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]

Order.

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

I'd like to thank all of our witnesses for taking the time to be here today. This is our last day of hearings on Bill C-257. We will be bringing in department officials on February 13 and going clause-by-clause on February 14 and 15.

Again, thank you to everyone for being here. Today I'm going to start with Mr. Nicholls; then move, via video conference, to our friends from Canpotex Limited; and then I'll go all the way around. I would ask each group for seven minutes. Then we'll have one seven-minute round of questions, followed by a five-minute round. The order will be Liberal, Bloc, NDP, and Conservative. We'll try to get in two or three rounds of questions.

I'd like to start with Mr. Nicholls.

You're from Billiton Diamonds, I believe?

[Steve Bedard, Chair, Canadian Employers Council]

Thank you.

The Canadian Employers Council is the voice of Canadian business on international labour issues and at the International Labour Organization, the ILO. The CEC has been actively representing the interests of Canadian business on international labour issues for over 80 years, since 1919, and the membership of the CEC represents a broad cross-section of Canadian employers, many of which are federally regulated.

The CEC speaks on behalf of Canadian business at the International Labour Organization, which is the United Nations agency that promulgates international labour standards; at the International Organization of Employers, the IOE, which is the international body representing employers' interests before the ILO; and within the Summit of Americas process.

Our equivalent at the ILO is the CLC, the Canadian Labour Congress. The CEC and its members are opposed to Bill C-257 and believe that it should be rejected in its entirety. On substantive issues arising from Bill C-257, the CEC endorses the submissions of FETCO, Federally Regulated Employers—Transportation and Communications. We understand that Don Brazier, FETCO's executive director, provided a written brief and appeared before the standing committee on December 5, 2006.

The CEC's submissions before the standing committee are limited to relevant international labour principles that shouldn't form any review of Bill C-257.

I refer the standing committee to the CEC's written brief, which was provided in both French and English. In our oral comments today, we'd like to focus on two areas. The first is that Bill C-257 represents an unwarranted politicization of federal labour law reform. This issue was touched on briefly by Michael McDermott, the former senior deputy minister for the labour program, during his appearance before the standing committee on December 7.

It is the CEC's position that the politicization of labour law reform runs counter to the tripartite tradition that flows from international labour principles and has long been embraced at the federal level.

Secondly, it is the CEC's position that the principles of international labour law do not support a prohibition on the use of temporary replacement workers.

The ILO has never made an adverse finding against Canada respecting the use of temporary replacement workers, and it has not adopted any instrument that expressly prohibits the use of temporary replacement workers.

Regarding concerns respecting the politicization of labour law reform, unlike labour law reform in many of the provinces, federal labour law reform has avoided politicization. Instead, tripartite reform processes have been embraced within the federal system to ensure the active and meaningful contributions of employers, trade unions, and governments. Tripartism is focused on the process leading to substantive labour law reform. Tripartism promotes stability and balance in a labour relations system.

A commitment to tripartism is at the core of the ILO and is reflected in three important international labour standards, which are discussed in detail in the CEC's written brief. These standards promote effective consultations and cooperation among public authorities, employers, and workers organizations. These international principles help to illuminate why the politicized process underlying Bill C-257 represents a disturbing departure from the tripartite tradition that has existed at the federal level.

A strong legacy of commitment to tripartism in labour law reform at the federal level is reflected in the 1968 Woods task force process and report, as well as in the 1995 Sims task force report entitled “Seeking a Balance”, which has already been discussed at great length before the standing committee.

The CEC's primary concern regarding the process leading to the introduction of Bill C-257 is that it constitutes a politically motivated attempt to reform the code for the purpose of shifting the balance of power between employers and trade unions.

Regarding the lack of expert tripartite process leading to the drafting of Bill C-257, to the contrary, an expert tripartite process was conducted by the Sims task force report, which heard exhaustive argument in favour of and against the ban on temporary replacement workers. In the end, this expert tripartite process concluded that a ban should be rejected.

The CEC believes that Bill C-257 will in itself create instability in the federal labour law sector. If the bill succeeds, it will open the door for further changes coming not from a tripartite expert process, but as a result of a political process, similar to what was experienced in Ontario in the 1990s—an experience that I believe neither employers nor unions would want to see again.

In terms of international labour principles respecting temporary replacement workers, there are absolutely no guidelines, policies, standards, or laws at the international level that ban the use of temporary replacement workers. There are, however, ILO principles supporting the right to engage in free collective bargaining and also the right to freedom of association.

Although the Canadian Labour Congress has brought a number of complaints to the ILO regarding labour relations issues in Canada and in the provinces, it has never complained with respect to the issue of replacement workers. In fact, the majority of the complaints are largely brought in respect of back-to-work legislation and provincial laws that limit collective bargaining and strikes.

Prior to the implementation of the Sims report a number of complaints were taken to the ILO regarding back-to-work legislation in the federal sector. Since Sims, there has not been one instance of back-to-work legislation—

[The Chair, Conservative, Dean Allison]

Pursuant to the order of reference of Wednesday, October 25, 2006, concerning Bill C-257, an act to amend the Canada Labour Code on replacement workers, the committee will now resume its study of the bill.

