Proceedings of the Standing Senate Committee on
Agriculture and
Forestry
Issue 10 - Evidence
OTTAWA, Thursday, February 20, 1997
The Standing Senate Committee on Agriculture and Forestry, to which was referred Bill C-60, to establish the Canadian Food Inspection Agency and to repeal and amend other acts as a consequence, met this day at 11:11 a.m. to give consideration to the bill.
Senator Leonard J. Gustafson (Chairman) in the Chair.
[English]
The Chairman: Honourable senators, I call the meeting to order.
Our first witness this morning is from Agriculture and Agri-Food Canada, Ronald Doering, Executive Director, Office of Food Inspection Systems. Later we will have witnesses from the Professional Institute of the Public Service of Canada.
We will begin this morning with Mr. Doering. Please proceed.
Mr. Ronald L. Doering, Executive Director, Office of Food Inspection Systems, Agriculture and Agri-Food Canada: I am pleased and proud to be before your committee to provide you with a brief background of Bill C-60, to explain its advantages and how we came this far.
The idea of a single food inspection agency was announced in the 1996 budget. However, following the 1995 budget, as part of program review, it was found that there were at that time four government departments that did food inspection. Industry had a food inspection job relating to labels and weights, et cetera. Fisheries had quite a large fish inspection program which involved more than 400 people. There were somewhere between 300 and 400 people at Health Canada who did food inspection for a variety of facilities. Lastly, and the largest of these, Agriculture and Agri-Food Canada had over 4,000 people doing inspection on a variety of activities.
Therefore, the decision was announced that, at long last, we would move to create a new agency that would be much more efficient in terms of saving money, and much more effective in terms of meeting the dual mandate of the government, that is, to enhance consumer protection and to be supportive of Canadian industry to help us in our exports.
Once the decision was made, we proceeded in two steps. A year ago last June, we moved the Health Canada inspectors to Agriculture. In the meantime, the Industry people had been moved there already. What we are doing under this legislation is taking the people who are now in Agriculture and the people who are now at Fisheries and having them join together to create this new agency. The target date for this is sometime early in the new year. We are still aiming for April 1.
Basically, there are seven reasons why the government was persuaded to take this initiative. First, it had to be clear that high-level health and safety standard setting had to rest with government and stay with the Minister of Health in the traditional way. Under this legislation, there is no diminishment of the mandate of the minister to make high-level health and safety standards. Consolidating the policy standard setting for health and safety allowed the inspection group to be not an arm's-length agency, but more an elbow's-length agency, as we have said, to be a little more efficient, to act a little more entrepreneurial, and to be able to do things differently to do a better job of serving industry.
The second rationale for the creation of the agency relates to what in Ottawa is called a long-standing horizontal problem. This, of course, refers to the fact that there were four different departments doing this function. According to industry, the provinces and the many people who came before us during our nine months of consultation before, the four different departments were not doing a good job of working together. It was found that the usual tendency of departments to be somewhat protective of their turf had prevailed. To get at that problem, there had been four studies in the last 25 years, all of which recommended some organizational change, such as moving to a single agency.
One of the issues that brought this to a head was the 1994 Auditor General's report. This Auditor General's report, while saying, as we all do, that Canada generally enjoys a safe food system, pointed out a number of accountability problems with four government departments and the failure to get the federal act together. The report said that this situation put in jeopardy our ability to compete internationally with the changing competitive structure. The report also said that it even ran the risk of jeopardizing food safety where accountability is not clear. The Auditor General's report was quite critical and was another factor in the government's conclusion that something needed to be done.
When I was talking to Senator Anderson briefly before we started, she indicated that she hoped nothing we do here will compromise food safety. The answer is that nothing in this bill will compromise food safety. One of the principal ways this agency will enhance safety is by doing a much better job with the long-standing federal-provincial initiative. I will not take your time to go into this, but who is responsible for what in food inspection is a complex array. If you made it up, people would think you were doing this just to be silly in terms of who does what in municipalities and provincial and federal departments.
There is a federal-provincial initiative of middle-level technical specialists to try to do a better job of getting at this proliferation of jurisdiction and this fragmentation. It is called the Canadian Food Inspection System. I am the federal co-chair. One of my cochairs, representing provincial health interests, is a man from British Columbia, and another, representing provincial agriculture interests, is a man from Manitoba by the name of John Taylor.
When we meet, as we will next week again, we are 38 members. Each of the provinces have someone from the areas of the environment, health and agriculture.In the case of British Columbia, the Department of Agriculture does not do any food inspection; it is done by the Department of Health. All these people are represented around the table.
In the case of the federal government now, at any rate, we will have a single focus. Clearly, the biggest threat to food safety in Canada is with the problem of having an organized system among the provinces and the federal government
If you were to come with me to a federally registered facility, such as a meat plant, you would see that there is always a federal veterinarian on the kill floor. Longstanding, experienced inspectors do carcass-by-carcass inspection of that meat. You would be impressed. It is highly unlikely that a food safety problem would come from a federal facility.
On the other hand, there are many provincial facilities which do not have federal registration. In some cases, and this is increasingly a problem as provinces face financial constraints, there is no inspection at all, or at least inspection to a different standard. If the federal government could get its act together, we could do a better job of working with the provinces.
Senator Anderson: What does CFIS stand for?
Mr. Doering: The Canadian Food Inspection System.
Senator Anderson: Is that what is coming?
Mr. Doering: No. I apologize for the confusion. The ongoing system which I now co-chair, as I mentioned earlier, is called the Canadian Food Inspection System. At these various meetings over the years, the provinces have come forward and said, "Our big problem is that we come to these meetings and Health Canada says one thing and Agriculture Canada says something else. Fisheries does not want to participate because they have another view." The provinces are very critical of the federal government for having this kind of fragmentation. Actually, the CFIS committee was one impetus for the development of this agency in that it said to the federal government, "Get your act together. Get a single window for industry and a single window for the provinces." We have now done that.
The Canadian Food Inspection Agency, CFIA, which will be established by Bill C-60, is to do a better job of this federal-provincial initiative. Although it is rare these days, we can say that every single province is in favour of this initiative, including the province of Quebec which is a strong participant. At our big plenary meeting, which is to be held in Toronto next week, every province will be represented. Everyone is complimentary of the federal government for finally getting its act together, just as they had requested in the past.
The fourth reason for this initiative is that it will improve significantly service delivery. Now, we have simply a single window for industry. There will be no federal person showing up in a meat plant, a potato facility or a dairy facility, other than the person working for the Canadian Food Inspection Agency. In the past, there have been problems with different inspectors showing up at different times, which has caused industry to say, "My God, surely you could do a better job." This has been particularly critical in recent years as the government has sought to recover some of the costs from industry. That is why they are even more anxious that we be more efficient.
Because of this move, I am pleased and proud to report that, while it is also unusual for a major policy change to have the complete support of all provinces, we also enjoy the unanimous support of industry. I am not aware of a single major industry group or association that is not is favour of what the federal government has done here.
The last three reasons for the creation of the agency include getting rid of the overlap and duplication and having one agency reporting to one minister instead of four departments reporting to four ministers. There is an estimated annual saving in each and every year, beginning next year, of $44 million. We must save that amount because the money has been taken away from us already by Treasury Board. Therefore, there will definitely be savings of $44 million starting in 1998-99. We will no longer have four sets of administrative overheads, et cetera.
The next point sounds a little bureaucratic. It removes constraints of the departmental system. The regular government departments were set up years ago to deliver services to Canadians. Generally speaking, they were reasonably routine services. Many rules and regulations create real constraints on officials, particularly when this agency now is already much more like a company in terms of some of the things it does. It will have revenues of over $50 million on the first day it is in business. That money will be able to be used more effectively and efficiently. The legislation has a whole range of flexibilities in it which allow us to do a better job over the next few years.
