?
Hon. Senators: Agreed.
The Chairman: It can be done.
Our witnesses today are from a coalition of employer associations concerned with statutory protection of the grain industry.
Is there one opening statement to be made on your behalf, gentlemen, or four?
Mr. David Church, Director, Transportation, Recycling and Purchasing, Canadian Pulp and Paper Association, Coalition of Employer Associations Concerned with the Statutory Protection of the Grain Industry: There will be four opening statements, all very brief.
The Chairman: Please proceed.
Mr. Church: I am with the Canadian Pulp and Paper Association. We have worked with other industry associations, including the three represented by the witnesses beside me here, as members of an informal group of employer associations, all of whom are opposed to proposed section 87.7(1) contained in Bill C-19.
CPPA is a national association that represents 80 per cent of pulp, paper and paper board manufactured in Canada. We spend approximately $2 billion to ship our products to more than 70 countries around the world each year. Last year, we shipped approximately 29 million tonnes, 11 million of which were shipped offshore or through ports to customers in the United States.
I and my colleagues are here to discuss proposed section 87.7(1) which, if enacted, would grant preferential treatment to the grain industry. If there is a strike or lockout at a port, grain will continue to move while the products of our industries will be held up. We believe that it is discriminatory and that it will seriously damage Canada's trade competitiveness. If the pulp and paper industry cannot serve its customers around the world, there are plenty of other mills in the United States, the Far East, South America and Europe that will step in. Some of our customers will be gone for good.
Rather than enshrining preferential treatment for grain, we ask that you consider amending the bill to ensure consistent, equitable treatment of all port users. In the submission that was tabled before you here today, you will find a copy of our alternative proposal.
This proposal has the support of this panel. In brief, the minister will be empowered to appoint a special advisor to monitor collective bargaining at the port. The advisor will contact both sides and also port users, and report regularly to the minister on the status of negotiations and the potential impact of a work stoppage. Based on the advisor's report, the minister could declare a cooling-off period, for example, or require the parties to submit the dispute to final-offer arbitration. We ask this committee to consider our alternative proposal seriously and to make recommendations to the full Senate that it be included, or at least part of it, as you see fit, in your report.
I thank you for your attention. I will now ask Bob Renwick to say a few words.
Mr. Robert J. Renwick, Chair, Western Canadian Shippers' Coalition, Coalition of Employer Associations Concerned with the Statutory Protection of the Grain Industry: Honourable senators, I am a transportation and logistics consultant with the Council of Forest Industries in Vancouver. The Council of Forest Industries is a member of a group called the Western Canadian Shippers' Coalition, and provides the chair and the secretariat for that coalition.
I should just like to highlight a few points in the brief that we submitted. The coalition represents over 200 companies in resource-based industries in the four western and Prairie provinces. We tend to think of resource-based industries as mines, but we are also active in the forest industry and with the Canadian Oilseed Processors Association.
The main point we would like to make regarding the bill fits with what David was saying about our competition: The western resource-based industries are far from being the only game in town. Lots of competitor companies and other industries can supply forest products, sulphur, coal, potash, chemicals, fertilizers, and oilseed products to the same customer base that we supply. We are concerned with more than the short-term effects of a strike. The Council of Forest Industries has calculated that a 10-day stoppage on the ports will begin to shut down pulp and paper mills and sawmills in B.C. and Alberta and will cost our industry between $25 million and $30 million a day. Almost all of the rest of our member companies are up against similar situations.
As Mr. Church indicated, many companies around the world are fit, willing, able and eager to take our customers away from us, and take them away on a permanent basis if they can.
We believe that it is Parliament's job to govern wisely and well for all Canadians, not only for special-interest groups. We do not believe that proposed section 87.7(1) can be justified under any circumstances.
As this upper house is the forum for sober second thought, we can think of no other issue in recent times where the action of the House of Commons cries out to be overturned by the Senate of Canada more than clause 87.7(1) of Bill C-19.
Closing mills, plants, mines and factories and throwing people out of work in the rest of Western Canadian resource-based industries in order to provide income for the grain companies surely cannot be justified. The loss of income and workers' jobs in these other industries, not to mention to the effect on Canada's balance of trade, ought to be sufficient motivation to remove this clause of the bill and substitute a better-thought-out method of settling labour disputes in British Columbia ports.
Mr. Church has mentioned the alternative solution or method of negotiation that we have attached to our brief. We urge that you give serious thought to recommending to the Senate that the alternative method be adopted or that some other solution you may develop in your negotiations be recommended -- which would mean that it would be possible to remove proposed section 87.7(1) from the bill.
Mr. Donald O. Downing, President, Coal Association of Canada: Mr. Chairman, I appreciate the opportunity to address the Senate committee at this time. I have a supporting document, which I will deposit with the clerk at the conclusion of our presentation.
The purpose of this presentation is to address the proposed amendments to Part I of the Canada Labour Code, in particular proposed section 87.7(1), entitled "Service to grain vessels." As a context for my comments, I wish to describe the key attributes of Canada's coal industry with an idea of indicating to senators that this is an important commodity for Canada and the western region.
In 1997, our coal production reached a total of 78.7 million tonnes from 28 mines in five provinces. This was a record for Canada. Total consumption was almost 56 million tonnes, mainly in electricity generation. We do import some coal into Eastern Canada, but a major part of our business is exporting coal. Over 36 million tonnes were exported in 1997. Again, that was a record.
Exports, in particular, require efficient, cost-effective transportation because the international market for coal is extremely competitive. Asian countries are the primary markets for this coal, principally Japan, Korea and Taiwan, but we now ship coal to over 20 countries around the globe. Our main competition in metallurgical coal markets and thermal coal markets are Australia, the United States, South Africa, Indonesia and Colombia. Each of these countries offers some natural advantage to its producers over Canadian producers, not the least of which is a much shorter rail distance to tidewater, typically 1 to 300 kilometres, as opposed to a Western Canadian coal rail distance of 11 to 1,200 kilometres.
In terms of economic impact, coal mining in Canada employs over 8,000 people directly, of whom about 5,000 are employed in the export mines in Western Canada. These are among the highest paid workers in Canada.
Just as important, the mining of coal creates a strong economic ripple effect or multiplier. Our most recent economic analysis, completed in 1995, shows slightly in excess of a three-to-one multiplier in mine support industries, which translates to total direct and indirect employment in Western Canada associated with our export industry of over 16,000 jobs. Coal transportation, rail and marine results in another 28,000 direct and indirect jobs. Thus, our coal exports are creating about 45,000 jobs in Western Canada alone. Each coal mining job leads to six additional jobs in mine support and the transportation sector.
It is the seaborne exports that create the interaction with the ports and marine service providers. Our coal exports are valued in excess of $2.5 billion, not insignificant by any measure.
I have gone through these facts for the Senate committee today to indicate that coal is an important sector to the economy. It is a contributor to investment, growth, employment and trade earnings, and it is a mainstay of Canada's transportation sector. Coal is an important commodity to Canada.
While coal represents a large volume moved by the transportation network, it should be noted there is little slack in the coal transportation system. This is because the mines located mainly in the Rocky Mountain region have limited storage capacity and rely on rapid take-away by the railways.
Coal moves to export terminals at an average rate of 700,000 tonnes per week. The storage capacity at mines is limited more than, for example, the storage capacity for grain on the Prairies. Other commodities are important exports, but they are smaller in volume and have greater storage flexibility. Interruptions in the transportation system cause havoc in the coal mining industry.
The amendments proposed for Part I of the Canada Labour Code appear to reflect a view that grain is more important than coal. Indeed, one could be led to believe that grain is the most important commodity in the country. This is clearly not the case, and the proposed amendment, by attempting to make a special case for grain exports, diminishes the importance of the coal industry and all other commodity industries.
We do not believe that proposed section 87.7 should stand as presently written, as it discriminates between commodities and makes a special case for one. It suggests that the government places a priority and special status on grain, which would be impossible for us to explain to our valued coal customers in over 20 countries.
Mr. David W. Goffin, Vice-President, Business and Economics, Canadian Chemical Producers Association: Honourable senators, our member companies ship chemicals valued at about $1.3 billion through West Coast ports, primarily Vancouver. Our member companies have also announced major new petrochemical investments in Alberta that will substantially increase our shipments over the next few years. In order to be viable, a new plant in our sector has to plan to market about 40 per cent of its output in offshore markets. Disruptions to shipments from these plants would cost our members millions of dollars. However -- and perhaps more important -- work stoppages in the transportation system are certainly taken into account when potential investors assess Canada for new chemical projects, and they certainly result in a large black mark on the check list of investment factors.
In that regard, I wish to point out that the next big investment being considered for Alberta right now is by Phillips Petroleum. They are in the planning and preliminary development stages of creating a major petrochemical complex in Alberta. They do not put a capital cost on it, but it would be about a $1-billion plant. Phillips sought out Alberta because there is a large quantity of the ethane feed stock needed for petrochemicals. The political climate is desirable, and the U.S. and Asian markets are accessible.
I was talking to a representative of Phillips Petroleum about this investment this week, and I can tell you that, of the issues still to be addressed to determine whether this project goes to Alberta or not, port reliability is certainly one the factors they must investigate. The senior VP in charge of developing this project was dismayed to find that the legislation we are here to consider today addresses port labour disputes and enhances port reliability for grain shippers but does not do so for chemical shippers or other shippers, who are missing that opportunity.
That concludes my remarks and the remarks from our panel. We would be pleased to respond to your questions.
Senator Maheu: Two independent studies have found that longshore employers and unions have used disruptions to grain exports to trigger back-to-work legislation. The effect has been frequent work stoppages, incremental to the reliability of shipments through the ports. This provision in Bill C-19 is intended to reduce disruption to grain exports due to work stoppages, and the effectiveness of this provision will be reviewed again in 1999.
We have to look back a little in time. Since 1972, there have been nine work stoppages by the longshore industry at West Coast ports.
They affected grain exports in all instances. Seven of these work stoppages needed to be resolved by passage of back-to-work legislation. There have been three work stoppages involving grain handlers since 1974, all of which were ended by passage of back-to-work legislation.
Do you feel that lengthy work stoppages are not uncommon in some sectors, such as forestry and mining? Would you support making collective bargaining disputes in these industries subject to binding third-party settlements, as has been suggested by the ports disputes? Do you feel that the proposed section 87.7 will result in longer work stoppages, or is it just an apprehension that you have?
Mr. Renwick: I have been in the forest industry for a good many years, and for some of the years that you mentioned, there have been port labour disputes. I was responsible for transportation management for two large pulp and paper complexes in Prince George, in the central interior. We were largely export-oriented companies and I can say with a certainty, because I was involved, that there were all kinds of protests to Parliament about pleading for back-to-work legislation before we had to shut down our mills and lay people off. It came from many other people than the grain industry. The grain industry, of course, is very vocal, but so too are many other people.
The fact remains, though, that at that time, while it was not good, all of us were being treated the same. This clause proposes to continue grain movements and, while I do not think we are here to knock heads with the grain industry, we feel that our industries are just as important as grain and ought not to be differentiated against.
The other point there is that it is our judgment, from what we have seen in the past and what we believe will happen in the future, that the duration of shutdowns in labour disputes will be greatly extended by allowing one commodity to move at the expense of the others.
Senator Maheu: What about third-party binding settlements?
Mr. Goffin: In the alternative that the coalition has developed, which has been provided to you, we have tried to preserve the dynamics of collective bargaining as far as possible, until such time as the minister is satisfied that he must intervene. You will see that we recommend a process that does ultimately end up in a final and binding dispute-resolution procedure, either final-offer selection or interest arbitration, depending on the issues that are in dispute.
Mr. Downing: I agree that legislation does reduce interruptions to the grain system, but I would support my colleagues in saying that it does so potentially at the expense of the exports of other commodities equally as important to Canada as the export of grain.
Most of the mines in Western Canada are unionized. Unions and companies go through a collective-bargaining process on a regular basis. The comparison with the port situation is limited, because if a strike occurs at an individual mine it does not affect the mining at other production sites, nor does it affect the transportation of other goods and services. I believe that people would agree that the situation in a port, which represents a single outlet for Canadian exports, is somewhat unique in that regard. Therefore, the industry has put forward an alternative, which was described by my colleague.