I would just like to take this time to welcome all of our witnesses here today. I've got you in order here and I'll let you know when you're going to go. There will be seven minutes each. I will give you a sign when you have one minute left if you're not watching your own clocks, and then we'll start with a couple of rounds of questioning, starting with the opposition and moving through over to the government. It will be seven minutes for the first round and then the second round will be five minutes.

I believe that via teleconference we've got the NWT and Nunavut Chamber of Mines. I want to welcome you. I will let you know when you're going to speak.

If we could start with our first witness, we're going to ask the Canadian Employers Council to proceed. I believe we have Steve Bedard.

Steve, you have seven minutes, sir.

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

Thank you, Mr. Chairman.

I would also like to thank our guests for coming today to tell us what they think about this bill.

I would like to start by comparing your opposition to Bill C-257 with the actual facts of the matter. Would it not be more advisable for you to advocate that Bill C-257 be passed for the following reasons? If we are trying to be objective, we have to realize that between 20 and 25 per cent of federally-regulated workers are unionized. We know that only 3 per cent of the collective agreements negotiated result in a labour dispute. Ultimately, we are talking about quite small numbers of people who could benefit from the legislation. You said as well—and all the parties here acknowledge this—that generally speaking, labour relations between employers and unions in federally-regulated areas are quite harmonious.

Your argument to justify your opposition to Bill C-257 is based mainly on the movement of goods and services, particularly air and rail transportation. We have seen that the other arguments did not stand up, particularly those having to do with banks and the 911 emergency service, either because these companies are not unionized, or because they come under provincial jurisdiction. So let us look just at the transportation sector.

We know that in both rail and air transportation, pilots, mechanics and train conductors must take seven to twelve years of training in order to do the job properly. Consequently, it is very difficult to replace them in the case of a labour dispute.

Is the company not shooting itself in the foot when it says that it will advocate the use of replacement workers rather than directly negotiating essential services with the unions?

Let us look at the statement made by CN, for example. If it rejects negotiations on essential services, how will it be able to negotiate with its locomotive drivers in the case of a strike? They cannot be replaced very easily.

I would just like to hear what you have to say about this. There's a weakness in this argument somewhere.

My question is both to the representatives of the Chambers of Commerce and to the people associated with rail transportation. On December 7, 2006, the Railway Association of Canada gave the example of your railway, Mr. Bell, and today you are telling us that your workers are not unionized, and your fear stems from the fact that a transshipment occurred in Sept-Îles, for example, where the workers are not unionized. The same argument applies to the Chambers of Commerce with respect to the two other rail companies.

I would like to hear your comments on this.

[The Chair, Conservative, Dean Allison]

Thank you, Mr. Bell. You're right on time.

Before we start our line of questioning, I'm going to do a couple of housekeeping matters, and then we will start with the Liberals.

I want to introduce to everyone Graeme Truelove, who started with us last week. He is a clerk in training, rather like an apprentice. I don't think Christine has any notions of firing him or anything, but he's going to be apprenticing as a clerk over the next little while with Christine. We want to welcome Graeme Truelove here.

The second thing is that we will have bells at 5:30 for a vote. I think all members are aware of that, but I wanted to mention that as well.

The last thing I want to mention is that there have been a couple of requests.

Mr. Silva has requested a comparison of Bill C-257 as it relates to the Quebec and the B.C. labour code—whatever that may be.

As well, Mr. Martin requested a study of disruption of essential services in Quebec and B.C. The researcher, Kevin, indicates to me that this has been found and is in translation right now and will be distributed to the respective offices on Friday, hopefully.

We have it right now, and the goal is to have it translated and out to your offices—hopefully by Friday.

Those are all the announcements I have. Let's get right into the questioning. We start with the Liberals. Mr. Silva is splitting his time with Mr. Savage.

You have seven minutes, please.

[Dr. Richard Bell]

—that are accessible by rail service only. They would go by plane, but most cannot afford it. To suddenly deprive these people of their rights and take away what they have already come to rely on would not be in the best interests of all of Canada. Bill C-257 will seriously impact our freedom to move and to provide the northern communities with essential rail service.

Thank you.

[Dr. Richard Bell, General Manager and Chief Operating Officer, Tshiuetin Rail Transportation Inc.]

Thank you, Mr. Chairman.

Good afternoon. Thank you for inviting me to appear before you today and for providing me with this opportunity to comment on Bill C- 257. I consider, for various reasons, that this proposed piece of legislation will only derail and hinder operations of rail service that are considered essential by those who benefit from it, such as the railway I represent.

First, let me introduce myself and describe the company I represent. I'm the general manager and chief operating officer of Tshiuetin Rail Transportation Inc., the first aboriginal-owned and -operated railway in North America, and perhaps the world. The shareholders of this railway are the Naskapi Nation of Kawawachikamach, the band council of Matimekush—Lac John Innu, and Innu Takuaikan Uashat mak Mani-Utenam. Each owns one third of the shares of the company.

