Finance Committee on Feb. 23rd, 2009

[Jack MacLaren]

I have a deal with the federal and provincial governments for a take-out and replant of an orchard, which will run to roughly $40,000, and that has been put on hold. Now I don't qualify because I had to get these—I nearly said clowns—gentlemen in to look at it. I would presume they didn't really know what they were looking at, except that an indent in the ground is called a creek. I think that's what this one man decided. He also told me that I did not own the water, which totally upset me because I had just drunk two glasses of it.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

To you, then, it's almost like a make-work project for bureaucrats, and what these proposed changes will mean to you is that you'll have the freedom to be a responsible steward of your own private property without a parade of government officials.

[Jack MacLaren]

That's exactly what I want to be able to do, to run my own property and my orchard and hopefully make a profit.

I have it figured out here that the mileage added.... The gentleman with the high hoe would be coming past my place—I would ask him to come into my farm, and he would have to come about 200 yards—when he's going by on the way home some night. It would take about an hour and a half to dig this out.

By doing what they've done—and I still don't have permission—I have it figured out that from Natural Resources in Pembroke and from Prescott, the total mileage that has been added to this would be 1,060 kilometres, whereas it would have been my telephone call and the gentleman coming in with his high hoe and truck on his way home.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

So about an hour and a half worth of work has stretched into over a year, not to mention the expense to you, but also to the taxpayer in general in paying the mileage and the days of work for these inspectors.

[Jack MacLaren]

That's right, and the taxpayers—all these people—are paying these two gentlemen who came to our place, whereas it could have been done.... That could have been dropped. I can handle it myself. I've survived for 84 years, so I must be doing something right. Basically I am in an oddball spot here. I am not a lawyer; I am a farmer. I am a seventh-generation Canadian, but I have one thing: my grandfather came to Canada and laid stones on the Rideau Canal, which goes through Ottawa.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Thank you.

My next question is to the Department of Transport. Whitewater rafting, the World Cup of Freestyle Kayaking, and the internationally renowned birchbark canoe by the Algonquins of Pikwàkanagàn are all part and parcel of the Ottawa River, right down here. What is in this legislation that is going to stop my canoeists, my whitewater rafting industry, my kayakers, and my fishermen from enjoying that river?

[David Osbaldeston]

Nothing.

[The Chair, Conservative, James Rajotte]

Thank you, colleagues.

Thank you to all the witnesses who came before us and made their presentations and answered our questions. We appreciate your time here this evening.

Members, we will suspend for one or two minutes and bring the next set of witnesses forward.

[The Chair, Conservative, James Rajotte]

We're starting the final panel for 8:30 to 10 p.m. with respect to our hearings on the budget implementation act.

We have six organizations with us, presenting as five groups. We have the Fédération des travailleurs et travailleuses du Québec, the Association of Justice Counsel, and the Federally Regulated Employers - Transportation and Communications. And we have two groups who I understand are presenting as one, Option consommateurs and the Public Interest Advocacy Centre. Finally, we have the Canadian Association of Professional Employees.

I ask each organization to do a five-minute opening statement in that order, and then we will go to questions from members.

We'll start with the Fédération des travailleurs et travailleuses du Québec. Are they here? No.

Then let's start with the Association of Justice Counsel.

[Patrick Jetté, President, Association of Justice Counsel]

Mr. Chairman, members of the committee,

The Association of Justice Counsel is pleased to have the opportunity to submit its views concerning Bill C-10.

In the next few minutes, I will briefly describe our concerns with this legislation, and then I will be pleased to answer your questions.

Our association represents over 2,500 lawyers across the country who are employed by the federal government in the Department of Justice, the Public Prosecution Service of Canada, and in federal agencies. They perform critical tasks in many areas, including prosecution, constitutional law, consumer and regulatory protection, national security, immigration, and commercial law.

In 2005 the Government of Canada extended the right of collective bargaining to the federal government lawyers, and in 2006 we began to negotiate our first collective agreement with the Treasury Board. Three years later, these negotiations have not led to a successful conclusion. As a result, federal lawyers have not had a salary increase since April 1, 2005, and our salaries have been substantially behind those of our provincial counterparts. Our comparative salary levels now rank seventh in the country, even though they used to be either first or second. We're now behind those of Ontario, British Columbia, Alberta, Saskatchewan, Manitoba, and Nova Scotia.

