Bill C-481 (Historical)

An Act to amend the Canadian Human Rights Act and the Canada Labour Code (mandatory retirement age)

This enactment amends the Canadian Human Rights Act and the Canada Labour Code to prohibit federally regulated employers — that is, private-sector employers subject to federal acts and regulations, as well as the federal public administration — from setting a mandatory retirement age.

Financial Statement of Minister of Finance

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

Mr. Speaker, I would like to share my time with the member for Mount Royal.

I rise today in the House to take part in the debate in response to this government’s very disappointing budget.

The media, the business and academic communities have all reached the same conclusion as we have on this side of the House. This is a lame duck budget and we give it a failing grade.

This budget is being called “a kind of half-hearted effort, incremental in nature, designed for political effect”.

These are not my words, these are the words of Christopher Dunn, an academic at Memorial University in St. John's, Newfoundland. He went on to say that there was some nominal social spending targeted at specific voters to “leave an impression of a government that hadn't forgot about average voters without actually doing that much for them”.

The official opposition leader put it very succinctly in his question to the government yesterday when he said:

Mr. Speaker, spending billions of dollars on stealth fighters, corporate tax cuts and mega prisons means the Canadian family has to be shortchanged.

There is nothing in the budget on affordable housing. There is nothing in it on child care. There is nothing to support our health system. These are the priorities of Canadian families.

Why is the Prime Minister out of touch and out of control?

How does the government fail to support Canadian seniors? On page 109 of the budget document, low income seniors are expected to get a guaranteed income supplement of $600 for single seniors and $840 for couples. Single recipients with an annual income, other than old age security and guaranteed income supplement, of $2,000 or less, and couples with an annual income of $4,000 or less will get the full amount of the benefit.

What is shocking about this is that the government is not making these increases permanent given that the benefit will be clawed back when the annual income level reaches $4,000 for singles and $7,360 for couples.

Residents in my riding of Laval—Les Îles pointed out to me that in real dollars, eligible seniors would receive exactly $1.20 per day. Obviously the Prime Minister has not gone grocery shopping for a long time. Otherwise, he would have noticed that milk costs $3.79 and sometimes up to $5.00. So, $1.20 will not even be enough to buy a quart of milk.

Let us imagine the Prime Minister or any of his cabinet members trying to live on that type of income with bread an average $3 a loaf; eggs, $2.69 a dozen; apples at $3.34 a kilogram; canned salmon at $3.15 for 213 grams. These were average prices in 2010.

What is the government's real commitment to supporting families and communities? The budget documents says:

The Government recognizes the contributions seniors have made and is committed to ensuring that they continue to have a good quality of life.

I am quoting the finance minister's own words.

Let me congratulate the finance minister and his team for co-opting my private member's bill, Bill C-481, An Act to amend the Canadian Human Rights Act and the Canada Labour Code (mandatory retirement age), which was reported to Parliament last Monday, as one of their priorities within the budget.

The budget indicated that the government clearly supports my bill, since the Minister of Finance wrote on page 112 of that document that:

The government proposes to introduce amendments to the Canadian Human Rights Act and the Canada Labour Code to prohibit federally regulated employers from setting a mandatory retirement age unless there is a bona fide occupational requirement. This would allow Canadians to choose how long they wish to remain active in the labour force. The government will review other acts to further this objective.

If the government truly believes what it says, why does it want to introduce a new bill when my private member's bill has already gone through committee?

Why the delaying tactics? I strongly urge the government to pass the legislation through Parliament and the Senate as quickly as possible, instead of waiting to create a new piece of legislation. Let me take the opportunity at this time to thank the Parliamentary Secretary to the Minister of Human Resources and Skills Development and to the Minister of Labour, members of the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities and my colleagues on both sides of the House for their support in getting this bill as far as it has gone in the legislative process.

I want to remind the government that the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities, on which I am a member, undertook a major study on poverty in Canada. The report, which contained 59 recommendations, was tabled in the House on November 17, 2010. How did the minister respond? The government's response was to refuse every recommendation the committee proposed and it is a government that purports to value families.

