Debates of the Senate (Hansard)
1st Session, 36th Parliament,
Volume 137, Issue 25
Wednesday, December 3, 1997
The Honourable Gildas L. Molgat, Speaker
Wednesday, December 3, 1997
The Senate met at 1:30 p.m., the Speaker in the Chair.
The Hon. the Speaker
: Honourable senators, I wish to draw
your attention to some guests in our gallery. As honourable
senators are aware, our Parliament buildings are undergoing a
major renovation. I am pleased to receive today in our gallery
officials of the Department of Public Works in South Africa, led
by Mr. Sipho Shezi, their deputy minister. They are here to see
what we are doing. They are accompanied by Mr. Glenn Duncan,
the Director General of the Parliamentary Precinct Directorate of
the Department of Public Works and Government Services of
Welcome to the Senate. We hope that your observations will
be helpful in your country.
Treatment of Demonstrators at International Summit
Hon. Consiglio Di Nino
: Honourable senators, the APEC
meetings of the past week should leave Canadians with some
comfort and much concern.
While recognizing the need for and the value of these types of
multilateral encounters, we should, in the clear light of today,
reflect on certain facts.
Canadians, I hope, are beginning to understand that democracy
in most of Asia is defined differently than in Canada, and that,
more often than not, the leaders whom the Prime Minister and
others wined and dined are nothing more than dictatorial tyrants,
whose principal objective is to enrich themselves, their families
and friends at the expense of everyone else, including citizens of
their countries, as well as unsuspecting foreign investors.
Of greater concern to me is the way we treated those who have
suffered under their oppressive regimes and their supporters. The
brutal behaviour of the RCMP, and the brainless criticism made
by the Prime Minister's communication director of a member's
refusal to stand when the Chinese justice minister was introduced
in the House should not make us proud.
While the President of the United States publicly calls for
human rights, social conditions and the environment to be linked
to trade, Canada's Prime Minister makes an insulting and
embarrassing joke about pepper spray.
It is ironic to realize that the repressive regimes we criticize -
and we certainly should - will use the pictures of our police
forces assaulting demonstrators as well as the Prime Minister's
remarks to further justify the brutal treatment of their people in
the name of peace and order. We will hear many compliments
about last week's APEC conference. We should also, honourable
senators, admit a little shame.
Newspaper Article on Senator's Residency
Qualifications-Letter in Response
Hon. Philippe Deane Gigantès
: Honourable senators, I wrote
a letter to The Ottawa Citizen
today which I should like to read to
you. It is very short. It is in response to an article they published
this morning on Senator Lucier. I quote:
Senator Paul Lucier lives in Vancouver because that is the
place nearest the Yukon where he can get treatment for his
form of bone cancer. As soon as he feels able (after each
debilitating treatment,) he comes to the Senate. It takes
courage and a strong sense of duty to do what he does.
When at the Senate, he is valued for his wisdom. It is
because of his valuable contribution that the Senate has not
exercised its right under article 33 of the 1867 Constitution
to question his residency qualifications.
As a former journalist, I am surprised that you relied so
much for your article on the views of Reform Party
members who are trying to make partisan hay out of a
fellow human being's struggle with disease.
Veterans' Health Care Services
Report of Social Affairs, Science and Technology
Committee Requesting Authorization to Engage Services
and Travel Presented and Printed as Appendix
Hon. Lowell Murray
: Honourable senators, I have the honour
to present the second report of the Standing Committee on Social
Affairs, Science and Technology requesting authorization of
special expenses in accordance with the Procedural Guidelines
for the Financial Operation of Senate Committees.
I ask that the report be printed as an appendix to today's
Journals of the Senate to form part of the permanent records of
The Hon. the Speaker: Is it agreed, honourable senators?
Hon. Senators: Agreed.
(For text of report, see Appendix A to the Journals of the
Senate of this day, p. 225.)
The Hon. the Speaker: Honourable senators, when shall this
report be taken into consideration?
On motion of Senator Murray, report placed on the Orders of
the Day for consideration at the next sitting of the Senate.
Notice of Motion to Reappoint Present Incumbent
Hon. Sharon Carstairs (Deputy Leader of the
: Honourable senators, I give notice that tomorrow,
Thursday, December 4, 1997, I will move:
That, in accordance with subsection 54(3) of the Act to
extend the present laws of Canada that provide access to
information under the control of the Government of Canada,
Chapter A-1 of the Revised Statutes of Canada, 1985, the
Senate approve the reappointment of John Grace as
Information Commissioner, to hold office until
April 30, 1998.
Depository Bills and Notes Bill
Hon. Sharon Carstairs (Deputy Leader of the
: Honourable senators, I have the honour to present
Bill S-9, respecting depository bills and notes, and to amend the
Financial Administration Act.
Bill read first time.
The Hon. the Speaker: Honourable senators, when shall this
bill be read the second time?
On motion of Senator Carstairs, bill placed on the Orders of
the Day for second reading on Tuesday next, December 9, 1997.
Bill to Amend-First Reading
Hon. Consiglio Di Nino
: Honourable senators, I have the
honour to present Bill S-10, to amend the Excise Tax Act.
Bill read first time.
The Hon. the Speaker: Honourable senators, when shall this
bill be read the second time?
On motion of Senator Di Nino, bill placed on the Orders of the
Day for second reading on Tuesday next, December 9, 1997.
Estimate of Overall Costs of Processing
Refugees-Timetable for Presentation to
Hon. Donald H. Oliver
: Honourable senators, my question is
to the Leader of the Government in the Senate. Like yesterday's
question, it deals with the Immigration and Refugee Board. In
1969, Canada signed the 1951 United Nations Convention
Relating to the Status of Refugees and the 1967 protocol thereto.
In doing so, we undertook to protect refugees who find
themselves outside their country and are unable to return to it for
fear of persecution. We established the Immigration and Refugee
In his report tabled yesterday, the Auditor General stated:
The complexity of the process means that the total
processing costs cannot be measured easily.
In a previous report, the Auditor General pointed out the lack
of information given to parliamentarians.
My first question is: Why was the department unable to
provide a reasonable estimate of the overall costs of the process,
and when will it be available to parliamentarians?
Hon. B. Alasdair Graham (Leader of the Government):
Honourable senators, I would hope as soon as possible. It is a
reasonable question and deserves a reasonable answer.
Monitoring of Progress of Refugee Claims-Government
Hon. Donald H. Oliver
: Honourable senators, the lack of
accountability is quite serious. The Auditor General pointed out
all the way through the process that:
...no one in the federal government monitors the overall
progress of claims.
It might explain:
...that in most cases, immigration officers rule on the
eligibility of a claim without first obtaining the information
required to make an informed decision.
What is the plan of the government to solve this problem?
Hon. B. Alasdair Graham (Leader of the Government):
Honourable senators, if no one is monitoring the progress of
claims, then perhaps the honourable senator has a very
substantial recommendation to make that should be taken
seriously by the government. I would be happy to take such a
recommendation to the proper authorities.
Report of Commission of Inquiry on the Blood System in
Canada-Recognition of Debt of Service to Justice
Hon. Richard J. Doyle
: Honourable senators, I have a
question for the Leader of the Government in the Senate; but
first, a comment. Stephen Jay Gould, writing about AIDS in the
New York Times
in 1987, described the terrifying normalcy of
Imagine plunging yourself into that black hole of long
suffering and unnecessary death.
That, honourable senators, is what Mr. Justice Horace Krever
has done for these last four years, and I hope the Leader of the
Government in the Senate will be able today to hint, at least, at
the reward, the honour, the recognition of debt that will be paid
to this true and faithful servant who frightened the government
into letting him finish his historic examination of the
contamination of Canada's blood supply.
Has the minister news of recognition for this good citizen?
Hon. B. Alasdair Graham (Leader of the Government):
Honourable senators, I would have to determine that in response
to the very worthy representation that my honourable colleague
has made. The government will be providing a very full response
to the report of the commission as soon as possible.
I want to say that the government welcomes the report of the
Krever inquiry. Justice Krever has done remarkable work. He has
made a lasting contribution to the health and safety of Canadians.
As was indicated by Senator Doyle, the report impacts not only
on one individual but on thousands of Canadians and citizens
around the world. The Krever inquiry raised very real and
legitimate concerns about the safety of the national blood system.
No one could help but be moved by the plight of the victims.
Therefore, the government accepts the conclusions contained in
Justice Krever's report about the federal role in what happened;
accepts them in their entirety, and without reservation.
Senator Doyle: Honourable senators, among many of his
recommendations, Judge Krever has urged the funding and
founding of a new and independent blood collecting and
distributing agency. While the provinces and territories would
help run this service, Judge Krever would deny the federal
government any role in its operation. I ask the Leader of the
Government in the Senate if granting that request might be
considered reward enough for the judge?
Senator Graham: Honourable senators, I am not sure to what
kind of reward my honourable friend is alluding. I think the
admission of the Government of Canada of its full accountability
and the gratitude of people, even from people beyond our
borders, is due Justice Krever.
As an immediate response, if I might add, to the Krever report,
the government is announcing the creation of a blood safety
council, which will include members from blood consumer
groups and the scientific medical community. It will advise the
government on blood safety matters.
In September of this year, an agreement was reached between
the provinces and the federal government on a cost-sharing
formula to fund the transition to a new national blood agency,
Canadian Blood Services. The agency, I understand, will be fully
operational in 1998. Of course, we encourage donors to continue
giving blood, which is vital to the health of our fellow citizens.
Report of Commission of Inquiry on the Blood System in
Canada-Responsibility for Purchase of Tainted
Product-Possibility of RCMP Inquiry-Government
Hon. Wilbert J. Keon
: Honourable senators, I have a
question for the Leader of the Government in the Senate.
Last Wednesday night in the midst of the CBC coverage of the
release of the judge's four-year examination of the contamination
of the Canadian blood supply, a young mother spoke of the
transfusion that poisoned her husband. "He died," she said, "for
It was a particularly poignant moment in recollections of the
terrible times when the Red Cross, the provinces, territories, and
Ottawa knew that the blood supplies on hand were tainted. They
knew also that heat-treated blood supplies in the U.S. were safe.
Canadians continued for nine months to buy the so-called
Judge Krever has named those who were careless and those
who were responsible enough to order more tainted blood
supplies for Canada's hospitals.
Will police and prosecutors be instructed to seek out those
whose actions can be considered criminal and place their names
before the courts?
Hon. B. Alasdair Graham (Leader of the Government):
Honourable senators, I thank my honourable friend for his
question. Obviously, he is a person who knows a lot more about
this particular problem than the rest of us in this chamber.
The Royal Canadian Mounted Police Force has indicated that
it is reviewing the report. As with any information or documents
in the public domain, it is up to the RCMP to determine if they
want to review the report and, in so doing, to determine any
appropriate action as to whether they will name individuals. At
this particular point in time, I believe it would be up to the
RCMP to make those recommendations.
Report of Commission of Inquiry on the Blood System in
Canada-Possibility of Commissioning of Health Digest
for General Distribution-Government Position
Hon. Mabel M. DeWare
: Honourable senators, Mr. Justice
Horace Krever, in his report of the Commission of Inquiry on the
Blood System in Canada, has provided us with a graphic account
of a national tragedy of epic proportions, which my colleagues
have touched upon in other questions. He has done more than
that. He has provided the first complete and detailed account of
government as a full partner in the question of health care in all
of the provinces in this great dominion. He shows what
disastrous results can ensue when government segments of health
care are carelessly monitored and irresponsibly tended.
Honourable senators, we are concerned here with blood and
blood products, but every aspect of the health of each of us
demands the intensive care of the specialists assigned to watch
over us by Ottawa, the provinces and the territories.
Much of the examination of the public health environment of
Judge Krever's report flows through chapter 7, page 148 of
volume 1, although all three volumes are rich with references and
commentaries on the achievements and failures of our
government doctors and administrators.
Will the Department of Health consider the commissioning of
a digest that might be entitled "The Nation and National Health"
and which could be distributed to all citizens concerned with the
functioning of the bodies and individuals or agencies - such as
the agency mentioned in answer to an earlier question - that
make life and death decisions on our well-being?
Hon. B. Alasdair Graham (Leader of the Government):
Honourable senators, I am not aware of a specific
recommendation of that kind or a specific response that might be
undertaken by the government. Obviously, the government is
examining the report and will have a response very soon.
After the release of the report, the Minister of Health,
Mr. Rock, indicated he would be discussing the
recommendations with his provincial colleagues. The provinces
themselves have noted that even compensation is a complex
question. There are many discussions and many questions to be
answered. The Government of Canada will do so after
appropriate discussions with the provinces and with the
responsible bodies and individuals.
Search and Rescue Helicopter Replacement
Program-Timetable for Purchase-Government Position
Hon. J. Michael Forrestall
: Honourable senators, I have a
question for the Leader of the Government in the Senate.
This is day 58. Is it true that the government will proceed to its
second tendering process with regard to the purchase of search
and rescue helicopters?
Hon. B. Alasdair Graham (Leader of the Government):
Honourable senators, I understand that a decision will be made
very soon with respect to the awarding of the contract for the
search and rescue helicopters. I am not aware that any second
tendering process will be undertaken with respect to replacement
of the search and rescue helicopters.
Search and Rescue Helicopter Replacement
Program-Possible Alteration in
Hon. J. Michael Forrestall
: I thank the honourable leader for
that answer, but honourable senators will be aware that on
November 19 we received in our offices from Sikorsky
International a letter with regard to what they felt was a biased
procurement process for the purchase of a search and rescue
helicopter. This was followed, as most senators will know, by a
news story in The Ottawa Citizen
on December 1, 1997.
Perhaps I could ask two questions of the Leader of the
Government in the Senate. Has Sikorsky or Eurocopter
threatened to sue the government over the procurement process
with respect to the search and rescue helicopters? If this is true, is
it because there may have been an altered specification
requirement with respect to the first tender?
Hon. B. Alasdair Graham (Leader of the Government):
Honourable senators, the answer to my honourable friend's first
question is: Not to my knowledge. The answer to his second
question is that I am not aware of any altered specifications.
Senator Forrestall: With respect to the ship-borne
helicopters, is it now true, inasmuch as this is the current
suggestion, that the announcement will be made sometime next
Senator Graham: Honourable senators, I assume that my
friend is talking about the maritime helicopters. I would hope
that after the first award is made, the process of selecting the
replacement for maritime helicopters - and I am sure that that
examination is already underway - will be undertaken in a most
serious and expedient fashion.
Auditor General's Report on Ozone Layer
Protection-Criticism of Government's Performance and
Lack of Strategy-Government Position
Hon. Mira Spivak
: Honourable senators, the Auditor General
has raised several concerns regarding Environment Canada's
record on ozone depleting substances. The report says that the
federal government has failed to provide direction, and has
missed or ignored available opportunities to do so, including the
1995 "Guide to Green Government."
According to the Auditor General, there are weaknesses in
Environment Canada's inspection functions for ODS regulations
under the Canadian Environmental Protection Act.
The Auditor General also revealed flaws in the 1992 National
Action Plan on Ozone Depleting Substances. He said that there is
a need for improved government accountability to address
differences in requirements among provincial regulations, the
plan's results, benefits and costs.
At the level of the federal department, the Auditor General
stated that no department appeared to be in charge of
implementing strategies to manage their ozone depleting
substances. The federal government has failed to set a direction
and articulate its expectations for leadership.
My question to the Leader of the Government in the Senate is:
Can you tell us what remedial steps are being taken to address
these concerns of the Auditor General?
Hon. B. Alasdair Graham (Leader of the Government):
Honourable senators, at the national level, Environment Canada
will coordinate the implementation of the National Action Plan
on Ozone Depleting Substances. That will be considered by the
Canadian Council of Ministers of the Environment at its next
The national action plan will continue to be the framework for
the coordination of the respective efforts of the federal,
provincial and territorial governments in ODS management and
control. The national action plan calls for, among other things,
the development of a strategy for disposal of unneeded CFCs,
and so on.
Report of Commission of Inquiry on the Blood System in
Canada-Compensation for Hepatitis C
Hon. Stanley Haidasz
: Honourable senators, I should like to
ask the Leader of the Government in the Senate whether it is the
intention of the federal government to announce before
Christmas its intention to grant any dignified compensations to
those Canadians who have contracted hepatitis C, in view of the
fact that the Red Cross unfortunately allowed tainted blood into
the supply that was given to these people over the past several
Hon. B. Alasdair Graham (Leader of the Government):
Honourable senators, I thank the Honourable Senator Haidasz for
his question. That is one of the matters that will be taken under
review by the government.
Hon. Sharon Carstairs (Deputy Leader of the
: Honourable senators, I have a response to a
question raised in the Senate on November 5 by the Honourable
Senator Oliver with respect to the Canada Pension Plan, effects
on retirees of decrease in benefits and increase in premiums; a
response to a question raised on November 5 by the Honourable
Senator Stratton regarding changes to the Canada Pension Plan
and the actions of the new investment board; a response to a
question raised in the Senate on November 6 by the Honourable
Senator Oliver regarding changes to the Canadian Pension Plan,
effect on employment; a response to a question raised in the
Senate on November 19 by the Honourable Senator Berntson
regarding the payment of legal fees for the former Minister of
Indian Affairs and Northern Development, difference in
treatment of others accused; and a response to a question raised
on November 17 by the Honourable Senator Spivak regarding
the upcoming conference in Kyoto.
Human Resources Development
Changes to Canada Pension Plan-Effect on Retirees of
Decrease in Benefits and Increase in
(Response to question raised by Hon. Donald H. Oliver on
November 5, 1997)
Since much of Canada's public pension system was put in
place in the 1950s and 1960s, demographic and economic
circumstances have changed significantly. Canada's
population is ageing rapidly as birth rates have fallen
dramatically and life expectancy has increased.
Today, there are around 3.7 million Canadian seniors. But
the baby boom will produce an explosion in the number of
seniors starting around 2011. By 2030, there will be some
8.8 million Canadian seniors. Because the post-war
baby-boom was followed by the baby-bust, these seniors
will represent a much larger share of the country's
population than ever before. In 1966, when the CPP was put
in place, there were about eight working-age Canadians for
every senior. Today in 1997, there are about five
working-age people for every senior. And in 2030, there
will be only three working-age Canadians for each senior.
Canadians are living longer in retirement. Thanks to
higher living standards and medical advances, life
expectancy has leapt forward in just decades. This means
that Canadians will be collecting OAS and CPP pensions for
an average of 20 years, compared to 15 years when these
programs were established.
As a result of these new circumstances, the Canada
Pension Plan is no longer sustainable as it is now structured.
It cannot meet the challenges that lie ahead. Action needs to
be taken now to reduce the burden on future working
To illustrate, the Chief Actuary of the CPP has shown that
if nothing is done, CPP contribution rates will have to
increase from under 6 per cent now to over 14 per cent to
cover escalating costs. This is an increase of over
140 per cent for future generations.
The changes to Canada's retirement income system that
the government is proposing will make our pension system
both sustainable and affordable - for today's working
Canadians and for generations to come.
Changes to Canada Pension Plan-Actions of New
Investment Board Outwith Auditing Jurisdiction of
Auditor General-Government Position
(Response to question raised by Hon. Terry Stratton on
November 5, 1997)
To preserve the arm's-length nature of the CPP
Investment Board, the Board will be permitted to appoint its
own auditor. This is normal business practice - Ontario
Teachers' Pension Plan and OMERS, for example, both
appoint their own auditors. The integrity of the audit is
ensured by the high and well-recognised standards of the
The Auditor General will continue to have responsibility
for auditing the annual financial statements of the CPP.
These will include a statement consolidating the accounts of
the CPP Account, the CPP Investment Fund, and the CPP
Investment Board. To accomplish this function, the Auditor
General will have access to any records, accounts,
statements or other information that he considers necessary.
Moreover, the Auditor General has been consulted on
Bill C-2 and believes its auditing provisions will ensure that
the financial status of the CPP is clearly and fairly
Changes to Canada Pension Plan-Effect on
(Response to question raised by Hon. Donald H. Oliver on
November 6, 1997)
In December 1995, the Department of Finance prepared
an assessment of the macroeconomic impacts of raising CPP
contribution rates. (This report, entitled The Macoreconomic
Impacts of Raising Public Pension Contribution Rates, has
been tabled.) The study examined short-term
macroeconomic effects of two scenarios that would raise
contribution rates to the steady-state rate of some 13.25 per
cent based on no changes other than contribution rate
The study shows that, even with much larger increases in
CPP contribution rates than are being proposed in Bill C-2,
the effects on growth and employment would be negligible.
This reflects the fact that putting the CPP on a sound
financial base will restore confidence in the viability of the
plan. The proposed investment policy of investing funds in
the new CPP Investment Board at arm's length from
government in the best interests of contributors will further
reinforce confidence in the future of the plan.The changes
will generate lasting benefits through higher saving,
increased investment and higher income. On balance, the
permanent benefits from the proposed changes will far
outweigh possible small negative short-term impacts.
Payment of Legal Fees to Former Minister of Indian
Affairs and Northern Development-Difference in
Treatment of Other Accused-Government Position
(Response to question raised by Hon. Eric Arthur Berntson on
November 19, 1997)
The Government of Canada is prepared to resolve
Mr. Munro's litigation involving the payment of his legal
fees in a manner which is fair and equitable to Mr. Munro
and to the Canadian public. I understand that counsel for the
Government has recently contacted Mr. Munro's
representatives to see whether the matter can be resolved.
Other than that, since the matter is before the Courts, it
would be inappropriate for me to comment any further.
Current Treasury Board policy provides for the payment
of legal fees incurred by servants and Ministers for actions
taken within the scope of their duties.
This is not an entitlement to legal assistance in every
case. Crown servants must come within the provisions of
the policy in order to receive legal assistance at public
At the time of Mr. Munro incurred his legal expenses,
Treasury Board policy did not cover Ministers. Requests
from Ministers were dealt with on ex gratia basis at that
time and there was no precedent whereby legal assistance
was afforded to Ministers for defending criminal charges.
The Government is attempting to resolve Mr. Munro's
claim for payment of his legal fees.
Upcoming Summit in Kyoto-Valuable Potential
Contribution of Members of Senate Committee on
Energy, the Environment and Natural
(Response to question raised by Hon. Mira Spivak on
November 19, 1997)
Canada is seeking an agreement that works for all
Canadians. We are taking a step-by-step approach to address
the issue of climate change.
Our targets are realistic and achievable.
The Government of Canada will work cooperatively with
the provinces and territories, in partnership with industry,
environmental groups, and individual Canadians to develop
a practical, flexible, and step-by-step plan for reducing
emissions prior to the ratification of the Kyoto agreement.
This step-by-step implementation plan will build on the
strengths and ingenuity of Canadians. We will strive to
maximize the opportunities to technology development and
minimize the negative impacts.
We will seek out opportunities to work in concert with
our trading partners. Our objective is to address our
international commitments in such a way that no region or
sector is asked to bear an unreasonable share of the burden.
An appropriate policy framework that encourages energy
efficiency and innovation will enable Canadians to take
action on climate change in a way that benefits both our
environment and our economy.
Postal Services Continuation Bill, 1997
Leave having been given to proceed to Government Order
Hon. Sharon Carstairs (Deputy Leader of the Government)
moved the second reading of Bill C-24, to provide for the
resumption and continuation of postal services.
She said: Honourable senators, frequently in this place, a
senator will rise and say that it is a privilege to speak to a bill.
Honourable senators, today it is not a privilege. Indeed, it is with
some regret that I speak to this bill. I say "regret" because I am a
firm believer in the collective bargaining process. When it fails, I
feel enormous sadness. However, as I will explain in a few
moments, the process broke down, and it has been left to
parliamentarians to ensure that Canadians from all walks of life
have their postal service restored.
Honourable senators, there is no question that there are now
many alternatives to the postal service - fax, e-mail and courier
service, to name a few - but for many Canadians, those services
are neither affordable nor available. They depend on their postal
service and, for the most part, it has served them well.
On a personal level, I know the valuable work done by many
postal carriers, who are the only contact that many seniors have.
These carriers keep an eye on those seniors, and I thank them for
that valuable service.
It is the Christmas season. When I was the mother of young
children, I remember letters sent to Santa, and addressed to the
"North Pole," postal code HOHOHO, that had return
correspondence from Santa which a postal worker, in his free
time, had written.
Honourable senators, while I am sad about what we are doing
today, I also believe it is essential. The Postal Services
Continuation Act, 1997, is legislation directed at bringing about
the resumption of postal services in Canada.
Honourable senators will be aware that the work stoppage that
began at Canada Post Corporation on November 19, 1997,
followed a lengthy period of negotiations. Despite the efforts of
the parties, the two sides were unable to reach a resolution of
The dispute that has led to the proposed legislation involves
negotiations for the renewal of the collective agreement between
the corporation and the Canadian Union of Postal Workers,
covering some 24,000 employees. The previous collective
agreement, which was reached in direct negotiations, expired on
July 31 of this year.
Following six weeks of direct negotiations between the
two sides, the union filed a notice of dispute pursuant to
section 71 of the Canada Labour Code. While the union
expressed a preference for no further assistance from the
department, the federal government felt it necessary to put
conciliation officers in place to assist the parties in their
deliberations. This was done on June 20, 1997. The parties
decided to continue with direct negotiations prior to the
conciliation officers joining the discussion on August 19.
Following a series of conciliation sessions, the union asked the
officers to report to the Minister of Labour ending their
involvement, and on September 18, 1997, CUPW rejected a
global offer made by the employer three days earlier.
A second stage of conciliation assistance was offered by the
federal government. Mr. Marc Gravel, a well-respected third
party, was appointed Conciliation Commissioner on October 7.
He held meetings on October 14 and continued to explore
avenues of settlement with the parties until the end of the month.
In his report, the Conciliation Commissioner indicated that he
was unable to help the parties resolve their differences and
suggested that the parties needed the pressure of a strike and/or
lockout deadline to conclude a settlement. He also recommended
that the Minister of Labour urge the parties to negotiate their
dispute promptly, diligently, and in good faith, and made the
services of the federal mediation and conciliation service
available to them.
The commissioner's report was released to the parties on
November 10, and they acquired the legal right to strike or to
lockout at 12:01 on November 18.
During the week following the release of the Conciliation
Commissioner's report, the parties met on several occasions in
direct negotiations. These meetings continued following
nationwide strike action by CUPW on November 19.
After speaking with both parties and being given their
assurances that they still desired a negotiated settlement to the
dispute, the Director General of the Federal Mediation and
Conciliation Service, Mr. Warren Edmondson, was appointed as
mediator in the dispute.
Unfortunately, honourable senators, neither of the parties
displayed the flexibility necessary to move toward a resolution of
the dispute, and the mediator, after some four days of intensive
meetings, determined that there was little chance of a settlement.
It is for that reason that I stand before you today.
In summary, Bill C-24 contains two main features: a
resumption of regular postal operations, and the appointment of a
mediator-arbitrator to resolve the issues remaining in dispute
between the employer and the union, with minor exceptions. The
bill implements a new collective agreement of three years
duration, expiring July 31, 2000, and provides for wage increases
of 1.5 per cent effective February 1, 1998, a further 1.75 per cent
effective February 1, 1999, and an additional 1.9 per cent
effective February 1, 2000. The three-year term is in line with
most of the collective agreements being signed these days, and
the wage increases are not unreasonable, given the current level
of settlements in the public sector.
The remaining issues will be referred to the
mediator-arbitrator, who will be guided by the need for
economic- and service-related goals for the corporation as set out
by the government, while taking into account the need for good
labour-management relations between the employer and the
The guiding principle in the legislation is designed to ensure
that the mediator-arbitrator recognizes the directions that have
been provided to the employer by the Government of Canada in
terms of financial performance and service standards, while
balancing these issues with the importance of good labour
relations within the workplace. Most experienced arbitrators take
such factors into account, and this clause is included in the
legislation for greater certainty.
There may be questions as to why the legislation provides for
a mediator-arbitrator, given that mediation was already provided
to the parties in an attempt to resolve the dispute. There are
basically two reasons: The first is that there are still a large
number of complex issues outstanding between the two sides.
The second is that the process continued in the legislation offers
the parties one last opportunity to resolve these issues themselves
at the bargaining table.
As I indicated, both the union and the employer maintain their
position that they would prefer a settlement that they reach
themselves. However, these parties have been unable to
demonstrate the required flexibility to date to make the process
work for them.
The Canada Labour Code gives the parties the right to strike or
lockout, and early intervention to take away the right would be
contrary to the spirit of the law and would discourage the parties
from any serious attempts at settling their own differences.
However, when it became evident that the parties were unable to
work effectively within that process, the government acted to
protect the interests of Canadians, to end this work stoppage,
which is harming Canadian charities, Canadian businesses and
the public at large.
I urge honourable senators to support this bill to restore postal
services across the nation.
Hon. Consiglio Di Nino: Honourable senators, I have a
question for the Deputy Leader of the Government in the Senate.
I am delighted that she mentioned in her remarks the effect that
this postal strike has had on seniors and charities. In addition to
them, many disadvantaged citizens have suffered because of the
postal strike. This group of people are served very well by
not-for-profit and charitable organizations.
Is there anything in the legislation that would alleviate the
problems the not-for-profit and charitable organizations have
experienced, particularly at this time of year, with the postal
strike? In particular, has any consideration been given by the
government to the possibility of extending the deadline for
donations for 1997 from December 31, 1997, to January 31,
1998, in order that the incredible number of generous Canadians
who are willing to donate can get a tax receipt for the 1997 year?
Senator Carstairs: I thank the Honourable Senator Di Nino
for his question. There is nothing specific in the bill to deal with
that issue, but I suggest that he put that question to one or both of
the ministers who we hope will appear here this afternoon in
order that they may be able to make use of his valuable
Hon. Edward M. Lawson: Honourable senators, is it true, as
the postal workers are saying, that this legislation imposes a
wage settlement lower than what they were previously offered by
the post office? If that is true, will the parties be able to negotiate
and resolve that themselves during the period of arbitration?
I am troubled by that, because The Toronto Star reports today
that the minister declined to say why he took the issue out of the
hands of the arbitrator, except to say, "I decided it was the proper
thing to do. I made the decision and it is there and it is staying
Senator Murray: Which minister said that?
Senator Lawson: The Minister of Labour is reported to have
Is it true that this legislation provides postal workers with less
than they were formerly offered by the post office? If so, and if
this legislation passes, will they have the option to negotiate that
discrepancy during the period of negotiation?
Senator Carstairs: The raises contained in the bill are 1.5 per
cent, 1.75 per cent and 1.9 per cent. I understand that in the last
round of negotiations before a strike was called, the workers
were offered 1.5 per cent, 1.75 per cent and 2.0 per cent over
three years. However, that was contingent upon greater
I suggest that the honourable senator ask that question of the
ministers as well as the union representatives and the
representatives of Canada Post itself, whom we are expecting
here should we proceed to Committee of the Whole.
Hon. Duncan J. Jessiman: Honourable senators, I want to
help the Deputy Leader of the Government in the Senate. The
bill specifically provides that there are two things the parties
cannot do. They cannot agree to change the term, which is set at
three years. Second, even if they want to agree among
themselves, they cannot agree to change the wage increases. I do
not know why that is.
Senator Carstairs: Senator Jessiman is quite right. The
legislation provides very clearly for the time of contract and for
Hon. Noël A. Kinsella (Acting Deputy Leader of the
Opposition): Honourable senators, I can understand fully why
the Deputy Leader of the Government would express some
sadness over the arrival of this bill here. Let us examine her
sentiment. It is sad indeed when one considers that, according to
the Canadian Federation of Independent Business, the lack of
government leadership in this disruption has resulted in a cost to
the small business sector alone of $200 million a day. The strike
began a couple of weeks ago, and therefore the cost has been
some $2 billion for an occurrence that was not unpredicted.
Honourable senators, I invite you to do a simple calculation.
This bill contains 21 paragraphs. This strike has caused a liability
of $2 billion, and all it took to rectify the situation was a bill
comprising 21 paragraphs. That works out to $100 million per
Honourable senators, this bill needs careful examination, even
though we are in an expedited mode this afternoon.
Honourable senators, certainly, the conditio sine qua non of
any agreement between parties requires that the parties first be
identified. The question, then, is: Who are the parties involved in
this dispute? Who are the parties involved in the legislation that
is now before us?
It is clear that the employees constitute one party. One would
have assumed that it is clear that Canada Post is the employer but
for the fact that, for the last several weeks, the Minister of Public
Works has been on television and in the news enunciating a
number of statements and positions that speak to the corporation.
