Bill C-4 (Historical)

Economic Action Plan 2013 Act No. 2

A second act to implement certain provisions of the budget tabled in Parliament on March 21, 2013 and other measures

Part 1 implements certain income tax measures proposed in the March 21, 2013 budget. Most notably, it
(a) increases the lifetime capital gains exemption to $800,000 and indexes the new limit to inflation;
(b) streamlines the process for pension plan administrators to refund a contribution made to a Registered Pension Plan as a result of a reasonable error;
(c) extends the reassessment period for reportable tax avoidance transactions and tax shelters when information returns are not filed properly and on time;
(d) phases out the federal Labour-Sponsored Venture Capital Corporations tax credit;
(e) ensures that derivative transactions cannot be used to convert fully taxable ordinary income into capital gains taxed at a lower rate;
(f) ensures that the tax consequences of disposing of a property cannot be avoided by entering into transactions that are economically equivalent to a disposition of the property;
(g) ensures that the tax attributes of trusts cannot be inappropriately transferred among arm’s length persons;
(h) responds to the Sommerer decision to restore the intended tax treatment with respect to non-resident trusts;
(i) expands eligibility for the accelerated capital cost allowance for clean energy generation equipment to include a broader range of biogas production equipment and equipment used to treat gases from waste;
(j) imposes a penalty in instances where information on tax preparers and billing arrangements is missing, incomplete or inaccurate on Scientific Research and Experimental Development tax incentive program claim forms;
(k) phases out the accelerated capital cost allowance for capital assets used in new mines and certain mine expansions, and reduces the deduction rate for pre-production mine development expenses;
(l) adjusts the five-year phase-out of the additional deduction for credit unions;
(m) eliminates unintended tax benefits in respect of two types of leveraged life insurance arrangements;
(n) clarifies the restricted farm loss rules and increases the restricted farm loss deduction limit;
(o) enhances corporate anti-loss trading rules to address planning that avoids those rules;
(p) extends, in certain circumstances, the reassessment period for taxpayers who have failed to correctly report income from a specified foreign property on their annual income tax return;
(q) extends the application of Canada’s thin capitalization rules to Canadian resident trusts and non-resident entities; and
(r) introduces new administrative monetary penalties and criminal offences to deter the use, possession, sale and development of electronic suppression of sales software that is designed to falsify records for the purpose of tax evasion.
Part 1 also implements other selected income tax measures. Most notably, it
(a) implements measures announced on July 25, 2012, including measures that
(i) relate to the taxation of specified investment flow-through entities, real estate investment trusts and publicly-traded corporations, and
(ii) respond to the Lewin decision;
(b) implements measures announced on December 21, 2012, including measures that relate to
(i) the computation of adjusted taxable income for the purposes of the alternative minimum tax,
(ii) the prohibited investment and advantage rules for registered plans, and
(iii) the corporate reorganization rules; and
(c) clarifies that information may be provided to the Department of Employment and Social Development for a program for temporary foreign workers.
Part 2 implements certain goods and services tax and harmonized sales tax (GST/HST) measures proposed in the March 21, 2013 budget by
(a) introducing new administrative monetary penalties and criminal offences to deter the use, possession, sale and development of electronic suppression of sales software that is designed to falsify records for the purpose of tax evasion; and
(b) clarifying that the GST/HST provision, exempting supplies by a public sector body (PSB) of a property or a service if all or substantially all of the supplies of the property or service by the PSB are made for free, does not apply to supplies of paid parking.
Part 3 enacts and amends several Acts in order to implement various measures.
Division 1 of Part 3 amends the Employment Insurance Act to extend and expand a temporary measure to refund a portion of employer premiums for small businesses. It also amends that Act to modify the Employment Insurance premium rate-setting mechanism, including setting the 2015 and 2016 rates and requiring that the rate be set on a seven-year break-even basis by the Canada Employment Insurance Commission beginning with the 2017 rate. The Division repeals the Canada Employment Insurance Financing Board Act and related provisions of other Acts. Lastly, it makes technical amendments to the Employment Insurance (Fishing) Regulations.
Division 2 of Part 3 amends the Trust and Loan Companies Act, the Bank Act and the Insurance Companies Act to remove the prohibition against federal and provincial Crown agents and federal and provincial government employees being directors of a federally regulated financial institution. It also amends the Office of the Superintendent of Financial Institutions Act and the Financial Consumer Agency of Canada Act to remove the obligation of certain persons to give the Minister of Finance notice of their intent to borrow money from a federally regulated financial institution or from a corporation that has deposit insurance under the Canada Deposit Insurance Corporation Act.
Division 3 of Part 3 amends the Trust and Loan Companies Act, the Bank Act, the Insurance Companies Act and the Cooperative Credit Associations Act to clarify the rules for certain indirect acquisitions of foreign financial institutions.
Division 4 of Part 3 amends the Criminal Code to update the definition “passport” in subsection 57(5) and also amends the Department of Foreign Affairs, Trade and Development Act to update the reference to the Minister in paragraph 11(1)(a).
Division 5 of Part 3 amends the Canada Labour Code to amend the definition of “danger” in subsection 122(1), to modify the refusal to work process, to remove all references to health and safety officers and to confer on the Minister of Labour their powers, duties and functions. It also makes consequential amendments to the National Energy Board Act, the Hazardous Materials Information Review Act and the Non-smokers’ Health Act.
Division 6 of Part 3 amends the Department of Human Resources and Skills Development Act to change the name of the Department to the Department of Employment and Social Development and to reflect that name change in the title of that Act and of its responsible Minister. In addition, the Division amends Part 6 of that Act to extend that Minister’s powers with respect to certain Acts, programs and activities and to allow the Minister of Labour to administer or enforce electronically the Canada Labour Code. The Division also adds the title of a Minister to the Salaries Act. Finally, it makes consequential amendments to several other Acts to reflect the name change.