The budget could have been a golden opportunity to state clearly that the government would immediately implement recommendation 3.1.1 of the standing committee's report and put in place a federal action plan to reduce poverty in Canada. Instead, we have a budget that ignores families and a budget that ignores children. Canadian parents are still waiting on the promised 250,000 child care spaces for their children, which have never materialized.

A Liberal government will return corporate tax rates to 2010 levels and tackle the deficit while strengthening Canadian families with investments in the following measures: a real family care plan, with a six-month family care EI benefit, and a new refundable tax benefit for working families worth up to $1,350 per year.

The Conservative budget provides no EI benefits, but rather a paltry tax credit that does nothing for low-income caregivers and is worth only $300 a year.

We are also proposing improvements to public pensions, by strengthening the base Canada Pension Plan with gradual increases to benefits and creating an option for topping-up savings with a new supplemental CPP, instead of just a modest GIS benefit that works out to only $1.20 per eligible senior a day.

The Liberals are also proposing support for learning and training, so that all Canadians who get the grades can get the skills they need to get quality, full-time jobs, instead of the paltry $34 per student that the Conservative government is offering. We are proposing quality, affordable early learning and child care, to give our kids the head start they need by offering working families a real choice when they need to find child care spaces for their kids.

What does the Conservative budget propose? It is offering just $75 per year for art classes.

My colleagues and I fully intend to vote against this budget.

Human Resources, Skills and Social Development and the Status of Persons with Disabilities

[Candice Bergen, Conservative, Portage—Lisgar, MB]

Mr. Speaker, I have the honour to present, in both official languages, the 11th and 12th reports of the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities in relation to Bill C-304, An Act to ensure secure, adequate, accessible and affordable housing for Canadians, and Bill C-481, An Act to amend the Canadian Human Rights Act and the Canada Labour Code (mandatory retirement age). The committee has studied both bills and has decided to report each bill back to the House with an amendment.

I wish to thank all of the committee members for their work and collaboration in the course of this process.

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

I would, therefore, like to move the following amendment:

That Bill C-481be amended by adding after line 15 on page 1 the following new clause: “COMING INTO FORCE“ 4. This Act comes into force one year after the day on which it receives royal assent.“

Thank you.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

I have a point I want to raise with the committee. I'm going to ask essentially that this bill, Bill C-481, which deals with mandatory retirement, not proceed to clause-by-clause consideration today. I'm going to ask the committee to consider tabling it, because a number of witnesses, particularly FETCO, the Chamber of Commerce, and the pilots association, have raised what they have said are matters of considerable concern to them.

FETCO, particularly, when talking about pensions and benefits, said that they would like to have seen an amendment that would allow age differentiation with respect to what those who might continue working past a certain age would have to face with respect to how much they might pay to get into the pension, whether they would get moneys back at a different level, and whether they would be entitled to some of the benefit plans, whether it's medical, drugs, or whatever. They felt that this was an important exemption. They also mentioned that they would have liked to have seen an exemption that provided for more rigorous testing and so on as the age increases.

The pilots association has said that in the collective bargaining agreements that have been entered into, they've made some agreements between the pilots--the young and the old pilots--whereby all of them agreed that these would be the rules of the game. Essentially, younger pilots have to stay at the lower pay grade until they reach a certain age, and then they receive higher pay, more benefits, more privileges, and so on. They've indicated quite strongly that if you remove the mandatory retirement age altogether, what would happen is that the younger fellows who have been in the system and in the collective bargaining agreement would not be able to--

[The Chair, Conservative, Candice Bergen]

We're ready to begin the second part of our meeting.

Pursuant to the order of reference of Monday, December 6, 2010, we are now looking at Bill C-481, An Act to amend the Canadian Human Rights Act and the Canada Labour Code (mandatory retirement age).

We are proceeding to clause-by-clause consideration.

(On clause 1)

I will at this time call the first clause.

Go ahead, Mr. Komarnicki.

[The Chair, Conservative, Candice Bergen]

To answer your question, we have until April 14 to get to Bill C-304 and report it back to the House.

We have so much to do, but that's why we have a work plan. Part of our problem is that we keep getting off our work plan, because we're quite reactive and I think we need to be proactive. I think we have a good work plan set until the Thursday after we get back from break. After that, there's nothing scheduled, so that's when we can finish Bill C-304. I would think we could finish Bill C-481. We also have an invitation out to the minister to come. Then we would also begin the disability study.

