Finance Committee on May 29th, 2012

[The Chair, Conservative, James Rajotte]

I call to order the 63rd meeting of the Standing Committee on Finance. Our orders today, pursuant to the order of reference of Monday, May 14, are for a discussion of Bill C-38, An Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures.

We want to thank our witnesses for their patience in waiting for us to return from the vote in the House.

We have with us here this morning four organizations. First of all, we have the Canadian Association of Professional Employees, then Democracy Watch, Merit Canada, and the United Food and Commercial Workers Union.

Thank you very much for being with us. You each have up to a maximum of five minutes for your opening statements, and then we'll have questions from members.

We'll start with the Canadian Association of Professional Employees, please.

[Claude Poirier, President, Professional Serving Canadians Coalition, Canadian Association of Professional Employees]

Good morning. My apologies to the interpreters because I will have to cut my speech short. Please bear with me.

My name is Claude Poirier. I am the President of the Canadian Association of Professional Employees, but I am here to talk on behalf of the Professional Serving Canadians Coalition, which comprises six unions representing more than 75,000 professionals employed by the federal government: The Canadian Association of Professional Employees, the Association of Canadian Financial Officers, the Association of Justice Counsel, the Canadian Federal Pilots Association, the Professional Association of Foreign Service Officers, and the Professional Institute of the Public Service of Canada.

We wish to thank the committee members for agreeing to hear our concerns regarding the passing of many of the measures contained in Bill C-38, An Act to implement certain provisions of the budget.

Our union members have been affected to various degrees by the provisions in the budget. Here are a few figures. So far, 3,291 of the approximately 13,000 CAPE members in the EC occupational group have received an affected employee letter, including no fewer than two-thirds of the economists and analysts in the EC group of Statistics Canada. On April 30, 95 federal lawyers working for the Department of Justice received notice letters. At the Professional Institute of the Public Service of Canada, 2,949 members have received letters, including 349 at the Canadian Food Inspection Agency, 384 at the Department of National Defence, and 455 at Statistics Canada. Even though the members of the Canadian Federal Pilots Association have not received a significant number of letters, the budget still had a significant impact on those employees. The operating budgets have been significantly reduced, including a $62 million reduction at Transport Canada alone.

All public service workers understand the cold hard reality behind these raw data: these employees, hired at the conclusion of rigorous selection processes in which they had to demonstrate their qualifications, expertise and competencies, will now have to start over again and compete against the very people they have been working side by side with for months or even years. We feel that many of these cutbacks don't make sense economically, but are being made strictly for ideological reasons.

On April 3, CAPE revealed that its analysis of an economic model developed by Statistics Canada predicted that the loss of 19,200 jobs in the public service would put as many as 40,000 Canadians from the private sector out of work across the country. You will see in our written document the number of jobs lost in both the public and the private sectors.

We are not the only ones to be concerned. The parliamentary budget officer has since stated that federal spending cuts, combined with those announced by the provinces, will lead to the loss of 108,000 jobs in Canada in 2015. The Canadian Centre for Policy Alternatives published a report that places the total number of federal public service job losses at 29,600 once the cuts from the 2012 budget have been fully implemented. The plans for the future of some 30,000 Canadian households are going to fall through.

But beyond the figures themselves, we are concerned about the issue of reduced services to Canadians. Here are some examples: the National Council of Welfare is being eliminated; the National Round Table on the Environment and the Economy is being abolished; new employment insurance eligibility rules are being brought in; changes are being made in the rules surrounding the slaughter of animals and food inspection; the number of aviation safety inspections will be reduced; the section that monitors the mental health of members of the Canadian Forces and focuses on suicide prevention will be closed; and there are cuts in the Department of Justice described by the AJC as an elimination of essential services.

[The Chair, Conservative, James Rajotte]

You have one minute left.

[Claude Poirier]

According to our analysis of the Statistics Canada model on the impact of public service job cuts, here are the data for the private sector. In Ontario, 18,199 jobs will be lost; in Quebec, 9,314; in western Canada, 4,886; in Atlantic Canada, 4,286; and in British Columbia, 4,009. While some might argue that these figures are not high, trot them out in front of an audience of concerned citizens or business people in Charlottetown, Red Deer, Brandon, St. John's or Moncton.

