Finance Committee on Feb. 23rd, 2009

[The Chair, Conservative, James Rajotte]

I call this meeting to order. This is meeting number six of the Standing Committee on Finance. Our orders today concern Bill C-10, an act to implement certain provisions of the budget tabled in Parliament on January 27, 2009, and related fiscal measures.

In the first part of our meeting, we have six groups before us this morning. We'll go in the order of the groups in terms of presentations. We have first of all the Public Service Alliance of Canada. We have the Assembly of First Nations of Quebec and Labrador, Fédération des femmes du Québec, Front d'action populaire en réaménagement urbain, the Professional Institute of the Public Service of Canada, and the Canadian Real Estate Association.

We'll have a five-minute presentation from each organization, and we'll go in that order. We'll start with the Public Service Alliance of Canada. At the end of the last presentation we'll start with questions from members.

Mr. Gordon, you may begin at any time.

[John Gordon, National President, Public Service Alliance of Canada]

Thank you very much, Mr. Chair.

On behalf of the 166,000 members of the Public Service Alliance of Canada, I welcome the opportunity to be here today and provide members of the finance committee with a few observations on Bill C-10, the Budget Implementation Act, 2009.

In our submission we focus on two aspects of Bill C-10, namely, the Expenditure Restraint Act and the Public Sector Equitable Compensation Act. Both are unnecessary and abhorrent.

If adopted, the Expenditure Restraint Act will be the subject of extensive litigation. Given that unfortunate but inevitable circumstance, I'll focus my opening statements on the Public Sector Equitable Compensation Act and why it should be withdrawn from Bill C-10.

Let me be clear: equal pay for work of equal value is not a budget measure but a fundamental human right that is protected by the charter and enforced by the Canadian Human Rights Act. The budget is no place to debate or to trade off human rights enshrined in legislation and in international instruments.

Moreover, as government officials have affirmed, the Public Sector Equitable Compensation Act is not about saving money. Whatever the government motivation was when drafting and introducing the Public Sector Equitable Compensation Act, it is clear that the act has nothing to do with stimulating the economy or with protecting jobs, sectors of the economy, and the unemployed.

While we take the position that the Public Sector Equitable Compensation Act has no place in Bill C-10, we also believe that the federal pay equity legislative framework does need reform.

In this regard, we note that the federal pay equity task force issued a comprehensive report in 2004 on how to improve the current law and make it fairer and more accessible. This report, the culmination of years of consultation with employers, including the federal government, and unions, individuals, and women's groups, should be the starting point for a legislative agenda on equal pay for work of equal value.

In appendices to our submission, we have provided your committee with an analysis of the Public Sector Equitable Compensation Act, as well as a document that compares the Public Sector Equitable Compensation Act and the Ontario and Manitoba pay equity models.

We urge you to review this material carefully, because we have noted that some debate in the House has equated the PSECA and the Ontario and Manitoba pay equity models. Unfortunately, the PSECA bears no resemblance whatsoever to the Ontario or Manitoba legislation.

Before concluding, let me make the point that pay equity legislation is fundamentally important. It is fundamentally important in a society where women earn 70% of what men earn, and, as a human right protected by the charter, it is fundamentally important to all Canadians.

As a union that has championed equal pay for work of equal value for decades, we understand full well that the current system takes too long and is unnecessarily legalistic. Moreover, pay equity has been costly because of the government's refusal to recognize and compensate for paying discriminatory wages to employees in female-dominated occupations.

The PSAC 1984 pay equity complaint against the federal government resulted in 15 years of protracted court and other actions on behalf of the government at the taxpayer's expense. These protracted actions resulted in an obligation to pay $3.2 billion to workers and former workers whose wages were found to be discriminatory all those years.

I'll conclude by saying that the pay equity model articulated in Bill C-10 is flawed beyond redemption. The PSAC strongly recommends that it be withdrawn. At the very least, it should be introduced as a stand-alone bill. That said, our preference is that the government go back to the drawing board and draft a new bill based on recommendations of the pay equity task force.