Therefore, the question becomes: What has been the role of
the Government of Canada in this process that has cost ordinary
Canadians, in particular the small business community,
some $200 million per day? What has been the role of the
Minister of Labour in what we would expect to be normal
industrial relations circumstances, including labour relations in
the public sector? I am referring to the minister who, for many,
was silent. He did not even appear on the radar for a long period
of time. Yet it seems that the Minister of Public Works and
Government Services has responsibilities, somehow, for the
corporation, Canada Post, and seemed to be enunciating
Therefore, for those who followed the dispute, some conflict
was apparent between what the Minister of Labour was supposed
to be doing, as the third party in the labour relations situation,
and the positions being enunciated by his colleague the Minister
of Public Works and Government Services, speaking often, it
appeared, on behalf of Canada Post, the employer.
As we assess the legislation, this question becomes terribly
important. On the one hand, it would appear that the Government
of Canada has no agenda for the future of Canada Post. This
government has failed to articulate a plan for this Crown
corporation that recognizes the new choices Canadians have for
mail delivery, including couriers, e-mail, faxes and direct
deposits. I remind my honourable colleague opposite that
children today are probably sending more messages to Santa
Claus via e-mail and the Internet than via Canada Post.
The government has not developed a long-term business
strategy for Canada Post to ensure the continuation of service to
Canadians, to explore ways of exploiting new markets such as
the electronic transfer of information, and to prepare for the
privatization of Canada Post. If the government plans to privatize
the corporation, then it should get on with it. The fact that this
government would allow a postal strike to occur shows that it has
been sleep-walking for the past four years. The Minister of
Labour and his government dropped the ball in this dispute
which has arrived before us at this stage. The Minister of Labour
should have introduced pre-emptive, back-to-work legislation
immediately to prevent a disruption in postal services.
This dispute was not unpredicted. It is not something that just
happened. In that regard, one might reflect on what previous
governments have done in this field. Honourable senators will
recall that when the Progressive Conservative government was in
power in 1991, that government was faced with a labour situation
that was not so very different from the one faced by the current
What happened in 1991? Canada Post was negotiating to bring
a number of unions, each with its own collective agreement,
under one agreement with the Canadian Union of Postal
Workers. There was a series of rotating strikes in August. The
government was urged to do whatever was necessary to allow the
two parties to come to a successful negotiation. This took three
steps. First, under Mr. Justice Gold, an experienced and effective
mediator, the Conservative government established a process that
helped the parties negotiate a number of agreements in a number
of sectors. Unfortunately, Canada Post and CUPW were unable
to conclude a global agreement at that stage, even though partial
agreements had been worked out in many areas with the help of
Second, the Conservative government passed the Postal
Services Continuation Act of 1991. At that time, the two parties
were close to being in a position to lockout or to strike, and it
was necessary for the government to prevent the damage to the
Canadian economy that would result from a work stoppage just
before Christmas. Compare that action and the leadership shown
at that time by the former government with the lack of leadership
and the cost that has been experienced by Canadians in this
Third, the parties were provided with an alternative dispute
settlement mechanism in the early 1990s. The Postal Services
Continuation Act did this with arbitration, as is frequently used
in the case of essential services. With the Canadian public
protected from a work stoppage; with the gains negotiated by the
union guaranteed in the new agreement; with immediate
financial compensation for the workers and a way for the two
sides to reach an agreement, CUPW and Canada Post were able
to do just that in the new year.
In other words, this was an example of true leadership on a
difficult issue. It should have served as a template to the present
government. However, that was not to be. The present
government advised us not to worry, that things would work
themselves out. We were told to trust them. However, in this
instance, the cost is real, and has been experienced by real
Honourable senators, during the question and answer session
that took place between colleagues on this side of the house and
the Deputy Leader of the Government who had already spoken
on this bill, reference was made to clause 12 of the bill. That is
the clause that provides for wage increases. How curious that the
bill provides for a wage increase that is less than the wage offer
that Canada Post put on the table on November 24. Think for a
moment about the question that this raises, honourable senators.
This legislation is proposing a wage settlement that is less than
the last offer put on the table by the employer, Canada Post.
Where did they come up with these numbers? When did they
come up with these numbers? That is the real question. When
were the legislative instructions given for drafting this bill?
Senator Di Nino: It does not take a brain, does it?
Senator Kinsella: It did not take a lot to draft this bill with the
old numbers - not the numbers that were put on the table by the
employer, Canada Post itself, on November 24. Therefore, who
gave those instructions to draft this bill?
Senator Oliver: The Minister of Public Works.
Senator Ghitter: The Prime Minister.
An Hon. Senator: Fast Eddie.
Senator Maheu: Is he supporting it or voting against it?
Senator Kinsella: Honourable senators, the Rules of the
Senate permit me 45 minutes to debate this bill. However, since
we wish to expedite this bill, I will not use my 45 minutes. There
are many other issues, but we will address them in committee.
Hon. Brenda M. Robertson: Honourable senators, I may be
too late, but I thought when Senator Kinsella rose that he would
be asking a question of the Deputy Leader of the Government in
the Senate. I wish to ask her if she would entertain a question. Is
it too late to ask her to respond to a question?
The Hon. the Speaker: Under the rules, it is too late;
however, with leave, the Senate can do as it wishes. Is leave
Honourable Senators: Agreed.
Senator Robertson: Thank you, honourable senators.
I have been following for some time now, as have we all, the
events surrounding this postal strike and the mismanagement of
the issue by the federal government. Who has been advising the
government in this regard? I do not think it has been Fast Eddie.
We have another culprit hiding in the weeds. We have the former
federal minister, André Ouellet, who is the head of the post
office. Is this the gentleman who has been advising the
government in this regard? What is he doing for his money? He
has been extremely silent. If he is the person advising the
government, then you had better get a new leader for Canada
Senator Carstairs: I thank the honourable senator for her
question. As she knows, I am not part of the government in the
narrow framework of her question, and I suggest that she ask that
question of the ministers when they appear.
Senator Robertson: Thank you.
Hon. Gerry St. Germain: Honourable senators, I do not trust
everything I read in the media.
Hon. Senators: Oh, oh!
The Hon. the Speaker: Honourable Senator St. Germain, do
you have a question?
Senator St. Germain: Yes.
The Hon. the Speaker: Is leave granted?
Hon. Senators: Agreed.
Senator St. Germain: Honourable senators, given that the
media does not always accurately reflect what people say, I
decided it would be proper to read the statement made by
Is this an individual decision? I see this as a recipe for disaster
when we consider the hostility that exists between the labour
faction and the post office at the present time. We can lead horses
to water - in fact, we can drag them to water - but we
certainly cannot make them drink, and that is my concern when
people make arbitrary statements such as this.
Is this a cabinet decision? Allegedly, the government has
approved this statement. However, in having the minister say as
much, does it not undermine things, and is it not a recipe for
disaster down the road? Will the government accomplish what it
set out to do by arbitrarily sending these people back to work?
Senator Carstairs: I thank the honourable senator for his
question. However, Mr. MacAulay is just outside the door. If we
could have second reading, we could refer the bill to committee.
The honourable senator could ask that question of the very
minister about whom the article was written.
Senator St. Germain: If I can give the approval, Madam
Minister, bring him in.
The Hon. the Speaker: If no other senator wishes to speak, is
it your pleasure, honourable senators, to adopt the motion?
Motion agreed to and bill read second time.
Referred to Committee of the Whole
The Hon. the Speaker
: Honourable senators, when this shall
this bill be read the third time?
Hon. Sharon Carstairs (Deputy Leader of the
Government): Honourable senators, I move that this bill be
referred to Committee of the Whole presently and that the Senate
do now resolve itself into a Committee of the Whole to hear the
The Hon. the Speaker: Is it your pleasure, honourable
senators, to adopt the motion?
Hon. Senators: Agreed.
Motion agreed to.
The Senate was accordingly adjourned during pleasure and put
into a Committee of the Whole on the bill, the Honourable
Eymard G. Corbin in the Chair.
Senator Carstairs: Honourable senators, I ask that the
Honourable Lawrence MacAulay, Minister of Labour, be invited
to participate in Committee of the Whole.
Hon. Senators: Agreed.
Pursuant to rule 21 of the Rules of the Senate, The Honourable
Lawrence MacAulay, Mr. Robert Cooke and Mr. Gordon Clark
were escorted to seats in the Senate chamber.
Senator Carstairs: Honourable senators, I welcome the
Honourable Lawrence MacAulay, Minister of Labour. He is
prepared to say a few opening remarks and then to take questions
Hon. Lawrence MacAulay, Minister of Labour: Honourable
senators, I should like to introduce the two officials who appear
with me: Mr. Robert Cooke, Senior Counsel for HRDC Legal
Services, Ministry of Labour, and Mr. Gordon Clark, Research
Director, Ministry of Labour.
I should like to say a few words about why it was necessary to
introduce back-to-work legislation to end the collective
bargaining dispute between the Canada Post Corporation and the
Canadian Union of Postal Workers. As Minister of Labour, I
would have much preferred to see the parties negotiate a new
collective agreement. However, when it became obvious that an
unbridgeable impasse had been reached, it was necessary for the
government to act to protect the public interest.
The collective agreement, which sets out the terms and
conditions of employment for some 45,000 postal workers and
letter carriers, expired on July 31, 1997. When the parties had
difficulty reaching consensus, I appointed two conciliation
officers to the dispute. These officers met with the parties from
the middle of August until early September, but despite their best
efforts, the parties remained deadlocked.
I decided to give the parties additional assistance and
appointed Mr. Marc Gravel, a well-respected labour relations
neutral to act as Conciliation Commissioner in the dispute.
Mr. Gravel indicated to me that he was having little success in
helping the parties resolve their differences. He suggested that
the parties needed the threat of a work stoppage to conclude a
As we know, neither party was prepared to demonstrate the
flexibility necessary to negotiate a settlement to end the dispute.
Although we firmly believe in the collective bargaining process,
we also take very seriously our responsibility to protect the
public interest. The employer and the union were obviously
locked in their dispute, and this was having a direct impact on
Canadian businesses, on workers facing layoffs because of the
strike, and on the Canadian public who depend on regular mail
I should like to outline the key provisions in the proposed
Postal Services Continuation Act, 1997. The legislation would
bring about the resumption of postal operations and provide for
the appointment of a mediator-arbitrator who will resolve the
issues in the dispute between the parties, with the exception of
wages and the term of the new agreement. The new collective
agreement will be of three years' duration, expiring on July 31,
2000. The agreement will provide for wage increases of
1.5 per cent effective February 1, 1998, 1.75 per cent effective
February 1, 1999, and 1.9 per cent effective February 1, 2000.
The remaining issues will be referred to a mediator-arbitrator
who will be guided by the need for economic and service-related
goals for the corporation as set out by the government, while
taking into account the need for good labour-management
relations between the employer and the union. Experienced
arbitrators take such factors into account, and this clause is
included in the legislation for greater certainty.
The legislation provides for a mediator-arbitrator because of
the large number of complex issues still in dispute between the
parties, and because the process offers Canada Post and CUPW
one last opportunity to resolve the issues themselves at the
bargaining table. Both parties are fully aware that their failure to
reach agreement at this stage will result in the issues being
determined by arbitration.
I sincerely believe in the free collective bargaining process,
and the decision to introduce back-to-work legislation was not
taken lightly. However, it is time for the government to end the
labour dispute when the parties involved are unable to resolve
their impasse and when the result is having a serious impact on
the Canadian public.
I would be only too pleased to respond to questions that
honourable senators might have.
The Chairman: I remind honourable senators that we are in
Committee of the Whole on Bill C-24, providing for the
resumption and continuation of postal services.
Senator Kinsella: As Minister of Labour, would you briefly
describe your role for the honourable senators?
Mr. MacAulay: As Minister of Labour, my role is to ensure
that Part I of the Canada Labour Code is complied with, that the
processes run properly and that it is fair to both sides. That is
pretty much the extent of my responsibility.
Senator Kinsella: Would it be a correct statement to say that,
generally speaking, the role of the Minister of Labour is that of a
third, or independent, party?
Mr. MacAulay: I am guided by the Canada Labour Code. In a
dispute such as this, I must be sure that both parties have a fair
opportunity to reach a collective agreement.
Senator Kinsella: Minister, could you describe for the
honourable senators your understanding of the role played by the
Minister of Public Works and Government Services?
Mr. MacAulay: The Minister of Public Works and
Government Services is the minister responsible for the post
office. He is not responsible for the labour program. In this
process, I was the minister who was responsible.
Senator Kinsella: When did negotiations break down?
Mr. MacAulay: The legal date for the strike was
November 19, 1997; is that your question, senator?
Senator Kinsella: That is helpful, minister, thank you.
When did you, as Minister of Labour, make the decision that
you would recommend to your cabinet colleagues that
back-to-work legislation should be introduced?
Mr. MacAulay: Honourable senators, as you are aware, we
went through all the processes. When I had had discussions with
Mr. Edmondson, the Director General of Mediation and
Conciliation Services, he indicated that the parties were still a
long way apart. At that time, for the good of Canadians, I felt
that it was my responsibility to recommend back-to-work
Senator Kinsella: Minister, when was that?
Mr. MacAulay: November 28, 1997, senator.
Senator Kinsella: When were drafting instructions sent by
you to the drafters to prepare this legislation?
Mr. MacAulay: Drafting instructions were sent shortly before
tabling of the bill. No doubt you were following the discussion
throughout the period. The last thing I wished to do was discuss
the legislation publicly, until I had to discuss it publicly, and it
Senator Jessiman: That is not the question. When did you
give it to the people drafting the legislation?
Senator Kinsella: Thank you, minister. My next question
relates to the wage settlement that is contained in the bill. How
were the dollar amounts and the time lines that are identified in
section 12 derived?
Mr. MacAulay: I discussed them with my officials, but there
was no wage rate agreement during the mediation up to the time
of legislation. In fairness to both parties, the wage increases in
the bill are fair both to CUPW and to the post office. The bill
ensures a fair wage increase to CUPW workers and not an undue
rate to the post office. It is a fair rate increase.
Senator Kinsella: Minister, did your colleague the Minister of
Public Works have any input into the drafting or the setting of
those increases in the rates of pay in clause 12?
Mr. MacAulay: No, he did not.
Senator Kinsella: Minister, it is my understanding, and
correct me if I am wrong, that the employer, Canada Post, put on
the table on November 24 their last offer as far as wages were
concerned. The employer's last offer from November 24 is
significantly better than what you have in clause 12 of the bill. If
you were considering the positions of both the employer and the
employees, and the employer had already proposed a wage
settlement, how could you come in with a wage settlement that is
considerably less then the employer's offer, unless your bill was
drafted prior to November 24?
Mr. MacAulay: Honourable senators, during negotiations, the
wage package, which was not agreed to, could or would be tied
to other issues.
As you are well aware, there was no agreement on wages. The
increases in the legislation are in line with collective bargaining
settlements in Canada and compare favourably with the current
rates for settlement in other public sector agreements. In fact,
they are slightly higher than average settlements for the third
quarter of 1997.
In February of this year, CUPW officials negotiated an
increase of 2 per cent.
Senator Di Nino: Minister, I think we would agree that all
Canadians have suffered during this dispute, including, I may
add, the striking postal workers. Canadians who have likely
suffered more than others are those who are less mobile. We can
also include seniors and other disadvantaged Canadians.
A number of not-for-profit and charitable organizations offer
this group of people help on a regular basis. This group of
organizations has probably suffered more than most in that their
normal, expected receipt of donations, particularly at this time of
the year, have not been coming in. Has the Government of
Canada considered any way to help alleviate the problems
created for these organizations by the postal strike?
Mr. MacAulay: Honourable senators, I agree with you that
there is certainly no good time for a strike or a lockout. Of
course, this time of the year is probably the worst time to have a
I also understand that all people in Canada engaged in small
business have suffered. However, we must also protect our
collective bargaining system, which, as you are well aware, has
worked very well in this country. In fact, in the last year, close to
94 per cent or 95 per cent of the businesses under federal
jurisdiction settled without any workdays being lost. The system
I am certainly in no position to indicate that we will deal with
losses or anything like that. I have no comment.
Senator Di Nino: You are saying that no thought has been
given to this.
Has the government given any consideration to possibly
extending the December 31 deadline to perhaps January 31 for
receipt of charitable donations to enable those making donations
to receive 1997 tax receipts?
Mr. MacAulay: Of course, that is not my responsibility.
Possibly the Minister of Revenue would be pleased to consider
Senator Di Nino: Are you saying that no thought was given to
this during cabinet deliberations?
Mr. MacAulay: Honourable senators, I am not saying there
was thought given to that issue, or no thought given to it.
However, it would be most unfair to say that no thought was
given to it.
I understand that I am here to explain and defend the content
of the bill.
Senator Di Nino: Notwithstanding that the content of the bill
is important, what we are really attempting to do is serve
Canadians. In order to serve millions of Canadians, would you
consider presenting to your colleagues - to the Minister of
Finance, the Minister of Revenue and the Prime Minister - a
request or recommendation, including draft legislation if
required, to extend the December 31 deadline for charitable
institutions for this particular year? Will you make that
recommendation to your colleagues?
Mr. MacAulay: I can assure you that my colleagues will be
reading the transcripts of this debate, and they will deal with the
issues for which they are responsible.
Senator Di Nino: With all due respect, minister, I did
understand your response to mean that you would support such a
Mr. MacAulay: I have indicated what will take place,
Some Hon. Senators: Shame!
Senator Lawson: Mr. Minister, when you are stripping trade
unions of their legal right to collective bargaining and the right to
strike - and there may be many reasons to justify taking
action - it is most important to preserve the sanctity of
arbitration in its purest form. This allows the arbitrator and the
parties to work things out within a specified period of time
without any preconditions or encumbrances.
However, in this case, it appears that you have taken the two
most key issues, wages and length of contract, out of the hands of
the arbitrator. Is this because of a lack of confidence in the
arbitration procedure, or is it because you want to take command
and make the decision? As you said, you made the decision, and
it will stay in place.
On the face of it, if we are to believe what the postal workers
tell us and what was raised in a previous question, the offer in
total dollars is about $1,000 per postal worker less than they were
previously offered. Even in its best light, it seems to be unfair; in
its worst light, it seems to be mean-spirited on the part of the
minister. It appears that you are trying to punish the postal
I raise that out of a real concern. We know that over the last
number of years labour-management relations have been terrible
between this employer and this union. However, to penalize
them, punish them and not give them the right to fair arbitration
is, as Senator St. Germain said earlier in our discussion, a ticket
for disaster that can only prolong and worsen labour relations.
Did you take that into consideration? Have you considered what
you are doing and how it will affect long-term relations?
Mr. MacAulay: Thank you, senator. I have answered this
question before. As I have indicated, the wage rates in the bill are
quite fair. Following on a 2-per-cent wage increase this year,
CUPW members are assured a fair increase over the next three
years. Three years is a reasonable length of time for a contract.
The percentage increase is fair. In fact, as I have indicated
previously, it is slightly above public service settlements in the
third quarter of 1997.
Senator Lawson: Minister, you may think it is fair but, as it
has been established that it is less than the workers were
previously offered, they will not think it is fair. Reasonable,
fair-minded people will not think it is fair. I do not think it is fair.
I think this will cause a lot of problems in the future.
Why would you not let arbitration run its course? Why did you
interfere and impose your will on the parties? From my
experience with arbitration, I know that the parties will facilitate
the arbitrator in imposing a settlement when there is cooperation
between the parties and when compromises are reached. Why
would you strip out the most important ingredient in arbitration?
Mr. MacAulay: Thank you, senator. First, this rate in the bill
ensures that union members get a fair increase. There are many
other monetary and benefit issues for the arbitrator to resolve in
his dealings between CUPW and the post office. The bill
provides for a mediator-arbitrator because we do hope that the
two sides will come together and that at least some of the issues
will be solved through mediation.
Senator Lawson: I put it to you, minister, that through your
arbitrary action you have precluded the possibility of that
happening in good-faith bargaining.
Mr. MacAulay: Thank you, senator. I hope you are not right.
Senator Tkachuk: Minister, thank you for being here. I am
deeply troubled, as are many Canadians, not only by the strike
itself but by all the events that led to the strike and by how we
have ended up dealing with this situation.
I understand, as you told Senator Kinsella, that you believe in
the right to strike and that, as Minister of Labour, you uphold the
Canada Labour Code.
It is my understanding that labour negotiations between the
post office and the union began in April of this year. Is that
Mr. MacAulay: Senator, I understand that direct negotiations
began about mid-April.
Senator Tkachuk: They would have continued into the
summer and through the fall. When did you decide to
recommend to cabinet the presentation of back-to-work
legislation to Parliament? Was it on November 28?
Mr. MacAulay: Senator, when I met with the mediator on
November 28 and he indicated that there was little chance of the
parties coming to an agreement, I recommended to cabinet that
we introduce back-to-work legislation.
Senator Tkachuk: Are you aware of a meeting between
Minister of Public Works and Government Services Gagliano
and John Gustavson, President of the Canadian Direct Marketing
Association, on August 6, 1997, where they discussed the strike?
Mr. MacAulay: I have read the transcripts in the media, as
you have. I believe that the Minister of Public Works and
Government Services will be here this afternoon. I think that
would be an excellent time to pose that question.
Senator Tkachuk: I am more interested in your response, as
Minister of Labour, to what was said at that meeting. My
understanding from the press reports is that Mr. Gagliano told the
Canadian Direct Marketing Association not to worry about the
strike, that there would be back-to-work legislation within seven
days of the strike's starting.
Mr. MacAulay: Honourable senators, many things happen
during disputes and the collective bargaining process. My
responsibility was to ensure that the collective bargaining process
was handled properly and fairly, and I believe it was. It is the
responsibility of other people to answer for what they did or said.
Senator Nolin: It is the same government.
Senator Tkachuk: Let us go back. Were you informed before
that meeting that the minister responsible for the post office
would say that? He is not a civil servant or simply a member of
Parliament. He is member of the executive of the Government of
Canada responsible for the back-to-work legislation.
Mr. MacAulay: Thank you, senator. I understand that the
Minister of Public Works and Government Services responded to
that statement in the media. However, I leave it to you to pose
that question later today. I would not have the audacity to answer
for what the media reported that someone else said.
Senator Tkachuk: These questions are not for Minister
Gagliano but for you. I asked you whether you were consulted
before the meeting took place. Did you know what he was going
Mr. MacAulay: No, senator. Cabinet ministers do not seek
clearance from me to attend meetings.
Senator Tkachuk: When you did learn this from the media,
did you, as minister responsible for labour negotiations, talk to
Mr. Gagliano about what he told the Canadian Direct Marketing
Mr. MacAulay: Senator, the Minister of Public Works and
Government Services has his own responsibilities. I had my own
responsibility in the situation, and that was to ensure that Part I
of the Canada Labour Code was adhered to. I believe all parties
are aware that it was adhered to properly.
Senator Tkachuk: I am asking you what action you took, and
I would like an answer. Did you take any action after you learned
that the cabinet minister responsible for the post office told the
Canadian Direct Marketing Association that the strike would be
settled in seven days? Did you then deal with the minister and
with the cabinet?
Mr. MacAulay: Senator, in all fairness, I have appointed
mediators and I have utilized every available part of the process.
At this stage, we have a mediator-arbitrator in place. I think that
if you evaluate the situation fairly, you will find that Part I of the
Canada Labour Code was adhered to properly. That is my
Senator Tkachuk: Minister, it is your bill.
Mr. MacAulay: That is correct.
Senator Tkachuk: You want us to rush this bill through on
behalf of the people of Canada. I am asking you a simple
question. What did you tell the minister responsible for the post
office after you learned that he had told the Canadian Direct
Marketing Association not to worry about this strike because it
would be over in seven days?
Senator Kinsella: That is a good and fundamental question.
Mr. MacAulay: It is my responsibility to ensure that the
process is handled properly. That is what I did. Any move that I
made, I discussed with my own officials, and the moves were
properly made. The parties were given ample time. They were
given all the assistance that they could be given from the labour
program in order to reach a settlement.
Senator Tkachuk: What if another minister of cabinet had
told another group that had a direct interest in the functions of
the post office, such as the people of Canada, that they should not
worry about the strike because it would be over in three days or
ten days? What is involved here is a collective bargaining
process. As the Minister of Labour, you have legal
responsibilities to uphold the process. I am asking you, sir, if
another minister had done this, would you have done nothing? If
10 ministers had been negotiating with the union and the post
office, would you have sat there and watched it all happen and
Mr. MacAulay: Quite simply, senator, I think the parties are
well aware of who is the Minister of Labour, who has the
responsibility, and who exercised that responsibility. I did.
Senator Tkachuk: I will also ask this question of the Minister
of Public Works and Government Services. Under what authority
would he have been speaking?
Mr. MacAulay: I suppose - and I do not know if I should get
into supposing - if anyone is speaking, they are speaking on
their own behalf.
Senator Tkachuk: I am becoming a little frustrated,
I do not know if I speak on behalf of other senators, perhaps
on both sides, when I say this, Mr. Minister. However, when you
ask us to deal with this issue in an afternoon, and we have a
responsibility to negotiate this on behalf of the people of Canada
in good faith, I think we have a right to receive answers to our
questions. I do not think you have the right to tell us that you do
not have to answer these questions.
Frankly, I am upset by the fact that we even agreed to do this,
because I think, sir, it is your fault that we are here today. We are
being asked to deal with this measure in one day. If we pass this
bill, members of the union will receive less money than was
offered by the post office. The management of Canada Post and
the government are not making any concessions whatsoever.
Mr. MacAulay: As I have indicated, this legislation is my
responsibility and I will respond to questions concerning it. The
Canada Labour Code is also my responsibility.
I believe you will find that both parties will agree that they had
a fair and reasonable chance to reach an agreement.
Senator Jessiman: Mr. Minister, I have a couple of questions.
The first one really only needs a "yes" or "no" answer.
On the day you decided what increases in rates of pay would
be included in this bill - and I add them up to be 5.15 per cent
- did you know that the corporation had already offered
something in excess of that? "Yes" or "no."
Mr. MacAulay: Senator -
Senator Jessiman: Either you knew it or you did not. It is not
a difficult question.
Mr. MacAulay: Senator, you are well aware that a "yes" or
"no" answer is not appropriate.
Senator Jessiman: No, I am not.
Mr. MacAulay: Many issues are involved in a collective
Senator Jessiman: That is certainly true. I have asked you a
simple question. On the day that you decided that you would give
the workers a certain increase, did you or did you not know that,
at that time, the corporation had offered something in excess of
Mr. MacAulay: The mediator informed me that the issue of
wages had not been settled. What do you want me to say? What
would you like me to say "yes" or "no" to, senator? Did I know
that something might or might not be approved?
Senator Jessiman: At the time you decided on the first
increase of what amounts to 5.15 per cent, did you know that the
corporation had offered 5.25 per cent?
That is not a difficult question. You may have some rationale
for deciding not to give them 5.25 per cent.
Senator Berntson: Either you did or you did not. If you do
not want to tell us, that is an answer, too.
Mr. MacAulay: I guess, senator, you are convinced they are
lower. The mediator gave me a report. I thought it was my
responsibility to make sure that CUPW employees were treated
fairly. The wage rates, as indicated, are fair.
Senator Jessiman: Before you arrived, the Deputy Leader of
the Government told us that the first offer on the table was
1.5 per cent; that 1.75 per cent was the second; and that
2 per cent was the third. That adds up to 5.25 per cent. The
legislation provides 1.5 per cent; 1.75 per cent; and 1.9 per cent,
for a total of 5.15 per cent.
Regardless of the rationale behind it, at the time you set that
total of 5.15 per cent, did you know the corporation had already
offered 5.25 per cent - "yes" or "no"?
Mr. MacAulay: I read the same article in the paper as you did,
senator. My responsibility was to ensure that there was a fair
wage settlement for the CUPW employees. I think you would
have to agree that the wage settlement is clearly fair.
Senator Jessiman: The question is not whether it is fair or
not. You may have all the rationale in the world for deciding on
a lower figure. I simply asked the question: At the time you made
that decision, on whatever basis, did you know that the
corporation had offered more? I am assuming you can only say
"yes," and then we can get on with the next question.
Senator Berntson: Or say, "I do not know."
Mr. MacAulay: Senator, if you asked me: Did I enjoy
jumping over the moon, it would not mean that I did.
Senator Jessiman: If you said "yes," it may not mean you
meant "yes." If you said "no," it may not mean you meant "no."
What do you mean?
Senator Roberge: He does not know.
Senator Jessiman: I will ask you something else that will
require something more than a "yes" or "no" response.
I should like you to refer to clause 16 of the bill which
contains amendments to the collective agreement.
You did not allow the arbitrator to set the term. You did not
allow the arbitrator to set wages. However, in clause 16 it is
stated about everything else in the collective agreement that, if
both parties agree, they can change everything the arbitrator has
done, but they can do nothing about the term of the agreement or
I am concerned, as Senator Lawson is concerned, that you did
not give that right to the arbitrator, and now, in clause 16, you are
taking it away from the parties. What is the rationale behind that?
Senator Comeau: The grits must be embarrassed by all this. It
is simply terrible.
Mr. MacAulay: The arbitrator can deal with everything else
except the length of the contract and the wages.
Senator Jessiman: I am asking you to look at clause 16. It has
nothing to do with the mediator-arbitrator. It has to do with the
parties. We know you would not allow the arbitrator to do it. I
am asking you why you would not allow both parties to change
Mr. MacAulay: The Canada Labour Code also recognizes that
the parties can modify the collective agreement, except in
Senator Jessiman: Are you saying that the other Act
overrules this one, and that this legislation does not mean
anything? Is that what you are saying?
Mr. MacAulay: No. Quite simply, I am saying that these
parties cannot change these two things. They cannot change the
length of the contract, and they cannot change the wage rate.
Senator Jessiman: You did not have to tell me that. If you had
listened to my question, I was telling you that that is what they
can do. I am asking you for the rationale behind it. You have now
said, after talking to one of your assistants, that the other Act,
which is not before us, allows the parties to change it at any time.
If that is the case, fine. This legislation does not mean anything,
then. Which is it?
Mr. MacAulay: Quite simply, senator, with this Act, they
cannot change either item.
Senator Jessiman: I understand that, sir. Would you please
tell us - or if you do not know, will you find out - when the
two parties to a collective agreement want to agree, and do agree,
the rationale for saying "No, you cannot do it"? Why?
Mr. MacAulay: Senator, I have answered the question a
number of times. I decided, and I decided so that there would be
a fair wage increase, and I also decided the length of the contract.
Senator Berntson: Is that collective bargaining?
Mr. MacAulay: After a certain period.
Senator Jessiman: I have another question that I will leave
for a second round.
Senator St. Germain: Mr. Minister, as you are well aware, the
Canadian public has already paid a huge price as a result of this
As you also know, we come to this Senate from various
backgrounds and experiences. Senator Lawson brings an
extensive background in labour relations. I know that he has
dealt with previous postal labour disputes and brings that
experience to the floor of the Senate. He has pointed out to you,
as has Senator Jessiman, who is an accomplished lawyer from
Manitoba, the aspect of 5.15 per cent as opposed to the
5.25 per cent that has been offered.
I say to you that you are trying to settle this strike. I worry that
you have been mislead by your officials. You will agree,
Mr. Minister, that if the perception, the optics appear arrogant, it
could undermine the prospect of getting these people back to
work. Do you not feel, sir, that we could end up with a major
problem if one side fails to respond positively to your
Mr. MacAulay: The increases provided for in the legislation
are in line with collective bargaining settlements in Canada.
They compare favourably with the current rates of settlement in
other public sector agreements. I have indicated that previously.
I would think that whoever might be upset, CUPW was
assured of a fair settlement, and that is right in the legislation.
There is no fear.
Senator St. Germain: I point out to you that fairness is all in
the eye of the beholder. I have had labour experience, as a union
leader. I know that if you do not deal with the optics, what seems
to be fair to one side can seem totally unfair to the other. Let us
get one thing straight: This is not a question of partisanship; this
is a question of doing the right thing.
Today we are at a critical point in time. A service essential to
our country is shut down at a critical time for our economy. I
urge you to treat it in that light, and to listen to what Senator
Lawson and others are saying. This place should not be as
confrontational as the other place, and should provide the results
that we need. If we need to change something, let us not be too
proud to make those necessary changes, before we end up with
an absolute disaster.
I believe that, in your mind, and in your heart and soul, you
think you are being fair. However, if it does not work, sir, it is all
for naught. Would you respond to that, please?