Division 7 of Part 3 authorizes Her Majesty in right of Canada to hold, dispose of or otherwise deal with the Dominion Coal Blocks in any manner.
Division 8 of Part 3 authorizes the amalgamation of four Crown corporations that own or operate international bridges and gives the resulting amalgamated corporation certain powers. It also makes consequential amendments and repeals certain Acts.
Division 9 of Part 3 amends the Financial Administration Act to provide that agent corporations designated by the Minister of Finance may, subject to any terms and conditions of the designation, pledge any securities or cash that they hold, or give deposits, as security for the payment or performance of obligations arising out of derivatives that they enter into or guarantee for the management of financial risks.
Division 10 of Part 3 amends the National Research Council Act to reduce the number of members of the National Research Council of Canada and to create the position of Chairperson of the Council.
Division 11 of Part 3 amends the Veterans Review and Appeal Board Act to reduce the permanent number of members of the Veterans Review and Appeal Board.
Division 12 of Part 3 amends the Canada Pension Plan Investment Board Act to allow for the appointment of up to three directors who are not residents of Canada.
Division 13 of Part 3 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to extend to the whole Act the protection for communications that are subject to solicitor-client privilege and to provide that information disclosed by the Financial Transactions and Reports Analysis Centre of Canada under subsection 65(1) of that Act may be used by a law enforcement agency referred to in that subsection only as evidence of a contravention of Part 1 of that Act.
Division 14 of Part 3 enacts the Mackenzie Gas Project Impacts Fund Act, which establishes the Mackenzie Gas Project Impacts Fund. The Division also repeals the Mackenzie Gas Project Impacts Act.
Division 15 of Part 3 amends the Conflict of Interest Act to allow the Governor in Council to designate a person or class of persons as public office holders and to designate a person who is a public office holder or a class of persons who are public office holders as reporting public office holders, for the purposes of that Act.
Division 16 of Part 3 amends the Immigration and Refugee Protection Act to establish a new regime that provides that a foreign national who wishes to apply for permanent residence as a member of a certain economic class may do so only if they have submitted an expression of interest to the Minister and have subsequently been issued an invitation to apply.
Division 17 of Part 3 modernizes the collective bargaining and recourse systems provided by the Public Service Labour Relations Act regime. It amends the dispute resolution process for collective bargaining by removing the choice of dispute resolution method and substituting conciliation, which involves the possibility of the use of a strike as the method by which the parties may resolve impasses. In those cases where 80% or more of the positions in a bargaining unit are considered necessary for providing an essential service, the dispute resolution mechanism is to be arbitration. The collective bargaining process is further streamlined through amendments to the provision dealing with essential services. The employer has the exclusive right to determine that a service is essential and the numbers of positions that will be required to provide that service. Bargaining agents are to be consulted as part of the essential services process. The collective bargaining process is also amended by extending the timeframe within which a notice to bargain collectively may be given before the expiry of a collective agreement or arbitral award.
In addition, the Division amends the factors that arbitration boards and public interest commissions must take into account when making awards or reports, respectively. It also amends the processes for the making of those awards and reports and removes the compensation analysis and research function from the mandate of the Public Service Labour Relations Board.
The Division streamlines the recourse process set out for grievances and complaints in Part 2 of the Public Service Labour Relations Act and for staffing complaints under the Public Service Employment Act.
The Division also establishes a single forum for employees to challenge decisions relating to discrimination in the public service. Grievances and complaints are to be heard by the Public Service Labour Relations Board under the grievance process set out in the Public Service Labour Relations Act. The process for the review of those grievances or complaints is to be the same as the one that currently exists under the Canadian Human Rights Act. However, grievances and complaints related specifically to staffing complaints are to be heard by the Public Service Staffing Tribunal. Grievances relating to discrimination are required to be submitted within one year or any longer period that the Public Service Labour Relations Board considers appropriate, to reflect what currently exists under the Canadian Human Rights Act.
Furthermore, the Division amends the grievance recourse process in several ways. With the sole exception of grievances relating to issues of discrimination, employees included in a bargaining unit may only present or refer an individual grievance to adjudication if they have the approval of and are represented by their bargaining agent. Also, the process as it relates to policy grievances is streamlined, including by defining more clearly an adjudicator’s remedial power when dealing with a policy grievance.
In addition, the Division provides for a clearer apportionment of the expenses of adjudication relating to the interpretation of a collective agreement. They are to be borne in equal parts by the employer and the bargaining agent. If a grievance relates to a deputy head’s direct authority, such as with respect to discipline, termination of employment or demotion, the expenses are to be borne in equal parts by the deputy head and the bargaining agent. The expenses of adjudication for employees who are not represented by a bargaining agent are to be borne by the Public Service Labour Relations Board.
Finally, the Division amends the recourse process for staffing complaints under the Public Service Employment Act by ensuring that the right to complain is triggered only in situations when more than one employee participates in an exercise to select employees that are to be laid off. And, candidates who are found not to meet the qualifications set by a deputy head may only complain with respect to their own assessment.
Division 18 of Part 3 establishes the Public Service Labour Relations and Employment Board to replace the Public Service Labour Relations Board and the Public Service Staffing Tribunal. The new Board will deal with matters that were previously dealt with by those former Boards under the Public Service Labour Relations Act and the Public Service Employment Act, respectively, which will permit proceedings under those Acts to be consolidated.
Division 19 of Part 3 adds declaratory provisions to the Supreme Court Act, respecting the criteria for appointing judges to the Supreme Court of Canada.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Thank you, Mr. Chair.