Mr. Church: In our industry, if there is a strike or a lock-out, there are other suppliers in the industry who will step in and fill the void, either in Canada, to supply those customers, or offshore customers. That is the risk that both the company and the union take in terms of going through labour disruption.
In this situation, with this bill, there are no other effective choices for our industry in terms of using a port. If the Port of Vancouver goes on strike, our industry will be severely affected by it. There are no other alternative choices in terms of being able to ship your product offshore. The Port of Portland or Seattle or Long Beach, California, are there, but they do not have the forest products facilities; additionally, the infrastructure is not there on the West Coast to be able to handle the volume of trucks and rail cars that will be required to go down the coast for those vessels.
It is a question of what are the alternative choices. In our industry, there are other choices for customers in buying products from our industry.
Senator Cohen: It is obvious to us that many non-grain industries find that the preferential treatment of grain is unfair and that it creates an uneven playing field. It is obvious from your presentation that it would have disastrous effects in other industries with commodities. Are you aware of, or are you involved in, any economic impact study that was undertaken to determine how this would be so negative in your businesses? Was there any type of assessment done?
Mr. Church: No.
Senator Cohen: Through none of you?
Mr. Renwick: Senator, as Mr. Downing mentioned, the coal industry has very limited storage capacity at its mines. The same thing is very true in the forest industry. While some of the lumber mills, particularly in northern British Columbia and northern Alberta, can avert some tonnage to the United States, to a large degree our mills are export-oriented for overseas markets. When you lose the access to the warehouses that are at the ports, tonnage is accumulated in vessels. The ILWU and the B.C. Maritime Employers Association represent those forest products terminals and the labour that is certified at them. When those warehouses and deep sea terminals go down, the impact is felt quickly in the forest industry in Alberta and British Columbia, and mills start going down in a very short period of time.
Senator Cohen: I understand that a study is underway by Judge Estey -- which was commissioned by Minister Collenette and about which we will hear in six or eight months time. A review will take place as to why there is such a rush to put through legislation that will be reviewed and may be changed in six months to a year. Do you have any comments on that? These are the things that are puzzling me as I am trying to get through this proposed legislation and what it really means to Canada and the economy.
Mr. Church: We have the same question as well. You are right that that is under consideration by Justice Estey, the former Supreme Court justice, in his grain review. It is part of his terms of reference to look at farm-gate to port side, the logistics system for western grain. We feel that this provision should be part of that. It is part of Justice Estey's terms of reference and, therefore, we think that this provision should be looked at in the whole context, not just in the context of Bill C-19, but in terms of Justice Estey's review.
Mr. Goffin: Just prior to coming here, we received notice of Mr. Justice Estey's phase 1 report, and this is certainly listed as one of the issues that he will pursue in the second phase of his work.
Senator Cohen: It is like putting the cart before the horse.
Mr. Church: That is correct.
Senator Grafstein: I would have thought that you gentlemen would have welcomed this initiative to provide a bit of a breakthrough in terms of how to deal with this problem. Even though it did not apply across the board, this is an innovative compromise to deal with a problem that has plagued certainly one industry that is politically prone to intervention -- unfair intervention perhaps by both bargaining sides. I look at this as a first but modest step in attempting to address an egregious situation.
As I understand the legislation, there is a sunset clause in terms of review. I would have thought that you would have, in a way, on the one hand, welcomed this as a first step as opposed to saying it is all or nothing.
Mr. Downing: Senator, I am not a labour expert. I am generally involved in speaking in support of promoting the Canadian exports and production of Canadian coal. However, it strikes me that the resolution to this particular labour issue is rather simplistic and not innovative. It is a piece of legislation that simply disallows strikes in this area. That does not take a lot of imagination.
Furthermore, while providing a resolution in terms of the interruptions to grain exports, it creates a potential for extending blockages of exports of other valuable commodities, mainly because of the dynamics of the labour situation in the ports. You would have some people on strike and some people unable to strike, a situation that would not lead to a prompt resolution of a port labour problem. The experts who operate the coal terminals in Vancouver indicate to me that it would extend a labour dispute, and I have no reason not to believe them.
Senator Kinsella: Would the witnesses please turn to page 30 of the bill? That is where we find proposed subsection 87.7(1), to which you have been speaking. If this committee were to accept your argument and seek to achieve the end that you are advocating, what would you do? What would you have us do with this proposed subsection 87.7(1)? How you would change that?
Mr. Goffin: We have appended an alternative to our submission. I wish we could have put that in legislative language, in a way that would fit easily into this bill. We did make a bit of an attempt to do that last summer. It is certainly not easy to do. It is unfortunate, as your colleague said, that more time has not been taken with this to provide a more comprehensive solution.
Senator Kinsella: You would want us to take your alternative proposals and the principles that are contained therein and try to turn that into a drafted amendment to the bill, to achieve the objective stated in the general outline that you provided?
Mr. Goffin: That is right.
Senator Kinsella: It would take a fair amount of legislative research and analysis for us to do that. If we have sufficient time, I suppose we could do that. It would be complex because it affects other clauses of the bill.
You see the problem. As legislators, when a legitimate argument is being made for a change, we must ask how that change can be effected within the drafting of a statute where our friends in the other place have not done any drafting around this.
To turn to the larger principles, do I understand correctly that your concern with proposed subsection 87.7(1) is that it is speaking to what happens at dockside as far as grain is concerned? Your concern is what happens to your own product at dockside.
We will have witnesses later today from the port in my province of New Brunswick. I do not know how much grain we ship through there, but we do ship a lot of lumber and potash and oil products. It would be interesting to learn whether they share the same concern.
The allegation has been made of discrimination on the product non-inclusion line. What do you mean by that kind of discrimination? Is it the kind of discrimination that is prohibited by section 15 of our Constitution?
Mr. Church: We just mean that it is unfair, as opposed to necessarily legally discriminatory.
Senator Kinsella: What are the criteria you are using to measure what is fair and unfair?
Mr. Church: You made the comment that you know that grain would continue to move but that you were not sure what would happen to the other products. We know that our products will be held up at the port. We must explain that to our offshore customers, who will be aware that grain is continuing to move. We are one of the largest industries in Canada, one of the largest contributors to our trade balance, yet we must explain to our customers why grain continues to move while our products are held up and that we cannot supply our customers. They will look to other countries, other suppliers, if we in Canada cannot offer a reliable supply. They can look somewhere else, to Europe, to Indonesia, to the Far East.
That is what we mean by "discriminatory." It provides what we think is preferential treatment to one industry at the expense of other industries.
Senator Kinsella: What is the nature of the impediment to the movement of your product from the point of production to dockside, whether it is being done by truck or rail, et cetera? As I understand, there is nothing specific to that part of the movement of the product. It is only the movement of the product at dockside.
Mr. Renwick: There is a problem when you cannot get rail cars for the forest products industry, and I believe Mr. Downing has indicated that that is so in the coal industry as well. I know from some of our partners in the Western Canadian Shippers' Coalition that this is also true for them. Our industries, by the very nature of our products, must ship by rail. It is the only economical means of moving our product. It does not take very long before all the rail cars in the fleet get tied up because they cannot be unloaded. There is no other way to get our tonnage to port because the terminals that unload our products are not available for access.
Senator Kinsella: In terms of getting it from the point of production or manufacturing or from the agricultural field to dockside, do you have alternative means of getting it there?
Mr. Renwick: No. In the resource-based industries in Western Canada, there is no alternative. There are very few products that can be moved to port by any other means than by rail.
Senator Kinsella: Therefore, would it be a logical extension of your position that if this was to apply to dockside that it should also apply to rail?
Mr. Renwick: That is not logical in our thoughts. We do not think it should apply to the docks. We do not think it should apply to anyone; we do not think that there should be a preference for one product.
The process that Mr. Goffin had outlined provides a long-term solution to the issue. It takes the heat off Parliament, if I may say so, and gives the minister the authority to deal with the matter. It also treats everyone the same. The most important element in this thing is the unfairness that Mr. Church spoke about. It will be very difficult for all of us who are closing mills and who are not able to supply customers.
I will speak about the forest industry for a moment because I know it best. We represent the council of forest industries and most of the western industry that Mr. Church's organization does not represent. We know that there are a whole lot of countries involved. For example, we have competition from the three Scandinavian countries, from Spain, Portugal, the United States, Chile, Brazil, Argentina, New Zealand, Australia, Indonesia and Japan. There are all kinds of companies in those countries that are fit, willing, able and keen to take our business away and to keep it.
That is the concern. If we get shut down, the effect will not last just for the duration of a strike, of perhaps 10 or 20 or 30 days. It is tremendously important and has some powerful long-range implications for Canada's balance of trade.
We suggest that you recommend to your colleagues in the Senate that, until Judge Estey finishes his study and makes his recommendations, this section should be struck from the proposed legislation at this time.
Senator Perrault: I am somewhat concerned with this proposed measure. It moves in the right direction and it probably provides reassurance to those in the grain handling industry, but I come from British Columbia. The objections that have been registered there have been quite formidable. For example, objections have been made by the Business Council of British Columbia, the Canadian Chemical Producers Association, the Canadian Pulp and Paper Association, Canfor Corporation, the Coal Association of Canada, the Council of Forest Industries, and the Forest Industrial Relations and Mining Association of Canada. That is only a partial list.
Frankly, these representations cannot be airily dismissed by anyone who serves in the Senate. I am concerned about it.
What percentage of tonnes shipped through Vancouver does grain represent at the present time?
Mr. Renwick: Perhaps Mr. Wilds from the B.C. Maritime Employers Association can better answer that question. We understand that grain represents about 30 per cent of the tonnages moving through there.
Senator Perrault: It is not by any means the major shipper?
Mr. Renwick: No.
Senator Perrault: What percentage of the total dollar value of that represents non-grain products?
Mr. Renwick: Forest products from British Columbia alone -- and this comes from the 1996 Price Waterhouse study of the forest industry in British Columbia -- represented $4 billion worth of sales through the British Columbia ports.
Senator Perrault: As far as grain is concerned, you are not asking that that be cancelled outright, are you? You see it as parity with grain rather than stopping this proposed change, do you not?
Mr. Renwick: Yes. We suggest the alternate proposal that Mr. Goffin spoke about, which would put everyone on the same basis over time and would provide a negotiating organization that would provide a better basis for negotiations. We have discussed that alternate proposal with the Canadian railways, who assure us that it would be a better system than they now have.
Senator Perrault: Judge Estey will complete his report by the end of December. If you are not asking that proposed section 87.7(1) be removed, are you also saying that, in light of major industry concerns, we should allow the provision to be reviewed by Judge Estey as part of his study? Would that be helpful?
Mr. Renwick: We would like to see you recommend that it not proceed under this bill until the Estey report is completed. Either it should be taken out of the proposed legislation or it should be agreed that it not be proclaimed until the completion of Judge Estey's study.
Mr. Church: I do not believe that granting preferential treatment to one industry -- that is, to the grain industry or the coal industry or the forest products industry -- will resolve the problem.
The infrastructure in Vancouver will not handle the embargo of all other commodities at the expense of one. If you were to say, "Grant preferential treatment to the forest products industry," we would not be happy because we do not think that it will work. Neither the rail yards nor the port facilities, or whatever, can handle the exclusion of all products except one and think that the railways will be able to move all those cars through. If the question were, "Does the grain industry or the forest products industry want preferential treatment?", we would say, "No. Grant equal treatment to everyone."
Senator Perrault: That is interesting.
Mr. Downing: Proposed section 87.7(1) could safely be deleted from the proposed legislation. Short of that, employer groups have an alternative that they propose.
It is anomalous to find a reference to a particular commodity transportation issue in the Canada Labour Code. Without that provision, I do not believe the Canada Labour Code would suffer a bit.
Senator Perrault: This bill has been passed in the House of Commons. Under certain circumstances, getting some pieces of legislation through the Commons or into the Senate is somewhat longer than the gestation period of an elephant. We have reached this point in terms of parliamentary progress.
