Finance Committee on June 4th, 2015

[The Chair, Conservative, James Rajotte]

I call order meeting number 86 of the Standing Committee on Finance.

Pursuant to the order of reference of Monday, May 25, 2015, we are continuing our study of Bill C-59, an act to implement certain provisions of the budget tabled in Parliament on April 21, 2015 and other measures.

We want to thank our witnesses for being with us here this morning. First of all, we have with us Professor Ian Lee from Carleton University. We also have with us the Canadian Association of Professional Employees and its president, Madam Emmanuelle Tremblay; the Intellectual Property Institute of Canada and its past president, Mr. Jeffrey Astle; the Professional Institute of the Public Service of Canada, Debi Daviau, the president; the Public Service Alliance of Canada and its national president, Ms. Robyn Benson; the Royal Canadian Mounted Police and Rennie Marcoux, chief strategic policy and planning officer, and the deputy commissioner for specialized policing services, Mr. Peter Henschel.

Thanks to all of you for being with us here this morning. You will have five minutes maximum for your opening statements.

We'll begin with Professor Lee, please.

[Dr. Ian Lee, Assistant Professor, Carleton University, As an Individual]

I thank the finance committee for the opportunity to appear before you and beside these distinguished witnesses. However, in sharp contrast, I do want to note that while they're at the very top of their unions and organizations, I'm merely a dues paying, rank-and-file union member at the very bottom. In short, I'm just a worker on the metaphorical shop floor of the education factory.

My disclosures, very quickly, are the following. First, I do not consult anyone or anything, anywhere—not corporations, not unions, not NGOs, not governments, not political parties, not persons. Second, I do not belong to nor donate any moneys to any political party. Third, I've published scholarly articles on public sector labour relations in Canada for over 20 years. Fourth, in 27 years of teaching I have not missed one single class, ever, not once, due to illness—although I have attended class sick, as my students are completely dependent on me to complete the course and graduate. Fifth, and most importantly, I've been a dues paying member of CUASA, the faculty union, for 27 years. Moreover, I recently became a part-time regular on a CBC program called The Exchange with Amanda Lang, where I receive a very modest honorarium, from which is deducted union dues for the communications union. Restated, I'm so committed to being associated with unions, I belong not to one but to two unions.

Today, I'll only address the sick leave provision in the budget implementation bill. In supporting the modernization of PS benefits, including the sick leave system, it is very important to state at the outset that I strongly believe that Canada is fortunate to have one of the most educated, most competent, most ethical public services in the entire world. I say that having taught executive MBA courses in many countries around the world.

Therefore, it is false and deceptive for any person to suggest that criticism of any component of PS benefits demonstrates contempt for public servants or contempt for collective bargaining. I am a unionized public servant, in a public university, from a family of federal public servants going all the way back to the 1940s, when my late uncle was appointed postmaster in Elfros, Saskatchewan.

No, the issue concerns reform and modernization. As I stated in my op-ed in the Ottawa Citizen in 2013, let us fully acknowledge that prior to the advent of collective bargaining in 1967, public servants were paid less and had fewer benefits than those in the private sector. However, the pendulum started to swing in the opposite direction commencing in the early in 1970s and continued until the current Parliament.

Therefore, it is a very serious mistake to blame the unions for the failure to modernize public service compensation and benefits. They were doing what unions are supposed to be doing and what I pay my union dues for—at least when not doing what unions shouldn't be doing by interfering in federal and provincial elections with my union dues.

No, accountability should be placed squarely on the shoulders of those responsible: past ministers of the Treasury Board, in past Liberal and Conservative governments who failed to apply the most difficult word in the English language, one of the shortest words, and that word is “no”, we will not approve your demand.

Now to absenteeism. As the most respected HR consulting firm in the world, Mercer consulting, as well as the Conference Board, demonstrated in their studies, absenteeism is very expensive. But it's not the direct cost of absenteeism, but the indirect cost of reduced productivity. Mercer estimates that the true cost of absenteeism at approximately 8.5% of total payroll expenditures. And do note that total payroll averages around 75% of total costs in most organizations.

Over the past 30 years, most Canadian employers modernized the sick leave policy from a two-legged stool of short term and long term, to a three-legged stool of personal leave of five to seven days with no documentation required, followed by short-term leave and then long-term leave. This cleverly distinguishes between personal issues, such as funerals, child's graduation, prom, or breaking your leg while skiing. Moreover, and more importantly, it properly shifts the responsibility to manage short-term leave from managers who are absolutely not qualified to evaluate medical certificates, to the trained professionals and insurance companies.