Good afternoon to my colleagues.

Good afternoon to our witnesses. Thank you so much for your testimony this afternoon. It's very interesting.

I, too, want to thank MP Zarrillo for bringing this motion forward.

My questions will be for the Canadian Labour Congress.

Before I start, I want to thank you for what you do for workers, as you said, Ms. Vipond, 3.3 million workers across this country. I want to thank you for your leadership and for your advocacy. I know that your past-president Hassan Yussuff has been in my riding of Saint John—Rothesay many times. We've laid wreaths together on the National Day of Mourning. I always enjoyed my time when he was here.

Our government has been an ally and friend of unions since coming to office. I remember that in 2015 one of the things I was absolutely passionate about going to Ottawa for was to fight for the repealing of Bill C-377 and Bill C-525, with our Bill C-4. I remember working with the CLC to make that a reality.

We've engaged regularly with unions and stakeholders across the country in numerous areas of our economy, from the energy workers to the building trades, and from the care economy to the tourism and hospitality sectors, all of which are critically important in my riding. We've been there to address the challenges facing these industries with government support and improvements to existing rules and legislation, such as the Canada Labour Code and occupational health and safety for federally regulated sectors.

Despite health care being a provincial jurisdiction legislated and regulated by their respective provinces, I do believe the federal government can still play a role in the hiring, the retention and the retraining of staff while improving work conditions for all.

Recognizing that health care is provincially delivered, what further opportunities do you see between unions, professional orders and employees in the care economy and the federal government to deliver quality services?

[Kristel Henderson]

Basically what this bill proposes to do is to return the sick leave regime to the negotiations process. The impact of the costs of sick leave.... Currently the collective agreements contain provisions around sick leave; therefore, there's an allotted number of sick leave days and there's a disability regime that is in place. What Bill C-4 proposed to do was to remove that and impose a sick leave regime that would impose upon the public service the new regime and disability plan, as well.

[Kristel Henderson, Acting Director, Corporate Labour Relations, Correctional Service of Canada]

Mr. Chair and honourable members of the committee, I would like to thank you for this opportunity to speak to you today on behalf of the Correctional Service of Canada, CSC, regarding your study on Bill C-62.

My name is Kristel Henderson. I am Acting Director of Corporate Labour Relations at CSC. I am hopeful that I can provide the committee information on our workforce at CSC and our labour relations regime as it currently stands today, in order to provide some further context for your consideration of Bill C-62.

I will begin by providing an overview of the work that we do. CSC is responsible for administering sentences of two years or more in institutions of various security levels, and supervising offenders under conditional release.

On a typical day, CSC manages approximately 15,000 offenders within our 43 institutions across Canada, in addition to more than 8,500 offenders under supervision in the community.

As one of the largest departments in the public service, the Correctional Service of Canada employs approximately 18,000 staff members from across the country. Our organization's workforce includes correctional officers, parole officers, program delivery officers, health professionals, electricians, food services staff, and staff providing corporate and administrative functions at the local, regional, and national levels. Our employees work within institutions, parole offices, and administrative or headquarters areas in all 10 provinces and three territories. While some work mostly regular day jobs, others work shifts that entail long hours. Two occupational groups, for the most part exclusive to CSC, represent over half of all staff employed in operational units.

The correctional officer group, or CX group comprises 41.8% of staff while another 14.1% of staff are in the welfare programs, or WP category. This group includes parole and program officers who work in CSC institutions and in the community. The remainder of CSC's workforce reflects the variety of other skills required to operate institutions and community offices such as health professionals or corporate and administrative staff.

All staff work together to ensure that institutions operate in a secure and safe way and that offenders are effectively supervised on release, with specialized initiatives and approaches for indigenous offenders, offenders with mental health needs, and women offenders.

Our workforce and workplace directly impact the success of our operations and how we fulfil our mandate. Without a strong and professional workforce, and without a workplace conducive to its development and well-being, we would not be able to get these jobs done.

As this committee is aware, Bill C-62 would restore the public service labour relations regime that existed prior to the coming into force of certain budget implementation acts. These include those related to essential services in the resolution of collective bargaining disputes, along with the rights of bargaining agents to negotiate terms and conditions of employment related to sick leave and disability matters.

The provisions of the proposed bill support the return to the former negotiation approach to determining an organization's essential services profile. In that regard, CSC has always been committed to establishing a listing of essential positions, which promotes a profile that balances opportunities for active union involvement and manageable operational risk, and that is based on sustainable rationales.

Most positions located within our institutions and community offices continue to meet the definition of essential service in that they provide a service that is or will be at any time necessary for the safety or security of the public or a segment of the public. As a result, a re-examination of the proposed profile, where safety and security contributions can be managed through alternative approaches in the event of a strike, will be required to determine where we may be able to assume any additional degree of operational risk management. The amendments to the Federal Public Sector Labour Relations Act, as introduced by former Bill C-4, removed the choice of dispute resolution method for the core public administration and made conciliation the primary mechanism, except in cases where 80% or more of the positions in a bargaining unit are designated by the employer as essential.

Historically the dispute resolution method selected by bargaining agents active within CSC has been conciliation even when 100% of the positions within the bargaining unit have been deemed essential. It is expected that, should Bill C-62 come into force, bargaining agents would revert to their historical dispute resolution method. In addition, Bill C-62 also proposes to repeal a section of former Bill C-59, the implementing legislation of budget 2015.

Division 20 of part three of Bill C-59 authorized the Treasury Board to establish and modify terms and conditions of employment related to the sick leave and disability regime of employees, notwithstanding the provisions of the FPSLRA, but outside of the collective bargaining process. Those provisions came into force upon royal assent, although to date, they have not been implemented by the Treasury Board.

If enacted, Bill C-62 would allow consideration of the terms and conditions of employment related to the sick leave of CSC employees to be dealt with as part of the collective bargaining process.

Thank you for the opportunity to appear before you today, and I welcome your questions.

Thank you.

[Krista Devine, General Counsel and Director of Representation, Public Service Alliance of Canada]

In terms of the impact of the essential services regime that was there, having Bill C-4 in place was deeply problematic for us. You've heard from other unions about the selection of the dispute resolution process. The designation process essentially dictates what dispute resolution process you end up in.

One of the cornerstones of our constitutional challenge related to the Border Services bargaining unit, which Minister Clement had targeted in particular as problematic. Through the legislation and through his introduction to the legislation, he targeted them in particular in terms of the level of essential services designation.