Would you look forward to some sort of commitment on the part of the minister that certain actions may be taken this fall; that is to say, some reassurance from him? Of course, the Estey procedure, to which we referred earlier, would be part of that. I would be interested in hearing any alternative ideas that you may have for something the ministry can clarify.
Mr. Downing: The Estey commission would be bound, I believe, if the proposed legislation is passed. It would be something that the Estey group would take up in the normal course. Ironically, he could look at that and say, "It is these types of special provisions that create problems in Canada's transportation system rather than resolve them."
In the normal course, this is the type of thing that the Estey commission would look at in any event. This is like pushing a problem out in front of the government. It does not resolve anything if you know that it will be reviewed in the context of the grain transportation issue in a few months.
Senator Perrault: Have you discussed this at length with your friends in the grain industry and set forth some of your concerns? If have you done that, they have rejected your overtures.
Mr. Renwick: It is safe to say that they have rejected our overtures.
Senator Perrault: You feel they lack breadth of vision, I am sure.
Senator DeWare: In your presentation, you suggested some proposals. One was that the minister could require the parties to submit all or part of the issues in dispute to a final binding-dispute-resolution procedure. When Bill C-66 was introduced, that was suggested at report stage but rejected. The Senior Assistant Deputy Minister, Michael McDermott, in writing to the labour employment board in Fredericton, said that the federally regulated employers and the unions representing the workers made it clear during the consultation process that they want neither their collective bargaining disputes subject to binding-dispute-resolution mechanisms nor the contents of their collective agreement imposed by third parties.
I read -- probably you did, too -- the comments of the other parties in the House of Commons during second- and third-reading debates. A lot of them recommended final-offer-selection arbitration. That could be an answer to this particular problem. Could you tell us how you feel about that? Perhaps it is a last resort sort of thing.
Mr. Renwick: We would like to see the bargaining process proceed in a normal way. We do not think that that should be taken away. However, a work stoppage -- and here I am talking principally about the British Columbia ports -- has such an effect on the economy of Western Canada that there must be a solution to that type of situation. Whether it involves final-offer arbitration or not -- and maybe it must -- it is a unique position. The economy of Western Canada can be held to ransom, if you will, by the failure of the two parties to negotiate a settlement.
Senator DeWare: Does anyone else want to comment on that?
Mr. Church: There is precedent for final-offer selection or final-offer arbitration. In the Canadian NTA, there is a provision called final-offer arbitration. It has been there since 1987, under the National Transportation Act. Basically, the experience of our industry is that -- and I think it is the experience of other industries as well -- when a party does go for final-offer arbitration, it forces negotiations. Ultimately, you have a negotiated settlement before you actually get to the arbitration process. That is the benefit of it, namely, that it will force negotiations and a negotiated settlement.
Senator DeWare: That would certainly be much better accepted in this country than back-to-work legislation. Would you not agree?
Mr. Church: I think so, yes. We would much prefer to see a negotiated settlement than back-to-work legislation. However, as Mr. Renwick and the other members have indicated, we rely on the port system to provide the service to get our products to market, and the customer is the bottom line. That is the most important issue. If we cannot serve the customers, there are others who will step in and fill the gap.
Senator DeWare: And we in Canada are the losers.
Mr. Church: That is right. You lose some of those forever. Some you get back, but some you could lose forever.
Senator DeWare: That happens in all labour disputes. It is also interesting that in this particular letter of March 3, 1997, he says to them that the effectiveness of the provisions in question, meaning allowing preferential treatment to grain handlers, would be subject to review in 1999, so they are still talking about this particular review.
Senator Callbeck: You feel that each industry, whether chemicals, pulp and paper, or grain, should be treated the same way, yet you are not in agreement with having all groups under the proposed section 87.7(1).
Mr. Renwick: If you put everyone under that proposed section, and perhaps some of our members would like that, you effectively ban the ability to strike or lock out. That does not work towards good collective negotiations.
Senator Callbeck: I agree. I am simply ensuring that I understand this. Do you not have a proposal to put before us today with which you all agree?
Mr. Goffin: Yes, we all agree.
Senator Callbeck: I have not seen a document, but I hear you say proposals plural. Is there one proposal?
Mr. Church: It is one proposal. It was attached to the CPPA submission, and you should have it before you. It is one proposal, but it offers the minister a range of tools that he can use. He could order a cooling-off period, if he wanted; he could order mediation; he could order final-offer arbitration. A number of tools are at his disposal. However, there is one proposal that this group endorses, and we have submitted that to the minister.
Mr. Renwick: We think it means that the minister could deal with the issue without having to go through the parliamentary process; that the minister would be able to deal with it.
Senator Callbeck: In your comments, you indicated that because of this proposed section you feel that work stoppages will be longer. I read that 200 employees of the 3,000 would be working here. Therefore, work stoppages will be longer, but only a few employees are involved.
Mr. Renwick: Senator, I think Mr. Wilds could perhaps better speak to that issue when he appears in a few minutes. It is our understanding that if they were to have 30 per cent of the work force spread over the registered workforce, which is a fairly small amount of the normal dockers in the British Columbia ports, they would be able to have a fairly substantial level of earnings. Together with the strike pay, they would be able to sustain a strike much longer than would normally be the case in a situation where there was a level playing field for all of us.
Senator Maheu: I have an uneasy feeling. I remember the undue pressure, to call it something more polite, with the longshoremen and the grain issue out west, the number of strikes that have forced Parliament to take measures such as back-to-work legislation, final-offer arbitration versus the right to strike. I get the feeling that you would just as soon have no one out west be allowed to strike. It is an ideal situation, I suppose, but do you not think that the threat of lost business would not encourage both yourselves and employees to avoid disputes by bargaining in good faith? I am having a bit of trouble understanding. Are you saying that, if the dockers must handle grain, they should also be obliged to handle all your products, thereby eliminating the right to strike?
Mr. Downing: Senator, it seems to me that this legislation takes away the right to strike, does it not? It says that workers must continue to handle grain. Does that not take away the right to strike?
Senator Maheu: Only because it has been used as the ultimate pressure tactic for so long now. If that tactic or pressure possibility is taken away, we get down to brass tacks, or do you not agree?
Mr. Downing: I think the opposite is the case. I do not see why stabbing back at the Canada Labour Code is being used to address a grain-handling problem in the Port of Vancouver. This now puts amendments to the Canada Labour Code at a time when Chief Justice Estey is reviewing grain transportation. The transportation of grain is an issue in itself. I am puzzled by why the Canada Labour Code has been chosen as an instrument to resolve that particular issue.
I am concerned about it because I believe that this particular way of resolving the grain transportation issue will backfire on coal exports. I am trying to make the point to members of Parliament and senators that exports of coal from Western Canada are equally as important as grain, not more nor less, but equally as important.
Senator Maheu: Could you make some comments on the right to strike, please?
Mr. Downing: The industry is heavily unionized. In the mines, rail transportation and at port, I think throughout, the industry recognizes the right to strike. Collective bargaining at mines has been going on since the beginning of modern-day coal mining in Canada. The producers are certainly well aware of that and are involved in the process. We do recognize the unique situation where a port like Vancouver, which is the port for the provinces of Manitoba, Saskatchewan, Alberta and British Columbia, has a special circumstance, and perhaps an innovative solution along the lines of alternatives proposed by this group and others would be a way of addressing that. However, addressing it through the Canada Labour Code by saying that grain must move under all circumstances does not appear to resolve the labour situation there whatsoever.
Senator Grafstein: Back to the problem: No one denies that each of your industries makes a huge and beneficial impact on our balance of trade and our economy. There is no question about that. The question is how we get at the problem, which I think you have indicated is quite specialized, in a monopoly situation as it applies to transportation outlets on the West Coast.
I do not see the devil as darkly as you do here because it is a short time frame. It is a year, as Senator DeWare points out -- 1999. It is a short window. I hear an apprehended problem, a real apprehended problem, but a short time frame. We have the Estey report coming along, which does not prevent them from re-examining this. It allows, I think, all of you, within the next year, to come back and say, "Look, this has not worked. Our apprehensions have been concretized."
Perhaps you could make a brief comment about that because I see this as a very modest and not prejudicial step to anything you said, other than painting the devil a little blacker than it is. It is grey at this moment.
Mr. Renwick: During that period, albeit short, some serious labour disruptions could arise, which could shut many of our plants and cause us serious financial damage.
Further, we do not think that there would be any guarantee. If the minister is not listening any better in the year's review than he listened when we all spoke to him to try, to get this changed, then the review may well be worthless as far as industry is concerned.
The Chairman: Thank you very much, Mr. Renwick.
Mr. Church: I should like to mention our experience with the Canada Transportation Act, with which we were involved in 1996. We talked to people in 1997 and were told, "It is only one-year old, give it time." Our fear is that we will come back here in a year and be told, "It's too soon, give it more time."
We are here today because we have a concern with the provisions as they exist today.
The Chairman: Thank you all. Notwithstanding the time constraints, I hope you feel you have had a fair and full hearing. I hope you found the discussion useful, as I think all senators did.
Mr. Bob Wilds of the B.C. Maritime Employers Association is our next witness. With him is Mr. John E. King, Chairman of the Board of the Port of Saint John Employers Association.
Mr. Bob Wilds, B.C. Maritime Employers Association: Mr. Chairman and senators, thank you for the opportunity to appear before you regarding this proposed legislation, which has major implications for our industry.
Our association represents approximately 75 companies engaged in shipping, stevedoring, dock operations, ship agencies, bulk-loading facilities and specialty grain-loading facilities on the West Coast of Canada. A copy of our membership list is included in our formal written submission.
We are the organization that negotiates the collective agreement on behalf of the industry employers with our labour partners, the ILWU Canadian Area and the presidents of six major locals. We perform many other services, but the negotiation and administration of the collective agreement are our primary responsibilities.
It is for that reason that we appear before you today to express our views on this proposed bill. If we leave you with only one message from our presentation, it is, senators, that there is no rush. Take your time in reviewing this legislation because this bill is in need of serious sober second thought. In our opinion, parts of the bill are extremely controversial and regionally divisive. We believe the true intent is often cloaked in fantasy, bureaucratic double-talk, myths and misrepresentations.
There are many good things in this bill. Our support for this legislation, however, is contingent upon the removal of the grain exemption contained in clause 87.7(1). In short, our opposition to the unfair and discriminatory grain exemption is based on our belief that the section constitutes an indirect grain tax levied against all industries dependent on exporting and importing through West Coast ports.
Further, the proposed mandatory movement of grain during legal strike or lock-out actions will undermine Canada's international reputation as a reliable supplier of commodities to world markets by subsidizing and prolonging work disruptions. The adverse consequences if this section is implemented as is will be profound and direct for our industry, for all port users and for the economies of British Columbia in particular and Western Canada in general.
As members of the Standing Senate Committee on Social Affairs, Science and Technology in consideration of Bill C-19, you are presented with the opportunity to repeal clause 87.7(1) and improve this legislation, hence providing a balanced and better labour code for all stakeholders.
We believe there are myths that underlie the grain exemption in clause 87.7(1). Our primary objective is to keep workers working, employers employing, and all commodities moving. In Western Canada, this is the backbone of our export driven economy, our jobs and our economic growth. Collectively, our livelihoods, our future prosperity and international reputation depend on this. This is applicable equally to the tripartite stakeholders including labour, management and government.
Clause 87.7(1) as it currently stands poses a direct challenge to these objectives. The exemption runs contrary to the general aim of the labour code itself by threatening the stability of labour relations at West Coast ports.
Further, the exemptions undermine collective bargaining by eroding the fundamental underlying principles, namely, the right to strike and lock out. This, in turn, will have devastating effects, not only on port employers and employees, but also on all Western Canadian port customers from potash to lumber to petrochemicals to coal producers -- those export-driven economic sectors that are the very engine of our economic growth.
It is our contention that the grain exemption -- its purported origin, its alleged intent, and its supporting rationale -- collapses under the weight of its own contradictions. Officials from the Department of Labour frequently claim, as they did yesterday during their appearance before your committee, that the impetus for the grain exemption comes from the Sims Task Force and the industrial inquiry commission. However, such claims are a distortion of the studies, given that neither study formally recommended that the government introduce this exemption. Nor, for that matter, did either study suggest or propose either directly or indirectly that the government implement this exemption.
