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.

Labour-sponsored Funds

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

Mr. Speaker, Bill C-4 will eliminate the tax credit for labour-sponsored venture capital funds. The Conservative government recognized that small and medium-sized businesses in Canada do not have enough venture capital to start up and bring their ideas and products to the market.

What solution did the Conservatives come up with? Strangely, they want to eliminate a tax credit that has been very effective in sustaining venture capital funds. This change makes no sense and it will hurt all Canadians, and Quebeckers in particular, as they represent 90% of the Canadians who use this tax credit and often put the shares directly into their retirement savings plans.

It is high time that the government reconsidered its ill-advised decision in light of the proposal supported by Canada's Venture Capital and Private Equity Association.

Offshore Health and Safety Act

[Élaine Michaud, NDP, Portneuf—Jacques-Cartier, QC]

Mr. Speaker, I would like to thank my colleague for her question.

I would like to believe that the Conservatives have had a revelation, a eureka moment. Then they would understand that it is important to protect our workers. Unfortunately, if we look at Bill C-4, which I spoke about and which was introduced just before Bill C-5, and if we consider all of the measures that have been implemented by the Conservatives since they won a majority, I have a hard time believing that is the case.

I am not overly optimistic that this government will protect workers in sectors outside the gas and oil industries. Since the start of the Conservative mandate, workers in the federal public service in particular have become this government's scapegoats for absolutely everything. Measure after measure is being adopted to eliminate positions, reduce the quality of working conditions and so on, all because it is easy to do.

I would really like to see the Conservatives bring in more measures to improve working conditions for workers in all sectors, but that is not what we are accustomed to under this government. Unfortunately, I am afraid that this is just a one-off. However, I will give them the benefit of the doubt. We can only hope that things will improve and that the Conservatives will start listening to the workers in various sectors, the people they represent in their ridings. It will be up to the Conservatives to prove that they really have the best interests of Canadian workers at heart.

[Élaine Michaud, NDP, Portneuf—Jacques-Cartier, QC]

Mr. Speaker, I am proud to join my colleagues in supporting Bill C-5 at second reading. Before beginning, I would like to say that I will be sharing my time with my colleague, the extraordinary member for La Pointe-de-l'Île.

The bill before us today is important. It is the result of negotiations that have gone on for a long time now, for more than 12 years in fact, between the governments of Canada, Nova Scotia and Newfoundland and Labrador.

This bill seeks to remedy long-standing issues in existing legislation relating to health and safety standards in offshore areas, with regard to the oil and gas sector.

If passed, Bill C-5 will enshrine safety practices in legislation, and it will establish a framework that clarifies the individual and collective roles of the federal government, the provincial governments, regulatory agencies, operators, employers, suppliers and workers.

There are three key principles that underlie Bill C-5. First, the legislation relating to workplace health and safety must protect workers in offshore areas as well as workers on land. In addition, workers have the right to know, to participate, to refuse, to be protected from reprisal and to receive adequate protection. Finally, it is necessary to support an occupational health and safety culture that emphasizes shared responsibility in the workplace.

The NDP is proud to support Bill C-5, which will make it possible to establish a stronger system for the protection of workers, which the NDP has been demanding for a very long time now. Clearly, in our view, the bill still does not go far enough, but it is a step in the right direction just the same. That is why we are going to support it. We hope we will be able to work with our colleagues from all parties to improve the bill and ensure that in offshore areas the workers in the gas and oil sector will enjoy adequate workplace health and safety protection.

Quite frankly, I find it rather refreshing that the Conservatives are introducing a bill that provides greater protection for workers' rights. This is surprising. We are not used to seeing the government take this kind of approach—quite the opposite.

Indeed, since winning a majority, the Conservatives have introduced a growing number of measures to erode protections for workers and undermine their rights, which is very unfortunate. This represents a small change in direction. However, we should certainly not forget the various measures the government has taken to effectively undermine the protection regimes in place for our workers in various sectors.