Through Bill C-4, the level of essential services designation was not challengeable before a third party. It was unilateral. It was imposed on us I think the day the legislation was passed or two days after that. I can say with great certainty that it had an impact for that group in particular, as it dictated the dispute resolution process and put into question the framework within which we would be bargaining for the next few years.

[Chris Aylward]

Certainly as I stated in my statement in July 2016, we reached an agreement with, at the time, Minister Brison, who is the President of Treasury Board, to restore our rights pre-Bill C-4. That certainly indicated to us a positive move for sure, and that's why we certainly welcome Bill C-62.

I just want to remind committee members that our members, my 130,000 fellow public sector workers as well as those of my friends in the other bargaining agents, are taxpayers as well.

[Chris Aylward, National Executive Vice-President, Public Service Alliance of Canada]

Thank you, Mr. Chair, and thanks to the committee members for providing the Public Service Alliance of Canada this opportunity to meet with you on Bill C-62.

The Public Service Alliance of Canada represents over 130,000 federal public sector workers.

We welcome this bill that finally restores some of the balance to collective bargaining in the federal public service that was lost by the passage of the previous government's two bills, Bill C-4 and Bill C-59. Division 20 of Bill C-59 took away the collective bargaining rights of our members and other federal public service workers. It gave the government the unilateral right to amend the sick leave provisions of our collective agreements at any time. We do not consider it free collective bargaining when the employer has the legal power to impose a predetermined outcome.

Bill C-62 will also restore rights taken away through the changes that were made by division 17 of Bill C-4 of the Federal Public Sector Labour Relations Act. These changes placed fundamental restrictions on our members' collective bargaining rights, such as those affecting designation of essential services.

The Supreme Court of Canada has confirmed that the right to collective bargaining is a protected right under the Canadian Charter of Rights and Freedoms. In 2007, it ruled that freedom of association includes the right to collectively bargain. That freedom is also guaranteed by the Canadian Bill of Rights. When governments restrict the ability of employees to engage in good-faith negotiations, an important term and condition of their employment, they violate that freedom of association. Bill C-59 denied the right of employees to good-faith bargaining by giving the employer the unilateral authority to establish all terms and conditions related to sick leave, including establishing a short-term disability program and modifying the existing long-term disability program. Bill C-4 gave the employer the authority to override many provisions of the Public Service Labour Relations Act, including the statutory freeze provisions that maintain the status quo while the parties are engaged in collective bargaining.

While we welcome the repeal of these sections, Bill C-62 will also contravene the charter. In January 2015, the Supreme Court of Canada issued a ruling on the Saskatchewan Federation of Labour's challenge to the province's Public Service Essential Services Act. The court ruled that the right to strike is protected by subsection 2(d) of the charter. It held that the right to strike is an essential part of a meaningful collective bargaining process in the Canadian system of labour relations. That ruling directly affects wording of the Federal Public Sector Labour Relations Act that would be restored by Bill C-62. The Saskatchewan Public Service Essential Services Act contained language that allowed the government to avoid using management or non-union staff to provide essential services during a strike. The Supreme Court ruled that this act was unconstitutional because it violated employees' section 2 charter rights.

The court decision included an observation about this language by the original trial judge. He said that it enabled “managers and non-union administrators to avoid the inconvenience and pressure that would ordinarily” occur due to “a work stoppage”. He also said that it shouldn't matter if the qualified personnel available to provide the necessary services are managers or administrators. If anything, the language works at cross-purposes to making sure essential services are delivered during a work stoppage.

Bill C-62 would permit identical language to remain in the Federal Public Service Labour Relations Act. To remedy this, we ask the committee to propose an amendment to remove, from clause 9, proposed paragraphs 121(2)(a), 123(6)(a), and 127(6)(a). All three read as follows, “without regard to the availability of other persons to provide the essential service during a strike”.

The amendment to remove these proposed paragraphs is consistent with the 2015 Supreme Court decision. When both Bill C-4 and Bill C-59 were passed, PSAC filed constitutional challenges. In 2015, we, and other federal bargaining agents, also filed a motion for an injunction that would prevent the government from using its powers under Bill C-59's division 20 until after the constitutional challenge was heard on its merits.

That motion was scheduled to be heard in the fall of 2015 and then was pushed to March of the next year, in order to give the new government an opportunity to revise the previous government's position and provide instructions to counsel. At this time, both court proceedings are adjourned, pending repeal of the offending provisions that were contained in division 17 of Bill C-4 and division 20 of Bill C-59.

In July 2016, an interim agreement was reached between PSAC and Treasury Board that included measures to address concerns regarding choice of dispute resolution mechanisms, rules governing public interest commissions and arbitration boards, and essential service designations, among others. However, that was a temporary measure and we will soon be entering another round of bargaining for our members in the federal public sector. Our constitutional challenges will not be withdrawn, until such time as these sections of Bill C-4 and Bill C-59 are repealed and our members' rights restored.

I ask the committee to propose the removal of the unconstitutional sections of Bill C-62 and to expedite its passage.

Ms. Devine and I will be pleased to answer any questions you may have.

[Chris Roberts, National Director, Social and Economic Policy Department, Canadian Labour Congress]

Thank you very much, Chair.

Good afternoon, committee members. Thank you for the invitation to appear before you today.

On behalf of the three million members of the Canadian Labour Congress, I want to thank the committee for the opportunity to present our views on Bill C-62. The CLC brings together Canada's national and international unions, along with the provincial and territorial federations of labour, and over 100 labour councils from coast to coast to coast. Employees represented by affiliated unions of the CLC work in virtually all sectors of the Canadian economy, in all occupations, in all regions of the country, including the federal public service.

The Canadian Labour Congress supports the enactment of Bill C-62, although with the important amendment that I think my colleagues from the alliance are going to raise in just a moment.

We believe that restoring vital aspects of the federal public service labour relations framework to the status quo prior to the enactment of Bill C-4 in 2013, and Bill C-59 in 2015, will provide for more fair, balanced, and constructive labour relations in the federal public service. Bill C-62 will also establish a labour relations framework that is more consistent with the rights of Canadians enshrined in the Charter of Rights and Freedoms and the Government of Canada's obligations under international law.