When the QNS&L decided to stop providing passenger service, the Government of Canada did not see any other alternative to ensure the 800 Naskapi, 700 Innu, and 250 non-natives living in Schefferville remained connected with the rest of Quebec than to set up this railway. Most of Tshiuetin Rail's financial needs are covered by the Government of Canada, which acknowledges that this service is essential to their survival.

Tshiuetin acquired 135 miles of rail line from the Quebec North Shore & Labrador Railway, or QNS&L. The rail line is located between Schefferville, Quebec, and Emeril Junction, a midpoint some 225 miles north of Sept-Îles, Quebec, and some 80 kilometres from Labrador City, Newfoundland. QNS&L still owns and operates the line between Emeril Junction and Sept-Îles.

Our passenger train departs from Sept-Îles on Mondays and Thursdays, returning from Schefferville on Tuesdays and Fridays. We own the locomotives and the cars used for the service, which include baggage cars, passenger coaches, and even a dining car. But moreover, it is manned and operated by our own crews, which at the present time are 100% Innu and Naskapi. However, while Tshiuetin is on QNS&L track, which runs between Sept-Îles and Emeril, our locomotive engineer is replaced by a QNS&L locomotive operator. Once at Emeril, our crew takes over the rest of the way to Schefferville.

The acquisition of this line by the Innu and Naskapi people has provided them with an opportunity to show the rest of the province of Quebec and Canada that they are a proud people, and that, if given the chance, they can stand on their own feet and contribute their fair share to the advancement of the north.

QNS&L, as ourselves, is a federally regulated railway. We have no unionized employees, but they do. Some 50 locomotive engineers are UTU members. I cannot and will not speculate on what their union would do if there was a strike at QNS&L. There is no guarantee that the passenger service between Sept-Îles and Emeril would be maintained either by unionized employees or by QNS&L management.

With the QNS&L decision to get out of passenger train operation, and since their core business is iron ore—from Labrador City—it only stands to reason where their priority would be placed if they had scarce resources to maintain their operation. Without talking too much about this technical point, it seems to me that the definition of managers in Bill C-257 might seriously reduce the number of persons who can be used during a strike to replace regular workers. In addition, the English version of proposed subsection 94(2.4) of the bill seems to limit what can be done in terms of operation.

Bill C-257 does not contain any provisions dealing with essential services—and trust me, essential service is exactly what this train is for the population it serves. We are the first aboriginal railway, not only because of our ownership but also because of our customers; 75% of them are first nations people.

Maybe we should stop for a minute and try to define what an essential service is. To me and to the people I represent, eating is essential. Most of the food comes to the Schefferville area by train, and so do the clothes they wear. Being able to move around by car and Ski-Doo is essential, so they need gasoline. Fuel for planes, helicopters, and heavy machinery is also essential and also moves by rail.

The railway is the only ground link between Schefferville and the rest of Quebec. There are no roads connecting this region with the rest of the province. The region is, thus, highly dependent on rail transportation. Moving people, food, fuel, and everyday essentials for that matter can only be done by rail or by plane. But plane is very expensive. A one-way rail trip ticket from Sept-Îles to Schefferville is $62.82. The airfare is $690, some 10 times more.

Now, 1,750 people may not be a lot of people when they're not hungry, but wait until the train doesn't come in with the food they need.

The town of Sept-Îles serves as the main supply point for communities in the Schefferville region. More than 73,000 tonnes of products of all types—general merchandise, gasoline and fuel, automobiles, and so on—are transported annually from Sept-Îles to Schefferville. If the train were to stop for only one week, it would mean that 1,400 tonnes of goods and products wouldn't make it to Schefferville. It would also mean a loss of revenue of about $480,000 for the Sept-Îles suppliers.

Currently, more than 16,000 passengers ride the train each year. This year 807 people took the train to go to Sept-Iles to access medical services not available in their community. Without the train, these people would have had to take the airplane, which is much more expensive. In addition, there are 45 camps located along the track and used by the Uashat mak Mani-Utenam and Matimekush-Lac John communities for fishing, hunting, and trapping trips. They need the train service that travels between these camps and their home.

If the rail service were to be interrupted as a result of a strike, Schefferville region would no longer be supplied with provisions and products of all types, outfitters along the track would no longer be supplied with provisions and would suffer economically as hunters, and fishermen would no longer have access to the outfitters' camps along the way. Members of the Uashat mak Mani-Utenam and Matimekush-Lac John community would no longer have access to their hunting, fishing, and trapping grounds, which is ancestral territory. For a limited number of families, hunting and fishing provide food for part of the year.

I did not want to speculate earlier on what unionized employees would do, so I would not speculate on the reaction of the aboriginal people. But let me guess: they wouldn't be very happy.

If you cannot amend this bill, and I'm told you can't, to include essential service, such as a mixed passenger and freight train service that I provide to the communities in northern Quebec, then don't waste your time with this legislation that will create more problems than there are to be corrected.

The first nations people have ancestral hunting and fishing grounds—

[Bill Gardner, Member, Winnipeg Chamber of Commerce]

Thank you, Dave.

Mr. Chairperson and honourable members, I submit, with respect, that Bill C-257 is a classic example of bad labour legislation, and I would propose eight reasons for it not to be passed.