I thank you for the opportunity to appear.

[The Chair, Conservative, James Rajotte]

Thank you very much, Mr. Gordon.

We'll now go to the Assembly of First Nations of Quebec and Labrador for their presentation.

[Grand Chief Lucien Wabanonik, Grand Chief of the Anishnabeg Nation, Assembly of First Nations of Quebec and Labrador]

Good morning. Firstly, I wish to thank the members of the Standing Committee on Finance for their invitation.

I wish to begin by stating that the first nations live in a situation of permanent economic recession, deprived of their territories and resources. The first nations are sensitive to what the Canadian population is currently experiencing. However, we warn the government: the poor state of public finances must not serve as a pretext for maintaining or aggravating the unacceptable socio-economic situation of the first nations.

If we were given the opportunity, we could address the committee members for several days. However, we will go directly to page 2, and talk about housing.

Investments in housing and safe drinking water for aboriginal communities are a far cry from meeting our needs. In the recently adopted federal budget, $400 million, over a two year period, have been earmarked for first nations on-reserve housing. An additional $165 million was allocated for the completion of infrastructure projects related to safe drinking water and wastewater. Out of the announced $400 million, our communities will benefit at the very best, from $20 million per year for two years. The needs would require 10 times this amount, and this, over a five-year period, in order to meet the social housing needs of the first nations of Quebec and Labrador.

Also, no measure has been provided for thousands of Aboriginals living off-reserve in alarming situations.

I will now hand the floor over to Chief Whiteduck.

[Chief Gilbert Whiteduck, Chief, Kitigan Zibi Anishinabeg, Assembly of First Nations of Quebec and Labrador]

In regard to improving the conditions linked to safe drinking water, the AFNQL estimated the needs of the communities to be about $100 million. The budget foresees $165 million for all of Canada. It's inconceivable to believe that the measures that were announced will have a true and immediate impact on the conditions for safe drinking water.

The amounts that were announced are really negligible in ensuring decent living for the aboriginal populations of Quebec and Labrador. In the community of Kitigan Zibi, where I'm from, we have a uranium problem. We have natural uranium in our water. All of our households are now getting bottled water. I've been getting bottled water for the past ten years.

Really, very little work has been done. We believe the limited funding is again just going to put off this work for a long time, which is unfortunate. We believe we're entitled to have safe drinking water and to ensure that the source system and what not are in place, like any other Canadian might be able to have. We certainly can no longer wait for that to occur.

[Grand Chief Lucien Wabanonik]

Following the presentation of the federal budget, the first nations of Quebec also expressed a major concern about the underfunding of education. Sums invested by the government do not tally with the needs or the gaps identified in several studies. Moreover, nothing is provided for ending the chronic underfunding of first nations education, except for specific measures that are clearly insufficient, and which were elaborated, once again, without consultation. The schools of the first nations have no reason whatsoever to rejoice, especially since the gap that separates them from the other schools in Canada is only bound to widen. The government is doing nothing to allow us to close the gap that affects our institutions and our children. Our schools are trying to survive with a funding formula that has not changed for 20 years. It is exactly as if the Quebec schools were financed as they were in 1980! It is scandalous.

Although the federal government made an announcement of $268 million over a five-year period for all of the first nations schools in Canada, it should be noted that the sums are conditional on specific criteria, and that schools must submit project proposals in order to have access to them. There is no provincial government whatsoever that would dare require from their schools that they submit a lot of small initiatives in order to have access to their financing. Yet, this is how the Department of Indian Affairs administers the education of the first nations.

According to an analysis on financing carried out by the First Nations Education Council, a loss in real monetary value of $28.1 million will be brought about by not taking into account the increase in the cost of living and the number of students, solely for the region of Quebec and for the year 2009-2010. In Canada, this loss is assessed at $267.3 million. This has been going on since 1996. It has now become unbearable for our communities to support such a lack of funding. We have to cut somewhere else to try and provide a modest education to our children, which is unacceptable for a society that claims to be fair and modern.

