Bill C-257 (Historical)

An Act to amend the Canada Labour Code (replacement workers)

The purpose of this enactment is to prohibit employers under the Canada Labour Code from hiring replacement workers to perform the duties of employees who are on strike or locked out.
The enactment also provides for the imposition of a fine for an offence.

[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), we'll commence as we look at clause-by-clause consideration.

I know that when we broke yesterday we had a motion before the committee. The question is, do we want to continue with that motion or do we want to go clause-by-clause? It's at the will of the committee to decide what we want to do.

Mr. Lake.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Mr. Chair, I get the impression I'm in the National Improvisation League here. The situation is completely crazy. A bill has been referred to us for consideration. We have heard a host of witnesses, and as we are preparing to conduct the clause-by-clause consideration of the bill, an amendment is submitted to us, a surprise motion that we're trying to negotiate like this.

I tell you that trying to negotiate with our colleagues is insulting and contemptuous. Mr. Chair, we can't treat matters as important as this lightly. We all due respect for my colleagues here present, I must say that this is intolerable.

We could very well have introduced a motion today and said that the evidence heard in the first part indicates to us that a better balance will be struck with this bill, and I would have found that insulting for our colleagues. The reverse is also true. You can't say today that Bill C-257 will result in an imbalance in view of the evidence we've heard, because that evidence has to be viewed in perspective, in light of the initial evidence.

We know that there was an imbalance in the evidence. That's been admitted here. By dint of circumstance, we accepted a motion introduced by the Conservatives to add witnesses to the list.

We know that we could also have issued a list to restore the balance. We could have called for the unions, since we heard from the Canadian Chamber of Commerce, then all the list of chambers of commerce of the provinces. We could have done the same with the Canada Labour Congress. We heard it and we could have called for all its affiliate organizations. There would have been a lot of people!

I contend that we should take Bill C-257 in its present form, as it was referred to us by the House, examine it clause by clause and responsibly conduct the evaluation and analysis with which we are required to proceed. That means that we will also examine the matter of essential services.

Are we going to shirk a responsibility that is ours by assigning it to someone else? That would be irresponsible. Ultimately, we could draw certain conclusions, but once the clause-by-clause consideration is done. At the end, we might find ourselves with a clause that is really the subject of special concerns. Everyone could then say that we can't find our way and that we should assign the study to someone else, but we have to know what it is about. We can't assign the whole thing to someone else.

I'm going to oppose this motion. I'll also say that I'm going to oppose any practice of this kind, which consists in introducing a makeshift motion, taking everyone by surprise, and trying to negotiate it with an opposition party. Mr. Chair, this is intolerable.

[Marc Toupin, Procedural Clerk]

I think, Mr. Chair, the process is that if members wish to amend Bill C-257 in such a way, they would have an amendment drafted by the House legislative counsel. That amendment could then be looked at, and ultimately the chair of the committee would have to rule as to whether or not it is in order.

The general rule is that it is not proper for a parliamentary committee to go into sections of the Canada Labour Code that are not being amended by this particular bill, by Bill C-257. There has been some reference by witnesses that any amendments to essential services would deal with section 87.4 of the Canada Labour Code, and that particular section is not being amended by Bill C-257.

[Munir Sheikh]

My expert tells me that she's not quite clear on what would be or would not be allowed. We really haven't come to those kinds of conclusions on the Bill C-257 provisions.

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

There are about seven people.

Taking a look at the bill itself, Bill C-257, and going on to proposed paragraph 94(2.2)(a), I've had a number people come forward with a concern in regard to where it states “a person employed as a manager, superintendent or foreman or as a representative of the employer in employer-employee relations”, in that they are the only individuals who would be allowed to work during a particular lockout or strike. Would this actually prevent individuals who are non-unionized employees, who are managers, to go in and provide replacement services?

[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.

[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.

[The Chair, Conservative, Dean Allison]

Okay, thank you very much.

Just before I thank all of our witnesses for being here today, I do want to remind everyone that if there are any witnesses you would like to see when we talk about Bill C-36, Bill C-269, or Bill C-278, could you get those to the clerk by Tuesday at noon. Christine will be sending out a notice to that effect, but it is Thursday now and we'll be heading to Friday and Monday. And remember there are the amendments for Bill C-57 as well, but you do have until Wednesday at noon to get them in.

Once again, I'd like to thank all the witnesses for being here today, and thank you for taking time out of your busy schedules.

The meeting is adjourned.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Thank you, Mr. Chair. I want to thank our guests for accepting our invitation.