For this critical reason, I urge the committee and the government to remove the seven-day qualifying period to qualify for short-term sick leave in the proposal by the government, because once the insurance companies have determined you're sick, then you really are sick.

Today, per the Mercer database, 97% of employees can no longer bank sick leave, including universities and provincial public servants.

Finally, and I am wrapping up, it is important to bring an issue to your attention. I have lived in this remarkable city my entire life, a city I characterize as the centre of the Canadian universe, and I have been employed on three separate occasions in the federal PS. I know an awful lot of public servants in this city.

Honourable members, this is not well known, but there is a serious split among the rank and file of PSAC, PIPSC concerning sick leave reform. A good number of public servants have contacted me—younger people—who quietly support the reforms, as it would be a better system for those who don't have banked sick leave while the older PS generally support the existing system. I do not know the percentage split. I do know it's substantial.

I urge the members to discount disgruntled, tired boomers who will soon retire, and instead listen to our young people, for they are our future.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Lee.

We'll now hear from the Canadian Association of Professional Employees.

[Emmanuelle Tremblay, President, Canadian Association of Professional Employees]

Ladies and gentlemen members of the committee, good morning. Thank you for having invited us to appear before you this morning, in the company of my colleagues from the Public Service Alliance of Canada and the Professional Institute of the Public Service of Canada.

The Canadian Association of Professional Employees, or CAPE, represents over 10,000 economists, statisticians and policy analysts, and 925 government translators, interpreters and terminologists, as well as the Library of Parliament analysts and research assistants with whom you deal on a daily basis.

In CAPE's estimation, the changes affecting collective bargaining in Bill C-59 violate the freedom of association defined in the Canadian Charter of Rights and Freedoms. This has been confirmed by the recent trilogy of Supreme Court of Canada decisions regarding labour rights. Bill C-59 is not an isolated gesture. It is part of a concerted strategy to change the rules of collective bargaining.

Bill C-4, passed in December 2013, had already amended our members' negotiating process by withdrawing their right to arbitration. This forces our members toward a single outcome, that of conciliation or strike. Through Bill C-59, the government now wants to exclude major issues from legitimate collective bargaining, a right that has been recognized by the Supreme Court; this shows contempt for the law and for the contracts that have already been signed between the two parties. It is as though you had signed a contract to purchase a house, and three years later, the former owner came back to take away the storage shed.

In addition to denying their fundamental rights, the government is proposing an approach that is unfair to the employees, and unjust to taxpayers. Indeed, the government claims that it will be saving money, on the basis of what is in fact an accounting liability. It says nothing about the cost of the new compensation system. In order to demonstrate the impact of a change that would take the number of annual leave days from 15 to 6, we have used the information provided by the employer. We analyzed the use of sick leave days according to duration and incidence. Our conclusion is that what has been presented at the negotiating table as an improvement would in fact be a marked deterioration for a vast number of employees, especially for the most vulnerable among them.

Every year, 60% of public service employees must take more than six days of sick leave, according to the data provided by Treasury Board, in the table contained in the written brief you have in hand.

Under the regime proposed by the government, less than 15% of them would see salary replacement through the short-term disability insurance plan that is being proposed. As Mr. Lee just mentioned, the waiting period is a particular problem. Almost half of these people would receive no benefits whatsoever under the new regime as it stands.

I would like to present a realistic scenario. I'm the mother of three children and not an old baby boomer—sorry Mr. Lee—and I can tell you that in the early days, when my kids were in day care, I would catch everything, and six days go by really fast. So a normal public service employee, 33 years old, who catches pneumonia after having used up her six days of sick leave would have to make the tough choice between coming to work sick to avoid losing income and staying at home without pay. If she chooses the former, she risks spreading her infection to her colleagues, creating a further burden on our public health system. Not only are such indirect costs not accounted for in the budget, but the price tag of putting the privately run, short-term disability plan in place is also very conveniently not estimated in the budget.

On the other hand, the finance minister books $900 million in savings. While this figure is not a projected expenditure; rather, it represents the book value of accrued sick leave. Savings cannot be realized out of non-expenditures, and I have a lot of economists to back me up on that.