I am particularly thinking of Bill C-377, an underhanded and mean-spirited bill designed to cripple Canadian unions by creating a massive bureaucracy they have to comply with, under the phony pretext of increasing the transparency of organizations. However, everyone knows full well that the Conservatives' real objective in introducing such a bill is to undermine the unions' ability to appropriately represent their members and defend their rights.

We know that the members opposite may find this concept difficult to understand, because in fact, none of them are participating in today's debate. We are talking about protecting workers and implementing very important measures to protect the people who work in the oil and gas industry—which the Conservatives care deeply about. However, they do not even bother to rise, to represent their constituents and defend the rights of workers.

However, they have no qualms whatsoever about introducing a growing number of measures to undermine the rights of workers in various industries. To be honest, this makes no sense at all.

I can mention another measure that attacked workers' rights, namely the special legislation passed by the Conservatives during the Canada Post lockout in June 2011. This legislation forced the employees back to work, obviously under worse conditions, while reducing their pensions and their protections, which were in fact acquired rights. The Conservatives gave themselves the power to gut certain measures that had been negotiated between the employer and employees. The Conservatives, however, clearly decided to circumvent all that.

This also brings to mind the recently tabled Bill C-4, which ironically weakens workers' health and safety protections. It also allows the minister to decide, unilaterally in a totally arbitrary way, which public services to designate essential, thus limiting the actions workers will be able to undertake to defend their rights or demand better working conditions.

Finally, who could forget how the Conservatives have gut the employment insurance system? They are leading a direct attack against seasonal workers all across the country. The Conservatives are not only failing Quebec and the eastern provinces: every part of the country will feel the impact of the employment insurance reform.

In my riding, Portneuf—Jacques-Cartier, not a day goes by without someone phoning or visiting our office because they are adversely affected by the EI reform, a reform the Conservatives pushed through without consulting the provinces, the territories or labour organizations.

All these examples illustrate the Conservatives' general attitude. Luckily, there is a tiny glimmer of hope now, since Bill C-5 would provide some workers with additional protections. Let us seize this ray of hope.

The NDP will support this bill. I must say again, though, how disappointed I am that the Conservatives are not taking part in the debate on Bill C-5. It may be that they have forgotten how debates work, or that they have no idea how to defend workers' rights, since they have never done it before. Why start now? Even though the Conservatives are introducing a bill about workers' rights, they are so close to big corporate bosses that they can no longer rise in the House and defend workers' rights, even when they should be standing up for their constituents.

NDP members will keep up the good work, doing their best to stand up for Canadians, including those the Conservatives should be standing up for. Today's debate is important. It is a shame so few government members are actually taking part in the debate.

Let us get back to Bill C-5. As I said earlier, this bill will improve the lives of offshore workers in some ways. However, it does have some shortcomings, the most significant of which is the fact that the government refused to create an independent, stand-alone safety regulator for the offshore zone. The governments of Nova Scotia and Newfoundland and Labrador have repeatedly called for this, but the Conservative government refused at every stage of the 12 years of negotiations.

In his June 2010 report, the hon. Robert Wells made several recommendations, including recommendation 29, which he believed to be the most important one in the report. The recommendation called for the creation of a new, independent and stand-alone organization to regulate safety issues in the offshore. This organization would have to be distinct and independent from all other bodies regulating offshore activities and would be solely responsible for regulating safety issues. Similar organizations exist in Norway, the United Kingdom and Australia. The United States is also considering setting up this type of body in the Gulf of Mexico. The Conservatives, however, have refused to even consider the idea. That is not how an NDP government would have handled things. We think it is important to create that kind of body. We will work toward that, which means that we will continue to pressure the government to create that kind of body, and we will continue to support our provincial partners as they work toward that goal, which is very important.

Various accidents and tragedies have occurred on our coasts, some of them fatal. Several of my colleagues have talked about that in the House, including my colleague from St. John's East. Despite everything, despite the Wells report and despite the fact that people from across the country have repeatedly asked the government for this, the government will not budge. Such an organization is not included in the bill and will not be created.