First, I suggest that any piece of legislation that is vehemently opposed by one side or the other is likely ill-advised, because the foundation upon which labour relations is built in our system depends upon consent, agreement, and compromise. My labour friends well know that Canadian workers don't react particularly well when something is rammed down their throats; there is no reason to suggest that anything would be different with respect to Canadian employers.

Second, Bill C-257 represents a dramatic change in the balance of bargaining power, and such a change should not be contemplated without a correspondingly serious need. I don't see such a need existing today across Canada.

Third, labour legislation that bans the use of replacement workers inherently affects different employers differently and is thus discriminatory. If you are a large multi-jurisdictional multi-plant employer, you can have one or more of your operations go down without a correspondingly serious effect. On the other hand, if you are a single-operation independent locally owned business, shutdown of your operation can very quickly be fatal. These types of businesses are the so-called small business operations that government and other organizations generally say are to be encouraged, and that studies show to be the greatest job creators in our economy today, yet this legislation would impact them in correspondingly detrimental way.

Fourth, Bill C-257--and you've heard this from some of the other presenters--has been drafted and, I would suggest, rushed through Parliament without the sort of extensive consultation that should occur well before even the initial drafting phase. None of that has happened in this case.

Fifth--again, you've heard this before--in the 1990s, under the previous Liberal administration, there was a process of extensive consultation regarding the labour code and this issue in particular, which was addressed and found its way into amendments to the Canada Labour Code. Of course, this was without going specifically anywhere nearly as far as Bill C-257 proposes to go.

Sixth, nothing since then has happened would justify considering that the circumstances have dramatically changed.

Seventh, the labour climate in fact appears to be fairly positive throughout Canada. I refer to the able presentation from the gentleman from the United Transportation Union, who suggested that only 3% of collective bargaining situations result in a strike. I can't verify that precise number, but it certainly corresponds with my impression that generally speaking the course of labour relations federally has been relatively smooth in the last few years.

Finally, the fact that the legislation exists in Quebec and British Columbia is no more reason to adopt it federally than the fact that it doesn't exist in eight out of ten other provinces is a reason not to do so. It would be impudent for me to suggest that I know what's good for the people of Quebec or British Columbia. That would be up to others, who know those areas better, but the fact that these pieces of legislation exist in two of our provincial jurisdictions is simply not a good reason to do it.

Those are my respectful submissions.

[Len Falco, President, Hamilton Chamber of Commerce]

Good afternoon, ladies and gentlemen.

My name is Len Falco, and as president of the Hamilton Chamber of Commerce I would like to thank the chair and honourable members of this committee for allowing us the opportunity to appear today.

I am also speaking as the owner and operator of a full-service recruiting and staffing company that specializes in general staffing and human resources consulting.

My co-presenter this afternoon is Mr. Bill Tufts, who is the chair of our human resources committee at the Hamilton chamber. The human resources committee monitors employment, labour, and workplace legislation.

The Hamilton Chamber of Commerce is one of Canada's most active local chambers, acting as Hamilton's recognized voice of business continually since 1845. We are in fact the oldest, largest, and most broadly based organization extant in the broader Golden Horseshoe, outside of the GTA.

Today we are comprised of over 1,900 individual members who represent 1,150 businesses and organizations of all sizes and sectors that collectively employ 75,000 people full time, in all parts of the city, and indeed many beyond our municipal boundaries.

It is essential to state that our broader membership also includes not-for-profit organizations and unionized corporations. In fact, we were one of the first chambers to actively embrace unions and welcome them to the city of Hamilton.

Hamilton is an important central transportation and distribution hub for road, air, marine, and rail. If Bill C-257 is passed, it would have an immense negative impact on Hamilton's economy and our industries, an effect that will be replicated all across Canada, from sea to sea to sea.

Additionally, we show complete support to the Canadian Chamber of Commerce regarding their views of Bill C-257.

The city of Hamilton has a superb transportation network, which is located at the centre of the Golden Horseshoe's industrial corridor. It has direct access to Toronto and points eastward as well as to the United States via Detroit or Buffalo along Highways 401 and 403 and the Queen Elizabeth Way.

The port of Hamilton handles over 12 million tonnes of cargo and is visited by over 700 vessels each year. This ranks Hamilton as the busiest of all Canadian Great Lakes ports.

A 2001 Stamm study determined that almost 4% of Ontario’s GDP and 30% of the greater Hamilton region's GDP is directly or indirectly connected to the operations centred on the port of Hamilton. This translates into an employment equivalent, considering both indirect and direct impacts, of approximately 220,000 jobs.

Since privatization, Hamilton International Airport’s airport-related workforce has grown from 726 to more than 1,300 full-time equivalent employees. Under TradePort management, passenger traffic at the Hamilton terminal has increased from 90,000 in 1996 to approximately 900,000 in 2002 and growing. Air cargo has increased by 50% since 1996. In 2002, 91,000 metric tonnes of cargo passed through the airport.

CN's Hamilton Metals Distribution Centre is located in the heart of Canada's largest steel-consuming market. The facility is home to Canada's steel manufacturing, distribution, and processing industry, and is located in one of North America's largest vehicle production areas. Furthermore, CN's Hamilton MDC is strategically positioned to do business in the largest Canada-U.S. steel corridor.