We know from the Parliamentary Budget Officer's analysis that the existing system costs very little, because the vast majority of employees on sick leave are not replaced during their absence from work. So we contend that the taxpayers will also be losers from this bad plan. It's likely to be more costly to manage than the current sick leave regime.

In conclusion, I think that the House of Commons is the keeper of the rights and freedoms of Canadian citizens. Public service employees are also citizens, and they should benefit from the same rights as other Canadians.

Bill C-59 is an illegal and unconstitutional attack on those rights.

This government contends that it is simply trying to modernize its employees' sick leave plan. If that's its goal, we're on board, and we can reach that without Bill C-59, without bypassing free and fair collective bargaining, and without changing the rules of the game after the fact.

Thank you very much.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll now go to the Intellectual Property Institute of Canada.

[Jeffrey Astle, Past President, Intellectual Property Institute of Canada]

Thank you, Mr. Chair.

I'm here to speak to part 3, division 3, clauses 44 to 72 on intellectual property. My name is Jeffrey Astle. I'm appearing on behalf of the Intellectual Property Institute of Canada, or IPIC. I serve on IPIC's governing council as the immediate past president. IPIC is the Canadian professional association of patent agents, trademark agents, and lawyers practising in all areas of intellectual property law, or IP law. I am an in-house lawyer, a patent and trademark agent, with the title of intellectual property counsel, working for Pratt and Whitney Canada, headquartered Longueuil, Quebec.

IPIC wishes to thank the committee for this opportunity to comment on Bill C-59.

I thank the members of the committee for having invited us today to comment on this bill.

This bill proposes significant improvements to Canada's IP framework, most notably by establishing privilege to protect confidential communications between clients and their intellectual property advisers from disclosure in court proceedings, an issue on which IPIC has been advocating.

To establish patent and trademark rights, a client typically seeks the advice and assistance of patent and trademark agents who have the expertise necessary to interpret the technical and legal landscape relevant to their client's business, to consider their client's business strategies and objectives, and to advise their clients on how they might use patent and trademark rights to help achieve these objectives. These professionals have the credentials necessary to help clients secure their intellectual property rights.

So that a client may obtain the best advice possible from their intellectual property advisor, the client and advisor must be able to freely communicate all aspects of the client's business strategies and objectives, the client's competitive landscape and challenges, the client's and advisor's strategies on how to use intellectual property rights to achieve those objectives in view of the competitive landscape and challenges, and the client's and advisor's strategies on how they plan to secure those rights worldwide through the preparation and prosecution of patent and trademark applications before the Canadian and other national intellectual property offices.

Where these communications are at risk of being disclosed, free communication between the client and the intellectual property adviser is discouraged, thereby impeding the adviser's ability to work effectively, resulting in less than optimal advice.

In Canada, unlike other jurisdictions such as the U.K., Australia, and New Zealand, confidential communications between clients and their patent or trademark advisers, in which advice is sought in respect of patents and trademark rights, are not protected from forced disclosure in court. This circumstance places Canadian innovators at a disadvantage in asserting their intellectual property rights in litigation in Canada and in other jurisdictions such as the United States, where courts force the disclosure of confidential communications because no protection against such forced disclosure is provided in Canada.

Communications between clients and their intellectual property advisers in which advice is sought in connection with patents and trademarks should receive the same protection as those communications in respect of advice sought in other areas of the law. In both cases there is a need for full, free, and frank communication between those who need the advice and those who are best able to provide it.

By fixing this gap, Bill C-59 ensures that Canadian businesses can speak openly with their intellectual property advisers in order to obtain the best possible advice about protecting their inventions or trademarks, knowing that those conversations will not be revealed to their competitors through a court process or litigation.

Businesses small and large can now confidently explore the possibility of securing intellectual property rights while knowing that strategic information shared confidentially with their intellectual property advisers will be protected. This provision will allow Canadian businesses to be more competitive in Canada and overseas.

Bill C-59 also allows the Canadian Intellectual Property Office the ability to extend deadlines in cases of force majeure events, thereby helping to avoid the unintentional loss of intellectual property rights where, for example, floods or ice storms prevent the timely filing of documents with the office. This is another initiative on which IPIC has advocated with the government, and we are pleased to see that the government is taking the appropriate steps to fix this issue.