Bill C-62 repeals many of the regressive changes to federal public service labour relations contained in divisions 17 and 18 of Bill C-4. Bill C-4 withdrew the ability of bargaining agents to select one of two methods of dispute resolution in the event of impasse: interest arbitration or conciliation/strike. The legislation imposed a default method of dispute resolution, conciliation/strike, without any compelling rationale or negotiation with federal unions.

At the same time, Bill C-4 gave the employer exclusive rights to determine what services are essential, and how many and which positions are required to deliver those services. The role of the bargaining agent was reduced to limited post hoc consultation, with no dispute resolution mechanism established to contest any of these designations.

The legislation also allowed the employer to require an employee, occupying a position designated as essential, to be available during off-duty hours to perform all duties assigned to that position. In other words, non-essential work would be performed during a strike.

Access to interest arbitration for bargaining units where the majority of workers were designated as essential was thus taken away. Arbitration would be available to the unions only where 80% or more of the positions of the bargaining unit had been designated by the government as essential.

The legislation also altered the factors to be considered by the arbitration board in making an arbitral award. From the original five factors to be considered by the board, Bill C-4 required the arbitration board to give preponderance to just two factors: one, the necessity of attracting competent persons to and retaining them in the public service in order to meet the needs of Canadians, and two, Canada's fiscal circumstances relative to its stated budgetary policies.

The second factor stifles a reasoned debate about the employer's fiscal circumstances and replaces it with the government's “desire to pay”, regardless of ability. In place of an evidence-based assessment of relevant economic factors and fiscal circumstances, the legislation effectively substituted the willingness of the government to compensate its employees at a certain level, and obliged arbitration boards to give preponderance to this factor and one other.

Finally, Bill C-59 granted the President of Treasury Board the ability to unilaterally impose a sickness and disability regime. Under Bill C-59, these fundamental terms and conditions of employment could be imposed rather than negotiated as they historically had been.

In conclusion, the CLC supports Bill C-62 with an important amendment that's about to be discussed, and the promotion of good-faith collective bargaining and respectful dialogue with public service employees. I want to emphasize that consulting and negotiating with public service bargaining agents, promoting mental health and providing support for workers, and investing in a workplace culture of fairness and respect pays off in high-quality services and lower costs to government and all Canadians.

A highly productive and motivated public service is one in which employees are supported, included, engaged, and recognized at work. Vilifying public service workers, undermining employee rights, and failing to invest in healthy workplaces represents a false economy, in my view. It leads to higher costs to government and Canadians in the form of low employee morale, a higher incidence and severity of depression and poor health, and lower levels of productivity, not to mention higher operational costs and elevated litigation risk to government.

Finally, the CLC believes that changes to labour laws must be conducted in a tripartite context, with ample study, consultation, and deliberation of the evidence, and an integral role for unions.

I want to close by echoing my colleagues' criticisms of PSECA and that egregious legislation, and also indicate the CLC support for repealing that legislation as soon as possible.

Thank you for your time, and I'd welcome any questions you have.

[Greg Phillips, President, Canadian Association of Professional Employees]

Honourable members of Parliament, we would like to thank the members of the committee for inviting us to appear, so that we are able to provide our opinion about Bill C-62.

My name is Greg Phillips, and I am President of the Canadian Association of Professional Employees, or CAPE. CAPE represents some 14,000 public service employees. The large majority of our members are economists and social science workers who advise the government on public policy. We also represent the translators and interpreters who work every day to preserve and promote our nation's linguistic duality. Last but not least, we also have the great honour of representing the 90 analysts and research assistants employed by the Library of Parliament.

Accompanying me here today is Peter Engelmann, a partner with the law firm of Goldblatt Partners, who has a great deal of experience in labour law and constitutional law, particularly in the context of the federal public sector.

I want to start by saying that CAPE is very pleased that the government is finally taking steps to repeal Bills C-4 and C-59, the blatantly anti-union legislation that was passed by the former government. While it has taken far too long for the government to make good on the promises that were made even before the 2015 election, CAPE looks forward to seeing this bill go through the legislative process as quickly as possible in order to help restore the balance in labour relations in the federal public sector.

As you are no doubt aware, under the guise of modernizing labour relations, the former Conservative government attacked the collective bargaining rights of federal public servants on a number of levels. Bill C-4 came first and was problematic in many respects. It provided the government with undue leverage in the collective bargaining system in everything from the negotiation of essential services agreements to public service recourse procedures.

However, from CAPE's perspective, the most egregious changes were to the dispute resolution process. In particular, Bill C-4 took away the rights of our bargaining agents to choose between the arbitration or conciliation/strike routes as a process for resolving collective bargaining disputes.

In CAPE's case, it took away the right to arbitration, a process that had always worked well for CAPE and its members, and pushed them into the conciliation/strike route. In addition, the government even compromised the arbitration and conciliation processes by imposing new factors that arbitrators and conciliators had to consider when making a recommendation or award.

Bill C-59 took matters a step further and permitted the government to fundamentally change the long-standing and hard-fought sick leave and disability programs of public servants. Most disturbingly, it gave the government power to do so unilaterally, bypassing the bargaining process altogether. CAPE, along with many other federal public sector unions, felt that this legislation denied its members their fundamental rights under section 2(d) of the charter in that it did not allow for meaningful collective bargaining with regard to these key workplace issues. Therefore, CAPE actively participated in a case before the Ontario courts, which challenged the constitutionality of that legislation. Following the important decision of the Supreme Court of Canada in the Saskatchewan Federation of Labour case in 2015, CAPE is confident that this charter challenge would have been successful in overturning Bill C-59 and likewise Bill C-4.

Needless to say, these changes to the labour relations scheme by the former government led to a combative and unproductive labour relations environment in the federal public service. This has been problematic not just for the members of bargaining agents such as CAPE, but for everyone who works in the federal public service. As noted at the outset, CAPE believes that it has taken far too long for the government to take these straightforward steps to turn back the clock to the labour relations system that was in place before C-4 and C-59.