This drop in education funding is only one example of a situation which persists since the federal government imposed a limit of 2% in regards to expenses of Indian government programs, and this since 1996.

We also wish to remind you that the community of Kitcisakik is a small Algonquian community that is still dreaming of running water and electricity. The community is still awaiting a response from the federal government.

To conclude, I wish to draw your attention to the will of first nations to develop, and to the necessity for the government to support our economic development in an active way. We are asking you to help us help ourselves, as you did on various occasions for other private or public organizations in the past. We are asking you to not apply a policy of negation towards our nations; we can become partners and succeed. This is the will and hope that we entertain, in spite of these hard times for everybody.

Thank you. Meegwetch.

[The Chair, Conservative, James Rajotte]

Thank you very much.

We will now turn to the Quebec Women's Federation.

[Michèle Asselin, President, Fédération des femmes du Québec]

Good morning. Thank you for your invitation.

I wish to begin my presentation with an important reminder. I wish to remind you that Canada signed on to the Convention on the Elimination of all Forms of Discrimination against Women on July 17, 1980, and ratified that convention on December 10, 1981.

Under that commitment, we believe that the federal budget should place a priority on measures to promote equality of women. Must we remind you that there are still wide gaps between men and women in some very key sectors in our country? The average wages earned by working women are still significantly lower than the wages earned by men. Women represent a disproportionate segment of the population that is earning a low income, and they are much more likely than men to only be working part-time. I could provide a long list of statistics that were provided by Statistics Canada, and that department could certainly not be labeled a radical feminist group.

Women remain unequal in Canada, and we expect concrete measures to fight against this discrimination. The budget tabled in Parliament on January 27 by the Minister of Finance, Mr. Jim Flaherty, does not introduce any new measures to fight discrimination against women. Worse still, there are certain legislative measures in the Budget Implementation Act of 2009, the bill that you are considering today, that prohibit women workers in the federal public service from demanding pay equity. To our mind, this is a real sign of regression.

Through this bill, the government is reiterating its intention to suspend legal recourse in all cases dealing with pay equity. In our opinion, the government should instead adopt measures that align the Canadian pay equity system with our national and international commitments to women's rights. It must adopt measures that recognize the contribution of women workers to our economy.

Quebec has a proactive law that governs both private and public sectors. That act has proven to be much more effective than the federal model that is complaint-based. We therefore recommend repealing all legislative measures on pay equity from the Budget Implementation Act of 2009, specifically speaking part 11. In addition, we recommend that the government adopt a proactive federal piece of legislation on pay equity, as was recommended by the 2004 Working Group on Pay Equity.

With respect to employment insurance, women are particularly penalized because they make up the vast majority of people working part-time, or who are returning to the workforce after a prolonged leave. Changes made to the Employment Insurance Act do not eliminate this discrimination and do not bring about any significant improvement. Indeed, eligibility criteria will not be relaxed, income replacement rates will not be increased, there is still the two-week waiting period, and training programs will remain inaccessible to those who are not eligible to receive employment insurance benefits. It is expected that six out of ten unemployed workers will remain ineligible.

As for eliminating certain provisions of the employment insurance system that discriminate against women, particularly the establishment of eligibility requirements, and hours worked, these criteria discriminate against people who are working part-time, the majority of whom are women. We believe that there must be a significant improvement to the employment insurance system so that the unemployed can maintain a decent standard of living.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much.

Mr. Roy.

[François Roy, Representative, Front d'action populaire en réaménagement urbain]

Good morning. My name is François Roy and I'm the coordinator of Logemen'occupe, an active member of the FRAPRU, a community activist group that advocates for social housing.

Our umbrella association seeks to promote and defend the right to housing for all. It is comprised of 130 member groups that represent almost all regions across Quebec. Of these groups, 27 are fully aligned with the position and actions of FRAPRU.