I think rather than being too reactive on some of these things, let's stick to our plan. It's amazing how we can actually get some things done if we do.

I hear you, Mr. Martin. We have a motion right now that we have to deal with. We're almost finished our time. Let's deal with the motion. Then I can get a consensus and we can maybe begin half an hour earlier on Thursday and at least see if we can discuss this and then finalize our plan. I'm not saying that we can get to Bill C-304 on Thursday, but we can decide what date we will look at Bill C-304 and what we will do after Mr. Lessard's study, unless Mr. Lessard is willing to give up that study. But I know that he was very adamant that he wanted to get to that, and that was what we had all agreed to.

Right now we're looking at March 3 to resume. That was the date you were looking at. Did you want to keep that date?

We are just about out of time. We do have a list of speakers.

Go ahead, Mr. Vellacott.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Thank you for the opportunity to make my case here.

I'm in agreement with the motion by both Mr. Komarnicki and Madame Folco on Bill C-481.

I guess I'm looking for some advice from the clerk as to what a reference from the Speaker means in terms of the order of business of the committee.

We had a reference, before Christmas, of Bill C-304. We're very close to getting it done. If we put it on the agenda for Thursday, I think we could get at least that piece of business out of the way and get it back into the House, where it can be dealt with in a more fulsome fashion. Then we would have lived up to our responsibility here to respond to that kind of reference and to make sure that it in fact happened.

We have a whole bunch of things hanging out there now. The biggest priority for me, and at one point for this committee, is Bill C-304. At a meeting a week ago, we suggested--I believe it was Mr. Lessard--that we take half an hour before our regular meeting at some point. I thought that was going to happen over the last week or so. It didn't happen, even though I thought we had unanimous consent to in fact do that.

If we could get to Bill C-304 at some point on Thursday, I think we would be living up to our responsibility here of responding to the Speaker's referral of this very important matter to our committee.

[The Chair, Conservative, Candice Bergen]

All right. Right now we're dealing with your amendment, which would say that the clause-by-clause consideration of Bill C-481 be tabled and would resume on March 3.

Yes, Mr. Vellacott.

[Capt Paul Strachan, President, Air Canada Pilots Association]

Thank you, Madam Chair. It's our pleasure to be here today.

Members of the committee, it's nice to see you.

We're here, obviously, to speak to an important contemplated piece of public policy, which is Bill C-481. We support the intent of the bill insofar as it seeks to defend individuals from arbitrary or discriminatory practices, specifically termination of employment by virtue of age.

This is obviously a noble cause, and specific to our case, we agree that paragraph 15(1)(c) is too broad a provision of the Canadian Human Rights Act, because in our instance, there are some 3,000 Air Canada pilots, making up more than half the airline pilots in the country. So we could then unilaterally or de facto set a normal age of retirement for people in similar positions. If under the act that serves as justification for a different employer to terminate the employment of an individual who does not have the benefit of the robust collective agreement and pension provisions that our members do, then it is clearly not appropriate.

So while we agree that paragraph 15(1)(c) is too broad, we must implore the committee to consider careful exceptions to this bill for fear that this bill also is too broad. It's the role of Parliament to protect human rights, but we don't talk specifically here about individual rights. We're talking about human rights in the broad sense, and that includes collective rights of the members of an organization such as our own. So Parliament's task then is to find a balance between those rights that properly protects the interests of all.

Our members have negotiated, as I said, a robust collective agreement, of which its pension plan forms part. Our pension plan is a very generous one. It goes to the limits of the Pension Act and the Income Tax Act and then beyond. We have a supplementary employee retirement plan, and in fact incorporate a retirement compensation agreement into the overall scheme as well, so that the vast majority of our members expect to retire from their employment at Air Canada with a pension that places them still in the top 1% of income earners in the country, with pensions of six figures in the vast majority of cases.

Insofar as Parliament may seek to protect the rights of the individual, you must be cognizant of the fact that you will necessarily impact the collective rights of our 3,000 professionals, who have told us, by a margin of almost 85%, that they favour the current ability to retire at their negotiated age of retirement, which is 60.