The last point is one that we added only halfway through the process, that is, that there is a psychological advantage to the establishment of this agency. People are excited about it. There will be close to 5,000 people coming to this agency from the four federal departments. Someone said to me last week that, perhaps, food inspection could be fun again and we could have an interesting vision of how we can do the best food inspection in the world. Canada will be the first country with a single agency dealing with all commodities. Many countries are watching what we are doing, quite enviously, in fact.
Senators, those are the seven good reasons for this initiative.
My next point relates to accountability. You may recall the acute problems that the U.K. had with mad cow disease, or BSE. There is a significant problem with salmonella poisoning in a variety of countries. There is a very big issue relating to hamburger disease, the 0157 E-coli contamination problem in the United States. Many people look at these food crises and say that one of the reasons we have had them is that, in some places, there has not been clear accountability: Who is responsible for that? In our case, there will be a single minister responsible for the agency. That minister will be the Minister of Agriculture and Agri-food. That is as a result of an amendment made by your colleagues in the other place, members of the Agriculture and Agri-Food Committee.
There will be a ministerial advisory board with some significant powers to allow it to involve industry and consumer interests. On it there will be members from consumers groups, health groups, health professionals, nutrition specialists, and industry representatives to advise the minister in the carrying out of this function.
One of the things about which we wanted to make absolutely certain was that we were not getting rid of one set of stove pipes, warring bureaucracies, to create new ones. To ensure this is done, we have been involved in a thorough process of being clear on who does what. This will be set out in memoranda of understanding so there will be no confusion. If there is an outbreak of some disease in some community, we will know exactly who has the responsibility to deal with it. As a result, there will be no confusion or buck-passing.
I am proud to say that there is enhanced reporting to Parliament, and greater accountability, in what we have done here. Several senior officials from the Auditor General's office are here today. They have been with us all along. The Auditor General, of course, is your servant in these matters. His department is excited about the fact that we have put in this bill some new reporting requirements and a new role for the Auditor General to enhance Parliament's oversight of our work.
I will not walk you through the financial framework other than to say that the agency will have somewhere around $300 million, and something in the order of $50 million will be raised through recovery from industry. One of the things about which we have been clear is that there are no planned increases to cost recovery in the next few years. This has been a big issue in Prince Edward Island, Senator Anderson, with respect to potatoes, and serious work is being done on that topic as we speak. Several other issues have come up in the context of cost recovery, but Minister Goodale has announced that there are no new planned cost recovery initiatives right through to the year 2000. When we went to cabinet and Parliament regarding the approval process, everyone agreed that we should not have to save any money in our first year. We needed to get our feet on the ground. We do not want to compromise consumer protection and food safety.
It is only in the second year, 1998-1999, that we will have to save this sum of money. We are confident that we can do it. The identified savings were unrelated to additional cost recovery.
One of the more controversial parts of the bill in terms of human resources is that, in the first year of its operation, the agency will be exactly as it is now. These people are all public servants. We all fall under the auspices of the Public Service Staff Relations Board, something which will continue indefinitely.
However, there is a provision under the Public Service Employment Act whereby the employer is the Treasury Board and staffing is done by going to the Public Service Commission.
In order to be more nimble and efficient, in order to do our job better, there was quite a lot of analysis done by a human resource specialist inside government. They looked at the existing human resource arrangements in the federal government, which are 25 years old. These arrangements no longer suit us. I will give you an example. If you are a public servant, you work a seven and one-half hour day. The hours of the meat plant in which you work number eight. As a result, someone has to pay everyone one-half hour overtime. Moving the whole human resource system to accommodate a separate collective agreement to arrange for those kinds of things would not appear to be impossible. I am sure it is not. However, the fact it is hard is proof of the fact that it has existed for many years and it has not been changed. It has been an ongoing aggravation about which I have heard from many people.
As a separate employer, the agency, after the first year, will move out from under the Public Service Employment Act. We will have our own staffing regime, and means and arrangements to be a little more flexible in terms of how we hire people and the kind of agreements we enter into with them.
As you may hear from representatives of the Professional Institute of the Public Service of Canada later this morning, this is a rather controversial issue. It is not exactly new. We are not the first separate employer. There are already some 20 of them. More than one-half of the public service today falls outside the Public Service Employment Act.
I am a lawyer who has done some government reorganization in different areas over the years. I can tell you that it was unanimous among human resource specialists, people who have worked their whole lifetime in the federal government, that if you have the opportunity to be your own employer and have a regime suitable to your needs and meet your objectives, then you should do it. That was the unanimous advice from our group.
With regard to human resources, it turned out that, in 1993, when the federal government undertook a range of legislative changes, an apparent error was made relating to the protection of separate employees for redress in the case of dismissal for non-disciplinary reasons. Representatives of PIPS made a compelling argument before the standing committee of the House of Commons about wanting to ensure that we could provide redress for suspension in such a case.
As a result, Minister Goodale has written to the Professional Institute of the Public Service indicating that he has discussed this with his colleagues and that it is his intention to address that technical error. Work is currently under way to develop such an Order in Council. It is our intention to have it in place by the time the agency is up and running, which, hopefully, will be April 1.
The federal-provincial dimension is significant to our work. We need to do a better job of working with the provinces. The provinces are excited by the fact that there are several provisions in this bill which allow us to work better and more closely with the provinces. I will give you two or three examples in that regard.
Under the proposed legislation, it would be possible for the agency to hire a private sector veterinarian in a remote area if it did not make sense to have a full-time federal government veterinarian to go to that location. At the moment, that is not possible. There are serious obstacles in delegating such authority to a private sector veterinarian. In the same vein, that is not to say that there would be much of this done. It is actually cheaper to do the work through the public service; however, there are cases in which this might make it easier.
The legislation allows us to delegate to provincial officials and to federal officials. In Manitoba, most meat inspection is done on a contractual basis by the federal government, by Agriculture and Agri-Food veterinarians and meat inspectors. It is cheaper to have them do it for us. Our hope is that inspections will be done on the basis of what makes sense rather than on a narrow interpretation of the Constitution.
One novel item is the creation of a federal-provincial corporation. The federal and provincial governments could have shares in this corporation. The board could be made up of both provincial and federal people. This corporation could carry out inspection and quarantine-related services in a way that cannot be done at present. As you know, the federal government cannot direct its jurisdiction directly to a province or vice versa. This is another reason the provinces are so keen to support this initiative.
It is important to note that we are keeping federal and provincial ministers accountable for the execution of their own statutory responsibilities. We are not changing the jurisdiction or the Constitution. We are trying to find an administrative means to do a better job.
Those are my overview remarks, senators. This is a big piece of legislation. However, it is not nearly as complicated as it looks.
The Meat Inspection Act, the Canada Agricultural Products Standards Act and the Fish Inspection Act remain in place. We did not have time to consolidate this legislation into a single food bill, although we would like to at some time in the future.
From a public service human resources stand point, all the people who now work for the government in the four departments involved will receive a job offer from the new agency. They will have a two-year job guarantee if they accept the offer.
There is a great deal of enthusiasm on the part of most front-line workers who feel that this measure will give them a real opportunity and that it will not decrease significantly their employment security. They remain public servants for the purpose of the Public Service Staff Relations Act.
The Chairman: Thank you for your presentation, Mr. Doering.
When I was the member of Parliament for Gainsborough, Saskatchewan, I was involved with a case of a butcher shop trying to sell sides of beef into Manitoba from Saskatchewan. He could not do this because his building did not meet the requirements of the province of Manitoba. The province required a brick building; he had one constructed of two-by-fours lined with steel. As a result, he could not sell beef into Manitoba. Even though we went to various departments, he could never accomplish his goal of selling meat to buyers in Manitoba.