Finally, we would like to briefly comment on the two changes to the public service pension plan. The first change will raise our members' share from 40% to 50%. The second change is the increase from 60 to 65 in the pensionable age for post-2012 new hires. Let me just say that those changes are unnecessary because the plan is in perfect condition.

We would like to thank the committee members for their invitation and for listening to our observations. If you have any questions or need some clarification, we are ready to answer your questions.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

Next we'll have Democracy Watch, please.

[Tyler Sommers, Coordinator, Democracy Watch]

Good morning.

I'd like to begin by thanking you for the opportunity to speak with you today and to take questions regarding Bill C-38. It's a pleasure to be here.

Democracy Watch is a national non-profit, non-partisan organization, and Canada's leading citizen group advocating democratic reform, government accountability, and corporate responsibility. Our work for democratic reform is aimed at winning changes so that everyone in politics and business is effectively required to act honestly, ethically, openly, representatively, and to prevent waste.

Our work is based on a number of principles. Canadians need access to full and timely information about government and business activities. Canadians need meaningful rights to participate and be represented in Canada's political system. Canadians need easily accessible remedies against government and corporate waste, abuse, and misrepresentation. Accountability measures are needed wherever there are concentrations of power in society, and measures must be enacted to help Canadians band together as citizens, consumers, and taxpayers.

Now, our position on budget bills has been laid out for many years. It's very simple: the inclusion of changes to other laws in the budget bill should be prohibited; and budget bills must focus on government spending.

The reasoning for this is simple and straightforward. By including changes outside of government spending, the bill becomes convoluted, and dialogue and debate suffer as a result. It's also virtually impossible for many members of Parliament to represent their constituents accurately when voting on omnibus legislation. There are simply too many things to consider.

In order to ensure that the changes the government makes are properly debated, that participation by the public is thoughtful and thorough, and that MPs have the opportunity to properly represent their constituents, the budget bill should focus solely on the budget. Other aspects should be removed and included in other pieces of legislation.

It's also important to ensure that politicians and advocates addressing issues such as these don't address them simply on a case-by-case basis. In this situation, for those advocating against an omnibus bill, the goal shouldn't just be to have this one bill broken up; the goal should be to address the cause rather than simply the symptoms.

This is an approach that should be embraced by all parties in all they do: solve the core rather than address the symptoms. I understand that this is not an easy task. It is monumentally difficult at many times. But it's something that's important to ensure that our Parliament and government operate effectively and efficiently for all Canadians.

Thank you. I look forward to taking your questions.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll now hear from Merit Canada, please.

[Terrance Oakey, President, Merit Canada]

Thank you, Mr. Chairman, for your invitation to appear here today to discuss Bill C-38, as it contains measures that we support and that are very important to our members.

My name is Terrance Oakey and I'm the president of Merit Canada. Merit Canada is the national voice of eight provincial open shop construction associations. Open shop construction in Canada represents roughly 70% of the industry, and our member companies directly employ approximately 60,000 Canadians.

I want to begin by saying that Merit companies do in fact pay a fair wage and have a competitive benefits plan, including retirement savings, that is transferable between Merit companies. Our members compete every day for labour, so in terms of pay and benefits there's little difference between our companies and the ones affiliated with unions.

Our members are united by one common vision: that construction contracts, employment, and individual compensation should be based on merit, regardless of employee affiliation. For the benefit of all honourable members, “open shop” does not mean non-unionized. It means that we have both union and non-union employees and do not discriminate against workers simply because they choose not to join a union.

I will address the specific issue of the so-called Fair Wages and Hours of Labour Act, which will be repealed as a result of the adoption of Bill C-38.

Wages and working conditions today are a far cry from 80 years ago when this law was brought in. Back then, there were few, if any, laws and regulations in place at any level to protect the interests of construction workers—although today we have a host of provincial measures in place to enhance and protect working conditions, wages, and hours of labour.

Our companies believe that employees are our best asset, and our members cannot successfully bid or win contracts without a highly trained workforce that operates with safety as their number one priority.

We support the repeal of the act because we believe that free and competitive labour markets are the best way to establish wage rates. Therefore, there is no need for federal government regulation in this area. This is borne out by Statistics Canada, which indicates that construction workers are paid an average rate of $28.35 per hour, making them the second-highest-paid workers in Canada. This rate exceeds the national average by some 30%.