Proposed subsection 94(2.4) of Bill C-257 states:

The measures referred to in subsection (2.2) shall exclusively be conservation measures and not measures to allow the continuation of the production of goods or services otherwise prohibited by subsection (2.1).

This provision contained in Bill C-257 will have the following impact on the health and well-being of Canadians.

First, it will undermine the dependability of Canada’s infrastructure industries. Continuity of service in the federally regulated infrastructure industries is important to virtually all Canadian enterprises, not just those under federal jurisdiction.

For example, if a work stoppage took place in the transportation network, with services halted, ports closed, and so on, it would be felt by all Canadians and Canada's trading partners who rely on an uninterrupted flow of goods. Most federal businesses are providers of services where the ability to stockpile goods does not exist.

Secondly, it would detract from Canada’s attractiveness as a place in which to invest. In an era of global mobility of investment, potential investors to Canada would also negatively perceive such a provision.

Bill.

[Tim Secord, Canadian Legislative Director, United Transportation Union]

Thank you, Chair.

The United Transportation Union is an international trade union with over 125,000 members throughout Canada and the United States. We represent employees in the railway, bus, and airline industries, with a preponderance of our membership working in federal juridiction in Canada. Our members contribute heavily to the economic and social fabric of Canadian society at every level and in almost every community. Our members work 24 hours a day, seven days a week, 365 days a year, in one of the most dangerous and demanding industries in Canada.

Currently, we're in contract negotiations with CN Rail with a strike and lockout deadline of February 9, 2007, looming before us. The committee should be aware that in accordance with the provisions of part 1 of the code, we sought a maintenance of activities agreement with CN; however, CN determined that no such agreement was necessary. In addition to the written text of this brief, the committee should also be aware that we've twice reached out to CN rail for a maintenance of activities agreement to deal with the issue of commuter transit in Toronto and Montreal, and still today there has been no response from CN.

We're pleased to have the opportunity to address the committee on this most important issue. We believe Bill C-257 can improve part 1 of the code by building a measure of fairness into it that currently does not exist. We believe this bill to be in the public interest and in the interest of fairness between workplace parties as a whole.

Labour law in Canada has long recognized the right to strike. This right provides a union its strongest opportunity for economic sanction to be leveraged on an employer through collective withdrawal of their services by its members to support its position in collective bargaining. The right to fair and free collective bargaining has been a fundamental right within our society for a very long time and is consistent with the ILO Declaration on Fundamental Principles and Rights at Work, adopted in 1998. This right to strike is fundamental to the Canada Labour Code and is but one of the many rights and obligations that govern labour relations in the federal sector.

The code acts as the vehicle by which both workplace parties, through their collective agreement relationship, can assure labour peace and measurable costs and benefits for a specific amount of time. The requirements related to the duty of fair representation and the grievance and arbitration process make sure workplace differences are resolved. The only opportunity a union has to bring economic pressure to bear on the employer is through the bargaining process, by exercising their right to strike at the expiration of an agreement; this committee knows full well that only 3% of collective agreement disputes ever get to the point of a strike or lockout situation.

Economically speaking, the balance of power between an employer and a union at the beginning of a strike is influenced by things both are entitled to consider. The union has to decide whether it will withdraw its services by engaging in a strike, while the employer must decide if they should hang onto positions that might result in a strike. Both parties begin a process whereby they determine, on the one hand, their ability to withstand a strike, and on the other hand, their acceptance of economic pressure through a strike.

The right to strike, as with all aspects of a union's functions, is set out carefully in the code. It is this process that provides a balance between the rights and obligations of the workplace parties in their relationship.

Replacement workers, not being a part of the bargaining unit, are strangers to that bargaining relationship. They have no level of participation in the collective bargaining process, nor do they have a community of interest with the employer. Replacement workers do not vote in the democratic process that seeks a strike mandate, and bringing replacement workers into the workplace interferes with the balance of power that the workplace parties have established and measured at the beginning of a strike. Research has shown linkages between the introduction of replacement workers and numerous negative effects. These negative effects include greater picket-line violence and unnecessarily prolonged strike action.

When replacement workers are brought into a strike situation, they normally come into direct contact with picketers and other union members who may also support the strike. This type of contact is counterproductive, inflammatory, and disruptive. Picketers view replacement workers with contempt, because they are aliens to the historical relationship between the employer and the striking employees. The replacement workers are seen as a means to dilute the economic pressure being placed on the strike-bound employer.

Such circumstances and the emotions involved become a recipe for escalating picket line incidents and increased vigilance, if and when violence should unfortunately occur.

It's in no one's interest to see violence occur at any time; however, there are a few examples when an unscrupulous employer has relied on this type of provocation to intimidate striking workers. Violence on picket lines can only poison relationships for years to come, in the workplace and in the community.

The effects of these poisoned relationships remain long after the strike is ended. If a picketer engages in criminal conduct, he or she is disciplined for it. That discipline is then handled under the collective bargaining agreement, and it has a tendency to delay the duration and the resolution of strikes.

