Thank you, Chair, and good morning, honourable members.
My name is Derrick Hynes, and I am the president and CEO of FETCO. I am pleased to be joined this morning by Christopher Pigott, who is a partner at the law firm Fasken and serves as external legal counsel to FETCO.
In my limited time, I will focus on two parts of Bill C-39. These are division 1, under industrial relations, and division 3, under paid medical leave.
First, I'll speak on industrial relations and the new framework established for collective bargaining. FETCO is encouraged that Bill C-39 recognizes that labour instability in Canada's transportation supply chains is a chronic problem that must be addressed. FETCO members are generally encouraged by the direction set via the proposed changes to the Canada Labour Code in this bill.
Unfortunately, Bill C-39 falls short of achieving the government's objective of providing an effective and stabilizing solution to this pervasive labour instability problem. The bill introduces new tools for the minister of labour for dealing with challenging collective bargaining tables. The introduction of both a special mediator to assist with difficult negotiations and a national interest assessment to inform ministerial decision-making will prove useful in some circumstances. However, this will not be enough in others.
The ability for government to intervene to protect Canada's national interest only after a work stoppage has occurred will continue to permit broad damage and will not bring the stability intended by Bill C-39. Customers and investors around the world will continue to see Canadian supply chains as risky. We urge your committee to support an amendment to this bill that will give the minister the authority to act pre-emptively in highly extraordinary circumstances to stop a strike from occurring when meaningful collective bargaining is no longer possible and it is clear the national interest is at risk. We have specific text to recommend in this regard.
Our second area of concern relates to paid medical leave. We are encouraged that Bill C-39 recognizes that paid medical leave, as required under section 239 of the Canada Labour Code, is not functioning as it should. The changes introduced in this bill are welcome, but they are inadequate. This policy, introduced under the last government, requires all federally regulated employers to provide 10 days of paid medical leave to all employees. This leave was introduced during a global pandemic when 10 days of isolation were required when a person came into contact with the disease or someone carrying it.
Our members support providing employees with protections when they are unable to come to work due to illness. Most have a wide range of protections in corporate policies or within collective agreements, but this paid medical leave requirement has gone far beyond providing basic insurance for employees. There are three critical problems. First, the number of days is simply too high. We cannot find a single jurisdiction in Canada or even in North America that mandates 10 days of paid medical leave. Second, the leave stacks on top of similar leave protections embedded in corporate policies or within collective agreements. Many employers are on the hook for more than 10 days. Third, there is no recourse for employers to manage misuse. An employer can ask for medical certification only after an employee takes five consecutive days of sick leave.
What has been the impact of this policy? It has been recurring labour shortages during peak periods in critical supply chain industries. This has a direct impact on productivity, when organizations are forced to scale back on operations. It's been millions of dollars in new costs for medium-sized employers and tens of millions for large employers on an annual basis. Expenses include the cost of the leave, the cost of the replacement staff and the administrative burden to manage the process. Some employers are scaling back on capital investment, workforce development and employee hiring. We think it is accurate to describe all the paid leave provisions—and there are others—introduced under the last government as a government-imposed productivity crisis.
There are simple ways to fix this policy that maintain its primary objectives but make it more sustainable in the long term. We have recommended some amendments in our brief to you. These are, first, introduce language that addresses entitlement stacking and related problems; second, modify the restrictions on the right of employers to seek medical certification; and third, reduce the annual entitlement from 10 days to five days to bring it closer to other jurisdictions.
Thank you.