I simply want to make a comment on Mr. Nicholls' remarks on workers' ability to judge the merits of the decision.

When it's said that they made the decision to strike because they didn't understand what the vote implied, I think that's quite contemptuous, particularly since, in that situation, we're talking about Aboriginal people. I've worked with Aboriginal people and they are people concerned about being able to communicate among themselves and to understand situations clearly. I've even seen them interrupt meetings that I've attended in order to hold group meetings among themselves so that they could be sure they had understood everything. So these are people who are concerned about clearly understanding things before making a decision.

I use that example to say that you can't rely on an argument such as yours to establish the validity of Bill C-257.

I very much like the viewpoint of Mr. Turnbull, who urges us to examine what's really essential. I don't think everything can be essential, and I think you'll agree with me on that. Otherwise, if Messrs. Finn and Turnbull, for example, told us that everything must be essential, all that would then remain for you to do would be to seek the abolition of the right to strike. But I don't think that's what you are arguing for today. So some things are not essential.

Based on experience observed in Quebec, there are key areas, including health, where there is a right to strike, but also essential services. However, those services are based on a relationship of understanding, first of all, as to what must be essential or not, and when the parties do not agree, a third party decides the matter.

I want to get a clear understanding because we'll have to take a position on this question. You two have argued to this effect, and you may intervene, as well as others. What should we favour between the two? Is this an approach whereby we agree on essential services with the union, or the right to replacement workers?

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

In your brief, you write, and you repeated it out loud:

Many of our people were not looking for or expecting a strike, which they never voted for.

And yet there are 300 and some unionized workers at the Ekati mine, nearly 400 even, and there have been two strike votes.

You know how it works. Miners are brought in by plane and stay there for a period of two weeks. Then they go home for two weeks. There were two votes, one at the end of February 2006 — pardon me, but I don't know the exact dates — and one in early March, I believe, around March 10. The vote was 74 percent in favour of the strike. Two-thirds of the workers voted for this strike.

If there hadn't been a strike vote, Mr. Nicholls obviously would have been the first to mount the barricades or at least to complain. He would have filed a proper complaint with the Canadian Industrial Relations Board. So I'm quite surprised to hear your allegation on that subject.

I should also say that the end of your presentation is more anti-union than anti-Bill C-257. I understand that you have needs and that your community has needs and beliefs, but it's a delicate matter to say that they go against union activities.

Having said that, I believe that is a personal opinion of yours and that it belongs to you.

In a labour dispute, you have to consider balance. Everyone is right to say so, except that we don't have the same definition of balance. Balance is the union party and the union party working together and negotiating together over a long period of time, then coming to the conclusion that there must be a strike or a lockout. The employer deprives itself of a portion of its production because, under Bill C-257, and based on 30 years' experience in Quebec, there are indeed managers who work. Workers are also deprived of their work and income. So that's really balance.

When replacement workers come in, it's as though a third player were entering a match that's already underway and who starts playing for the employer.

[David Turnbull, President and Chief Executive Officer, Canadian Courier and Logistics Association]

Thank you, Mr. Chair. Ladies and gentlemen, thank you for inviting us to appear here today.

My name is David Turnbull. I'm the president of the Canadian Courier and Logistics Association. I'm accompanied by Bill Henderson, senior vice-president of operations with Purolator Courier. On behalf of the Canadian Courier and Logistics Association, I would like to provide the committee with our significant concerns regarding Bill C-257.

Canada's courier industry provides delivery of time-sensitive packages, freight, and documents to small, medium, and large businesses, government institutions, public health facilities, and individuals. The courier industry is a vital part of the Canadian economy, with estimated revenues of approximately $5.5 billion, and it is responsible for employing some 46,800 people.

Today, Canada's manufacturing and retail industries depend on just-in-time delivery for essential replacement parts and inventory. Interruptions to these just-in-time deliveries can cause slowdowns or even closure of production lines, impacting the Canadian economy. The automotive industry, among others, transfers component parts between manufacturing facilities for assembly. Many of the smaller components cross and sometimes re-cross the Canadian border using courier company services.

Distribution of vital medical supplies and diagnostic material are transported by our couriers every day. For example, Canadian Blood Services collects whole blood from more than 14,200 blood donor clinics and ships blood, plasma, and other blood products to nearly 750 hospitals across Canada using couriers to transport. In times of emergency, critical supplies are delivered through the courier industry's national and international facilities.