How will you deal with province-to-province situations? Does the federal government have the power to sit down with Manitoba, Saskatchewan or any province and say, "Look, get your act together here. Don't put this small producer out of business because he has to meet a set of regulations that happen to be in place in another province"?
Mr. Doering: Mr. Chairman, given the trade and commerce provisions of the British North America Act, if a product is to cross provincial boundaries or is to be exported, that falls under federal jurisdiction. In the case of meat, it falls under the Meat Inspection Act. If you want your meat to cross from one province to another, or to leave Canada, then you must be a federally registered meat facility. You need a federal number. In order to maintain that registration, you must meet a certain standard of inspection. Included in that is construction standards. You need walls that are non-permeable so that blood does not soak in. You need a four-inch drain. If you are to be federally registered, there are rules by which you must abide which stipulate what is required.
In this day and age, we talk about an economic union. If you wanted meat to go from Saskatchewan to Manitoba, surely you would be able to do so, right? Is this not a barrier to trade? The answer is that it is. I hope we will be able to solve this problem soon, but there is a reason for it.
Would it be fair for a product to move from one province which has a reasonably high standard of inspection to a province that has a reasonably low standard of inspection? The people who live in the latter province would say, "We have to track that meat and figure out from where it comes."
Ironically, in this case and the case of Saskatchewan, they have only a voluntary system for in-province meat as it is. You could have an abattoir or a meat processing facility in Saskatchewan, and as long as the meat does not leave Saskatchewan, you do not receive regular inspection. This is thought to be a health and safety problem. It is also thought to be a significant trade problem.
Under the rules of both the NAFTA and the World Trade Organization, you cannot stop a product from coming into a province. For example, a higher standard cannot be placed on meat coming into Manitoba. There cannot be less favourable treatment for them.
The national treatment definition now means that if you let a product go from Saskatchewan to Manitoba at this standard, then that becomes the new standard in Manitoba. If you traced it back and found meat from Tennessee and Kentucky, all they would have to show is a standard of inspection. There is a real federal role in saying, "No, we do not want to allow a product into Canada with these new import standards." They would pose a serious health risk to Canadians. The real trick to overcome the problem you have described, senator, is to have a national standard system agreed to by the provinces and the federal government. Why not have a harmonized standard? That way, the meat could come in at that level. No one would worry about it.
To answer a question posed by Senator Anderson earlier, a group chaired by the medical officer of health for the public health department of Nova Scotia, and another large group including veterinarians and food science specialists, are close to having a national meat code. If it is adopted by all provinces, then we will be able to move the product a lot easier, exactly as you have said.
Right now, it is a very complicated question. Some provinces are not in favour of it. Some of the bigger meat companies are not in favour of it. They pay all this money to have a big, federally registered facility, and they do not want these people who do not have to meet these standards producing meat at a lower standard.
I do not want to make light of the fact that this is a complicated problem. However, I believe that we have moved a long way in the past year to address the problem you have described.
The Chairman: It will be important for the economic benefit of Canada to have trade between provinces. We talk about free trade, international trade and global trade, yet we do not even have free trade between the provinces. I suggest that it would be most important to deal with this issue right at the outset.
Having been a cattle producer -- and my boys are still cattle producers, raising exotic cattle and crossing the U.S. border -- we all know, although it is hard to get departments to admit it, that every once in a while someone on the U.S. side will say, "We are afraid of this certain problem." It then becomes a health problem, which is not the reason at all. They just want to stall the movement of certain cattle, or whatever the case may be. It may be bees and honey, as we had here three or four years ago.
In my opinion, this is more of a political situation than a health problem. I think it will be important to iron out these situations for interprovincial trade, as well as for international trade.
Mr. Doering: I agree with you completely, senator.
The Chairman: I have some problem with the numbers in the sunset clause. You say that there will not be any job interruptions. There had to be a lot of duplication of jobs to bring four departments together. Is there a sunset clause on these workers, or will you phase them out through attrition or other ways?
You mentioned two years. Well, two years is a short time in a lifetime.
Coming from the Conservative side, our government said jobs, jobs, jobs. The present government is saying jobs, jobs, jobs. We all agree on one thing -- it looks like there will be fewer jobs all the way along in our society, for various reasons. This is a big concern.
Today, one of the concerns of the working public is that they have no confidence in the country because they have no confidence in the fact that they will have job security. This is a very serious situation, not only in this area but in many areas. It will be predominant here.
Mr. Doering: One of the good things we have going for us in the case of food inspection at the federal level is that no province thinks the federal government should be out of this area. No province is saying that this should be decentralized and that they should be given the power. There will not be a significant decrease in the number of people because we somehow pass this down to the provinces. The provinces want us do it because of the export trade reasons and because there is a big expense in doing it. There is no movement at all to decentralization, which helps to maintain federal jobs.
On the deregulation side, no one is suggesting that there should be less of a role for the federal government. This is an area in which the government creates jobs in two different ways. The first is that there is quite a significant number of federal jobs here. However, the fact is that the industry, the private sector, wants the federal government to be there. If you want to sell your product abroad, you must have it Canada approved. We have to say that this is the Canadian Food Inspection Agency. We are the world's best, and you have our stamp. We can prove that we are equivalent to you on phytosanitary things in terms that we are disease free and we can prove it. Canada has a good reputation in this respect.
As you know, Canadian wheat was one of the first products simply moved by computer means for inspection. Similarly, all commodities came forward from the meat council and the poultry council. All these major industry groups said, "Whatever you do, do not let the federal government go away because we want federal inspectors there." It is not our expectation that there will be any significant decrease in the number of people doing the food inspection job at the federal level.
At the more practical level in terms of overlap and duplication, quite a few federal public servants have left because of downsizing over the last couple of years. Everyone will receive a two-year job guarantee. However, that does not mean that some people will not be leaving. You may well receive the two-year job guarantee, but if you are willing to go on your own hook, then you are eligible for ERI or EDI pay-out provisions.
One of the things we have going for us in this area is that the average age of people in the food inspection area is 52. There is a line-up of more people who want to go than we can let go.
This is not a case where there will be a lot of pink slips, even in two years' time. In fact, if we do a good job of working with the provinces to establish new opportunities, we could end up having more people, not fewer people, in this area. However, we would be doing the job more efficiently and more effectively.
Senator Anderson: I have to admit that I received these papers just before I arrived at the committee. I did not have much of a chance to look them over. Would you mind going back to the rationale for the creation of the agency?
You started off rather quickly. I do not understand what is meant by differentiation of functions, steering from rowing, permits more commercial approach and clarifies accountability. Please explain what that means.
Mr. Doering: I apologize, senator.
As governments of all countries in the western world were looking at themselves in the late 1980s and early 1990s, they were asking: What is the role of the government here? We cannot afford to have the same degree of government in the future. That is what got us into many of the fiscal problems. We have to figure out what is core to government and keep on doing that. There can be no change in that.
That led to a variety of political scientists and others talking about the fact that it would be useful to differentiate the so-called steering function of government -- making the rules -- from the less core job, namely, the kind of rowing function, if you will, a more operational kind of activity. If what you were doing was primarily steering, policy setting, there could be no devolution of that to what was a little more of an arm's-length agency. If what you were doing was a little more operational, then you could.
Gaebler, and others, talked about differentiating the steering function, which government can never give up, and the rowing function which could be done somewhat differently. In our case, we realized that in the case of food inspection it could not go off to an independent agency. This in not an independent arm's-length agency we are creating here. In early days, people thought they could do that. However, it became clear for accountability reasons that we could not create an arm's-length agency here. You could not say, "There will be a minister and a president and they will run everything. It would be like a Crown corporation." This is not a Crown corporation.