Mr. MacAulay: That is the responsibility of the Minister of
Labour, namely, to ensure that he is fair. This piece of legislation
is fair. The wage rates are fair; in fact, slightly higher, as I
Senator St. Germain: Yes, I hear you, but I do not believe
you are listening. I have been a minister. Being a minister does
not bestow godliness. One can still err as a minister. I have seen
it done by Conservatives, NDPs, Liberals, Social Creditors, and
various others across this nation.
I am not drawing just from my side, because Senator Lawson
was appointed by the Liberal regime. I am urging you to consider
this aspect of it. I understand that someone must make the
decision. I have been in your position, but I do not necessarily
agree with the notion of standing firm when it is pointed out to
you that you are facing a recipe for disaster.
Mr. MacAulay: I should like to indicate that, again, there are
other benefits that the arbitrator-mediator will be able to decide
upon that have economic consequences. The wage rate is there,
and it is fair.
Senator Beaudoin: As to the legislative jurisdiction in this
case, there is no doubt that the Parliament of Canada has full
jurisdiction on postal strikes. There is, however, a freedom of
association that is restricted. We may restrict the freedom of
Could you tell me if the Minister of Justice, as is usual in those
cases, has issued a certificate indicating that the legislation
before us is not against any fundamental freedom?
Senator Nolin: It must be "yes."
Mr. MacAulay: The Minister of Justice's officials reviewed
the bill before it was tabled.
Senator Nolin: That is not the same as certifying it.
Senator Beaudoin: The usual practice when legislation affects
fundamental rights is to have the matter studied by the
Department of Justice. Usually a visa or a certificate is issued.
Since this case is related, to a certain extent, to the freedom of
association, was such a certificate or visa or some form of
permission issued by the Department of Justice?
Mr. MacAulay: The Supreme Court of Canada ruled in
January 1994 that this provision does not contravene the Charter.
Senator Beaudoin: That is right. The right to strike is not,
according to the Supreme Court, implicit or explicit in the
Canadian Charter of Rights and Freedoms, but there are some
restrictions here in respect of that association.
My question is whether, as is usual, such a certificate was
Mr. MacAulay: As I indicated previously, Department of
Justice officials approved the bill.
Senator Berntson: Who drafted it?
Senator Phillips: I extend a welcome to the Minister of
Labour, a fellow Islander, and point out to him that,
unfortunately for this chamber and for Canada, we will shortly be
losing one of our senators, who is a constituent of his. I hope that
his experience in this chamber today will encourage him to make
the walk from the green chamber to the red chamber. Now that
the niceties are over, let us get down to business.
Senator Di Nino has already touched on my question. The
Federation of Independent Businesses stated that it is costing
them $200 million a day. For the length of the strike, that
amounts to approximately $2.8 billion. That does not take into
account the fact that, before the strike began, the post office was
advising people not to use the mail. Therefore, the total cost
would be higher. To me, that is callous indifference, callous
Who was responsible for that callous incompetence? Was it
the Minister of Labour? Was it the Minister of Public Works?
Was it the Prime Minister? Who assumes the responsibility for
this callous indifference and incompetence?
Mr. MacAulay: Thank you for your kind opening statements.
As a fellow Islander, I appreciate them.
You are absolutely correct that everyone loses and there is no
good time for a strike or a lockout. However, as I indicated
previously, the collective bargaining system has served us well in
this country. In the federal jurisdiction, 94.25 per cent of
businesses resolved their differences without any loss of time at
work in the last year. Strikes and lockouts are difficult to address,
especially at this time of year, but we cannot destroy the system
just because we have a strike at an inappropriate time.
Senator Phillips: It is interesting that the minister places more
emphasis on the system than he does on the businesses that have
gone bankrupt because of the strike. I need not remind the
minister that there has been a tremendous increase in the number
of small businesses undergoing bankruptcy.
That leads to my next question. As I understood the minister's
reply to Senator Di Nino, there will be no assistance for small
business nor for charities that lost money as a result of the strike.
Is that correct?
Mr. MacAulay: I hate to correct a fellow Islander, senator, but
I did not make that statement.
Senator Berntson: He did not make any statement.
Senator Phillips: You did not say there would not be any
Now then, will there be assistance? Let us eliminate the
confusion. "Yes" or "no"?
Mr. MacAulay: I must say, senator, this is my first visit to
your chamber and you are certainly big on "yes" and "no"
Senator Phillips: We have been observing this government
for some time.
Mr. MacAulay: As I indicated previously, my colleagues and
officials will be reviewing the transcripts of this Committee of
the Whole. If there are decisions to be made, they will make
Senator Nolin: It will be too late!
Senator Phillips: Would the Minister of Labour lend his
support to assistance for various firms, including two firms of
which he is very well aware, Vessey's Seeds Ltd. and the Island
Preserve Company in P.E.I.? Both firms have been very hard hit,
and the minister is very familiar with both of those companies.
Will he give his support to assistance for these firms?
Mr. MacAulay: The senator is drifting slightly from the
content of the bill. As I indicated, these proceedings will be
reviewed. I suspect that the appropriate people, if there are
decisions to be made, will make them.
Senator Phillips: I note your remark about drifting from the
bill. I was following your example, Mr. Minister.
Senator Sparrow: It seems to me that probably the wrong
piece of legislation is before us today. If we are to take away the
right to strike and to legislate labour settlements for an industry
as important as this one, perhaps the Crown corporation should
be designated a necessary service and strikes should be
prohibited within that industry.
That is crucial. If they cannot settle by collective agreement
and the government must come in and impose settlements as
often as they do - particularly wage settlements - then there is
no advantage in having any collective bargaining agreement at
all or an arbitrator.
Why, in this particular time, does the government or your
department feel it is necessary to put the wage rate increases in
In 1991, the last time we had back-to-work legislation, there
was no provision in the bill for salary increases. However, it is
imposed in this particular bill. Why is this being done in this
instance? Was there something wrong with the previous
legislation? Did the parties not negotiate and arbitrate a
satisfactory agreement in 1991? Why is it now necessary to take
that part out of the bargaining process?
Mr. MacAulay: I thank the honourable senator for that
As I indicated previously, my mediator indicated to me they
had not reached a settlement. With the wage rates included in the
bill, it guarantees the union members a fair rate increase over a
Senator Sparrow: What was the difference between this
increase and the one in 1991, then? Why do you think you can be
fairer now than you were in 1991?
Mr. MacAulay: As you are no doubt aware, I was not part of
the 1991 government. I am not here to condemn legislation. My
responsibility is to ensure that legislation for which I am
responsible is fair. The wage rates in this bill are fair. A fair rate
of increase is provided for CUPW members. I wanted to ensure
that that happened.
Senator Sparrow: You are saying that it is fair. In whose
opinion is it fair? It might very well, in your opinion, be fair, but
is it necessarily fair in the corporation's opinion and fair in the
opinion of the workers? Those are the people who must be
satisfied, not you as minister and not the government.
I am assuming that you have familiarized yourself with the
1991 agreement. This is almost word for word what is contained
in the 1991 agreement, except the wage rates are not imposed.
When you saw that provision relating to increases in rates of
pay in this bill, what convinced you that, although it was not fair
to impose rates in 1991, it would be fair to impose them now?
This is crucial to this bill.
Mr. MacAulay: I had to evaluate the situation at hand. Quite
simply, it was fair for both sides, CUPW and the post office, that
I impose a fair wage increase, which I did.
Senator Sparrow: Was the previous agreement not fair?
Senator Tkachuk: That is the question.
Senator Nolin: "Yes" or "no"?
Senator DeWare: At the time.
Mr. MacAulay: The previous agreement was reached in direct
bargaining. As I indicated previously, they also had a 2-per-cent
increase in February of this year.
Senator Sparrow: I am talking about the 1991 agreement.
Mr. MacAulay: I believe it was fair, and I believe this
legislation is fair.
Senator Nolin: You have been the Minister of Labour since
Mr. MacAulay: Immediately following, or a few days
following the June election.
Senator Nolin: As Minister of Labour, you are responsible for
implementing and enforcing the Canada Labour Code. That is
my understanding of your responsibility. Am I correct?
Mr. MacAulay: You are correct.
Senator Nolin: I am correct?
Mr. MacAulay: Yes, you are.
Senator Nolin: When you presented Bill C-24 to your
colleagues in cabinet, at that moment and throughout the period
that you and your office drafted that piece of legislation, did you
keep in mind the fiduciary duties, the preamble to Part I of the
Canada Labour Code? If I may, I will read some of the sections
that start with "And Whereas" included in that preamble. The
second one states:
And Whereas Canadian workers, trade unions and
employers recognize and support freedom of association
and free collective bargaining as the bases of effective
industrial relations for the determination of good working
conditions and sound labour management relations.
Were you aware of that and did you keep that in mind?
Mr. MacAulay: Very much so.
Senator Nolin: You had that in mind when you were writing
and directing your officials in the writing of Bill C-24?
Mr. MacAulay: Yes.
Senator Nolin: I will read the fourth one to you which states:
And Whereas the Parliament of Canada...
That refers to this body, the body that you are part of, and this
chamber. It goes on:
...desires to continue and extend its support to labour and
management in their cooperative efforts to develop good
relations and constructive collective bargaining practices,
and deems the development of good industrial relations to
be in the best interests of Canada in ensuring a just share of
the fruits of progress to all.
I take it your response would be the same respecting that
Mr. MacAulay: Correct.
Senator Nolin: I heard almost all of your testimony this
afternoon and I do not believe that you kept those two "whereas"
paragraphs in mind. Can you explain that to me, please?
Mr. MacAulay: Quite simply, I gave the process full and fair
opportunity. I gave both sides every opportunity under my
control and gave them every assistance that the labour program
could offer to both parties. However, they could not come to an
agreement, so I exercised my responsibilities as I saw fit.
Senator Nolin: You have acknowledged this afternoon that
your bill sets pay rates lower than the level agreed to between the
parties a few days before the tabling of your bill. How can you
tell us that you have respected the reference in the preamble to
the Canada Labour Code to harmonious labour relations between
employer and employees?
Mr. MacAulay: As I indicated previously, during labour
negotiations, there are a number of things involved. My mediator
indicated to me that they had not reached an agreement on
wages. I felt it was my responsibility to ensure that the CUPW
employees got a fair increase. I made sure they did by putting it
in the bill.
Senator Bonnell: First, I should like to note that our witness
was offered a seat in this red chamber upon my departure in
January of next year. I should like to ask him to stay where he is
for a little longer, because he is doing a great job for the people
of Canada in taking part in this process to get the postal workers
back to work so that people can send Christmas cards and
presents to their children abroad. It is essential that people who
rely on social services receive their cheques. As an Islander, I am
proud of him.
Senator Berntson: Hear, hear!
Senator Bonnell: I noticed in The Ottawa Citizen the House
of Commons' suggestion that he should run for the leadership if
former premier McKenna does not steal the job from him.
I also wish to congratulate him for taking the strong stand he
took against Mr. Weatherill of the Canada Labour Relations
My question, Mr. Minister, is will you pledge to stay in the
House of Commons and look after labour relations for the next
Mr. MacAulay: Thank you, senator. I will certainly do my
part and be responsible for labour in this country for the next
Senator Bonnell: Will you give serious consideration to
representing P.E.I. in the Senate when a vacancy arises in 1999?
Mr. MacAulay: Thank you, senator. That is an excellent
question, but it is drifting slightly from the content of the bill.
Senator Oliver: My first question relates to the language of
your bill, Mr. Minister. I direct you to clause 17 entitled
"Enforcement". The first line states:
An individual who contravenes any provision of this Act
is guilty of...
The union last indicated its intention to disrupt business and
has done so at airports in Toronto and Halifax. How do you
intend to stop these disruptions if they occur on the workers' own
time when they are not working? Will the fines that you are
imposing under clause 17 be sufficient to catch a worker and will
the language in the first part of clause 17(1) - "An individual
who contravenes" - be broad enough to catch a worker when
anything occurs on the worker's own time?
Mr. MacAulay: This clause is directed at getting the workers
back to work. That is why it is there.
Senator Nolin: That, we know.
Senator Oliver: That was not my question at all. Do you want
me to restate my question?
Senator Kinsella: Yes, you had better. Go slowly.
Senator Oliver: Clause 17(1) of the bill states, in part:
An individual who contravenes any provision...
Since the unions have indicated in the daily newspapers that
they intend to disrupt business and in fact have done so at
airports in Toronto and Halifax, how do you intend to stop these
disruptions if they occur on the workers' own time? Is the
language in your bill, clause 17(1), broad enough to stop it?
Mr. MacAulay: Clause 17 indicates that they must go back to
work. What the workers do on their own time is not dealt with in
Senator Oliver: If there are problems such as those that have
been threatened, what will you do about it, Mr. Minister? The
newspapers have indicated that there may be repercussions if this
bill becomes law, such as stoppages and problems at airports and
elsewhere, some of which have already occurred. Since the
language of your bill - in particular, clause 17 - is not broad
enough to cover these actions, what, if anything, will you do?
Mr. MacAulay: Senator, as I indicated previously, this part of
the legislation is there to get the workers back to work. Other
problems or legal problems will be dealt with by the law of the
land. If one party or the other decided to do something illegal,
the problem would be dealt with by the law of the land. This
legislation, as I indicated, is intended to make sure that the
workers get back to work.
Senator Oliver: You are bringing in a bill that will probably
become law. One of the things that the law does - and I am a
lawyer - is to build upon precedents. Senator Sparrow asked
you a series of excellent questions about the precedent that we
would like you to cite for us with respect to putting in this bill
something that has not been in previous bills, in particular,
clause 12. What is the precedent for putting clause 12 in
legislation such as this?
Senator Kinsella: That is an excellent question.
Mr. MacAulay: Senator, it has not been done previously. As I
indicated before, I felt it was a move I should make in order that
fairness be assured for CUPW and the post office.
Senator Oliver: In other words, there is no precedent for
breaking the collective bargaining process such as you have in
Mr. MacAulay: Not in this type of legislation; not in the
Senator Oliver: Senator Carstairs made some remarks before
you came into the chamber. One of the phrases she used in a
carefully crafted address was "essential service." Is it your
opinion that the postal services in Canada are or are not an
Mr. MacAulay: It is what it is. It is not an essential service. It
is treated under the Canada Labour Code like any other business.
Is that the answer, or are you asking for my personal opinion?
Senator Oliver: I am asking for your personal opinion.
Mr. MacAulay: I feel that it is where it should be.
Senator Oliver: As Senator Di Nino pointed out, certain
charities, business groups, elderly people and others who are
disadvantaged have been seriously injured and harmed as a result
of this essential service being stopped. Do you still not consider
this to be an essential service? Are you not prepared to name it as
Mr. MacAulay: I am well aware that you are genuine in your
concerns, but there has been a review of the Canada Labour
Code. There was never any suggestion that the post office should
be classified an essential service at the time.
Senator Oliver: Are you prepared to review that portion of
the Canada Labour Code in light of the hundreds of millions of
dollars that have been lost in the last two weeks?
Senator Kinsella: Two billion dollars.
Mr. MacAulay: Senator, essential service legislation does not
guarantee labour peace, nor does it ensure a healthy labour
relations climate, such as recently happened in the education
field. It does not ensure that we will not have a strike or a
I agree with you that there is never a good time for a strike or
a lockout. However, I do not believe that, when we have a system
that has worked as well as the collective bargaining system in
this country, we should destroy the system because of certain
Senator Oliver: Earlier, when honourable senators were
asking questions, you requested that they make their questions
more directly related to the legislation before us. With that in
mind, I would now like to direct you to clause 16.
Previously, you indicated that there is no precedent for your
proposed clause 12. I am asking, therefore, is there also no
precedent for proposed clause 16?
Mr. MacAulay: Senator, proposed clause 16 is a standard
clause that has been used previously.
Senator Oliver: It is not standard when it says that everything
but clause 12 can be subject to collective bargaining. What is the
precedent? Perhaps you could assist me by directing me to the
statute in our book that shows there is a precedent. I do not know
of one. Would you be kind enough to direct me?
Mr. MacAulay: As I have indicated, there was no precedent
for clause 12, but I did answer as to why I felt it was appropriate
for me to put the wage rates in the bill.
Senator Oliver: My point is that if there is no precedent for
clause 12, and clause 16 excludes clause 12, how can there
possibly be a precedent for clause 16 in its present form?
Mr. MacAulay: You are correct, because there is no precedent
for clause 12.
Senator Oliver: There are two provisions in this bill that are
without precedent, then?
Mr. MacAulay: That is correct.
Senator DeWare: Mr. Minister, I realize that public pressure
to settle the strike or find a solution has resulted is this
back-to-work legislation. However, that pressure does not
preclude the government from exercising its power to do
everything possible to ensure that there is bargaining in good
At the time the mediator decided that he could not go any
further, how many items were signed off and how many were
left? Second, did you consider final-offer selection, and if not,
Mr. MacAulay: Senator, when I spoke with my mediator on
Friday, he indicated that there were quite a number of issues that
were not settled. I did not consider final-offer selection because
the issues were too complex. As you are aware, the Sims report
indicated that in complex settlements it does not work.
Therefore, I could not consider final-offer selection because it
would not be fair; it would only result in winners and losers. I
wanted a settlement that was as balanced and fair as possible.
Senator DeWare: How many items were up for negotiation
when you started? Were there 110?
Mr. MacAulay: I do not have the exact number.
Senator Kinsella: Could you send for it?
Senator Forest: I, too, would like to thank you for coming
here to answer our questions. This is a difficult situation. It is
difficult for our postal workers, the corporation, and especially
for the Canadian people whom we represent. You will understand
that we do have some questions to ask.
A number of questions have been asked about the wage offer
that was put on the table by the corporation, and the disparity
between it and the wage that is stipulated in the bill. I assume
that when the offer was made by the corporation, which the
union did not accept, there were other conditions attached to that
offer that were also not accepted. Is it the case that the wage offer
made in the bill is somewhat different because other working
conditions were not agreed to?
Mr. MacAulay: I thank you for your question, senator. In
labour negotiations, there are many issues. You cannot pick out
one item in a complex issue.
It is my responsibility to ensure that the system is fair.
Including these rates in the bill assures both CUPW and Canada
Post that the wage rates will be fair.
Senator Forest: I appreciate your answer. We all hope that a
fair settlement will result, and that our postal workers can get
back to work to the benefit of businesses and charities.
Senator Stratton: Thank you, minister, for attending here this
My first question requires a "yes" or "no" answer. It concerns
the wage rates set out in clause 12 with no opportunity for
Can the minister assure us that André Ouellet, Chairman of
Canada Post, will not receive any salary increases, including
bonuses, in excess of those spelled out in clause 12 of the
Mr. MacAulay: Senator, you will have the opportunity to ask
that of the minister responsible for Canada Post once you have
finished with me.
Senator Stratton: Who determines the chairman's salary?
Mr. MacAulay: The chairman's salary does not fall under my
Senator Stratton: If you do not know the answer, that is fine.
You are not expected to know everything; just the bill.
Mr. MacAulay: I would suspect that it is settled by Order in
Council, but I should not guess.
Senator Stratton: Can I expect that the minister responsible
for Canada Post would be able to respond to that?
Mr. MacAulay: I would expect that he could respond to your
Senator Stratton: Clause 10 of the bill deals with
"proceedings prohibited." It states:
No order may be made, no process may be entered into
and no proceeding may be taken in court...
(b) to review, prohibit or restrain any proceeding or
decision of the mediator-arbitrator.
Is that a standard clause in a bill such as this?
Mr. MacAulay: It is in the Canada Labour Code and has been
Senator Stratton: This, then, is a normal clause in a bill such
Mr. MacAulay: Yes, senator.
Senator Stratton: Even if they do something wrong under the
law, they cannot be sued?
Mr. MacAulay: They would use the 1995 law, senator.
Senator Stratton: If either side, or the mediator, does
something wrong, under the law there is no recourse to the
Mr. MacAulay: If it is patently unreasonable, it can go to
Senator Stratton: If it is patently unreasonable under the law,
it can go to court?
Mr. MacAulay: Yes.
Senator Kinsella: Minister, in response to Senator DeWare's
questions concerning how many items were left outstanding on
the table between the parties, and in order to deal with this
legislation this afternoon, would you have one of your officials
send immediately to the department for answers to the questions
that could be brought to us by messenger? I am sure you have
enough assistants around that you can do that. Would you
undertake to send for them right away?
Senator Roberge: "Yes" or "no."
Mr. MacAulay: Senator, the exact number is not relevant. It
was just a number of issues in dispute. What we want to do is
come to an agreement.
Senator Kinsella: Senator DeWare asked the minister how
many items were left outstanding. If senators were to check the
record of the proceedings they would see that the minister said
that they were "substantial" that he could not recall the exact
number, but they are available.
My request is that the minister send to his department to obtain
that information so that we can have it as we are deliberating. It
is information that we wish to have.
Will the minister undertake to send someone to get that
information so that we can deal with this legislation?
Mr. MacAulay: Quite simply, the mediator reported to me
that there were several issues in dispute and that they could not
resolve a number of issues. We will have now a
mediator-arbitrator who will solve the issues between the parties.
Senator Kinsella: Minister, is it your testimony that you do
not know how many items were outstanding or that you do know
but you do not have the information with you here in the Senate?
Mr. MacAulay: Quite simply, I am not trying to hold up
anything. I did not have a specific number. What I know is that
several issues were not resolved. We are putting in place
legislation that will permit mediation. If that does not happen, an
arbitrator will decide.
Senator Kinsella: Are you aware of what the outstanding
issues are between the disputants?
Mr. MacAulay: Yes, I am aware of a number of the issues,
such as route lengths, job security and wages. There are several
Senator Kinsella: Minister, would you agree that, in order to
make a reasoned assessment of this back-to-work legislation,
which strips the rights of Canadians, great care and caution must
be exercised by Parliament? Therefore, the nature and the
magnitude of the dispute is germane to assessing the legislation
that is now before us.
Senator Comeau: "Trust us," he says.
Mr. MacAulay: As you are well aware, the parties will bring
all the issues to the table. They will have mediation, and an
arbitrator if they cannot reach a decision.
Senator Kinsella: Minister, the responsibility of the Minister
of Labour in bringing before Parliament labour legislation, which
the minister believes is in the public interest, is to ensure that
members of Parliament are able to assess whether or not what is
being asked is, indeed, in the public interest. Therefore, one has
to know the nature and magnitude of the dispute. As Senator
DeWare asked, what were the outstanding issues? You have said
that there were several. You have made reference to two or three,
one of which is contained in clause 12 of the bill.
Can you give us a bit more of a feeling about this? What are
the outstanding issues? Why were other outstanding issues not
put in other clauses of the bill? After all, clause 12 deals with one
issue, namely, wages.
Mr. MacAulay: As I stated previously, there are a number of
issues that we hope the mediator will be able to resolve. At the
moment, the public interest is what is at stake. We want to get the
post office functioning. That is what this legislation is all about.
It is also to ensure that members of CUPW and the post office
are treated properly.
Senator Kinsella: In terms of the public interest and the cost
to the Canadian public, minister, what is your estimate as to how
much this strike has cost to date?
Mr. MacAulay: I am well aware that it has cost the Canadian
public a great deal. It has cost small- and medium-sized
businesses a great number of dollars. It has also hurt charities. I
do not have, nor should I give, an estimated figure. It is on an
hourly basis that money is lost. That is why it is so important that
we get the post office moving again.
It must be kept in mind that we have used every effort at our
disposal to ensure that the bargaining system works. That is why
the mediator-arbitrator is contained in the bill.
Senator Kinsella: When you made the decision to introduce
back-to-work legislation to override the normal collective
bargaining rights of the parties, did you do so in the national
Mr. MacAulay: I did it in the interests of all, in the interests
of Canadians, members of CUPW, the post office, small
businesses and charities - Canadians as a whole. That is why
this legislation is being brought forward.
Senator Tkachuk: I wish to go back to the meeting with
Mr. Gustavson. Did you say that you were not consulted before
Mr. MacAulay: That is correct. I was not consulted as to
whether or not he would meet with him.
Senator Tkachuk: Were you aware of the meeting? You may
not have been consulted. Let us go through that again.
Mr. MacAulay: Quite simply, I was aware when I read it in
the media. The Minister of Public Works and Government
Services has responded a number of times concerning this issue.
As I indicated previously, I expect he will respond when you
have finished your questioning of me.
Senator Tkachuk: Did you have discussions with the
chairman of the post office on this matter?
Mr. MacAulay: No, I did not.
Senator Tkachuk: Do I understand, then, that there were no
discussions among the post office, the union and your office?
Mr. MacAulay: About this meeting?
Senator Tkachuk: No. Did you have meetings with them?
Mr. MacAulay: Yes, I did. I met with the president of the
CUPW and officials of the post office on more than one
Senator Tkachuk: Which officials of the post office?
Mr. MacAulay: I met with the chairman of the board, and I
met with the president of the CUPW.
Senator Tkachuk: Together?
Mr. MacAulay: No.
Senator Tkachuk: When you were meeting with Mr. Ouellet
- you said "officials of Canada Post" - what other officials
were in the room with Mr. Ouellet?
Mr. MacAulay: Drawing from memory, I met with him
shortly on one occasion. If I recall correctly, it was more or less
to urge him to try to come to a settlement. It was not at the end of
the negotiations. I did meet with the president of the CUPW. I
was in contact with both parties before I appointed
Mr. Edmondson as mediator, but I met with the president of
CUPW on that occasion.
Senator Tkachuk: Let me get this straight. You said you met
with Mr. Ouellet and the chairman of the board and officials of
Canada Post. However, in fact, you just met with Mr. Ouellet.
There were no other officials present. This was a private meeting.
Mr. MacAulay: You are correct.
Senator Tkachuk: Did the same situation prevail in your
meeting with the president of the CUPW? That is to say, was it
just he and you?
Mr. MacAulay: No. When I met with the president of CUPW,
he had two officials with him, I believe. I believe I had one staff
person. I met him twice. That was the situation both times.
Senator Tkachuk: Was it before Mr. Edmondson was
appointed that all of these meetings took place?
Mr. MacAulay: That is correct.
Senator Tkachuk: What do you think caused the system to
Mr. MacAulay: I believe there was not enough flexibility on
either side. When I made the last-ditch attempt to appoint a
mediator and I met with the CUPW and spoke with officials of
the post office, I was just urging them to become more flexible.
Senator Tkachuk: Do you think it was a failure of
negotiations; or was it incompetence on both of their parts, or on
one of their parts?
Mr. MacAulay: I would certainly never indicate that. As you
are well aware, sometimes things do not work out. I certainly
would not blame either party.
Within my powers, I did everything I could to encourage both
parties to become more flexible. In most cases, it works; in this
case, it did not.
Senator Tkachuk: You had one meeting with the chairman of
the board of Canada Post, Mr. Ouellet. You had one meeting with
the president of the CUPW. You now tell me that you did
everything possible to bring the two parties together. You only
talked to them once, and only for a brief moment with the
chairman of the board is what you said. Were you having
discussions with the minister?
Mr. MacAulay: I met with the CUPW president twice. My
responsibility is not to be mediator but to ensure that all
opportunities are available to both sides to come to a mediated
Senator Tkachuk: Did you tell them that, if they did not
come to terms, they would be legislated back to work before the
mediator was appointed?
Senator Simard: That would be a threat.
Mr. MacAulay: No.
Senator Tkachuk: Did you tell the minister responsible for
the post office that you would be legislating the postal workers
back to work?
Mr. MacAulay: Before I made the decision on Friday and
made a public announcement, I did everything in my power to
urge both sides to get together and to come up with a collective
Senator Sparrow: In answer to the question raised by Senator
Stratton concerning clause 10, which deals with proceedings
being prohibited, you indicated that was a standard provision in
agreements such as this. That "standard provision," as you refer
to it, was not contained in the 1991 legislation. Are we now
establishing another precedent in this particular legislation? It
was mentioned earlier by Senator Oliver that there were only two
precedents. Is this a third one?
Mr. MacAulay: No, it is not. This was used in 1995, and it is
also contained in Part I of the code.
Senator Sparrow: I asked about the 1991 legislation, the last
time they were legislated back to work.
Mr. MacAulay: I understood that you asked me if there was
any precedent for this, and I just indicated that it was used in
1995 and that it is contained in the code.
Senator Sparrow: During further questioning you indicated
that, although you were aware of the unresolved issues, you
could not list them. It would seem to me that you would surely
have asked what the unresolved issues were. If you did ask, then
that information should be available to us. If you did ask and you
did not get that, it seems to me that a decision was to taken to
legislate regardless -
Senator Nolin: Early August.
Senator Sparrow: - of what happened in the negotiations.
That takes away any possibility of free bargaining by the
corporation or by the unions. That is wrong. That is why I
prefaced my remarks earlier by stating that, if that is the case,
then the wrong legislation is before us. If we are to be faced with
back-to-work legislation, then make it an essential service so that
we know and they know where we stand, and so that this service
will not be disrupted in the future.
Some Hon. Senators: Hear, hear!
Mr. MacAulay: The last agreement was reached without a
strike. I certainly would not appoint a man of the calibre of
Warren Edmondson to enter a fray like that unless I felt there was
a reasonable chance that we would come to a collective
In all honesty and fairness - and I think you would have to
agree - I used every tool at my disposal to see if we could come
to a collective agreement. That was what I wanted. The last thing
I wanted was to come in with legislation, but the time has come.
Senator Sparrow: You have suggested that you have used
every tool. What about the unresolved issues? If there was no
possible agreement on these other issues, perhaps they should
have been included in the imposed settlement the same as the
You must have known what those unresolved items were. If
you do know, then you should answer the question of the
honourable senator who asked about those issues. If you do not
know the answer, then I do not think you did everything possible
to resolve this dispute before it got to this stage.
Mr. MacAulay: As I indicated previously, the issue of
part-time workers was one difficulty. Route length was another.
Job security was a difficulty. On wages, they had not reached
agreement. I felt it was important and proper that both sides were
treated fairly in the wage issue. That is exactly why I put the
wage rates in the bill, namely to ensure that CUPW employees
and the company had a fair settlement.
Senator Robertson: Mr. Minister, you said you have used
every tool at your disposal. This dispute with the postal workers
has been going on for a long time, many months. Did you hire
outside labour lawyers to help you resolve this dispute or did you
rely totally on in-house staff?
Mr. MacAulay: Yes, I did hire an outside lawyer. Marc Gravel
is a well-respected, neutral person in mediation.
Senator Robertson: Anyone else?
Mr. MacAulay: He followed my own conciliation officers
who were appointed before Mr. Gravel. After Mr. Gravel failed,
I appointed the Director General of the Federal Mediation and
Conciliation Services, Mr. Warren Edmondson, who is, again, a
highly respected neutral person. He stepped into the dispute to
try to come up with a collective agreement.
Senator Robertson: Mr. Gravel was the only person whom
you employed before Mr. Edmondson?
Mr. MacAulay: He is the only one outside of my own people.
Senator Robertson: Did you employ management consultants
before things broke down?
Mr. MacAulay: My responsibility is to follow the directions
under the Canada Labour Code. I am sure you are aware of that.
Senator Robertson: Yes, I understand that.
Mr. MacAulay: That is exactly what I did. I believe you
would agree that we appointed Mr. Edmondson - this is a
matter of opinion, too - to a situation that was not easy.
Mr. Edmondson is highly qualified. He did everything he could
possibly do but was unable to come up with an agreement.
Senator Robertson: Before Mr. Edmondson, did you hire
anyone beside Mr. Gravel either as a labour lawyer or as a
management consultant? Was he the only one?
Mr. MacAulay: No. As I indicated, I followed the process
under the Canada Labour Code.
Senator Robertson: Are you aware whether Canada Post had
hired labour lawyers or management consultants during that
run-up to what we could call a breakdown?
Mr. MacAulay: Perhaps they did. I am not aware. Possibly
CUPW did, too. That is their prerogative, to hire people to help
in the negotiations.
Senator Robertson: I will reserve that question for the next
witness. He should know about that.
The Chairman: I thank Mr. MacAulay, the Minister of
Labour, and his officials for assisting the committee in its
deliberations this afternoon.
Senator Carstairs: Honourable senators, I would ask that the
Honourable Alfonso Gagliano, Minister responsible for Canada
Post Corporation, be invited to participate in the deliberations of
the Committee of the Whole.
Hon. Senators: Agreed.
