Bill C-4 (Historical)

Economic Action Plan 2013 Act No. 2

A second act to implement certain provisions of the budget tabled in Parliament on March 21, 2013 and other measures

Part 1 implements certain income tax measures proposed in the March 21, 2013 budget. Most notably, it
(a) increases the lifetime capital gains exemption to $800,000 and indexes the new limit to inflation;
(b) streamlines the process for pension plan administrators to refund a contribution made to a Registered Pension Plan as a result of a reasonable error;
(c) extends the reassessment period for reportable tax avoidance transactions and tax shelters when information returns are not filed properly and on time;
(d) phases out the federal Labour-Sponsored Venture Capital Corporations tax credit;
(e) ensures that derivative transactions cannot be used to convert fully taxable ordinary income into capital gains taxed at a lower rate;
(f) ensures that the tax consequences of disposing of a property cannot be avoided by entering into transactions that are economically equivalent to a disposition of the property;
(g) ensures that the tax attributes of trusts cannot be inappropriately transferred among arm’s length persons;
(h) responds to the Sommerer decision to restore the intended tax treatment with respect to non-resident trusts;
(i) expands eligibility for the accelerated capital cost allowance for clean energy generation equipment to include a broader range of biogas production equipment and equipment used to treat gases from waste;
(j) imposes a penalty in instances where information on tax preparers and billing arrangements is missing, incomplete or inaccurate on Scientific Research and Experimental Development tax incentive program claim forms;
(k) phases out the accelerated capital cost allowance for capital assets used in new mines and certain mine expansions, and reduces the deduction rate for pre-production mine development expenses;
(l) adjusts the five-year phase-out of the additional deduction for credit unions;
(m) eliminates unintended tax benefits in respect of two types of leveraged life insurance arrangements;
(n) clarifies the restricted farm loss rules and increases the restricted farm loss deduction limit;
(o) enhances corporate anti-loss trading rules to address planning that avoids those rules;
(p) extends, in certain circumstances, the reassessment period for taxpayers who have failed to correctly report income from a specified foreign property on their annual income tax return;
(q) extends the application of Canada’s thin capitalization rules to Canadian resident trusts and non-resident entities; and
(r) introduces new administrative monetary penalties and criminal offences to deter the use, possession, sale and development of electronic suppression of sales software that is designed to falsify records for the purpose of tax evasion.
Part 1 also implements other selected income tax measures. Most notably, it
(a) implements measures announced on July 25, 2012, including measures that
(i) relate to the taxation of specified investment flow-through entities, real estate investment trusts and publicly-traded corporations, and
(ii) respond to the Lewin decision;
(b) implements measures announced on December 21, 2012, including measures that relate to
(i) the computation of adjusted taxable income for the purposes of the alternative minimum tax,
(ii) the prohibited investment and advantage rules for registered plans, and
(iii) the corporate reorganization rules; and
(c) clarifies that information may be provided to the Department of Employment and Social Development for a program for temporary foreign workers.
Part 2 implements certain goods and services tax and harmonized sales tax (GST/HST) measures proposed in the March 21, 2013 budget by
(a) introducing new administrative monetary penalties and criminal offences to deter the use, possession, sale and development of electronic suppression of sales software that is designed to falsify records for the purpose of tax evasion; and
(b) clarifying that the GST/HST provision, exempting supplies by a public sector body (PSB) of a property or a service if all or substantially all of the supplies of the property or service by the PSB are made for free, does not apply to supplies of paid parking.
Part 3 enacts and amends several Acts in order to implement various measures.
Division 1 of Part 3 amends the Employment Insurance Act to extend and expand a temporary measure to refund a portion of employer premiums for small businesses. It also amends that Act to modify the Employment Insurance premium rate-setting mechanism, including setting the 2015 and 2016 rates and requiring that the rate be set on a seven-year break-even basis by the Canada Employment Insurance Commission beginning with the 2017 rate. The Division repeals the Canada Employment Insurance Financing Board Act and related provisions of other Acts. Lastly, it makes technical amendments to the Employment Insurance (Fishing) Regulations.
Division 2 of Part 3 amends the Trust and Loan Companies Act, the Bank Act and the Insurance Companies Act to remove the prohibition against federal and provincial Crown agents and federal and provincial government employees being directors of a federally regulated financial institution. It also amends the Office of the Superintendent of Financial Institutions Act and the Financial Consumer Agency of Canada Act to remove the obligation of certain persons to give the Minister of Finance notice of their intent to borrow money from a federally regulated financial institution or from a corporation that has deposit insurance under the Canada Deposit Insurance Corporation Act.
Division 3 of Part 3 amends the Trust and Loan Companies Act, the Bank Act, the Insurance Companies Act and the Cooperative Credit Associations Act to clarify the rules for certain indirect acquisitions of foreign financial institutions.
Division 4 of Part 3 amends the Criminal Code to update the definition “passport” in subsection 57(5) and also amends the Department of Foreign Affairs, Trade and Development Act to update the reference to the Minister in paragraph 11(1)(a).
Division 5 of Part 3 amends the Canada Labour Code to amend the definition of “danger” in subsection 122(1), to modify the refusal to work process, to remove all references to health and safety officers and to confer on the Minister of Labour their powers, duties and functions. It also makes consequential amendments to the National Energy Board Act, the Hazardous Materials Information Review Act and the Non-smokers’ Health Act.
Division 6 of Part 3 amends the Department of Human Resources and Skills Development Act to change the name of the Department to the Department of Employment and Social Development and to reflect that name change in the title of that Act and of its responsible Minister. In addition, the Division amends Part 6 of that Act to extend that Minister’s powers with respect to certain Acts, programs and activities and to allow the Minister of Labour to administer or enforce electronically the Canada Labour Code. The Division also adds the title of a Minister to the Salaries Act. Finally, it makes consequential amendments to several other Acts to reflect the name change.
Division 7 of Part 3 authorizes Her Majesty in right of Canada to hold, dispose of or otherwise deal with the Dominion Coal Blocks in any manner.