The more we listened to Canadians it became obvious that no one would ever accept the proposition that one could not say to the government, after my daughter died of hamburger disease last week, "What about this?" No minister could ever say, "Don't talk to me. Go talk to the head of the agency." The minister will be held accountable for that kind of terrible situation. Food safety is too important. Therefore, the government has to set the rules for food safety.
However, if you could have a more operational agency, with some kind of flexibility, maybe you would do a better job of that rowing function. Perhaps, for example, if you had to set flexibility in financial and human resource areas that would allow you to keep on doing it as a government, but do it cheaper and better.
Another example is government departments which, if they save money in one year, they cannot carry anything but a small amount over into the next. However, the agency can do that, which leads to the dilemma you have heard of in which departments spend all their money in the last few weeks of the fiscal year because they will not be able to keep it. The agency would have a full roll-over provision in order to be more business like in the way it does its work. There is a kind of distinction here in that case.
There is also another distinction. Clearly, Health Canada is the standard setter. In fact, Health Canada will audit the agency to make sure it does its job. Even though we are getting some flexibilities not otherwise enjoyed by government departments, we are nonetheless just as accountable, maybe even more so, because of these provisions for Health Canada to audit us. This is to ensure that the agency is not, for example, in the pocket of industry. Canadian consumers do not want this to be there just to do inspection for industry. Interestingly enough, industry does not want that either. Industry knows that it is the credibility of the food inspection system that is central to their competitiveness. The reason Canadian food products can be sold so well almost anywhere in the world is that we have this system which has such high integrity.
Senator Anderson: In May 1995, the government established the Office of Food Inspection Systems. I understand you, sir, are the executive director of that agency. With will happen to this Office of Food Inspection Systems? Will it disappear?
Mr. Doering: We will disappear and we will lose our jobs.
Just to explain, what happened is that the government was frustrated, and has been for 25 years. They would turn to the four departments and say, "Get your act together. We cannot believe you have four departments doing this work. Do something about it." They would always have reasons why this could not happen. They would say, "No, we have to protect the fishing industry and, therefore, it has to be done separately." The same would be said with respect to quarantine functions, agriculture veterinarians, et cetera. What the government did to move this along is it brought in an outside Assistant Deputy Minister who did not work for any of the four departments. The government seconded a lot of people to look at whether or not an agency would make sense. We did that in the first year and concluded that an agency did make sense. Indeed, the departments came around to that view as well. We had the responsibility of setting this thing up.
What it meant was that I did not have to worry about running the Department of Agriculture's food inspection system while we were setting up this agency and readying the legislation. This is all we had to worry about doing. Everyone who worked for me was seconded from other government departments. There was no actual cost to this measure. Many of them are here with me now. I am sorry you do not have a chance to meet them. If you have a complicated question I cannot handle, I will ask one or all of them to come forward.
For example, we have seconded a person from the Auditor General's office, who was one of the authors of the very critical report. Nevertheless, people were impressed by his understanding of the material. We have a representative from Treasury Board. One of their officials is seconded to us on a full-time basis. We have others from Agriculture and Health Canada.
We put together a team of seconded people who were excited by the idea of setting up a new agency. The day the agency is created some will move into it, but many will just go back to their parent departments.
Senator Rossiter: Mr. Doering, I understood you to say that you had started taking people under your wing in 1995, when they were starting part of the inspection group, but they were not. They were just coming under the systems group. Is that right?
Mr. Doering: Yes.
Senator Rossiter: You anticipate the agency starting operations April 1, 1997, which is only a short time away. I presume you have prepared some sort of a business plan with regard to revenue expenditures, et cetera, for at least the next two or three years. Could we see that, please?
Mr. Doering: Yes. It is required that the business plan be tabled as soon as possible after the agency is created which, presumably, will be some time this summer. We have done draft work on that plan already.
In terms of the actual financing for the first year what will happen is this. All the money that is now spent by Agriculture in the Food Inspection Branch, the former inspection group in Health Canada and the fish inspection service, as well as the approximate 400 people from the Department of Fisheries, will go to the agency for this year. There are no new financial arrangements for this year. This is a transition year. We simply get the money and the people intact. Instead of working for three or four different places, they will work for one.
The business plan for future years will be tabled in Parliament this June or September. That document will set out our business plan for the three, five-year planning phase, including the details of the finances for after the first year. We could table all of that with you.
Senator Rossiter: We would like to have it, please.
Some people are very concerned about user fees. What part of the revenue of the agency will be made up of user fees?
Mr. Doering: Depending on how you measure it, it is about 10 per cent or 15 per cent. It differs according to commodity. Basically, it depends on what are your numerators and denominators. It depends on the program.
By way of illustration, the meat program is something in the order of $140 million. We cost recover around $15 million. So in the case of the meat program, it is less than 10 per cent. One of the reasons is that we do not want to be non-competitive with the Americans. We have to be very careful that our inspection fees are not higher than theirs. It is a comparative thing.
Senator Rossiter: Do I understand that they have none?
Mr. Doering: It depends what you mean by none. This was the subject of a whole day's meeting with the standing committee of the House of Commons. It depends how you measure it. They charge overtime, for example. By charging overtime, it works out to a certain percentage. People are debating this at the moment.
Senator Rossiter: On what do they charge overtime?
Mr. Doering: On inspectors.
Only last week, the American government announced that it would increase significantly cost recovery by $390 million. This caused quite a stir in Canada. However, it remains to be seen whether they will get that approved. If that happens, obviously, the Americans will be doing a lot more cost recovery than they do now.
To answer your question on a broad level, cost recovery has probably been the most difficult problem we have faced in the past year. I thank you for raising it. I have spoken to it briefly, but now I will deal with it a little more.
Under the first phase of program review, starting in the early 1990s, and through the second phase of program review, and even cutbacks from before, the various departments were forced to save money by having fewer people. One of the things that Agriculture Canada did on the inspection side was to raise cost recovery fees in order to keep more people. The value of a full-time equivalent is between $65,000 and $75,000. If you keep that person, there is a cost associated with it.
In the past, the Department of Agriculture found a way to do some cost recovery in order to keep some people in place. During these various programs there were targets set for cost recovery. The target for the Department of Agriculture was in the range of $50 million to $60 million. In the Department of Fisheries and Oceans the target was about $5 million for inspection of a total of about $29 million.
This is obviously an irritant to people. No one likes paying; and you cannot blame them. We have to ensure that we do a better job of explaining why we are doing this and that there are not special cases in which it causes undue hardship to industry. There is currently work being done on that in the potato area.
The fact is that it is still a reasonably modest amount of the total. The taxpayers of Canada are still paying 80 per cent or more of what we spend on food inspection.
We knew that if we set the agency up simply to do more cost recovery, that alone would anger the industry. Therefore, the decision was made by the government not to do additional cost recovery this year and next year. That is why Minister Goodale has announced that there will be no new cost recovery plan before the year 2000.
Senator Rossiter: However, there is no guarantee after that?
Mr. Doering: No, but the government has announced that all of this will be done in consultation with the industry. People will spend a great deal of time working out what is fair and what is not. One of the advantages of cost recovery, apart from the money it raises, is that it starts to put a price on the free goods. In the past, industry could simply say, "We want a lot more inspectors." It did not cost them anything, so why would they not demand more inspection services? Now if they want more, there is a cost to it. Getting a hand on that free good was one of the other reasons for the cost recovery initiative.