I think that is a shame because there are some measures in Bill C-5, measures that protect worker health and safety, that the NDP can support. We will be happy to do so.

[Matthew Dubé, NDP, Chambly—Borduas, QC]

Mr. Speaker, I would like to begin by saying that I will be sharing my time with the hon. member for Beaches—East York.

It is not easy to take the floor after such a passionate speech. However, this is an issue that affects us all. Although Bill C-5 is especially important to the Atlantic provinces, we all have a role to play in the overall issue of workers' safety. We definitely need to do more to improve working conditions.

As my colleague said, it is unfortunate that other than this bill—and not to mention the fact that Bill C-4 is undoing some of the work of Bill C-5—the government is not listening to these concerns. I could list numerous examples to demonstrate why I am saying that.

The most important aspect for me is my own riding. When I am replying to people's letters or attending events, I often hear people saying that they get the impression that businesses in our communities are increasingly being given carte blanche. The example that comes to mind in the rail industry is this summer's tragedy in Lac-Mégantic. It is just one example of how deregulation can affect the public. I believe it is relevant because the issue of workers' safety is part of that domino effect.

The federal government is failing to provide leadership when it gives carte blanche to the oil and rail industries. Consequently, those industries will abandon their employees, the workers.

With that in mind, as legislators, it falls to us to ensure that regulations allow people to work in the safest environment possible. Will we ever ensure that 100% of people are protected and that there will be no workplace accidents? Of course not. There is always a potential for risk.

Still, that argument is not enough to convince us, as legislators, to abdicate our responsibilities. That is why we can be proud of the work done by various levels of government with respect to Bill C-5. This excellent example also proves to the government that it is a good idea to sit down with provincial governments from time to time to get results like the one before us today.

That being said, despite the good work that seems to have gone into this bill, it is important to note that there are still some shortcomings. The most significant of these is the absence of the well-known recommendation 29 from the Wells report, a recommendation that speaks to a situation that arises frequently with this government.

This recommendation sought to create an independent organization responsible for workplace safety. Every time anyone recommends setting up an independent organization to evaluate safety or anything else, the government seems to get nervous. We know how it treated the parliamentary budget officer, an independent officer of Parliament who had a job to do in Canadians' best interest. There are other examples too. I remember a bill on military police introduced about a year ago.

Even in that case, the government was not ready to include an independent ombudsman in the bill, a person who would have the power to conduct independent evaluations on behalf of the people. After all, as politicians, we are not always in a good position. Even within these institutions, and particularly within a company, people are not always equipped to make decisions that are not influenced by their own biases. That is why it is important to pay attention to this recommendation.

We would sure like to ask the government member why our recommendation was not included in the bill. Unfortunately, I do not think that we will get an answer unless a Conservative member finally decides to participate in the debate. Since returning to the House and since the Speech from the Throne marked the end of prorogation a few weeks ago, we have heard very little or nothing at all from government members about quite a few bills, including this one.

When the time comes to do our job as MPs, deal with such issues and speak to the shortcomings of a bill, even if we support it, we are unable to ask questions and to have a healthy debate. In the end, we are forced to point out flaws of a bill to government members who, in this case, remain silent.

The bill is at second reading stage. However, when we are in committee, I hope that we will hear more from government members and the parliamentary secretary who are on the committee. Our concerns might finally be addressed. Even though this is a step in the right direction, we would like to know why the government did not choose to follow through and implement all the recommendations in order to have a much tougher bill with respect to workers' rights.

When it comes to the rights, health and safety of workers, we cannot take half measures. However, we will not reject this half measure, as it does represent a step in the right direction. Nevertheless, the NDP believes that we must implement all of the recommendations. We firmly believe in this philosophy, and we will put it in place when we form the government. If a recommendation is found to be lacking, we will at least rise in the House, out of respect for workers, and explain the government's viewpoint, or why some recommendations were set aside.