Division 8 of Part 3 authorizes the amalgamation of four Crown corporations that own or operate international bridges and gives the resulting amalgamated corporation certain powers. It also makes consequential amendments and repeals certain Acts.
Division 9 of Part 3 amends the Financial Administration Act to provide that agent corporations designated by the Minister of Finance may, subject to any terms and conditions of the designation, pledge any securities or cash that they hold, or give deposits, as security for the payment or performance of obligations arising out of derivatives that they enter into or guarantee for the management of financial risks.
Division 10 of Part 3 amends the National Research Council Act to reduce the number of members of the National Research Council of Canada and to create the position of Chairperson of the Council.
Division 11 of Part 3 amends the Veterans Review and Appeal Board Act to reduce the permanent number of members of the Veterans Review and Appeal Board.
Division 12 of Part 3 amends the Canada Pension Plan Investment Board Act to allow for the appointment of up to three directors who are not residents of Canada.
Division 13 of Part 3 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to extend to the whole Act the protection for communications that are subject to solicitor-client privilege and to provide that information disclosed by the Financial Transactions and Reports Analysis Centre of Canada under subsection 65(1) of that Act may be used by a law enforcement agency referred to in that subsection only as evidence of a contravention of Part 1 of that Act.
Division 14 of Part 3 enacts the Mackenzie Gas Project Impacts Fund Act, which establishes the Mackenzie Gas Project Impacts Fund. The Division also repeals the Mackenzie Gas Project Impacts Act.
Division 15 of Part 3 amends the Conflict of Interest Act to allow the Governor in Council to designate a person or class of persons as public office holders and to designate a person who is a public office holder or a class of persons who are public office holders as reporting public office holders, for the purposes of that Act.
Division 16 of Part 3 amends the Immigration and Refugee Protection Act to establish a new regime that provides that a foreign national who wishes to apply for permanent residence as a member of a certain economic class may do so only if they have submitted an expression of interest to the Minister and have subsequently been issued an invitation to apply.
Division 17 of Part 3 modernizes the collective bargaining and recourse systems provided by the Public Service Labour Relations Act regime. It amends the dispute resolution process for collective bargaining by removing the choice of dispute resolution method and substituting conciliation, which involves the possibility of the use of a strike as the method by which the parties may resolve impasses. In those cases where 80% or more of the positions in a bargaining unit are considered necessary for providing an essential service, the dispute resolution mechanism is to be arbitration. The collective bargaining process is further streamlined through amendments to the provision dealing with essential services. The employer has the exclusive right to determine that a service is essential and the numbers of positions that will be required to provide that service. Bargaining agents are to be consulted as part of the essential services process. The collective bargaining process is also amended by extending the timeframe within which a notice to bargain collectively may be given before the expiry of a collective agreement or arbitral award.
In addition, the Division amends the factors that arbitration boards and public interest commissions must take into account when making awards or reports, respectively. It also amends the processes for the making of those awards and reports and removes the compensation analysis and research function from the mandate of the Public Service Labour Relations Board.
The Division streamlines the recourse process set out for grievances and complaints in Part 2 of the Public Service Labour Relations Act and for staffing complaints under the Public Service Employment Act.
The Division also establishes a single forum for employees to challenge decisions relating to discrimination in the public service. Grievances and complaints are to be heard by the Public Service Labour Relations Board under the grievance process set out in the Public Service Labour Relations Act. The process for the review of those grievances or complaints is to be the same as the one that currently exists under the Canadian Human Rights Act. However, grievances and complaints related specifically to staffing complaints are to be heard by the Public Service Staffing Tribunal. Grievances relating to discrimination are required to be submitted within one year or any longer period that the Public Service Labour Relations Board considers appropriate, to reflect what currently exists under the Canadian Human Rights Act.
Furthermore, the Division amends the grievance recourse process in several ways. With the sole exception of grievances relating to issues of discrimination, employees included in a bargaining unit may only present or refer an individual grievance to adjudication if they have the approval of and are represented by their bargaining agent. Also, the process as it relates to policy grievances is streamlined, including by defining more clearly an adjudicator’s remedial power when dealing with a policy grievance.
In addition, the Division provides for a clearer apportionment of the expenses of adjudication relating to the interpretation of a collective agreement. They are to be borne in equal parts by the employer and the bargaining agent. If a grievance relates to a deputy head’s direct authority, such as with respect to discipline, termination of employment or demotion, the expenses are to be borne in equal parts by the deputy head and the bargaining agent. The expenses of adjudication for employees who are not represented by a bargaining agent are to be borne by the Public Service Labour Relations Board.
Finally, the Division amends the recourse process for staffing complaints under the Public Service Employment Act by ensuring that the right to complain is triggered only in situations when more than one employee participates in an exercise to select employees that are to be laid off. And, candidates who are found not to meet the qualifications set by a deputy head may only complain with respect to their own assessment.
Division 18 of Part 3 establishes the Public Service Labour Relations and Employment Board to replace the Public Service Labour Relations Board and the Public Service Staffing Tribunal. The new Board will deal with matters that were previously dealt with by those former Boards under the Public Service Labour Relations Act and the Public Service Employment Act, respectively, which will permit proceedings under those Acts to be consolidated.
Division 19 of Part 3 adds declaratory provisions to the Supreme Court Act, respecting the criteria for appointing judges to the Supreme Court of Canada.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Sure. I just want to say first of all that we support the amendments put forward by Ms. May, as well as putting forward our own amendments that I'll describe in just a moment.

