Human Resources Committee on Feb. 13th, 2007

[The Chair, Conservative, Dean Allison]

Pursuant to the order of reference of Wednesday, October 25, 2006 Bill C-257, An Act to amend the Canada Labour Code (replacement workers), the committee will now resume its work on the study.

I would like to take this time to welcome the Department of Human Resources and Social Development. We have the Deputy Minister of Labour; the Director General, Labour Program, Federal Mediation and Conciliation Service; and some legislative help as well as senior counsel. Usually you'd have seven minutes each, but because the reason for the meeting today is to have you here, you can take the time you need.

Mr. Sheikh.

[Munir Sheikh, Deputy Minister of Labour, Department of Human Resources and Social Development]

Mr. Chair, let me first of all thank you for inviting me and my team here today to deal with some fairly important issues on replacement workers. We, the officials, are here to provide you with facts. Of course it is up to the government and Parliament to make decisions of a policy nature.

As you mentioned, I have my colleagues here with me from the Federal Mediation and Conciliation Service who deal with issues related to replacement workers, and I have a legal counsel from the Department of Justice who works with us in the labour program. Today with your permission, Mr. Chair, we have submitted two documents. These should be available to all by now.

The first document, Mr. Chair, is an update of the “List of Complaints Filed with the Canada Industrial Relations Board Illegal Use of Replacement Workers”. You may recall that a version of this document was submitted earlier, and this is an update to that document, bringing it into line with the most recent information we have.

The second document you'll find in front of you that we are submitting, and actually I would like to present the document to you today, is entitled “Key Observations Regarding the Effect of Replacement Worker Legislation on Workers”. This second document uses the data that the labour program has been collecting for a very long time.

Let me just mention three observations on the data that we are using. First, these data are collected on the same quality basis as data collected by Statistics Canada. Second, these data are used widely. Indeed, if I can mention it, as of April 1, 2007, the salaries of members of Parliament will be adjusted based on the data that we produced on wage settlements. Third, the data we produced on the key variables that I'm going to take you through are quite similar to the data that provinces produce for their own jurisdictions. Indeed I'm going to be comparing some information in these tables, federal compared with provincial. Our data are very similar, for example, to the data that Quebec produces. I can explain the technical differences between the two, but for all effective purposes they're basically the same.

What is the main message that comes out of the document I've given you? The main message is that we, the analysts, are not able to detect any positive impact of anti-scab legislation on workers; at least that is not what these data show. I'd like to take you through these tables and explain to you why we come to that conclusion. The data are in front of everybody, and you can draw your own conclusions from them.

On page 2 of the document called “Key Observations”, we have table 1. There are some shaded yellow boxes in that table. As an example, if you look at the British Columbia number, which is 0.04, this is the number of work stoppages per 10,000 employees for a particular year. In 2005 there were 0.04 work stoppages in British Columbia. This is of course a province that does not allow the use of replacement workers. So the number is pretty low, which is a good thing.

If you compare that number, however, with that of Quebec, you find that Quebec's number is more than six times the number for B.C. If you compare the B.C. number with that of Ontario, you find it is three times larger than British Columbia's number.

My conclusion in looking at these data is that I really cannot relate the anti-scab legislation to the number of work stoppages. There is simply no relationship between those two variables.

Table 2, which is on page 3, is a table about the average duration of work stoppages--how many days a work stoppage lasts. Again let me do the same thing. In this table, Mr. Chair, to avoid the cycles that are normal in any economic data, we have taken averages to get a more basic trend in the data.

Let's take the average for 1975 to 1977 as an example and look at British Columbia. The average duration of a work stoppage over that three-year period in British Columbia was 27 days. It was 37 days in Quebec--a bigger number than in British Columbia, and as you know, both have anti-scab legislation. Ontario's average was 28--before the legislation in both provinces--which was about the same as B.C. but lower than Quebec.

Let's go to the bottom of this table. For the period 2003 to 2005--for British Columbia and Quebec this was a post-legislation period--B.C. had 28.9 days, Ontario had 38.1, which of course is higher and Ontario doesn't have that legislation, but Quebec had 46.6. Looking at the average for those three years, if you asked me to conclude what the relationship was between those two variables, my conclusion would be none.

The second thing we can do in this table is go from the historical period pre-legislation to now and see what this legislation does. Looking at the Quebec numbers, the average duration of work stoppage went from 37 days in the three-year period before 1977 to 46.6, an increase of 10 days. The legislation didn't seem to have any effect in reducing the average duration of work stoppage. It went up.