The Chairman: I have heard that as much as $52 million is raised by user fees. Someone got the idea that since prices, especially grain prices, were going through the roof we should put our hand in the pocket and take some money out of the situation. That is not happening. In fact, I am told that the overall net profit in agriculture was approximately 11 per cent and that it may drop as low as 7 per cent this year. The agriculture community is paying the big buck, as we see in grain transportation and demurrage on the west coast right now.
What portion of user fees is the industry paying in the meat industry, for example, or is it paying any portion?
Mr. Doering: In the meat industry, they are paying 10 per cent to 15 per cent of meat inspection.
The Chairman: So the farmers are paying 85 per cent.
Mr. Doering: No. The taxpayers are paying the balance. In a sense, it is a form of subsidy to the meat industry for meat inspection. There are good reasons for this. If a meat plant on this side of the 49th parallel is paying more for inspection fees than a meat plant on the other side of the 49th parallel, you have a competitive disadvantage. The Canadian Meat Council, the Canadian Poultry Council and other industry groups came forward in our consultations over the course of a year and said that they are reasonably comfortable with what is happening. However, they wanted to ensure that if they were made non-competitive, Canadians jobs would be lost and it would hurt our trade and commerce prospects.
The Chairman: At Estevan, Saskatchewan, this winter, especially in December and early January, good, fleshy cows were selling for 33 cents a pound. That is tremendous hamburger. Yet, there was no movement in the price of meat across the counter. It takes $250 worth of hay to feed a 1,000-pound cow which would sell for only $330. It does not take you much accounting to understand that this is not a paying proposition.
I raise that only to make you aware, as I am sure you are, of the problems that exist. Additional user fees are coming into the equation in some areas when the situation is already very critical. Certainly it has never been more critical, in my experience, than it is right now in the cattle industry.
A gentleman told me the other day that he had to sell pure-bred Semmintal cattle for around $400 apiece. He said that it brought tears to his eyes. That is the situation we are facing.
Mr. Doering: I understand. This is the much lauded market. The federal government must be very careful of what it does with regard to the impact of its fees on the competitiveness of the Canadian industry.
We probably have not done a very good job of looking at the cumulative impact of these things. Any one department or agency does not think about the cumulative impact of their inspection fees with others. There is quite a bit of work being done by Treasury Board on that now.
The Chairman: What about fertilizer? You have probably heard the story on fertilizer before. We have had increases of 100 per cent.
This is not just farmers crying. This is a real problem. I was a part of the government and I chaired the task force on drought in western Canada when our government threw billions of dollars into agriculture simply because we had no choice. If we had not, there would be no farmers left out there in many areas, especially young farmers. This is not just farmers crying. This is a real problem that will emerge in a very serious way in two or three years unless there is a change in the international marketplace in a lot of commodities. Tractors and combines are selling at $250,000, fertilizer prices are going through the roof and land prices are starting to rise again. I see some clouds on the horizon. Do not be a bit surprised if we are back in this very room in three years asking what the government is going to do about this. Many of the decisions that are made now will be very critical in the outcome of these situations.
Mr. Doering: I take your point, senator. I was born and raised on the farm and I have lost money on all commodities, so I know about that. You are talking about a much bigger issue than food inspection, of course.
One of the things we found about industry is that they are very supportive of the move to this agency. They know that, both from an inspection and a quarantine point of view, a food inspection system that is integrated and better organized is perhaps their main competitive advantage. That is why I am pleased to say that, while there is an ongoing worry about cost recovery, we made a commitment that no new cost recovery is planned. At the same time, every single association that came forward strongly supported the agency, be it the cattlemen, the meat council, the poultry council or the Canadian Federation of Agriculture. They agree with the concept of getting rid of this overlap and duplication. They, too, raised the issue of cost recovery. We have to do a good job of that.
We were hit with a lot of complaints about cost recovery that were not related to us. People were complaining about the pest management agency which has nothing to do with the food inspection agency. People were complaining about a lot of different costs that were not related to us.
For our part, we have done what I think was a necessary thing, that is, get organized; get rid of the overlap and duplication; be as efficient and as effective as we can possibly be. We have made a commitment to sit down with industry to work out how we will do this stuff in the future.
Senator Maheu: I would like to touch on two points you raised under the heading of accountability regime. You stated clearly that the safety of food supply is the core function of government. Am I right in understanding that here we are talking strictly federal government?
Mr. Doering: That is right.
Senator Maheu: You also spoke about federal and provincial ministers remaining accountable for the execution of their respective statutory responsibilities with, for example, Quebec. I gather you have a proposal for provincial inspection of all retail operations and federal inspection of all processing?
Mr. Doering: Yes.
Senator Maheu: Where do the municipal governments fit in? They are today, at least in Montreal, doing most, if not all, of the retail inspections. There are nowhere near enough inspectors to cover a large city. I am sure it is that way right across the country. What will happen to the quality of food being sold to the consumer? What can your agency do if you already have an agreement that gives you no control over provincial or municipal governments?
Mr. Doering: The federal government has only very limited jurisdiction at the retail level. In Quebec, it is le niveau tertiaire. There is very little role for federal government there. This is really a provincial jurisdiction. You are right. The way they choose to carry that out, generally speaking, is done by municipal governments. So, in Montreal, all the inspectors are Montreal Urban Community inspectors. There are very few federal or provincial people there.
That will continue to be the case. Restaurants and retail food establishment authority-type places are inspected not by those at the federal government level but by those at the retail level. They are very big players in food inspection. They are not part of the federal agency because we cannot use the agency to infringe on provincial jurisdiction. The Bloc Québécois in the House were adamant that we guarantee them that we were not now trying to infringe on provincial jurisdiction by the creation of this agency.
Whatever is federal jurisdiction now will be federal jurisdiction in the future. We cannot change that. What we can do is try to work better together. The solution is not to say that this level of government does it or that level of government does it. The solution is to work better together.
Much of the impetus for the agency comes from this Canadian Food Inspection System with municipal people involved to ensure that we work well together. I will give you an example of one of the initiatives under way.
The retail food establishment code, a final draft of which will be tabled next week in Toronto, is not a product of the new Canadian food inspection agency. It is a product of the federal-provincial harmonization initiative of which I am the federal co-chair.
The retail food establishment code seeks to provide, at least, a common code for food safety handling. At the moment, for example, we can overcome problems like this: If you take a course on food handling in Hamilton and you are now certified by the provincial people and approved by the municipal people, then you would have to do it all over again if you were transferred to Toronto. That is because municipalities do not have a common standard. There is no common code with regard to food safety handling.
People could not get a handle on that. It is not the federal government's job. You can imagine how upset the provinces would be if we came in and declared a new code for the retail level. What we can do is work together.
Under the CFIS initiative, federal, provincial and municipal people have been working for the last year and a half to develop a common manual, a code.
If you get a common standard, who inspects to it is not that important. If we get a common retail food establishment code which is interchangeable, we could have courses and a common manual. In this area, perhaps the federal-provincial corporation could be helpful by providing a seal of approval which is mobile across the country.
People are excited about that possibility. The retail food establishment code is funded by the Canadian Restaurant Association and the Canadian Grocery Products Distributor Association and the like. They have given us money to work with the federal-provincial government to establish this code. I am quite optimistic about future progress, but I will admit to you that there is a lot less inspection than people think we get. We do not want to say that outside these walls because we do not want our international competitors to use it against us and we do not want to have panic in the streets.
It is estimated that there were over 2 million cases of food-borne illness in Canada last year. This is a significant factor which we must consider seriously. From the federal government's point of view, we must leap from behind at the retail level.
In Quebec, we have some people going in at the retail level checking weights, measures and packaging. If something is labelled fat-free, is it really fat-free? Those are the kinds of things that the federal government does.