In conclusion, I would like to use my last two minutes to expand on a point that I made in my speech. This issue primarily affects my colleagues from the Atlantic provinces, but when it comes to the people of Chambly—Borduas, legislators have the mandate to protect not just oil company workers but also the people who work for any of the big businesses that we welcome into our community. That is my first concern about this bill.

These companies have a business to run and it is good for the economy to welcome them into our communities. However, in my opinion, as the MP for Chambly—Borduas, if these companies are going to set up shop in our communities, they must be good corporate citizens and respect the legislators' intent to implement regulations so that they understand that our constituents are the ones working for them and who make it possible for them to do their job and make a profit. It is a symbiotic relationship, a two-way street. In that respect, I do not think that we are asking for much.

We hope that they will agree to this type of proposal and that they will play an active role in it. We often hear what labour federations have to say on this subject, but it is important that the companies play an active role in the health and safety of their workers, who are the Canadians that I have the honour of representing.

It is extremely important.

I am now prepared to take questions from my colleagues.

[Jack Harris, NDP, St. John's East, NL]

Mr. Speaker, the member's speech on safety, particularly in our offshore and in industry throughout Canada, was very passionate. I thank him for his kind remarks concerning my involvement in this.

I note the member talked about the recommendation of Mr. Justice Wells to have an independent safety regulator, what he called his “most important recommendation”. It was supported by the federations of labour in Newfoundland and Labrador and in Nova Scotia and the Government of Newfoundland and Labrador most strongly, but it is not implemented here.

I would point out another problem that we have discovered since the legislation has been tabled, which is the so-called “budget implementation act”, Bill C-4. I do not know what this has to do with budget implementation.

This bill is designed to give stronger powers to health and safety officers named in the act, with amendments to such in section 144 of the Canada Labour Code to give certain powers and immunities to health and safety officers. However, it is contradicted by Bill C-4, which also amends section 144, but, in fact, it takes the words “health and safety officers” entirely out of the Canada Labour Code and gives all of their powers to the minister or his delegates.

I am wondering about two things.

I know this is a technical point, but what does that say about the current government's approach to legislation when this bill, which is very much the same as Bill C-61 in the last Parliament and has been around a long time, can be thwarted by a budget implementation bill, one of these omnibus bills that would amend the Canada Labour Code and dozens of other acts? What does it say about the Conservative government's handling of these important matters?

[John Beckett]

No. It's interesting you refer to the chart. The chart actually refers to all work in Canada, where the injury rate has gone from 50 per 1,000 workers to 14.7 per 1,000 workers. The majority of that work is in the provincial jurisdiction, where the proposals in Bill C-4 exist already.

I take a little bit of faith in the fact that the general responsibility system is working well in most Canadian workplaces, which is no interference with government officials, so that these changes, from my perspective, will have no negative impact on the rights of workers to refuse work.

[John Farrell]

FETCO supports a tripartite process to review labour legislation. We are supporting certain...the provisions of this legislation, which we happen to agree with. The horse is out of the barn, and we're asked to respond to Bill C-4.

[John Beckett]

Okay.

My last comments are around improving the performance of the government system. The changes proposed in Bill C-4 remove the responsibility formerly delegated to health and safety officers and gives that responsibility to the minister.

FETCO supports the provisions in the proposed legislation that are designed to improve the efficiency and allocation of resources by the Minister of Labour. Those positive measures include allowing the combining of identical or substantially similar health and safety matters, and allowing the minister to rely on the findings of previous investigations.

[John Beckett, Chairman, Occupational Health and Safety Committee, Vice-President, British Columbia Maritime Employers Association, Federally Regulated Employers - Transportation and Communications (FETCO)]

Thank you.

I going to start with strengthening the internal responsibility system. The legal duties and responsibilities of employers, supervisors, and workers overlap and complement each other in the pursuit of the highest possible health and safety outcomes. Together they create what's known as the internal responsibility system. This concept is as fundamental in health and safety law as is the concept of due diligence. The internal responsibility system is a key component of a well-functioning occupational health and safety system that exists to ensure that workers are safe and their health is protected.