Concomitant with our pension provisions, which I say are very generous, we have a true deferred wage scheme, and by that I mean we have a ladder of progression on our wage scale that starts very low--artificially low--in the early years of employment and ramps up over the course of one's career to in fact overpayment in the final years, which allows our members to maximize their retirement earnings, because their final average earnings, their FAE, are calculated on the basis of those five final years.

If you stall the progression up the ladder, it stagnates for some period of time, and the transfer of wealth that occurs is significant. Not only is a member now stagnating at some lower level on the ladder, but unless you're in the top 15% approximately, unless you've achieved your highest progression expected up that ladder at the point of stagnation, you will lose to some degree. In the case of our most junior members, the transfer of wealth is measured in seven figures, because not only are they suffering from the lack of progression in their income during the period of stagnation, but they lose the time value of that money and can never recover. So insofar as you're allowing those few individuals who might like to change the rules and stay longer, you're now impacting the rights of all those other members, because now you're forcing them to stay longer if they want to equalize their career potential and expected earnings, but you're also taking away the time value of that money forever. It's a zero-sum game, so you need to be very careful that this bill does not create unintended consequences.

So it's for that reason that we propose an amendment to this bill. Rather than strike paragraph 15(1)(c) from the Canadian Human Rights Act, it would be more thoughtful and appropriate to amend it to allow for specific exceptions such as in the circumstances in which we find ourselves.

Our proposal would be, then, that paragraph 15(1)(c) be amended to read that it is not a discriminatory practice if the termination of employment or refusal to employ is because of the terms or conditions of a bona fide retirement or pension plan, and that this is justifiable and balances the rights of the individual with the collective rights of a very large group of people.

Thank you.

[Susanna Cluff-Clyburne]

Thank you, Mr. Komarnicki.

Essentially, we've recommended amendments in three areas. The first would be to explicitly permit federally regulated employers to apply mandatory retirement when there is an issue of risk to the safety of the public and/or other workers. The second area is to allow employers to continue to treat employees differently, based on their age, for the purposes of pension and benefits. The third area is to revise the proposed amendment that Bill C-481 proposes to the Canada Labour Code to explicitly state that in cases in which an employee is involuntarily terminated due to safety concerns and is eligible to receive a pension, no severance would be paid.

Those are the three areas. We'd be happy to submit that.

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

You're not challenging it, Madam Cluff-Clyburne, but my impression is you're giving it a slow death. Either you're discriminating or you're not discriminating. It can't be black, white, and café au lait. It has to be one or the other.

This bill, C-481, says there is discrimination. If there is discrimination against one group, then all the people within that group have to be affected by Bill C-481. This is where I take exception to the amendments you proposed to this committee.

It seems to me, and I'm not an expert, that when you talk about discrimination you must include all the members within a particular group who have identical characteristics. From the time you withdraw one group and say, well, they're not being discriminated against even though they're under the same exceptions, then you're not respecting what Bill C-481 is trying to put forward.

[Susan Eng, Vice-President, Advocacy, Canadian Association of Retired Persons]

Thank you very much.

Thank you for having me here today.

CARP is a national, non-profit, non-partisan organization with 300,000 members across the country in 41 chapters. We advocate for social change that will improve the quality of life for all of us as we age. Our advocacy covers financial and retirement security; equitable access to health care; and such human rights issues as freedom from elder abuse, ageism in the media, and age discrimination, especially in the workplace.

Consequently, we appreciate the opportunity to appear before the committee to voice our support for Bill C-481 and to encourage Parliament, through this committee, to expedite passage of the bill.

Bill C-481 will remove paragraph 15(1)(c) from the Canadian Human Rights Act. We believe this provision amounts to legislated age discrimination, and the courts have found it to be contrary to the Canadian Charter of Rights and Freedoms. The Federal Court has said that paragraph 15(1)(c) has “the effect of perpetuating the group disadvantage and prejudice faced by older workers” by promoting “the stereotypical view that older workers are less capable, or are less deserving of recognition or value as human beings or as members of Canadian society”.

CARP has pursued the elimination of mandatory retirement over the years and has worked with various provincial jurisdictions to repeal the equivalent provision in their own human rights codes. At this point, every Canadian jurisdiction has so eliminated--except for the federal jurisdiction. In the federal jurisdiction, an estimated 840,000 employees across the country are still subject to mandatory retirement because of the operation of paragraph 15(1)(c). The federal government is the last jurisdiction in Canada to hold onto legislated age discrimination.