After careful consideration of all factors affecting industrial relations at West Coast ports, both the Sims Task Force and the industrial inquiry stop short of making the formal recommendation for the grain exemption. The reasoning behind this is clear. For example, the Sims Task Force concluded that except for the reasons of public health and safety, the right to strike or lock out should not be removed from any group of workers or any employers subject to the code. Clearly, the grain exemption as it currently stands does exactly that. It selectively removes labour's right to strike when it comes to the movement of grain and it selectively removes the right of employers to lockout.
Hence, contrary to suggestions by officials of the Department of Labour, not only does clause 87.7(1) not arise out of the Sims Task Force, but by implementing it the government is violating a central conclusion of the report, namely, that the right to strike and lockout should not be removed unless in cases of public health and safety.
This brings us to the most absurd of all contradictions surrounding the grain exemption. On numerous occasions in the House of Commons, before committee and in correspondence, labour officials have claimed that the grain exemption is "designed to maintain the strike and lockout rights of both parties in the port and grain handling section."
With the proposal for the grain exemption in clause 87.7(1), they are suggesting that selectively removing stakeholders' rights to strike and lock out when it comes to the movement of grain at ports, will somehow maintain the strike and lockout rights of the port and grain handling stakeholders. This justification is beyond ridiculous. We think it is absurd. It is reminiscent of those justifications offered by the soldiers who had to destroy the village in order to save it. This is Orwellian logic gone mad, in our opinion.
The Department of Labour is saying that the Government of Canada must selectively intervene in collective bargaining and erode its fundamental principles in order to preserve collective bargaining. They are saying we have to remove the right to strike and lock out in order to protect the right to strike and lock out. The absurdity of these justifications is self-evident. It is our submission that the introduction of clause 87.7(1) at this juncture is neither appropriate nor timely.
This section threatens the stability of labour relations at West Coast ports and, if implemented, will effectively contribute to extended labour disputes by allowing employees to profit from the mandatory movement of grain during disputes. In effect, the mandatory movement of grain during a legal labour dispute would be a subsidy to employees. A labour dispute is a labour dispute regardless of commodity. We have had labour disputes in the past when no opportunity for earnings existed. This provision will only make that situation worse, in our opinion.
This brings us to the next contradiction underlying the rationale for the grain exemption. This section unfairly introduces industrial discrimination into the labour code by unjustly granting preferential treatment or a special status to grain as a commodity over all other Western Canadian commodities. This special status for grain is introduced without foundation or reason.
It has been claimed by the officials from the Department of Labour that grain has been deemed to be to the general advantage of Canada. When we asked for references to this claim, the officials claimed that this special status is granted in the Constitution, section 55 of the Canada Grain Act and section 76 of the Canadian Wheat Board Act.
Upon review, we are of the view that those supporting references are a weak interpretation at best, and misleading at worst. The two sections referred to do not declare grain to be to the general advantage of Canada, in our view.
Grain elevator mills, warehouses and their workings are declared to be to the general advantage of Canada. However, these acts do not explicitly grant grain as a Canadian commodity with any special preferential status. Hence, although the processing facilities for grain may have been deemed to be for the general advantage because of their relative importance to the grain industry, grain as a commodity does not by extension enjoy that special status relative to any of Canada's other commodities, namely, forestry, mining or petrochemicals. Neither by reason nor law does one follow the other.
In order to clarify the record, we suggest that you ask the officials from the Department of Labour whether they have received an opinion from the Department of Justice supporting their interpretations and whether they would table such an opinion with your committee.
The contradiction only becomes more profound. For example, the Minister of Labour often states that the grain exemption will prevent grain from being the ace in the hole for both sides in the bargaining process. Should this provision remain, it is our view that the exact opposite may turn out to be true. Grain will become the ace in the hole by subsidizing employees during the legal labour dispute. This will unnecessarily prolong labour disputes. Further, if the push for legislative intervention to resolve a strike does not come from the grain lobby, it will most certainly come from other commodity producers, effectively making other industries the ace in the hole for the other side in the bargaining process. If not grain, then it will be potash, forest products, coal, petrochemicals or all of them.
If this provision remains, we believe that it will have major negative consequences on our collective bargaining. If prolonged strikes are not acceptable to our customers, Canadian importers and exporters, we will be forced to accede to unrealistic demands or to introduce unnecessary changes into our collective agreement. Neither of these alternatives is attractive.
We are not attempting to diminish the importance of the Canadian grain industry. Approximately $4 billion of grain cargo moved through the Port of Vancouver in 1996 alone; that is no small sum. However, by comparison, this represents only 13 per cent of the total value of cargo moved through that port that year. That does not include any of other Western Canadian ports. Other Canadian imports and exports through the Port of Vancouver accounted for $26 billion or 87 per cent of the dollar value of cargo moved in 1996 in the Port of Vancouver. We want equal treatment for all commodities, regardless of special interest politics.
Further, it is often stated that an objective of the grain exemption is to reduce the number of labour disruptions affecting grain. We point out, however, that it is the intention of the labour code to reduce the number of labour disruptions affecting all commodities and industrial sectors, not just grain.
The grain exemption, as is, protects grain at the expense of all other commodities and industrial sectors. The effects will be particularly devastating for the export-driven economies of Western Canada. Such assertions highlight the discriminatory nature of the proposed grain exemption.
The inclusion of clause 87.7(1) is premature. In doing so, the government is putting the cart before the horse. It may be preempting the recommendations of its own commission assigned to consider some of the very issues that this exemption purports to address.
As you know, Minister of Transport David Collenette recently appointed Mr. Justice Estey to conduct a comprehensive review of all aspects of the grain handling and transportation system. That commission has identified labour relations within the grain handling system as one of the areas to be considered. Furthermore, that the government saw the need to conduct this review is evidence of the fact that there are numerous complex problems associated with the movement of grain.
In its present form, clause 87.7(1) will affect one small aspect of the grain transportation system and, even then, only certain bulk grains. Of note, the desire to see the Estey review completed prior to implementing the grain exemption was compelling enough for five cabinet ministers to write to the Minister of Labour requesting that he remove this clause, at least until the government had the benefit of the Estey conclusions.
Furthermore, clause 87.7 is selective and discriminatory within the agricultural sector, since it applies only to those commodities handled at the five grain elevators in Vancouver and the one in Prince Rupert. What about agricultural products handled by other terminals such as Neptune bulk terminals, Vancouver wharves, coastal containers and all container terminals which handle containerized agricultural products? None of those commodities are included in this exemption.
Clause 87.7 is an uncontrolled experiment being conducted by the federal government. When officials from the Department of Labour state that they intend to conduct a review of this provision in 1999, we believe they admit as much. They do not know what the impact will be. This is because the clause 87.7(1) experiment is based on no supporting analysis, research or economic impact assessments. They are not even waiting for the conclusion of the Estey review prior to implementing this radical change in labour policy. Why put the cart before the horse? What is being proposed is to legislate and then study, as opposed to study then legislate if found necessary.
If you ask the Department of Labour for their supporting studies, analysis or impact assessments, none will be forthcoming because none were conducted. Do not be fooled by their rhetoric about extensive consultations, because consultations are meaningless if the opinion received from stakeholders is ignored and the original agenda is implemented indifferently to the concerns received from the stakeholders. We believe that is the case here.
The Chairman: Do you intend to leave some time for Mr. King, Mr. Wilds?
Mr. Wilds: I am just about finished.
In many ways, clause 87.7 confirms a profound detachment between the government and Western Canada. This will undermine Canada's reputation for reliable deliveries of commodities to world markets. This is particularly relevant for western commodity producers. These products will remain stagnant in the event of an extended strike indirectly subsidized by the mandatory movement of grain.
In effect, clause 87.7 can be considered an indirect grain tax levied by Ottawa against all industries who are dependent on exporting or importing through the ports in Western Canada. This approach reflects a fundamental lack of understanding of the western economy and the B.C. economy, in particular. Given the tenuous position of the current western economy as a result of the drop in world oil prices and the Asia crisis, such a threat to future economic stability could not come at a worse time. This could only be allowed to happen, in our view, to Western Canada.
Our final question is: If the movement of grain is so critical, why did the government not propose to declare it an essential service and require all associated with its movement to continue to provide service in case of legal disruptions? This would include all prairie pools, rail terminal elevators, inspectors, and longshore workers. It is a reasonable question that has yet to be answered.
Given the numerous contradictions, the inconsistencies, the questionable rationale, honourable senators, we encourage you to take your time in reviewing this controversial legislation. We encourage you to hold extensive, far-reaching hearings to obtain the facts. We are certain that once you have all the facts, you will conclude that the grain exemption is misguided, that it is bad public and bad labour relations policy. As such, it is worthy of removal.
Please provide value-added sober second thought and not a simple rubber stamp. Please amend the bill by removing clause 87.7.
Mr. John E. King, Chairman of the Board, Port of Saint John Employers Association: Honourable senators, the Port of Saint John Employers Association is pleased to have this opportunity to present its views on Bill C-19. I am the chairman the board of the association. In real life, I am general manager of one of the contracting stevedores in the port.
In November 1996, the Canada Labour Relations Board certified our association as the management representative for the contracting stevedores in the port. We replaced the Maritime Employers Association, which had been the management representative in our port for many years.
As management representative, we are responsible for the negotiation and administration of the labour contracts with the three International Longshoreman's Association locals that provide labour in our port. We administer jointly with labour the pension and welfare plan for the longshore workers.
We are also responsible for the dispatch of labour.
The association comprises 10 member companies involved in stevedoring, ship operation and agency. It has a full-time staff of five and is governed by a five-person board of directors taken from the member companies. There are approximately 350 employees active in longshoring in the port, of which approximately 220 are members of the three ILA locals.
The Port of Saint John is the second largest port in Canada, having handled slightly in excess of 21 million tonnes in 1997. It is the largest port in Eastern Canada in terms of tonnes handled. That being said, it is important to note that the operations are effectively split into three areas: petroleum; bulk, composed of potash, sugar and salt; and general cargo, mostly forest products.
Eighty-six per cent of our tonnage is petroleum handled either as inbound crude through an offshore buoy outside of the harbour or outbound product from a privately owned and maintained terminal in Courtenay Bay.
The vast majority of the employment opportunities in the port arise from the handling of the remaining 3 million tonnes. Of those 3 million tonnes, only slightly over 1.3 million tonnes are in the higher labour usage areas of containers and break bulk cargoes.
The point of all this is that cargo pays the majority of the bills. We are a port that handles slightly over 1 million tonnes of cargo, and we have to work hard for every pound.
What does all of this have to do with labour relations in Bill C-19? Quite a lot, actually. Up until recently, labour relations at this port were like those in other ports in Eastern Canada and, with due deference to my colleague, in Western Canada as well, I expect. They were locked in a 1960s or 1970s time warp of hostility, antagonism and confrontation.
I would like to tell you that we are moving away from that type of labour relations because of enlightened management and leadership, but that is not entirely true. We are moving towards a more positive relationship with our employees and their unions because we have recognized that we cannot grow the business while fighting with ourselves and our employees. We are too small and the business too fragile for that in this age of globalization and fierce competition.
As one of the founders of the republic to our south said during their revolution, "We must hang together or we will surely hang separately."
The competition is not only other ports -- it is other modes of transportation and the changing markets of our customers, the shippers. As an example, little more than a decade ago, the newsprint mill in Saint John sent over two-thirds of its production to market over our docks. It now sends less than one-third. The other third has been lost to overland transit to U.S. destinations.
How are things different now in labour relations? Let me give you some examples. In late 1995, before our creation but after the process of separating from the MEA had begun, we negotiated a new three-year agreement with our largest ILA local prior to the expiration of the old agreement. "No big deal," I can hear you say. "It happens every day." Well, not in my industry. To our knowledge, never before in Canada had that been done in a port covered by geographic certification. Since then, we have implemented an employee assistance program, started grade 12 equivalency training programs for our employees, met regularly with our union executives, and generally improved labour relations. Does that mean that the morning has arrived? No, it does not, but it does mean that we are moving in a different direction.