The lengthy delay of over two and a half years since the election has unnecessarily prolonged this adversarial environment. CAPE is also disappointed that the bill fails to address some of the problems that have plagued the federal public service labour relations regime since even before Bills C-4 and C-59, such as the lengthy delays in getting cases to adjudication. This would have been an excellent opportunity for the government to tackle this important access to justice issue.

On a more positive note, it appears that this bill undoes virtually all the difficulties created by Bills C-4 and C-59. CAPE looks forward to returning to a labour relations system that is not perfect but is much more balanced and fair.

CAPE also notes that while Bill C-62 is amending the Public Sector Equitable Compensation Act, it is only a housekeeping provision to restore the procedures applicable to arbitration and conciliation that existed before December 31, 2013.

CAPE is disappointed that the government is not seizing on this opportunity to fulfill its commitment to completely repeal PSECA and to move forward with a proactive pay equity scheme immediately.

PSECA is a regressive piece of legislation that is a major step backward from the concept of equal pay for work of equal value, and it significantly interferes with the rights of federal public-sector employees by denying them human rights procedures for systemic gender discrimination in pay. CAPE is concerned that this will be another instance where there are unacceptable delays, which will prejudice its members, and we call on the government to take concrete steps as soon as possible.

Thank you for listening.

[Karine Trudel, NDP, Jonquière, QC]

I have a question about the coming into force of the provisions of Bill C-4. Some provisions have been repealed, but not all of them. I would like to know whether any collective agreements were finalized during that period.

[Bobby Morrissey, Liberal, Egmont, PE]

The issue of the minister being involved and named was brought in at that time on those changes in Bill C-4. Am I correct?

[Bobby Morrissey, Liberal, Egmont, PE]

Thank you, Chair.

I wanted to follow up on a point that was raised by Ms. Harder. What was the rationale for the former government on Bill C-4? It was an omnibus piece of legislation introduced by Ms. Leitch at the time. It was a change, and in the language in the bill it named the minister directly to deal with frivolous complaints. What was the rationale used by the government for that change at the time?

Federal Public Sector Labour Relations Act

[Scott Duvall, NDP, Hamilton Mountain, ON]

Madam Speaker, I rise today to speak to Bill C-62, an act to amend the Federal Public Sector Labour Relations Act and other acts. I have heard some good feedback on this.

What struck me this morning were some of the statements made by the member for Louis-Saint-Laurent. He is a good friend. I really respect the person, but obviously, we have different ideas. He made statements about union bosses and union leaders and about the Liberals just saying “thank you” because some of the unions were putting money in and campaigning against the Conservatives in the last election. I want to say that I totally disagree with that. The unions were campaigning against the Conservatives, yes, but they were also supporting anyone who could beat the Conservatives, and that was because they have a very bad reputation for taking away gains from labour that people have fought for all their lives, and they wanted to make sure that those people never got back in power until they got their act together and started to respect what labour could do.

We are pleased that the government is finally moving forward to repeal legislation based purely on a backward ideology that forces public servants to go to work sick and that totally undermines the principle of collective bargaining. We have to ask what took the Liberals so long to bring this bill forward. What took them so long to act? Of course, this is a question many Canadians are asking more and more often about the current government. Why are the Liberals not keeping the promises they made during the election, and why are they so slow to act or are not acting at all?

The list of broken promises is far too long to list in the time I have today, but we all know about the Liberals' failure to support electoral reform, their failure to restore door-to-door postal delivery, and the failure to keep the promise to make government more transparent. We also know about their failure to support pay equity legislation, anti-scab legislation, and measures to increase retirement security. One of their most shameful failures is the unwillingness to protect workers' pensions.

We have heard over and over again expressions of sympathy from the Prime Minister and his Minister of Innovation, Science and Economic Development for Canadian workers, like those at Sears Canada who have lost severance and termination pay and health care and life insurance benefits. They now face reduced pension benefits.

Canadians need and expect more than their sympathy and their shallow talking points. They need action. They need the government to change Canada's inadequate bankruptcy and solvency laws. We have shown the Liberals how this can be achieved, but still the government fails to act or move to protect millions of vulnerable Canadians. As my friend from Timmins—James Bay is fond of asking, when is the government going to put the protection of Canadian pensions ahead of Bay Street profits? It is a very good question and a question millions of Canadians would like to know the answer to.

Let me come back to Bill C-62. New Democrats want to undo Harper's anti-labour legacy and build a fair framework for collective bargaining. We welcome the introduction of Bill C-62, which would formally put an end to measures introduced by the former government. We know that the government Bill C-5 and Bill C-34, both introduced last year, have been languishing on the Order Paper since their introduction. We hope that their being amalgamated into Bill C-62 means that the government is finally ready to move forward.

Bill C-62 would reverse the attacks by the former Conservative government on the collective bargaining rights of federal public service employees, and it should be passed without delay. This bill would repeal the power given to the government to remove sick leave from federal public service collective agreements so that it could be changed unilaterally, outside of the bargaining process. The bill would also restore some of the changes to the Federal Public Sector Labour Relations Act affecting collective bargaining, which the Conservatives had included in one of their budget implementation bills in 2013, such as those affecting the designation of essential services. New Democrats rallied against the Conservatives' agenda to curtail public service workers' right to strike. The Federal Public Sector Labour Relations Act was amended in December 2013 to remove the choice of dispute resolution being available to essential services.

In our 2015 platform, we promised Canadians we would stand up for public sector workers in light of the lost decade of Harper's union abuse. Supporting this bill makes good on that promise. A respectful relationship with the public service starts with safeguards to free and fair collective bargaining, not stacking the deck in favour of the employer.

Bill C-62 is aimed at repealing two blatantly anti-labour pieces of legislation introduced by the former Harper government: division 20 of Bill C-59 and Bill C-4. The first of these sought to unilaterally impose an inferior disability and sick leave management system on public servants, which was an unwarranted and significant attack on the rights of public service workers.