Inherent in the legislative system are mechanisms for workplace parties to resolve issues. Those mechanisms include shared rights and responsibilities. Employers are required to provide a safe workplace, and workers have rights to know, rights to participate, and rights to refuse dangerous work. Most importantly, the right to participate requires workers to do their utmost to ensure that the highest possible standards of health and safety are maintained in the context of each unique workplace.

Also inherent are engagement mechanisms for resolving issues as they arise. This is a shared responsibility of employers, employees, and the joint health and safety committees or the health and safety representatives.

Bill C-4 would improve the internal responsibility system. The employer and employee, and workplace safety representatives and health and safety committees, are required to work together to resolve issues at the workplace without the need for intervention of government-appointed health and safety officers. The primary mechanism to resolve workplace health and safety issues has always been the health and safety committee. Canadian employers and unions have invested heavily in the training and processes to ensure that health and safety committees are effective. Bill C-4 strengthens the role by requiring employers to engage both the employer and employee members in the assessment and resolution of unsafe work and work refusals.

I now turn to the changes to the definition of danger. The definition of danger is changed in Bill C-4 to “an imminent or serious threat to the life or health of a person”. The definition does not diminish the right of employees to refuse unsafe work, nor will it diminish protection provided by the Canada Labour Code.

The current broad definition invites an assessment of speculative risk based on potential hazards for future activities that inevitably contribute to unnecessary work refusals. Speculation about unsafe conditions that do not pose an imminent or serious danger should be resolved by the workplace parties through the health and safety committees without the need to exercise the right to refuse or government intervention.

Now, refusing dangerous work is not something either party takes lightly. The current process is a three-step process that involves the workplace parties. This process is enhanced in Bill C-4 by requiring written documentation by the employer, and it enhances the role of the health and safety committee in resolving work refusals. You have been given a slide that explains the revised system and how it would work by comparing the existing and proposed processes. I'd be happy to review that during the question period, if asked.

The first step in the process to resolve or refuse requires the workers to contact their supervisor and indicate their concerns. The majority of refusals are resolved at this stage. If not, the next step engages the health and safety committee to do further investigations and make recommendations. This is the mechanism in the internal responsibility system designed to have workplace parties resolve issues. The proper role of government is to intervene only when the internal responsibility system fails. This has not been the case in the federal sector. Too often, labour affairs officers have been injected into the process too early, which undermines the responsibility of employers, employees, and their representatives to seek appropriate solutions together.

The workplace parties are better equipped to assess and manage these risks than health and safety officers, because the assessment of health and safety risks often requires specific expertise and technical knowledge about sector-specific workplaces. There are many examples of early inappropriate intervention by health and safety officers that diminish the effectiveness of the federal health and safety regulatory system.

Asking government officials to intervene in speculative risks is asking them to become experts on issues where evidence is often minimal or non-existent. That is the responsibility of the workplace parties.

In the provincial jurisdictions, the ministers of labour and workers compensation boards have developed protocols that are similar to those proposed in Bill C-4 to ensure that there is minimal interference in the workplace health and safety internal responsibility system. Danger is not defined in most provincial jurisdictions. Where it is defined, it is defined narrowly as an imminent danger to life and health.

[John Farrell]

Thank you, Chair, and members of the committee, for allowing us to address you today regarding Bill C-4.

My name is John Farrell, and I'm the executive director of FETCO. I'm accompanied by John Beckett, who is the vice-president of training, safety and recruitment for the B.C. Maritime Employers Association, and the chairman of the FETCO occupational health and safety committee. He is also the employer spokesperson on employment and social development Canada's regulatory review committee, and a member of the council of governors of the Canadian Centre for Occupational Health and Safety.

FETCO consists of most of the major federally regulated employers in transportation and communications and represents 450,000 employees in the federal jurisdiction.

FETCO first became aware of the proposed changes to part II of the Canada Labour Code after Bill C-4 was introduced in the House of Commons. We attended a meeting of ESDC's regulatory review committee. The regulatory review committee is a tripartite process based on a consultative model and allows both employers and labour representatives to provide expertise and guidance to the labour program with the objective of continually improving health and safety in federal workplaces.