Another reason we support the repeal is that most small, family-run construction companies are reluctant to establish a dual wage structure within their company for private work and public sector work. Many open shop companies simply refuse to bid on federal projects, and this results in lower levels of competition and increased construction costs for the government.

Thank you, Mr. Chairman, for the opportunity to bring to your committee our perspective and our support for the measures contained in Bill C-38. We would welcome any questions you may have.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll now hear from the United Food and Commercial Workers Union, please.

[Bob Linton, Director, Government and Political Affairs, United Food and Commerical Workers Union]

Thank you, Mr. Chair.

On behalf of the membership of UFCW Canada, Canada's largest private sector union, I welcome the opportunity to comment on Bill C-38.

UFCW Canada represents more than 250,000 members across the country. As Canada's largest private sector union, UFCW Canada is a leading force for workers in the retail, food processing, and hospitality sectors. As one of Canada's most progressive unions, our membership lives in communities from coast to coast and in every province.

Given the size and number of subjects covered in this bill, it's quite absurd to expect anyone to make suitable comments in five minutes on the far-reaching changes that will take place in Canadian society if this legislation is enacted. However, given the time allotted, I would like to focus on three areas of Bill C-38: changes in eligibility to the GIS and OAS, changes in employment insurance, and changes in the temporary foreign worker program

I would like to mention that our initial communication with the clerk's office was to have us speak on part 4 of the bill relating to the labour code. However, since we are a private sector union with small numbers that would be affected by the labour code, on that we'll defer to other labour organizations who have much more membership in that area.

With respect to the changes in eligibility to the OAS, we believe that the rationale to make the change is as a result of an artificially created crisis. We know that this will have a negative impact on both younger and older workers. Many of the jobs available to younger workers in today's labour market can at best be described as precarious.

What will these changes to the OAS mean for younger workers? When older workers retire, will their jobs, and the benefits and protections afforded them, also disappear and be replaced by precarious jobs?

Most UFCW members have the benefit of being members in a jointly trusteed employer-union multi-employer pension plan. They see the CPP as part of Canada's three-pronged pension system of public, individual, and private sector plans that will allow them to retire at age 65. They are fortunate to be in a workplace pension plan, but with the great recession and its after-effects, many find difficulty in saving for retirement as individuals.

Those older workers who are in their forties and fifties are now facing a further two years of work to qualify for OAS, which they see as a failure of the public system. They also face the reality that as the federal and provincial governments make changes to pension plans and download the costs of those changes, there is less money for benefits.

These same workers are facing another phenomenon in Canada's retirement system, which is the increasing number of employers who want to change existing defined benefit plans to defined contribution plans—a benefit change our union defends against on a daily basis.

There is ample evidence from the Parliamentary Budget Officer, the federal and provincial finance ministers working groups, and respected economists from the Canadian Centre for Policy Alternatives and the Canadian Labour Congress that Canada's public pension system is financially stable and there is no need to increase the eligibility age from 65 to 67.

As to the other issues mentioned earlier, changes to the EI program and changes to the temporary foreign worker program, it is our belief that both will do nothing more than undercut the wages and employment conditions of all workers. Fast-tracking employer applications and allowing them to pay migrant workers up to 15% less than the prevailing rate shows that the government believes migrant workers are not equal. They are supporting wage discrimination. What is even worse is that with the majority of migrant workers being racialized people, they will be promoting wage discrimination based on race.

Instead of filling long-term labour needs with a short-term disposable workforce that does not enjoy the same rights and protections as other workers, Canada should be giving these workers the opportunity to become permanent residents as part of our nation-building.

Furthermore, instead of making changes to the TFWP that unfairly skew the program in the interest of employers over workers, the government should be enforcing stronger compliance, monitoring, and enforcement measures to protect the rights of migrant workers while in our country.

The changes announced by the government relating to employment insurance are similar to the changes to OAS and TFWP: they are seriously flawed. The government plan to replace 1,000 part-time members of the EI board of referees who currently hear 25,000 cases per year with 39 full-time members will be, in our opinion, unworkable. It will lead to a large volume of complaints against the system and a large delay and backlog in the hearing of the cases.

Of major concern to UFCW members is the government's failure to address the problems of Canada's unemployed and the decision to seemingly blame the unemployed for being out of work. Recent figures released by StatsCan paint a different picture from the federal government's. StatsCan reports that there were 5.8 unemployed workers for every reported job vacancy.