To provide just one example of the disparity, federal government lawyers today earn between 40% and 60% less than their Ontario provincial counterparts. The salary gap is even more pronounced in comparison with our private sector counterparts, with whom we regularly appear in court in representing the interests of the Government of Canada.

The ongoing failure to redress this profound and growing salary disparity created by Bill C-10, the Expenditure Restraint Act, has given rise to three very serious issues for the administration of justice in Canada.

First, the federal government is having an increasingly difficult time retaining its lawyers. Simply put, our lawyers are leaving their jobs and going elsewhere, that is to say they are either retiring as soon as they can, or going to work for one of the provincial governments, or are simply going into private practice. It's a simple matter for them to cross the street and go work for a provincial government and in the process, earn thousands more a year doing the exact same kind of work they were doing for the federal government.

Second, the disparity in salaries is thoroughly hampering the ability of the federal government to recruit top-notch legal talent to replace those who are leaving.

In some locations and fields of expertise, the lack of qualified lawyers has reached critical levels. For example, in the city of Calgary, which includes the Prime Minister's own riding, the Public Prosecution Service of Canada has lost more than half its lawyers, prosecutors, and has not been able to replace them. It is the same thing in British Columbia, in Ontario, and in other provinces.

Third, as a result of the long-standing salary disparity facing federal government lawyers, morale is at an all-time low.

All these challenges have been documented publicly in the recent annual reports of the Public Prosecution Service and the Department of Justice, and if Bill C-10 passes in its current form, none of these challenges will be addressed.

In addition, federal lawyers will be singled out not only as the only group deprived of the process for negotiating their first collective agreement, but also as the only group not to have a negotiated or arbitrated salary increase for 2006-07.

We must contrast treatment of the AJC with that of another employment group in a similar situation. I am talking here about the border guards who were granted a salary increase of 19.5% three days before.

Finally, we respectfully urge the members of this committee to seriously consider the constitutionality of Bill C-10, especially in its specific and disproportionate impact on lawyers.

Thank you.

[The Chair, Conservative, James Rajotte]

I think we'll go back to you then, Monsieur Laliberté, and have your presentation. Cinq minutes.

[Pierre Laliberté, Economist , Fédération des travailleurs et travailleuses du Québec]

Thank you, Mr. Chair.

I would like to thank the committee for this opportunity to present our views on Canada's budget priorities. It would have been nice to do this before the budget was tabled, but nevertheless, just having the opportunity to do so is appreciated.

To our way of thinking, the budget that was tabled contains some interesting and worthwhile initiatives, but overall, it falls rather short.

We feel that first and foremost, the budget should have focused on ways of beefing up the employment insurance program, given the critical importance of this program during times of crisis. Moreover, from a macroeconomic standpoint, this program has the biggest repercussions. Since the program was reformed some fifteen years ago, it has never been tested in a real recession.

EI reform was, in our estimation, the key component of a recovery program. So then, we were deeply disappointed when we saw the budget. While it does provide for one improvement in that it calls for an extension of the benefit period, it fails to provide for any kind of notable improvements in areas that we deem equally important.

Even more disappointing to us is the fact that a considerable sum of money is being spent nevertheless in other areas. In some cases, this increased spending is admittedly justified. However, we feel that employment insurance must be considered a component of any recovery program.

During a recession, even a typical one, market indicators begin to fall and the unemployment rate begins to rise. As a rule, it takes six months for the economy to show any signs of a recovery and generally speaking, it takes at least two years before the unemployment rate returns to its pre-recession level. Assuming that the current recession will be deeper, there is every reason to believe that the unemployment problem is here to stay for awhile. In our opinion, that was a critical consideration.

On another note, the government did make an effort with respect to professional training and this effort was duly noted. However, we had also called upon the government to bring in special measures targeting older workers who will not be able to find new jobs, especially during this downturn. This type of program would have helped them bridge the gap between the end of their employment and retirement programs.

The program for older workers was cancelled under the Liberal government. Given the current state of the economy, it would have been the right thing for the government to do to reinstate this program, especially since it is not that costly, in the grand scheme of things. If our calculations are correct, the cost would be somewhere in the neighbourhood of $70 million.