We could take that money that we now spend on inspectors and let Quebec do that niveau tertiaire. Some provinces would like us to get out of the food inspection business and have the agency do it for them on a contract basis. This legislation allows us to do that.
Senator Rossiter: I would like to talk about the aquaculture industry which is pretty lucrative in Atlantic Canada. They want to have fish health and water quality programs for protecting molluscs in the water to be transferred to the agency, but apparently they are not meeting with any success. What is the problem and when can it be fixed?
Mr. Doering: I will give you a quick overview on that matter. I will then ask my colleague Reg Bourque to join me. He is the senior Regional Director General in the Department of Fisheries and Oceans in Atlantic Canada. He has been seconded to my office for the last several months to ensure we do a good job of looking after the fisheries issues. He was with us at the House of Commons standing committee where Sharon Ford, who represents the aquaculture industry, came forward and made this argument.
At this stage, we declined but undertook to see what we could do to get this issue examined more broadly. We are working on it, but I am afraid to say that this issue is not resolved yet. People are still looking at it. Even Ms Ford, who represents the aquaculture industry, was not prepared to say that they wanted aquaculture taken out from the Department of Fisheries and Oceans. There is an ambivalence there.
Mr. Reg Bourque, Senior Regional Director General, Department of Fisheries and Oceans, Atlantic Region: This is one of the areas which is quite complicated because there are a number of people involved. The water-quality microbiological area is covered by the Department of Environment. The toxin area is covered by the Fish Inspection Program, and will go into the agency. Therefore, there is a need for discussion as to where there are possibilities for efficiencies. Because it has such a longstanding background, there just was not time to look at all the details, but it is part of the plan, for our first year of operation, to look at the request that was made by the Canadian aquaculture group so that we can determine what is the best fit. It was just not possible, in the time we had, to look at all of the details and to deal with all of the players.
There are differences, for example, between what is happening on the west coast and what is happening on the east coast. We need to look at those differences and see what is the best approach. It is an important area. Molluscs is the number one priority for the Fish Inspection Program. Before we make moves in that direction, I think the status quo is the best thing. It will give us the time to look at the situation and then to move forward over the next while.
Senator Rossiter: It evens affects oysters and clams.
Mr. Bourque: Yes.
Senator Rossiter: Sometimes areas are closed due to, for want of a better word, pollution in an area where clams or oysters are dug.
Mr. Bourque: That is right. There are quite significant differences between oysters and clams, when you look at the overlay waters, which is what is measured. That has to be examined in detail. Some of the standards which are for oysters do not work for clams. Before we make the changes, we want to assure ourselves that we have looked for everything and brought everything together in a composite way with the proper planning.
Senator Rossiter: The aquaculture of salmon at the mouth of the Saint John River would be more in estuarial waters, would it not? Would it not put a different picture on the whole situation?
Mr. Bourque: The problems with aquaculture of salmon are quite different. We are not dealing with the same problems at all as when we are dealing with molluscs.
Senator Rossiter: I trust you will continue to look at the request and work it out with the aquaculture industry.
Mr. Bourque: Absolutely.
Senator Anderson: I have a question about the fact that the Canadian Food Inspection Agency will be an independent agency which will report to Parliament. What other independent agencies are there at present?
Mr. Doering: It turns out that we are unique. We are not a Crown corporation like Air Canada used to be. One of the principal reasons is that everyone accepts the fact that we are not on the way to becoming a self-sufficient commercial organization. There will never be a time when this is a fully cost-recovered commercial organization. We are here to protect the consumer as much as to advance trade and commerce. We will always have to be a government agency.
We are not even arm's length. It was decided not to have a board of directors like a corporation because of the accountability problem. As I mentioned earlier, no one will be able to say that just because the board of directors made some decision, the minister is not accountable. We ended up creating a new department for food inspection with the president like a deputy for accountability purposes. There is no other agency like this. We are not independent in the sense that we are not government either. Everyone is a public servant. The Public Service Staff Relations Act applies. I cannot give you a case which is exactly like us. We worked with industry and consumers to determine what we needed to do the job best. This is what we need. It is kind of tailor-made in a way.
The Chairman: I want to thank you for appearing this morning.
Our next witnesses represent the Professional Institute of the Public Service.
Please proceed.
[Translation]
Ms Michèle Demers, Vice-President, Professional Institute of the Public Service of Canada: Mr. Chairman, honourable senators, I would like to thank you for inviting us to present this brief to you this morning. To my right is Luc Grenier, a negotiator with the Professional Institute of the Public Service of Canada. I am the Vice-President of PIPS.
The Professional Institute of the Public Service or PIPS is the largest union representing professionals working in the Public Service of Canada, including some 1,500 veterinarians, biologists, agriculture scientists and other specialists who work in inspections and related services for food, animal and plant health.
In the 1996 budget, the government embraced the principle of alternative service delivery or ASD. Bill C-60 is the first major application of the ASD principle. Given that it could become a model for many more applications of ASD, it is essential to ensure that the legislation governing the proposed Food Inspection Agency both ensures continuing accountability to the public, and protects basic rights of the agency's employees.
This brief focusses on the Institute's concerns about the ASD concept and the new Food Inspection Agency. Our brief to the House of Commons dealt with the general issue of whether a food inspection agency should be created to take over the function of food inspection from the Department of Agriculture. We accept that this issue has now been decided.
The Professional Institute represents a large majority of the professionals who perform duties with respect to federal inspection and related services for food, animal and plant health.
At present, all of those employees are considered to be employees of the Treasury Board, appointed by the Public Service Commission. Under Bill C-60, employees who are transferred to the Food Inspection Agency, or are appointed to it by the Public Service Commission, will become employed by the agency itself.
The Institute is concerned about the labour relations impact of Bill C-60. These submissions suggest two modest amendments that will address those concerns while preserving the labour relations intent of the legislation, which is to create a separate employer with the authority to negotiate its own terms and conditions of employment.
Without the proposed amendments, employees of the agency will be stripped of many important rights that are enjoyed by other federal government employees, and for no discernable reason.
Members of the committee should be aware that the same rights are at stake not only for the more than 4,000 federal employees who will work for the new agency, but for many thousands more public employees.
Mr. Chairman, since I had decided to do part of my presentation in French and part in English, I would like to ask at this time if all committee members are anglophones?
Senator Maheu: I understand French.
Ms Demers: In the 1996 budget, the government announced an intention to create three new separate employers to take over not only food inspection, but also the management of Canada's parks and functions currently performed by Revenue Canada.
It is estimated that these three new separate employers will, together, employ about 48,000 federal employees. This number is far in excess of the approximately 18,500 persons who are currently employed by separate employers created by the federal government.
It appears that all three separate new employers will be subject to the same statutory framework as applies to the Food Inspection Agency. Furthermore, consideration is being given to creating yet more separate employers under the same regime.
Section 12 of Bill C-60 states that the agency is a separate employer. As such, it will be governed by the provisions of the Public Service Staff Relations Act.
For unionized employees and their bargaining agents, the PSSRA creates and regulates important rights including: the certification of bargaining agents; the exclusion from collective bargaining of managerial and confidential employees, the protection of employees' rights to join and participate in unions; the continuation of bargaining rights upon the creation of a new separate employer; the negotiation of collective agreements; and various methods of resolving bargaining impasses. For those matters, mainstream public employees and employees of separate employers are treated identically.
Unlike most labour relations legislation, however, the PSSRA, through sections 7 and 69(3) effectively precludes bargaining agents from bargaining about a number of important matters. These include the organization of the public service; the assignment of duties to, and classification of, positions in the public service; the appointment, deployment, promotion and demotion of employees; the appraisal of employees; the lay-off of employees; and termination of employment for non-disciplinary reasons.