FETCO supports the proposed changes because they strengthen the internal responsibility system, improve the overall efficiency and management of health and safety—they have safety officers in the field—and will strengthen the role of health and safety committees.

We'll now look at each of these components of the proposed legislation in more detail. I'll turn over that responsibility to John Beckett.

[Bob Kingston, National President, Agriculture Union]

My focus will be on the presentation that was done on the 19th. I believe that this committee and the minister have been ill-served by some of the information that has been coming out about its shortcomings.

What you heard from the department was incomplete, would be the politest way I can say it. These are not just my opinions; these are facts. You can verify every one of them yourself.

First, on the right to refuse being unchanged, it is still there. As was already referenced, the minister now has the right in the proposed amendments to dismiss without investigation. That is simply unheard of in any jurisdiction. This is a first, and it's a shocking first.

You can find that on page 180 of Bill C-4 in subclause182—

[Chris Aylward, National Executive Vice-President, Public Service Alliance of Canada]

Thank you, Mr. Chair.

Good afternoon, committee members. Thank you for the opportunity to appear here today. My name is Chris Aylward, and I am the national executive vice-president of the Public Service Alliance of Canada.

Bill C-4 would change health and safety protections that were put in place in 2000 after extensive consultation with labour, employers, and government. This time there has been no consultation with workers or employers or to our knowledge with federal health and safety officers. The regulatory review committee, a tripartite body that addresses emerging health and safety concerns in the federal sector, has received no complaints about the administration of the code, nor has the minister's advisory committee or the labour operations practice committee.

Our first concern is that the new vaguely worded definition of danger will result in a very narrow interpretation of what is considered to be a workplace danger.

Courts typically take a cautious approach to interpreting the definition of danger. The jurisprudence interpreting the definition of danger has evolved in the last 13 years. This jurisprudence would have no value if the definition of danger were fundamentally altered.

Our previous experience with the term “imminent” shows that it has been interpreted to mean “almost immediate”.

For our border services officers and our park wardens, the bullets would have to be whizzing over their heads for the danger to be deemed imminent. Gone is the recognition that the outcome of exposure to a hazard might not occur immediately. Gone too is the explicit language that recognizes that a worker's reproductive system is worth protecting from potential threats.

We are also concerned about the new section that allows the minister to stop further investigation of a work refusal, where she deems that refusal to be trivial, frivolous, vexatious, or in bad faith.

First, an employer could discipline workers who fear for their health and safety without an impartial investigation taking place first. This fear of reprisal would undoubtedly deter refusals to work and endanger workers.

Second, there would be no statutory right of appeal of the minister's decision. That would effectively undermine the right to refuse dangerous work. All that would be left is a narrow scope of review by the court. Judicial review, by its nature, is deferential to the first level decision-maker, in this case the minister or her delegate.

Third, workplace health and safety committees are proven mechanisms to address ongoing workplace concerns. Bill C-4 would eliminate any incentive for an employer to do meaningful consultation and collaboration on workplace issues. The employer could refer such matters to the Minister of Labour, who could silence all health and safety concerns by saying the concerns were trivial.

We have heard it said that these measures in Bill C-4 were prompted by the fact that 80% of all work refusals and appeals result in decisions of no danger. The implication is that the current definition of danger is too broad.

Decisions of no danger don't mean there isn't a problem. Decisions of no danger could just mean that the danger was less serious. In many cases, decisions of no danger were also accompanied by directions written to employers to comply with the law. In other cases, employers were asked to give assurances of voluntary compliance. In the last two years, more than 5,000 assurances for voluntary compliance have been issued per year. The link between these assurances and decisions of no danger is what this committee really needs to consider.