These improvements will not cost the federal government any money. The protection of confidential communications is consistent with initiatives on this issue taken by many of Canada's most important trading partners and leading innovative economies. It ensures that Canada operates on a level playing field with its international counterparts. With these changes Canada has taken significant steps to reform its intellectual property system and to focus on giving intellectual property professionals the tools they need to better serve and protect innovators.

I welcome your questions.

Thank you for your attention.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We will now hear from the Professional Institute of the Public Service of Canada, please.

[Debi Daviau, President, Professional Institute of the Public Service of Canada]

Mr. Chair, honourable members, thank you for the opportunity to make a submission before you today in relation to division 20 of Bill C-59 on behalf of the nearly 55,000 members of the Professional Institute of the Public Service of Canada.

The vast majority of institute members are professionals providing public services in federal departments and agencies who are currently in the process of negotiating collective agreements.

The members I represent are directly affected by division 20, which grants Treasury Board unilateral power to impose whatever terms and conditions it wants in relation to sick leave, on whatever employees it wants within the core public administration, whenever it wants, and for as long as it wants.

We believe that division 20 is unconstitutional and fundamentally flawed, and as such should be struck entirely from Bill C-59. In the brief time that I have today I'll take you through the institute's concerns, which are laid out in much more detail in our written submission provided to the committee.

Firstly, division 20 is unconstitutional. Indeed, just last winter the Supreme Court of Canada stated that subsection 2(d) of the charter protects the right of employees to engage in meaningful collective bargaining and the right to strike. This proposed legislation violates both of those rights by effectively preventing meaningful bargaining and striking over an important workplace issue.

Bill C-59 stacks the deck against unions at the bargaining table by granting to the Treasury Board—the very party negotiating with us—the power to unilaterally impose terms and conditions related to the employer's only substantive issue in this current round of bargaining: sick leave. At any time, even in the course of bargaining, Treasury Board can decide to implement the terms it wishes and simply wipe out existing sick leave provisions contained in collective agreements, gains made by unions in good-faith negotiations.

Secondly, division 20 is an affront to the rule of law.

The proposed legislation also allows the employer to override the statutory freeze provisions recently highlighted by the Supreme Court of Canada. This important statutory protection under the Public Service Labour Relations Act ensures that an employer does not change the terms and conditions of employment while bargaining is under way. In effect, division 20 is legalizing an unfair labour practice by the Treasury Board.

Even more shocking, division 20 is drafted so that any order issued by Treasury Board relating to sick leave would not have to meet the test of charter compliance as it normally would pursuant to the Statutory Instruments Act. This is nothing less than a direct affront to the rule of law.

Thirdly, division 20 will undermine public services to Canadians.

The government's proposed plan related to sick leave and disability is bad for public servants, bad for public services, and bad for Canadians. In many cases, public servants will have to either take unpaid sick days or go to work sick.

What's more, there's no evidence to support the government's claim that this approach will result in savings. The $900 million of supposed savings reported in the 2015 budget is nothing more than a convenient artificial accounting exercise that contributes to a pre-election balanced budget without representing any real savings. The drive to get this so-called “unfunded liability” of banked sick days off the books does not reflect the fact that public servants off sick are most often not replaced. The additional workload is simply picked up by their hard-working colleagues.

Worse yet, the government has conspicuously failed to account for the additional costs their proposal to move to a privately managed plan will dump on taxpayers.

To conclude, on behalf of the 55,000 professionals and scientists that PIPSC represents I urge the committee to defend the credibility of Parliament's law-making powers, which must respect the Canadian Charter of Rights and Freedoms.

Division 20 of Bill C-59 is unconstitutional and an affront to the rule of law. I urge you to reject it.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll now hear from the Public Service Alliance of Canada, please.

[Robyn Benson, National President, Executive Office, Public Service Alliance of Canada]

Good morning.

Thank you for the opportunity to appear today on Bill C-59. I will address part 3, division 20, on the sick leave and disability programs.

Since 2007 the Supreme Court of Canada has issued a number of of important rulings on the subject of freedom of association in section 2(d) of the Canadian Charter of Rights and Freedoms. The court has made it clear that the charter protects the right to free collective bargaining. It guarantees that workers have the right to join together to collectively present demands to their employers and to engage in a meaningful dialogue.

The court has also imposed constitutional obligations on governments in their role as employers. As employers, they must agree to meet with unions and bargain in good faith, and they must not enact legislation that substantially interferes with the ability of a union to bargain workplace issues. International human rights and labour laws also protect collective bargaining as part of freedom of association.