To compensate for the union's inability to negotiate terms of employment in those critical areas, Parliament enacted the Public Service Employment Act which gives most federal employees rights in those areas, along with appeal mechanisms to enforce those rights.
For example, the PSEA and accompanying regulations create legislative rights and protection concerning: appointments in accordance with merit, including appeal procedures for unsuccessful candidates; detailed policies concerning promotions and demotions; the procedure governing layoffs; provisions with respect to probationary employees; deployments and appeal procedures for those wrongly affected; the right to request an harassment investigation; the right to file classification grievances; and last but not least, the maintenance of a non-partisan public service.
The PSSRA also governs the right of all federal employees, be they unionized, non-unionized or managerial, to file grievances and have them ruled upon at adjudication. Here, employees of separate employers are treated differently. Pursuant to section 92 of the PSSRA, these employees may not refer to adjudication any grievance relating to a non-disciplinary suspension, demotion or termination.
The previous witness, Mr. Doering, said plans were in the works to introduce the notion of recourse to the Governor in Council for adjudication of grievances. The Minister, Mr. Goodale, wrote to the President of the Professional Institute to provide him with similar assurances. If some assurances have been given that public service employees will be able to refer their grievances to adjudication, what reason can there be for not including this in the legislation? Why the refusal to even consider this, as it would afford us some protection, more than we get from vague promises.
Why deny agency employees this fundamental right? After all, they are still federal public servants working for all Canadians.
[English]
The issue of maintaining the non-partisan character of the public service is well expressed by the Tait report dated December, 1996, entitled "Discussion Paper on Values and Ethics in the Public Service." This was one of a number of task forces of deputy ministers established by the Privy Council Office in 1995 to examine important issues in government. I would like to read to you the extracts that are particularly relevant.
The non-partisan character of public administration was once one of the most important achievements of public service reform early in the century, and laid the foundation for many of the highest achievements of Canadian life in the twentieth century, including the social programs that have, in a relatively short time, become integral to the Canadian identity. Prior to these initial public service reforms, appointments to the public service were made on the basis of political patronage and partisanship, a practice that limited the professional competence of the public service, sapped public confidence in its integrity and vitiated it as an instrument of the public good. It was the establishment of a non-partisan public service that overcame these handicaps and made it possible to develop much of the infrastructure of modern Canadian live.
The citation continues:
We do think it appropriate, however, to comment on the vital role that the Public Service Commission has traditionally played in Canada in ensuring the non-partisan character of appointments, especially initial appointments to the public service. We think that this is a function that should not be imperilled. It needs to be performed by an agency that can assure Parliament about the non-partisan character of appointments -- especially initial appointments -- and of the public service itself, and also provide assurance that patronage appointments do not threaten its integrity and professionalism. This assurance will be needed for any new program-delivery agencies that may be created as much as for the traditional integrated ministerial departments. We believe an audit role for such a parliamentary agency would be less effective than an ultimate veto power over initial appointment.
Of course, it would do no good, in the long run, if political patronage were kept at bay while suspicions of unofficial bureaucratic patronage blossomed. The traditional appointment practices of the public service, those associated with the principle of "merit", have aimed at preventing the appearance or reality of internal favouritism just as much as external. The result has been to spawn a system of appointment in the public service that is far more elaborate, time-consuming and cumbersome than anything in the private sector.
A public organization does not and cannot enjoy the "flexibilities" of private sector organizations. It will always have to meet higher standards of transparency and due process in order to allay any fears of favouritism, whether internal or external, in performing its duties under its position of trust and in its use of public funds.
The Public Service Employment Act applies only to those employees who are exclusively appointed by the Public Service Commission. Clause 13 of Bill C-60 gives the president of the Food Inspection Agency independent authority to appoint employees, set their terms and conditions of employment, and assign duties to them.
As a result, none of the important rights and protections given to mainstream public servants by the Public Service Employment Act apply to employees of the agency once the initial transition period ends.
The briefing notes released by of the government clearly indicate that the intent of Bill C-60 is to remove the agency from the coverage of the Public Service Employment Act. However, clause 94 of Bill C-60 will allow for a transition period in which the implementation of any clause in the legislation can be delayed. The briefing notes describe the intent behind this clause as follows:
During the transition period, "the agency will remain under the Public Service Employment Act. A transition period is needed for the following reasons: to provide some continuity and stability for staff; to give the agency the time to review options for an appropriate staffing regime; and to determine the most appropriate classification system. These matters are important for the on-going operations of the Agency."
The unintended result of Bill C-60, when coupled with the effects of section 67 and 69(3) of the PSSRA, is that at the end of the transition period, employees of the agency will lose all protections in the Public Service Employment Act and its accompanying regulations and policies. Their bargaining agents will be prevented from negotiating any analogous protections whatsoever in those very important areas.
Unless Bill C-60 is amended to close that gap, employees of the food inspection agency and their bargaining agents will be powerless to negotiate or to require the agency to institute any rights to protect some of their most basic and important employment interests. This will arbitrarily place employees of the agency in a grossly unfair and prejudicial position compared with both mainstream federal employees and employees in the private sector.
The institute recommends specific amendments to Bill C-60 in order to ensure that food inspection agency employees are not needlessly stripped of important rights that are well established for mainstream federal employees.
First, consistent with Parliament's intent to give the agency the flexibility to develop and negotiate its own labour relations system, Bill C-60 should be amended to preclude the application of section 7 and section 69(3) of the Public Service Staff Relations Act to the agency. This will allow bargaining agents to bargain those matters presently addressed by the Public Service Employment Act.
Second, a clause should be added to the bill to provide that notwithstanding subsections 92(1)(b) and (c) of the Public Service Staff Relations Act, employees of the agency may refer to adjudication grievances with respect not only to disciplinary action resulting in a financial penalty, but also to termination of employment, suspension or demotion whether for disciplinary cause or not.
Third, failing the acceptance of the first recommendation, the agency could either be put under the statutory framework of the Canada Labour Code or kept under the PSSRA and the PSEA in order to maintain access to the Public Service Commission as an impartial arbiter for appeals.
If Bill C-60 is adopted without amendments to reflect the concerns we have raised, an important portion of the federal public service will lose its non-partisan character and the guarantee that hiring will comply with the merit principle. Employees will lose faith in the new organization because they will have lost all protection in staffing matters.
We ask you, members of the committee, not to let this happen. Do not allow for the potential for favouritism, patronage or nepotism. Even at this late date, you have the power to make the modest changes that are needed in order to respond to our concerns.
Senator Anderson: I am concerned especially about the last part of your brief where you talk about the fact that, at the present time, all food inspection employees fall under the jurisdiction of Treasury Board. However, if this bill is passed in its present form, the Canadian Food Inspection Agency will have separate employee status and will be fully responsible for its own management. The staff, then, will come under the Public Service Staff Relations Act but not the Public Service Employment Act. I cannot understand the reasoning behind that.
Ms Demers: The Public Service Employment Act, as stated in the brief on page 3, gives protection concerning appointments in accordance with merit, appeal procedures, recourse mechanisms for employees who are laid off or for employees on probation, for deployments or for employees who are wrongly affected.
Under the agency rules as currently presented in the act, they do not have this protection. They do not have this recourse mechanism unless they refer to the Governor in Council for an Order in Council, which is a very cumbersome process. It is needless at this point. It has never been used since it was instated in 1993. We do not have faith that the agency would use this process, even though we have had promises that this would occur after the agency is created. If we do have this assurance, why not put it in the act?
Senator Rossiter: Has there ever been a request to the Governor in Council for such an order? If so and it was turned down, why?