It is in this context that we comment on the proposed legislation. Let me start by saying that we support and applaud the majority of the provisions in this bill. We think that overall it provides a better context for the advancement of cooperative labour relations in the federal sector. We are, in particular, pleased with the increased emphasis on the parties resolving their differences without intervention. Too often in the past, both parties have negotiated with the objective of getting a good report from the conciliator rather than an agreement.
There are other aspects of this legislation that we are less pleased with, including provisions related to replacement workers and the provision of off-site employee information to unions. We would like to see these changed, but, frankly, we can live with them. Other presentations to this committee no doubt have spoken to them or will speak to them. There is one provision, however, with which we have serious problems on both practical and philosophical grounds. It is the provision relating to grain handling.
The Port of Saint John no longer handles any significant amount of grain, although a new bulk terminal proposed for the port sometime next year may very well bring back grain handling. However, we feel very strongly that singling out any cargo for special consideration is a dangerous and divisive precedent.
As you know, longshoring is the only industry in Canada subject to mandatory employer association in ports so designated by the Canada Labour Relations Board. This was instituted, in part, to ensure that employers who share a single pool of labour act in concert. You will appreciate the difficulties that arise when competitors find themselves required to associate and act in mutual interest.
Nonetheless, the ports with geographic certification have managed this with varying degrees of success. That success has been the result of the realization that we are all in the same boat and must, at least in some sense, succeed or fail together. At the heart of it, we all need labour to load and unload ships, and contract conditions apply to all. Thus, the longshoring provisions of the current act, while not unflawed, have resulted in relative labour peace on the waterfront in most of our major ports. Any provision that mandates the handling of some cargo but not others in a labour dispute will inevitably split the employers association and render the existing structure unworkable. The fundamental alignment of interests of the employers will be broken, and it is inevitable that the functionality of the associations will decline.
We strongly urge that the national interest in the continuing movement of grain be addressed in some other way that preserves the principle of equal treatment under the law. It is our opinion that the current legislation already provides sufficient remedies, including the appointment of a mediator and the ultimate sanction of back-to-work legislation.
Honourable senators, we would urge you, if there is a special problem in Vancouver, to solve it in Vancouver and not impose it on the nation, where it may not be appropriate in all places.
The Chairman: Colleagues, we have five minutes for questions. We have a panel of four organizations to hear from between 5:00 and 6:30. We will then continue on until 9:00, according to the schedule you have given me.
Senator Kenny: I wish to make an observation, Mr. Chairman. There is a miscommunication here. The witnesses clearly have not been told or do not understand that we are not here to have lengthy statements read to us. They have an opportunity to send material to us in advance, and the purpose of these hearings is to have a dialogue with senators. That cannot take place if witnesses sit and read to us. Perhaps that was not communicated to this panel, but could we communicate it to future panels? Perhaps they can keep their comments to five minutes so that we can have a dialogue with them and explore the points that are of interest to this committee.
The Chairman: Thank you, senator.
Senator Kinsella: Mr. Wilds, in your very informative presentation, you mentioned, amongst other things, that four ministers had written to the Minister of Labour. Who were those ministers and approximately when were they writing to him?
Mr. Wilds: They were four ministers from British Columbia requesting that this proposed section be withheld until the Estey commission is completed.
Senator Kinsella: Do you have a copy of that correspondence?
Mr. Wilds: I have seen the correspondence.
Senator Kinsella: Would you be prepared to table copies of those letters?
Mr. Wilds: I would prefer not to do that.
Senator Kinsella: Fine.
The substance of those letters is that those four provincial ministers were asking the federal minister to do what?
Mr. Wilds: To withhold proposed section 87.7 until the Estey review is completed.
Senator Kinsella: To your knowledge, did the ministers receive a reply?
Mr. Wilds: I do not know the answer to that question.
Senator Kinsella: What was the time frame of this?
Mr. Wilds: Some number of weeks ago.
Senator Kinsella: For the record, I would ask the Department of Labour whether they would be prepared to share this information with us.
The Chairman: The minister will be here as a closing witness.
Senator Kinsella: Thank you.
Senator Maheu: Mr. King, there have not been many work stoppages in the Port of Saint John or in any other Atlantic ports in recent years, certainly none that have required parliamentary intervention as we have had to use on the West Coast, unfortunately. What is your secret for success?
Mr. King: I believe it is because we are a small enough group that it is very easy for us to identify the fact that we are all in this thing together. However, if someone wishes to attribute that to visionary leadership, we will accept that, too.
Senator Maheu: I wish to make a comment to Mr. Wilds. In spite of everything you have said, there have been nine work stoppages in the longshore industry on the West Coast which have affected grain, and there have been three work stoppages involving grain handlers, since 1974. All of them had to be ended by back-to-work legislation. I get the feeling that undue pressure was always used when it was a grain strike, and every time there was a strike affecting grain, you would have the government legislate you back. What happened to the right to strike and the right to bargain in good faith?
Mr. Wilds: I would suspect that my counterparts who will follow us will indicate that there has never been a charge by either party of failure to bargain in good faith. There have been significant labour disputes in past years. I would say, on my own behalf and on behalf of Mr. King, in our bargaining with the international longshore workers we have had one labour dispute in the last 10 years. We have been to the bargaining table on four occasions. We have concluded collective bargaining on three of the four occasions. I do not believe that that is an unreasonable record. I am not here to speak to what happened long before my time there. Significant improvement has been made. There have been more labour disputes in other industries than there have been in our industry in the last 10 years that have affected the movement of grain, yet we are being singled out.
The Chairman: On that note we must close. I should tell the committee that we had squeezed these two witnesses in for a half hour because they did take the position that they had a perspective that was not fully represented by the coalition, which testified for an hour before them.
Honourable senators, for the next hour and one-half, approximately, we have a panel of three organizations, whose spokesmen will each make 10-minute presentations.
Mr. John Pearson, Chairman, Prairie Pools Inc.: Honourable senators, I wish to start off by introducing Prairie Pools Incorporated. Prairie Pools is an association of Western Canada's largest farmer-directed cooperatives: Alberta Wheat Pool, Saskatchewan Wheat Pool and Manitoba Pool Elevators. Together, the pools have over 100,000 farmer members and shareholders and employ well over 5,000 Canadians. Our grain handling operations have been declared to be in the general interests of Canada and, as a result, we are federally regulated as an employer. We handle close to 60 per cent of the grains, oil seeds and special crops delivered to the country elevator system on the prairies. Individually, together, and in partnership with other companies, we own and operate grain terminals at the ports of Vancouver and Prince Rupert on the West Coast, and at the Port of Thunder Bay in the east. As cooperatives, the pools have returned more than $2 billion to our farmer member shareholders since their beginning.
Bill C-19 is seen by Prairie Pools as an acceptable compromise which will take the first steps toward a more efficient and modern labour relations environment in Canada. This bill is truly a compromise that was reached after extensive consultations by an industrial inquiry commission into West Coast industrial relations in 1995, as well as by a task force on Part I of the Canada Labour Code, lead by Andrew Sims, and then twice through the parliamentary process.
We are not happy with everything in the bill. We still have concerns around a number of provisions, including those on replacement workers, certification of unions and access to off-site workers. However, we feel that overall the bill is a step forward and we encourage you to support this difficult compromise.
Like the speakers before us, our main focus is on one proposed section of Bill C-19, and that is clause 87.7. I will take a few moments to put the issue into perspective. First, you have heard the previous speakers talk about clause 87.7 giving grain special status. We have to argue that grain is in a pretty special situation right now.
On the West Coast, most of the activities involving grain, from unloading rail cars to weighing, cleaning, grading and storage, are performed by employees of the grain terminal companies. They are represented by the Grain Workers Union which negotiates collective agreements with the B.C. Terminal Elevator Operators Association. As terminal elevator operators, the pools are part of that bargaining unit and have input into the negotiations with our employees.
The actual loading and letting go of grain vessels is done by the members of the International Longshoremen's & Warehousemen's Union. These workers are not grain terminal employees. Their union negotiates with the B.C. Maritime Employers Association. The grain industry has no input into these negotiations and, therefore, no ability to influence strike or lockout situations. Yet, when there is a strike or a lockout by the longshore, grain stops moving.
Over the past 10 years, grain has been stopped four times at the West Coast by disputes between the longshore union and their employees and only once by the grain workers. Three of these four disputes were ended by federal legislation when problems for the grain industry grew too severe. The Industrial Inquiry Commission recognized this unique situation, stating in the 1995 report that collective bargaining was not working in this case and that both sides were relying on the ability to stop grain to achieve a legislated settlement.
In the meantime, while this poker game was being played with grain as the "ace in the hole," the grain transportation system was plugged up. Farmers lost the ability to deliver and our overseas customers grew more and more frustrated with our inability to supply their needs. The industrial commission recommended that longshore workers be removed completely from grain handling. We supported that recommendation but, in the interests of labour peace and the maintenance of jobs in the longshore, we accepted clause 87.7 as yet another compromise.
This compromise was suggested in the Sims Task Force report. We believe that clause 87.7 does not give grain special status -- in fact, quite the contrary. It will put grain on an even footing with other commodities. It will allow us to focus on and commit to our own industrial relations without being threatened by the failure of other bargaining processes.
Second, it appears to us that all the debate over clause 87.7 makes the assumption that there will be strikes and lockouts. Let us not lose sight of the fact that the goal of this legislation is to enhance the collective bargaining process and to reduce the number of strikes and lockouts. We certainly do not go into negotiations on the assumption that we will not reach agreement through bargaining. We agree with the independent industrial inquiry commission that without grain to hold as hostage in order to get a legislated settlement, the collective bargaining process has a potential to be enhanced, that is, if the parties who are bargaining want to reach an agreement.
We thank you for listening to our perspective and we encourage to you support Bill C-19 with clause 87.7 intact.
Mr. Tom Dufresne, President, International Longshoremen's & Warehousemen's Union: Senators, we appreciate the opportunity to speak on behalf of our memberships about Bill C-19. We believe that this Senate committee has an important role to play in ensuring that this legislation moves forward as a complete package without further amendment.
In order to allow sufficient time for discussion, we are proposing to make a brief joint opening statement. We look forward to responding to your questions individually, as the union members we represent do have different roles in the grain transportation industry. We have provided additional materials in writing to facilitate your understanding of each union that we represent.
As you are aware, Bill C-19 is the product of years of deliberation, consultation and compromise. The unions represented here today believe that the consensus reflected in this bill strengthens the Canada Labour Code. We strongly urge committee members to resist the temptation to make changes to the legislation. That will undermine the support expressed by farmers, grain industry management, port employers and unions alike. Further delays in the implementation of these amendments will send a discouraging message to members of the labour relations community and the general public.
Of particular interest to our members is proposed section 87.7(1) which deals with services to grain vessels, in which the flow of grain would be continued in the event of a strike or lockout. This clause preserves the right of grain handlers and their employees to participate in free collective bargaining without the threat of back-to-work legislation.
The unique nature of the grain industry warrants this measure. Grains exports from West Coast ports in recent years have reached as high as 20 million tonnes valued at upwards of $5 billion. Maintaining this movement of grain has a direct effect on the cash flows of more than 120,000 Prairie grain farmers. The economic benefit of the grain industry is shared across the country but is critical to the well-being of Western Canadians, especially those who live in rural communities.
We recognize that other commodities, such as lumber, pulp, potash, sulphur and coal, are important to the Canadian economy and can be adversely affected by labour disruptions. However, because they can be stockpiled, these products are not nearly as sensitive as the grain industry to interruptions.
As I mentioned earlier, there are a number of small-business people involved in the grain industry export chain who simply do not have the capacity to absorb the impacts of a labour disruption. This is why there has been broad political support for back-to-work legislation in the past.
In summary, unions represented here today have been active participants in the development of this legislative package, Bill C-19. As early participants in the Sims Task Force deliberations, we have worked diligently to identify changes that will produce, on the whole, a more effective Canada Labour Code. We believe that the consensus that has been reached on this package of reforms is a prudent step forward. We respectfully urge this Senate committee to recommend passage of this bill without further amendment or delay.