I want to start off by saying that I think the changes which the Conservative government is making about workplace health and safety are the most serious and dangerous changes in this bill. I'm very, very strongly opposed to them, as are many of the witnesses we heard testify before committees.

I have to say, when I first started getting involved in my union as a young person, it was as a health and safety representative in the federal jurisdiction, so on a personal level, I really valued the health and safety legislation. I saw it progressively get stronger over the years, and the changes in this legislation would in fact take the legislation back in time many, many years. Ultimately, I think it will make the workplace much more dangerous and less desirable for Canadian workers.

Fundamentally, every worker deserves a workplace that is safe and healthy, that's free from danger, free from health hazards. The obligation is on the employer to provide that safe and healthy workplace. That's their legal requirement. Working people also have rights, such as the right to refuse unsafe work, to know what they're working with, to participate in their health and safety, but how you define the right to refuse work, for example, is changing dramatically. It is becoming narrowed by this legislation. What that means is there are workplace conditions that previously would have meant that a worker can decide that it is dangerous for them and they could have had the right to say that they don't want to put themselves in that situation. With these changes, they would be obliged to continue to work.

I don't think we have an absolute epidemic of work refusals in this country. It's a pretty serious step for someone to refuse to continue to work, but when someone does refuse, it is the right that they ought to have in order to protect the integrity of their own health. It is really rolling back the clock to narrow this definition. Let's make no mistake that it will increase the risk that workers are subjected to, and it will increase the injuries. It will increase, in fact, the compensation claims and the lost time, and ultimately will be very dangerous for workers. It also doesn't make good economic sense on that basic level.

Speaking to our amendment on narrowing the definition of “danger”, we believe that providing an alternative definition that's more substantive in scope is important. Again, we think that when it comes to a person's individual health and safety, none of us wants to be put in a position where the employer is saying that you must work even though you truly believe it is going to be a serious health risk or a serious risk to your safety.

The other amendment is about the change the government is making, which is to strip health and safety officers of nearly all of their powers and concentrate them in the hands of the minister. The minister has a myriad of other things that he or she is responsible for. The minister cannot have the expertise of a health and safety officer, who is trained, who does this for a living, who is an expert, and has a track record when it comes to health and safety. It really makes no sense.

Again, as I said on a previous clause, it lacks transparency and accountability, and ultimately it would undermine the ability of people to get their rights enforced in the workplace.

Our amendment would undo the elimination of health and safety officers, while requiring that they be government employees and not be outsourced or have that power concentrated in the hands of the minister.

I want to say that one of the changes in the rules which we find is remarkable is that under the changes in Bill C-4, there would no longer need to be a physical inspection of a work site, an actual workplace; a phone call would suffice. You can just imagine this: the employer is sitting in an office and someone from the minister's office, or someone that has been delegated, phones up and says, “ Is this okay? Have you got that done? Did you do this? Are you going to do this?” “Sure, everything's fine. Good to go.”

The fact that they would not have to go there and lay their eyes right on that situation and inspect it for themselves frankly is shocking, and it's unbelievable. I just can't imagine that we would allow that situation through our laws. This is Canada, and people have a fundamental right to a safe and healthy workplace. We're strongly opposed to the changes that would be made through this bill.

We believe that our amendments and Ms. May's amendments would help correct some of these changes. Again, I would urge my colleagues across the way to put themselves in the position of someone who's trying to get a basic right enforced and that employer is sitting in the office telling an inspector over the phone that the workplace is good to go, no problem.

Hopefully, you will support our amendments.

[The Chair, Conservative, James Rajotte]

I call this meeting back to order.

We are resuming debate on Bill C-4, with clause-by-clause discussion. We left off at clause 176.

Colleagues, we have a number of amendments. We have Green Party amendments 1, 2, 3, 4, and 5, and we have NDP amendments 7 and 8.

This is a grey area but I'm proposing, and hopefully it's agreeable to you, that we give Ms. May a maximum of five minutes to address all of her amendments in this clause, if she can do that in one fell swoop. Then we will go to the NDP, and they'll address their amendments.

Ms. May, you may address your five amendments, please.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Mr. Chair, I am very happy that Mr. Keddy spoke again because that shows the lack of rigour on the government side.

I would just like to remind the committee that we are looking at an omnibus bill. Once again, it is because of omnibus measures, not to mention the rush and the debates being cut short, that this type of measure was passed. It is very interesting because, during the hearings on the consideration of Bill C-4, a number of very credible witnesses warned us about the dangers of having a bill that deals with a number of different pieces of legislation. Unfortunately, it has not been studied in sufficient depth, despite all the serious thought and effort that has gone into it.

So we are forced to correct it after the fact, after all the costs have been incurred by various players in the community, as well as by the government and taxpayers, of course. It is very important to point that out.

In closing, I would say that this is just one measure among many that the government had to correct and that it will have to correct in the future. In addition, there is no mention of the major dangers that were brought to our attention by a number of witnesses, meaning the referral of some measures to court because they are not consistent with some of our country's fundamental laws. The outcome is costs, exclusion and hardship for people.