Additionally, when all is considered together, these dynamics are harmful and will likely damage and/or interfere in the re-establishment of the bargaining relationship over the term of the next agreement.

Members of this committee understand the obligations and responsibilities that unions have under the code, and we're equally confident you are also aware of the employer's obligations and rights under the code. In the interests of time, we won't reiterate them here.

Suffice it to say that there are ample checks and balances built into the code, including numerous prohibitive clauses. Without getting into the morass of statistics, we believe the issue that needs to be looked at is what labour relations are like when replacement workers are used and what they're like when they aren't.

If one believes there's a balance of power under the code during a strike when replacement workers are allowed, then how is that balance maintained when an employer locks out its employees?

With that, Mr. Chairman, in the interest of time I'll close and thank the members of the committee for their time, and certainly the members of Parliament who saw this bill through to this level—and beyond, I'm sure.

[Douglas Coles, Second Vice-Président, Greater Charlottetown Area Chamber of Commerce]

Thank you very much.

The Greater Charlottetown Area Chamber of Commerce is a non-profit organization made up of business and professional people sharing a common goal: the economic development of the greater Charlottetown area. With over 740 members, the chamber represents a diverse network of small, medium-sized, and large businesses from almost every industry sector and business profession. Because Charlottetown is home to the headquarters of Veterans Affairs Canada and is a provincial capital, there are a number of federal public sector employers in our community with whom our local businesses have a vital business relationship.

It is the chamber's position that significant changes to the labour act, such as the prohibition of the use of replacement workers, fundamentally alters the basic premise for labour-management relations and potentially threatens the continuity of essential services provided by critical infrastructure workers. Such a change should not be made without a thorough understanding of what gap in the existing labour relations structure the amendment purports to resolve and a careful examination of the consequences to ensure that the overall result of the change will be beneficial.

Legislative changes that have the potential to destabilize federal labour-management relations may have serious repercussions for our members. Our members are very vulnerable to labour instability for the following reasons.

Many of our members are small to medium-sized businesses with limited capacity to absorb losses or delays arising from labour instability within federally regulated organizations, customers, or suppliers.

Because of the size of our province, chamber members are highly dependent upon the interprovincial transportation system for importing supplies and exporting product. Any labour instability related to federally regulated transportation will have a significant impact on our members' ability to conduct business.

The balance of power in labour-management relations is already shifting as the labour supply tightens and it becomes a sellers' market.

It is the chamber's position that significant changes to the labour act, such as the prohibition of the use of replacement workers, fundamentally alters the basic premise for labour-management relations. Again, any change cannot be made without a thorough understanding of what the amendment purports to resolve.

Legislative bans on permanent replacement workers exist in most jurisdictions in Canada. This means that striking workers have the right to their job once the strike is over. They cannot be permanently replaced by replacement workers who may have been temporarily hired during the strike.

The more stringent ban on the use of temporary replacement workers has been in place in Quebec since 1978, in British Columbia since 1993, and in Ontario between 1993 and 1995. The chamber suggests that consideration of the labour relations climate in these provinces would indicate that such bans on even temporary replacement workers can have a polarizing effect on collective bargaining and a serious impact on the economy.

The chamber does not believe that Bill C-257 remedies any existing weakness in the labour relations framework in Canada. Indeed, the chamber is at a loss to understand what benefits would result from the passing of the legislation. Is there evidence that replacement worker legislation reduces the number of work stoppages? Is there evidence that replacement worker legislation reduces the duration of work stoppages? Is there evidence that Canadian workers are being paid unfairly by employers?

In the 1990s, the Canada Labour Code underwent a careful review, involving thorough consultation with stakeholders, resulting in several important changes to the code, including a recourse for the unions that believe employers are abusing the use of replacement workers in order to undermine the union. Furthermore, the amendments provided protection for striking workers to be reinstated ahead of any replacement workers.

The chamber submits that there is no ostensible failing in the existing legislation that requires such a drastic change, and there has also not been sufficient study and consultation with the affected parties to fully appreciate how such a prohibition would affect all stakeholders.

Bill C-257 would create a distortion in the balance of negotiating power between employers and unions. While striking employees have the right to find work elsewhere, employers do not have the right to seek other workers. If the option to use replacement workers is removed from the labour relations model, the options for the employer would become more extreme: to have to accept the union's position; to face a complete shutdown of operations for the duration of the strike; or to go to government and seek back-to-work orders and binding arbitration.

The use of replacement workers does not undermine the power of unions in strike situations. Given the increasing difficulty in recruiting workers in even the best working conditions, finding workers who are capable and competent to perform the work and who are willing to face the negative messaging and ill will that is targeted at replacement workers is a significant challenge. Employers do not readily opt for this approach, if there is any possibility of negotiating a deal with the unions.

Bill C-257 is more drastic than existing comparable legislation in British Columbia, because it denies employees the right to cross picket lines. Furthermore, it makes no provision for essential services. Hence, strikes involving critical infrastructure workers could bring entire service sectors across Canada to a grinding halt.

In conclusion, Bill C-257 is an echo of legislation in place in the province of Quebec that has had negative effects on both labour relations and the economy in that province.