My brothers and I would be pleased to respond to your questions, including giving our perspective on some of the questions which we have heard asked of the previous speakers.
The Chairman: Consider those questions asked.
Mr. Garry Smolik, Spokesperson, Six Independent B.C. and Alberta Grain Producers: Honourable senators, we would like to focus our attention on proposed subsection 87.7 which, as you are well aware, we obviously support. I represent a group of Alberta and B.C. farmers who have been active participants in efforts to make revisions to the Canada Labour Code.
We are not direct contributors to labour negotiations but are in fact the injured third party in many cases. We approach these consultations as grass-roots producers whose input is needed to arrive at fair and equitable solutions. It is with regret that I have left my farm at this critical time in the growing season, but these changes need to be made to protect the farming industry into the future.
We have aired our concerns at various fora in the past and I am here today to ensure that the message from producers is heard and understood. Up to this point, we feel that we have been heard and understood. We feel very good about the responses which we have received in other discussions in which we have participated.
The immediate costs of a disruption in grain movement are crippling to us as producers, but even more significant is the loss of our reputation as reliable producers and suppliers. This loss of reputation will result in incalculable economic loss for both our industry and the Canadian economy if it is not stopped now.
As producers, we pay the entire cost of transportation, from farm to tidewater and on to market. We are in the midst of rapidly changing and extremely competitive times, and recent trade agreements in North America and around the world have forced us to become more competitive. We are adjusting, but part of that adjustment requires the cooperation of the grain-handling and transportation system.
Over the years, labour disputes have hindered our ability to deliver our products to customers in a timely fashion and we are no longer viewed as reliable suppliers. Mr. Pearson mentioned the problems in the past decade. Movements have been halted in Vancouver five times, I believe: once by a dispute between grain terminal workers and the terminal operators, and four times by disputes between the International Longshoremen's and Warehousemen's Union and the B.C. Maritime Employers Association. Three of those four disputes were ended by government intervention and legislation.
While the strikes were not of long duration, their impact in backlogging the system and the effects on overseas shipping arrangements were felt for months after. As producers, we ultimately pay the high cost of an arbitrator-imposed settlement, even though we have no opportunity to influence or negotiate it.
I believe that clause 87.7 would remove the ability of the longshoremen and their employers to use grain to achieve government intervention and would force all parties into reasonable and conciliatory bargaining.
When he was chairman of the House of Commons Standing Committee on Transport, Mr. Stan Keyes made some interesting comments about labour-management relations in the port section of the committee's national marine strategy. He said:
The organization of both labour and management in our major ports is cumbersome and inflexible and there is a seeming inability to resolve outstanding issues. The collective bargaining process does not appear to be working as the issues never get resolved because of back-to-work legislation.
He went on to say:
It has come to this -- the Canadian economy can no longer sustain any labour disruptions to port operations, even a day or two is becoming too costly. Another way has to be found to deal with waterfront disputes than back-to-work legislation.
He concluded:
The status quo is unacceptable and unsustainable.
We heartily agree with that. What we have today is not an option for the future.
Opponents of clause 87.7 seem concerned with what they see as the unique treatment of grain. In fact, grain is unique; not only because it is part of the world food supply, but also because of the political nature of production, marketing and transportation. We believe that this political nature has prevented reasonable contract settlements without strikes, lockouts and the resulting back-to-work legislation. In fact, grain has been detrimental to labour peace on the West Coast during contract negotiations for this very reason. I know of no other commodity that has been used or could be used in this manner. Inclusion of clause 87.7 will only serve to bring grain back to a more level playing field. In other words, clause 87.7 would eliminate the unique status of grain, as it is now, and all commodities will then be more equal.
The Industrial Inquiry Commission wrote in 1995:
Collective bargaining in this industry has been reduced to a ritual that is more akin to a poker game with the ace in the hole being the capacity to halt grain exports. When grain is halted, it guarantees speedy intervention by Parliament. Collective bargaining per se simply no longer exists.
As you can tell, farmers are frustrated, and our customers are frustrated with us. They are looking elsewhere for supply because we have become unreliable. Japan, for example, has raised serious concerns over guarantee of supply. Despite efforts to reassure them, they are looking elsewhere -- to Australia, Argentina and the United States -- for canola supply. In fact, they are encouraging canola production in those countries.
This market, which has taken years to develop, is being threatened -- not by draught, disease or demand, but rather by our inability to be a reliable supplier to our customers.
In summary, continuous movement of grain is essential to us as producers. We pay all the costs but do not have the influence necessary to keep grain moving. Solutions are mandatory and we believe that clause 87.7 will address many of the concerns addressed here today.
There must be tremendous merit in this legislation to have farmers, industry, and labour all supportive of it. Solutions must begin with a compromise. This amendment to the code provides a compromise that should lead to the labour peace that all parties seek.
Mr. Pearson discussed the compromise. The commission suggested the removal of the longshore. This indeed is a compromise, but I think it is a very good start. We need provisions such as this to provide the reliability and security that farmers and farm families need to operate successfully today and into the future.
The Chairman: Thank you, gentlemen, for your succinct opening statements.
Senator LeBreton: Thank you for your presentations.
Mr. Dufresne, you talk about maintaining the movement of grain while the collective bargaining process continues. What is the incentive, then, to settle? While all of this is going on, would this not affect the movement of other commodities? Do we not run the risk of backing up the whole system?
Someone mentioned that the other commodities can be stockpiled because they are not perishable like grain. That is true, but what about the right of other commodities to access the markets?
Mr. Dufresne: During collective bargaining, all the commodities can continue to move. I should like to point out that three of the last four work disruptions that took place in the last 15 years have been lockouts and not strikes.
It has been said that some people will be able to continue working, thereby subsidizing the rest of the workforce. On Canada's West Coast, grain constitutes approximately 30 per cent of the total volume of cargo moving through the ports. However, it represents less than 10 per cent of the number of hours worked.
Brother Sigurdson has analyzed how the foremen's hours would relate in dollars per day to each individual involved in a strike or lockout. We have heard many of these statements previously at the standing committee of the House of Commons when this bill was Bill C-66 and also when it was Bill C-19. We have heard them made to four different labour ministers -- Axworthy, Robillard, Gagliano and MacAulay. Some people appearing here today believe that all of those ministers had the wool pulled over their eyes. I will go no further on that.
There is not enough money generated by the people working to subsidize a strike or lockout, and it is not the intention of the union to engage in a long work disruption. Our work history shows that we try to promote Canada's West Coast ports by attracting American cargo to them. The more cargo that goes through our ports, the more work there is for our members, which is good for us.
Perhaps Mr. Sigurdson can comment on the amount of money generated by people who continue to work.
Mr. Doug Sigurdson, President, ILWU Ship and Dock Foremen, Local 514, Vancouver: I had heard that the employers were using that argument so I decided to look into it. I researched three companies that move grain. I spoke to some of their management staff and used figures that are reported to me each month. I determined that if we were to divide up the wages of those who remained working among the rest of the membership, it would amount to $5 a day each before taxes.
With regard to coal, it is true that 35 million tonnes of coal goes out through the Province of British Columbia, but 22 million of that goes out through Roberts Bank, and that is not covered under the master collective agreement. If there is a strike in the Port of Vancouver, Roberts Bank continues to work, so the coal continues to move.
Between 4 million and 5 million tonnes of that product goes out through Prince Rupert, which is a non-union facility, so the 4 million to 5 million tonnes will continue to move.
The only coal that would be affected would be that which moves through Neptune terminals, which could easily be diverted through either one of the other two. Coal is really not affected by this legislation.
Senator LeBreton: What about pulp and paper?
Mr. Sigurdson: Yes, pulp and paper is affected.
The Chairman: Is Roberts Bank under federal jurisdiction?
Mr. Sigurdson: Yes, it is.
Mr. Sigurdson: Pulp and paper could go out by rail either through a large facility in Kitimat or through Thunder Bay, Montreal, Saint John or Halifax.
Senator Callbeck: I asked the previous witnesses that question. They indicated that work stoppages would be longer and would increase the cost of transportation. You have answered my question.
Senator Perrault: Reference has been made to U.S. competition. How real and threatening is competition by U.S. ports such as Tacoma, Seattle, Portland and other West Coast ports? Is it placing the jobs of Canadians in real jeopardy?
Mr. Dufresne: Our work record on Canada's West Coast is comparable to the U.S.; for example, the amount of tonnage that is moved on an hourly basis per person hour worked or per payroll. However, we have less on the payroll side if you take into account what the U.S. dollar is worth.
Senator Perrault: Are they threatening to win over some of our businesses?
Mr. Dufresne: There is always competition, but the U.S. longshoremen earn $4 U.S. an hour more than a Canadian longshoremen earns on Canada's West Coast. Those factors must be taken into account. If you take our current 60-cent dollar into account, it costs a few dollars.
Senator Perrault: Are there any prairie grain shipments moving through Portland? I heard there were some.
Mr. Ron Burton, Secretary-Treasurer & Business Representative, Grain Workers Union, Local 333, Vancouver, B.C.: Some barley was shipped down there last year. One of the real dangers in terms of shutting down the grain transportation is going through the ports.
Cargill and ADM, two major players in the grain industry, have ports and terminals in Tacoma. Basically, they are empty. If there were any kind of disruption in the grain, it would be very easy for them to move the cars down there.
Senator Perrault: That would mean a loss of jobs and other dire consequences.
Mr. Pearson: There have been investigations on behalf of the terminal industry regarding moving grain through U.S. ports. That may not occur, however, because there is a cost benefit to move it through Canadian ports.
As the witness said, a test shipment was made through Portland. It was primarily financed and organized by the Canadian Wheat Board and the Canadian Grain Commission. That was during a time when there was a labour interruption, and it was felt that we needed to have different opportunities available to us in case disruptions caused problems in terms of meeting our customer commitments. That is always a concern that we have when we look at those other alternatives. That is why, from our perspective, we see proposed section 87.7 as a benefit to the general reputation of Canada.
Senator Perrault: Is there any comparable U.S. legislation of the type proposed in this measure we have before us?
Mr. Pearson: Not that I am aware of.
Senator Perrault: Have the Americans felt it necessary to give special preference to any particular port?
Mr. Hugh Wagner, General Secretary, Grain Services Union (ILWU - Canadian Area) Regina, Saskatchewan: One of the differences is that Western Canadian farmers are 800 miles or 1,200 kilometres from tidewater. The only options are to ship in large quantities west or east. The bulk of the movement has moved to the west. The American grain industry has a number of different options, including the Mississippi.
Senator Perrault: It is subsidized, too.
Mr. Wagner: Yes, at great expense. The U.S. industry can stockpile its entire crop and store it, whereas our system depends on rapid movement and turnover. We turn our system's capacity over seven times a year, as compared to the U.S, where -- at least on a volume basis or on a storage basis -- they are far less pressed for movement.
Senator Perrault: I sense that there is general support for the problems faced by the grain producers. It is important for Canada's reputation to sell a maximum amount of grain abroad.
There are other important commodities in Western Canada as well. Why is it not logical, then, to extend some of these same provisions that we have for wheat to coal and some of the other commodities?
Mr. Dufresne: Coal already enjoys the special privilege of being able to be shipped out of Roberts Bank in British Columbia, some 15 miles from downtown Vancouver; and from Prince Rupert. If the B.C. workers locked out the longshoremen, as they have in the past, the coal association would continue to move through those facilities.
Senator Perrault: What about lumber?
Mr. Dufresne: COFI has a mill in Kitimat, which is operated by the PPWC; and one operated by the CAW.
Senator Perrault: Do you mean Prince Rupert?
Mr. Dufresne: That is operated by the ILWU. They have other facilities. Some distortion is happening here -- that is why they did not want to answer any questions. However, I would hate to call them liars.
Senator Perrault: That is why we have meetings -- namely, to have everything put on the table. That is a good thing.
Mr. Justice Estey will report by the end of December. Would you object to us saying that we will not proclaim certain clauses of the bill until we know precisely what Mr. Estey is proposing? Is that productive or counterproductive?