The same is true for Ontario. It went up from 28 days pre-1977 to 38, about the same increase as in Quebec. In B.C., on the other hand, there was not much of an increase--from 27 to 29--but if you look at the average for B.C. in the middle of the page, which is again the pre-change issue since the B.C. legislation came in 1993, you will see that there was a drop from 44 to 29.

The simple message from these numbers again is that I really can't find a link between the average duration of work stoppage and anti-scab legislation.

I take you now to page 5, which is a third variable of interest to us. This is the number of person-days not worked. If we look at the bottom of the page, for B.C. the number is 59, which is the lowest number on the table. For Ontario, which doesn't have that legislation, the number is 81, which is higher than B.C.'s number. But the Quebec number is 132.

Again I can't establish a link between this type of legislation and the number of person-days not worked.

The most important variable, as shown on page 7, was in the wage gains of workers, based on whether or not a law of this type was available.

The federal wage gain in 2005 was 2.7%. We don't have this legislation. The British Columbia wage gain was 2.3%, lower than the federal wage gain. Quebec had a gain of 2.4%, again lower than the federal wage gain. But I'm not going to conclude that if you don't have this law workers get bigger benefits, because that certainly is not true. The Ontario number was 2.3% as well, which is the lowest number in the table for wage gain.

So I cannot draw a conclusion that this type of legislation can help workers achieve larger wage gains.

I have mentioned the four variables of wage adjustments, the number of work days lost, the average duration of strike, and the number of work stoppages. My data are quite credible, have been used by many analysts, and are of the same quality as Statistics Canada's data. If we use the averages over these periods, we cannot establish a link between the legislation and the variables we are looking at.

So that is the conclusion we draw from these data. Of course I can use these data to draw other conclusions, but I would argue that those are not reasonable conclusions based on the use of data. I can give you many examples, just looking at these tables, of how that can happen. Some people have tried to do that, but I would suggest that is really not very scientific.

That's all I have to say. We're here to answer your questions on these tables or other questions of fact and analysis that we can deal with, as I said, in order for the minister and the government of Parliament to come a decision on policy.

Thank you, Mr. Chair.

[The Chair, Conservative, Dean Allison]

Thank you very much.

We're now going to move to our first round of seven minutes for questions and answers. We're going to start with the opposition, the Liberal Party.

Mr. Silva, for seven minutes, please.

[Mario Silva, Liberal, Davenport, ON]

Thank you very much.

On section 87.4 of the Canada Labour Code, there's a reference in this bill to that particular legislation. But there's been a concern raised by many other people, witnesses I've heard, on the whole issue of essential services. Can you comment on these concerns? Are essential services protected under section 87.4 of the Labour Code?

[Munir Sheikh]

Thank you.

Mr. Chair, as I said, I'll deal with issues of fact. There are issues of policy in that question that I would not want to deal with.

Let me explain that in the Canada Labour Code the reference to essential services is essential services in a very narrow sense. The services defined in the code only relate to health and safety.

The reason there's such a narrow focus on essential services is that the essential services provisions of the code work hand in hand with the replacement workers provision. The two go together. Because businesses are allowed to use replacement workers, the code did not have to be very prescriptive on what essential services are, and it has suggested mechanisms in the code on how to deal with the essential services issue. The code quite explicitly states that management and unions should sit together and define what essential services are in their particular areas.

I'll give you an example. On the CN strike that is happening right now, effective February 10, the two parties jointly determined that the commuter rail service in Toronto and Montreal will not be shut down. The service is still running, and it's only the freight service that has been hit by the strike.

If the two parties, Mr. Chair, cannot agree on which services should continue, they would apply to the Canada Industrial Relations Board, and the board would come to a decision on what it would consider to be essential. It is what both parties would be expected to follow.

To summarize my answer, since the two provisions in the code work hand in hand, the provisions for essential services are very limited. If, for the sake of argument, one of the provisions of the code were to change, then there would of course be a huge imbalance between the two.

For example, if Bill C-257 is made into law, it would mean the essential services provision in the Canada Labour Code would not be sufficient. If it is not dealt with, then I would speculate that the Canada Industrial Relations Board would find it has to deal with a workload that is significantly more than is realistic at the present time. The board may not be able to handle that.