Pursuant to rule 21 of the Rules of the Senate, the Honourable
Alfonso Gagliano, Minister responsible for Canada Post
Corporation, and Ms Jane Billings were escorted to seats in the
Senator Carstairs: Honourable senators, Minister Gagliano is
accompanied by Ms Jane Billings, Assistant Deputy Minister,
Corporate Implementation Group, Public Works and Government
The Chairman: I welcome Minister Alfonso Gagliano and
Ms Billings to the Senate. You may make a statement to the
Senate; if not, we will proceed immediately to questions by the
Hon. Alfonso Gagliano (Minister of Public Works and
Government Services): Honourable senators, I thank you for
your invitation. I am here to answer your questions on the grand
Canadian institution it is my honour to be responsible for: the
Canada Post Corporation.
It is most unfortunate that the reason for my presence here
today is a 14-day-long strike by the employees of Canada Post,
members of the Canadian Union of Postal Workers.
For weeks and months, my colleagues and I have worked very
hard to create the environment for a negotiated settlement.
Indeed, this year alone, Canada Post has succeeded in signing
collective agreements with its three other employee unions. I
believe the negotiations turned out to be more difficult because
CUPW still believes that we want to privatize Canada Post. I
have said dozens of times that this is not the case. I said it in
French, English and even Italian. Nothing seems to convince
Again yesterday, during debate in the House of Commons, the
fear of a privatized Canada Post resurfaced. Once again, the
government took clear action by agreeing to a change in the
initial wording of the bill. However, it is important to remember
what the government means by "viability" and "financial
By "viability" and "financial stability," the government means
that Canada Post must operate in a manner that is consistent with
comparable industries in the private and public sector. Canada
Post must have sufficient flexibility to manage its business in a
competitive environment. This means that it must make
acceptable financial returns.
The arbitrator will have to be guided by the fact that the
government has instructed Canada Post to be profitable. This is
the approach of our government.
I am happy to answer any questions that you may have at this
Senator Kinsella: Thank you, minister, for being here this
Perhaps it would be helpful to honourable senators if you
would briefly describe your role as the minister responsible for
Canada Post. In so doing, perhaps you could explain the
relationship that exists between you as the minister and the board
that governs Canada Post.
Mr. Gagliano: As the minister responsible for Canada Post, I
answer to the Government of Canada and to Parliament.
Therefore, I meet or speak regularly with the chairman of the
board or the president of the corporation. I also meet frequently
with the members of the board. As minister, I recommend to the
Governor in Council the members of the board of the Canada
Post Corporation. That is my role.
Senator Kinsella: Within your responsibilities, do you have
any special duties relating to labour relations between Canada
Post and its employees?
Mr. Gagliano: As the minister responsible for Canada Post, I
must assure Canadians that their postal service is adequate.
Therefore, I am concerned that management-labour relations
should function. I was definitely concerned, and I raised these
issues with the chairman of the board.
Senator Kinsella: What class or category of Crown
corporation is Canada Post?
Mr. Gagliano: It is a Schedule II Crown corporation.
Senator Kinsella: As a Schedule II Crown corporation, who is
Mr. Gagliano: Canada Post Corporation, the company, is the
Senator Kinsella: On August 6, 1997, did you have a meeting
with a number of persons, including John Gustavson, president
of the Canadian Direct Marketing Association?
Mr. Gagliano: During that period I met with Mr. Gustavson,
yes. I also had a meeting with the officials of the Canadian
Federation of Independent Business. During the same period -
not on the same day - I had a meeting with CUPW officials.
Senator Kinsella: It is our understanding that Mr. Gustavson
wrote a memorandum subsequent to that meeting on August 6,
1997, in which he stated that you, as minister, said that the postal
workers, should they go on strike, would be legislated back to
work within seven days. Is there any truth to that statement, as
far as you are concerned?
Mr. Gagliano: No.
I met Mr. Gustavson. He came to see me to convince me that
the postal service was an essential service and that we should
withdraw the right of its employees to strike.
I stated categorically that there was consultation two years ago
on the Canada Labour Code. It was made very clear that this was
an issue. The workers of Canada Post have the right to strike, but
I also indicated that, as a government, we have a responsibility to
look after the national interest. We hoped that there would be a
negotiated settlement. However, if there were to be a strike, we
would look at the situation. If the national interest indicated that
we would have to intervene, the government would make a
decision at that time. I never indicated how long the strike would
run before the government would legislate if, indeed, it did.
Senator Kinsella: As the minister for Canada Post, when did
you conclude that there had been a breakdown in the labour
negotiations between CUPW and the postal service?
Mr. Gagliano: During the last month and a half there were
high and low periods. There was a period when I thought we
were close to a settlement, but, all of a sudden, talks broke down.
There were days when I thought we could reach an agreement,
and there were days when talks were not going anywhere,
according to my report. I did not intervene directly in the
negotiation. However, I was in touch with the chairman of the
board to find out how things were proceeding and what was the
possibility of a negotiated settlement. I always told Canada Post
officials that the best settlement would have been a negotiated
settlement. We hoped for that until the last minute.
Senator Kinsella: Approximately when did you advise the
government that they should start preparing back-to-work
legislation or prepare contingency plans?
Mr. Gagliano: That report came from the Minister of Labour.
He had us mediate a report. That is when we all found out that
there was no hope. We were already into the eleventh or twelfth
day of the strike.
Senator Kinsella: Were you aware of the wage offer tabled by
Canada Post on November 24?
Mr. Gagliano: Yes. I was informed before the strike that, in
order to negotiate a settlement and avoid a strike, Canada Post
officials made an offer. At that point, I was receiving reports that
a settlement was possible. Unfortunately, at the end of the
evening, everything collapsed, and the union refused the package
that was made for the sole purpose of avoiding a strike and
having a settlement.
Senator Kinsella: Clause 12 of the bill will legislate a lower
wage package than what was put on the table by the corporation
on November 24. Did you advise your colleague the Minister of
Labour to make a lower offer than what the corporation had
Mr. Gagliano: I did not advise him. The Minister of Labour
took his decision. I indicated that the offer was made with the
firm intention to settle and not to have a strike. After going into
a strike situation, Canada Post would suffer heavy financial
losses. Therefore, I felt it was not fair for Canada Post to
reinstate the same offer after a dozen days of strike action in
which a loss of over $12 million was suffered.
Senator Kelly: May I ask a supplementary to the question just
The Chairman: I will add your name to the list, senator.
Senator Tkachuk: It is all right with me if the senator wishes
to ask a supplementary question of the minister now.
The Chairman: As chairman, I hesitate to get into
supplementary questions because they often lead to other
supplementary questions and take us off the beaten path. I prefer
to stick to the list.
Senator Tkachuk: I will follow up on Senator Kinsella's
question. You said that the settlement was a little lower than the
last one offered because of the losses suffered by Canada Post.
Were you exacting punishment? Was this a punitive measure
because they went on strike and, therefore, the blame was
entirely theirs, not management's?
Mr. Gagliano: No. The wages that are indicated in the bill are
a matter of government policy. They are there to ensure that an
inflationary factor is not triggered, especially when there are
other negotiations going on in the public sector.
Senator Tkachuk: To which salary proposal are you referring
as the one that is inflationary, sir, the one that was offered by
Canada Post prior to the legislation being introduced or the one
that is in the legislation?
Mr. Gagliano: The reason Canada Post made that offer was to
avoid a strike. When the government drafted the bill, it included
the figure of 1.9 per cent and not the 2 per cent. This was
government policy so as not to trigger inflation. It reflects the
average of the industrial index that is made public every month
by Statistics Canada.
Senator Tkachuk: Are you saying that it would have been
triggered by the offer but not by the imposed settlement?
Mr. Gagliano: Yes.
Senator Tkachuk: Did you see the offer before it was made?
Was it made without your authority and, therefore, you did not
know it was inflationary?
Mr. Gagliano: The offer was made without my authority. I
said from the beginning that I would not get involved in the
details of the negotiation. That was Canada Post's offer. I was
informed after that offer was made and it was rejected by the
Senator Tkachuk: We know that the workers went on strike.
Therefore, they have suffered. They have paid the price because
they did not receive their salaries.
You very clearly told Senator Kinsella that the lower offer by
Canada Post made on behalf of the Government of Canada in the
legislation was made because of the losses that were suffered by
Canada Post and it was, therefore, a little bit less than that which
was offered earlier.
How will you make the management, for example, the
chairman of the board, pay for their role in this particular
Mr. Gagliano: With all due respect, I did not say that this was
done to penalize anyone. I said that that offer was made prior to
Senator Oliver: That is not what you said.
Mr. Gagliano: Being made prior to the strike, it was made to
avoid a strike.
Senator Oliver: No.
Mr. Gagliano: However, the union rejected it and there was a
strike. In its legislation, the government put in place a wage that
reflects, first, the industrial index.
Senator Oliver: That is not your evidence.
Mr. Gagliano: It also reflects the government's policy on
wage negotiations with other sectors of the public service.
Senator Tkachuk: Perhaps we can have your answer read
back to us after I ask a few more questions. I know that is not
what you said.
Senator Oliver: He said it was because of the losses at
Canada Post. That is what he said. That is not the reason. So you
punished them under clause 12.
Mr. Gagliano: The offer was made to avoid a strike and to
avoid a loss. Once you are on strike there is definitely a loss.
Canada Post is losing approximately $17 million per day. That is
what I said. It was not meant to be punitive to any one. I am not
in the business of being punitive.
Senator Oliver: However, it was punitive.
Senator Tkachuk: We discussed with the Minister of Labour
the meeting that you had with John Gustavson of the Canadian
Direct Marketing Association. It was stated that Mr. Gustavson
believed that you had indicated to him that there would be an end
to the strike within seven days. Are you saying that you did not
Mr. Gagliano: No.
Senator Tkachuk: Did you not give him any indication of
that? Was he living in dreamland somewhere?
Mr. Gagliano: He might have interpreted my proposal in that
way. I said that the members of the union, the workers at Canada
Post, have the right to strike and that they will exercise that right
if they wish. I believe that was in the month of August. I do not
think we knew at that time whether or not there would be a
strike. I said that if there is a strike, the government will take its
responsibility for the national interest. I did not indicate any
length of time or how long it would last. I indicated that, yes, as
a government, we would be responsible and take our
Senator Tkachuk: Before this meeting with all these people,
did you consult with the Minister of Labour on this matter?
Mr. Gagliano: No.
Senator Tkachuk: Were you speaking on behalf of the
government to these people or on behalf of yourself?
Mr. Gagliano: I was speaking as minister responsible for
Canada Post. They were coming to see me as minister
responsible for Canada Post.
Senator Tkachuk: As minister responsible for Canada Post,
are you the one who would initiate back-to-work legislation?
Mr. Gagliano: No.
Senator Tkachuk: What would be the national interest, then,
that would cause you to think that they would be legislated back
Mr. Gagliano: I said that the government will take its
responsibility and look at the national interest. That is what the
government did. It took its responsibility so many days after all
the conciliation attempts, the arbitration and the mediation.
Senator Tkachuk: Would you tell me how much the chairman
of the board of Canada Post makes?
Mr. Gagliano: It is an Order-in-Council appointment. I do not
know the exact figure, but I can provide it to you.
Senator Tkachuk: Can you have someone get that
information for us now so that we can have it before we leave
here? I should like to know what it is.
Mr. Gagliano: It is an appointment made by Order in Council.
I will have to obtain that figure. I will get it to you as soon as
possible. I cannot guarantee that I can get it at this time.
Senator Tkachuk: I would like to ask about the other board
members. What are the salaries of the other board members of
Canada Post? Do they get paid on a daily or a yearly basis?
Mr. Gagliano: Again, those are Order-in-Council
appointments. I believe they are paid every time they meet.
Senator Tkachuk: Do you know what they are paid?
Mr. Gagliano: Not exactly, because there is a bracket.
Senator Tkachuk: Can you give us an approximate figure?
Mr. Gagliano: It depends on the number of meetings. I
believe they receive between $100 and $200.
Senator Tkachuk: Does your deputy know the answer to that
Mr. Gagliano: Again, I do not set those salaries. It is done by
Order in Council by the Privy Council, and I can ask the Privy
Council for details.
Senator Tkachuk: I hope officials from the Privy Council are
listening and will bring those figure forward. Do you know what
the president makes?
Mr. Gagliano: No.
Senator Tkachuk: How would you know, then, what is
inflationary and what is not?
Mr. Gagliano: As I said, we rely on indicators found in the
material compiled by Statistics Canada, the inflation rate, and the
labour index. All of those are factored in. For a few years now,
we have experienced one of the lowest inflation rates ever. Our
economic system works better, and we want to ensure, as a
government, that inflation remains low.
Senator Phillips: I should like to follow up on the question
raised by Senator Kinsella concerning responsibility for this
I have a publication called The Future of the Canada Post
Corporation prepared by Mr. George Radwanski published in
1966. In chapter 6, on page 63, he discusses the board and the
minister's responsibility. He states that the effect of being
supervised by so many authorities has often been that the
corporation is meaningfully supervised by no one.
Would you agree with Mr. Radwanski's statement?
Mr. Gagliano: Mr. Radwanski wrote a lengthy report, in
which he covered many issues.
The government analyzed the report and drew some
conclusions that gave a mandate to Canada Post to be
commercial and operate in a fair manner. We also gave the
corporation a mandate to freeze the increase of the price of
stamps for two years. After those two years, they must keep any
increases below inflation, continue to be viable and make a profit
so that they can not only pay fair wages but also continue to
operate and invest in new technology and assure Canadians that a
universal postal service is in place for Canadians. We also said
they could not close any more rural post offices. We also said
that Canada Post should not be involved in non-addressed mail.
Those were our responses as a government to the Radwanski
Senator Phillips: Mr. Radwanski states that the corporation is
currently beyond any effective control by the government. It
leaves me rather puzzled as to how you can give all those
directives, if it is beyond the control of the government.
You said that the post office was expected to be profitable.
What is the amount of profit you are demanding this year?
Mr. Gagliano: Subsequent to the new mandate, the
government asked Canada Post to prepare a five-year plan,
ensuring that the mandate is respected. Because of the labour
negotiations, that five-year plan has not been completed.
Therefore, I cannot tell you the exact amount of profit. Since
63 per cent of Canada Post's costs are labour, the labour
settlement has an impact on that five-year plan. However, we
made it clear that we want Canada Post to operate commercially.
Therefore, it must make a return.
If this legislation passes within the nine-day period, whether as
a settlement or as an imposed settlement, we will then know the
cost, and we hope to have a five-year business plan as soon as
possible so that we can assess whether the mandate the
government gave to Canada Post is being implemented in the
way the government wants it to be implemented.
Senator Phillips: Do you operate in much the same manner as
Sheila Copps? Minister Copps has responsibility for the CBC,
but I do not think she issued a directive to the CBC indicating
that they must show a profit, did she? I am curious to know why
the Minister of Public Works and Government Services is asking
the post office to show a profit when Ms Copps is not asking the
CBC to do so.
Mr. Gagliano: Senator, may I say that it is not the Minister of
Public Works who is asking Canada Post to produce a profit; it is
the Government of Canada. This was a government decision after
the review by Mr. Radwanski, and you quoted from the report.
After that review, the government took a decision, and that is the
mandate to Canada Post. As minister responsible for Canada Post
representing the shareholders of Canada Post, that is, the
Government of Canada and the Canadian taxpayer, my
responsibility is to ensure that that mandate is implemented. We
are waiting for that five-year plan to ensure that the Canada Post
administration took the necessary steps to achieve that plan.
Senator Phillips: Before posing my next question, I would
suggest to the minister that, by his frequent statements on the
post office, he is making Ms Copps appear like a saint, and that
is a very difficult job.
I asked the Minister of Labour about compensation for those
who have been financially damaged by the strike, and not only
the strike but also the turbulence that existed in the post office for
at least a month before the strike. Does the government have any
plans to compensate those victims?
Mr. Gagliano: Not to my knowledge.
Senator Phillips: Would you be prepared to recommend to the
government, as the minister responsible, that businesses and
charities that have been severely damaged by this strike receive
Mr. Gagliano: Senator, we have in this country a collective
bargaining process. The employees have the right to strike.
Parliament gave them that right. I cannot see how the
government should compensate people who have some financial
loss because of a strike. There are other strikes. We cannot
compensate for every strike. This is the law of the land.
Let me remind you, senator, that 94 per cent of the labour
disputes have been settled without strike. It is unfortunate that in
the past couple of weeks, or the last month, small businesses,
charities and individuals have lost their jobs and suffered losses
in their businesses, but again, the Parliament of Canada has
passed a law where there is free collective bargaining and the
right to strike, and I respect that right. It is unfortunate, but that is
the way we live in Canada. That is what freedom is all about.
Senator Phillips: I respect the right to strike, but as I told the
Minister of Labour, I find there has been a great deal of callous
indifference and callous incompetence that has caused these
people to suffer financially. I hope you will reconsider your
position. Thank you, Mr. Minister.
Senator Stratton: Minister, thank you for attending. When I
asked Minister MacAulay the following question, he assured us
that you would have the answer. I will ask it anyway, even
though you have told us what the answer is. Can the minister
assure us that André Ouellet, Chairman of Canada Post, will not
receive a salary increase, including bonuses, in excess of those
spelled out in the legislation for Canada Post's unionized
Mr. Gagliano: I believe that the appointment of the chairman
of the board of Canada Post is made by an Order in Council. The
level of salaries are determined therein, and there is no
disposition that I know of that he will get a salary increase.
Senator Stratton: You have no assurance to give to the
Canada Post employees that he will not receive an increase. He
could possibly receive an increase. Is that what you are saying?
Mr. Gagliano: From what I know today as to the way the
rules are set, there is no plan for an increase. The government
can always change an Order in Council, but under the present
Order in Council, there is no increase provision. That is my
Senator Stratton: You are assuming that if the civil service
receives an increase in salary when the wage freeze comes off in
the new year, the chairman will not receive an increase?
Mr. Gagliano: Yes, because he is not part of the public
Senator Stratton: I understand that, sir.
Mr. Gagliano: It is an Order in Council appointment, and in
order to give him an increase, we would have to change the
Order in Council.
Senator Stratton: My question is: Has the chairman's salary
been frozen as long as the salaries of civil service employees?
Mr. Gagliano: As far as I know, there is no change in that
Order in Council appointment and the range of the salary is
established in there.
Senator Stratton: So you are not able to answer the question?
Mr. Gagliano: I am answering the question to the best of my
knowledge. There is an Order in Council.
Senator Stratton: I understand the Order in Council. You are
responsible for the Post Office. You are responsible for the
chairman. You should know the salary of that chairman, and also
what the history of his wage increases or salary increases and
bonuses has been over the course of the last six or seven years.
You give him a performance rating, I am sure. Would you not
know what his salary has been over the last six years?
Mr. Gagliano: I have just been handed a document that says
that the salary range for the chairman of the board of directors is
between $128,000 and $160,000, but I do not know exactly what
the salary is. That is an Order in Council appointment, and those
figures do not change unless the Order in Council changes.
Senator Stratton: The salary increase mandated in this bill is
5.15 per cent over three years. What does this mean to the
average postal worker? Is it $1,000 over three years, or $500? Do
you have any statistics or knowledge of what that would be?
Mr. Gagliano: I will see if my official has any statistics. I do
not have any statistics on hand and I would not like to give you
the wrong figure.
Senator Stratton: Do you know what the average salary is of
a postal worker?
Mr. Gagliano: I can say, senator, that the base hourly rate is
$17.41, and then there is overtime.
Senator Stratton: I understand. So is it $17.41 average?
Mr. Gagliano: Yes. If we add the other premiums, overtime
payments, benefit packages and so on, I think the total
compensation per hour is about $22.38.
Senator Stratton: Roughly $22, so about $40,000 or $45,000
per year. My question then is: If he gets a 5.5-per-cent increase
over three years, he would get around $2500? I am just asking
for a rough figure. "Yes" or "no?"
Mr. Gagliano: I will not argue with the figure. Yes. It is about
Senator Stratton: That is about right. If the chairman receives
a similar salary increase - and I would assume that the postal
workers would want to be informed of this - even at the low
end, then he would get 5 per cent of $128,000. That is a fair
chunk of dough for that man.
Mr. Gagliano: I did not say he would receive a salary
Senator Stratton: I am taking the opportunity to say that he
will. If you look at that in comparison to what the average
worker gets, that is a pretty large disparity. What we need to
know from you, the minister responsible for Canada Post, is that
this chairman will not receive a percentage increase equal to
what the postal worker will receive under this legislation.
Mr. Gagliano: Again, this is an Order-in-Council appointment
and, as far as I know today, there is no plan to give him any
increase. I do not know how I can make it clearer.
Senator Stratton: I perceive from what you have said that
you can give us no assurance that you will be fair and equitable
to the postal worker.
Mr. Gagliano: Of course I will be fair.
Senator Stratton: You are saying to me that there is no
guarantee that the chairman will not receive an increase that
would be disproportionate to what the worker gets.
Mr. Gagliano: To be fair, senator, this is an appointment by
Order in Council. Order-in-Council appointments are made by
the government, not just by one minister.
Senator Stratton: Thank you.
Senator Oliver: I have two questions. They relate to two
clauses in the back-to-work legislation: clauses 12 and 17.
The Minister of Labour told us earlier today that there is no
precedent that he knows of for clause 12 in back-to-work
legislation. The Minister of Labour indicated that clause 12 deals
with rates and the time. It says:
The collective agreement shall also be deemed to be
amended by increasing the rates...
It goes on to set the rates over the next three-year period.
This clause does not support the collective bargaining process.
If you, the government, will not support the collective bargaining
process as indicated by the wage condition in clause 12 of this
back-to-work legislation, why not just take the opportunity to
declare Canada Post an essential service and take away the right
Mr. Gagliano: I have already said that the government
decided to legislate wage increases to ensure that an inflation
spiral will not occur.
Senator Oliver: What is the role of an arbitrator-mediator
then? Is that not what they normally do?
Mr. Gagliano: If you will allow me to respond, the issues in
this dispute involve not only wages. There are issues on work
organization, mail routes, inside workers. The mediator will have
a large and important role in solving this dispute. The
government legislated wages because we have worked very hard
in past years to put our financial house in order. Therefore, we
want to ensure that the inflation spiral does not come again.
Let me also say that the Government of Canada, in giving
Canada Post its new mandate, freezes the price of Canada Post
stamps for two years. After two years, price increases must be
below the inflation rate. The government has acted fairly in my
Senator Oliver: In your experience, has a mediator-arbitrator
ever been able to successfully negotiate a wage increase that kept
in mind the government's guidelines with respect to inflation?
Mr. Gagliano: I do not have the statistics in my hand with
which to answer.
Senator Oliver: I said "within your experience."
Mr. Gagliano: I have no recollection.
Senator Oliver: Is it your view, therefore, that
mediator-arbitrators, when appointed to look into disputes such
as this, do not have the competence to set wages within
Mr. Gagliano: They have great competence. We have very
competent people in Canada, and I am sure the Minister of
Labour will appoint one of the best.
Senator Oliver: Notwithstanding that competence, you felt
you still must put in a clause like clause 12?
Mr. Gagliano: It is for the same reason that we told Canada
Post: Do not increase the price of stamps until two years have
passed and then increase within inflation rates.
We wanted to ensure that the inflation spiral and wage
increases reflect that. The government took its responsibility very
Senator Oliver: You told Senator Kinsella that you are the
Minister responsible for Canada Post and you described to him
your jurisdiction and duties and obligations.
Canada Post employees have indicated that it is their intention
to disrupt business. They have done so at airports in Toronto and
Halifax. How do you intend to stop these disruptions if they
occur on workers' own time?
Clause 17, we were told by the Minister of Labour, is there to
get the workers back to work. As you know, that clause states:
(1) An individual who contravenes any provision of this
Act is guilty of an offence punishable on summary
What contingency plan do you have to ensure that these types
of disruptions do not occur should this bill pass?
Mr. Gagliano: First, I believe that Canadians are responsible
and have respect for the law.
Senator Oliver: Have you read the newspapers?
Mr. Gagliano: We will have to wait and see. I believe that
Canadian postal workers are responsible people and that they
will go back and deliver the mail. The bill has some provisions. I
do not believe any people, including union leaders, are above the
law. If this bill becomes law, I hope they will respect the law. If
they do not, then we have a judicial system in the country that
will follow its course.
Senator Oliver: What is your contingency plan in the event
that the threats that we have read about in the paper do in fact
take place? What is your plan?
Mr. Gagliano: My plan, as a minister, as part of the
government, is to respect the law. I believe the management of
Canada Post will ensure that Canada Post property is protected,
that the mail is delivered and that the workplace functions
normally. We do not expect violence. We believe Canadians are
responsible people and law-abiding citizens. I am sure Canada
Post workers will do the right thing.
Senator Oliver: So you have no plan?
Mr. Gagliano: As I said, I do not run the post office.
Senator Oliver: You described your duties to Senator
Mr. Gagliano: I represent the department. The Parliament of
Canada, sir, decided in 1981 that Canada Post should not be an
agency of the government but a Crown corporation. I am
representing the Government of Canada and the shareholders. I
do not get involved in the daily tasks. I do not supervise the daily
operation. We appoint a board of directors. They appoint
managers. I am sure they have the necessary plan to cope with
Let me reassure you and repeat that I believe Canadians are
law-abiding citizens. They will go back to work if the Parliament
of Canada decides to pass a law that requires that they go back to
work, and they will respect the law.
Senator Oliver: Senator Phillips began to ask you questions
about the number of Canadians who have been hurt by the lack
of action on the part of the current government. Small business
has been hurt by this strike. Charities, cultural groups and many
other groups have been hurt. Hundreds of millions of dollars
have been lost as a result of inaction on the part of this
government. What took so long and why are we just getting this
Mr. Gagliano: We believed that the collective bargaining
process could work and we gave that process the opportunity to
work. When we realized there was no possibility that the two
parties would sign a collective agreement, we intervened.
The facts are there. Government gave the process time to
work, but, after a while, we had to look at the national interest.
Small businesses and charities were losing money. People were
losing their jobs because of that. We are not happy to take away
the right to strike and send people back to work. We had no
Senator Oliver: You have been working on this for more than
four months. You know how important the month of December is
for charity groups, cultural groups and people who want to get
stuff through the mail, through Canada Post. With that
knowledge, why did you take so long? Why did you dilly-dally
before taking substantive action?
Mr. Gagliano: Again, I repeat, we have a collective
bargaining process that works approximately 95 per cent of the
time. Most labour disagreements are settled without striking. We
hoped that would happen again, and we gave the process a
chance to work. The Minister of Labour used all his powers
according to the labour code to appoint a mediator, a conciliator.
Unfortunately, it did not work. When we realized there was
nothing more we could do, the Minister of Labour introduced the
legislation. The House of Commons went through all the stages
in one day, and here we are today.
Senator Nolin: Could you tell us about the collective
agreement, which is no longer in effect?
Mr. Gagliano: The collective agreement expired on July 31. It
was in effect until the date of the strike.
Senator Nolin: I understand it was extended. The contract
Mr. Gagliano: In 1995.
Senator Nolin: So it was a two-year contract. When you were
invested with the responsibilities of the minister responsible for
Canada Post, did you issue instructions to the corporation as to
the conduct of these negotiations?
Mr. Gagliano: My only advice to the president of the
corporation was that they do their best to arrive at a negotiated
settlement. That is the best kind of agreement, because the public
does not have to suffer the consequences of a strike.
The president and the board of the Canada Post Corporation
have to take into consideration the mandate they were given by
the government in early May of 1997. The Canada Post
Corporation therefore negotiated in good faith, in keeping with
that mandate, in order to reach an agreement within the budget
limitations set by the government.
Senator Nolin: So, if I understand correctly, you were
appointed as the minister responsible for the corporation in June.
Mr. Gagliano: Yes
Senator Nolin: The collective agreement was already in effect
at that time.
Mr. Gagliano: And the mandate as well.
Senator Nolin: So a mandate had already been given to the
corporation by your predecessor. Are you aware of its content?
Mr. Gagliano: Yes.
Senator Nolin: And what was it?
Mr. Gagliano: My predecessor made the mandate public.
First, we confirmed the moratorium on rural post office closings.
We said that the corporation should freeze the price of stamps for
the next two years and then increase it, but at a level below the
rate of inflation. We called for the corporation to be managed like
a commercial enterprise.
Senator Nolin: But that was already part of the general
mandate for the kind of relations the government and the
preceding government wanted to establish: commercial relations.
This intention is not new. What was the specific mandate for the
collective bargaining process? You talk about keeping rural post
offices open, and keeping postal rate increases below the rate of
inflation. You must have reiterated this mandate when the new
minister responsible addressed the corporation as a shareholder.
What, more specifically, was the mandate for the collective
Mr. Gagliano: Another example of the mandate was that we
stated very clearly that costs had to remain affordable and that
the corporation should not use its monopoly to finance those of
its activities that are in close competition with the private sector.
That was important and was in the recommendations.
We also said that the corporation had to meet stricter financial
requirements, which would put it on an equal footing with the
private sector. In response to complaints from consumers and the
public, we created the position of ombudsman this fall. The
corporation has already responded to a number of government
requests. Of course it still has to restore relations with its
employees in order to cut costs and improve profits. That is part
of the bargaining process, if you will.
We have repeated frequently, and I mentioned it in my
introduction to you, that the union believed, and continued to
believe, that the government has a hidden agenda to privatize the
Canada Post Corporation.
Both my predecessors and myself reiterated that we had no
such intention. We want the Canada Post Corporation to remain
profitable and to remain a Crown corporation to ensure universal
service. It is our clearly stated mandate to provide universal
postal services to all Canadians, wherever they live, from coast
to coast. Within these limits, the corporation must accommodate
labour costs representing 63 per cent of its total operating
Senator Nolin: Upon your appointment in June, I assume you
confirmed this mandate.
Mr. Gagliano: I should like to point out, if I may, that my
predecessor, as minister responsible for Canada Post acting on
behalf of the government, gave it this mandate, which I naturally
do not have to either confirm or change. This is a mandate from
the government. I continued to ensure this mandate was carried
Senator Nolin: If I am not mistaken, you were the Minister of
Labour before becoming the Minister of Public Works and
Government Services and Minister responsible for the Canada
Post Corporation. It is also common knowledge across Canada
that labour relations at Canada Post are sometimes strained. You
may say this is no longer your responsibility, but I will put the
question to you anyway. As I understand it, bargaining started in
April 1997. After the report, to which my honourable colleagues
referred earlier, was released, it was to be expected that the road
ahead would be rough. In your opinion as former minister of
labour, could it already be anticipated that this round of
negotiations would degenerate into a confrontation, leading to
the sad conclusion we are now witnessing?
Mr. Gagliano: As minister of labour at the time, I met with
union officials who had concerns about the content of the report.
The union still has this fear of privatization. When I was
appointed Minister responsible for the Canada Post Corporation
during the summer, I met with them. Naturally, we had
discussions, and I reiterated that we had no intention of
privatizing the corporation and that the mandate it was given was
If you look at this mandate and the bargaining that has taken
place since April, it is clear that the corporation never gave its
employees the assurance that no jobs would be lost. Job security
is a very rare thing nowadays, even in government. This is very
important. All this to say that they were worried, but we do
believe that, in spite of everything, there is still room to
manoeuver. The corporation needs flexibility, not to lay people
off but to increase its competitiveness and productivity while at
the same time giving some guarantees to its employees. The
negotiation process should reflect this flexibility to meet the
Senator Nolin: In your opinion, does Bill C-24 comply with
the major principles stated in the Canada Labour Code?
Mr. Gagliano: I doubt there is one labour minister in the
world who would like to introduce a bill whose purpose is to
remove the right of workers to strike and force them back to
work. Circumstances are such that, had I been the labour
minister, I would obviously have had to make the same decision.
Overall, and under the circumstances, Bill C-24 does comply
with the spirit of the labour code. The government has a
responsibility to protect the national interest.
I would also point out a new element. There have been a
number of postal strikes over the years, but, for the first time
ever, no replacement workers were used during a postal strike.
A while ago, I met business and union officials and I told them
clearly that if the union decided to go on strike, then there would
be a strike. The labour code gives the right to strike. Therefore,
union members must be allowed to exercise their right. However,
we have a responsibility to protect the national interest. But, for
the first time, no replacement workers were used. The
corporation respected the right of its employees to strike, and it
let them exercise this right without replacing them with
colleagues or other workers while they were on the picket lines.
I feel this goes further than what is provided in the Labour
Code, which you and I, who are both from Quebec, know very
Senator Nolin: Indeed, we know the Quebec laws well.
