Finance Committee on Nov. 26th, 2013

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

Thank you.

Welcome to all the witnesses.

I was struck during the presentation by the witnesses today.

Ms. Blais, you called the process around Bill C-4 an assault on due process. We've had several witnesses, whatever their view is on the specifics of this bill, who have expressed genuine concern about the process of omnibus bills. This is the fourth omnibus budget bill that we're dealing with. But I've also heard concern about lack of due process when it comes to lack of consultation.

I'll ask my question to the three of you here in the room with us—Ms. Roy, Ms. Blais, and Mr. Barrett. Is this because labour relations right now are at such a critical point that the government has no time for due process? Is this a house on fire? Are we so inundated with federal jurisdiction strikes and rampantly escalating pay raises and workplaces run amok that the government has no choice but to come in wielding a pickaxe, which is a short form for omnibus budget bills? Is there any rationale that you can see for the government embarking on this process?

[Steven Barrett]

No, none whatsoever. In fact, as I said, it defies the non-partisan tradition, particularly for the federal government, of consulting meaningfully before changes are brought in and seeking expert advice. For example, I'm not aware of the essential service designation having caused any loss of delivery of essential services or any real risk to safety or security.

Ironically, for a Conservative government in fact forcing workers to the more militant strike/adversarial approach seems odd.

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

Do you think that will be the outcome, that it will in fact provoke more labour unrest?

[Steven Barrett]

That's right, and it will force unions like the lawyers—my former client, actually—to engage in strike action. They have no interest in engaging in strike action. They view it as inconsistent with their professional obligations. Of course, if the government ends up designating most of them as essential, they're going to lose access to any truly independent arbitration mechanism.

In answer to your question, is there some crisis in federal public sector labour relations, of course not. As I noted I think in my opening remarks, we just had the parliamentary review called for under this new legislation, which has only been in effect since 2003. The government participated in the review, as well as the unions, other stakeholders, experts. The government didn't ask for these changes in 2011. Nothing has changed since then. The review recommended none of these changes. It's hard to ascribe a motive of making good public policy to the government.

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

I just have a quick follow-up question before I get to the other witnesses. How long have you been practising labour law?

[Steven Barrett]

Too long, since 1985.

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

So for almost 30 years you've been working in this field. You would tend to know what you're talking about. You would tend to have some experience.

[Steven Barrett]

Yes.

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

Ms. Blais.

[Lisa Blais]

We see this as a solution looking for a problem. We're not unreasonable. We understand that changes, ameliorations, can be made to all legislation, and that's what the law reform commission—and the law commission after it—was set up to do. It was an independent, arm's-length body that looked at laws and said, okay, what's working, what's not working, and it would provide expertise and recommendations. These things wouldn't be done in secret without consultation with experts.

Talking about essential services, if I could, I refer you to—

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

I would like to get to Ms. Roy as well.

[Lisa Blais]

Okay. I simply refer you to the chart in our written submission where we talk about essential services, and everywhere except for one exception is there a right to negotiate who is essential and who is not.

I urge you to look at that when you have a moment.

[The Chair, Conservative, James Rajotte]

Thirty seconds.

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

Ms. Roy, you're actually in the workplace. What's happening there?

[Isabelle Roy]

I am an employee of the institute, so I help represent these 55,000 members. Historically, this has not been a workplace that has gone on rampant strikes. There is not labour unrest in the federal public service. There's no urgency calling for this piece of legislation. Wages are not out of control. In fact, we've just come out from under the Expenditure Restraint Act in the 2009 omnibus bill. The PBO has recently declared that the wage increase in the public sector is just about the rate of inflation. We're not running away with pockets full of money at the bargaining table.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Ms. Nash.

Mr. Van Kesteren.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you, Chair.

Thank you all for attending this session. There are so many great people here at the panel.

I'm going to direct my attention to the folks from Fair Pensions for All. The question was raised, is there a crisis? In the last panel I suggested that much, if not all of this, is the direct result of something that absolutely must be done. We're not going to talk about the discrepancies between wages at this point.