Again, I think the two things need to be looked at together.

[Mario Silva, Liberal, Davenport, ON]

Maybe you could help this committee. You spoke about the fact of it not being sufficient. There have been arguments that the essential service provision under section 87.4 is the same as, for example, what is in B.C. and what's in Quebec. I'm hearing from you that it's probably not the case. Is that what you're saying?

[Munir Sheikh]

That's my understanding. In effect, if I understand it, in the Quebec legislation there's considerable detail as to what essential services are, which are considerably more--a lot more--than what we have in the federal code.

[Mario Silva, Liberal, Davenport, ON]

But the essential service provision in Quebec is in relation to public service. It's basically all the ambulances and hospitals, and it's not related to private enterprise.

[Munir Sheikh]

I'll let my colleague provide further details on the Quebec legislation, but let me make what I think is a fairly important point, and that is reflected in the reality of the Canada Labour Code.

As long as they're related to health and safety, there are of course many more services that are essential at the provincial level than at the federal level because of the nature of the federally regulated sectors. The unique thing about the federally regulated sectors is that they provide a national foundation on which the rest of the economy functions. Their role is not as much about health and safety as it is about the importance of these sectors to the overall Canadian economy, a role that I would argue is somewhat different from the provincial role. The provincial role, of course, relates to economies within a province, whereas the federal role is for sectors that would affect everybody in every province. In that sense, some people have used different terminology for what the federal government does and have said that it is critical, not essential--“essential” being the word used to describe health- and safety-related issues.

So I would suggest that a really important issue in this context is that for an economy that deals with the entire scope of the country--and we're dealing here with economic issues that affect everyone, not just those in one province--there should be some discussion of what role critical services play and how they should be dealt with.

[Mario Silva, Liberal, Davenport, ON]

Are you suggesting, then, that it would be helpful to add the words “essential services” or to broaden the definition? Would that be helpful to clarify things?

[Munir Sheikh]

Again, the word that has been used--helpful--is not what I can really deal with. What I'm saying is that in the existing code, the provision on essential services is linked directly to the question of replacement workers. If that provision on the replacement workers were to be changed, then there'd be an imbalance that would need to be fixed.

How far should Parliament go to fix that balance is really up to Parliament, but there will be an imbalance. It's really not for me to decide or opine on how far that change should go, but the existing provisions would not be very practical.

[Mario Silva, Liberal, Davenport, ON]

I just wanted to know something. When you talk about imbalance, is that your opinion, or is that a legal opinion from the department?

[Munir Sheikh]

It is an opinion based on what is meant by balance in the context of the code, and on whether or not that definition of balance would be disturbed.

The definition of balance was used in pulling the provisions of the code together, and the Sims report really describes it and discusses it in detail. To determine if there is balance, you must look at whether or not the law would create equal incentives for both parties to come to a reasonable solution.

Again, I can use the CN example. In the current strike, both parties face financial challenges. The workers, of course, face financial challenges because they lose income as long as they are on strike. According to a union spokesperson, CN is now running at 25% capacity, which of course means that CN management and business are also facing financial challenges. So there is the balance in the code to encourage both parties to come to a view on what a reasonable settlement would be. If you change that balance, then of course the incentives will change.

I'm not here to suggest whether or not that new balance is appropriate. All I'm suggesting is that the existing balance, in which there are reasonable incentives on both sides to come to a view as to what a reasonable settlement would be, would be disturbed, and then somebody would have to find what new balance one would need or whether one needed a new balance. As I said before, that is really a policy question.

[The Chair, Conservative, Dean Allison]

Thank you, Mr. Silva.

Now we're going to move to the Bloc, with seven minutes for Madame Lavallée.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Thank you very much, Mr. Chair.

Thank you very much, ladies and gentlemen, for coming to enlighten us further on the bill before us.

I'm pleased to meet you, but I didn't think you were going to talk to us about the document that was produced on October 24, the day before the vote, which Minister Blackburn had distributed to all members only a few hours before the vote on second reading.

When I received that document, I was quite surprised because I had the impression that the statistics it contained were not correct. I've told this committee on a number of occasions: it's a surprise when you compare work stoppages in Quebec and Ontario. It's like comparing tomatoes and carrots: they're both good, but the comparison isn't fair and doesn't give an accurate idea of the situation.