Mr. Gagliano: So this is something new. I was hoping it
would give good results. Unfortunately, it was not the case.
Senator Nolin: When did you issue the directive enjoining
Canada Post not to use replacement workers during the strike?
Mr. Gagliano: That was this summer, when I met the various
groups including union representatives and business people.
Senator Nolin: In June?
Mr. Gagliano: I do not remember exactly; I would say July or
August. I said that the right to strike exists and that we had to
respect that right.
Senator Nolin: Therefore, at that time, the possibility of a
strike was very real in the minds of the negotiating parties?
Mr. Gagliano: Considering the state of labour relations at
Canada Post, such a possibility is always present. However, in
1995, my predecessor at Canada Post succeeded in signing a
negotiated settlement; so we thought that it would be difficult,
Senator Nolin: Mr. Minister, we have no doubt that this
legislation will force the postal workers back to work,
considering the fines they would have to pay. However, we have
to recognize that labour relations remain strained. As the minister
responsible, what initiatives are you going to take to normalize
labour relations at Canada Post?
Mr. Gagliano: I realize that back-to-work legislation can
create a tense climate. I said it yesterday in the House and I
repeat it here: I intend to meet the parties, that is Canada Post
management and the union, as soon as possible to find solutions
and implement mechanisms so that, after the three-year
agreement provided for in this bill, we can once again enjoy
harmonious labour relations and find a way to protect the rights
of workers so that we will not have to go through a strike every
four or five years, where people are losing their jobs and small
and medium-sized businesses and the Canadian economy are
losing millions of dollars.
As minister, I am determined to address these issues. I have
had discussions with the President of the Canada Post
Corporation and we will work together to find ways to solve all
these problems once and for all.
I had the opportunity to represent Canada Post at an
international meeting of ministers responsible for postal
operations, and there is no doubt that our corporation is one of
the best in the world. If we can solve these labour relations
problems, all Canadians will have a reason to be proud of this
corporation, this postal system; indeed, people from other
countries have congratulated us on our progress over the last
Senator Bolduc: Mr. Minister, in this conflict, the wage
increases offered by Canada Post were higher than those
provided for in the bill. So the employees will be paying. So
there is a cost to be paid by the employees. Members of the
public are also being penalized because they are not receiving
their mail, and this is causing concerns for everyone, including
voluntary organizations, individuals, business, and especially
small business. Do you intend to take measures aimed at Canada
Post management? We are told that the government is basing
salaries on performance, but in this case, performance has not
been great. So do you intend to review the salaries of Canada
Post officials and especially its board members?
Mr. Gagliano: First of all, I would say that it was not the
government that made the offer you are referring to. It was the
corporation that made it as a final offer, to avoid a strike. The
government put in the legislation rates of pay consistent with the
government salary policy. I find it regrettable for everyone, not
just for the minister, but for all officers of the corporation. The
members of the board of directors are appointed by the Governor
in Council; it is their responsibility to administer; there are
officers who take their orders from them, but who run the
corporation on a day-to-day basis. We do an annual appraisal of
all our directors. This appraisal will be done and if disciplinary
measures are in order or performance appraisals need to be
reviewed, I will assume my responsibilities.
I should like to reassure you, however. This is about more than
negotiating a collective agreement. The government gave one of
its corporations, in this case the Canada Post Corporation, the
mandate of becoming more competitive and managing its
revenues from stamps, 50 per cent of its revenues. In addition, its
mandate requires it to act as a commercial corporation, so that is
what it must do, because part of its business is in close
competition with the private sector. The corporation has been
given quite a broad mandate, with very serious constraints, and I
am going to judge them on that mandate. My role, as the
minister, is to assess whether directors have met the
government's mandate. Of course, this mandate was on the
bargaining table. So, to reply to your question, I must take the
mandate into account and judge on that basis.
Senator Roberge: Mr. Minister, you said earlier that you had
met the president of the corporation, Mr. Clermont, and the
chairman of the board, Mr. Ouellet. Have you met with the
Mr. Gagliano: Yes, once this autumn at one of the meetings in
Senator Roberge: During the recent negotiations?
Mr. Gagliano: No, I think it was late in August or early in
Senator Roberge: In what context?
Mr. Gagliano: In a general context as a new minister meeting
the board. We discussed the corporation's major issues, the
negotiations, the mandate.
Senator Roberge: What, in your opinion, is the role of the
Mr. Gagliano: Like any agency, any corporation, its roles are
to review the business plan and give directives and mandates to
the management and operating committees. To date, that role has
been performed well.
Senator Roberge: One of the minister's functions being to
advise the executive, do you not think it would have been
appropriate, in the current context of the probable deadline, for
the minister responsible for the Canada Post Corporation to meet
with the board of directors to give or receive advice?
Mr. Gagliano: As the minister responsible for the Canada
Post Corporation, I am answerable to the government. The
government had given a mandate to the Canada Post
Corporation. I discussed the mandate and the negotiations when
we met at the end of August and the beginning of September.
The situation is unchanged. The government has neither changed
nor withdrawn the mandate. It was my duty as minister to tell the
executive of Canada Post to try to reach a settlement without a
strike, but within the mandate received.
Senator Roberge: I understand, but negotiations are a
constantly changing thing. It seems to me that, if I were the
minister responsible for the post office, I would go and sit down
with the board in order to listen to what they had to say, not just
with the chairman of the board or the president of the
You also said earlier that at one point you were very close to a
deal. What were the outstanding points, as you got close, that led
to a decision to prepare this bill?
Mr. Gagliano: One of the outstanding points related to wages.
I think you heard about this because everything was reported to
the media. The last offer from Canada Post was 1.5 per cent,
1.75 per cent, I believe, and 2 per cent. The union's demand was
still 3 per cent plus inflation, so they were talking about
5 per cent a year. Canada Post could not accept that.
Canada Post asked the union to accept that their members, on
a voluntary basis, request or accept early retirement. It was
voluntary. No one would be forced. Those who would like to
take early retirement would have that opportunity.
Everyone talks about the question of mail delivery and
lunches. The collective agreement - and I should have brought
it with me - is longer than the Canadian Income Tax Act. It
states very clearly that you have to pay for a certain amount of
time - I believe somewhere between 15 and 20 minutes - so
that the letter carrier can come back to the post office for lunch,
and then go back out to his or her route. Canada Post says that
that does not make sense today. They offered to pay the car
expenses of those who own a car if they continue their route
without coming back to the office. That would have saved
Canada Post about $8 million. Those were the items.
Again, the union was not making any concessions because it
feared that the concessions would help the government privatize
Canada Post. For the last month they were only changing text,
but nothing concrete happened. The Minister of Labour had to
realize that the failed negotiations meant that he had to introduce
Senator Roberge: You mentioned the issue of routing, which
affects the lunch break, and you have talked to me about wages.
Were there any other items outstanding at the time that you
prepared this bill?
Mr. Gagliano: There were many items. As I said, the
collective agreement is so long and complex that it looks like the
Income Tax Act.
I will try to answer the question in the best way that I can. I
would, however, remind you that I was not at the negotiating
table. From a distance, I received reports about what was
happening. I was saying that the best way was to settle. The
strike was costly, and we had to make concessions.
In the end, in the last hours, Canada Post made the wage offer
that everyone knows about. There were three or four items. They
wanted an agreement on that and the rest, and then they could
There was also a period where Canada Post offered to have a
permanent negotiating committee for the next three years to
address all these technical issues. You cannot change 300 pages
of a collective agreement in one negotiation.
Senator Roberge: I agree with what you say. I think it makes
a lot of sense. I was trying to find how many points were left on
Mr. Gagliano: Those were the issues. The four major issues
were moving employees from one post to the other, the mail
delivery route, voluntary early retirement, and wages. Those
issues touched a lot of sections and subsections. When Canada
Post put those four issues on the table, I thought there was the
basis for an agreement, but, unfortunately, it did not work out
Senator Roberge: There were those four issues, plus many
jobs as well. If there were so many outstanding items, why were
you sure that you were so close to a deal? Could you explain that
Mr. Gagliano: That is what I was saying. Those were the four
Senator Roberge: Can you explain how close you were to a
deal? You said to us before that you were close to a deal. It was
up and down. Now you say there were four major points plus a
lot of other small points. That testimony does not seem to jibe.
Mr. Gagliano: Again, I was not at the table to judge exactly. I
was told that when those four points were made, there was hope
that there could be some concessions. However, when they got to
the financial aspect of wages, that is when the hope was no
The Chairman: Honourable senators, I have no choice but to
indicate that it is now six o'clock. Pursuant to rule 13(1) of the
Rules of the Senate, I will have to leave the Chair until eight
o'clock this evening unless, of course, there are developments of
which I am not aware.
Senator Carstairs: There is agreement of both parties that we
will not see the clock.
The Chairman: Is that agreed, honourable senators?
Hon. Senators: Agreed.
Senator Sparrow: The discussion today, and this legislation,
leads me to believe that the postal service is considered an
essential service, although that has not been explained entirely. It
is an essential service, but it is a service that is not open to
competition - at least in the financial sense. Could the national
interest be served better by removing the exclusive privilege of
the corporation in its movement of first class mail? As everyone
is aware, private companies must charge at least three times the
rate of a first class letter to compete. If it were further opened up
to greater competition then it would no longer be required as an
essential service because the competition could handle the mail.
Before this legislation was proposed, was consideration given
to removing that special, exclusive privilege of the Canada Post
Mr. Gagliano: This issue is a very complex one.
Unfortunately, every time there is a postal strike we raise this
issue, but once everything goes back to normal, we forget about
I can assure you that I intend to follow this up. As I said
before, if this bill passes, I want to work with labour, with
management and with experts to find a solution. We have a lot of
expertise across this country and we must find a solution to this
As it stands right now, there is a monopoly privilege.
However, it is not the same as it was in the past. The monopoly
does not represent 100 per cent of the businesses served by
Canada Post, it represents approximately 55 per cent, and
45 per cent is in direct competition with the free market. We
must ask how we can give that right to strike while being part of
a monopoly situation.
You raise an important question: By taking away that
monopoly right from the Canada Post Corporation can we be
assured of a universal postal service where Canadians, no matter
where they live - that is, whether it be in the north, in the east,
in the west or in the rural or the urban parts of this country -
will receive the same service at the same prices? I assure you that
it is easy to organize a postal service in Montreal, Toronto,
Vancouver, Winnipeg or Calgary, but for parts of the country it is
very costly to do so. As Canadians, we decided that we wanted to
have a universal service. I do not have a specific solution to this
Our modern society, taking into account our mandate, must
ask ourselves: How can we ensure not only that workers have the
right to collective bargaining but also that Canadians have a
minimum level of service?
Although we failed to reach a negotiated settlement, we were
able to have what I call a "civilized" strike - that is, one where
there was no violence on picket lines as has occurred in the past.
Another thing that happened during this strike, which is very
interesting, and, I hope we can build on that, is that there was an
agreement between management and the union to deliver
cheques to seniors, pensioners, and people in need.
We must put all this on the table and ask all the questions that
are necessary in order to solve this problem. I hope that before
the terms of the next labour agreement expire we will be able to
ensure that Canadians do not have to go through any more postal
strikes as we have experienced in this country in the past - that
is, a total shut-down of the system. That is costly to individuals,
to corporations, and to everyone in our society.
Unfortunately, I do not have an answer. I am aware of the
problems and, as the minister responsible, I intend to address that
as soon as possible.
Senator Sparrow: Thank you, Mr. Minister.
Approximately 45 per cent or 48 per cent of the total
movement of parcels and mail is now handled by the private
sector. There have been few complaints about the level of service
provided in the free enterprise system. Increased competition has
not greatly affected the profits of the corporation. It has not been
detrimental. As you have said, it may not be very detrimental to
consider allowing private corporations to deliver these items.
Since the last legislated settlement in 1991, the post office
guaranteed mail delivery anywhere in the country within
48 hours. From major centres, first class mail delivery was
guaranteed within 24 hours. Since that time, the post office have
stopped making that commitment because they found that they
could not honour it. The general consensus now is that they can
deliver a first class letter in a minimum of five days. However,
many times it takes seven or eight days. At the same time, the
price of postage has gone up 50 per cent since the last imposed
settlement. Why has the service dwindled so badly while the
price of postage has risen?
Mr. Gagliano: I have here the standards for mail delivery.
There may be some cases where the delivery time is longer. We
handle it on a case-by-case basis where it takes longer than the
standards. Presently, those standards are audited by an auditing
The standards established in 1986 are two business days
within the same urban centre, three business days between urban
centres in the same province, and four business days between
urban centres in different provinces. The auditor, Ernst & Young,
has said that those delivery standards are met consistently in
97 per cent of the cases.
Canada Post recently completed a pilot project and has
announced that it will be implementing it on a permanent basis. I
am sure you are aware of instances where people who live in a
small town have sent their letters to a larger city, where it is
processed and it is then returned to that small town. Canada Post
has changed that process. Now mail from small rural centres
must be sorted twice. The mail that remains in the town stays
sorted there overnight and is delivered by the local post office;
whatever is for outside, is delivered there and processed there.
Some progress is being made. We hope that Canada Post can
continue in this vein. They need some more flexibility so that
they can adjust to the modern way of managing. Naturally, as a
government, we want them to manage as though it were a
commercially viable business.
We are making progress. The standards are there. If we can
make the necessary changes in organizing how the work is done,
then I think the service can be improved and the length of time
for mail to be delivered could be shorter. For example, right now,
the collective agreement does not allow workers to be moved
easily from one post office to another. There has to be a
consultation process with the union, and that might take weeks or
We have established an electronic system that we are selling to
the rest of the world through our international branch. Everyone
appreciates the technological developments that we have made.
One is a mail-tracking system by which we can predict where
higher volumes of mail will occur over the course of the next few
days, in which area of the country and at which post office.
If we were able to move our workforce to answer that
overflow, then we could give better service. We now have to hire
others to do that work, as well as having to pay overtime.
That is what all this negotiation has been about. I admit that is
very difficult. It is true that the legislation determines the wages,
as well as the length of time. It is those issues that are at the heart
of the negotiations. We hope the mediator will succeed in that
Senator Sparrow: What minister of the Crown would have
recommended to the government that legislation be imposed?
Would it have been you as Minister of Public Works and
Government Services or would it have been the Minister of
Labour who recommended to your cabinet colleagues that this
type of action be taken? Which department or minister would
have recommended the wage settlement that is contained in this
Mr. Gagliano: Senator, the Minister of Labour is responsible
for the Canada Labour Code. As a matter of fact, I believe four
or five days prior, the Minister of Labour appointed a mediator.
He said that he had sent the best that we have in the country.
As was said before, I was once the Minister of Labour. I have
worked with Mr. Edmondson, who is the best we have. He was
sent to try to settle this matter and report back to the minister.
The minister informed his colleagues in cabinet that he tried
everything and that it was not possible to achieve a settlement.
Therefore, to end the strike, we needed legislation. The
legislation that is before you now is legislation for which the
Minister of Labour is responsible.
Senator Sparrow: Are you saying that you had no input as to
the recommended salary increases that would be legislated?
Mr. Gagliano: Again, as I said, the recommended salary was
part of the government's salary policy from Treasury Board. That
is what was put in the legislation.
Senator Murray: I would like to get a better idea of what the
status of Canada Post is as a Crown corporation vis-à-vis its
minister and the government. Most of us here are old enough to
remember when the post office was a department of government
like any other. There was a minister called the Postmaster
General, a Deputy Postmaster General and a department. The
minister took responsibility and replied on a daily basis in the
House of Commons for the operations of the post office.
Then, early in the 1980s, I think it was, the government and
Parliament in their wisdom decided to make Canada Post a
Crown corporation. I think that was done in order to give Canada
Post the flexibility and autonomy that were presumed necessary
to enable it to carry on its business in a more competitive
If I can believe the findings of Mr. Radwanski in his report to
the government, we seem to have the worst of a number of
possible worlds. The company now has a board of directors, a
chairman, a president and vice-presidents and so on, like any
other company, but it is subject also, not just to you as the
minister responsible, but to Treasury Board, the Minister of
Finance, the Crown corporations directorate and so forth.
Mr. Radwanski finds that the effect of being supervised by so
many authorities has often been that the corporation is
meaningfully supervised by no one.
I have been at another committee meeting, so I would ask you
to stop me, please, if this next paragraph has been read into the
record already. I do not want to be any more repetitive than
Although Canada Post is owned by the government,
operates on the strength of a monopoly granted by the
government, and is perceived as a representative of the
government in its dealing with Canadians, the corporation is
currently beyond any effective control by the government.
I should like to get your view on that as minister. At the same
time, I am trying to get a better understanding of just how it fits
as a Crown corporation. Senator Phillips mentioned the
relationship between CBC, Radio-Canada and their minister. I
am not sure that analogy is quite on the mark. Perhaps it is.
To what other Crown corporation is Canada Post similar in
terms of its relationship with the government?
Mr. Gagliano: The Canada Post Corporation is subject to
legislation covering Crown corporations. You described very
well the structure, senator.
In 1981, Parliament decided that the post office would not be a
department or agency of the government in order that it could
operate at arm's length. There are various types of corporations
for which I am responsible, including Canada Post. There are
about six Crown corporations. They have boards and they
manage their affairs.
Canada Post, naturally, because of the nature of its business,
which is to deliver the mail, which is how Canadians
communicate, has a monopoly privilege. There are always
complaints about the standard of service. In the 1980s, there was
a debate about the rural postal service and super mailboxes.
Canadians are proud of that service. That is why the government,
I believe in 1995 or 1996, mandated a review to see exactly what
was the government position and what kind of postal service
Senator Murray: For how long have you been the minister
responsible for Canada Post?
Mr. Gagliano: Since June.
Senator Murray: Does the finding of Mr. Radwanski conform
to your experience?
Mr. Gagliano: I do not agree with everything he said. It was a
very interesting report. We studied the report and, last spring, the
government took a decision as to what it thought was best for
Canadians. It gave a new mandate to Canada Post. As the
minister, my responsibility is to ensure that that mandate is being
Senator Murray: I just wonder what difference there is
between you and the Postmaster General of 20 years ago. Just
how long is the arm in terms of the arm's-length relationship
between the government and Canada Post? You have the right,
and this is why I think the analogy with the CBC and their
minister does not quite fit.
Section 22 indicates that, in the exercise of its powers and the
performance of its duties, the corporation shall comply with such
directives as the minister may give to it. We know that the
government has given Canada Post a directive to become
profitable. What other directives has the government issued in
last few years?
Mr. Gagliano: Not to close the rural post offices; to freeze the
price of stamps for two years; to increase the price of stamps
after those two years below the inflation rate; to create an
ombudsman to receive claims or complaints and ensure that
Canadians receive the right service and that Canadians can be
heard; and, naturally, to be a profitable corporation.
Senator Murray: That is not much autonomy, is it, minister?
I am not disagreeing, obviously, with the decision, but if you tell
them not to close any more rural post offices and not to increase
the postal rates for some time, you are into micro-management,
and you have the right under the Act to do it. Then you tell them
to be profitable. It really is not a highly autonomous Crown
corporation. You would not compare it to Air Canada, when it
was a Crown corporation, or to CNR, would you?
Mr. Gagliano: The Government of Canada, on behalf of
Canadian taxpayers, is the shareholder. When you are a
Senator Murray: You call the shots.
Mr. Gagliano: Yes.
Senator Murray: What is the advantage of having in place a
Crown corporation, if you are calling the shots?
Mr. Gagliano: The difference between a Crown corporation
and a department is that, with a department, you deal with it on a
daily basis. We gave them a mandate and said, "Here is the
mandate. Give us a five-year business plan, and we want to
Senator Murray: "But do not put up the price of stamps, and
do not close rural post offices."
Mr. Gagliano: Yes, and we also said we want universal
service for Canadians. I believe, and the government believes,
that that mandate is achievable, and I am sure some of the things
are being implemented. Once we solve this labour-management
problem, I believe that plan can be viable. Canadians can receive
a universal postal service no matter where they are, paying the
same prices. All the administrations are doing it. I think we need
to know what the government intends to do as a shareholder,
what type of results it wants to have, and then it is up to Canada
Post management to tell us whether or not that is possible.
Senator Murray: They would not dare.
Mr. Gagliano: We asked them to give us a five-year plan.
Senator Murray: Minister, you obviously have a very
intimate familiarity - I have listened carefully - with the
course of the collective agreement negotiations this time. You
know everything about them. You told Senator Nolin and others
that the only advice you gave to management was to try to settle,
and to try to settle without a strike and, of course, the overall
mandate that they had to be a profitable corporation. How often
did they discuss the collective bargaining negotiations with you?
Mr. Gagliano: I did not discuss -
Senator Murray: Did they report regularly to you?
Mr. Gagliano: No. As you said, and as I said, I am the
minister responsible in the House of Commons during Question
Period, so therefore it is my duty to be informed on the stages of
the negotiation, in order to be able to answer questions in the
House of Commons. The only advice that I gave to Canada Post
was that the best settlement would have been a negotiated
settlement, and that definitely there is the mandate to always take
When I became minister, knowing that the negotiations were
already started, I thought it was my duty to inform myself of the
issues. What I have discussed here is not necessarily what the
issues were. At the end, Canada Post tried to avoid a strike. The
major issues had been put on the table for settlement. Those were
the main issues that I tried to enumerate during Senator
Roberge's questioning. I believe that, as the minister responsible,
it is my duty to know what the issues are, and why we do not
have a settlement. I think I must ask that question, and that is
what I described previously.
Senator Murray: I do not know whether that is the case,
minister. In the case of an autonomous Crown corporation, I
would think that management would be told to conduct their own
negotiations, and that Parliament would be told that management
had the duty and right to do that, period.
Your testimony today, before the committee, has been that the
wage settlements provided for in this bill represent the salary
policy of the government; correct?
Mr. Gagliano: Yes.
Senator Murray: Did you tell the management of Canada
Post, when the negotiations began, that they were therefore
expected to adhere to that policy?
Mr. Gagliano: No.
Senator Murray: You did not try to -
Mr. Gagliano: They offered more than is in the bill.
Senator Murray: They offered more than is in the bill?
Mr. Gagliano: The bill goes up to 1.9, and they offered
2 per cent in the last offer.
Senator Murray: To your knowledge, did any other minister
or official of the government, either the Treasury Board,
Department of Finance, Crown corporation secretariat, or what
have you, give any guidance or instruction to the management of
Canada Post on that matter?
Mr. Gagliano: I am not aware of any. Again, Canada Post
received a mandate from the government, and Canada Post, like
anyone else, can read the amount of the inflation rate, the private
sector index, the public sector index, and I think Canada Post
was trying. Again, I repeat that that offer was made as a last
resort before a strike, so I believe they were doing their best to
avoid a strike within the financial constraints that they had.
Senator Murray: I am sure you have already explained to the
committee why you are punishing them by providing for less in
this bill. Have you?
Mr. Gagliano: I am not in the punishing business. I am not
Senator Murray: You are giving them less than Canada Post
Mr. Gagliano: I repeat, Canada Post made that offer with a
hope. It was a package with two or three major issues to solve, in
the hopes of not having a strike, and not having Canadians go
through what they have been going through in the past 14 days.
As a government, we have a responsibility. We do not want
inflation to start going up, and therefore we are respecting the
inflation and the average that is there. Government is one of the
biggest employers in the country; therefore, I think if we legislate
someone's wage, we must ensure that we can afford to pay the
same increases to the others.
Senator Murray: Minister, that suggests that the government
would intervene anywhere in the federal public sector where they
found that a settlement or wage increase was about to exceed the
guidelines set out in the federal government's salary policy. Is
that your intention?
Mr. Gagliano: Let me remind you that the government
already acted in the past when it froze public servant's salaries to
ensure that we put our house in order.
Senator Murray: I am perfectly aware of those cases and I
am aware of the six-and-five policy back in the 1980s, but is
there such a policy now and the intention to enforce it throughout
the federal public sector?
Mr. Gagliano: I am not responsible for the public service. The
President of the Treasury Board is. However, as a member of the
government, I can tell you that the government intends to keep
inflation low, where it is now, because low inflation and interest
rates are the major factors that have allowed us to put our
financial house in order. We want to ensure that jobs can be
created and that business can continue to do business. As a
government, we want to ensure that we do not start an
Senator Murray: I understand the concern about inflation,
but there are many unions and various employers involved in the
federal public sector. You have a policy, you have stated, and the
reason you have provided for certain increases in this bill is so
that that policy will be enforced. My question is whether you
intend to enforce it throughout the federal public sector and how
you will do that.
Mr. Gagliano: Each negotiation is separate. I think we
indicated the government's intention in this bill, and I do not
want to predict the result of any negotiation that is ongoing. We
will have to wait and see what happens in the other negotiations.
Senator Murray: Yes, we will.
Senator Robertson: Minister, I want to speak of the process
for a couple of minutes. I have been listening very carefully to
your responses this afternoon. They are a bit curious in some
areas, shall we say. You said to Senator Kinsella - and repeated
this and properly so - that you meet on a regular basis with the
chairman, Mr. Ouellet, and members of the board. Then later in
your discussion with Senator Kinsella, you mentioned that it was
only about a month and a half ago that you recognized that there
was the possibility of a breakdown in the near future. That would
be in about the middle of October. Were you given no indication
by the chairman of the board or the board members that the
negotiations were not progressing very well before that time?
Was it only then that you realized that there was going to be a
Mr. Gagliano: I do not know the exact date and I do not want
to give you the wrong date. First, in the early fall, the Minister of
Labour appointed two mediators to help the parties. In our effort
to try to help the parties - I should perhaps not address this, but
since I am a former labour minister I know a bit about it - if the
parties do not want help, the Minister of Labour cannot impose
anything. However, after the mediators reported that they could
not really help the parties, the Minister of Labour had the option,
at that time, of appointing a commissioner-conciliator, which he
did. After a while, the commissioner-conciliator reported that he
could not help the parties come to an agreement. Once that
happened, there was a legal basis for a strike or lockout. There
were different attempts during that period by both parties to see
if they could come to an agreement. Then, when the strike came
about, the Minister of Labour appointed the mediator to see if he
could do something. Again, after a few days, he realized that
things were not going anywhere, and that is why the Minister of
Labour recommended legislation, and we are here.
Senator Robertson: I believe, minister, that all of us here
understand those facts and have been following that progression
with some degree of interest. You have said - and I agree with
you - that we have lots of expertise across the country. During
this period of negotiation, did Canada Post bring in experts, such
as labour lawyers from outside Canada Post, or that sort of
Mr. Gagliano: Yes, the chief negotiator, until that famous
incident, was an outside lawyer. He was the chief negotiator from
the beginning with Canada Post.
Senator Robertson: I ask this, minister, because there have
been comments this afternoon that we are dealing with an
aggressive union. I think most of us have discovered or have
learned over the years that, when you have an aggressive union,
very often you have a management that perhaps is responsible for
the aggression. For instance, if you consider the employees of
Canada Post, I doubt if their work would be more difficult than
that of employees who belong to other unions. I am thinking of
police officers, people who work in fire prevention and fire
protection, the fire-fighters. You can go on and on, if you want
to. You can even consider nurses who put in long hours of work.
There always seem to be methodologies that can be developed
between management and the union that allow more satisfaction,
shall we say, than what we have been experiencing with Canada
You have mentioned that over the next three years you intend
to go through that contract, which is as long as the Income Tax
Act. That will be a big job. Do you plan on having outside
consultants look at the management of Canada Post? You have
heard all the criticism that has been levelled at the corporation.
Do you feel you have to look at it from top to bottom in order to
get the corporation on a steadier basis that will better satisfy the
public and stop these interruptions?
Mr. Gagliano: Yes. There is just one thing I want to make
clear. I do not intend to go through that labour agreement clause
by clause because I believe, as a minister, it is not my role.
Senator Robertson: That is true, but someone would do it. I
do not expect you to do it.
Mr. Gagliano: Labour-management relations are like a
marriage. It takes two to tango. I am not blaming one side or the
other. This is not new. It has been going on for years. For the last
seven years we have not had a strike. We realize, unfortunately,
that there is a lot of work to be done, and I intend to get the best
minds to study this, not only from management and the union but
I want to bring in other experts. We have a lot of experts in
industrial relations in our universities and private-sector firms.
We have to find a way to solve this problem. Yes, you are right,
it should be examined from top to bottom.
The problems are not necessarily only at the top. There are
problems on the floor of the post office, at the different levels of
management. This is the fourth largest corporation in the country
with over 54,000 employees.
It is true that three other unions signed the agreement, but the
major union, which represents about 45,000 of the
54,000 workers, has problems with labour-management relations.
We must find a way to solve those problems.
Senator Robertson: I would certainly hope so, minister.
Certainly you have a large group with whom to contend, but the
public expects more. You will have to analyze management as
well as the union membership and leadership before you achieve
peace. We will be interested to know what progress you make in
Senator Kelly: I wanted to raise a supplementary some time
ago relating to Senator Kinsella's questions and the following
long series of questions about the wage offer in this legislation
being somewhat lower than the wage offer that had been on the
table before negotiations collapsed.
It is my understanding that, at the time management made a
wage offer, which admittedly was slightly higher than the wage
offer in the legislation, it was against a background of requesting
certain flexibility in dealing with the workforce. In the ensuing
three hours you have covered that, but I just wanted to be sure
that my understanding was correct. We were comparing two
wage offers in isolation, which was not totally fair because that
approach did not tell the whole story.
Having waited and listened to other questions, I now have two
other matters to raise. Being somewhat more conditioned in the
corporate world, would you not agree that a board of directors is
responsible to the shareholders. The matters dealt with by the
board as directives are really matters of policy. A shareholder or
group of shareholders has a perfect right to do that; that is the
role of shareholders. By contrast, we expect the day-to-day
management will be carried on by strong, competent,
professional management. Is that not the case?
Mr. Gagliano: Yes.
Senator Kelly: My third question relates to a remark made by
Senator Robertson. I want to add to the causes of aggression
amongst employees. You may not want to agree with this
because it is too pointed, but very often aggression occurs
through the very active participation of union leadership, as
opposed to union membership.
For a period of years membership became concerned about the
overly aggressive stance taken by the leadership, which did not
reflect the feelings of the general rank and file. That may not be
the case in this instance. I do want to add to the possible reasons
for aggression, overenthusiastic leadership.
Mr. Gagliano: Thank you, senator. You will understand that I
would not like to pass judgment on the union leadership
Senator Kelly: I do not think you should.
Mr. Gagliano: As Minister responsible for Canada Post, I
must pass judgment on the management side. I will try to stick to
that and ensure that I stay out of trouble. Hopefully, within the
next 90 days, if this bill passes, we will have a negotiated
settlement. From there we must build good management
relations. I hope you appreciate that I am specifically trying not
to answer your question.
Senator Kelly: I was offering a personal opinion. Thank you.
Mr. Gagliano: I appreciate it. Thank you.
Senator Lynch-Staunton: I should like clarification, minister,
on an answer you gave to Senator Murray regarding the
determination behind the raises of 1.5 per cent, 1.75 per cent and
1.9 per cent over three years.
Did I hear you say that this was the result of the government's
determination to keep inflation down?
Mr. Gagliano: Yes. The inflation rate in the country is below
2 per cent. The average industrial labour sector increases is
below 2 per cent. That is why the government went as far as
1.9 per cent.
Senator Lynch-Staunton: Will that be the determining factor
in all labour relations with public service unions that will start in
earnest next year?
Mr. Gagliano: No.
Senator Lynch-Staunton: You say "no," but you just said that
the determination to keep inflation below 2 per cent is so strong
that, even in negotiations for wage settlements, that will be the
main preoccupation and, therefore, this settlement may set the
pattern for future settlements.
I will answer my own question and I hope you can contradict
it. It seems as if you are setting a wage policy that you are
imposing on future negotiations.
Mr. Gagliano: I am saying that inflation is below 2 per cent.
As a government we want to ensure it stays below 2 per cent.
Senator Lynch-Staunton: Is that so even at the expense of
those who have not received a wage increase for the last
six years? We have had a wage freeze, as you know, minister,
introduced by the Progressive Conservatives, which lasted three
years. That freeze was extended by your government for three
years. Unless you fall within a certain category and can capture
an increase within the category, your wages, effectively, have
been frozen for six years.
Mr. Gagliano: Let me remind you that Canada Post
employees just got a 2-per-cent increase in February. I would
restrict my comments to the area of my responsibility. The
government wants to keep inflation low. Currently, public sector
negotiations are underway. Those negotiations will continue and,
when they are completed, the government will take its decision.