The amounts announced for infrastructure spending are interesting. However, an order to buy Canadian appears to be missing from the budget.

The Americans have no qualms about imposing these restrictions, and it is all quite legal for them to do so under the WTO and NAFTA. Canada is a little like a boy scout that doesn't quite understand how things work in the real world.

No less than $100 billion will be spent on infrastructure in Canada over the next few years. There is nothing in the budget promoting Canadian content and Canadian businesses. Considering the potential spinoffs, this makes no sense at all to us.

However, the budget continues to contain measures respecting public-private partnerships which, in this current economic climate, only delay project implementation. This too makes no sense to us.

I don't have time to broach the issue of pay equity at length. It would simply like to add my voice to those of my union brothers and sisters who have stated that budget legislation is perhaps not the appropriate vehicle for discussing pay equity or finding solutions to this problem at the federal level. We fervently hope that the government will reconsider its decision and table separate parallel legislation.

Thank you very much.

[The Chair, Conservative, James Rajotte]

Merci beaucoup.

Mr. Farrell, please go ahead with your presentation.

[John Farrell, Executive Director, Federally Regulated Employers - Transportation and Communication (FETCO)]

Thank you very much.

I am going to ask David Olsen, who is assistant general counsel for Canada Post, to present our position. He is also a member of FETCO and has been involved in employment equity matters for many years.

David, I'll turn it over to you.

[David Olsen, Assistant General Counsel, Legal Affairs, Canada Post Corporation, Federally Regulated Employers - Transportation and Communication (FETCO)]

Thank you.

I should state that although I am counsel to one of the members of FETCO, I am here as a representative of FETCO and not on behalf of Canada Post. Thank you.

FETCO: what does it stand for? Federally Regulated Employers—Transportation and Communication. We are an organization of most of the major employers and employer groups in transportation and communication under federal jurisdiction. A brief will be submitted. In appendix A of that brief are listed all the members of the organization: Canada Post, CBC, the railways, the ports, the airlines, and so on.

FETCO members employ approximately 586,000 workers, 212,000 of whom are unionized. We represent approximately two-thirds of the unionized workforce under federal jurisdiction. We are pleased to be invited here today to give our preliminary views on the proposed Public Sector Equitable Compensation Act.

Our members have extensive experience with the current section 11 of the present Canadian Human Rights Act. A number of us have been deeply involved in equal pay for work of equal value issues, assessments, and litigation over decades. It is without a doubt a deeply important and complex issue. However, there are certain flaws in the current section 11 of the Canadian Human Rights Act that have generally been unhelpful to parties in resolving equal pay disputes, and we would like to comment on that.

The proposed Public Sector Equitable Compensation Act, while it does not apply to our members in the federally regulated private sector, contains important new principles and sound operative provisions that we believe will improve the ability of employers and unions in the federal public sector to assess and implement equal pay or equitable compensation for men and women in a manner that is pragmatic and fair.

This legislation makes sense to our members because, one, it integrates equitable compensation, equal pay for work of equal value, into the collective bargaining process; two, it requires that both employers and unions share responsibility for equitable compensation or pay equity, not the employer alone; and three, more importantly for those of us who've been involved in protracted litigation under section 11 of the Canadian Human Rights Act, it provides a more efficient, effective, and equitable problem-solving and dispute resolution procedure.

The heart of the issue for FETCO has always been the fact that equal pay for work of equal value must be integrated into the collective bargaining process. Like equal pay for work of equal value, freedom of association for employees is accorded the status of being a fundamental human right, and both are considered sacrosanct in our society. But that does not mean, in our view, that they cannot be addressed together. If anything, they must be addressed together in order for both to be balanced and achieved.

The current section 11 of the Canadian Human Rights Act articulates only the general principle that men and women who are performing work of equal value must receive equal pay. Other than articulating the general principle, it has been left to the courts and tribunal. In our view, this vagary of section 11 has been routinely and strategically leveraged by trade unions as a means by which to effectively reopen negotiated collective agreements. It's a second kick, as it were, that flies in the face of the fundamental sanctity of collective bargaining. This is fair in a non-unionized environment where the employer alone is responsible for setting the wage package and terms and conditions of employment, but in the unionized sector it is both the employer and the trade union together that are responsible for making a bilateral decision about terms and conditions of employment. And I dare say—in my experience, anyway—it is largely the trade union that makes decisions about how that wage package is to be allocated and distributed, and so it's the collective bargaining parties that must also be responsible for implementing pay equity.