Another concern is that the bill would change all references to “health and safety officers” to “the minister” and allow the minister to delegate her powers to anyone she deems qualified. The current health and safety officers are neutral, trained, and specialized. They have the authority to monitor workplaces and issue directions. They help make sure employers take their responsibilities seriously and don't cut corners that could inadvertently harm their workers. With the new provisions, they could be replaced with ad hoc private entrepreneurs. These entrepreneurs would be dependent on the government for their next contract and would be reluctant to issue a direction against it. There is very strong evidence that actual citations and penalties reduce the frequency or severity of injuries in the workplace.

In the last several years, the ratio of employees to federal inspectors has increased dramatically as the number of inspectors has steadily been reduced. In 2005, the ratio of employees to federal inspectors was 6,607:1. In 2007, it was 8,057:1.

Finally, I want to say a word about virtual inspections. Clause 212 of Bill C-4 will allow the minister to electronically administer or enforce the provisions of the code.

Let's put this in context. We've steadily lost health and safety officers across the country. There are more demands for intervention, and the officers have new administrative burdens and pressure from management to do the work from their desks to save travel dollars.

Realistically, how can an officer investigate a safety complaint without meeting with the parties in the workplace to assess the circumstances? Where is the data that shows replacing a visual inspection with a virtual inspection won't lead to an increase in injuries or loss of life on the job.

In conclusion, we ask that the proposed changes to the Canada Labour Code be withdrawn from Bill C-4. Any proposed changes should be subject to thorough tripartite consultation before any legislation is introduced.

Thank you.

[Hassan Yussuff]

In the interests of time, I will conclude.

In summary, the changes contained in Bill C-4 serve to: water down protection for workers from dangerous work by redefining "dangerous work" to the most narrow definition possible; render less effective the legislative measures to deal with dangerous work and work refusals under the unproven guise of improving effectiveness; undermine the system of accountability and enforcement that keeps workplaces safe; and place the lives of workers in the federal sector needlessly at risk.

Thank you so much.

[Hassan Yussuff, Secretary-Treasurer, Canadian Labour Congress]

Thank you, Mr. Chair.

On behalf of the Canadian Labour Congress and its 3.3 million members, I want to thank you for providing this opportunity for us to summarize the impact of Bill C-4, the provisions that make changes to the occupational health and safety regime for workers under federal jurisdiction as defined in the Canada Labour Code, division V.

The health and safety changes to the Canada Labour Code should be taken out of Bill C-4 in their entirety. If the government believes the health and safety provisions of the Canada Labour Code should be amended, it should respect the tripartite process that has effectively operated for decades in this area. We are not aware of federally regulated employers or unions requesting these changes that would gut the principle of the right to refuse dangerous work, making it the weakest in the country. This is of particular concern given Canada's commitment to ILO convention 187.

By redefining “dangerous work” in the code, clause 176 of the bill basically narrows the scope of application that allows workers to exercise their right to refuse dangerous work. The right to refuse work would now only apply to workplace conditions that cause so-called “imminent or serious threat” to the worker. The right to refuse would no longer apply to conditions that pose future dangers, such as exposure to hazardous substances, such as asbestos or cancer-causing chemicals, or those that cause reproductive harm and create mutagenic effects, which are changes that can be passed on to other generations through genetic mutation.

The proposed new definitions will have the effect of setting aside decades of jurisprudence that has clarified the meaning of dangerous work. The new wording opens the door to years of possible legal haggling before implementation can take place.

Changes in clause 180 of Bill C-4 would remove many of the powers of health and safety officers to review or investigate complaints and recommend remedial actions from employers to stop intolerable conditions. These changes would transfer powers to the minister instead, thus creating a new time-consuming bureaucratic hurdle. Many decisions will now be exercised through political direction, at the whim of the politicians of the day.

Subclause 182(1) would give power to the minister to not undertake an investigation, and provides no avenue of appeal for the worker.

Subclause 181(2) would transfer the employer's responsibility to initiate formal investigations over to the workplace health and safety committee, or to the health and safety representative. Ironically, subclause 181(1) of the bill repeals the very part of the code that currently empowers the health and safety committee to require employers to stop dangerous activities until rectified.