Right now, this bill addresses the postal situation and,
therefore, I must disagree with you. Canada Post employees got a
2-per-cent increase in the month of February. We are offering
another 1.5 per cent whenever the contract is signed, and
1.75 per cent and 1.9 per cent in the next two years. There is
protection in the clause regarding inflation increase should the
rate rise. We want to ensure that inflation stays low.
Senator Lynch-Staunton: You said it is the policy of the
government to keep inflation as much as possible at 2 per cent or
lower. Therefore, the pattern that you are asking us to legislate
today is one that, no doubt, you will want the government to
follow in its other wage negotiations with other employees.
Mr. Gagliano: I cannot predict what the negotiations will be.
Senator Lynch-Staunton: I am asking about the
Mr. Gagliano: Presently the government is faced with a postal
strike and the government wants to ensure that inflation does not
go out of control, so it set those wage rates in its legislation. I
would remind you that the freeze has been broken and some
adjustments to salary have already been made. The public service
is now negotiating, and I would like to stay out of those
If we arrive at a negotiated settlement, then we will judge it.
Unfortunately it did not work with the post office. If they had
accepted the negotiated settlement, they would have received the
2 per cent.
Senator Lynch-Staunton: You are giving them less. You are
delaying the modest increase by six months. The post office
offered to make it effective retroactive to the expiration of the
contract on July 31. This bill stipulates that they will get the raise
at the beginning of February. They are being penalized by having
to wait six or seven months. Why did not you make it effective at
the end of the last contract?
Mr. Gagliano: We are saying that they will get their increase
when they reach a contract. In the legislation there is a 90-day
period, that is why the February date is there.
Senator Lynch-Staunton: It has been done before, but it is
horrendous legislation, no matter how essential the service, when
it is motivated by a profit factor and the priority of the
government is more to make a profit out of an essential service
than to give some reasonable increase to at least allow the
discussions regarding the labour contract to go on.
This goes beyond this particular issue, but I find it hard to
accept. We have been through this before, whether with rail
workers or dock workers. We allow them the right to strike, and
then, when the strike goes on for too long by somebody's
determination, we tell them they do not have the right to strike
The government should find a new method of proper
negotiation with a public less perturbed than it is now and allow
normal negotiation to take place. Either you take the right to
strike away or you find a new way of doing it. This is the worst
I am not defending the union. They have been reprehensible in
the way they have behaved. If they come here tonight I shall tell
them that. However, this is just a charade. Six months have been
lost and we come to this stage and end up with an arrogant
government, an unhappy union and members, and a management
that becomes a tool of this law, in effect.
The Chairman: Mr. Minister, do you wish to respond?
Senator Gustafson: Minister, in regard to wages, did you
draw a comparison between the postal workers and other sectors
of Canadian workers?
Mr. Gagliano: As I said before, we are dealing with the postal
workers right now and other sectors are negotiated under their
In setting the wages in this bill, we took into consideration the
industrial index factor, which is published on a monthly basis.
That is what is reflected there.
Senator Gustafson: Do you not compare sectors of the
Mr. Gagliano: The labour index compares all the sectors,
public and private, and that is what we took into consideration.
Senator Gustafson: What about different regions of the
country? Does a letter-carrier in Saskatchewan get the same pay
as a letter-carrier in Toronto?
Mr. Gagliano: I believe so; however, I do not have that detail.
I believe it is the same rate.
Senator Gustafson: You have not investigated that?
Mr. Gagliano: No.
Senator Phillips: Minister, I have been informed that the
union has announced that, regardless of what happens in this
chamber today, they will go back to work tomorrow. In view of
that announcement, does the minister still consider this
legislation essential and, if so, why?
Mr. Gagliano: I do not know. I am glad if they are going back
to work tomorrow because Canadians will have a postal service
sooner than I expected. However, there is no new contract, so we
are where we were 14 days ago. What happens if two weeks
from now they decide to go on strike again? Legally, they can go
on strike. They can go in tomorrow and the day after that they
can go out again.
It is important that this legislation pass so that the Minister of
Labour can appoint a mediator and perhaps something will come
out of that process over the next 90 days that we can work with.
I agree, senator, we definitely cannot continue like this. Every
time we try - and different governments have tried to
modernize the postal service - we are forced against a wall. We
must look into it. We hope that we can get better
management-labour relations and that Canadians will not have to
go through this again. However, I believe that does not change
The decision of the union is very welcome. I am sure Canada
Post management will welcome them back and hopefully postal
service will resume by Friday, if it is possible, or even by
Senator Phillips: Minister, I will now drop the other shoe.
They have announced that they will be offering a postage-free
period. In other words, if you mail a letter without a stamp on it,
the workers will ensure that it gets through. How does that tie in
with the legislation and your instruction that the post office be
Mr. Gagliano: I believe that announcement by the union is
illegal. It is irresponsible for any union or Canadian to encourage
Canadians to participate in postal fraud or other illegal acts.
I believe that Canadians are law-abiding citizens and their
workers will respect the law. I am sure Canadians will mail their
letters and Christmas cards with the appropriate postage, but,
again, we will have to wait and see what happens.
Senator Nolin: When you spoke about greater flexibility in
the use of the labour force, you spoke of a program that would
permit you to forecast fluctuations in service requirements. Were
you referring to a region, like Montreal for example, or the entire
Mr. Gagliano: The entire country.
Senator Nolin: So if, within a ten-day period, demand were
expected to increase at the other end of the country, say in
Vancouver, you could take employees from Toronto and send
them to Vancouver. That is not what you mean, otherwise I
would understand why they are striking.
Mr. Gagliano: No, it is within a region. At the moment the
collective agreement provides for a radius of 40 kilometres. The
consultation process for reaching a decision is too long. In the
private sector, a decision that takes too long hurts business.
Senator Nolin: You are saying that, within a radius of
40 kilometres, if you foresee an increase in demand for service in
one postal station, you take employees from Station A, for
example, and move them to Station B.
Mr. Gagliano: Yes. Take Montreal, for example. There could
be an increase in the west end of the Island of Montreal. We
could take employees from Montreal's east end and send them to
work in the west end.
Right now, a series of consultations and measures are provided
for in the collective agreement. Last year in Toronto, for
example, 47 people were laid off. The agreement provides for
consultations by seniority. After seven months, they had
managed to place only four. It will take another six months to
finish the job. It involves establishing a classification, that is,
moving personnel because 47 positions were abolished. Nobody
loses their job, but people have to be reclassified and reassigned.
The way the consulations are described in the collective
agreement makes the process very difficult. This sort of system
slows down the corporation's decision-making process and
prevents it from being profitable and competitive. No one is
getting fired. Everyone who has a job at the Canada Post
Corporation will be kept on, unless they want to take their
Senator Nolin: So I presume that was one of the items not yet
Mr. Gagliano: With a major financial impact, yes.
Senator Nolin: Am I to understand that you are guaranteeing
us that, with the exception of article 12, all the rest remains to be
negotiated between the parties as part of the normal collective
Mr. Gagliano: Apart from the length and amounts, the rest is
under negotiation. For example, if agreement is reached before
the mediator imposes a settlement, I hope that would still be the
The Chairman: Honourable senators, I have completely
exhausted the list of senators who wished to speak. It only
remains to express our sincere appreciation to the minister for
agreeing to appear before the Senate. I also thank his adviser. I
would now ask Senator Carstairs to introduce the next witnesses.
Senator Carstairs: I would ask honourable senators that
George Clermont, the Chief Executive Officer and President of
Canada Post Corporation, and Raymond Poirier, the chief
negotiator, be invited to participate in the deliberations of the
Committee of the Whole.
The Chairman: Is it agreed, honourable senators?
Hon. Senators: Agreed.
The Chairman: Thank you, Mr. Clermont and Mr. Poirier, for
agreeing to take part in the Senate's consideration of the bill in
Committee of the Whole. I am first going to ask you if you have
a statement to make.
Mr. George Clermont, CEO and President of Canada Post
Corporation: It is a great honour for us to be here in this historic
I only wish the circumstances could have been different.
Canada Post's management and board of directors are profoundly
disappointed that Parliament has had to legislate a return to work.
I want to assure you that we had a total commitment to a
negotiated settlement, and I personally and truly believe at this
time that a negotiated settlement was possible.
I am an optimist by nature and I have remained one throughout
the many months of these negotiations. For many years now, we
have been trying to improve our relations with employees, and
although appearances may perhaps be against us today, I think
we have accomplished a great deal.
Have we not managed to sign three collective agreements this
year? We were hoping to make that four out of four, but that was
unfortunately not possible.
We decided early on and told CUPW that we would not use
replacement workers to move the mail in the event of a strike.
We did say that wages and job security would not be rolled back,
but we also said that we needed some changes - changes that
would ensure Canadians continue to have a universal postal
service at an affordable price; changes that would ensure the
competitiveness of the Canada Post Corporation.
These changes were modest. We wanted to be able to assign
surplus employees to where the work is. No one wants a situation
where employees are sitting around with nothing to do. As well,
we wanted to change the delivery system so that letter-carriers
could cover a few more addresses during their working day.
These small changes add up to big savings, savings that could
be used to fund wage increases, service improvements and the
costs of a system that is expanding by 175,000 new addresses
The union chose to interpret this as an attack on jobs. It is not.
We want to grow the business and have a secure basis for the
jobs we now have, and that could be created in the future if we
remain competitive. We may have a monopoly on letter mail, but
in today's world, that, as well as every other service, faces
Our future is tied to customer service and customer loyalty,
and that is why I was deeply disturbed to hear the union's
leadership threaten some of our largest customers with retaliation
because they support a more productive and efficient postal
Fortunately, I know that our employees are more realistic and
have not lost sight of the fact that, without satisfied customers, it
is illusory to talk about job security. Their wish continues to be
to serve Canadians to the best of their ability. Furthermore, that
is what we all wish to do.
I want to assure honourable senators that Canada Post will
make every effort to quickly restore full postal service to all
Canadians should this bill be passed. We have thousands of
people anxious to get back to work.
I want to assure senators that Canada Post will participate fully
in the process established by this bill to finalize our contract with
the Canadian Union of Postal Workers, and that our corporation
will continue to make every effort to build a better climate for
relations between the Canadian Union of Postal Workers and
Senator Kinsella: Could you describe briefly the day-to-day
operational relationship between you, as senior managers, and
the board of directors of the corporation?
Mr. Clermont: The board of directors is responsible for the
policy-making of the corporation and for the management, in a
general fashion, of the corporation, as is the case with any
corporation, I assume. As managers, we are responsible for the
day-to-day operations of the corporation.
Senator Kinsella: Did you submit the proposal that you were
intending to bring to the table in your negotiations with the postal
workers' union to your board of directors prior to its being tabled
in your negotiations?
Mr. Clermont: Yes, we did. We received a mandate of
negotiations from the board of directors in the early spring.
Senator Kinsella: Was there ever any discussion with your
board or amongst yourselves as to the possibility of back-to-work
legislation being introduced, should you fail to reach a collective
agreement with your employees?
Mr. Clermont: We were very confident that we would reach
an agreement. We had reached an agreement with that same
union in 1994, and we had settled three major collective
agreements with three other unions during the year 1996-97. We
were quite confident that we could reach a settlement this time
also. At the time when we received a mandate from the board,
there was no thought of back-to-work legislation.
Senator Kinsella: When was the first time that the idea of
back-to-work legislation was discussed amongst senior
Mr. Clermont: Maybe three weeks ago.
Senator Kinsella: Three weeks ago. Would that have been
prior to November 24?
Mr. Clermont: Roughly around there. I think it was in
mid-November or early November, when the negotiations were
at a stalemate. I called on Mr. Tingley, the President of the
Canadian Union of Postal Workers, in an effort to try to resolve
this impasse. We spoke that day on the phone, and subsequently
met on that day and talked about a possibility of fast-tracking the
negotiations so that we could perhaps have an agreement by the
end of that week. These have been very hectic weeks. I think it
was November 13.
Senator Kinsella: Were any discussions held prior to
November 24 on the subject-matter of back-to-work legislation
with the Minister of Public Works or any officials from that
Mr. Clermont: Not to my knowledge; not specifically.
Senator Kinsella: Could you advise the honourable senators
as to how many items were left on the table when negotiations
Mr. Clermont: Mr. Poirier, the chief negotiator, will answer
Mr. Raymond Poirier, Chief Negotiator: At the end of
November, when talks broke off, there were still 24 items on our
demand, and for the union, 36 items.
Senator Kinsella: One of those items was wages?
Mr. Poirier: Wages and COLA, yes.
Senator Kinsella: On November 24, did the corporation make
a proposal that is effectively far more generous than the proposal
that is contained in clause 12 of this bill?
Mr. Poirier: The proposal we made on that date was half of
1 per cent, 2 per cent in the third year, as compared to the
1.9 per cent that is contained in the bill. This was put to the union
in the context of a settlement at that time, in order to avoid a
potentially costly strike. It was tied to a number of other
proposals that were made to the union at the time, most of which
have so far remained unanswered.
Senator Kinsella: Clause 12 of this bill proposal, on wages, in
effect is significantly less than your last offer on wages. Were
you consulted on this matter at all? Was your position known to
the Ministry of Labour?
Mr. Clermont: No. We had talked to the Treasury Board early
in the negotiating process to give them an idea, as a shareholder,
where we were going, but we did not review with them each and
every step of the process. The offer we made, accompanied with
a number of other proposals, included - and this is perhaps what
the honourable senator is referring to - an increase as of
August 1, but that was in the spirit of compromise, to avoid a
strike. The fact is that the members of that union, our colleagues,
did get a 2 per cent increase on February 1 of 1997.
Senator Kinsella: Either under your November 24 last wage
proposal or the imposed wage settlement that this bill is
proposing, how does the magnitude of the increase - either the
more generous one that you brought to the table or this one -
compare with salary increases for the management cadre at
Mr. Clermont: Our management cadre have not had an
increase in four years. The salaries have been frozen for the last
Senator Kinsella: Are there any performance bonuses
available to management?
Mr. Clermont: There are performance bonuses available, yes.
Senator Kinsella: What would be the percentage of salary
that such performance bonuses would represent?
Mr. Clermont: It would depend on the function of the
employee. It varies from 10 to probably 20, 25 per cent. These
performance bonuses are tied to some strict guidelines, such as
achievement of the financial targets and achievement of the
service performance target, which is 97 per cent on-time delivery
as measured by Ernst & Young. There is a part based on
improvement in customer satisfaction and a part based on
Senator Kinsella: What is the size of the management group
at Canada Post?
Mr. Clermont: Roughly 2,500 excluded people. Some of the
unionized people do share in these incentive plans.
Senator Kinsella: Do any of the members of the board of
directors share in the incentive plan?
Mr. Clermont: No.
Senator St. Germain: As you gentlemen know, the Minister
of Labour appeared before us earlier today. The questions that
some of us put to him relate to the legislated wage settlement that
is less than the amount that you had negotiated. As you point out,
other items were attached to that offer, but it was done in the
spirit of trying to avoid or avert a strike.
Obviously, you have gone through some very tense and
emotional negotiations. We now have a situation where these
people are being legislated back to work, believing, I am sure, in
a lot of cases, that they are being forced to accept a wage
settlement that is arbitrary on the part of the government. You
will still have to face these people tomorrow, or whenever they
return to work.
I have a limited experience in labour relations, but I draw on
the experience of people like Senator Lawson, who was put here
because of that experience, and others. I should like your opinion
as to how you will deal with this situation.
If I, as a postal worker, had been offered something and later
learned that I would be locked into something less for a
three-year period by virtue of legislation, I just do not know how
I would react. I am from British Columbia. People out there are
aggravated at everyone. How will you manage this? How will
you make these people understand that they must accept this
legislated solution and that it is arbitrary?
Mr. Clermont: Certainly it will not be easy. It is a challenge
for us. I believe that, in the last five or six years, we as managers
have put much emphasis on employee relations. It is important
here to distinguish between labour relations and employee
relations. The employee relations that we have put so much effort
into are the direct contacts with our employees, whether they be
of this or that union or whether they are unionized at all. I have
personally met thousands of employees on every shift across the
country. It is not easy. There is resentment there, but I am
gratified to say that I think we have made headway. I receive
hundreds of personal letters and phone calls from employees who
have problems every week, hundreds a week, and I answer each
of them personally. I think this has born fruit.
Four years ago, we decided that we would spend $55 million a
year in training. To that end, we formed the Canada Post
Learning Institute, which has so far given courses and lectures
and seminars on customer relations and on interpersonal relations
to more than 25,000 of our employees.
Rome was not built in a day. A great deal of resentment was
built up in Canada Post. I will not judge as to who is to blame for
this, but we as managers have taken our responsibility in hand.
We have put our human resources as our first priority because we
firmly believe in the theory that, to be financially viable, you
need satisfied customers, and you can only get satisfied
customers if you have well-trained and satisfied employees. That
has been our focus in the last several years, and that will continue
to remain our focus.
We have, as we speak, started some video training of
supervisors and superintendents and plant directors, and each and
every one of us will be out there to welcome our colleagues back
to work. I firmly believe that the great majority of our colleagues
want this corporation to succeed and to be a winner in the end,
because they believe that, without customers, there is no job
It will not be easy, but it is feasible.
Senator St. Germain: I hear what you are saying. However,
having said that, considering where you stand with your relations
right now, looking on as an outsider, it is hard for me to believe
that anything has been done at all, which is why I must ask you
this particular question: Were you people consulted as to the
salary in the drafting of the legislation?
Mr. Clermont: No, we were not.
Senator St. Germain: My final question, Mr. Chairman, is
this: When you talk about the corporation, are you speaking of
viability or profitability? I believe there is a difference. Has the
government or have previous governments given you a mandate
centred on profitability that is possibly causing some of the
anguish and the problems within the corporation, or are you
operating for a period of time on the basis of viability with a
view to profits in the future?
Mr. Clermont: It is all a matter of definition, but we feel, and
this is the mandate we received, that in order to provide service,
to improve service, to invest in research and development of new
products and services, to raise and to modernize the equipment
that we use, for which we need capital, we should generate
enough revenue, enough earnings, to provide for that at no cost
to the taxpayers.
The government has asked, or at least these were the
recommendations of the mandate review, that we provide a
dividend to the government, the shareholder, which every one of
our competitors does as well.
Senator St. Germain: You are saying profitability, then.
Mr. Clermont: Indeed, inasmuch as profitability is required,
we invested in the mid-1980s in multiple line or character
readers. We invested in equipment that was very modern for the
day, but it will become obsolete someday.
We have bought flat sorting machines in the last two years that
have cost us $120 million. We need the funds to buy that
equipment in order to be competitive.
Senator St. Germain: What do you expect for a return on
investment or as a profitability factor?
Mr. Clermont: The mandate review recommended that a
return of 10 to 11 per cent on the equity would be adequate. We
have not yet finalized a corporate plan and have not finalized the
financial structure or framework within which we will operate
for the next five years. That has yet to be done.
Senator St. Germain: Do you include labour in any of these
decisions at all? How will you achieve these targets?
Mr. Clermont: Labour forms 63 per cent of our costs, so we
are concerned and aware that labour must be a part of that.
Senator Lynch-Staunton: You mentioned, Mr. Clermont, that
you had settled three out of four major labour agreements. Are
the three that were settled on the same basis as this?
Mr. Poirier: It is below the 2 per cent range for the three
Senator Lynch-Staunton: For a three-year period?
Mr. Poirier: Yes.
Senator Lynch-Staunton: So this one is within the range.
Mr. Poirier: It is within the same range, yes.
Senator Lynch-Staunton: I am not convinced that the post
office should be a profit centre. I do not want to get into a
philosophical discussion, but I think it is such an essential service
and so many people depend on it that it should be considered an
essential service before a profit centre. What is the experience
elsewhere in the world? How do they consider a post office in the
United States, Germany, or Japan? Is it considered a profit centre
before it is considered a public service? The two do not
necessarily go together.
Mr. Clermont: Things have evolved drastically in the last
10 years, perhaps. In most countries in the industrialized world
today, the post office is looked upon as a profit centre. It is
required to earn an adequate return on investment.
In one case, it has been privatized, and that is in the
Netherlands. In 1998, the post office in Germany will be
privatized by 50 per cent. In the UK, of course, the Royal Mail
generates about £300 million to the British treasury per year as
profits. The French post office has not managed to generate a
profit but is mandated to do so. The post offices in Australia,
New Zealand and Argentina have all been mandated to earn
commercial rates of return.
Senator Lynch-Staunton: The most successful countries you
mentioned are those with a small land mass and a relatively large
population. It is easier for them to meet those goals than it is for
this country, where we have more difficult geographical and
population factors. How much does that requirement for
profitability affect the service that you should be giving? I am
not going back to when we had two deliveries a day, and even
one on Saturday. I should like to think we could go back to the
times when we had, perhaps, a little faster receipt of mail from
Montreal to Toronto, or even from Magog to Georgeville.
Mr. Clermont: Magog to Georgeville will improve drastically
under a new system that we will be putting in place very soon.
Our standards between major centres - at 97 per cent for
two-day, three-day and four-day delivery - are certainly
amongst the highest in the world, I must say. To achieve
97 per cent for two-day delivery, you have to have at least 75 to
80 per cent next-day delivery, statistically. Two days ago, I was
reading a bulletin of the European Commission which said that
they will require that 80 per cent of the trans-European mail -
and I would say continental Europe is probably the size of
Canada, perhaps even smaller - reaches its destination in major
centres within three to four days. I believe that we are not that far
off the mark in this. The measurement is done by Ernst & Young.
Senator Lynch-Staunton: In the countries you mentioned
where the concept of profitability or break-even is a requirement,
do the employees have the right to strike? Perhaps I should put it
the other way: What other countries have a postal service with a
right to strike?
Mr. Clermont: I believe, senator, that the United States is the
only country in the industrialized world that does not have the
right to strike. The others all have it, and they use it.
Senator Lynch-Staunton: Maybe this question is for you,
Mr. Poirier. How much latitude do you have in the negotiations,
since you are really acting for the government? The government
is your only shareholder. Whether you have a board of directors
or not, you are answerable to the government. Is the government,
in effect, directing you in your negotiations?
Mr. Poirier: No.
Senator Lynch-Staunton: What latitude do you have, as a
representative of a major corporation, a major employer,
knowledgeable of the day-to-day activities? Are your hands tied,
or is your negotiating ability limited by the government's broad,
general wage policy and inflation policy?
Mr. Poirier: In my case, I receive my mandate from the
Senator Lynch-Staunton: Maybe the president could answer.
From whom does he get his mandate?
Mr. Clermont: I get my mandate from the board of directors,
Senator Lynch-Staunton: The minister, Mr. Gagliano, told us
that these wage increases over three years - 1.5, 1.75,
1.9 per cent - were largely determined by the government's
hope to see that inflation would remain at 2 per cent or less.
Surely, if he has told us that, you must have been told that, too, in
your negotiations with your union before we had to come to this
Mr. Clermont: We were very much aware, and have been
throughout from the conversations we had way back in the spring
with Treasury Board, that the government was concerned about
the type of increase we might give our union. We were very
much aware that this was a concern. If Mr. Poirier had asked me
whether he could go to 3 per cent or 4 per cent, he would not be
Mr. Poirier: Thank you.
Senator Lynch-Staunton: I think that answers my question.
Looking down the road, since the postal rates are frozen for
another two years or so, what are you planning?
Mr. Clermont: I am sorry, senator, I missed your question.
Senator Lynch-Staunton: Are postal rates going to be frozen
for another two years?
Mr. Clermont: Yes.
Senator Lynch-Staunton: Will you be announcing increases
Mr. Clermont: Absolutely not. The government announced
last spring that there would be no increase before January 1999.
Senator Lynch-Staunton: They are frozen now, but what
about after January 1999?
Mr. Clermont: We will see after January 1999. We have not
yet set up our five-year plan.
Senator Lynch-Staunton: I guess what I am saying is that
you do what you can, but you are really limited by the
government's policy, and when governments change, maybe your
priorities need to change, too. You do not have the independence
of running the operation and the corporation, which perhaps you
should have, considering its magnitude and importance.
Mr. Clermont: With respect, I do not agree with that, senator.
Senator Lynch-Staunton: I do not want to put answers in
your mouth, sir, but I suspect if you had a little more
independence, you would be a little more effective. You do not
have to answer. I saw the nod but it is not recorded.
Mr. Clermont: I was nodding to Mr. Poirier.
Senator De Bané: I must admit that I was very surprised this
evening to hear some of my colleagues making a distinction
between viability, the break-even point, on the one hand, and
profitability, on the other hand. I have a hard time understanding
how an operation can be viable, sustainable, competitive and not
profitable. We are entering a communications era where huge
investments will be required.
I was reading an article this week on a company like Federal
Express and the billions it spends - $3 billion alone on
computer technology every year. We think we can do the same
by breaking even without making a profit. What planet are we
Recently, Gordon Ritchie was quoted in The Globe and Mail
as saying that the collective agreement of the Canada Post
Corporation was probably the most restrictive in North America.
A few years ago, a journalist who managed to get into the
Toronto postal station for a two-week period reported that he was
not permitted to speak to management and was required not to
work too quickly. I read these days in the paper that, under the
collective agreement, Canada Post cannot evaluate employees'
performance. I would like your comments on the objectives of
the bill, which require the mediator to take the corporation's need
for profitability, efficiency and competitiveness into account.
There are five or six criteria. Could you tell us about some of the
current bottlenecks in the agreement that oblige the corporation
to assume 63 per cent of the costs and become much more
effective, like other Canadian companies?
Mr. Clermont: I do not want people to think that postal
workers, my colleagues, are not hard-working. They are
excellent workers, they do their best and they do it with great
What we are looking for in this round of bargaining and in
those to follow is more flexibility. Examples of excess have been
given by some honourable senators that prevent us from adapting
the corporation to market demands. You alluded to the capital
spending Federal Express faces in order to automate. Federal
Express and UPS are our competitors. We have many
competitors. Will the Internet replace physical mail as we know
it today? I cannot tell you. I do not have a crystal ball and I do
not know the answer. But we must be ready for this next stage,
these challenges resulting from technology or competition from
multinationals four or five times our size. I know what our
employees want. What we want from our unions is flexibility.
Senator Lynch-Staunton spoke at length about other countries,
and I would like to draw a comparison with the Australia Post
Commission, which serves a population spread out over a very
large area and still manages to generate large profits for the
government and for reinvestment. What happened in Australia
12 or 15 years ago? The situation was hardly better than ours and
the union finally realized that there was competition out there. If
the union and managers did not sit down at the same table to
share the commission's objectives, they would get nowhere.
The Australia Post Commission was losing hundreds of
millions of dollars a year. A number of years ago, they signed a
business contract with the union in which the commission's
long-term objectives were approved by both the union and the
employer. That is what we are trying to achieve. That is what we
would like to do. That is what we have done with three of our
unions. But when the union's rule is not to talk to management,
when the union disciplines one of its employees who went
bowling with his manager, we are still a long way from the
community of interests that we would like to create and that our
employees, my colleagues, also share.
Senator Murray: In his report, Mr. George Radwanski makes
it clear that he is opposed as a matter of principle to the
commercial mandate that was given to you by the federal
government in 1986. Indeed, he thinks it is at the root of many of
the corporation's current difficulties. I say he is opposed in
principle, because he goes on to say:
Public enterprises exist to serve a public purpose and to
provide a public good; private enterprises exist to make
money for their owners or shareholders and to meet a
Mr. Radwanski is of the view that what he called the delicate
balance between the public policy responsibilities and
commercial objectives of Canada Post was tipped towards the
commercial mandate by that decision in 1986.
I will not ask you for your philosophical opinion or your
political opinion. However, it is fair to ask you whether, as a
practical matter, it is possible for Canada Post to carry out a
public policy mandate and, at the same time, to function as a
Do you agree with Mr. Radwanski that the core public policy
responsibilities of Canada Post are twofold - to provide all
Canadians with universal mail service at a uniform affordable
price and to serve as a nation-wide presence of the federal
As a practical matter, assuming that that is the public policy
mandate, is it possible to carry that out and to succeed in a
commercial mandate at the same time?
Mr. Clermont: I believe that, as a practical matter, it is. I
think that over the past 10, 12, 14 years, Canada Post has proven
that. Canadians enjoy the second lowest postage rate in the world
in, as was mentioned, a very large country with a very sparse
population. Notwithstanding that, Canada Post has competed in a
number of markets connected to the postal business and has done
so quite successfully.
The track record of earnings is not as good as we would have
hoped and as was estimated in 1986. Still, since that time, the
corporation has not dipped into the public treasury and, I think,
has managed to do fairly well.
Much remains to be done. It is public policy to keep the rates
as low as possible, providing service to all Canadians, wherever
they live. It is proven economically that one must fill the
pipeline. The postal business requires a huge infrastructure that
cannot live by itself.
The same report from which you are quoting, Senator Murray,
also recommended, as a solution to fulfilling just the core policy,
a rate increase - of 5 cents or 7 cents, I am not sure - and a tax
of 50 cents on every courier item transported by the private
sector as a compensation for the loss of revenue, recognizing that
the infrastructure is a very costly one which must be maintained
whether there are two letters or ten letters to deliver at each
Senator Murray: There is the general public policy mandate,
which you referenced, to serve all Canadians at a uniform rate, et
cetera. There are also specific directives that you have received
from time to time that leave me to think that there is some
inconsistency between trying to carry out a public policy
mandate and achieving the commercial objectives at the same
time. I refer to the directive not to close any more rural post
offices. The freeze on postage rate increases existed for a while.
Was Canada Post compensated by the federal government for
either of these decisions?
Mr. Clermont: No, and we never did ask for compensation.
The policy of the government was to freeze the conversion of
rural offices. At this stage, and in the long run, that may serve us
These post offices, in addition to being a federal presence in
the communities, will also, hopefully, down the road, serve as a
single kiosk for delivery of government services through
electronic means. We have been in discussion with provincial
governments and some federal departments of the federal
government on delivery of services through these post offices.
Senator Murray: Were they money-makers?
Mr. Clermont: They are not money-makers. However, if you
are assessing an infrastructure and a retail network the size of
ours, you will find some that will make money and others that
will not. That is no different from banks, for instance, where
some branches will make a lot of money, say, at the corner of
Bloor and Yonge, but others will not, yet the bank, or Canadian
Tire or whoever, chooses to have a presence there and to
amortize the cost.
Senator Murray: One of the questions I was trying to ask
Minister Gagliano when he was here related to the degree of
autonomy that really exists for Canada Post as a Crown
corporation. He told us that it is an arm's length relationship with
the government. I asked: How long is the arm? Later, he
acknowledged that, when one is the sole shareholder, one may
call the shots. Would you agree that that is a proper description
of the relationship?
Mr. Clermont: Yes, very much so. It is no different from a
single shareholder of a large corporation.
Senator Murray: That leads me to wonder - and I will not
put the question to you, because it would be unfair - what we
gain by having Canada Post as a Crown corporation as opposed
to the situation that prevailed previously when it was a simple
department of government.
You did go somewhat farther than other witnesses in regard to
the wage guidelines of the federal government. I take it you met
with Treasury Board officials early in the process, or perhaps
before the negotiations began, and those Treasury Board officials
made it clear to you what the ceiling was to be in terms of wage
settlements in the federal public sector.
Mr. Clermont: Senator, if that is the impression I left, I stand
to be corrected. Each year, we sit with the Crown corporation
directorate of the Treasury Board to set the financial objectives
of the corporation. This year was no exception.
While the report of Toronto Dominion Securities came out
later and recommended a five-year financial framework, it has
yet to be finalized. We did, however, file and discuss the
corporate budget for this year with Treasury Board as a
representative of the shareholder.
While there was no set wage increase, we were very much
aware, as every Crown corporation or department of government
must be aware, of the government's concern with inflation. We
looked at average settlements in the industry and we set out goals
and objectives according to that.
Senator Murray: Was this a matter you discussed with the
Treasury Board officials?
Mr. Clermont: Yes. However, I do not recall that we talked
about a percentage, such as 1.5 per cent or 2 per cent, in the
corporate plan. It is always the large picture we consider.
Our labour costs will go up or down by 1 per cent, to
62 per cent or 63 per cent. However, we never got too specific
because, at that time, we did not know what the demands of the
union would be. At the beginning, they were asking for
11 per cent.
Senator Robertson: I would assume, gentlemen, that Canada
Post has been involved in major downsizing in the last five or six
years. If that assumption is correct, what has the staff reduction
Mr. Clermont: I am afraid I cannot give you a precise figure.