As a public interest advocacy organization, we try to ensure that we fairly represent the views of our membership. We do our best to keep them up to date on various developments so that their views are in fact well-informed. We communicate with our members through our magazine, through the website, and increasingly through an e-newsletter that reaches some 85,000 opt-in subscribers. We've kept them up to date on the progress of a number of issues, including this one and the Air Canada pilots case.

Even more instructive is the polling that we're able to conduct. We seldom get fewer than 1,500 responses, and generally get 3,000 to 5,000 responses. I've provided you with the results of two recent polls. You will have that in your materials. One result we issued just this Friday, and I'll give you the conclusions of that poll.

This is what the CARP members wanted this committee to hear from them. CARP members are solidly in favour of passing Bill C-481 immediately. They see it as legislated workplace discrimination against Canadians who must work. Fully one half say that they will not vote for their own party if it blocks passage of the bill, and the vast majority say that no Canadians should have to go through the experience of the recently reinstated Air Canada pilots.

Add to that the fact that older Canadians are the most engaged and consistent voters--70% of those over age 60 vote regularly--and you have a message from your most loyal but vigilant constituents that should not be ignored.

We've called on the federal government over the years to remove paragraph 15(1)(c). Most recently, CARP's call to the parties to act in the wake of the August 2009 decision in Vilven and Kelly supports the introduction of Bill C-481.

In the absence of parliamentary action, the courts have ruled that the section violates the Canadian Charter of Rights and Freedoms, as it denies equal protection and equal benefit of the law to workers over their normal retirement age. As a result of these decisions, and after seven years of costly litigation, two airline pilots were recently reinstated with full seniority. They appeared before you last week.

In coming to these conclusions, the courts have done what Parliament has failed to do, and that is to invalidate legislated age discrimination. However, because the rulings apply only to the individuals before the courts, it means that any other pilot, or indeed any other Canadian, has to go through a similarly arduous process in order to assert his or her right to keep working.

The courts have also made it clear that legislated age discrimination has no place in today's society. I've included some quotes on that in the material here.

The recently released Federal Court decision from just two weeks ago, February 3, unreservedly found that the section was not reasonably justified “in a free and democratic society” under section 1 of the charter. Thus, it is reasonable to expect that each of the nearly 200 cases now before the Canadian Human Rights Tribunal will be decided in the same manner. However, because of the failure of Parliament to act, you will waste many more millions of tax dollars in order to see that these people will go through the same process over again.

If my time is up, I will conclude that this is an important time for Parliament to act. It's a time to show some leadership.

Thank you very much.

[Susanna Cluff-Clyburne, Director, Parliamentary Relations, Canadian Chamber of Commerce]

Absolutely, and thank you for the opportunity to be here today.

The Canadian Chamber, as you probably know, represents businesses of every size in every region of the country. We count amongst our members several federally regulated employers in the communications, financial services, and transportation sectors.

Last fall the Canadian Chamber of Commerce released a policy paper entitled “Canada's Demographic Crunch: Can Underrepresented Workers Save Us?” In that paper we called upon the federal government to amend the Canadian Human Rights Act to eliminate mandatory retirement for persons aged 65 and older. This recommendation recognizes the reality that Canada is undergoing a major demographic shift. Canada's population and its workforce are aging. Last year nearly all growth in the labour force stemmed from immigration. Some business sectors indicate they are facing shortages of the skilled people they need to remain competitive and to grow. Canada's businesses are concerned that these shortages will continue as more baby boomers reach traditional retirement age.

What must Canada do to ensure it has sufficient skilled people to replenish its workforce? While many look, quite rightly, to immigration as an answer, we need to look at the potential of our homegrown human resources as well. We need to provide more opportunities for those Canadians who are underrepresented in our workforce. These include older workers, our aboriginal peoples, and peoples with disabilities.

In light of our shrinking workforce, arbitrarily fixing a retirement age is unwise. The mandatory retirement age of 65 hearkens from another era. Things have changed. People live longer, healthier lives, and many wish and/or need to work past what has been considered the traditional retirement age. Older workers have a wealth of skills, knowledge, and experience, which are tremendous assets for a business in a country facing a labour supply crunch in their day-to-day operations and in the transferring of human capital and knowledge to younger workers.