[Peggy Nash, NDP, Parkdale—High Park, ON]

What we are proposing with this amendment deals with rate changes. The minister under Bill C-4 would have the power to substitute in any year whatever rate he wanted for any reason he deemed to be in the public interest.

We think there should be some accountability that goes with that power. We're concerned that it opens the door to continuing politicization of premium rates and potential future abuse of the system to create surpluses to be used for non-EI purposes, which is the situation I just described with the $57 billion that Conservatives and Liberals used for balancing budgets and giving corporate tax cuts.

Our proposed amendment NDP-6 would require the minister to report to Parliament on the reasons for substituting a rate. If the minister wants to change the rate, he should have to, at a minimum, tell Canadians why he wants to change the rate, and what the impacts of the substituted rate would be compared with what was recommended by the EI commission. We believe this would bring much greater transparency, and with the EI funds that's greatly needed, given that it is moneys that come in from workers and employers across the country, and given the shocking history of abuse of the EI funds by successive governments.

We feel that if the minister is going to have these increased powers, which basically override the EI commission, which he has been disregarding anyway, that he should have to justify a substituted rate that he's recommending and say why this will have a positive impact versus the rate that the EI commission is recommending.

We think that greater transparency and accountability are what Canadians are looking for. I would urge my colleagues, especially in the Conservative Party, to vote in favour of accountability and transparency.

[Andrew Saxton, Conservative, North Vancouver, BC]

Mr. Chair, the motion put forward by the member opposite would effectively increase the maximum deduction available in respect of restricted farm losses to $40,000. The amendment in Bill C-4 proposes to increase the maximum deduction from the existing $8,750 to $17,500 in order to reflect inflation. The motion of my colleague across the table is inconsistent with the increase, which is already in the clause.

Thank you.

[The Chair, Conservative, James Rajotte]

I call to order meeting number 12 of the Standing Committee on Finance.

Pursuant to the order of reference of Tuesday, October 29, 2013, we are continuing our study of Bill C-4, a second act to implement certain provisions of the budget tabled in Parliament on March 21, 2013 and other measures. Colleagues, we are doing clause-by-clause consideration of this bill.

I'll remind you as your chair, that I'm operating according to the motion, moved by Mr. Saxton, and adopted by this committee on Tuesday, November 5. It's quite a lengthy motion. I know you are quite familiar with its contents.

We have a number of amendments proposed by many of the parties here with respect to certain clauses. My advice to the committee in terms of how we propose.... You obviously have a copy of the agenda in front of you. The agenda highlights which clauses have which amendments attached to them. If any of you need any additional information, please highlight that to the clerk. We have our legislative clerk here as well, if you need any procedural advice with respect to amendments.

I will delve into clause-by-clause consideration.

Pursuant to Standing Order 75(1), consideration of clause 1, short title, is postponed. Therefore, I'm going to move to clause 2.

I do not have an amendment until clause 14, so, colleagues, may I...?

Ms. Nash, go ahead, please.

[Graham Fraser, Commissioner of Official Languages, Office of the Commissioner of Official Languages]

Thank you very much, Mr. Chair.

Mr. Chair and members of the committee, good afternoon. Bonjour.

I'm particularly pleased to be here today to share a few of my thoughts on my 2012-13 annual report, which I tabled in Parliament on November 7.

First, I'd like to recognize the recently re-elected chair of the House of Commons Standing Committee on Official Languages, the Honourable Michael Chong. Mr. Chair, I'm confident your knowledge of our official languages and your invaluable leadership on key issues such as bilingual education will serve the committee well in its deliberations during this current session of Parliament.

This past February, Prime Minister Stephen Harper asked me to stay on as Commissioner of Official Languages for an additional three years. I was honoured to accept. Over the course of my first mandate as commissioner, one of the questions that I have often received is the most general and difficult one: how are we doing in terms of official bilingualism? The answer is often unsatisfying—it depends.

My seventh and latest annual report will attempt to explain that answer in some detail. The report was conceived as a summary of my seven years as the Commissioner of Official Languages. Even though my mandate has been extended for another three years, I feel this has been a useful exercise to examine the progress—or lack of progress—made during these past seven years.

As I begin my second term, I can look back on the successful outcomes that have resulted from our investigations and proactive interventions. Seven years ago my investigation into complaints by official language minority communities following the abolition of the court challenges program of Canada, and my subsequent seeking of intervenor status before the Federal Court, showed that the government had not respected its obligations under part VII of the Official Languages Act. Mobilization by these communities resulted in an out-of-court settlement that established the language rights support program.

Last year my investigation of the appointment of a unilingual Auditor General added credence to a private member's bill that was passed unanimously by Parliament and now requires all agents of Parliament to be bilingual at the moment of their appointment.

In addition, my office's collaborative work with federal institutions and the organizing committee of the Vancouver 2010 Olympic Winter Games led to a very successful event presented in both official languages, with the unfortunate exception of the cultural component of the opening ceremonies. The invaluable lessons learned from this experience resulted in the production of a practical guide to promoting official languages for any organization hosting a major sporting event in Canada.

This past summer Canada Games organizers in Sherbrooke used the guide and were clearly successful in promoting both official languages during this national event, proof that we have made great strides.

I can also point to our investigation into the decision to move the Quebec City Marine Rescue Sub-Centre to Trenton and Halifax, which led to the postponement of the move until emergency services on the St. Lawrence could be guaranteed in French.

As well, when CBC/Radio-Canada's decision to eliminate virtually all local programming at French language radio station CBEF, in Windsor, generated 876 complaints in 2009-2010, I asked the Federal Court whether I have the jurisdiction to investigate such complaints. This was confirmed by the court in a preliminary decision.