Senator Robertson: Can you give me a ballpark figure?
Mr. Clermont: I can say that we have not laid off anyone.
Through natural attrition and through buyouts, we did reduce the
number of staff.
In the fiscal year 1993-94, we took a special charge of
$225 million against earnings. We ended the year in a loss
situation, but that is a common practice, in order to allow us to
buy out people. In head office, we probably reduced the number
by about 700 in the five years.
Senator Robertson: What percentage of Canada Post staff is
full-time and what percentage is part-time? Has the ratio between
the two changed significantly during the past five years?
Mr. Poirier: Globally, around 70 per cent to 75 per cent of the
staff is full-time.
Senator Robertson: Has that stayed constant over the last five
or six years?
Mr. Poirier: At least for the last five years.
Senator Oliver: There have been a number of incidents
reported in our paper - and my question is bill-specific - about
civil disobedience that has occurred at airports, in banks and so
on involving some of your employees. We have been told by the
ministers that the purpose of clause 17, the enforcement clause,
is to get people back to work and that it has nothing to do with
any civil disobedience that might occur otherwise.
What contingency plan do you have to ensure that those
incidents do not continue after this bill is passed?
Mr. Clermont: Although I have not touched a law book in
many years, I believe it would be a proper interpretation of the
law to say that the laws of the land would apply. If some of
Canada Post's employees block traffic at an airport, it is up to the
airport authorities or the police who patrol the airport to ensure
that this does not happen. I do not believe that the provisions of
the bill could be applied in such a case. That is not a legal
Senator Oliver: Do you have any internal contingency plans
of your own?
Mr. Clermont: If trouble occurs on our premises, we have
plans of our own. However, we cannot plan for the disruption of
airports, bridges or other facilities that the union leadership has
indicated will be disrupted. This is the responsibility of the local
law enforcement agency.
Senator Kinsella: From your standpoint, do you think that
final-offer arbitration would have been a useful model for
arbitration under this legislation?
Mr. Poirier: With two of our unions, we have final-offer
arbitration available. It is fairly new to us. Whether this would
work with a large union representing a large number of
employees such as that is difficult to answer at this stage.
Senator Kinsella: Has it been working with the unions to
which it is applicable?
Mr. Poirier: We went to arbitration with one of our unions. In
fact, it worked pretty well for both in that specific situation.
Senator Kinsella: Would you be able to inform honourable
senators as to how much Canada Post has spent on negotiations
in this round? For example, could you give us an estimate as to
how many PYs are involved for Canada Post in the negotiations?
Mr. Poirier: On a regular basis, we have around 15.
Obviously, you require external help when you negotiate a large
collective agreement like this with a large number of employees.
There is some of that. Within the corporation, we require some
assistance, whether it comes from finance, legal services or
elsewhere. The main body of the negotiating team is comprised
of approximately 15 full-time individuals.
Senator Kinsella: Would you be able to give a dollar estimate
as to the cost of negotiating this round from this past summer
Mr. Clermont: That would be difficult to ascertain.
Senator Kinsella: Fair enough.
What is your best estimate as to what the strike has cost
Canada Post to date?
Mr. Clermont: Thirteen days at roughly $18 million a day.
That is the direct cost. In addition, we have to count the lost
business before the strike. A great majority of customers did not
wait until the last minute. Some did but others did not. They
went to the competition.
Our task now, and it will be very difficult, will be to bring
some of that business back. We know for certain that some of our
very large customers have signed multi-year agreements with
competitors. That business is lost.
It is too early to tell at this point, but I would venture to say the
strike will cost us at least $200 million in lost business.
Senator Kinsella: Given the magnitude of that loss to Canada
Post and taking into consideration the loss to small businesses,
which has been estimated to be upward of $2 billion, do you feel
some responsibility to the Canadian public? As a Crown
corporation, do you feel that either you should have made a
better effort at the table or that you should have recommended to
the government earlier that they should move with contingency
legislation or, indeed, back-to-work legislation so this
tremendous loss of over $2 billion could have been avoided?
Mr. Clermont: With regard to your last point, senator, we
were hopeful that we would achieve an agreement.
As Mr. Poirier indicated, when we started this process in April,
we put 39 demands on the table. The union put 53 demands on
the table. When negotiations broke off, we had 15 demands left.
In most cases we had abandoned the rest in a spirit of
compromise. The union was almost at their original number of
I phoned the president of the union in early November and
offered in a spirit of compromise to accelerate and fast-track the
negotiations so that we could remove the doubt in the minds of
our customers, the public, about a strike as quickly as possible. I
was given the assurance that they would look at that and that
they shared the concern.
After that, the demands came exactly as they were before. Not
one iota had changed. At that stage, we made the demands pubic.
Their reply to our overtures would have cost us an
extra $400 million a year.
Senator St. Germain: Gentlemen, you have a 63-per-cent
labour component in your overall operation. The question of the
enforcement of clause 17 of the bill has been raised. You may be
able to lead a horse to water, and you may even drag one to
water, but you cannot make it drink.
Apparently we have had 11 disruptions in the post office over
a fairly short period of time. Have you ever thought that perhaps
it is time to develop a new strategy as to how to approach these
negotiations? This strike has been devastating. It is devastating to
the small businesses of this country. It has put in turmoil various
charitable organizations. The result of this strike is just horrific.
With 11 disruptions over a period of 20-odd years, there must be
a better way. Have you ever given any thought to that, and is
there anything in the process to make that happen?
Mr. Clermont: Of the 11 disruptions in the last 18 years, two
were in the same week - the disruptions in 1987, 1991 and now.
Since the corporation was formed, there have been three
disruptions. In 1987, there was one union representing the
letter-carriers and another one representing the inside workers.
They both went on strike. That was two strikes, if you will, but
one work stoppage.
I tried to explain a while ago that, yes, we do have a strategy,
which is to work with our employees and work on employee
relations. We want to provide more job satisfaction and more
opportunities for all of us to grow in the corporation. That is why
we have given so much money to training. I know many
colleagues who want to become sales people or move up in the
organization, and we want them to have an opportunity to do
Once more, it is very important to distinguish between
employee relations and labour relations. Our labour relations are
not good. I will be the first to admit that. However, I think we
have made major progress in the area of employee relations.
Senator St. Germain: Perhaps the employees should be
viewed as shareholders rather than employees. I am not about to
tell you how to run your business, but obviously we have serious
problems. I hope we can do something.
The Chairman: On your behalf, honourable senators, I wish
to thank the witnesses, Mr. Clermont and Mr. Poirier, for their
participation in our deliberations this evening.
Senator Carstairs: Honourable senators, I would ask that
Deborah Bourque, 3rd National Vice-President of the Canadian
Union of Postal Workers, and Geoff Bickerton, Director of
Research for CUPW, be invited to participate in the deliberations
of the Committee of the Whole.
Senator Lynch-Staunton: Before the witnesses are heard, we
were under the impression, although perhaps an incorrect one,
that the head of the Canadian Union of Postal Workers would be
with us this evening. Was an invitation sent to him?
Senator Carstairs: My understanding is that the invitation
was extended and that the witnesses before us tonight have been
sent on his behalf.
The Chairman: In thanking Ms Bourque for appearing here
tonight, perhaps I could ask if there are any reasons why the
president could not come personally. Of course, we welcome
Ms Deborah Bourque, 3rd National Vice-President,
Canadian Union of Postal Workers: I want to thank the Senate
for the opportunity to appear today, and also for the time and the
thoughtfulness that you have invested in the discussion on this
I would like to begin by talking briefly about the back-to-work
legislation and then about a number of sections in the legislation
that the union finds particularly abhorrent. I will then conclude
by providing you with a bit of background to our negotiations
and this legislation. We would be more than happy to answer any
questions you may have.
First, the bill is a fundamental betrayal of workers' rights.
Under Canadian law, postal workers have collective bargaining
rights. Postal workers have had these rights seriously violated.
People in this country ought to be concerned about the erosion of
basic rights in Canada, be it the removal of the right to strike or
the pepper-spraying of students who are simply protesting human
rights abuses. I suggest that the abuse of basic rights is becoming
far too routine in this country, and that it is time we told our
government that we will not put up with this ritual abuse of our
As if having one's basic rights abused is not enough, the
government has added some particularly nasty and unusual
sections to the back-to-work legislation before you. These are
sections that we would like you to consider amending.
We would like an amendment that eliminates the legislated
wage offer in clause 12. It amounts to about $1,000 less than the
employer's last offer over the three-year term. Ideally, we would
like you to consider eliminating the clause that imposes wages
because it is fundamentally unfair. The government owns Canada
Post, and stands to directly benefit by imposing a low wage offer.
At the very least, the wages should not be less than the last offer
on the table: 1.5 per cent on August 1, 1997; 1.75 per cent on
August 1, 1998; and 2 per cent on August 1, 1999.
I should also like to point out that postal workers have fallen
very far behind in wage settlements since the mid 1980s.
Between 1984 and 1996, the consumer price index rose by
53.1 per cent. During the same period of time, a mail handler's
wage - a representative classification - increased by only
35.2 per cent. Workers in comparable sectors of the economy
saw their wages increase by 44.8 per cent in transportation and
communications; by 46.5 per cent in public administration; and
by 58.2 per cent in manufacturing. The source for those statistics
is Labour Canada.
We would also like an amendment to clause 10 of the
legislation. This clause denies the union legal recourse to
challenge the appointment of the arbitrator, even if it is someone
who is well known for being anti-union, or who does not have
the skills required to arbitrate this settlement.
I would like to conclude with a bit of background through
which I hope to provide you with an understanding of why we
ended up here today. We believe that what started in our
negotiations and ended with this legislation was scripted from
start to finish. First, the government had a review of the post
office. The review was chaired by George Radwanski, Jean
Chrétien's former speech writer. The review recommended
annual cuts to labour costs of $100 million to $200 million. This
recommendation was based on two so-called independent
assessments, but the studies were far from independent. For
example, the study by Gordon Ritchie was based on Canada Post
information. Ritchie even said in his study: "I do not have the
expertise in labour contracts required to present an independent
assessment of these calculations."
During the review, the Canadian Direct Marketing Association
called for even higher cuts of $350 million. The CDMA also
asked the government to consider imposing legislation to reduce
Canada's labour costs, as it did with railway workers in 1995,
and the government agreed to do this.
John Gustavson, president of the CDMA, said in a memo that
the minister responsible for Canada Post promised to introduce
back-to-work legislation in the event of a strike. Mr. Gagliano
has denied that he promised to legislate postal workers back to
work, but Mr. Gustavson has confirmed, as recently as in
Saturday's Globe and Mail, that Mr. Gagliano made this promise.
Essentially, the government is using every trick in the book to
ensure that they get unjustified cuts to labour costs - a review
conducted by an old friend of the party, bogus studies, and
In case it is not clear, our negotiations and this legislation are
all about who gets what from Canada Post. The Liberals want
Canada Post to cut costs and make more money so that the
government can get dividends, and so that it can give its friends
in big business some of the lowest postage rates in the
industrialized worlds. Forget about basic collective bargaining
rights; forget about investing in post office jobs; forget about
expanding postal service. This is about greed.
In our negotiations, postal workers were calling on Canada
Post and the government to take a different approach. The
CUPW wants the corporation to use any profits it makes to
expand service to the public and create full-time jobs in our
communities. We have realistic proposals to convert already
existing part-time, overtime and temporary hours into full-time
positions. We think that the union's proposals to preserve and
create jobs are a reasonable approach in a world where some
people have too much work while others have little or no work at
all. Given that neither the economy nor the government seems
capable of creating decent jobs for Canadians, we hope that you
will consider supporting our fight for jobs and the future of
public postal service by opposing this back-to-work legislation
or, at the very least, by agreeing to the amendments that we have
Mr. Geoff Bickerton, Research Director, Canadian Union
of Postal Workers: I have only a few very specific points about
wages to add to what Ms Bourque has already said. I have been
here since three o'clock today, listening to the proceedings of this
committee. It is very important that a few things be clarified. I
only wish that you had more time to investigate the matter and
go through the documentation. The documents speak for
themselves. The application of a wage increase is not a matter for
a subjective opinion; it is a matter of fact. Let us look at the facts.
Today you have been told by the Minister of Labour and the
minister responsible for Canada Post that CUPW members
received a 2-per-cent increase in February of this year. I only
wish that were true. All postal workers wish that were true.
Let us look at what really happened. In 1995, we negotiated a
collective agreement with Canada Post for a period of two and a
half years from February 1, 1995, to July 31, 1997.
The wage portion of this collective agreement was as follows.
Beginning on February 1, 1995, there was a zero-per-cent wage
increase but we were paid $718 in a lump sum. Our annual
income in that year was comprised of $718 lump sum plus our
wages, for a total of $36,322.
The next year, February 1, 1996, again we received the same
lump sum and, again, there was no increase in our wages. Our
annual income was $36,322.
Beginning February 1, 1997 - and you have been told that we
received a 2-per-cent increase - the lump sum was eliminated.
We did not receive a lump sum cheque. The amount to which it
corresponded was folded in or incorporated into our wages. Our
wages went up by 35 cents but we did not receive a lump sum.
Our annual income is $36,334 - a grand increase of $12. That is
only because it really was 34.6 cents and was rolled up to
We did not receive a 2-per-cent increase this year. The people
who have been suggesting that in this house are wrong. They are
either mistaken or they were duped by the public relations
exercise that Canada Post engaged in when they placed their
full-page ads in the newspapers. That was before they changed
their wage offer.
What did they do when they changed their wage offer? They
increased the offer to 1.5, 1.75 and 2 per cent, but they changed
the date of application from February 1, 1998, for the 1.5 per
cent to August 1, 1997. They moved it up, but this legislation
moves it back.
I have with me a document that I received at the bargaining
table from Mrs. Pierrette Richard of Canada Post, in the presence
of Mr. Poirier, who was here earlier. It is very simple. It is a
simple document. The wages are made applicable on August 1.
What difference would that make for a postal worker? By
shifting that increase from August 1 to February 1, this year we
will lose $272. Next year, by shifting the 1.75 from August 1,
1998, to February 1, 1997, we will lose $323.49. The following
year, with the combination of moving the 2 per cent to
1.9 per cent and shifting the date from August 1, 1999, to
February 2000, we will lose $396.53. For a full-time worker in
the post office, that is a loss in three years of $991.
You have to ask yourself: If that is not vindictive and if that is
not punitive, what is? It is one matter to place before this house a
piece of legislation designed to get the post office working again,
but it is a very different matter and it is a sad day when, in order
to get the post office working again, the government of this
country introduces legislation that penalizes the individual
workers - workers who will be carrying those Christmas cards
in subzero temperatures across this country. That is what this law
does. It deprives us not only of our collective bargaining rights
but also penalizes the individual 45,000 workers - men and
women who deliver, sort and process the mail day in and day out.
You must ask yourselves: Why was that done? Why were you
told by ministers of the Crown that we received a 2-per-cent
increase this year? I challenge anyone to find that money.
Senator Lynch-Staunton: I certainly agree that clause 12 is
punitive and unfair. I would be happy to move an amendment,
but our numbers on this side are not strong enough. If I can find
a seconder on the other side, or if you can convince them before
you are through, I will be glad to follow through.
I feel that while wage settlements have been imposed in
back-to-work legislation before, it is wrong to do so. I also feel
that the mediator-arbitrator has powers that are extraordinary and
that, in effect, remove the employer and employee from the
negotiating table overall. That speaks to the whole collective
bargaining process in this country, which must be reviewed and
brought up to date.
I will not get into that except to sympathize with you.
Unfortunately, it is all I can do with regard to clause 12 - that is,
unless you can get someone on the other side to stand up and
Senator Stewart: Can you not get a seconder on your own
Senator Lynch-Staunton: Yes, and we will get the bodies out
to vote in favour of it, too!
Can you tell us about job security in your union? There is job
security. How strong is it? Can a worker be laid off, or can he
only be removed for cause or because of retirement or mutual
agreement? There is an off-set to what you consider are unfair
wages or too low wages in benefits, particularly in job security, is
Ms Bourque: You are right, despite the fact that many of our
collective agreements have been imposed by back-to-work
legislation over the past couple of decades. That, coupled with
the fact that we have been negotiating things like job security
rather than substantial wage increases, is one of the reasons our
wages have not kept pace with inflation and our members have
lost purchasing power.
We do have job security in the collective agreement for all
regular employees. That job security is not jobs for life as it has
been described by the media. The job security exists during the
life of the collective agreement. Every time you go back into
negotiations to renegotiate the provisions of your collective
agreement, job security is back on the table, as it is back in this
round of bargaining.
We also have 9,000 employees in Canada Post, members of
our union, who have absolutely no job security whatsoever.
Those are temporary workers, many of whom have worked for
10 years for Canada Post not knowing from one day to the next if
they will be called back in. They spend their lives sitting by the
telephone. They have no job security. In fact, they were laid off
prior to the strike.
The no lay-off provision also provides that Canada Post can
relocate employees within a 40-kilometre radius.
Senator Lynch-Staunton: That is not objectionable, is it? Is it
objectionable to be relocated to within a 40-kilometre radius?
Ms Bourque: We have agreed to that provision of the
Senator Lynch-Staunton: I am sorry that Mr. Tingley is not
here, because we have heard him too often now calling for civil
disobedience, telling us that when the postal workers go back to
work they can ignore proper stamping of envelopes and misdirect
the mail. How can your union, which, Ms Bourque, you just told
us feels that this law is a betrayal of workers' rights, betray the
Canadian people by such disrespect for the rule of law, which is
fundamental to our society, even to those who feel they are
penalized by it? If we abandon that concept, we are heading for
anarchy, are we not?
Ms Bourque: Members of CUPW have no intention of
betraying the people of this country. We will go back to work.
However, our members will not go back to work happy. They
will not go back to work feeling any great loyalty to the
corporation. They will go back to work feeling extremely
frustrated. That is what happens when you deny workers their
Our quarrel is with the federal government; our quarrel is with
Canada Post Corporation; and our quarrel is, by extension and
their involvement in our negotiations, with the Canadian Direct
We have no quarrel with the Canadian public. In fact, many of
us in the union at all different levels have worked very hard for at
least the past decade to develop a relationship with the public
based on our struggles, not just for jobs in the community, but for
expanded service to Canadians. We have worked hard for that
and have no intention of seeing that destroyed. We do not intend
to inconvenience or disrupt the lives of ordinary Canadians. In
fact, we made additional efforts during our strike to volunteer to
work during the strike, even the first day of the strike. I want you
to imagine how awkward and difficult that was for postal
workers. We made that effort to volunteer to deliver pension
cheques and socio-economic cheques because we know that we
do not have a quarrel with the Canadian public. We know where
those lines are drawn. It is not our intention to do that.
Senator Lynch-Staunton: I hope we agree on where the lines
should be drawn. When you had some of your workers going
through banks in Ottawa just a few days ago knocking over
customers, and when you closed down the airport in Halifax and
blocked roads elsewhere, how can you now convince us that all
of this is to be forgotten, that you will go back to work and
follow the rules, and that the Canadian public will not be
inconvenienced? I will be inconvenienced, as will all of us, if
you do not see that we put proper postage on envelopes. That
will mean a loss of revenue, which will mean additional costs in
the future. What do you think you will achieve by this call not to
respect the rules of the game? Whether we approve of the rules
or not, they are there and must be abided by. We can spend our
time trying to change them, but as long as they are there, they
must be abided by. We are told that some direct mail may be
addressed to Vancouver but that it may end up in Taiwan and that
that is too bad. Do you think the Canadian public can accept that
attitude no matter how unhappy, frustrated and how disenchanted
the workers are?
I can sympathize with that. I find this kind of legislation
onerous. I do not like participating in it. This is the fourth bill of
this kind that we have had to deal with. We had one bill relating
to the dock workers, two rail strikes in two weeks, and now this
bill. The whole concept is wrong. You should not be in here; you
should still be at the table with the employer, with fair and open
bargaining. I sympathize with you when you have the whole
weight of the Canadian government, as the major shareholder,
having the edge over you.
That being said and done, in return, some self-discipline must
be imposed. I find that Mr. Tingley is not helping matters with
his calls for, in his own words, "civil disobedience."
Ms Bourque: I have been here since three o'clock, so I have
not heard any announcements or media reports about postage. I
cannot comment on that.
Senator Lynch-Staunton: We will leave it at that. You are
here to be questioned, but I had to get that out of my system. I
am sorry Mr. Tingley is not here.
Ms Bourque: As am I.
Senator Lynch-Staunton: I am waiting for someone on the
other side to make the proper amendment. If that is done, we will
certainly offer our support.
Senator St. Germain: We just heard representatives of your
employer. They pointed to excellent employee relations and very
poor labour relations in the post office. Could you comment on
Ms Bourque: I did not hear all of their presentation. I did hear
Mr. Clermont talk about the excellent employee relations he has
on a one-to-one basis and about the thousands of letters he
receives from postal workers on a regular basis. As an officer of
the union, I tend to receive copies of some of those letters and I
can tell you that they are not all congratulatory on his wonderful
and benevolent employee relations.
We have had larger participation on the picket lines in this
strike than we have ever had as a union. Unions rarely get
100-per-cent participation on their picket lines. This is the most
overwhelming participation that we have had by rank and file
members of this union.
I do not think one can separate employee relations and labour
relations. If, as an employer, you recognize that a bargaining
agent has the legal right to represent your employees, then you
ought to have the same respect for that bargaining agent as you
have for the employees who work in your corporation.
Senator St. Germain: We also discussed with them the fact
that Canada Post is now viewed by the main shareholder, the
government, as having to be a profit centre. In view of the
competition, has your side accepted this as a fait accompli and as
a fact of life with which you have to deal?
Ms Bourque: We believe that the mandate of the Canada Post
Corporation, as enacted in the legislation in 1981, is still the
correct mandate for the corporation. It does not call for dividends
for the government or profitability; it calls for financial
self-sufficiency. We believe that was appropriate in 1981 when it
was a drain on the taxpayer; and we believe that is also an
appropriate mandate now when they are making hundreds of
millions of dollars in profit.
We believe that the profit Canada Post makes should be put
back into expanded services to Canadians such as expanded
door-to-door delivery and new technology such as public access
to the Internet at Canada Post facilities. Those are the kinds of
service expansion initiatives that we think the profits ought to be
turned back into.
I know that reference was made to Mr. Radwanski's report on
the Canada Post Corporation and that that was one of his
recommendations. He did not buy the idea of a dividend payment
to the government. He thought profits ought to be put back into
Senator St. Germain: Do you agree that the shareholders
should have the right to determine whether it is a profit centre or
just a viable operation that breaks even?
Mr. Bickerton: I do not know how many of you have the
Canada Post Corporation Act, but it speaks to this issue. It speaks
to the issue in section 19(2). For those of us who were around
from 1978-81 during the debates, you will recall there was a
section inserted at the behest of the large volume mailers.
For those of you who are unfamiliar with that section, I shall
read it. The answer to your question, senator, is to be found in the
act. Remember, this act received unanimous approval by all
parties in the House of Commons and was also approved by the
management and the unions. The act states:
The rates of postage ... shall be fair and reasonable and
consistent so far as possible with providing a revenue,
together with any revenue from other sources...sufficient to
defray the costs incurred by the Corporation in the conduct
of its operations under this act.
In other words, the act itself is framed in such a way that Canada
Post should not have to borrow. It should not have to take from
the public purse. It should not have to draw from the finances of
the country. It should be totally self-sustaining to pay for the new
However, it is very clear that it was never an intention of the
drafters of the act to pay dividends to the government. As a
matter of fact, the large volume mailers of the day insisted that
section 19(2) be in there because they did not want the post
office to become a cash cow whereby their rates of postage
would be funnelled back to the government.
We agree Canada Post should pay its own way, but if you are
asking if Canada Post should pay its own way and then also be a
secret generator of endless dividends and taxes for the federal
government, we say, "No, the act is clear." The act says it shall
be financially self-sufficient. The act says that rates should not be
set at a rate higher than is necessary to conduct the operations.
Senator St. Germain: Based on that premise, then, I can see
- and everybody should be able to see - why we have a
problem. You were here, Ms Bourque, when we were told it is to
be a profit centre. If this is not negotiated or mitigated or dealt
with, is it any wonder that we have arrived at this point? I am not
taking either side in this. If the government decides it is supposed
to be a profit centre, that is one thing. If it is not, then that is
another issue. However, if there is one party saying that they
believe that it is basically just there to subsist and another saying
it should be a profit centre, we have a major problem in the
country. I am concerned because, in spite of what Ms Bourque
and others are saying, there is a great deal of animosity out there.
You will become as unpopular as politicians if you keep this up.
I am totally disappointed in clause 12. If the government wants
to do this, they should at least have put it in the same terms as
what they had offered you. This is incredible. I know the job that
you will have in taking this back to your membership.
I am going to close by pleading with you. You have come
before us. This is what Canada is all about: The Senate,
Parliament, is the court of last resort. I would hope that somehow
you can reach your people in such a way that they will be
rational in dealing with this legislation. I hope we will never
have to deal with this sort of thing in this way again. Forcing you
to accept this, by way of legislation, through clause 12, is a
recipe for disaster.
I urge you to speak to Mr. Tingley. You have not told us yet
why he is not here. If you are not going to tell us, I will respect
Ms Bourque: I will explain; I am sorry.
Senator St. Germain: Several people have asked you,
Ms Bourque, but you have not answered the question. You have
done an excellent job of avoiding it until now. I am more
concerned about your going back to your membership and
making certain that they do not violate the laws of the land. Your
initial statements regarding a fundamental violation of basic
rights equates, I believe, to people upholding the law.
Ms Bourque: I want to clarify. I am not trying to duck any
questions or hide anything. I could not hear from that end of the
room when the chairman was speaking.
We only found out at noon today that it was possible for us to
appear before you. We were very anxious to do so. At the same
time, we had already scheduled a press conference for four p.m.
to announce that our members would be complying with the
back-to-work legislation and returning to work. It was absolutely
essential that Mr. Tingley be the spokesperson at that press
conference to make that announcement. So I was dispatched here
to make this presentation before the Senate. That is the only
reason Mr. Tingley is not here.
Senator Forest: Thank you for coming and allowing us to
question you on these issues.
Several references have been made to the fact that the wage
offer that is stipulated in the legislation is less than that which
was put on the table by the corporation during the negotiations. I
am wondering about the reasons for your not accepting that offer.
Was it because you considered that offer too low, or was it
because of working conditions that might have been attached to
that offer? I would like to know that.
Mr. Bickerton: I would like to give you a complete answer, if
I can, senator. You recall the weekend before we went on strike,
which I believe was the weekend of November 14 or 15. The
employer's chief negotiator was out of town, as were some of
their senior staff. We managed to complain about that quite a bit,
and Mr. Clermont and Mr. Tingley talked and it was decided on
the Monday morning to try some exploratory talks. We decided
to see if we could come to an agreement on the major issues, and,
if we could get a general agreement on those, we would attempt
to restart full negotiations with all the subcommittees.
We decided we would deal with four issues. Wages was the
fourth. We would only get there if we had agreed on the other
three, if we had reached what we thought was the basis of an
agreement. We eventually did get to wages. We got to wages on
the afternoon of November 18, and at that time we presented a
new wage proposal to Canada Post Corporation. We lowered our
wage demand. We were very clear that this was not our final
offer, that we were willing to negotiate. We were very clear on
that. We went down to 3 per cent and 3 per cent.
Management said they would go away because there were the
other issues to consider as well.
Mr. Tingley held a press conference that night at 8:30 p.m. in
which he said that things were very positive. You may have seen
it on television. He said that we expected to be going back to
talks. At 10 p.m. that evening, Canada Post said publicly that
talks were over. We were genuinely confused. We had not heard
that from them. There had been a bit of a pattern by Canada Post
of announcing its position in the media.
Later on that evening, when our chief negotiator went up to
talk to the Canada Post people about what was happening, he was
assaulted. He was assaulted by two individuals.
On the following morning, we received a call very early,
saying they then had a mandate to talk to us. That was good. We
were happy. We went to that meeting. At that meeting Mr. Poirier
emerged as the chief negotiator. It was at that meeting that this
piece of paper was given to us. There was basically no
explanation. The wage proposal is completely straightforward.
We asked one question: Did this constitute the entire wage and
monetary package? We were told, "No, this is simply the wage
proposal." There were no conditions added at that time, and it
was very clear that this was not being presented to us as a final
offer, as a take-it-or-leave-it type of offer.
Subsequent to that, later on that evening, we found ourselves
in a situation where Canada Post reneged on a commitment that
had been made when Mr. Lafleur was the chief negotiator, and
the talks basically stalled around our attempt to revive where
they had been and the momentum that had brought us close to a
settlement. You will recall that Mr. Gagliano said in the House of
Commons that we were very close. He believed we were very
close. Mr. Tingley said publicly, at 8:30 p.m. the night before, he
thought that negotiations would start again. I know, I was there. I
was there for seven months during these negotiations.
I can tell you exactly what happened at that meeting. The
wage offer was given to us, and it was clear that management
was doing exactly what we had done the afternoon before. We
had presented a new offer. They presented a new offer. It was our
belief that we were going to go back and make another
counter-offer, because we expected at that time that full-blown
negotiations with all its various subcommittees would
Senator Forest: We did hear this afternoon that one of the
reasons talks were broken off was that they expected the union to
come back with other conditions on which the union had not
moved. At any rate, we have heard from both sides.
We have been told that, for Canada Post, labour costs run to
63 per cent of total costs. Have you any concern that wage
demands might be such as to make the corporation financially
non-viable or non-competitive? That is a problem that could
result not only in loss of jobs but in the corporation going down
the drain. As was mentioned earlier, it is not enough just to break
even. You must have an edge if you want to make updates in
technology and to keep the corporation competitive. Has that
been a concern of yours?
Mr. Bickerton: I wish you had more time to deal with this; it
would be a very good discussion. Perhaps justice would be done.
I hope justice would be done.
Senator Nolin: Take all the time you need.
Mr. Bickerton: On Saturday, November 22, we provided
Mr. Porier with these documents. They represent a complete
analysis of our wage proposals and all of our other demands and
our analysis of the costs based on a 3 per cent wage increase and
also based on a 2 per cent wage increase. If they came back with
2 per cent, we wanted them to know how much it would cost.
We provided that to Mr. Porier. We asked them to come back
with an analysis to indicate where we were wrong. They have
never disputed these figures to date.
These figures show that, with a full 3 per cent and our full
COLA, Canada Post would still have almost record profits this
year, in excess of $100 million.
If you are asking whether we have dealt with this issue with
the employer, the answer is yes. If you are asking whether we are
concerned about it, the answer is also yes.
We heard through the media a few weeks ago that our
demands would cost $400 million and raise the price of postage
by 20 cents. We have no idea where that came from.
Subsequently, we learned from people working in the corporation
that it was based on a three-year collective agreement. We had
never made proposals for a three-year agreement. They based it
on 16-per-cent wage increases and on a whole range of
assumptions that we have now had the time to discuss with them.
Some things they got wrong in a very big way.
If you are asking whether our proposals have bankrupted the
corporation or made it non-competitive? The answer is no.
Senator Forest: Thank you. It is very difficult when we hear
two completely different perspectives on this.
Mr. Bickerton: Perhaps you can take the time and we can go
Senator Murray: Mr. Chairman, I would like to take the
witnesses through several questions that we covered with other
Leaving aside your views about Mr. Radwanski's partisan
political background, which we all acknowledge, what is your
view of his finding that Canada Post is often meaningfully
supervised by no one because of being supervised by so many
authorities? He has other things to say about that. You have
probably read the report. What is your view?
Ms Bourque: Mr. Radwanski had quite a few things to say
about Canada Post in terms of their management practices,
transparency, levels of accountability, and so on. We preferred to
focus on some of the other issues of more direct concern to us,
such as the issue around labour costs and his analysis that the
collective agreement was too rigid. Those were real concerns to
We had also spent a lot of time thinking about some of the
other recommendations in his report. With respect to that one, I
do not know if I have ever even thought about it. My apologies.
Senator Murray: You have been involved with Canada Post
for some considerable time. I do not know whether, in your union
career, you have had experience with other companies. I just
wondered what your experience was with Canada Post. Do they
have the required autonomy to make the kind of decisions that
management would normally make, say, in terms of a collective
Ms Bourque: We have found, particularly in this round of
bargaining, that the process is incredibly frustrating. Perhaps that
explains why negotiations dragged on for so long with no real
results. Obviously, that is why we are here. The fact is that
Canada Post did not have a real mandate to negotiate. They had a
directive from the federal government that they were to
pay $280 million in dividends over the next five years to the
federal government and that they were expected to reduce their
labour costs by $200 million in order to finance those dividends.