Bill C-257 is a proposal that lacks a clear purpose and a balanced benefit. The bill has proceeded to this point of review without due consultation of its potential impact on the labour relations framework in Canada. Our chamber urges the committee to recommend against the passage of Bill C-257.

This is respectfully submitted by John Gaudet, president of Greater Charlottetown Area Chamber of Commerce.

[The Chair, Conservative, Dean Allison]

I call the meeting to order.

Pursuant to the order of reference of Wednesday, October 25, 2006, Bill C-257, an act to amend the Canada Labour Code on replacement workers, we'll now continue to hear our witnesses.

Ladies and gentlemen, we are going to start with the Greater Charlottetown Area Chamber of Commerce because they have some time restrictions on their end and wanted to make their submission.

Because we have three of you via teleconference, I will identify who I'd like to speak next. We're going to go with seven minutes of opening statements. I will indicate when you've got one minute left, so you don't have to look at your own stopwatch. We will proceed with a couple of rounds of questions--a seven-minute round, followed by a five-minute round.

Typically we'll have the MPs address the question. They may want to address the Hamilton chamber or the Winnipeg chamber. If you'd like to make a comment and there's some time, you can just identify yourselves as the Hamilton chamber, for example, and then the teleconference experts will make sure they put the camera on the appropriate chamber.

We'll get started with the testimony. I have some announcements, but since we don't have all our members here yet, I'll save that until after we've had a chance to hear from the opening witnesses before we start our rounds of questioning. By that time, hopefully, we'll have all our members.

I would like to welcome the Greater Charlottetown Area Chamber of Commerce. I believe we have Mr. Douglas Coles and Ms. Kathryn Coll.

Please go ahead, Mr. Coles, for seven minutes.

[Robin Rensby, Senior Director, Human Resources, Canadian Council of Human Resources Associations]

Thank you. I will be very brief. I echo David's comments that we appreciate that you have allowed us to come before you today.

My perspective is somewhat narrower, and it is that of an employer who has bargaining unit members who may well be implicated in this whole process. So I would start by saying I support David's comments about the need for rigorous consultation and analysis of the whole framework of labour relations in this country before moving forward. In Bill C-257, it seems to me, one has to ask the question about things like essential services—I know you have heard about these from other people—the requirement to bargain in good faith, and the potential for upward pressure on public sector wage rates. To me, it comes down to a very simple question: how does this bill make the framework better? When I read it, I can't find a good answer to that question.

I would point out that I see a number of references to the provincial models, and I would echo some of the comments you heard earlier today that the provincial models may not be appropriate. Some of the comments say those bills were passed in provincial jurisdictions and days lost to strike went down, but I haven't seen anything that talks about cause and effect. Would an employer capitulate and sign an agreement they might not otherwise sign in the absence of this kind of legislation? I would argue that may well be the case.

In the interests of time I'm going to cut to the only image I would ask you to consider. In our 2005-06 annual report we reported that there were about 140 million transits across our bridges in the greater Montreal area. As I read section 87.4, the definition of essential services, it is arguably the case that we could not define those bridges as an essential service. While it may sound somewhat circular, we might then close the bridges in the best interests of public safety. I would just ask you to keep in mind an image of 140 million transits per year and the bridges in the greater Montreal area closed. If this is a result of Bill C-257, I fail to see that it's a good result.

Thank you.

[Kim Furlong, Director, Government Relations, Retail Council of Canada]

Thank you very much.

Good afternoon. My name is Kim Furlong, and I am the director of federal government relations for the Retail Council of Canada.

Founded in 1963, RCC is the voice of retail in this country. We are a not-for-profit association representing about 40,000 stores of all retail formats, including independent merchants, regional and national retail chains, and online merchants.

With annual sales of close to $400 billion, the retail industry is the second-largest employer in this country. In 2005, retailers injected more than $7 billion dollars into the economy, through store design, construction, technology, and telecommunications. Indeed, retail is one of the most dynamic economic players in our economy.

On behalf of our members, we'd like to thank the committee for the opportunity to share our views before you today. We, too, had some concerns before Christmas that we wouldn't have a chance to appear, so I thank you.

Our perspective is anchored in the ramifications of the proposed changes to the Canada Labour Code for those who rely on the products and services of federally regulated employers. RCC believes the economic impact of the proposed changes will be extremely damaging to the Canadian economy. In an interconnected world, where economies of scale rely on the ability to move goods quickly and to interface with technology, the thought of having transport or telecommunications services in Canada suspended, even for a short time, is very alarming.

Supply chain logistics have evolved significantly over the last fifteen years. The days of big inventories in warehouses are no longer. Business models such as just-in-time delivery and lean production have become the cornerstones of our economy.

The ability to move goods efficiently is essential to Canada's competitiveness as a trading nation. The Vancouver port dispute is a haunting case in point. The disruption caused by the job actions of independent truckers in the summer of 2005 was devastating to our sector: containers just sitting there and the supply chain completely disrupted, costing the Canadian economy untold millions of dollars. This was one event, in one location, and relatively minor compared to what would happen should Bill C-257 become reality, and the cost was tremendous.