Mr. Luc Grenier, Negotiator, Professional Institute of the Public Service of Canada: No, there has not been any request because the agency is not in place yet.
Senator Rossiter: No, but by any other party. This was in place before the agency came into effect.
Mr. Grenier: Would you believe that we deal with other agencies such as the National Film Board and the National Research Council? When this agreement was put into the Financial Administration Act and the PSSRA, we were never advised of that. We found out about it when we started the study of Bill C-60 for the food agency.
I personally approached the NFB to see if they were willing to come with us to have a change made. Of course, their answer was no.
Our main concern is why are employees of agencies exempted from this right? Why? They are still public servants. They still work for the federal public service. Why do these employees have to get an Order in Council in order to have some rights?
Our suggestion is to amend clause 12(2) of the bill. You will find these suggestions for amendments at the end of our brief. We would like to amend clause 12(2) as follows:
For the purpose of section91(1)(b) of the Public Service Staff Relations Act, the Agency is deemed to be designated pursuant to s.92(4) of the Public Service Staff Relations Act.
By this amendment, employees from the agencies would have the same rights as are enjoyed by other employees of the public service.
Senator Rossiter: What were the circumstances under which this clause was enacted or this power was given in 1993? Something must have been happening then that someone thought that this should be done for a reason.
Senator Maheu: Could you answer Senator Rossiter's question about whether or not you know of any instance where someone was refused a request to the Governor in Council? You have not even touched on her question in that regard.
Mr. Grenier: No, we have not asked. We are asking now. This is the first time we have seen that it will apply to the food agency.
Senator Maheu: Are you saying that in no other circumstances does any one have to go directly to the GIC?
Mr. Grenier: It was also asked why this appeared in the legislation. We tried to find out from the separate employers and the answer we received from the National Research Council was, "We made applications to the legislature and they accepted the amendment."
Senator Rossiter: No one has ever used it.
The Chairman: Is the answer that no one has ever used it?
Mr. Grenier: Not yet, no.
Senator Rossiter: Therefore, no one has been refused, either.
Mr. Grenier: That is right.
Senator Rossiter: Do you think this is the first step toward a food inspection system that will be totally privatized? You referred in your brief to other groups.
Ms Demers: I was referring to other initiatives such as Parks Canada, the Revenue Canada Commission or the 72 initiatives mentioned in the 1996 budget that we have not seen as of yet.
All this boils down to a question of fairness for the employees being transferred, a question of transparency, a question of having staffing done under transparent mechanisms and having a recourse mechanism for the issues not covered under the Public Service Staff Relations Act. That is all we are asking for. It is just the continuance of basic rights for the employees being transferred to the agency.
The Chairman: How many people do you think this measure will displace from the public service?
Ms Demers: The figure we have so far is 48,000 federal public employees.
The Chairman: But they are not all being displaced.
Ms Demers: That is right. This is for the food inspection agency.
Senator Maheu: How many employees are being displaced from the public service for the food inspection agency?
Ms Demers: I could not tell you that. We have 1,500 members and professionals from our own union. For the other unions, I do not have the exact figures.
The Chairman: Under the two-year implementation we heard about earlier, do you feel your people are being fairly treated? You say you are losing rights, negotiating privileges and so on.
Ms Demers: Whatever applies to the members we represent applies to all the other employees who will be transferred to the agency. They will all be governed under the same rules.
The Chairman: In all fairness, would you not say that there must be some need in this time of governments trying to take hold of the deficit situation for bringing some discipline into what has been happening in the public service, or is that unfair?
Ms Demers: I do not understand what you mean by "bringing some discipline" into a system that just brings fairness to staffing matters and other recourse mechanism matters. This is not a question of deficits or costs. It is a question of treating employees fairly in terms of labour relations. It is a question of not allowing the managers to decide unilaterally and arbitrarily, "I will hire my sister-in-law because she is out of town and out of a job."
We are saying we will use the merit principle because it has been a good principle to guarantee proper staffing procedures in the public service. There is no guarantee of the merit principle under the rules that will be applied as the legislation is now written.
The Chairman: It appears to me that in this bill there is a certain direction -- for lack of a better word -- to privatize the agency. I suspect there will be more contracts to deal with these situations.
Ms Demers: That is not what Mr. Doering said a while ago. He said there would be no cuts in the jobs transferred to the agencies. Quite the contrary, there would be more in terms of food inspection, meat inspection and anything else. I cannot see the relationship with what I am saying and what you are telling me. Perhaps I do not understand correctly.
The Chairman: Perhaps I do not understand from my aspect. If you look at global situations in terms of coming to grips with government spending, some of these measures are necessary. In some of these areas it might well be necessary to bring some control to duplication, for example, where there were four sets of inspectors. It really must come down to numbers somewhere. If it does not, there is no point in doing it. We would be going through a ridiculous exercise if it did not yield some benefit and some saving.
My background is agriculture. I consider myself to be a practical person. I do not send four guys out to do the same job on my farm. I send out one. I expect that person to be efficient. Government has to become responsible in these areas.
It may sound like I am speaking for the government here, and I should probably leave that up to the government side of the Senate, but we in the Senate consider ourselves to be efficient when it comes to committees. Across all party lines, this seems to be a given.
If there is to be a reduction in duplication of service, which there is in all these areas, fewer people will be needed. There must be a way of dealing in a fair manner with these people who may have to find or take different jobs within government, if possible.
Ms Demers: I totally agree with what you have said. PIPS is not against cutting duplication.
Mr. Chairman, your last comment was that we deal with this in a fair way. That is what we are looking for. All we are asking for is that employees be dealt with in a fair way. That is the essence of our brief.
I am tempted to ask any one of you to call on me for further discussion if you feel you need clarification. I would be more than happy to spend some time with you to discuss this situation in an in-depth way and to explain whatever it is you do not understand.
Senator Rossiter: The Canadian food inspection system is still talking about a transition. They do not seem to have a definite, finite business plan ready for us yet. It seems to me that everything is so vague that it is hard to get a handle on anything. Am I mistaken? The employees do not know what will happen.
Mr. Grenier: You maintain those basic rights for your own employees of the Senate and the House of Commons. They still fall under the Public Service Employment Act, and there is a control over employment, demotions and promotions. There is a control of some kind. We do not have any.
It is true that the transition period will be a period in which the agency will have to adapt and to make decisions. What we are asking does not stop the agency if, in two years, they realize that they do not need as many vets as they have right now. However, we are asking that if this happens, that it continues to happen under the same rules that apply now in the public service -- that is, under the merit principle and the right of access to an impartial third party if you feel you have not been treated properly.
What is now proposed is that all of these powers of hiring, firing and demoting will be if the hands of one person, the president, with no recourse for the employees.
By the way, this does not apply just to unionized employees. It applies to managers as well. Managers now have access to the Public Service Employment Act, but they will not under the agency.
Senator Rossiter: Will you not be negotiating with the agency?
Mr. Grenier: We cannot. I can picture that that is difficult to grasp. They will still be under the Public Service Staff Relations Act. Sections 7 and 93 of that act prevent the bargaining agents from negotiating these things. Right now in the public service, although we cannot negotiate these things, the employees are protected under the Public Service Employment Act, which they are now eliminating with the establishment of this agency.
Senator Maheu: I wanted to correct a comment made by our witness. Political employees of the Senate and the House of Commons do not fall under public service guidelines. Employees of senators and members of the House of Commons are political employees. None are protected.
I noticed a reaction from some of the young people in the room.
Mr. Grenier: I stand corrected.
The Chairman: I want to thank the witnesses for appearing today and for giving us a very in-depth insight into the situation as they see it.
Ms Demers: Hopefully, you will come to see it in the same way.
The committee adjourned.