There have also been a few outcomes during my ten years that I would characterize as conspicuous failures. For example, the government failed to see the importance of having bilingual Supreme Court judges. I have given my support to Bill C-232, which sought to amend the Supreme Court of Canada Act, as I firmly believe that any litigant appearing before the Supreme Court should have the right to be heard and understood by all the judges in either official language without the aid of an interpreter.

This year, my office completed a study on the bilingual capacity of the superior court judiciary, which I presented at the Canadian Bar Association's legal conference in August. This marked the first time I worked on a joint project with my provincial counterparts in New Brunswick and Ontario. The impact of this study and its recommendations are crucial for Canadians who would use the court system. This is why we are urging the Minister of Justice to act quickly on the recommendations in the study, in close collaboration with his provincial and territorial counterparts as well as with the chief justices of the superior court.

When I first came aboard in 2006 there were some pleasant surprises. I found that there was much less resistance to the Official Languages Act inside federal institutions than I had expected, but from time to time there are incidents that indicate that officials simply don't understand what it means to have two official languages with equal status.

Last month, there was an incident here on the Hill that I must admit I found completely unacceptable. A briefing for parliamentarians on Bill C-4, the omnibus bill, was made available only in English. An MP complained, officials objected, and another MP complained that he didn't understand the conversation. The briefing was delayed for a day.

Frankly, I thought that unilingual briefings had gone the way of typewriters and that “French to follow” was a thing of the past. I thought that Parliament's unanimous decision to ensure that agents of Parliament were bilingual was recognition that Canadians, not to mention parliamentarians, have an absolute right to equal quality of service in the official language of their choice. The fact that a member of Parliament even had to ask for a briefing in French in 2013, 55 years after simultaneous interpretation was introduced into the House of Commons and 50 years after the launch of the Royal Commission on Bilingualism and Biculturalism, is deeply disappointing.

Despite these embarrassing lapses, most federal institutions and most public servants want to do the right thing. Sometimes they simply have trouble getting the tools they need and developing the reflexes to use them. To do our part, my office developed online tools for federal institutions and employees, including a self-assessment tool for managers to evaluate whether their behaviour supports the use of both languages in the workplace and, more recently, a tool to develop effective language training practices.

There have also been some disappointments. The complaints I've received, coupled with the findings of our various studies and audits, tell me that much remains to be done in order to meet the obligations and the spirit of the act fully. When federal employees provide services to Canadians, active offer is still the exception, not the rule. It also remains difficult for air travellers to be served in the official language of their choice in Canadian airports. Too often, people have to ask, and, too often when they do, they face incomprehension or delays.

In the public sector, it's quite common for leaders to say a few words in French and then continue uninterrupted in English, as if the use of French at a public event were merely a symbolic gesture rather than the natural expression of a Canadian language. Even here in Ottawa, I get the feeling that speakers, even if they are bilingual, are hesitant to speak French in public.

As well, federal institutions have been uncertain about how to take positive measures for the growth and development of official language minority communities, as required by the 2005 amendment to the Official Languages Act.

Five years ago, the government issued its Roadmap for Linguistic Duality, which expired this year and was replaced with the Roadmap for Canada's Official Languages, which runs through to 2018. During this time, we have experienced a period of financial instability, heavy federal investment in infrastructure projects, the Strategic and Operating Review and the Deficit Reduction Action Plan.

Generally speaking, official languages have not been targeted, but there has been collateral damage and unintended consequences for official languages stemming from closures and cutbacks. The result has been a subtle erosion of bilingualism through the transfer of federal offices from bilingual to unilingual regions, the reduction of language skill levels required for bilingual positions, the pressure on public servants to produce documents in English only, and the regular failure to offer a sufficient number of training programs in French.

We also see the posting of senior management positions where both official languages are described as an asset rather than a requirement, or described as a requirement and then not considered as such. The consequence of all this is a quiet undermining of the use of both languages in the workplace, and of the ability to offer services in English and French.

My work over the past seven years has shown me how much leadership matters in federal institutions. As commissioner, I will continue to stress the importance of second language learning, whether in our universities or in the public service, and I will continue to position the use of both official languages as a key leadership competency.

What lies ahead in the field of official languages? What challenges will need to be addressed over the next three years of my mandate?

Immigration and the demographic change it brings are critical issues for minority-language communities and for the country.

Social media will continue to transform the way that government deals with citizens. Essentially, the public expectation for an immediate response in either official language is greater than ever. Social media represent both significant challenges and tremendous opportunities in terms of language policy.

We know the Pan American Games will take place in Toronto in the summer of 2015, as well as a series of major anniversary events leading up to the 150th anniversary of Confederation in 2017. This is an opportunity for renewed engagement and leadership from the federal government. Throughout the planning stages and delivery of these events, it will be critical to respect the needs of both official language communities.

As reflected in my annual report, I've made recommendations in the following six areas: language training in federal institutions; the “Roadmap for Canada's Official Languages 2013-2018”, specifically the need for a new management and accountability framework; immigration policies and their impact on francophone minority communities; initiatives to raise the level of bilingualism among Canadians and reverse the decline in bilingualism among anglophones; the bilingual capacity of our superior court judiciary; and the impact of budget cuts on federal institutions' abilities to respect their obligations.

I believe we're now past the point where Canadians are shocked to hear the other language. This became quite evident to me this summer at the Canada Games in Sherbrooke. Both languages were used interchangeably during the opening ceremonies and elicited similar responses from those in attendance. Our official languages are a defining characteristic of our Canadian identity. We need to feel that both languages belong to us and are part of our sense of national identity, even if we don't speak one of them.