Aside from perishable goods and items that didn't make it onto shelves, such as back-to-school items, the cost of this labour dispute was far more significant than what was not consumed. In fact, the strike caused a loss of business for the city of Vancouver and its port workers. Because of the uncertainty created by the dispute, some importers, including several Retail Council of Canada members, have chosen to diversify their import routing and have altered shipping patterns by using other entry points, such as the east coast.

Members of this committee must consider the impact that a labour dispute under the guidelines of Bill C-257 could have on the economy of a region and on the workers in the long term. In fact, Bill C-257 threatens Canada's competitiveness. In a world where Canada is an exporting country and competing for a greater share of world trade, it seems nonsensical to implement legislation that brings instability to the investment and business climate. Canada's ability to attract foreign direct investment is not to be taken for granted, especially when we're competing against giants such as India and China, which are leading the way.

In addition, and very importantly, the traditional argument that our proximity to the U.S. market makes Canada a prime location to invest could easily be refuted if our labour laws were to interfere with the free flow of goods. Canada's competitive advantage lies in our ability to deploy just-in-time delivery to the U.S. market. Should airlines or railways be out of operation, this competitive advantage would be significantly damaged.

In addition to these transportation issues, a breakdown, even minute, in the telecommunications system would have a direct impact on the retail industry. Canadians are the world's top debit card users, and the vast majority of retail purchases are card payments. A slowdown in the processing of card payments would mean loss of sales for our members. A breakdown in the system would mean a slowdown in the Canadian economy.

It has been clearly demonstrated over the last few years that the dynamism of the North American economy is being fuelled in part by consumption. Canadian consumers expect to be able to have access to their bank accounts at all times, and they rely on credit for many of their routine purchases. An inability to approve a card transaction means no sale.

Again, we urge members of this committee to think about the larger picture and to consider what these changes to the Canada Labour Code could have on Canadians in general.

Having clearly defined the possible risks associated with the proposed legislative changes included in Bill C-257, we now turn our attention to the raison d'etre of this bill.

After reviewing the recent history of federally regulated labour disputes, RCC does not understand the need for these changes. The proposed changes eliminate the delicate balance that was reached with the adoption of the Sims report in 1999. The report was the product of an extensive, tripartite, cross-Canada consultation led by Andrew Sims, and was assisted by a panel of experts appointed by the federal minister of that time to bring recommendations to modernize part I of the Canada Labour Code.

The expert panel in its report entitled Seeking a Balance, examined the issue of replacement workers and concluded that, and I quote:

Replacement workers can be necessary to sustain the economic viability of an enterprise in the face of a harsh economic climate and unacceptable union demands. It is important in a system of free collective bargaining that employers maintain that option, unrestrained by any blanket prohibition. If this option is removed, employers will begin to structure themselves to reduce their reliance on their permanent workforces for fear of vulnerability, to the detriment of both workers and employers alike.

The report also recommends that:

There should be no general prohibition on the use of replacement workers.

Where the use of replacement workers in a dispute is demonstrated to be for the purpose of undermining the union's representative capacity rather than the pursuit of legitimate bargaining objectives, this should be declared an unfair labour practice.

In the event of a finding of such an unfair labour practice, the Board should be given specific remedial power to prohibit the further use of replacement workers in the dispute.

The evidence shows that the 1999 changes have brought a balance to the labour climate. In 2005 and 2006, 97% of all collective bargaining agreements under federal jurisdiction were signed without work stoppage.

In conclusion, in light of the fact that this is a very divisive issue, and that the Sims report recommended against the inclusion of a ban on replacement workers, and that federally regulated sectors were chosen and put under federal jurisdiction because of their strategic importance to the functioning of our nation, the eagerness of proponents of Bill C-257 to shift the fine balance that was reached in 1999 is puzzling. The RCC believes that at a time when Canada faces tremendous pressure to be competitive with regard to the rest of the world and we need to enhance our productivity, the thought of implementing legislation that would send a signal to foreign investors that our key infrastructure industries could be hijacked at any moment by a labour disruption is not key to improving Canadian prosperity.

Thank you.

[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, I call the meeting to order.

I just want to say thanks to the witnesses for being here today, and I apologize for any challenges we had by changing the room. We may be missing a witness or two as a result of the room change, but we do need to get going so we can make sure we have enough time to answer questions.

We had a steering meeting, which we'll discuss a little more afterwards, but one of the suggestions that came out of the steering meeting earlier today was that we try to limit speeches to a couple of minutes and get to some questions. I know we're not going to be able to convince our witnesses to change their minds at all, so we want to get to our questions as quickly as possible.

Once again, you can have some preamble, but the witnesses are here, and we're here to ask them questions. Try to make the best use of that. This was a suggestion of the steering committee, so I will just pass it along.

What we'll do is start now with Mr. Stewart-Patterson.

We have seven minutes each. We will start round one with seven minutes for questions and answers; round two with five minutes; and, with any luck, round three, which will be a little bit shorter, with five minutes as well.

Welcome, Mr. Stewart-Patterson. We'll have your seven-minute opening, please. I will let you know when you have one minute left.