Giving the minister the power to set regulations as to what constitutes suitable employment for various categories of workers, and also to define reasonable and customary efforts to find work, will result in claimants being cut off EI if they decline suitable employment or do not make reasonable and customary efforts to find work. We believe this is intended to drive workers to take jobs that are now being filled through the TFWP, whereby workers can be paid up to 15% less than the prevailing rate. It is our belief this will cause the 15%-less rate to become the new prevailing rate.

We believe the changes discussed in our submission are about austerity and cuts and will do nothing to address job creation or revenue growth to sustain social programs. Rather than continuing to attack the unemployed or underemployed, the government should be focusing its attention on a job creation program that will add to tax revenue and create and provide decent jobs so people can earn a decent living instead of falling into the country's rapidly growing ranks of the working poor.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll begin with Ms. Nash for five minutes, please.

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

Thank you.

Welcome to all the witnesses.

My first question is for Mr. Linton. Your organization represents people in the service sector and the agricultural sector. You've talked about temporary foreign workers. Could you tell us about the health and safety situation for people who work in these sectors?

I'm recalling a situation in my city of Toronto a couple of years ago. Some temporary foreign workers were on some scaffolding on Christmas Eve, and I think four of them were killed. Can you give us an overview of the health and safety risks of people in your field?

[Bob Linton]

Certainly that is one example. Those workers had no coverage, and they were intimidated, because if they weren't working they were probably shipped back to their country. They were here to get a better life. Our experience is that it's more so in the agricultural sector, as you had mentioned, with a lot of workers who come in under the seasonal agricultural workers program. We've had experiences where people have been terminated from their jobs because they refused to spray in greenhouses while people were working there.

There is also—

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

To spray with pesticides...?

[Bob Linton]

Yes, pesticides, while they were working there—and they were terminated. If you're working there and you see something like that happening, do you not think that intimidates you?

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

Do you think that with the changes to EI, and with the increase in temporary foreign workers and the changes to that program, there is a greater likelihood that people may feel more desperate and therefore may accept greater risk in the workplace?

[Bob Linton]

We see that already. I mean, the seasonal agricultural workers program is not perfect, but it has been a good program and it has worked well for a lot of people. But once the temporary foreign worker program came in, all of a sudden we saw people coming in not under the agricultural workers program, but under the temporary foreign worker program as low skilled, pitting those people who came in under that one program against others.

People became frightened that they might lose their jobs under the seasonal agricultural workers program, and they felt that they had better adhere to whatever their employer wanted. There is greater exploitation. We witness it every year as these workers come into the country.

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

Do you think there is going to be greater downward pressure on people's wages given the proposed changes to EI and the temporary foreign worker program, which would see workers obliged to accept lower wage rates?

[Bob Linton]

Oh, absolutely. It's not just wages, though.

It certainly will be wages, and it won't be only for migrant workers coming into the country, but for resident workers in Canada. We see that happening as well.

But it won't be just about wages. It will be about benefits as well and what protections they have on the job.

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

I only have a couple of minutes and I'd like to ask Mr. Oakey a question.

Mr. Oakey, your organization represents the construction associations. There are eight organizations that you represent, and you've been campaigning on the changes to the labour standards and also on the changes in Bill C-377 to reporting of funds.

I wonder who constitutes your board. Is it the eight associations that you represent? I couldn't find on your website who is on your board of directors.

[Terrance Oakey]

Our board is made up of 13 contractors from across the country who are all elected by our provincial associations.

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

They fund the campaigns that you are undertaking for these changes?

[Terrance Oakey]

We have a funding arrangement for the eight provincial associations. Some are larger than others. There's a much larger open shop construction industry in Alberta and British Columbia and smaller ones in other parts of the country. Of course, Quebec is an open shop as well.

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

Can I just ask you one quick question? Do you publish the budgets and information on the funds for the advocacy work that you do in support of the construction associations? Is that available online?

[Terrance Oakey]

Thank you for that question.

I understand what you're getting at, and I'm happy to discuss Bill C-377 here if you wish, or the budget bill.

In terms of Bill C-377, there's a key distinction between any voluntary member organization and a labour organization. It's not a condition to run a business in Canada to be a member of Merit Canada.