We elaborate more fully in our brief on these issues and the mischief of the current legislation. FETCO commissioned a comprehensive study on the issue when we appeared before the Bilson task force; and Professor Paul Weiler, a noted Canadian academic, labour lawyer, and jurist, prepared a paper. It has also been provided to you.

In sum, if I just could—

[The Chair, Conservative, James Rajotte]

I'm sorry, Mr. Olsen, we'll have to leave that for questions. I'm sorry about that.

[David Olsen]

Thank you so much.

[The Chair, Conservative, James Rajotte]

My understanding is that the next two groups will be presenting together. Is that correct? Yes? Okay.

Ms. Bose.

[Anu Bose, Head, Ottawa Office, Option consommateurs]

Good evening.

Thank you, Mr. Chair, members of the Standing Committee on Finance, Mr. Clerk of the Committee and the staff of the committee, for inviting me to appear before you this evening to discuss Part 12 of Bill C-10, that is the proposed amendments to the Competition Act.

My name is Anu Bose and I am in charge of the Ottawa office of Option consommateurs, an organization that is headquartered in Montreal. With me are Michael Janigan, Executive Director and General Counsel for the Public Interest Advocacy Centre in Ottawa.

For over three decades now, our two organizations have been working to represent the interests of consumers in the area of regulated trade. Mr. Janigan has already testified before the Industry Committee on connection with the former Bill C-19 tabled during the 38th Parliament. This bill to amend the Competition Act was never adopted.

We would first note that while the proposed amendments are quite comprehensive, they have certainly been the subject of considerable past discussion amongst stakeholders and, in our opinion, represent a fairly balanced approach to the necessary refinements to the act.

Take, for example, the issue of the amendments that complete the reform of misleading advertising or deceptive marketing that has been the consensus for over two decades. These amendments help the competition authorities address this abuse in an economic and administrative fashion.

In the view of Option consommateurs, this package of amendments places appropriate emphasis on the importance of deterring anti-competitive conduct, particularly in the current difficult economic and financial environment that all Canadians are experiencing.

I'm asking Michael Janigan to give some additional comments on the importance of these amendments.

[Michael Janigan, Executive Director and General Counsel, Public Interest Advocacy Centre]

Thank you, Mr. Chair.

It is essential that the committee understand that these amendments are designed to make markets work better and to protect the legitimate interests of consumers and suppliers in open markets. The practices that are being deterred involve conduct that subverts the operation of a competitive market and prevents the existence of an informed market of consumers, as well as the ability of suppliers to challenge dominant players with new products and services.

When some of these changes were brought forward in Bill C-19 in 2005, there were some vociferous protests from some of the larger business players concerning the potential burdens that could be imposed upon them. If a protest occurs again, it's important that these submissions be adjudicated on their merits, not on the basis that they represent the views of all non-governmental stakeholders.

For example, you won't be hearing from the independent business person who has used the family assets to finance a new business, only to see it crushed by the actions of suppliers of the new business instigated by a market incumbent. You may read about a scam luring shoppers to purchase a wonder product that is misrepresented and misdescribed, but the pensioner who has cut back on necessities because she fell for the scam won't be here to tell you that, as some have suggested. What happened to her is an acceptable risk that allows for more creative advertising to take place. And you won't hear from parties who complain about increases to maximum penalties, that the existence of dollar amounts sufficiently robust to deter the largest of businesses from breaching the act will probably prevent more bureau files from being opened because of business self-policing to avoid such sanctions.

But it is of the highest importance that you understand that deterring anti-competitive conduct, as proposed here, is not the heavy hand of government in operation; instead, it is supportive of open markets and less regulation. The fact is that a lot of money can be made by misleading the public or unfairly stacking the deck against competitors. Unless you have the tools at hand, as this act promises, to prevent such conduct from being rewarded, you are allowing three unfortunate things to happen: you are preventing informed choice and possible innovation, you are enabling inefficiency in the delivery of that product and service, and you are ensuring that incumbents have little incentive to become more productive.