Let me speak to the implications of Bill C-257 for the courier industry. Bill C-257 would seriously jeopardize the courier industry's ability to deliver essential packages and freight in the event of a strike or lockout. It proposes a fundamental change in the balance between the interests of organized labour and business and tilts heavily towards labour. The proposed bill would not allow businesses to continue operations, while at the same time, it would allow striking workers to seek employment outside the workplace. How can you consider that to be balanced?

No credible evidence exists to suggest that any problems exist in the present Canada Labour Code with respect to replacement workers. Numerous presentations to this committee have quoted statistics produced by Human Resources and Social Development Canada that refute the premise of Bill C-257. The number of work stoppages per 10,000 employees in the province of Quebec is significantly higher than in comparable federally regulated business operations, despite the fact that Quebec has a provincial restriction on replacement workers and the federal code has no such restriction.

The current federal legislation provides a fine balance between the interests of business and labour. It was arrived at after extensive consultation and input. No such extensive consultation led to the creation of Bill C-257.

The Canadian Courier and Logistics Association believes that enactment into law of Bill C-257 would reduce the competitiveness of Canadian businesses. It would make Canada less attractive for foreign direct investment, and SMEs would consider moving to the U.S. or to overseas locations following any national labour disruption.

It is important to note that operations of both unionized and non-unionized companies would be affected by strikes in other sectors. The domino effect from the closure of such facilities as airports due to safety certificates being revoked could ripple through the whole of the Canadian economy. As well as these economic considerations, a significant risk to Canadians' health would be posed by the disruption of courier services for vital medical deliveries.

In consideration of the above, the Canadian Courier and Logistics Association urges the committee to reject this legislation.

In summary, Bill C-257 would impact the Canadian public and industry as follows: It would change the existing balance in part I of the Canada Labour Code without a full consultation. It would lead to longer, more frequent work stoppages. It would hurt workers financially, drawn into disputes unrelated to the employer they work for. It would prevent the delivery of essential parts and inventory in the event of strike or lockout; and, therefore, would undermine the viability of many small and medium-sized businesses, putting jobs at risk. It would endanger investment and, indeed, the Canadian economy at large. It would prevent couriers from maintaining the delivery of essential services to Canadians. It would adversely impact public health and safety and would inevitably force Parliament to pass back-to-work legislation in strike situations.

So in summary, the Canadian Courier and Logistics Association urge you not to proceed with this legislation.

I don't know if the clerk has handed out my handout. I've detailed in great detail some of the medical supplies that are transported by our couriers, and some of the auto parts, to give you a sense of this, and Mr. Henderson would be pleased to speak to some of the medical issues that are delivered. I urge you to look through this package and consider the broad implications for the whole of Canada. Not just a single industry, but every single Canadian can be impacted negatively if this bill goes through.

Thank you, Mr. Chairman.

[Sean Finn]

Sure. I can do it in French, if you want me to.

I apologize to the interpreter.

Anyone who has been to China and met the Chinese exporters or shipping companies can tell you that one of the first questions asked to any visiting Canadian delegation pitching for an increase in Asia's North American trade through Canada is, what about your labour situation? This may refer to the ports, the truckers, or the railways, but to be sure, every work stoppage that leads to delays in moving our customers' goods to market hurts our competitive position and hurts Canada's competitive position.

The government sees great promise in the Pacific gateway initiative. There is talk in Atlantic Canada of an Atlantic gateway initiative. We at CN see great promise as well, but we do not underestimate how quickly our competitive advantages can be lost because of an uncertain labour environment. We at CN are extremely excited by the potential of the new container port that will open this fall in Prince Rupert.

Traditionally, labour legislation has been drafted carefully after lengthy consultation with both labour and management. Existing federal legislation reflects years of discussion and consideration. In the end, it represents a compromise approach, under which neither side gets everything it wants. To arbitrarily change one aspect of the Canada Labour Code destroys that careful balance and has the potential to significantly damage labour relations in the companies covered by the act.

There are many changes we'd like to see made to the current law, and I am sure the unions also have a long list. It is indeed time to consider or reconsider the current legislation, and do it in the right way. Appoint a panel of experts to look at the law in its entirety and bring forward a set of recommendations reflecting the concerns of all parties based on facts and experience.

Finally, Mr. Chairman, CN believes that Bill C-257 is seriously flawed and cannot be sufficiently improved through amendment, and urges the members of the committee to vote against the bill in its entirety.

Thank you very much.