Therefore, more responsibilities would now be vested in the committees while at the same time eliminating its powers to effectively act. The linchpin in the authority of health and safety officers to investigate is thus undermined by the new discretionary power vested in the minister.

To a large extent the bill eliminates the flexibility in the current law that takes into account the diverse dimensions of federal workplaces. The new provisions would eliminate flexibility in responding to dangerous work, and introduces the possibility of unnecessary delays.

For example, a current option to involve the workplace health and safety committee in an investigation would now become a strict requirement. However, there are many workplaces where a health and safety committee or health and safety representative are not present.

In like manner, clause 181 will amend the code to require a written report of the employer after investigating a refusal to work, an unnecessary step that only can delay important decision-making.

The government states that these changes will enhance the effectiveness of what it calls the internal responsibility system, the IRS, which is set up to encourage worker-employer cooperation for solving health and safety issues through predefined procedures. The suggested changes will not improve the effectiveness.

The government also claims that in the last 10 years, 80% of refusal cases have turned out not to be dangerous, and thus the reason for these amendments. However, no review, no audit, and no research by the department has been made public for stakeholders to assess. Our requests to the government for such information continue to fall on deaf ears.

We are aware of only one government audit in this area, and the conclusions are known to be faulty. The audit tallied refusals where inspectors had not found a strictly defined requirement for immediate action. Not included in the audit were the number and types of orders that inspectors nevertheless issued as a result of investigating the same refusals, which are important to include, as they are indicators of health and safety violations.

Nevertheless, despite the government's assertion that 80% of cases found no danger, by their standards, one in five cases were determined to be dangerous. Is the government really willing to risk the lives of 20% of workers in the sector found to be in dangerous work situations?

In principle, we agree that work refusal should be better understood, with a view to focus on the most serious cases, but setting priorities, including changing legislation, should be based on reliable and verifiable data. Indeed, reliable data clearly shows that the current regulatory framework is associated with reduction of injuries.

Mr. Chair, I must express disappointment in the government's handling of these proposed changes. Until now, Canada has been a model in the international community for its commitment to tripartite decision-making and consultation with respect to health and safety. Neither we nor the employers, nor any credible stakeholder party to the regulatory review processes overseen by the HRSDC labour program either knew about or had the chance to review the proposed changes prior to the introduction of the bill. We are left to wonder who called for these changes and in whose interests do they serve.

This is all the more disturbing when one considers Canada's ratification two years ago of the ILO convention 187, which is a new framework for occupational health and safety. In its report submitted to the ILO earlier this month, our government unabashedly referred to Canada Labour Code, part II, as it currently exists, to show its compliance to that convention. In that convention, Canada is committed to undertake measures in full consultation with stakeholders through tripartite processes. The government has dismally failed to do so by proposing unilateral amendments to part II of the Canada Labour Code.

[The Chair, Conservative, Phil McColeman]

I call this meeting to order.

Good afternoon, everyone, and welcome.

This is meeting number five of the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities.

Today we're continuing our study on the subject matter of clauses 176 to 238, divisions 5 and 6 of part 3 of Bill C-4 , a second act to implement certain provisions of the budget tabled in Parliament on March 21, 2013 and other measures.

For our first hour today we have witnesses from a number of organizations. We have Mr. Chris Aylward from the Public Service Alliance of Canada, and appearing with him is Mr. Bob Kingston. We also have Mr. John Beckett and Mr. John Farrell from FETCO, Mr. Hassan Yussuff and Mr. Jeff Bennie from the Canadian Labour Congress, and Dr. Katherine Lippel from the University of Ottawa.

Panellists, because we have limited time, one hour, and we're squeezing four different panellists into the presentations, I'd ask you if you could to limit your comments to a maximum of seven minutes. Five minutes would be better, as it would give us more time for questions. You can judge accordingly, but I am going to be very strict on the time and not allow you to go over seven minutes.

We will start with Mr. Yussuff, if you're speaking on behalf of your group.