That was the mandate within which Canada Post was negotiating
at the bargaining table.
Issues that perhaps could be resolved between the parties -
operational issues, work rules, real working conditions, bread
and butter issues - tended to get side-tracked by the fact that
Canada Post did not have any autonomy at the bargaining table
to negotiate. We kept asking for them to go back and get a
mandate from the federal government to actually negotiate a
Senator Murray: What mandate are you talking about? What
directive are you talking about? I am aware that there was a
directive that they must be a profitable corporation. You say that
the federal government quantified that to the extent of
$280 million and that the federal government went beyond that
to say that they were to finance it in part by reducing their labour
costs by $200 million. Where is that directive?
Mr. Bickerton: You should compare the most recent five-year
plan, which came out before the election in 1996, to the 1995
plan. On the plan from which they are currently operating,
Canada Post is told to increase their dividends from $122 million
to $204 million. They were told to increase their income tax
payments from $54 million to $131 million. In other words, the
government was going to increase its take by $150 million.
Canada Post had already told all of the large corporate mailers
that there would be a rate increase of one cent per year, according
to the 1995 plan. The government ordered them to go back and
tell their customers that the increase would be only two cents
over the next five years. Compared to the previous five-year
plan, that reduced estimated revenues by more than $300 million.
The government increased the amount that Canada Post will
pay back to the government. They reduced their ability to raise
revenue by $300 million. They caused a crisis. Canada Post
could not raise their revenues. They had to provide more
dividends to the federal government. Where else can they look
but to labour costs?
Senator Murray: Are you saying that the directive, as you
call it, to reduce their labour costs by $200 million is implicit in
the overall directive?
Mr. Bickerton: Following that, Mr. Clermont started making
public statements about reducing labour costs by $200 million.
We pieced the puzzle together and we very easily drew that
conclusion. The government put Canada Post management into a
complete bind. It was the government that effectively created the
crisis that could only be solved by them attacking the labour
Senator Murray: Do you think that there is a contradiction
between the public policy mandate of the corporation and the
commercial mandate? Do you think that the two are achievable?
Ms Bourque: Canada Post is and should be, first and
foremost, a public service. I believe that it has a very important
public policy role to play. Contrary to current discussions during
the postal dispute, it has an even more important public policy
role to play today than it has had in the past.
Whether or not that is contradictory to a commercial mandate
depends upon the financial targets that are set as part of that
commercial mandate. If the financial targets are to be the same
financial targets as those of a private commercial enterprise, then
you will have problems. There is then a profit motive rather than
a service motive. In a country the size of Canada, that creates
real problems, particularly to those Canadians living in rural
If the financial targets were reasonable, Canada Post could
make a reasonable profit and still provide the level of universal
services mandated under the Canada Post Act and this would
even allow some of that money to be put back into new and
expanded services for Canadians.
Senator Murray: What would you say to Mr. Radwanski's
recommendation that the government direct Canada Post
Corporation to withdraw from all competition with the private
sector in areas of activity outside its core public policy
responsibilities for providing postal services? Have you thought
about that? Are you familiar with that recommendation?
Ms Bourque: Yes. The whole competitive nature of Canada
Post was a major focus of the Radwanski review.
Senator Murray: His recommendation is that the government
direct Canada Post to withdraw from all competition with the
private sector in areas of activity outside its core public policy
responsibilities for providing postal services. What would you
say to that?
Ms Bourque: I would disagree with that recommendation.
Senator Murray: I take that to mean that Mr. Radwanski
would have Canada Post focus on its public policy
responsibilities rather than on competing with its private sector
providers in other areas. Do you oppose that?
Ms Bourque: If what Mr. Radwanski meant is that Canada
Post, for example, should get out of priority courier services,
then I would disagree completely with that. That is a competitive
area in which Canada Post is engaged. That contributes to
Canada Post's public policy role because priority courier
provides service to rural communities where Canada Post
competitors do not necessarily provide service. Canada Post
should be permitted to stay in that area.
Last fall the government made a decision to take Canada Post
out of the competitive area of the unaddressed ad mail delivery
business. Not only did that cause severe unemployment, it caused
an increase in the unemployment rate, by laying off 10,000 ad
mail workers. That took a revenue-generating service out of
Canada Post. The government took a service away from
Canadians and decent jobs away from the economy.
I do not think competitiveness should be Canada Post's driving
force. It obviously has basic letter mail services to concentrate
on, as well. However, if Canada Post can generate revenues and
provide services, in particular to those areas where a basic
private sector courier company is not prepared to go, then
Canada Post should be permitted to stay in those competitive
Senator Murray: You would not agree with a regime in
which Canada Post simply concentrated on those activities that
could not be effectively provided by the private sector; is that
Ms Bourque: That is right.
Senator Murray: For the record, would you tell us why you
would oppose the out-and-out privatization of Canada Post? We
are familiar with the public policy arguments, but in terms of
your membership, why would you oppose privatization of
Canada Post if that were possible to achieve?
Ms Bourque: The privatization of Canada Post would result in
a decrease in service to Canadians. A private company would not
continue to provide universal postal service to every community
in this country at the same postage rate; it just simply would not
Therefore, privatization of Canada Post might not hurt you if
you live in downtown Toronto. However, if you live in one of the
many rural communities in this country, then you would be
severely hurt by privatization. You would not receive the level of
service, and you would surely not have a 45-cent postage rate.
Mr. Gagliano can say he is not going to privatize Canada Post
in 16 different languages, but if he is talking about privatization
or commercialization, it means the same thing to people. If you
take the public service aspect out of Canada Post and replace it
with a profit motive, then service to Canadians will suffer,
services will decrease and postage rates will increase. That is
why we are opposed to privatization.
Senator Kinsella: Did you receive an invitation to appear
before the House of Commons concerning this bill?
Ms Bourque: No.
Senator Kinsella: When you were at the table attempting to
negotiate a collective agreement, who did you think you were
facing on the other side of the table, was it simply the corporate
bargaining team from Canada Post, or at times did you think you
also had the management of Canada Post sitting there? At other
times did you feel you had the board of directors of Canada Post
at the table as well? Did you ever think that you had the Minister
of Public Works and Government Services or the Minister of
Labour on the other side of the table?
Ms Bourque: It was often more crowded than that. We
thought for a while we had John Gustavson and Catherine Swift
at the bargaining table with us as well.
Senator Kinsella: Let me turn to John Gustavson. He is the
president of the Canadian Direct Marketing Association; am I
Ms Bourque: Yes.
Senator Kinsella: In testimony before this Committee of the
Whole we have learned that a meeting took place on August 6,
1997, between the Canadian Direct Marketing Association and
Minister Gagliano, and about a memorandum, to which you have
alluded, written by Mr. Gustavson. Do you have a copy of that
Ms Bourque: Yes, we do.
Senator Kinsella: Would you read that memorandum into the
Mr. Bickerton: Shall I read the whole thing or only the parts
that talk about the back-to-work legislation?
Senator Kinsella: Only the pertinent part, which speaks to the
minister's assertion, according Mr. Gustavson, that the postal
workers would be legislated back to work in seven days if there
were no collective agreement.
Mr. Bickerton: The date of the memo is August 7. The author
is John Gustavson. It is regarding a meeting between Alfonso
Gagliano, Minister Responsible for Canada Post; Jane Billings,
who I think was here earlier, from the Consulting and Audit
Branch; Pierre Tremblay, Executive Assistant; Allan Levine and
It reads in part as follows:
3. The Minister also pointed out that once the
conciliator's report had been received by the Minister of
Labour there is no time limit on the Minister to respond to
the report. The Minister also mentioned that it would be an
option for the Minister of Labour to order a new round of
conciliation. (Assumption: The government would again
re-emphasize to the Union the requirement to change work
practices in order to give a second round of conciliation any
chance of working.)
4. If all conciliation fails the government will allow a
strike to occur. I -
- meaning Gustavson -
- indicated to the Minister our views that the right to
strike was fundamental and should not be taken away from
postal workers as a general rule. I argued strenuously,
however, that there were special circumstances in this case
that dictated that with the failure of conciliation no solution
would be possible without government intervention. The
Minister indicated adamantly that the government felt the
right to strike was so fundamental that it would not take
away that right prior to a strike. I tested the strength of the
government's viewpoint in a number of ways but the
Minister remained firm that it would be the policy of the
government to allow the strike to begin.
The Minister stated that the strike would be very short
and that back-to-work legislation would be quickly
introduced. The Minister suggested it would take a
minimum of eight days to pass legislation and that assumes
that, although there would be opposition to the legislation
from some opposition parties, there would be no obstruction
tactics by the opposition. The Minister asked for our help in
persuading the opposition not to block the legislation.
The Minister indicated that they will not allow the Union
to walk away without taking responsibility for a strike, even
though it would be short, and that this time government
cheques would not be delivered by postal workers during a
strike but by an alternative but unidentified delivery service
already secured by the government. (Our conclusion: The
government intends to hold the Union leadership's feet to
the fire because even a strike will ultimately not change the
government's determination to get work practices at Canada
Post in line with the private sector.)
I think that is the relevant portion.
Senator Lynch-Staunton: That is more than enough.
Senator Kinsella: That is very helpful. Thank you for that.
I will return to some specifics. That provides us with a bit of
an indication as to the backdrop against which collective
bargaining was underway. I should like to have your assessment
on who you thought was calling the shots on the government
side. Was it the Minister of Public Works and Government
Services or the Minister of Labour?
Ms Bourque: We believed it was the Minister of Public Works
and Government Services. He was the one who met with
Mr. Gustavson. I should point out that the other part of that
memo, which is not quite as blatant as the issue of the
back-to-work legislation, is the promise that the whole
conciliation process would be used to drag out negotiations.
There has been much discussion here today about the timing of
this strike and the impact that it has on charities, businesses and
average Canadians. That was not our doing. We wanted our legal
right to strike in August when it would not have had that kind of
impact on Canadians, but the minister imposed two conciliation
processes, despite the fact that the government has since
reintroduced the same legislation that died on the Order Paper
prior to the last federal election and that would have eliminated
the second conciliation process. He made it clear to the CDMA
that he would use that conciliation process to drag out
What happened was that the second conciliator he appointed
did not follow the script; he did not stick around for several
months. He said, "I can't assist the parties, I'm out of here." That
resulted in our legal right to strike at this time.
That is one of the more insidious parts of that memo as well. It
is clear that Mr. Gagliano was the one who always talked about
back-to-work legislation. Every time he mentioned back-to-work
legislation, whether in a media scrum or in the House, the brakes
went on at the bargaining table. Canada Post stopped negotiating.
They had no need to negotiate. They knew they had
back-to-work legislation in their back pocket.
Senator Kinsella: Therefore, is it your testimony before this
Committee of the Whole of the Senate of Canada that the
Minister of Public Works was interfering with the collective
bargaining process, which properly should have been under the
jurisdiction of the Minister of Labour?
Ms Bourque: Yes, and we have actually written and asked for
Senator Kinsella: I want to get your evidence before this
committee that you believe speaks to clause 12 of the bill; in
particular the following: On November 24, you received at the
table a wage offer from Canada Post. A few days later, contract
negotiations stopped. Legislation is drafted, and in clause 12 of
the bill is a wage offer that is less than what was offered on
Does that raise in your mind a question about the back-to-work
legislation, particularly clause 12, which imposes a raise less
than was offered on November 24? What is your interpretation of
the timeline and why we see in a government bill an offer that is
less than the offer made on November 24?
Ms Bourque: I believe that the wage increase that has been
written into this legislation is designed to punish postal workers
for exercising their legal right to strike.
Senator Kinsella: Did you or any of your colleagues think
that that timeline might indicate that the back-to-work legislation
was drafted before November 24?
Ms Bourque: We would be guessing. We believe that the
back-to-work legislation was drafted as early as August 7. We
believe that there have been several versions of this legislation
floating around at any given time ready to be tabled. We have
been very public from the beginning that we believed that
back-to-work legislation had already been drafted.
Senator Kinsella: If clause 12 were removed from the bill; in
other words, if there were no reference to a wage settlement and
it was left on the table as one of the remaining items after
negotiations broke down, would that be an improvement to the
Ms Bourque: Absolutely. The whole issue of back-to-work
legislation aside, if that clause were removed from the legislation
and we were able to take our fair shot before an arbitrator -
either in terms of the mediation process in trying to mediate a
wage increase for postal workers, or if we got into interest
arbitration and got to argue why the wage increase should be
there - we would be happy to accept that fair shot before an
arbitrator to negotiate a fair wage increase for postal workers, not
one that is punitive.
Senator Kinsella: Therefore, you would comply more
willingly with the law, being respectful of the rule of law. If
clause 12 were not in the bill, the back-to-work mechanism of
the bill would still exist. Although we have found some
difficulties in the mechanism contained in this particular bill in
our studies this afternoon, at least the legislation would be in
place. The postal workers would have to return to work, but the
matter would be adjudicated through the arbitration mechanism
that is involved. Is that something that you would accept?
Ms Bourque: It is something that we would consider at least
to be fair and non-punitive.
Senator Gustafson: I am having some trouble - not with the
pronunciation of my name but with the numbers.
Earlier today, the minister said that the average wage for a
postal worker was $45,000, if I heard correctly.
Ms Bourque: I believe he said that that was the wage and
Senator Gustafson: You indicated here that the average wage
was $36,334. Does that include everyone from the top to the
Mr. Bickerton: In our bargaining unit, it does not include
George Clermont. I think he would raise the average
Senator Gustafson: But it includes the average worker. You
also indicated that, because of the rollback of time, instead of
gaining 2 per cent, you are losing $900 in three years.
Mr. Bickerton: I am sorry if I did not explain it in a clearer
fashion. I meant to say that in the offer from Canada Post
Corporation, the increases would come into effect on August 1 of
each year. In this legislation, the increases come into effect on
February 1 the following year, six months later.
We have not had an increase in our annual income since 1995.
With the offer of the employer, we would have received an
increase on August 1, and it would have been retroactive to
August 1. With this legislation, we will not receive another
increase until February 1. It is that difference in each of those
three years that will mean, over the next three years, that I will
have $991 fewer to spend.
Senator Gustafson: Were there any negotiations on pensions
or other money demands other than the wage rates?
Mr. Bickerton: We have a range of benefits, some of which
are monetary benefits. There has been some movement on some
of those, for instance, some aspects of our dental plan. In some
cases, Canada Post has put proposals forward to reduce the
benefit levels. In other cases, we have come to some agreements
around some improvements. However, a whole range of the
benefit package is not included here. Pensions are covered by the
Public Service Superannuation Act, so they are non-negotiable.
Senator Gustafson: I live in a rural area. My understanding is
that in our little town the co-op store contracts the postal work,
and it is done in that store for probably less money than what it
costs to do it in Toronto. It works very well. I can say that I have
not had any problem receiving mail. It has not obstructed my
farm or my business, or whatever.
You have done a good job, and I compliment you on that.
However, a portion of the Canada Post Corporation is privatized,
is it not, in that sense?
Ms Bourque: There have always been private retail postal
outlets. They have been around since the turn of the century. In
early 1980, Canada Post started expanding the private sector
retail network. Until the Liberals put in place the moratorium on
rural closures, rural communities, particularly in Saskatchewan,
were decimated. Thousands of post offices were closed across
the country. However, they did have the private sector outlets
open. Today, many of those are large, well-operated and
well-serviced outlets, but in the early days, and in many of the
rural communities, they are still not quite up to standard with a
public sector outlet. They are often located in the back of a store,
or in the back of a video store or garage, or something like that.
In many cases, Canada Post has put in place new standards so
that the private sector outlets are up to standard. In some cases,
as they cut back they became even better than the public sector
outlets. Privatization or contracting out had a devastating effect
on many rural communities, particularly in Saskatchewan and in
Senator Gustafson: It also had a positive effect. In many of
those small towns, there would not be a post office today, since
some of them have only 100 boxes. If it were not for the fact that
this kind of arrangement was reasonably costed, we could not be
receiving the mail there.
Ms Bourque: In many of the communities where there is no
post office, there are no banking services, either. We think there
should be postal services and banking services, and perhaps
public access to the information highway as well, in those
facilities so that they are not just maintaining a few lock boxes
but, instead, are providing more services that people in rural
Senator Gustafson: The reality is that that will not happen in
many areas. It is not feasible.
Ms Bourque: As part of the collective agreement that expired,
and that we are currently renegotiating, we negotiated a
job-creation service expansion project. One of those pilot
projects is in place right now in Niagara-on-the-Lake. There is a
Canada Post retail office there, and our members staff it. There
are computers there and the public can buy time on the Internet.
Our members have been trained to help them access that service.
That pilot project is working quite well and the people in the
community like it. It is protecting jobs, and it is moving Canada
Post into the new technologies and forward in a way that we
think can be expanded upon. It is especially important in rural
Senator DeWare: Did I hear you say that you have not had a
raise since 1995?
Mr. Bickerton: As a result of the rounding off, it is $12 a year.
Senator DeWare: The minister said twice today that you
received a 2-per-cent increase last February.
Mr. Bickerton: The minister was wrong. I will explain it
again, if you wish. In 1995, we negotiated a 2.5-year contract
beginning February 1. In the first year, we received no increase
in wages but $718 in a lump sum payment. The next year,
February 1, 1996, we received another $718 in a lump sum and
no increase in wages. February 1, 1997, we did not receive any
lump sum but our wages went up by 35 cents an hour, which
represented the amount of the lump sum spread over one year.
Our annual income since 1995 has gone up by a total of $12
because of the rounding off of the 34.6 cents into 35 cents. Yes,
the minister was mistaken.
Senator DeWare: Can you tell me how many items were in
your bargaining collective agreement?
Mr. Bickerton: How many items?
Senator DeWare: Yes. Was it 300?
Mr. Bickerton: We have 56 articles that might cover separate
items, and then we have a range of appendixes at the back.
Senator DeWare: When mediation broke down on
November 24, could you tell me how many items were still on
the table that had not been signed off?
Mr. Bickerton: In terms of "signed off" and "agreed to," there
is quite a difference in bargaining. Canada Post Corporation
stopped signing things off several days before that. We started
changing language, but they stopped signing. That can happen
when both parties are getting close, but you are not sure if it will
all hold together.
As I mentioned before, we thought we were closer on the night
of November 18. That was the decisive night. After that, Canada
Post management backed off on a very important aspect
concerning the letter carrier work rules. We never managed to
put those major issues back to them again. We made inroads on
some of the minor issues.
Senator DeWare: On November 18, you were down to what
you thought was the issue of wages. Everything else was pretty
well agreed to at that point.
Mr. Bickerton: The parties were moving on money. We never
thought there was a major impasse on the issue of wages. We had
been bargaining for seven-and-a-half months. Canada Post only
made one wage offer prior to November 19. We had not even
begun to talk money.
We came back on the night of November 18 with a new money
proposal and were fully expecting a back-and-forth dialogue
I would ask you to appreciate that money is a fairly
straightforward issue in terms of bargaining. You make equations
and everything is up front. Job security and work rules are much
Senator DeWare: I realize that.
Senator Bolduc: Honourable senators, my question follows
on the questions of Senator Murray. It is not a logical
continuation of what Senator DeWare had to say, but it is
complementary to Senator Murray's question.
I may be mistaken, but I believe there is some law or
regulation that states that letters cannot be delivered for less than
45 cents. It must cost at least 45 cents to deliver a letter. Is this
Ms Bourque: Yes.
Are you talking about a competitor, someone other than
Canada Post? Most products in Canada Post have been
deregulated over the years. Only basic letter mail is still
regulated. A private company would have to charge three times
what Canada Post charges.
Senator Bolduc: Letters cannot be delivered for less than
45 cents in Canada. There is a regulation on this. If that is so, do
you feel that the disappearance of that regulation would result in
individuals or companies delivering letters for less than 45 cents?
Ms Bourque: No. There may be companies that would
transport letters for less than that in the urban centres, but
certainly not outside of the urban centres.
Senator Bolduc: Continuing with the same line of reasoning,
if people can deliver letters to Montreal, Toronto, Vancouver,
Halifax, Ottawa, Winnipeg, Edmonton, Calgary, just about
anywhere in Canada for less than 45 cents, that means that there
is cross-subsidization in the present system. In other words, you
are making a profit in the cities in order to be able to serve rural
areas. Since 90 per cent of people live in cities, would it not be
better to say that there is no set price, that anyone can create a
company if he pleases and deliver letters at the price that suits
him? We have no problem with that. And in places where no one
wants to provide service, there will be a public service in order to
serve the interests of the public. Mail will be delivered for the
10 per cent of people who live in the country. Does that make
Ms Bourque: It might make sense if you live in downtown
Toronto. It does not make sense if you live outside the major
We have a universal postal service in this country, the same as
we have a universal medicare service. That is the kind of country
we live in, and I appreciate it. We have universal services,
whether you live in cities or in rural communities.
Even if the monopoly on first-class letter mail was loosened,
that would not mean an automatic decrease in postage rates, even
in the major centres. In Sweden, they eliminated the postal
monopoly. They now have private sector companies operating in
Sweden, and postage rates have increased by 40 per cent.
Senator Lynch-Staunton: I have not heard anyone on the
other side challenge your assertion, which we share, that
clause 12 is extremely unfair and arbitrary. We will move an
amendment to delete it from the bill unless we hear arguments
against that at the appropriate time.
However, I wish to make sure you understand that if we are
successful - and I am being realistic - it would put the union
in the hands of an unknown mediator-arbitrator named by the
employer. Are you willing to risk his or her judgment rather than
knowing that, by this law, if clause 12 is preserved, you are
getting Canada Post's last offer?
Ms Bourque: We are prepared to take our chances before an
arbitrator on that question.
Senator Lynch-Staunton: This principle of imposing a wage
settlement with numbers and timing makes a mockery of the
whole process of labour negotiation in this country. No matter
what government is in power, this has been going on for too long.
I feel that in three years we will be back to where we are today if
this process is allowed to continue.
Minister Axworthy was here when labour was part of his
portfolio. He agreed with everything that we are saying today,
but nothing has happened in those two or three years. Surely,
someone can come up with a better solution than this. It is a
Senator Phillips: This is not the first occasion on which I
have seen representatives of labour unions appear before this
chamber. I would remind the witnesses that, in the past, a number
of unions saw improvements to the legislation as a result of
amendments originating in this chamber.
This afternoon, I listened to two ministers. This evening, I
listened to representatives of the post office. I was not impressed
with any of them. However, I am not at all impressed with you.
The Senate has spent almost eight hours of continuous debate
in Committee of the Whole on this legislation. While we were
sitting, you announced that you were going back to work
You made that announcement cognizant of the fact that
80 per cent of Canadians were against your actions. Having
accepted the legislation and announced you are going back to
work tomorrow, you then turn up here tonight and ask us to reject
the legislation, at a minimum. If you felt that way, why did you
not wait until you appeared before this chamber before making
your announcement about going back?
Ms Bourque: It was because we had no idea that the Senate
was going to debate this legislation for this length of time. We
thought we would be appearing before the Senate at around
three o'clock this afternoon. We have been waiting since
three o'clock to come before you. We had to notify our members
as to what our response to the back-to-work legislation would be.
Perhaps it was our naiveté about the process, but we fully
expected the legislation to be passed by now, and our members
needed to be informed as to what our response to the legislation
We meant no disrespect to the process, if that is what you are
implying. We simply wanted to be able to put our views before
this body, to see if any amendments were possible. The timing
was something that we did not quite understand. Our members
needed to be told what we were recommending in terms of a
response to what we thought would be legislation that would
have been already passed by this time.
Senator Phillips: As I understood your earlier statement,
madam, you said you knew this morning you would be appearing
before this committee this afternoon. If you had any respect for
the Senate, you would have waited before you made your
commitment to accept the legislation. I am irritated and annoyed
that, having accepted the legislation, you would come in here and
ask me as a legislator to change it in your favour. As far as I am
concerned, you have accepted it, so stick with it.
Ms Bourque: We have not said that we could accept this
legislation. We have said that our members will comply with the
legislation, but we certainly do not accept this legislation.
Senator Phillips: I do not think you said your members would
comply with it when you said you were offering free postage. I
repeat: You accepted the legislation, and as far as I am
concerned, you can stick with it.
Mr. Bickerton: In answer to that, we can only say we have
come here to ask for justice for our members, and that is why we
have asked you to amend clause 12. That will be, I suppose, your
The Chairman: Thank you.
Honourable senators, on your behalf, I thank the witnesses,
Ms Bourque and Mr. Bickerton, for their appearance this
Honourable senators, the Senate is still in Committee of the
Whole on Bill C-24, to provide for the resumption and
continuation of postal services. I now intend to put all questions
to honourable senators.
First, shall the title be postponed?
Hon. Senators: Agreed.
The Chairman: Shall clause 1, the short title, be postponed?
Hon. Senators: Agreed.
The Chairman: Shall clause 2 carry?
Hon. Senators: Carried.
The Chairman: Shall clause 3 carry?
Hon. Senators: Carried.
The Chairman: Shall clause 4 carry?
Hon. Senators: Carried.
The Chairman: Shall clause 5 carry?
Hon. Senators: Carried.
The Chairman: Shall clause 6 carry?
Hon. Senators: Carried.
The Chairman: Shall clause 7 carry?
Hon. Senators: Carried.
The Chairman: Shall clause 8 carry?
Hon. Senators: Carried.
The Chairman: Shall clause 9 carry?
Hon. Senators: Carried.
The Chairman: Shall clause 10 carry?
Hon. Senators: Carried.
The Chairman: Shall clause 11 carry?
Hon. Senators: Carried.
The Chairman: Shall clause 12 carry?
Some Hon. Senators: Agreed.
Some Hon. Senators: No.
Senator Kinsella: Honourable senators, I move, seconded by
the Honourable Senator DeWare:
That clause 12 be deleted and that the subsequent sections
The consequential amendment would be:
That clause 13 be amended by dropping the letter "s"
after the word section in sentence 2 of clause 13, and
deleting the conjunction "and" and the number 12 and
furthermore by deleting the number 14 and replacing it with
the number 13.
Senator Carstairs: Honourable senators, as a suggestion,
perhaps we should deal with clause 12, and then the other
affected sections could be dealt with after we have dealt with
The Chairman: Before proceeding any further, I should like
to deal with the amendment proposed by Senator Kinsella. I refer
honourable senators to Beauchesne's Parliamentary Rules &
Forms, 6th edition, particularly to page 207, paragraph (6) of
citation 698 on the admissibility of amendments in committee:
An amendment to delete a clause is not in order, as the
proper course is to vote against the clause standing part of
I suppose the effect is the same. In that sense, the proposed
amendment is not receivable. However, if honourable senators
wish to oppose clause 12, all they have to do is stand up and be
counted as opposed.
Senator Murray: I call for a standing vote, Mr. Chairman.
The Chairman: We will now proceed with a standing vote.
Will those honourable senators in favour of clause 12 please
Will those opposed to clause 12 please stand?
Senator Robichaud (L'Acadie-Acadia): Same old gang.
Senator Berntson: Same old gang.
The Chairman: Thank you, honourable senators.
The result of the vote is the following: Yeas, 32; nays, 16.
Therefore, I declare clause 12 carried.
Shall clause 13 carry?
Hon. Senators: Carried.
The Chairman: Shall clause 14 carry?
Hon. Senators: Carried.
The Chairman: Shall clause 15 carry?
Hon. Senators: Carried.
The Chairman: Shall clause 16 carry?
Hon. Senators: Carried.
The Chairman: Shall clause 17 carry?
Hon. Senators: Carried.
The Chairman: Shall clause 18 carry?
Hon. Senators: Carried.
The Chairman: Shall clause 19 carry?
Hon. Senators: Carried.
The Chairman: Shall clause 20 carry?
Hon. Senators: Carried.
The Chairman: Shall clause 21 carry?
Hon. Senators: Carried.
The Chairman: Shall clause 1, the short title carry?
Hon. Senators: Carried.
The Chairman: Shall the title carry?
Hon. Senators: Carried.
The Chairman: Shall I report the bill without amendment?
Some Hon. Senators: Agreed.
Senator Lynch-Staunton: On division.
The Chairman: On division.
Thank you, honourable senators.
The Hon. the Speaker: Honourable senators, the sitting of the
Senate is resumed.
Hon. Eymard G. Corbin
: Honourable senators, the
Committee of the Whole to which was referred Bill C-24, an Act
to provide for the resumption and continuation of postal services,
has examined the said bill and has directed me to report the same
to the Senate without amendment, but on division.
The Hon. the Speaker
: Honourable senators, when shall this
bill be read the third time?
Hon. Sharon Carstairs (Deputy Leader of the
Government): Honourable senators, with leave, now.
The Hon. the Speaker: Is leave granted, honourable senators?
Hon. Senators: Agreed.
The Hon. the Speaker: Is it your pleasure, honourable
senators, to adopt the motion?
Motion in Amendment
Hon. Noël A. Kinsella (Acting Deputy Leader of the
: Honourable senators, I move:
That Bill C-24 be not now read the third time, but that it
be amended as follows:
(a) on page 5, by deleting clause 12;
(b) on page 5, by replacing line 39 with the following:
"section 11 constitutes a new collective"; and
(c) by renumbering clauses 13 to 21 and all
The Hon. the Speaker: Is it your pleasure, honourable
senators, to adopt the amendment?
Some Hon. Senators: No.
Some Hon. Senators: Yes.
The Hon. the Speaker: Will those honourable senators in
favour of the amendment please say "yea"?
Some Hon. Senators: Yea.
The Hon. the Speaker: Will those honourable senators who
are against the amendment please say "nay"?
Some Hon. Senators: Nay.
The Hon. the Speaker: In my opinion, the "nays" have it.
And two honourable senators having risen.
The Hon. the Speaker: Call in the senators.
Is there an agreement by the whips on the bells?
Some Hon. Senators: Now.
The Hon. the Speaker: Is it agreed that we proceed with the
Hon. Senators: Agreed.
Motion in amendment negatived on the following division:
THE HONOURABLE SENATORS
Nolin, Oliver, Roberge,
Robertson, Spivak, St.
THE HONOURABLE SENATORS
|Adams, Bacon, Bonnell,
Callbeck, Carstairs, Cools,
Corbin, Fairbairn, Ferretti
Barth, Forest, Graham,
Haidasz, Hays, Hébert,
Kenny, Lewis, Losier-Cool,
Maheu, Mercier, Milne,
Moore, Pearson, Pépin,
Perrault, Petten, Poulin,
Rompkey, Stewart, Stollery,
Taylor, Watt, Whelan-34
The Hon. the Speaker
THE HONOURABLE SENATORS
: It was moved by the Honourable
Senator Carstairs, seconded by the Honourable Senator Fairbairn,
that this bill be read the third time now.
Is it your pleasure, honourable senators, to adopt the motion?
Some Hon. Senators: Agreed.
Senator Lynch-Staunton: On division.
Motion agreed to and bill read third time and passed, on
The Hon. the Speaker
informed the Senate that the following
communication had been received:
3 December 1997
I have the honour to inform you that the Right
Honourable Antonio Lamer, Chief Justice of the Supreme
Court of Canada, in his capacity as Deputy Governor
General, will proceed to the Senate Chamber today, the 3rd
day of December 1997, at 10:15 p.m., for the purpose of
giving Royal Assent to a bill.
Judith A. LaRocque
Secretary to the Governor General
The Speaker of the Senate
Hon. Sharon Carstairs (Deputy Leader of the
: Honourable senators, there is agreement to let all
other matters on the Order Paper stand.
The Hon. the Speaker: Is it agreed, honourable senators?
Hon. Senators: Agreed.
The Senate adjourned during pleasure.
The Right Honourable Antonio Lamer, Chief Justice of the
Supreme Court of Canada, in his capacity as Deputy Governor
General, having come and being seated at the foot of the Throne,
and the House of Commons having been summoned, and being
come with their Deputy Speaker, the Right Honourable the
Deputy Governor General was pleased to give the Royal Assent
to the following bill:
An Act to provide for the resumption and continuation of
postal service (Bill C-24, Chapter 34, 1997)
The House of Commons withdrew.
The Right Honourable the Deputy Governor General was
pleased to retire.
The sitting of the Senate was resumed.
The Senate adjourned until tomorrow at 2 p.m.