The 2006 Canadian census took place during a time of economic growth for Quebec and for the rest of Canada that began in the 1990s. Between 2000 and 2005, the gross domestic product of Quebec increased by 22.7%; labour force participation rates for Quebec rose from 63.1% to 65.6%; the number of households receiving social assistance fell to 43,200.

All of these statistics should have led to a marked drop in the number of renters that paid too high a portion of their income to rent. Yet, the number reached 448,840 in 2006, whereas it was 445,200 five years earlier.

Renters today are poorer than they were 25 years ago. In 1981, the income of renters was $14,746. Had it risen in proportion to the cost of living calculated on increases in the Consumer Price Index, that income should have been $35,287 in 2006. Yet, figures from the most recent census indicate that that income was $29,416; in other words 16.6% less. Yet, average rents in Quebec were $223 per month in 1981. Based on increases to the cost of living, average rents should have been $534 in 2006. Instead, it was $566, 6% more than in 1981.

It is abundantly clear that to resolve this problem, the federal government must increase its investments in new social and community housing units. By setting aside slightly more than $2 billion for social housing, there's recognition in the budget that the government can do something to face this economic crisis.

However, according to FRAPRU, these investments will not meet the needs. Even if the figure of $2 billion seems rather large, the provinces will only be receiving $475 million over two years to build new social housing for older people, and disabled people. For Quebec, this translates into funding for approximately 850 dwellings, under the Quebec program AccèsLogis, in order to meet all of the existing needs. No money was made available to other households in need.

The budget does not set aside any additional money for programs that the government decided to extend for five years, as announced last fall, mainly the Affordable Housing Initiative, the Residential Rehabilitation Assistance Program, and the Homelessness Partnering Strategy. Funding for these programs was not indexed to the cost of living in the past several years, and is insufficient relative to the scope and scale of the needs. As regards the Affordable Housing Initiative, the announced investment of $125 million per year is even less than the initial budget set in 2001, of $680 million over five years, or $136 million per year.

By investing so little in housing the government is not taking steps to protect its most vulnerable citizens from the consequences of the economic crisis. For example, the 1991-1992 recession led to a 48% increase in the number of households which were most in need of housing help, according to the Canada Mortgage and Housing Corporation's own figures. Indeed, investments are clearly insufficient to make up for the shortage of rental units, a situation that is now affecting 26 of the 34 metropolitan regions canvassed during the last national census.

Thank you.

[The Chair, Conservative, James Rajotte]

Merci.

We'll now go to the Professional Institute of the Public Service of Canada.

On behalf of all committee members here today, I think it's appropriate that I express our condolences to you and everyone in your organization on Michèle's sudden passing. I know it must be a difficult time. We certainly appreciate you being here.

[Geoffrey Grenville-Wood, General Counsel, Professional Institute of the Public Service of Canada]

Thank you very much, Mr. Chairman.

I'm sure you're all aware of the fact that we're going through a very difficult time. Only this weekend we appointed an acting president, who is present today. I hope you'll take the opportunity to meet with him during the break: Mr. Gary Corbett.

Mr. Chairman, honourable members and ladies and gentlemen, I would first like to introduce to you those appearing on behalf of the Professional Institute of the Public Service of Canada. I am Geoffrey Grenville-Wood, the general counsel for the institute. With me here at the table is Isabelle Roy, legal counsel. Present in the audience is Gary Corbett, interim president of PIPSC.

We are grateful to the committee for offering us the opportunity to present to you our views on the legislation before you, Bill C-10, which is the budget implementation legislation. We are most concerned with parts 10 and 11, the Expenditure Restraint Act and the Public Sector Equitable Compensation Act respectively.

The Professional Institute of the Public Service represents 55,000 professionals across Canada's public sector, the vast majority of whom work in the federal public service. Institute members work in the federal government's departments, agencies, crown corporations, museums, archives, laboratories, research institutes, and field research stations. We represent, among others, the scientists who work for the Canadian Nuclear Safety Commission, the veterinarians who work for the Canadian Food Inspection Agency, the auditors of Canada Revenue Agency, information technology experts in that agency as well, health professionals working for Health Canada, and many other specialists and professionals who, on a daily basis, work to protect and advance the health, safety, and well-being of Canadians from coast to coast to coast.