Progress has been made to encourage older workers to stay in the labour force, and efforts must continue to remove any stigmas and institutional deterrents to the continued participation of older Canadians in the workforce. Most federally regulated employers no longer impose a mandatory retirement age, and the provinces and territories have implemented legislation to eliminate it. We urge the federal government to follow suit.

That said, just as arbitrarily setting a mandatory retirement age is outdated and economically unwise, arbitrarily allowing anyone at any age to perform any occupation is equally so. Therefore, in our recommendation to the federal government in last fall's report, we also said that employers need to have the flexibility to maintain occupational requirements based on age that exist for safety reasons. Federally regulated employers provide essential services to Canadians. Their needs and those of their employees are very different. Therefore, the laws and regulations governing the relationships need to be flexible enough to protect their respective rights and serve Canadians safely and effectively.

We recommend that Bill C-481 be amended to explicitly permit federally regulated employers to apply mandatory retirement ages in specific occupations associated with a risk to the safety of the public and/or other workers. As you have heard from other witnesses, many pension, benefit, and insurance plans are based upon the traditional retirement age of 65. We also recommend that Bill C-481 be amended to explicitly allow employers to continue to treat employees differently based on their age for pension and benefit plans. This would recognize the potential for the added cost to employers of providing these benefits to older workers and is consistent with the approach taken by the provinces and territories. Bill C-481 also needs to be amended to explicitly state that where an employee is involuntarily terminated due to safety concerns and is eligible to receive a pension, no severance is payable. The change Bill C-481 proposes making to the Canada Labour Code leaves this open to interpretation.

Employers will need time to modify their business practices to accommodate any changes resulting from the passage of Bill C-481. Therefore, should Bill C-481 become law, we propose a coming into force date of no less than two years following royal assent.

In conclusion, the federally regulated members of the Canadian Chamber of Commerce agree that the time has come to eliminate mandatory retirement. However, any legislative changes and supporting regulations must explicitly enable these employers to manage their businesses and employee relationships in a manner that ensures that they can continue to serve Canadians safely and efficiently.

Thank you.

[The Chair (Ms. Candice Hoeppner (Portage—Lisgar, CPC)), Conservative, Candice Bergen]

Good morning, everyone.

I'd like to call this meeting to order. This is meeting number 44 of the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities.

Pursuant to orders of the day, we are looking at Bill C-481, An Act to amend the Canadian Human Rights Act and the Canada Labour Code (mandatory retirement age).

We have witnesses with us for the first 45 minutes. After that 45 minutes we will have a new set of witnesses, and following that we will be looking at the bill clause by clause. So we do have a very aggressive agenda today.

We are very happy to have with us today Seamus Cox from the New Brunswick Human Rights Commission. From the Canadian Association of Retired Persons, we have Susan Eng, vice-president, and Michael Nicin, government relations. As well we have a representative from the Canadian Chamber of Commerce, Susanna Cluff-Clyburne, who is the director of parliamentary relations. Thank you all for being here.

I would ask each one of the organizations to take five minutes for their presentation. I apologize for the short amount of time, but that will give us time for questions and answers.

I will begin with the Chamber of Commerce. Would you please begin with your five-minute presentation?

Thank you.

[John Farrell]

Thank you, Madam Chair.

FETCO represents approximately 586,000 employees in the federal jurisdiction.

First and foremost, FETCO members support the principle of removing the provision in the Canadian Human Rights Act that permits mandatory retirement. The time has come. The provinces have adopted this principle in their human rights legislation and regulations. Indeed, most companies in the federal jurisdiction that are members of FETCO have already adopted the principle that employees may work beyond age 65.

We are here today fundamentally to assist the Government of Canada in crafting new legislation and regulations that will address the complexities of changing from the current regime to a new regime. Our objective here is to end up with better legislation that will stand the test of time and address issues appropriately.

The federal sector includes interprovincial and international transport undertakings such as airlines, air traffic control, shipping, railways, and trucking, in which the nature of work performed raises concerns regarding significant risks to public safety.