[Sean Finn, Senior Vice-President, Public Affairs, Chief Legal Officer and Corporate Secretary, Canadian National]

Thank you, Mr. Chairman. My name is Sean Finn. I'm the senior vice-president and chief legal officer at CN.

Mr. Chair, it is a pleasure for us to be here today and to have the opportunity to give you our comments on Bill C-257.

We at CN take Bill C-257 very seriously and view it with great concern. CN has approximately 15,000 unionized employees across Canada. These employees belong to seven unions in 21 certified bargaining units and are covered by 30 collective agreements.

There are a number reasons why certain sectors are federally regulated. One is that we are companies with broad enough operations and important economic impacts that we significantly impact the Canadian economy.

CN, as you know, is a freight railway. We serve eight provinces as well as the mid-United States. In Canada, CN serves the ports of Vancouver, Prince Rupert, Montreal, and Halifax. In the case of Halifax and Prince Rupert, we are the only railway servicing those ports. The majority of VIA Rail Canada's trains travel on CN tracks, as well as much of the commuter traffic of GO Transit in Toronto and the Agence métropolitaine de transport in Montreal.

Since 1971 CN and its unions have been involved in four strikes. Strikes in 1974, 1986, and 1995 all required back-to-work legislation by the federal government. This was done because Parliament deemed it necessary to ensure that the Canadian economy did not suffer serious damage, and also to ensure that CN's customers did not have to shut down plants and lay off workers, with substantial impact to their businesses.

In 2004 CN faced a month-long strike by the CAW. CN continued to operate during the work stoppage, exercising our rights under the existing labour legislation, using managers—who had to be qualified and skilled—as well as retirees to continue to operate the railway and service our customers. The strike was generally peaceful, and ultimately a settlement was reached through the collective bargaining process and ratified by a large majority without government intervention. I'm very pleased to note that just last week the same CAW employees, without a work stoppage, ratified a new four-year agreement.

If this legislation were passed, with its strict limit on the tasks management personnel can perform and taking away our ability to bring back retired managers to help run the railway, it would not be possible for us to maintain operations through a strike.

Under current labour legislation, bargaining representation is system-wide. With the changes suggested in this bill, labour would have the power to disrupt company operations nationwide. Companies would not have the resources to deploy to maintain the critical services necessary to maintain nationwide services essential to the general welfare of Canadian citizens. We fear this would mean a return to a system where any nationwide railway work stoppage would inevitably require government intervention. This is not the way to build trust between management and the union or to improve labour relations.

I'd like to speak a few minutes about the collateral damage that would take place in the event of even a short railway strike.

First, the commuter rail service in Toronto and Montreal would quickly grind to a halt, leading to traffic jams and great inconvenience for millions of people. In some cases, depending on which union is striking, VIA Rail service could largely stop.

I must remind you that while it is possible to apply to have workers designated as essential, the grounds are very narrow, and the chance of success, unless the unions agree, is minimal. Economic consequences are not considered.

Canadian railways are a significant driver of the economy. The Canadian economy is heavily dependent on trade. The majority of our bulk products and many of our manufactured goods are moved to export position by rail, as referred to by Canpotex. Grain, forest products, coal, sulphur, fertilizer, metals and minerals, and many other bulk commodities rely almost exclusively on rail to get to destinations in the United States or to export position at Canadian ports. The many companies relying on just-in-time delivery parts would see their production lines slow and eventually stop. Companies would incur increased storage costs and in some cases would have serious problems finding places to store their production. Canadian ports would face serious backlogs on incoming containers, and ships waiting for out-going products would sit in port running up large demurrage bills. Canadian farmers and other primary producers would suffer, as would Canada's international reputation.

These would not be short-term or one-time issues, as the reliability of Canadian suppliers to meet their commitments would be drawn into question. In the past, strikes at west coast ports have caused traffic to move to U.S. ports, and some of that traffic never comes back.

[Howard Mains, Canadian Public Policy Advisor, Association of Equipment Manufacturers]

Thank you very much, Mr. Chair, and thank you, John, for your kind comments.

I think it's important to note that the dealers and the manufacturers all share a common goal, and that is, to get the right equipment into the hands of the farmers and make sure that equipment is working when they're trying to get their crops off.

Let me first say a few words about the Association of Equipment Manufacturers. AEM is the trade association representing the agricultural, forestry, construction, and mining equipment sectors. In addition to Canadian equipment manufacturers, such as MacDon out in Winnipeg, there are about 700 other members, including those that manufacture the tractors, tillage, electronic, and harvest equipment Canadian farmers depend upon to plant and take in their crops.