As a final matter, Dr. Bose will address a small amendment of concern to Quebec consumer organizations.

[Anu Bose]

In the future, instead of a class action suit filed in provincial court, it is likely that the new procedures set out in the bill will be applied.

We are proposing that the clause in the former Bill C-19 be inserted immediately before clause 74.19 and that clause 74.19 be subsequently renumbered [Editor's note: inaudible]. That way, Quebec consumers would still have the right to file class action suits and this right will henceforth be extended to all Canadian consumers.

Thank you. We would be happy to answer your questions.

[The Chair, Conservative, James Rajotte]

Merci.

We'll now go to our final group, the Canadian Association of Professional Employees.

[Claude Poirier, President, Canadian Association of Professional Employees]

Thank you, Mr. Chair.

CAPE represents 12,000 Canadian public servants, some of whom you may already know very well. They include the Library of Parliament analysts, research officers, translators and interpreters working on the Hill and, last but by no means least, the economists and political analysts who advise you.

Allow to briefly review the situation for you. Approximately 10 years ago, Treasury Board decided to reduce the number of groups with which the government negotiates agreements. The recommendation was that the number of professional groups, anywhere from 65 to 70 at the time, be reduced to 25 or 30. Bargaining agents like CAPE participated in the exercise in good faith, and some groups did merge. The economists and other professionals represented by CAPE were faced with a fait accompli, namely the creation of a new group, the EC group. No one knew exactly what lay in store, but the group was composed notably of economists and sociologists.

To facilitate the process, it was suggested that a new classification be created. The general classification standard that the government was considering at the time did not apply, for a variety of reasons, So then, to facilitate the process, salary scales were merged to create a single pay scale, with different levels, for all of the employees in the group. The final phase of the process—and all parties at the table clearly agreed on this—was the negotiation of new pay scales. That was supposed to have happened in 2005-2006. Unfortunately, work on the new EC classification standard was not far enough along to allow for the negotiation of the new pay scales at that time. Consequently, the union signed a one-year collective agreement. We were given a formal commitment that during the next round of bargaining, new pay scales would be negotiated.

In the fall of 2008, the government presented a final offer to the union, one that was just recently accepted by our members, on the understanding still that the pay conversion issue would eventually be resolved. Unfortunately, when we saw Bill C-10, in particular Part 10, we realized that there had been one exception made, which my colleague alluded to earlier. Several members of the Canada Border Services Agency were able to benefit from pay conversion, whereas our members who, while they may not be protecting our borders, nevertheless provide valuable services to the Canadian government, have been overlooked. A classification conversion occurs only once during a person's career. Our members have been waiting for this day for 15 or 20 years, and the next opportunity won't likely come along for another 20 or 30 years. Our members won't see this during the course of their career. This was their last chance.

Given that the legislation provides an exception for the border services group, we would like to recommend to you that, for the sake of a healthy bargaining process, a short five-line clause be added to the text of the bill. It follows the exact same model as the exception provided for employees of the Canada Border Services Agency and would allow the negotiation of pay conversion for our group members to move forward in a dignified manner.

Thank you very much and good evening.

[The Chair, Conservative, James Rajotte]

Merci beaucoup.

We'll now begin with questions from members. We will start with Mr. McKay, please.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Thank you, witnesses.

A number of you are opening up a window on some rather unhappy employer-employee relationships, and the government appears to have chosen a route with a sledgehammer to eliminate a number of problems right up front. Mind you, I do have some problems with economists being represented here. They got it so wrong in the past year that maybe they should be punished for an entire lifetime or career.

But let me start with another favourite group, namely the lawyers. You have a very legitimate dispute with the Government of Canada. I completely take your point that your pay relationships are certainly much less than your provincial cousins and much less than your private sector counterparts, although I'm not sure it's a good time to go into private practice in law, given the current economic circumstances.

So the question here really is this. Aside from a complete exemption from Bill C-10, what is the other alternative in terms of solving your dispute? I understand that for the last three years you've been negotiating, negotiating, negotiating, but it doesn't seem to have gone anywhere. So what are the alternatives?