One challenge that remains, I feel, is for all of us to embrace fully linguistic duality as a core Canadian value, no matter what language we speak. As the committee begins a new session, it will no doubt be considering where to focus its work. I have raised a number of issues, including those areas where I made recommendations. I hope the committee finds this useful in determining which topics are deserving of its attention.

On that note, Mr. Chair, I will conclude my remarks and be pleased to answer any questions you and your colleagues may have.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you, Chair, and thanks to our witnesses for being here today.

Mr. Pruden, you've seen the collective bargaining process first-hand, both in the private and public sector, so I think you're qualified to comment on how this process can sometimes be very inefficient and time consuming. Measures in Bill C-4 streamline the collective bargaining process. For example, negotiations will now start exactly one year before the expiry of the current agreement and arbitration boards and public interest commissions will now be able to take into account an employee's overall benefit package when determining fair compensation.

Do you agree with changes like these that not only streamline the process but also bring them into line with the private sector and provincial government practices?

[Peggy Nash, NDP, Parkdale—High Park, ON]

Thank you.

Welcome to all the witnesses.

I was struck during the presentation by the witnesses today.

Ms. Blais, you called the process around Bill C-4 an assault on due process. We've had several witnesses, whatever their view is on the specifics of this bill, who have expressed genuine concern about the process of omnibus bills. This is the fourth omnibus budget bill that we're dealing with. But I've also heard concern about lack of due process when it comes to lack of consultation.

I'll ask my question to the three of you here in the room with us—Ms. Roy, Ms. Blais, and Mr. Barrett. Is this because labour relations right now are at such a critical point that the government has no time for due process? Is this a house on fire? Are we so inundated with federal jurisdiction strikes and rampantly escalating pay raises and workplaces run amok that the government has no choice but to come in wielding a pickaxe, which is a short form for omnibus budget bills? Is there any rationale that you can see for the government embarking on this process?

[Robert Murray]

Thank you, Mr. Chair.

We at the Frontier Centre are proud to have been invited to speak today because we feel that Bill C-4 represents a series of essential changes and clarifications to a variety of aspects of Canadian government.

As requested, my comments here will be limited to part 3, divisions 17 and 18, which seek to modernize the collective bargaining and recourse systems available.

Popular interpretation and criticisms of divisions 17 and 18 seem to focus on an effort by the government to limit or eliminate labour rights, particularly from unionized workers, in an omnibus bill. For the most part, I would say the provisions of divisions 17 and 18 are aimed to create efficiencies in the labour processes, particularly in recourse mechanisms, and will in some cases reduce unnecessary duplication or confusion.

Clearly, the most controversial aspect of these sections is that which focuses on the ever dubious essential service designation. We at the Frontier Centre believe the time has come for a public debate about the right to strike in the public sector, and we welcome the opportunity to comment, though at the outset I would also urge caution with any expansion of the essential service designation.

There is no doubt that the essential service designation is important and could be more widely applied in the federal government, but there is a risk in overutilizing the concept. First, the clear expansion of government power in this area as a result of Bill C-4 is in some ways problematic and really needs to be thought through further. Also, if overused, unproductive negotiations could continue for unusually long periods of time, unless parties agree to a final-offer selection of binding arbitration at the outset.

While we do support the arbitration process and believe that unions have historically done well under the process, I would stress that it is a key right of the employer to designate a service as essential, though any expansion of the designation or a reduction in the ability of unionized workers to strike or to access labour rights will clearly face significant opposition. As such, a long-term, honest consultation process should be embarked upon, which I believe this committee is trying to get at, but I hesitate to say will not go far enough in that consultation process.

Curtailing or limiting the right to strike or access to grievance arbitration will never be appealing to unionized workers as it is a vital last-resort option in times of difficult labour processes. I do believe the use of strikes has become far too overutilized. It is now seen as a tactic rather than a last-resort option. As such, we would support efforts to further limit the ability of a party to strike in some cases. As such, we would also urge that there would have to be curtailment of the ability to walk out simultaneously.

In any public sector work stoppage, it is not the government that is hurt, it is the taxpayers. Canadians pay a very high premium for what are supposed to be world-class public services and should not have to face close-downs because of labour instability. We see little need for taxpayers to pay for services they have no access to, and it's time for these issues to be tackled.

Further, it is very much in the public's interest to have certain services declared as essential, but the government must prepare for the myriad of court challenges that will come as a result of expanding the designation. Ultimately, if this bill is to move forward, the success of a court challenge would, at least in part, be dependent upon how much consultation has actually taken place and how impartial that consultation process truly is.

Other aspects of divisions 17 and 18, such as the expanded use of conciliation, the extension of bargaining timelines, streamlining recourse and grievance processes, and the consolidation of matters into one board are all very useful in their own right in some cases, though each must be considered and valued on its own merit.

Ultimately, what we see the government is trying to do in divisions 17 and 18 is very positive, though we have questions regarding why this is being embedded in an omnibus budget bill. The status quo is not working well for any party involved in negotiations at this point in time, and it's certainly a time for alterations in the ability of public sector employees to strike and their access to certain labour recourse mechanisms to be reviewed, so as to not hold taxpayers hostage.

Even so, legitimate, fair, and transparent practices are by far the best ways to achieve labour peace. We would hope that these underlying values are being contemplated—

[Gareth Neilson]

Thank you, Mr. Chairman.