This afternoon I wish to speak about five areas of interest to this committee. Just briefly, the first is the sales history. I had handed out a chart that shows the sales history over the past 20 years of farm equipment in Canada, or rather tractors and combines in Canada. As you can see, it's not a rapidly growing market, except in those sectors that seem to serve the large acreage sector. You can also almost match those sales numbers with various market influences, such as the BSE crisis in 2003-04, and you can take a look at the tractor and combine sales in those years.

All of us in this room will be familiar with the tremendous productivity improvements Canadian farmers have made over the past 40 years. Work done at the George Morris Centre at the University of Guelph illustrates that farmers have been just as innovative and efficient in their productivity gains as other major industrial sectors in Ontario. Our farmers have much to be proud of in that regard.

These productivity gains result from many different types of technological advancements. For example, if I were still milking cows out in Lanark County 45 minutes from here, I might be thinking about buying a robot to do the milking, like some of my neighbours have who are still milking cows out in the barn.

Another great leap forward in productivity is the application of GPS technology in farming. Precision agriculture systems that are now in place--the assisted power steering systems, monitors for planting, fertilizer and pesticide applications, and harvest yields--all allow farmers to drive down fuel and crop input costs, while at the same time reducing environmental impact and maximizing revenue from an acre of land. So precision agriculture systems can and do address the economic and environmental issues confronted by farmers today.

Engine manufacturers have also made great strides in increasing fuel efficiencies. That's one of reasons why we're asking that the CCA rates be increased. According to the Univeristy of Nebraska tractor test laboratory, the average fuel rating measure in 1981--and I apologize for this measure, but this is the way they do it, and those of us who farm know a little bit about this--was 12.2 horsepower hour per gallon. That's a tough one, isn't it? Regarding the latest technology, last year Deere had a tractor go through the Nebraska tractor test that came out at 18.7 horsepower hour per gallon, so that is a 50% improvement, while at the same time meeting the new EPA tier three emission regulations.

As a result of these ongoing technological improvements, not only in tractors, but across the full line of agriculture equipment, Canadian farmers are replacing their equipment much faster. In the past, innovative farmers might have upgraded their tractors every five to seven years. It all depends, but we'll use round numbers here. Now, and the dealers will know this, those leading edge, innovative farmers are trading in their equipment much sooner, maybe three to five years, in order to reduce the operating costs through fuel efficiencies and increase operator efficiencies as much as possible.

Let me ask you to picture in your mind two things. The first is a horse harness and the second is a bright new 250 horsepower GPS-equipped tractor, maybe down on Doug's lot down in Winchester.

I think you'd agree there's a stark contrast between those “tractors”. Well, under the tax act there isn't; they are the same. They both are classed in class 10 of the capital cost allowance. Both are allowed the same 30% depreciation rate. That's just one example of how outdated our tax code is in this country, and I think it's fair to say that we need to have a good, hard look at that and to say that horse harnesses and new tractors are not the same thing.

Last October, dealers and manufacturers jointly wrote to the Minister of Finance asking the government to modernize CCA rates, and we urge this committee to recommend these changes to the government. By doing so, the agriculture committee would be supporting both the industry committee, which tabled its report on Tuesday and made a recommendation in this regard, and the finance committee. We would be able to go into the budget cycle possibly with three committees making the same recommendation.

Allow me to turn to a matter of significant concern to AEM members and indeed to dealers, a matter that's before Parliament in committee, and that's Bill C-257. I'm sure some of you may have heard a little bit about it.

Dealers and manufacturers require a robust, dependable telecommunications network to ensure rapid delivery of replacement parts for repairs to agricultural equipment. In particular, I would point out that in some provinces, agricultural equipment manufacturers are under a statutory obligation to deliver parts within a set period of time. In Saskatchewan, it's 72 hours. A lengthy strike by telephone company employees without replacement workers to maintain mission-critical telecommunication networks that everybody at this witness end of the table depends on would put into jeopardy our combined ability to get those parts into the hands of the farmers.

In the 20 years leading up to the changes in part I of the labour code in 1999, Parliament had to intervene 17 times to end labour disputes. Since then, not once has Parliament intervened. I trust, therefore, that you would draw these concerns to your caucus colleagues.

AEM in both Canada and the United States supports the ongoing efforts of government to establish a renewable energy strategy. In the U.S., AEM is working with 200 other organizations on the 25X25 initiative, which has a goal of obtaining 25% of U.S. energy supplies from the nation's working lands by 2025.