You have to compare the number of person-days lost by workers governed by the Quebec Labour Code and those lost by workers governed by the Canada Labour Code. If there are figures that should be compared, it's those ones. When you compare Ontario, British Columbia and Quebec, a number of other factors that are not taken into consideration influence the figures.

I'm thinking, among other things, of the number of unionized workers. It is a well-known fact that the percentage of unionized workers is much higher in Quebec than in Canada or in any other province. So you shouldn't compare workers who are governed by the Quebec Labour Code with those governed by the Canada Labour Code.

On its Web site, the Government of Quebec has posted some good tables on the subject, which are available and which I could distribute to you, if Mr. Chair gave me the permission. We have the figures on labour disputes in Quebec involving workers under provincial jurisdiction and those under federal jurisdiction between 1989 and 2004. You realize there are far fewer workers under federal jurisdiction — they represent eight percent or less of the total labour force — but that the number of person-days lost is generally, on average, much greater than eight percent in their case. For example, between 1989 and 2004, the average number of person-days lost by those workers represented 18.8 percent of the total number, whereas they represent less than eight percent of the total labour force. These are figures that talk, that are accurate and that are spread over a long period.

It is true that there are years in which the number of person-days lost is less than eight percent, but it is also true that, in some years, that number is much higher. I am thinking, among others, of 2002, when the percentage was 47.8 percent, and the last average reported, which is 18 percent. I will be extremely pleased to submit those figures to you.

Perhaps you haven't observed the direct impact of passage of the anti-strike breaking legislation in Quebec in 1977 on the number of work stoppages, but, when you look at the figures in Quebec, you see that, in 1976 and 1977, there were respectively 293 and 276 strikes. The last figure I have is 96 for 1995, and I see that you've come up with the figure of 76 for 2005.

That may not be the most interesting statistic, but it confirms that the anti-strike breaking legislation resulted in social peace in Quebec. Everyone says it: the unions and even the employers have been saying it for years. We moreover found no real criticism of the strike breaking legislation in any of the briefs by the Conseil du patronat du Québec.

Having said that, I'll allow you some time to comment on the figures I've given you, Mr. Sheikh.

[Munir Sheikh]

I'll make two observations, Mr. Chair.

The first is that all the factors you have mentioned can have a bearing on the impact of such legislation and the variables we're all interested in. There is a simple way of looking at this issue, which is what I've done. And there's a complicated way of looking at this issue, where you do economic studies--I've done many in my life--and come to a resolution of precisely what the impact of such legislation is. That is not what I've done in these tables.

If I can make a reference to page 4 of the document we gave you, these are not our studies. We don't know why these studies were undertaken and who funded them or whatever. All we know is that we were not the ones who asked for these studies. Most of these studies overwhelmingly show that the simple conclusion I have drawn stands. That conclusion doesn't get overturned.

I would suggest maybe that should be looked upon—

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Pardon me, Mr. Sheikh, but my time is limited.

If I may interrupt you for a few seconds, I will say that most of the studies that you cite were conducted by renowned U.S. academics. Moreover, they are very well known and we know them particularly well because they are usually the advisors of major American employers. They advise those employers to be extremely tough on workers. They are right-wing people. One of the authors you refer to, John Budd, is known for his right-wing positions and his advice to employers, who always oppose workers in a very tough manner. So you'll allow me to express a few doubts about the other authors as a whole. You cite them, but we don't know how their studies are conducted.

As I said earlier, you have to compare apples with apples. In Quebec, you have to look at the person-days lost and compare workers governed by the Provincial Labour Code with those governed by the Canada Labour Code.

Pardon me for interrupting you.

[The Chair, Conservative, Dean Allison]

Mr. Sheikh, please give a quick response. We're out of time, but go ahead with an answer.

[Munir Sheikh]

All I can say is that we have our own data. Those data are quite credible. We have looked at the data, we've analyzed them in whatever way we can, and we are simply not able to establish a link. I'm not saying there is a positive link or a negative link; we simply cannot establish a link among the data.

[The Chair, Conservative, Dean Allison]

Thank you very much.

We're now going to move to Ms. Davies, for seven minutes, please.

[Libby Davies, NDP, Vancouver East, BC]

Thank you very much.

Thank you to the officials for coming today. I'd like to pick up on a couple of points you're making.