Our members are directly affected and indeed singled out by Bill C-10, in particular by parts 10 and 11.

We are of the view that the two proposed acts constitute an unwarranted and unnecessary attack on the charter rights of unions representing federal public service employees. Our brief, which has been distributed to all honourable members, presents our analysis and criticisms of the legislation, but let me be clear and unequivocal: these two pieces of proposed legislation represent an unconstitutional interference with the rights of our members and of female public service employees.

The brief sets out in greater detail our reasons for taking this view; however, it is appropriate for honourable members, in our submission, to think about how Parliament can knowingly pass unconstitutional legislation. As our colleague Mr. Gordon said, this proposed legislation will lead to litigation. There is absolutely no doubt about it, and it is going to be long and protracted and difficult litigation. If Parliament is going to pass this bill, it should do so knowing that.

With respect to the proposed Expenditure Restraint Act, let me first state that I'm sure you already know that the process of collective bargaining is now protected by the Charter of Rights and Freedoms. This fact was affirmed by the Supreme Court of Canada in the B.C. Health Services case. Part 10 of Bill C-10 represents an attack on the process of lawful collective bargaining. It will not withstand scrutiny under the charter. In our respectful view, the courts will likely conclude that the proposed legislation ought to be struck down as being an unacceptable interference in the process of collective bargaining.

The Professional Institute urges the committee to carefully reconsider this proposed legislation in light of the constitutional principles laid down by the Supreme Court of Canada, as recently upheld by other courts, including the Court of Appeal for Ontario.

In the light of the constitutional protection for collective bargaining, the charter places limitations on Parliament's power to enact legislation that interferes with collective bargaining. Legislation that has the effect of substantially interfering with the process of collective bargaining is unconstitutional.

In its decision regarding the B. C. health case, the Supreme Court stated the following:

[...] the state must not substantially interfere with the ability of a union to exert meaningful influence over working conditions through a process of collective bargaining conducted in accordance with the duty to bargain in good faith. Thus the employees' right to collective bargaining imposes corresponding duties on the employer. It requires both employer and employees to meet and to bargain in good faith, in the pursuit of a common goal of peaceful and productive accommodation.

There are ample grounds for concluding that this legislation constitutes substantial interference with collective bargaining. I commend you to read our brief, because my time is short here today, and I won't go into that in greater detail.

In other words, and to cut to the bottom line, so to speak, permitting bargaining to continue on non-monetary issues, as this bill proposes, does not give the government a free pass to restrict all collective bargaining on all pay-related issues.

Let me also make it clear to the committee that the International Labour Organization also indicates that such legislation would be inappropriate.

I would like to turn now to part 11, the Equitable Compensation Act. The equity legislation is designed to assist women. When that legislation discriminates against the portion of the group it was designed to help, women working in the federal public service, than that legislation violates the equality guarantee in section 15 of the Canadian Charter of Rights and Freedoms.

The preamble to this bill affirms that women should receive equal pay for work of equal value. In our respectful submission, this is a hollow and cynical promise, for the provisions of the bill are designed to ensure that there is no workable or practical means of attaining this objective.

[The Chair, Conservative, James Rajotte]

I'm sorry, we are well over time here. I am sure this will come up during the question period.

[Geoffrey Grenville-Wood]

Can I just conclude then, Mr. Chairman?

[The Chair, Conservative, James Rajotte]

Yes, very briefly.

[Geoffrey Grenville-Wood]

It is our considered view with respect to part 11 that it is not only unconstitutional, but it also creates an unworkable, self-defeating morass in which the concept of pay equity will not only not prosper and advance but will wither and die. This ought not to be the intent of Parliament.