Mr. Wagner: That reference is a red herring. Justice Estey will not object to proposed section 87.7 because it facilitates the movement of grain. However, he might be concerned about other aspects of the code or other aspects of labour relations. That is something for him to comment on.
Senator Perrault: He is a very wise person.
Mr. Wagner: I find it hard to accept that he would somehow be offended by a provision that actually deals with one of the bottlenecks in grain movement. My guess is that he would applaud this initiative as one small step.
Senator Perrault: He was raised in Saskatchewan, so he would know something about grain. Would it do intolerable damage if we held it for six months?
Mr. Pearson: I think it would do some damage. It is very important that Justice Estey move forward on his process. The whole complex industry of grain transportation and handling contains lot of different issues that must be addressed, and this issue is just one of them.
If we could resolve this matter by moving this legislation forward, it would help the direction that Justice Estey is going and some of the things that he is doing. I think he has a massive task on his hands. There are a lot of things with which he must deal. If he has to move this into his process, too, that makes it even more complex.
Senator Perrault: There are lots of problems out there. Prices are just rotten.
Mr. Burton: Everyone hangs their hat on the Estey report. This is not the first investigation of the grain transportation system in Canada; there have been numerous ones. They have all come to the same realization -- namely, that the competing capitalist interests that you see are a detriment.
I have called for the nationalization of the grain industry. At least then we can point to it and we would know why it is inefficient. I do not think that we can say, "Let us wait until Estey makes his recommendations," because he may not come up with any different recommendations than we have had in the past. He is a very bright person, but that is not to say that other people who investigated it were not as bright.
Senator Kinsella: I have a question about the prohibition relating to replacement workers. It is on page 32 of the bill, where it states that "Section 94 of the Act" will be amended. Proposed subsection (2.1) states:
No employer or person acting on behalf the employer shall use, for the demonstrated purpose of undermining a trade union's representational capacity rather than the pursuit of legitimate bargaining objectives, the services of...
Would you explain that to me?
Mr. Wagner: For better or worse, I have been designated to handle that question. I should make it clear that the labour side would have had a complete ban on replacement workers; however, we support the compromise and say that this is a small step.
The amendment and the provision address a complete breakdown of or withdrawal from the collective bargaining process and the utilization of replacement workers. In a number of labour disputes, replacement workers have been used not so much to bring about a settlement or to maintain production, profitability or commercial operations as to destroy the other party in the collective bargaining relationship. The mine dispute in the north is one example where negotiations simply ran out and there was a determination not to negotiate any further.
The proposed legislation gives a learned panel in the form of the Canada Industrial Relations Board the opportunity to examine the facts and circumstances of each situation and arrive at a decision or conclusion. I do not see this as the sinister development that some might because most employers, when they have a dispute, do not engage in the hiring of replacement workers.
Senator Kinsella: In your own words, under what circumstance could an employer use a replacement worker that it would not be an unfair labour practice?
Mr. Wagner: Right now, the bill does not outlaw the use of replacement workers.
Senator DeWare: Almost.
Mr. Wagner: I disagree. If I had written it, I would have been much clearer in that regard. Replacement workers simply would have been banned. If a person was maintaining boiler operations or that type of thing in a plant, where it would be very difficult to shut down or start up again, that would be one situation.
Senator Kinsella: Who would make that determination?
Mr. Wagner: I do not want to give the employer's side on all of the arguments.
Senator Kinsella: No. I want to understand clearly in lay person's terms how this will work and what it really means. In that example, could a stationary engineer be hired by an employer to replace the stationary engineers who have withdrawn their services?
Mr. Wagner: Yes. It would be an issue that might pertain to health and safety.
Senator DeWare: Or to essential services.
Mr. Wagner: Yes, to people around there generally.
[Translation]
Senator Ferretti Barth: Mr. Dufresne, work stoppages in the grain industry are extremely problematic because the product is a perishable one. The economic repercussions for government and industry are enormous. In connection with the opening up of the Pacific rim market, are your concerns relating to clause 87.7 which, if I understand correctly, is favourable to you because of the Asian market which has just opened up recently, or because of the perishable nature of the wheat? What, in recent years, has the envelope been for the Pacific wheat market?
[English]
Mr. Pearson: Despite the current goings-on with the Asian flu and the disruption in the financial markets, we still have very good, strong markets in the Pacific Rim. Our Pacific Rim customers have expressed the greatest concern to us regarding the labour disruptions, and they have encouraged us to be sure to move some kind of a process forward that does not allow those disruptions to occur.
I think that you should be aware that some of our customers in the Pacific Rim have gone to other countries because of our inability to supply products just in time. They have even developed production facilities in other countries just to be sure that they can keep a steady flow of production or commodities coming over the seas generally to Japan, China or wherever. Japan is a big cash-paying customer, which is critical for us.
Perishability is still an issue for us. Grain is perishable. It is not as perishable as tomatoes or something like that but, nevertheless, it does not store forever. It does deteriorate at some point in time, so that is still a concern. It is still better for us to move steadily. Once grain starts in an elevator system in the country, it is best to move it through as quickly as possible. One of the other witnesses commented on the ability of Canada to store and handle, and we do not have very much ability. Our strength is in being able to move grain quickly and on time when our customers want it. Our U.S. competitors can store a year-and-a-half's crop in their bins. That is much different from our situation, but they were financed partially by government programs. Ours has been primarily private-sector financing.
[Translation]
Senator Ferretti Barth: You did not answer my question. In recent years, has the Pacific rim wheat market increased or not? Have you had a heavy export demand, or has the market remained the same in recent years? I refer to the past five or six years. By the Pacific rim market, we mean China, South Korea, North Korea, and so on. You agree with clause 87.7 of Bill C-19. Is your concern related to the increased demand for wheat, or not?
[English]
Mr. Dufresne: We have concern for all products leaving through Canada's West Coast ports. The union has done a great deal of work in conjunction with different employers and groups selling Canada's pork, chicken or whatever. We have gone on marketing tours with the government and Team Canada to increase and enhance the reputation of the West Coast ports. It is not that we are saying all this stuff can sit there and rot or something. Coal has been sitting in the ground for millions of years, as has potash. They can sit outside in the event of a work stoppage for a few more days and it is not as if everyone will go broke. However, the grain is in the pipeline and has to be off the field. Jack Frost is after it while it is growing, and he is after it again when the farmers try to get it off the field before winter comes. We feel the farmers have enough things to worry about without having to worry about the longshore workers being locked out on Canada's West Coast. We feel that it will level the playing field in negotiations.
As I said, the last three of the four work stoppages have been lockouts, something which has been commented on by the Sims Task Force and by the Supreme Court of Canada when we challenged Bill C-10 which forced us back to work in 1988. The justice stated that the employer's action to lock out was purely political in order to drag the government into the dispute, get some back-to-work legislation and get everyone rolling along again.
Our intention is to level the playing field. We believe it will work. The various ministers of labour with whom we have dealt over the years have made it clear that if there are foul-ups, then that provision could very well be gone. We are saying, "Put it in. Pass the code. We will do our best to make sure that the code works."
We are not happy with many of the provisions in the code, such as those dealing with replacement workers, the 72-hour strike notice which the employer received, and the multiple strike votes we will have to go through now. However, as a package, four different labour ministers dealt with this matter. Two different standing committees of the House of Commons have dealt with it. Minister Gagliano, when he was Minister of Labour, held consultations across the country, which we attended.
Someone was talking about the gestation period of an elephant. It is more like the gestation period of a rock. This thing has been sitting for a long time. Many people have dealt with it. This is the best package that everyone could come up with. It is one with which the farmers, the workers and many of our employers could agree. The federally regulated employers who will appear after us today spoke in favour of the code as a package in front of the standing committee of the House of Commons.
No one will always get everything. Everyone got something in this bill. Some of the people, such as those who got the 72-hour strike notice, which is not in the current code, and the multiple strike votes are saying, "We are happy with all that but we just want one more little piece." We believe this is a consensus deal. It is part of a package. Let us give it a try and go from there.
Mr. Smolik: Mr. Chairman, I would also like to address that question. You ask about the increase or decrease in demand. Prior to the Asian crisis, there was a significant increase in the wealth of many Asian people. With an increase in wealth comes a change to a more westernized diet. The demand is increasing and the potential is vast.
Assuming that the Asian crisis will be resolved at some point in the not too distant future, I suspect that our potential demand in those Asian countries will be extremely high for a number of reasons. One reason is that the diet changes include the consumption of a lot of red meat or poultry which take a considerable amount of grain to produce. It takes three pounds of grain to produce one pound of meat. That creates an even larger demand. The increase in meat in their diet means that they need much more grain or grain products.
I think the outlook for a very large increase in demand is extremely positive. The I think this amendment will also send a clear message to our customers that we intend to be reliable suppliers. We will send the message that we will be on time and will provide what is needed when it is needed. They will not have to build a lot of storage facilities, which is one of their concerns. They want a just-in-time delivery system. One of the Japanese delegations said that they do not want to have to provide any storage.
[Translation]
Senator Ferretti Barth: That is exactly the response I was looking for.
[English]
Mr. Burton: That was what I was going to say with respect to an increased Asian market.
Senator DeWare: This has been a very interesting discussion because we are talking about moving our products. You were just talking about the importance of our trade missions going overseas and selling other Canadian commodities apart from grain. We are talking about opening up the trade market. If there is a shutdown at the port and there is no grain to move, it does not matter that the other commodities cannot move. It should matter because this is very important to Canada now that we have this international trade set-up. You gave me the impression that just so long as grain moves it does not matter about anything else. It should matter because, after all, if you make a contract to deliver and you do not deliver because of a strike, someone else in another country will get that contract. We do not want that to happen to Canada.
Mr. Dufresne: Neither do we, senator. That is not the impression I was trying to leave. With potash and coal, if the employers know that negotiations are not going well, they can speed up delivery of the product in order to have it stockpiled in Asia, Europe or wherever it is going. However, with grain, they cannot go to the farmer on the Prairies and say, "Hurry up and grow more wheat." It is on a timetable of its own, if you will.
Senator DeWare: Someone else could stop that wheat by, for example, a lack of transportation to the port.
Mr. Dufresne: We are just saying that we will not be the ones doing that.
Mr. Wagner: There are always other alternatives. If one of the railways is shut down, there is another railway. If one of the grain companies on the Prairies is shut down, there is another grain company. Potash, as an example, is a Saskatchewan commodity. I am from Saskatchewan. With potash, there are other routes that can be followed.
One of the strengths of marketing Canada's grain commodities is that we have a distinct quality advantage over the U.S. and, for that matter, Australia. Our system of grading, segregation and pinpointing, if you will, commodities for particular customers' needs is second to none. That is why the American ports are not the alternative that one might suggest in terms of grain commodities, whereas potash can go through another port quite easily.
The Americans do not ship their grain cleaned the way we do. All of our grain hits the hold of the boat clean. In the U.S., they ship it with whatever happens to be in there when it leaves the bin. That is a distinct marketing advantage that Canada has enjoyed for a good number of years. There simply are not the alternatives that might present themselves for other commodities.
Mr. Burton: It seems we might be losing some focus here. This is a labour bill and the idea is to promote free collective bargaining. That is one of the reasons this bill was introduced. As the senator rightly pointed out, there are 33 different unions involved in getting grain from where it is grown to market.
As Mr. Wagner has said, there are alternatives on the Prairies. Out here, there are not the alternatives. If there is a shut down by another union, it effectively takes away the grain workers' right to strike. Let us face it, they are not going to allow grain to be shut down twice in a single year. If there is a shut down with the longshore workers, the bill is in place and ready to go before we begin our negotiations. We do not really have a true chance at collective bargaining. One of the reasons we are supporting this bill is because it does promote free collective bargaining.
Senator DeWare: There are certainly other issues in this bill that other people do not like, and there are issues that you do not like, for instance, the provisions regarding replacement workers.
Mr. Smolik: I agree with Mr. Burton. There are alternatives at times.
The other important factor that some of us have missed is that the other unions in the system have an economic incentive. Both labour and management have an economic incentive to bargain quickly and efficiently, whereas in this particular situation, the BCMEA does not have any costs associated with the bargaining; they are passed on to us as farmers. They do not have an economic incentive in the same way as some of the other unions along the way have. I think that is one unique situation.