Yet in spite of international conventions and Supreme Court decisions, the federal government continues to interfere with the bargaining rights of our members and with the ability of our union to negotiate freely.

Unfortunately, Bill C-59 is the most recent act by the government to deny its employees their constitutional rights. Division 20 authorizes Treasury Board to modify the sick leave provisions of its collective agreements. It allows them to unilaterally impose a short-term disability plan outside of the agreements. Treasury Board will have full control to design the plan as well as modify the terms of the current long-term disability plan. It will also be able to alter sick leave entitlement and carry-over of unused sick leave regardless of what is in our collective agreements.

About a year before PSAC and Treasury Board were scheduled to begin bargaining, the government started its campaign to get rid of the current sick leave provisions. They started by releasing statistics about the use of sick leave in the federal public service, in effect to sway public opinion. Their statistics were later called into question by both Statistics Canada and the parliamentary budget office.

Then Treasury Board communicated directly with its employees about its new workplace wellness and productivity strategy. They talked about the new sick leave regime, leading employees to believe it was a done deal. The government's next step was to include $900 million in so-called savings from accumulated sick leave in its latest budget, in order to fund a projected surplus. Now it is taking the final step of using its power to unilaterally change our collective agreements.

It is very clear that the government has predetermined the outcome of negotiations. This offends the charter right of our members to free collective bargaining. It's completely inconsistent with section 2(d) of the charter, which calls for a meaningful process of collective bargaining.

We believe that collective bargaining works when both parties are able to negotiate freely. For example, we knew that there was a significant growth in long-term disability claims related to mental health issues. Increased sick leave usage is directly related to these claims, as members must use their banked sick leave before they can transition to long-term disability. Recognizing the importance of this issue, we tabled a proposal and reached an agreement with Treasury Board to create a joint mental health task force.

This is another reason why division 20 is such a problem. Unilaterally changing their sick leave protection just adds to our members' stress at work. It is an affront to employees with health issues, both mental and physical. We ask the committee to give serious consideration to removing division 20 in its entirety from the bill, upholding our right to negotiate our collective agreements free from the threat of legislation.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll now hear from the RCMP, please, Mr. Henschel.

[D/Commr Peter Henschel, Deputy Commissioner, Specialized Policing Services, Royal Canadian Mounted Police]

Thank you, Mr. Chair.

Thank you for the opportunity to appear before the committee as you consider division 18 of Bill C-59. I am Deputy Commissioner Peter Henschel, and I am responsible for the RCMP's Specialized Policing Services, which includes the Canadian Firearms Program.

I am here today with Ms. Rennie Marcoux, Chief Strategic Policy and Planning Officer and responsible for the RCMP's Access to Information and Privacy Branch.

The Information Commissioner's investigation into an access to information request for the long-gun registry has been the subject of considerable contention. We would like to take this opportunity to clarify misconceptions of how the RCMP handled this request, as well as the destruction of the non-restricted firearms registration records, otherwise known as the long-gun registry.

In particular, we would like to emphasize that the RCMP takes our obligations under the Access to Information Act seriously. As we will outline, the RCMP worked with the Information Commissioner to respond to the complaint in question while also fulfilling our obligations under the Ending the Long-Gun Registry Act.

To begin I should highlight that what was referred to as the “registry” was not a document stand-alone system, or simple electronic record, but rather a compilation of certain information contained in the Canadian firearms information system. This database is constantly being updated. On a monthly basis there are an estimated 50,000 new or amended records added to the database. A copy of the registry could not be printed, copied, or deleted with the push of a single button. The Firearms Act and associated regulations define the type of information required for the registration of a firearm, such as the make, model, manufacturer, registration date, province, and postal code. In total 27 fields in the Canadian firearms information system relate to the registration of the firearms, or the registry, of which 15 include personal information such as a person's name and address.

Since 2006 the RCMP has responded to over two dozen access to information requests for the long-gun registry. These requests were met by providing the 12 relevant and releasable fields of data. Aside from the request under investigation, the RCMP has never received a complaint on the content of our responses.

I would like to now focus on the destruction of the registration records. Contrary to what has been reported, the RCMP did not—and I will repeat—did not destroy any registration data before the coming into force of the Ending the Long-Gun Registry Act on April 5, 2012. Consistent with the government-approved implementation plan, the RCMP destroyed the records between October 26, 2012, and October 31, 2012, with the exception of the Quebec records, which were maintained pending the outcome of a Supreme Court decision.