In conclusion, the Professional Institute of the Public Service of Canada believes that the laws proposed constitute a gross intrusion into and interference with the constitutional rights of our members generally and with our female members in particular with respect to pay equity law.

We believe that, at the very least, this legislation should be removed from the omnibus budget implementation legislation and referred to the appropriate committee of the House for in-depth study and analysis.

We would be pleased to appear before such a committee to propose amendments and approaches that would improve the legislation, while meeting the overall objective of having pay equity the subject of negotiations between the employer and the various public service unions.

Finally, Mr. Chairman—

[The Chair, Conservative, James Rajotte]

Thank you.

Mr. Grenville-Wood, we're way over time. I'm sorry, I'm trying to be fair to every organization.

[Geoffrey Grenville-Wood]

I'm just going to say thank you very much.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll now go to our final presenter, the Canadian Real Estate Association.

[Pierre Beauchamp, Chief Executive Officer, Canadian Real Estate Association]

Thank you, Mr. Chairman.

Honourable members, I am Pierre Beauchamp, chief executive officer of the Canadian Real Estate Association. At my side is Allison McLure, legal counsel regarding the Competition Act.

The Canadian Real Estate Association is one of Canada's largest single-industry trade associations, representing more than 97,000 real estate brokers and agents who work through our various real estate boards in Canada, provincial associations, as well as one territorial association.

While strongly in favour of efforts to improve the act, we feel that it is extremely important to ensure that any amendments do not have significant negative and unintended consequences.

The amendments to the Competition Act should be dealt with as a separate bill. The amendments to the Competition Act proposed in Bill C-10 are substantial, and we believe that they deserve to be studied in depth.

In 2008, Mr. Chairman, the competition policy review panel considered amendments to the conspiracy provisions of the act, the introduction of AMPs for abuse of dominance, as well as an increase of AMPs for deceptive marketing practices. Responses to the panel at that time of the panel's report were split, with half of the submissions supporting the amendments and half of the submissions speaking against the amendments. This is hardly a consensus and does not represent justification for including these amendments to the Competition Act in this bill. We propose that they should be divorced from the budget and be dealt with in a separate bill.

With respect to conspiracy provisions amendments, Bill C-10 proposes the creation of a two-track system that would define per se illegal agreements to be prosecuted criminally without a competitive effects screen such as the current “undueness” element in section 45 of the Competition Act. Removing the undue lessening of competition requirement would render the resulting provision overly broad. Without the qualification of “undue”, a very wide range of agreements would fall within the scope of the offence. Surely this is not the intent of the amendments. Unfortunately, though, it is probably a likely result. For example, a real estate broker's office policy regarding commission rates charged by the broker's agents working in the same office may fall under the proposed section 45 even if the broker and his agents do not have market power. The agents and broker could be considered competitors within that same office, and there is no exemption that would clearly apply to an agreement between a principal and his or her agents.

Brokers need to have the ability or the right to set policies on commissions within their own offices with the confidence that they are not violating the law. The new law may force brokers out of business since they will not be able to operate using their existing business models. The increased potential for their agreements to fall under the scope of section 45 and the increased threat of criminal sanctions could result in a chilling effect. We strongly recommend that the current provisions relating to conspiracy be maintained, and we further submit that should this dual-track system be adopted, an exemption should be added to both the criminal provision and the civil provision for agreements between principals and agents in a manner that clearly exempts brokers and their agents.

We believe that the proposed AMPs for abuse of dominance would be punitive in nature, which is not appropriate for conduct that is not inherently anticompetitive, and in fact, is usually procompetitive and efficiency-enhancing.

We do not believe there is any demonstrated need for additional deterrence for the reviewable trade practice provisions. As for increasing the AMPs for deceptive marketing practices to a maximum of $15 million, we feel that the risk of such a large AMP could cause a small-business person to be excessively cautious and therefore less informative in their advertising. Accordingly, the issue of increased AMPs is a significant concern, since the majority of our members, again, own and work for small businesses. As such, we strongly suggest that the amendments regarding AMPs not be accepted, not be adopted. At a minimum, there should be at least a grace period before the AMP sections enter into force.