Senator DeWare: You indicated that clause 87.7 was recommended. I am not disagreeing with you. However, I am wondering why there cannot be something done in final-offer selection or arbitration to help the other commodities.
You said that clause 87.7 was supported and recommended by the Industrial Inquiry Commission and by the Sims Task Force. However, Mr. Wilds indicated that their information was that this was not recommended. What is the origin of this proposed amendment?
I bring this to your attention because the Sims Task Force did not quite recommend it. They were concerned about some of the inquiry's recommendations. They recommended that the Minister of Labour should initiate consultations with labour, management and others affected on the full range of recommendations brought forward by the Industrial Inquiry Commission into industrial relations in the West Coast ports. However, they did not recommend that this clause be included.
Mr. Wagner: There was considerable consultation.
Senator DeWare: I know there was. I have read the Sims report carefully.
Mr. Wagner: Sims addressed the potential interference with the freedom of association. I do not think that anyone had an appetite for the solution of taking people away from their union of choice and forcing them into another union. However, the consultation did occur and the federally regulated employers were consulted, as well as the grain industry. The BCMEA had every opportunity to be part of the same process. It was only once the wagon was hitched to the horse and off to market that they suddenly discovered they did not like the contents. They were a player, the same as everyone else, and they raised no objections until late in the consultative process.
Mr. Dufresne: On the point of final-offer arbitration that you raised, the union is vehemently opposed to the imposition of final-offer selection arbitration. As Sims commented in his report, it is comparable to Russian roulette; it is like holding a gun to the head of the union. I would not suggest that any of the people in this room are on this committee, but some might like to see collective bargaining done away with. We are opposed to that.
Canada is a signatory to the NAFTA and to the Free Trade Agreement, through two successive governments, where labour standards are recognized. There is recognition that people must be entitled to join a union and entitled to free collective bargaining.
We believe that clause 87.7 adds to that. While we are giving up a certain right to strike or be locked out on the grain, we believe it is worth it in order to level the playing field. We are asking the Senate to abide by the wishes of the House of Commons committee and the various labour ministers. Take this as a package and let it be.
Senator DeWare: Being a former Minister of Labour, I do not disagree. I like collective bargaining. I have had to give employers a little slap on the wrists about some of the ways that they were handling negotiations.
What about the certification process, a trade union without a majority vote? I have spoken to people from British Columbia who already have it in their legislation. That is something I have a hard time with.
Mr. Dufresne: We would support the CLC position on that issue. I do not know if they have appeared yet or if they are scheduled to appear.
The general consensus on that is that where an employer is interfering with the rights of the employee to a free and democratic vote -- and I guess it is based somewhat on the Wal-Mart decision in Ontario, but I am not sure exactly where it came from -- where an employer is interfering in the election, they can declare it void. One of the hallmarks of Canada's free and democratic society is the right to vote without interference.
Senator DeWare: What if it happens in reverse?
Mr. Wagner: There are provisions to decertify a union if there is evidence of coercion, intimidation or fraud. An application for certification can be rejected.
This provision gives the board a remedial authority to deal with a situation where an employer has broken the rules. I happen to be a member of the Saskatchewan Labour Relations Board and we have the same rules there as those being proposed for the federal code. If there is evidence of employer coercion or intimidation, interfering with people's democratic right, then one of the consequences is that they will be decertified. I say this as a labour practitioner.
It presents the union involved with a very sticky wicket because they must now go into the bargaining process with a group that is already afraid, trying to organize collective bargaining with the potential that could lead to a strike or lockout. This does not exactly hand the union a trophy; it hands them an obligation and a responsibility. The opportunity to decertify is still there; it is present in the code.
Senator DeWare: That takes a while to do, too.
Mr. Wagner: It takes a year.
The Chairman: By way of editorial comment, Mr. Dufresne, I am happy to hear you invoking the labour standards provisions of the FTA and NAFTA.
Mr. Dufresne: I do not agree with NAFTA, but I use what helps.
The Chairman: Last week, the environmentalists were invoking the environmental provisions of the NAFTA.
Senator Maheu: The Industrial Inquiry Commission recommended a restructuring of bargaining units at West Coast ports, to remove the loading of grain vessels from the longshore industry, as well as a standing system of binding arbitration for ports' disputes. What would be the impact of those recommendations on labour relations on the West Coast ports?
Mr. Dufresne: It would be devastating.
Senator Maheu: Could you elaborate, using the recommendations of the Industrial Inquiry Commission?
Mr. Dufresne: The Industrial Inquiry Commission is not the union's favourite reading material. However, it would take away people's freedom to join the union of their choice, which, in this case, is the ILWU. It would take away work from employers that we work for right now, stevedoring companies that have been loading grain on Canada's West and East Coasts for 100 years. It would interfere with commercial contracts. It would lead to a serious situation where we would be extremely unhappy.
Mr. Sigurdson: I could elaborate further. When these things happen, members often move from one bargaining unit to another. It can sometimes happen against their choice. However, the IIC recommended the movement of work, not the movement of workers. This meant that the work itself would go to members of local 333. The ILWU would lose that work.
We were not prepared to accept that under any circumstances. Complete hell would break loose on that waterfront, if that were to happen. It was a haywire recommendation.
Mr. Burton: It would have been nice to have had the extra members. However, in terms of respecting jurisdictions and what the longshore have done, with their long history, it would have been difficult, if not impossible, for any of our members to accept the work that they have traditionally done.
Senator Maheu: It has also been suggested that if services to grain vessels must be maintained, you will use the money earned to supplement strike pay and we will see more frequent and longer work stoppages in the ports. How would you respond to that?
Mr. Dufresne: The amount of money generated in the event of a work stoppage by people working in grain would amount to something like $5 a day. It represents less than 10 per cent of the work on the West Coast, as it relates to longshore, so it is less than 10 per cent of the current payroll. However, it represents 30 per cent of the tonnage because fewer hours of work are put into loading a tonne of grain than loading a tonne of lumber in board feet.
Potash is another example. The same amount of work might have to occur. The Grain Workers Union does a certain amount of work in the elevators before the potash gets to the point where the longshoremen handle it.
The amount of income generated from my colleague's figures represented about $5 a day. You cannot sustain a strike in this day and age giving people $5 a day. The ILWU does not have a strike fund. We have not had one since about 1958.
Senator Maheu: Back-to-work legislation?
Mr. Dufresne: Essentially, that is what happened. Senator Perrault asked earlier if they get preferential treatment in the U.S. The U.S. government refuses to interfere in labour disputes. The last labour dispute on the U.S. West Coast that involved the ILWU lasted for 181 days. There was a short strike of about a month. A cooling-off period was imposed, and the second portion of the strike lasted over 180 days. The union members realized that they had mortgages to pay and car loans to pay and kids to put through university. They were not going to be out on the picket line for a long time. It makes people be reasonable.
I realize that what is reasonable for me and reasonable for you might be different, depending on where we live, but cooler heads prevail. People sit down to talk, and that is part of the collective bargaining process. You try to get what is realistic. You always try to get a little more when you start, but when you come down to the crunch and realize you might be on strike for six months, everyone is beating you about the head and shoulders at home because there will not will not be a paycheque. The employer also realizes they have shareholders to answer to. They might not be able to sustain it.
The government does not interfere. The government stays right out of it.
Mr. Sigurdson: We took one of the representatives of the Industrial Inquiry Commission to San Francisco and met with our international president and the chief negotiator of the foremen's union. He also met with management down there. He was apprised and given all the information about what goes on in the United States. That is basically what he was told by the union side. I do not know what the employers told him.
No one wants to go through that kind of devastation again down there, where the government kept their nose out of it and let the two parties slug it out. There has not been a strike there since.
Senator Kinsella: Mr. Dufresne, with respect to the International Longshoremen's and Warehousemen's Union, roughly how many members does it have?
Mr. Dufresne: Roughly 3,000 working longshoremen.
Senator Kinsella: Of those 3,000, how many are sisters? I am hearing about the brothers. How many are your sisters?
Mr. Dufresne: I do not have the figures with me at this point in time.
Senator Kinsella: What percentage, roughly, would you say are women?
Mr. Dufresne: Working longshore?
Senator Kinsella: Yes.
Mr. Dufresne: A very small percentage.
Senator Kinsella: Does your union embrace any affirmative-action program?
Mr. Dufresne: We do not have an affirmative-action program, as such, in place.
Senator Kinsella: Is there any interest in increasing the participation of women in the workforce?
Mr. Dufresne: Yes.
Senator Kinsella: What are you doing about it? Are you working with the Human Rights Commission to increase the percentage?
Mr. Dufresne: Some of the locals and the employer are working together on some propositions that have come forward from the Canadian Human Rights Commission or from the Department of Human Resources.
Senator Kinsella: Is there a recognition that there might be some historical systemic discrimination along gender lines?
Mr. Dufresne: I do not think that is the case.
The Chairman: There is room for improvement, perhaps.
Senator Maheu: A lot of room.
Senator Kinsella: Are we able to agree or to accept that your union subscribes to the ILO conventions, particularly Convention 100 that deals with no discrimination on the basis of gender in the workplace?
Mr. Dufresne: That is correct. Our constitution spells that out. We stand against discrimination.
Senator Kinsella: Have you ever given any consideration to changing the name from longshoremen and warehousemen?
Mr. Dufresne: As a matter of fact, at a recent convention, in March 1998, the name of the union was changed to the International Longshore and Warehouse Union in Canada.
Senator Kinsella: Good for you.
Mr. Dufresne: The international name was changed in 1997 at the convention in Hawaii to the International Longshore and Warehouse Union.
Senator Kinsella: I am delighted to hear that, and I hope the same enlightened leadership shown in this union will be embraced by my colleagues here. I am speaking, of course, of the over 88 gender-specific phrases in this bill that they are going to change.
Mr. Dufresne: We just came out of the convention at the end of March. As the new collective agreements come up, the constitution will be changed, as well as the name and the business cards.
Mr. Wagner: On that subject, senator, you realize that the evolution and development part of this has to do with industry economics.
The grain industry, as well, cannot point to its past with great pride in terms of gender equality in the workplace. However, our union is taking steps with organizations such as the Saskatchewan Wheat Pool and Manitoba Pool Elevators, where we have embraced formal employment-equity programs with the hiring of designated groups -- women, people of colour, disabled people and aboriginal people. We have a lot of work to do in the grain industry. For example, only 16 per cent of our workforce is female. I would venture to say that in the grain elevator system itself the percentage is far lower than that.
As with anything else, we have had significant obstacles with which to contend. We once pioneered credited seniority, so that if a woman was hired in a non-traditional occupation, she would get half the seniority of the members in the bargaining unit. That was very popular with the union leadership, until it reached the union membership. A number of former union leaders are now back in the rank and file as a result of that effort. Things move sometimes by fits and starts, but we are doing our best.
Senator LeBreton: Having been raised on a farm, I was interested to see them say women could handle grain. I handled the same amount of grain and carried the same cans of milk that my brothers did. Thank you for at least recognizing that. There was equality in the workplace on our farm.
Mr. Wagner: Most grain trucks are driven by women when they arrive at the elevator.
Mr. Burton: In terms of the Grain Workers Union, Local 333, we have been pushing an affirmative-action program with the employer. Women comprise only 15 per cent of our workers, but we are actively pursuing getting more women in there. We have been fighting with the employer to ensure that the work is capable of being done by anyone, regardless of stature or strength.
Within the union, we have an affirmative-action program in terms of female representation at the shop steward level. We are looking at the executive level as well.
We are sending five women to a summer institute for women trade unionists, so we are very active along that front.
The Chairman: I wish to thank our witnesses for their excellent presentations.
Mr. Burton: Before we leave, one thing I found interesting is that the fellows on the end of the witness table representing the employer seem to have problems with replacement workers and access to off-site workers, as do we, but we are coming from different ends of the issue. I think that speaks worlds to the notion of making a compromise bill.
The Chairman: Senators, we will take a break and resume our hearings at 7:00 p.m.
The committee recessed.