When that decision was rendered on March 27, 2015, the RCMP deleted the remaining Quebec records from the Canadian firearms information system between April 10 to April 12, 2015, again consistent with the government-approved implementation plan. I should note here that the destruction process was subject to an audit that was externally verified for the October 2012 destruction. The same process is under way to verify the destruction of the Quebec data. So with these clarifications, I will just turn to my colleague to address the findings of the Information Commissioner.

[Rennie Marcoux, Chief Strategic Policy and Planning Officer, Royal Canadian Mounted Police]

Thank you.

I would like to start by providing background on a file that was investigated by the Information Commissioner. The investigation is based on a single access to information request received on March 27, 2012, for access to the RCMP database regarding the gun registry. The RCMP had provided the requester with an estimate of the processing costs associated with his request. The requester disputed this estimated fee and lodged a complaint.

To resolve the complaint the RCMP worked with the Office of the Information Commissioner to find a solution that would meet the nature of the request. Based on these discussions, the RCMP provided him with a copy of previous access to information requests that met the parameters. He received over 8 million rows of registration data that included the 12 fields described earlier, as well as four additional fields. To add more context, if we were to print this package it would be approximately 171,000 pages long.

During Ms. Legault's investigation, the RCMP met with investigators from the Office of the Information Commissioner on many occasions, provided all requested documentation related to the request that was the basis of the investigation, and arranged many information sessions on the Canadian Firearms Information System.

We maintain the position that in all aspects of this file, the RCMP fulfilled its obligations pursuant to the Access to Information Act and provided the requester with information to which he was entitled. We did so while also fulfilling our obligations to meet the requirements set out in the Ending the Long-Gun Registry Act.

In conclusion, the RCMP is very aware of the great deal of sensitivity and interest surrounding the destruction of non-restricted firearms registration data.

I should note that as we're dealing with this complaint from Madame Legault, we are also dealing with a complaint from the Privacy Commissioner to the effect that we did not delete the registry. So we do understand the sensitivity.

I will conclude with that.

[The Chair, Conservative, James Rajotte]

Yes, very briefly, please.

[Rennie Marcoux]

I would like to emphasize my colleague's opening remarks, namely, that the RCMP takes its obligations under the Access to Information Act seriously. As an organization, the RCMP responded to over 9,700 Access to Information requests in 2014, and since 2006, we have responded to over two dozen requests for registry data.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you.

We will begin with Mr. Caron, who has seven minutes.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you very much, Mr. Chair.

I also thank the witnesses for being here with us today.

I will begin with Mr. Henschel and Ms. Marcoux, who represent the RCMP.

There has been much talk about the whole situation surrounding the destruction of data and the current conflict with the Information Commissioner. We are not necessarily talking about the process here. I think that aspect will be settled with the Information Commissioner. The problem with this bill is that the government wants to retroactively amend an act while a legal proceeding in respect to that act is ongoing.

Since you work at the RCMP and regularly conduct investigations there, I would like you to tell me how a retroactive change connected to an ongoing proceeding affects the work of the RCMP? Let's take an example. Let us suppose that legal provisions set the value of the gifts MPs may receive at $500, but that an MP receives a gift valued at $750. However, in order to protect the MP, or for some other reason, the government decides, while there is a complaint before the courts, to retroactively increase the limit for gifts to $1,000. You can just imagine the problems that this would cause, not only in that situation but also in any other investigation the RCMP might be conducting.

[D/Commr Peter Henschel]

Just to make sure my answer is very clear, I'm going to reply in English.

It's not our role to comment on legislation. Our role is to enforce the laws that are passed by Parliament.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I understand that.

I want to point out, however, that your testimony, even though it is interesting and informative, does not really have any impact on the legislative changes that are being proposed here. Indeed, the principle of these changes is a retroactive amendment to an act while a legal proceeding has already been undertaken. Consequently, even though your testimony is interesting—and I am sure it will be heard and listened to—it is not really relevant to what is being proposed in Bill C-59.

I would like to go back to Ms. Tremblay and Ms. Daviau. Can you tell us more about the $900 million? According to what the government is saying, it is introducing savings via this budget, and these will contribute to its much-vaunted balanced budget.

Could you tell us in a more detailed way how this $900 million constitutes, according to you, only ostensible, fictitious, savings?