Bill C-4 would have drastically changed the rules for collective bargaining within the public service, giving the government full control over union rights, such as the right to strike and the right to arbitration. The government would have also determined what positions would be considered essential.

A key provision in the collective agreements of public service workers is sick leave, which allows full-time workers 15 days per year of leave for use in case of illness or injury. The previous Conservative government was determined to unilaterally change this provision by reducing the number of sick days from 15 to 6, eliminating banked sick days, and imposing a short-term disability plan for federal public servants.

The previous government claimed this change would have saved $900 million, despite evidence to the contrary. According to the 2014 parliamentary budget officer's report, “the incremental cost of paid sick leave was not fiscally material and did not represent material costs for departments in the core public administration.” That means most employees who call in sick are not replaced, resulting in no incremental costs to departments.

Under the Conservative legislation, workers would have been forced to choose between going to work sick or losing pay for basic necessities. Its legislation would eliminate all accumulated sick leave for public servants, reduce the amount of annual sick leave to 37.5 hours per year, subject to the absolute discretion of the employer, and institute a seven-day waiting period without pay before people could access short-term disability benefits.

I want to comment that, because I come from a union background. I served the union for 36 years. We had that seven-day waiting period also, and we made great gains. We proved to the company that having a waiting period of seven days would bring in workers who were sick, causing other workers to be sick, which actually caused a downturn in production because there were not have enough workers on the job to produce the machinery. Therefore, doing that was a step backward.

Both the NDP and the Liberals committed to reversing the changes during the last election. Bill C-62 would repeal the offending legislation, thus restoring sick leave provisions to public servants for the time being.

Bill C-62 would also revoke some of the more offensive Conservative legislation, including: giving government, as the employer, the right to unilaterally define essential services instead of negotiating an essential services agreement with the bargaining agent; undermining the right to strike by making it illegal to strike if at least 80% of the positions in a bargaining unit provide essential services, as defined by the employer; removing the bargaining agent's right to choose arbitration as a means of resolving collective bargaining disputes, making conciliation the default process, and undermining the workers in cases where the employer consents to arbitration by requiring arbitrators to give priority to Canada's fiscal circumstances relative to its stated budgetary policies. It also removed discrimination-based complaints by public servants from the jurisdiction of the Canadian Human Rights Commission. That to me is a shame.

While we fully support Bill C-62, we also know there is more to be done to dismantle the Harper government's legacy of anti-labour legislation. Some of those measures include restoring the Canada Labour Code provisions pertaining to the rights of Canadians to refuse dangerous work. That was gutted by the Harper government, a right that everybody wants when they go into a workplace. Too many deaths have happened, and it should not be determined by the employer. The Fair Wages and Hours of Labour Act should be reinstated, bringing forward pay equity legislation, as well as the federal minimum wage, bringing Bill C-7 back to the House of Commons, and respecting the right of RCMP members to associate and bargain collectively.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

Madam Speaker, I thank my colleague for his speech.

Another important aspect of Bill C-4 introduced by the Harper government that we need to talk about is division 5, which amended the Canada Labour Code provisions dealing with dangerous situations. As defined, it narrowed the scope of what were considered situations of imminent danger. The Liberal bill provides a new definition for danger. However, it is important to make sure that the bill, which will pass in the end, properly supports health and safety officers within the process to help them refuse any work that is dangerous. At present, that can be difficult if they have to appeal directly to the Minister of Labour.

I would like to hear my colleague's thoughts on the importance of having people to support us on occupational health and safety matters.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Madam Speaker, we have been hearing a lot of rhetoric from the Conservatives today about how important the public service is and how important it is that we work with our public sector. However, another thing the previous Conservative government did with Bill C-4 was to unilaterally deem public services to be made essential, which would have effectively stripped the ability for unions to bargain in good faith with their employer, being the federal government.

With my colleague's experience in unions and being at the head of unions, can he comment on how he sees that kind of action being taken by the government, and whether it is a good or bad thing?

[Don Davies, NDP, Vancouver Kingsway, BC]

Madam Speaker, it is a privilege to stand in the House today and speak to Bill C-62, an act to amend the Federal Public Sector Labour Relations Act and other acts. This legislation and the subject matter with which it deals is not only important to me as a parliamentarian and a legislator, but also professionally. I was fortunate enough to spend 16 years working as director of legal resources for Teamsters Union Local 31, where I represented workers and the union in all facets of labour relations and human resources. I am well aware of the very strong need to have fair and balanced labour legislation in this country.

To that end, New Democrats are very pleased to see this legislation introduced and will be supporting the government as it moves the legislation through the House. As with all pieces of legislation from the Liberals, it is not exactly what we would like to see and it does not go quite far enough, but it definitely goes a large distance in re-establishing that balance in Canadian labour law that Canadians by a large majority want to see.

Specifically, Bill C-62 is aimed at repealing two blatantly anti-labour pieces of legislation that were introduced by the former Harper government. That was division 20 of Bill C-59 and Bill C-4. The first of these, the former Bill C-59, sought to unilaterally impose an inferior disability and sick leave management system on public servants, an unwarranted, unjustified, and significant attack on the rights of public sector workers to freely and collectively bargain their benefits. Bill C-4 would have drastically changed the rules for collective bargaining within the public service, giving the government full control over union rights such as the right to strike and the right to arbitration. The government would have also determined what positions would be considered essential, again, unilaterally.

The New Democrats fought vigorously against the government's attempt to introduce that legislation in the previous Parliament and we have fought vigorously in this Parliament to repeal the Conservatives' move to take those regressive steps.

To examine these provisions in a bit more detail, a key provision in the collective agreement of any worker, and in particular public service workers, is sick leave, which allows full-time workers, in the case of the public sector, 15 days per year of leave for use in case of illness or injury. The previous Conservative government was determined to unilaterally change that provision regardless of the wishes or desires of the majority of employees whose benefit it was, by reducing the number of sick days from 15 to six; eliminating entirely all accumulated banked sick days, in other words, wiping out accumulated benefits that public servants had accumulated for years; and imposing a short-term disability plan for federal public servants.