In Canada, the government has established a mandate for biofuels. However, without tax parity with the U.S., much of the value-added processing will locate south of the border. This means the value of the jobs, equipment, and supplies to build and service the industry will accrue to the U.S. and not to Canada. We simply would become exporters of raw product and purchasers of finished goods.

We have a once-in-a-lifetime opportunity to have a new industry created and developed in Canada, and all producers are asking for is a level playing field. There will be clear spinoff benefits to rural communities and their agriculture-based economies.

In summary, Mr. Chair and members of the committee, manufacturers and dealers have a shared goal, and that is providing Canadian farmers with equipment that does the job of getting the crop planted and harvested. AEM supports the concerns of the dealers brought to this table, and in particular urges the committee to pass a motion calling on the government to increase CCA rates.

Thank you for allowing me to address the committee this afternoon.

[Graham Nicholls]

Thank you very much, Mr. Chairman.

My remarks today are further to a letter of December 11 that we sent to the standing committee on behalf of BHP Billiton Diamonds.

My name is Graham Nicholls. I'm a vice-president and director of BHP Billiton Diamonds. Joining me in making the presentation today is Maurice Zoe, aboriginal site coordinator at the Ekati Diamond Mine. Nancy Deshaw, our in-house legal counsel, is available to assist in answering any specific questions.

BHP Billiton is the world's largest diversified resources company. Its main asset in Canada is the Ekati Diamond Mine in the Northwest Territories. It's a multi-billion dollar investment and falls under federal labour law. Ekati uses the services of between 1,500 and 2,000 people, including employees and contractors. Of the total workforce, in excess of 30% are aboriginal.

We have important socio-economic obligations to the communities in the area, and we operate under stringent licences to ensure protection of the environment.

Diamond mining provides over 40% of the GDP of the Northwest Territories, as well as a significant flow of taxes and royalties to the federal government.

Our mine is located in the tundra about 300 kilometres northeast of Yellowknife. It depends on air transport and a winter ice road for access, fuel and supplies. The mine is a very complex operation, located in a sensitive environment. It can't be shut down as a result of a labour dispute without risk and negative impacts to the local economy, to the social fabric of aboriginal communities and to the environment.

There was a strike at Ekati last year. We kept operating, using our contractors and non-union employees and the 42% of bargaining unit employees who freely chose to return to work. We did not use replacement workers; no one was brought to the mine who was not already providing services there before the strike started. A first collective agreement was reached, with 97% of the workers returning to their jobs after the strike. There was minimal disruption to other stakeholders, and our safety and environmental commitments and programs were not compromised.

The strike would have lasted much longer if legislation like Bill C-257 had been in place, because the workers at Ekati had the right to return to their jobs and demonstrate that the union did not have their support for the strike. The proposed legislation would make it illegal for these workers, many of them aboriginal, to exercise this right and express their position.

The strike was imposed by the union without an independent strike vote, which is a benefit accorded to unions under the existing code when a tentative agreement is voted on and rejected. However, the code also provides a check against unions prolonging strikes that are not supported by their members, by allowing workers the option of returning to work. This is an example of the many checks that help retain balance in the current system.

The proposed bill is narrow and one-sided, and it would drive a wedge through the careful balance that is found in the existing legislation. We think the code has worked well; let's not fix what isn't broken. Mechanisms are already in place to ensure that the use of replacement workers does not undermine the role of the union. If passed, the bill would surely result in further legislation and labour disputes in an attempt to refine it further, causing even more uncertainty and instability for all stakeholders.

The proposed legislation is even more troubling because there's no evidence that it would reduce the frequency or the length of work stoppages. Rather, based on the key observations of the October 2006 HRSDC report, which you're familiar with, it is likely that the opposite would occur.

As a global investor, we must emphasize that the draft legislation would have an adverse impact on Canada's competitiveness. A decision to substantially expand our mine would be affected, for instance, if we felt that the labour situation would be difficult to manage. If our bargaining power is diminished and unions are able to exploit our dependence on the winter road or air support, or exploit our inability to shut down operations without incurring undue risk and damage to ourselves and our stakeholders and the environment, then our appetite for investment will also be diminished.

Legislation that benefits only unions and imposes risks on business continuity and an employer's ability to comply with his contractual commitments to regulatory bodies and customers alike will inevitably have negative consequences on growth and investment in Canada.

I'd now like to hand the presentation over to Maurice Zoe, to speak about the perspectives of aboriginal people, given our experience at Ekati.