After reviewing Bill C-4 we were pleased to see some necessary changes made to labour relations and arbitration systems. We believe it's the right direction for the Canadian government to take at this time. Having said that, today we'd like to comment on income inequality, fairness in pensions, and keeping our seniors out of poverty, as we feel that these are issues the government needs to look at a little more carefully.

When we do talk about public sector compensation, it seems fashionable today to compare their compensation with the top 1% in our society. That is a completely false comparison. The richest in our society are rarely concerned about what the average public sector worker makes. Similarly, it wouldn't be fair to judge what a public sector worker makes by the poorest in our society, because it would be a complete imbalance.

What we are suggesting is that the committee focus on the average working Canadian when analyzing what compensation is equitable for a public sector worker. Since 2003 we've seen a significant increase in public sector compensation. According to the PBO, the average civil service employee now makes in excess of $77,000 per year. What makes that both alarming and unfair, in our opinion, is that the average private sector worker in the country today is making just in excess of $40,000. In other words, the private sector worker is making about 48% less than the public sector worker. I think in the previous panel one of your witnesses testified to that. He realized that the pay was so much spread apart between the public and private sectors.

At a time when inflationary trends are causing financial challenges for the average private sector worker, we do think it's very important for the government to fix this fiscal imbalance. I think there are some measures in this bill that certainly could do that.

The effect of rising salaries in the public sector has also had a very negative effect on pension programs. For every dollar that you give a civil servant in salary, the pension fund has to find $16 for that worker in retirement. When our pension system was created, the expectation was that an employee worked for about 30 years, would be retired for a few years, and then pass away. However, today our life expectancy is so much higher. A recent actuarial report that we have seen showed that the average life expectancy for a female public sector worker was 89.4 years and for a male it was 87.3.

Now, of course, we find ourselves two years into the baby boom retirement tsunami, and many of the pension plans are broken. It seems that the only answer to that has been to increase the contribution rates. That's not going to work. Over the last 10 years, in fact, we've seen contribution rates increase by over 130% into these pension funds, and now it is a fact that Canadians invest as much into public sector pension funds as they do into their own RRSPs. Again, this is unfair to the average private sector worker. As they struggle to pay the bills and have nothing left to contribute to their own pension fund, they have to match the contributions dollar for dollar of the public sector worker. According to the PBO, when you include pension matching and when you include some of the benefits, the average civil servant is costing taxpayers $114,000 per year. In fact, last year Canadians contributed over $34 billion into public sector pensions.

At Fair Pensions for All we believe that every Canadian should be able to save for retirement, not just the wealthy and not just those who are in government.

There's also been a lot of talk about the big CPP recently. We reject that out of hand. We ask you to do the same, because we see that as basically a backdoor bailout of public sector pensions and we would suggest you ignore that.

[Isabelle Roy]

Okay.

The bill strips the tribunal of any jurisdiction in relation to allegations of violations of the Canadian Human Rights Act in the workplace for federal public service workers, granting exclusive jurisdiction to the new board. Under the present federal human rights scheme, a finding of discrimination against an employee may attract a direction that the employer cease the discriminatory practice and take measures, in consultation with the Canadian Human Rights Commission, to redress the practice. This power is not provided to the PSLREB in Bill C-4.

The proposed legislation will extend the discretion to dismiss grievances on the basis that they are considered trivial, frivolous, vexatious, or made in bad faith to the employer. Traditionally this was a power granted to independent bodies, like the CHRT or the PSLRB. It's unprecedented to give the employer this ability to unilaterally dismiss grievances before they're even heard. Don't be surprised if there's an increase in the number of grievances that end up in front of this new board for that very reason.

In conclusion, Bill C-4 erodes the associational rights of public servants to fair collective bargaining and their individual rights to prompt, efficient, and unbiased dispute resolution.

Division 17 constitutes an unjustified violation of the freedom of association guaranteed by the charter and is unconstitutional.

Divisions 17 and 18 should be separated from Bill C-4 to allow for proper consultations with stakeholders so that a true modernization of labour relations in the federal public service can take place, as opposed to proceeding with this regressive proposed legislation.

Thank you.

[Isabelle Roy, General Counsel, Legal Affairs, Professional Institute of the Public Service of Canada]

Thank you, Mr. Chair.

Thanks to the committee for the opportunity to make these submissions.

The Professional Institute of the Public Service of Canada represents about 55,000 professionals across the country in the public sector, most of whom work in the federal public service. Our members are directly affected by Bill C-4, in particular divisions 17 and 18, which amend the PSLRA and the PSEA, as well as the Canadian Human Rights Act.

It is our contention that the proposed legislation significantly impairs the right to collectively bargain, to the point where it in fact constitutes a violation of the freedom of association, protected by paragraph 2(d) of the Canadian Charter of Rights and Freedoms and the International Labour Organization’s convention 87, among others.

Our criticism starts with the process itself. Like my colleagues, we feel that burying such important amendments in omnibus legislation is certainly not the proper way to go about this. Instead, the changes should have formed part of a stand-alone piece of legislation that would have allowed for the meaningful consultation with subject-matter experts that we're used to in this country when it comes to these types of changes.

This government's approach of imposing sweeping changes without consultation with stakeholders has been severely criticized by the International Labour Organization and is considered to be an attack on freedom of association in different contexts.

The amendments to the PSLRA contained in Bill C-4 will result in collective bargaining that is in fact devoid of any fair and independent dispute resolution mechanism in the event of impasse at the bargaining table. That, in our view, is a violation of the right to collective bargaining that is protected by paragraph 2(d) of the charter.

Bill C-4 proposes to make conciliation/strike the default process to resolve disputes, while at the same time it grants the employer exclusive and unfettered power to determine which positions are to be designated essential.