We are going to begin with Ms. Daviau and then go to Ms. Tremblay.

[Debi Daviau]

As you may or may not know, PIPSC represents about 10,000 chartered accountants at the Canada Revenue Agency. They've been able educate me on it, and hopefully I can give that to you as well.

The $900 million plus the additional $250 million in the subsequent two years actually represents about $1.4 billion. That amount represents the accounting value of the entire sick leave bank. Essentially what they're saying is that they're going to retain the accounting value of the $5.2 billion sick leave bank of accumulated sick leave for their members. It means that they're essentially trying to eliminate the bank through legislation. But the bank forms a part of our collective agreements, and, as we mentioned, we are rarely replaced when we're off sick.

You can call it a liability—that might be an accounting term—but it really is an insurance policy for public servants when they need their sick leave. In most cases, many of them leave a lot of this bank behind when they retire. There's no ability to somehow cash out or retain that leave upon retirement.

The number is not an amount at all. It's a bank of sick leave that is not likely to get used, and, even if it does get used, doesn't represent a cost for government. Therefore, eliminating it doesn't represent a savings for government.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Ms. Tremblay, I am going to ask another question.

As Mr. Lee said, the sick leave provisions were negotiated between the unions and the government, and both parties accepted these provisions. I think that Ms. Daviau, and probably Ms. Benson as well, talked about the possible unconstitutionality of this provision in Bill C-59. If this provision were adopted, what would be the direct consequences? Since this provision may be unconstitutional, what steps will be taken after the passage of this bill?

[Emmanuelle Tremblay]

We all condemn this provision. We all question its constitutionality.

May I repeat that this is the retroactive application of a rule after a contract was concluded. As Ms. Daviau mentioned, sick leave is one part of compensation as a whole. At the negotiating table, the employer tells us that he cannot offer us a salary increase that corresponds to the rate of inflation. As members of Parliament, you obtained a salary increase that was comparable to increases in the private sector, that is to say 2.3%.

Historically, the employer has rarely been able to match the rate of inflation. So he told us that instead of this remuneration, he would offer us other advantages, such as sick leave. That leave was a part of the whole compensation package. It is very valuable to the members because it is an insurance policy, as Ms. Daviau explained.

Once an employee retires, the liability disappears as if by magic. The fact that the government is presenting the elimination of accumulated sick leave as a savings continues to feed the myth that people end their career by using up sick leave, which is completely false.

I compared the situation to the contract for the purchase of a house; the contract was signed but the owner comes back three years later to say that he wants the garage back. This is just as illogical as that. These banked sick leave days are based on what was agreed upon in the collective agreement.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Ms. Tremblay.

Thank you, Mr. Caron.

Mr. Saxton, you have seven minutes.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you, Chair.

Thank you to our witnesses for being here today.

My first questions will be for you, Mr. Lee. Can you provide the committee with an outside perspective, your perspective, on the state of collective bargaining today? Specifically, how has recent jurisprudence affected who holds the balance of power at the bargaining table?

[Dr. Ian Lee]

I'm not a lawyer, but I've certainly been reading the legislation.

It started when I did my Ph.D. thesis on the post office. I didn't intend to get into collective bargaining, but because the post office was at the origin of the introduction of collective bargaining in Canada at the federal level, I ended up spending about a third of the 850 pages on the introduction and evolution, and reading the various acts up to the time of my thesis.

As I said in my opening comments and in my op-ed, I think the balance of power has shifted in the past 45 years. I do not blame the unions, and I want to say that over and over. They did what they're supposed to be doing on the bread-and-butter issues. That's what I'm paying my union dues for. As for where the failure was, it was in successive weak ministers of the Treasury Board who did not, for example, go out and benchmark against the private sector every time in collective bargaining.

I came from the private sector. Even though I've been in the university for 27 years, I was in financial services for 10 years and know a lot of people there, and I'm very sensitive to the fact that I'm a minority. There are only 4 million people in the broader public service sector in Canada, including colleges, universities, health care, and so forth, and there are 14 million people in the private sector who simply do not have the same benefits or the same.... Sixty per cent of people in the private sector don't even have a pension, and we have gold-plated pensions.

To answer your question, I think the balance of power has shifted in the past 40 years, and I think it's very difficult for any government or any political party to try to bring it back, because while human beings are upwardly mobile, we're distinctly anti-downwardly mobile.