You focused a lot on numbers, and you seem to be coming to a conclusion, or you're wanting us to believe a conclusion, that your numbers show that this bill banning the use of replacement workers hasn't had an impact. I think it's really important to note that numbers alone don't tell the story. You have to look at the labour relations climate in terms of what is happening at any particular time. I would draw your attention, and the attention of members of the committee, to your own tables that you presented today. I think it's very clear on page 5, in table 3, that in Quebec, when you look at the number of person-days not worked, you can see a very high figure--four million plus--in 1977, prior to the legislation coming into effect in Quebec, and then you can see a very sharp drop-off after that, going down to one million. Then there are some figures below that.

It seems to me that if you want to just argue numbers, you could use this table equally the other way around. Unfortunately you don't show the B.C. situation, because the B.C. legislation came into effect in 1993, so we actually can't do the comparison there.

The other thing I would add is that I think it's very clear that in Quebec there was a wave of work stoppages, particularly in 2005, because there were a lot of conflicts because of a major restructuring by the Quebec government that went on. So that produced a very different kind of labour relations climate, and I think you have to put that in the mix.

So I don't share your conclusion that this is just based on numbers alone. I think these numbers can be looked at in different ways, particularly in the table I've just pointed out. You can comment on that if you want.

The second point I'd like to raise and get you to respond to is that you seem to be saying that section 87.4 in the Canada Labour Code, which deals with maintenance of services, which we all understand to be the provision that deals with essential services, is very narrow. I think you said that in your comments. And it is correct that section 87.4 says “to prevent an immediate and serious danger to the safety or health of the public”.

But let's be very clear. It's very similar in Quebec. And in B.C., the legislation says “safety or health” and I think they use the word “welfare” as well. Nevertheless, we are dealing with similar provisions. So I'm not aware that the narrowness of the scope of those pieces of legislation has in any way impeded parties from being able to declare what are essential services.

I would point out further that the CIRB itself, in a ruling dealing with the Montreal airport--its own ruling--raises the question of what is meant by the safety and health of the public, and the board itself is saying that in the board's view, the code gives it plenty of leeway by refraining from imposing any definitions whatsoever, and then it goes on beyond that. So even the board itself, in its own rulings, seems to have been quite satisfied that it has the scope to deal with the provision of essential services as defined in the code.

Finally, I would like your officials to walk us through section 87.4 of the Labour Code. We have heard so much conflicting testimony--that there are no provisions, that we can't deal with essential services, that it's not clear, that it's not fair--and yet I've read section 87.4, and it's very clear to me that the employer or the union or the minister can actually request the board to provide an intervention and define what those essential services are.

But rather than having it come from me, I would like your officials to walk us through how section 87.4 of the Labour Code works and who can do what in terms of defining what those essential services are.

[Munir Sheikh]

On the question of numbers, we observed the Quebec situation going from 4.4 million to a very small number. I think you can see the same thing for other jurisdictions as well. Indeed, for B.C. the 1992 number is 545,620, and it went down to 76,820 in 2005. You can observe this is a downward trend for all jurisdictions over time.

On the question of essential services, the point I was making is that the scope of essential services defined in the code in relation to federal sectors is very narrow. For example, look at our provincial economy, which has responsibility for health, safety, education, and what not. If you take health and safety, and that is the only way to define essential services, then of course you're going to have a much larger part of the provincial economy that would come under their jurisdiction.

For the federal government, which is national in scope and really is the foundation on which the rest of the economy works--analysts use the word “critical” or “essential”--the issue that I think needs to be discussed is what essential services are in the context of shutting down critical national services and the whole country comes to a standstill.

[Libby Davies, NDP, Vancouver East, BC]

Deputy Minister, do you not agree that in your board's own opinion they have enough leeway under the code and through the decisions they have made to make that determination? They're already doing it. Do you agree with that?

[Munir Sheikh]

I totally agree with that. In fact, that was my second point. The board has all the jurisdiction it needs to define essential services in the context of the current replacement workers legislation. The fact that the code has given authority to the parties to determine what essential services effectively are means you don't really need a huge law or huge intervention from the board. Once you change the replacement workers legislation, then that balance I was talking about, the ability of the board to come to a decision, comes into question.

[Libby Davies, NDP, Vancouver East, BC]

The question of replacement workers is a completely separate issue. We are debating whether without replacement workers there is adequate provision through this process for the parties to agree, on their own or with the assistance of the board or through the intervention of the minister, that essential services can be established. That's a very straightforward question.

I would like you to respond, whether you think there is an adequate provision in the code to establish that now.