Should the parties to collective bargaining eventually find themselves before an arbitration board—or even a conciliation board, for that matter—Bill C-4 proposes restrictions that give the employer considerable leverage throughout that dispute resolution process as well. The process will become less fair and more politicized.

These changes dilute the value of objective analysis of relevant economic factors and replace factual evidence with ideological preference.

Put differently, Bill C-4 completely stacks the deck in favour of the employer. It corrals unions to the conciliation/strike route while keeping exclusive and unchecked control over how many workers actually get to go on strike in the hands of the employer and the employer alone. The bill goes further by ensuring that arbitration or conciliation boards have their hands tied by the government of the day's desire to pay—not the ability, which is the proper standard.

The proposed system forces confrontation and results in a serious impairment of the freedom of association protected by the charter. Beyond these associational rights of public servants, the bill also attacks individual rights of our members.

Bill C-4 calls for the PSLRB, the Public Service Labour Relations Board, and the Public Service Staffing Tribunal to be consolidated to form a new entity, the Public Service Labour Relations and Employment Board.

While the purpose of these types of exercises is usually to find efficiencies, this legislation is actually going to have the opposite effect. There are currently long delays, both at the PSLRB and the PSST, and it is not apparent how merging these two entities will shorten those delays.

In fact, compounding these problems, this legislation will probably increase the volume of complaints by forcing similar individual grievances to be filed separately instead of using the policy grievance tool, which was a tool that was developed under the 2005 Public Service Modernization Act and had resulted, in our view, in a lot of efficiencies by handling a number of individual matters in one policy grievance.

The proposed legislation strips the Canadian Human Rights Tribunal—

[Lisa Blais]

The latter had the right to strike forced upon them in 2003 by the Charest government as a way to avoid binding arbitration. It culminated in strike action by almost 1,500 Quebec government lawyers in February 2011. The situation broke the bond of trust between these lawyers and the government and jeopardized many serious criminal prosecutions.

On a completely practical level, how can the government save money by forcing employees to strike? I just referenced the importance of preserving the right to strike. The point is, Bill C-4 will force some of us to strike. Let's remember that when unions were first given this choice in 1967, it was meant to address the imbalance of power in the federal public sector context. Arbitration has consistently been the preferred route for the AJC and for most public sector unions. This civilized approach to labour disputes preserves services to the public and ensures federal workers and their families are treated with respect, dignity, and fairness.

[Lisa Blais, President, Association of Justice Counsel]

Thank you. I want to thank the committee for this opportunity.

The AJC is the exclusive bargaining agent for 2,700 federal lawyers. We're prosecutors, we're counsel at the Department of Justice, and we also provide legal services to various tribunals and agencies.

Before becoming a so-called union boss, I was a drug prosecutor enforcing the government's tough on crime legislation. I will be returning to my prosecutorial role at the end of my term with the AJC.

To begin, I would be remiss as the representative of federal lawyers if I didn't address the issue of due process. I know you've heard a lot on that, but it bears repeating because it's so fundamental to who we are as Canadians. Make no mistake, using massive budgetary omnibus bills to significantly alter several long-standing and complex pieces of legislation is an assault on due process.

Bill C-4 contains many elements that have absolutely nothing to do with budgets or finances. Respectfully, we question how a bill that is 308 pages long, contains 472 separate clauses, affects at least 29 different pieces of legislation, and amends or repeals 70 legislative measures can seriously be considered a true budget bill, or seriously considered at all, folks, in light of time constraints and debate limits imposed on this entire process.

We know that omnibus budget bills are not new. In 1994, then MP Stephen Harper criticized such a bill—which was 21 pages and entirely related to budgets—as being, and I quote, “so diverse that a single vote on the content would put members in conflict with their own principles”.

The scope and breadth of Bill C-4 negates your ability to even know its full impact. Further, division 17 of the bill brings drastic amendments to the PSLRA, a fundamental piece of legislation, albeit not perfect, that has been a reliable tool for labour relations for the past 50 years. These amendments, make no mistake, denude employee protections and powers. I will elaborate upon that in a moment.

Due process has taken a hit, folks, since the law reform commission was forced to close its doors in 2006. Never have we needed more such an informed and independent voice. Contrary to past practice, these amendments were crafted without any consultation with any stakeholder—not with unions, not with labour law specialists, not with academics, not with anyone.

We question this bill's constitutionality. Advanced consultations would have minimized the vulnerability of these changes to challenges under paragraphs 2(b) and (d) of the Canadian Charter of Rights and Freedoms. Our highest court has confirmed on several occasions that collective bargaining is the fundamental right of every Canadian employee. This right can be limited only minimally, and only in exceptional circumstances. This bill bestows upon the employer the exclusive right to determine who can arbitrate, who can strike, who is essential.

Further, when a union is allowed to participate in interest arbitration, the adjudicator's ability to consider relevant factors has been severely constrained to the point where it can be argued that the outcome is already determined. Bill C-4 contravenes several of our international labour obligations as well.

Let's talk about costs. You are a finance committee, and that's the lens through which you are all tasked to look. For a government that constantly trumpets its desire to streamline operations and save money, Bill C-4 will have the opposite effect. Let me tell you why. Changes to the PSLRA remove the workers' right to choose between interest arbitration and strike action. What does that mean? Forcing federal workers to strike rather than go the interest arbitration route will affect the services Canadians receive and serve to frustrate labour relations even further.

We need only remember the Quebec prosecutors and civil lawyers who were recently forced into this exact situation.