Repealing the provisions of the Canadian Human Rights Act that allow mandatory retirement will remove an important mechanism that has been available to federal employers to manage some older workers with dignity with regard to diminishing performance resulting from advancing age. The management challenges presented by older workers, particularly in safety-sensitive workplaces, will remain and cannot simply be ignored. FETCO is concerned that Bill C-481 fails to provide any guidance or assistance to employers in respect of these significant management challenges.

We are suggesting two policy options. First, employers should be permitted to apply reasonable mandatory retirement ages in certain circumstances and only in specific occupations where the performance of work is associated with a high risk to public safety and the safety of other workers.

Second, a provision should be included in the CHRA that stipulates that it is not a discriminatory practice on the basis of age for an employer to impose periodic skills and competency testing on employees in safety-sensitive positions after they have reached a certain age.

This targeted approach would reduce a potentially significant burden on employers and would not interfere with employees' equality rights. Indeed, in some industries, such as the trucking industries, medical examinations for drivers over age 65 are required on an annual basis. We heard earlier that there are specific arrangements that are required in the airline industry.

Now we want to address issues with respect to the effect of removal of mandatory retirement on pensions and benefit plans.

Regarding pensions, Bill C-481 does not address how the elimination of mandatory retirement will be reconciled with pension plans that are designed to be integrated with the Canada Pension Plan, a practical problem we have to deal with.

Bill C-481 does not contemplate how the elimination of mandatory retirement will affect the ongoing transition in many workplaces to systems of phased retirement that allow employees to access earned pension benefits while they also continue to accrue pension benefits as a result of a change in employment status.

Turning to benefits now, Bill C-481 fails to address how benefits and insurance programs will be treated if mandatory retirement policies are prohibited. Various provinces, such as British Columbia, Alberta, Saskatchewan, New Brunswick, and Nova Scotia, have enacted specific exceptions that allow employers to continue to differentiate between employees on the basis of age in the administration of employee pensions, benefits, and insurance plans.

These legislative exceptions address the legitimate concerns of employers that the cost of financing certain employee benefits and/or insurance plans will increase in respect of older employees who choose to continue working beyond the so-called normal retirement age.

It is FETCO's position that Parliament must address the similar legitimate concerns of employers in the federal jurisdiction regarding benefits such as life insurance and extended health care, for which costs increase substantially with age, and disability benefits, for which costs increase dramatically as a result of increases in the duration of benefit and the frequency of claims.

FETCO notes that, in its current form, Bill C-481 will impact the Canadian human rights benefit regulations.

We must say that if you take a look at those regulations as they currently exist, they apply to a different regime, which is going away. So there is a great deal of work that needs to be done by the Government of Canada to consider rewriting regulations that will suit new legislation, and we employers want to be part of that process so that we end up with proper regulations that will stand the test of time.

Finally, removal of mandatory retirement could materially affect federal employers' costs of workers compensation benefits, which is another problem. These benefits are administered by the provinces on behalf of federally regulated employers. There is no doubt that as employees get older, the cost of workers compensation benefits will increase. The probability of injury will increase, and the probability that an employee will not be able to return to work and recover from an injury, because he or she is older, will increase. We have to find a way to balance increasing age with workers compensation regimes managed by the provinces. It's a very real, practical problem.

With respect to severance pay, FETCO is concerned that Bill C-481 adds unnecessary ambiguity to the severance provisions of the Canada Labour Code. We're not satisfied that the way you're dealing with this provision is technically clear enough to prevent problems from occurring.

First, section 235 of the Canada Labour Code should make it clear that any employee who voluntarily decides to retire and thereby terminates the employment relationship is not entitled to statutory severance. The existing provisions don't necessarily allow people to see that immediately.

Second, FETCO believes that federal employers should be entitled to continue to impose reasonable mandatory retirement ages where there is a significant risk to public safety arising from a particular occupation. In cases where a legitimate mandatory retirement age is in place and an employee retires with pension benefits upon reaching that age, FETCO's position is that the employer should continue to be relieved of the statutory severance obligation.

What are our conclusions? FETCO supports the Government of Canada's initiative, but it needs to be accompanied by legislative exceptions that continue to allow reasonable age-based retirement policies in some limited circumstances. Specifically, and further, FETCO—