Thank you, Mr. Chair.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll now go to questions from members.

Mr. McCallum, you have seven minutes.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you, Mr. Chairman, and I thank all the witnesses who are here this morning.

Before putting any specific questions, I would like to make a general observation: Canada is presently in a full-blown economic crisis.

That has to take priority, in our view. In other words, every day, every week, every month there are thousands or tens of thousands of people losing their jobs and being laid off. The government ought to have acted many months ago to support the economy through a fiscal stimulus. Finally they have it, and in our view the top priority has to be to get that fiscal stimulus out the door as quickly as possible in order to support jobs.

We are aware that there are huge deficiencies in this budget. We are aware that the government should have acted earlier. We are aware that the government needs to be monitored. But my general point is that if witnesses wish to make amendments to the budget, they will have to penetrate the hearts of those people on the other side of the table, because otherwise we think the top priority for the country at this time of crisis is to get the money flowing to support jobs.

Having said that, I'd like to ask a question to Mr. Pierre Beauchamp on the Competition Act. I think the Competition Act is framework legislation and generally is not changed more than every twenty years. It's an egregious breach of process to rush it through with little debate in a budget bill. I agree with the position that many have taken on that point.

I was interested in your comments about the chilling effect that certain aspects of this legislation may have on small business in particular. I wonder if you could elaborate a little bit on that briefly.

[Pierre Beauchamp]

Thank you for the question.

We feel that this is going to have a very negative effect, because the new definitions, as I said earlier, of per se illegal agreements could be prosecuted criminally without the undueness element. This essentially means that small-business people who don't have market power and who enter into competitive alliances for competitive reasons will be caught by the changes under the criminal conspiracy provisions that are being proposed.

If they are caught in this manner, they will change their strategies, and they will be afraid to enter into such ventures with other real estate brokers. The idea is to catch people here who would in fact be in situations where they are dominant and want to control markets. In this case, the assumption would be that you're possibly guilty just by trying to do this. There is no proof, no weight at all given to arguments within those two brokerages, which I've mentioned in our paper, that try to get together to compete within any given market in this country. Therefore if they can't do that, if they're afraid to be caught within this particular new legislation, they will obviously not compete in this fashion. That, in our opinion, is exactly the opposite of what competition policy is designed to do.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you very much.

I'd now like to ask a question to Mr. Grenville-Wood about the constitutionality issue.

You're a lawyer and I'm an economist. Lawyers and economists frequently disagree with each other. I think it's a very serious thing if the government knowingly proposes a law that is unconstitutional. The government may disagree with you on constitutionality, so my question to you is whether this is a legal opinion. How certain are you? Can you tell us non-lawyers in language we can understand how this is truly and obviously unconstitutional and the government has to know it?

[Geoffrey Grenville-Wood]

Thank you, Mr. McCallum. It's an important question.

I've heard of two-handed economists, and there are two-handed lawyers as well, but in this case we aren't two-handed. I think it's very clear in the context of the B.C. Health Services case, which dealt with very similar legislation produced by the B.C. government limiting the right of collective bargaining, cancelling collective agreements, and having retroactive effect. Even in that particular case, the right to negotiate salaries was maintained in the legislation. However, the Supreme Court of Canada said it was unconstitutional interference with the right to collective bargaining to limit the scope of bargaining on other issues and to cancel existing contracts.

This is exactly what this legislation is doing. It's cancelling existing contracts in many cases. It's cancelling the negotiations that have taken place, and it's not permitting negotiations to take place in the future on a very major part of collective bargaining.

In our submission, it's about as clear as you can get. As I say, there are always two-handed economists and two-handed lawyers. There are people who will say it's all right, and I presume, in all fairness and with all due respect to the government, that they have probably obtained a legal opinion to say this is constitutional. In our view--and we've looked at it very carefully and obtained several legal opinions--it is unconstitutional, period.