I pause here to say that many people in workplaces in Canada do have short-term disability plans. Others have accumulated sick days and each of those systems has its pros and cons. The point, however, is that in a unionized environment the way to come to a determination about what those benefits are is through collective bargaining. It is the employer and the union sitting at a table engaging in free collective bargaining and doing the inevitable trade-offs so that they come to a negotiated settlement. It is not by one side, in this case the employer, bringing down the unilateral hammer to impose its will on the other side regardless of the wishes or interests of the other side, but that is what the Conservatives did in the last Parliament.

The previous government also claimed that this change would save $900 million despite evidence to the contrary. According to the 2014 parliamentary budget officer:

...the incremental cost of paid sick leave was not fiscally material and did not represent material costs for departments in the [core public administration].

In practice, of course, the PBO found that most employees who call in sick are not replaced, resulting in no incremental cost to departments. The punitive reason given by the previous Conservative government, that it would save money, once examined by an independent officer of Parliament, was found to be completely unsubstantiated.

I am going to pause here and just say there is something else the previous Conservative government said would save about that same amount of money, and that was the introduction of the Phoenix pay system. The Conservative government laid off, I think it was approximately 800 or 900 payroll workers across this country in the federal civil service, and instead bought a computer program that was developed by an outside private contractor. It then concentrated a much smaller workforce in New Brunswick to handle payroll issues for the entire country.

At that time the Conservatives, with their ideological mantra of privatization and smaller government said we would save money. How did that work out? Here we are, three or four years later, and the federal public payroll system is in utter chaos. Hundreds of thousands of public servants have had errors in their pay, have not been paid at all, or have been overpaid. Any time a federal public servant changes their status, whether they move up a category to fill in for someone on a temporary basis or to take a promotion, their pay inevitably gets completely confused.

We now know that it will cost somewhere in the billions of dollars to repair this colossal, irresponsible undertaking. Conservatives always try to convince the Canadian public that they are best managers of the public purse. I hope Canadians remember this. Here are examples where the Conservatives made moves, punitively, to save money that ended up costing taxpayers billions of dollars and implementing decisions that actually made the situation worse.

I am going to pause here for a moment. I want to talk a little about unionization. My friends on the Liberal side of the House are standing up and strenuously advocating for the right to unionize. I heard my friends in the Conservative Party asking what stops anybody. In this country, what stops people from unionizing is the law.

It is currently the law in Canada that employees who work on Parliament Hill are prohibited from unionizing, by law. There are certain groups that have always been prohibited from being certified at labour boards, people like articling students in law firms, interns in hospitals, and other groups. However, on the Hill, successive Liberal and Conservative governments, for decades and decades, have made it impossible for MPs' own staff to unionize.

When Canadians watch this and see Liberal and Conservative MPs stand up and say that they believe in unionization and the right to free collective bargaining, one might ask why they do not believe in that right for their own employees.

The New Democrats, in contrast, have recognized this right by voluntarily recognizing a union to represent the employees of members of Parliament here, and have done for decades. We have signed successive collective agreements that give superior wages, superior benefits, superior job force protections, and safer workplaces, because New Democrats have voluntarily extended the benefits of unionization to our staff.

I say it is time for the Liberals and Conservatives to jump into the 21st century. I call on them to repeal that law that prohibits their own employees from applying to a labour relations board and being certified.

I also want to talk generally and philosophically about different approaches to our economy, and where workers and legislation like this may fit in. It has been my experience, and it is my assertion, that the best performing economies in the world have three features. They have strong, responsible governments, strong business communities, and strong labour movements. All three of those factors come into play and I believe are key foundational elements of not only strong economies but just societies.

One only has to think of countries like Norway, Sweden, Germany, or any of the European countries that, year after year, top all metrics and measures of happiness and prosperity. When we look at what the core features of those countries are, it is always those three features: a strong democratic government, strong business communities that are innovative, and strong labour movements whose rights are respected. That is why this legislation, which seeks to undo some of the most egregious anti-labour and anti-union initiatives of the previous Harper government, is so timely and overdue.

I want to talk a bit about what this legislation would do for essential services. I think everybody recognizes that there are some jobs in society that are just so essential to the safety of the public or the functioning of our society that we accept there are some limitations put on the right to strike. However, the mechanism of determining who those people are and in what numbers is left to negotiation between the parties and, ultimately, to an independent third-party arbitrator at a labour board if there is disagreement. What the Harper government did, and what this legislation seeks to change, is that it allowed the employer to unilaterally determine who is essential and in what numbers, again tilting the balance of the management-labour relationship completely in favour of the employer and upsetting years and years of established labour tradition and law in this country.

This legislation would also fix a problem where the previous legislation sought to undermine workers by limiting the opportunity for unions to refer differences and collective agreement disputes to arbitration for ultimate resolution. All in all, I am pleased to see this legislation come forward. I am pleased to see legislation that, once again, puts some respect back into the public service so that the federal government, of whatever stripe, Liberal, Conservative, New Democrat, Green, it does not matter, is compelled to treat the civil servants of this country in a manner that is fair and respectful.

Many features go into a democracy. It is not just about putting a piece of paper in a ballot box every four years. There needs to be an independent judiciary, a non-corrupt police force, a free and diverse media, an informed electorate, and a professional civil service. The civil servants of this country perform an invaluable service, not only to the people of this country and the taxpayers who pay their bills, in delivering the services that people need, but they play an integral role in upholding our democracy, because governments come and go but the civil service stays. It is its job to professionally serve the government of the day and faithfully administer and execute the policies that the government, which is democratically elected in our country, may choose. Therefore, treating those employees with the upmost respect, respecting them as workers, respecting their ability to engage in normative collective bargaining in this country, is a principle that must always be respected, and this legislation would do that.

I congratulate the government for bringing it forward and New Democrats will support it wholeheartedly.