You folks have been working with pensions for a long time. I've followed you. I've read a lot of your material. I want you to tell us, is there a crisis in the pension? And how critical is it to address the defined pension plan shortfall in this country? I want you specifically to talk about public sector pension plans. Maybe talk about some of them, not only at the federal level but at the provincial and municipal levels. Then I want you to tell us if you have a solution.

I've read your briefing on CRISP, the proposed Canadian retirement income savings plan, and maybe you'll have some time to talk about that. So go for it.

[Gareth Neilson]

Is there a crisis? Yes. We have gone through and looked at pension plan after pension plan. They all have unfunded liabilities that are growing and growing.

To give you a specific example, the most recent one we just dealt with was the OMERS plan, which is the municipal plan in Ontario. We were invited to a conference in which they were asked whether or not they could just wind up the plan. Everybody who is in the plan gets their pension, but there's no more, no less. That's what they get.

The actuary said unfortunately they couldn't do that. If they did that, they would be $40 billion short. That's a remarkable number because you're talking about just paying people what has been promised today, not what has been promised tomorrow, not paying them the lump sum today, but over the lifetime paying for their commitments. Without more money coming into the system, they don't have enough money to pay for what they have promised already today, which is scary. They need to have more money to pay for the obligations they have already made.

So what happens tomorrow, when they have to make up for those obligations as well? Who pays for that? That would be the first issue.

Increasing contribution rates is one of the main things that seems to happen. When you increase the contribution rates, the private sector taxpayer has to match that. When they do that, it essentially takes more of your budget and puts it towards pension contributions.

We're seeing this at all three levels of government, where pension contribution amounts are growing, and it leaves an infrastructure shortfall. That would be another very real situation for the government to have to deal with as these contribution rates keep going up.

Now we did mention a solution. Our solution essentially calls for ending defined benefit pensions, bringing in a defined contribution plan, increasing the average or the minimum amount you can get in retirement. Right now it's about $18,000 and change. We want to move it up to $25,000.

We think we can put in income testing. So if you have a defined benefit pension in excess of the average working wage of the country, you don't get what amounts to today's CPP and OAS. That money would be put back into the system so that the poorest in our society, those people who are on the poverty line right now—the mother who has spent her whole life raising her children and doesn't have much to go on—would see an increase in their pension amount.

I think that is really what we need to do. Let's take it from some of the people who have a great pension now, and let's divert that money to the people who really need it.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

I have a final question, and I need to know this. I think committee members all need to know this too.

Is the current pension system we have in the public sector sustainable?

[Gareth Neilson]

It would be highly unlikely. Certainly it isn't the way the system is set up now. If there are systemic changes that are made, then yes, go down a different path. If you wanted to keep a defined benefit program by putting caps so that pensions could only go to a certain level, then you probably could make them sustainable.

But in terms of what's going on now, the answer is no, because the current system says I'm going to put in 10¢ a year for 35 years and I'm going to take out 70¢ a year for 35 years. There is absolutely no calculator I have ever found that shows that math works.

[The Vice-Chair, NDP, Peggy Nash]

Thank you, Mr. Van Kesteren.

Mr. Cuzner.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Thank you very much, Madam Chair. I see your chairman has moved on. He has seen that picture of Mr. Murray in Edmonton and the picture of the north Saskatchewan fishing fleet up behind him and he had to go cool himself down.

I have a couple of things. Mr. Murray, if you could, you have referred to an increase in the amount of strike action here in Canada. Could you expand on that? What research are you referencing there?

[Robert Murray]

I don't believe I referenced an increase in strike action in Canada. I think my comment was about what we see with regard to the application of the essential service designation and the impact that could have on people's options and evaluations, as to whether or not they are going to strike and whether the government, through this bill, is pushing them into those more militant strategies. Statistically, no reference was made to an increase in the use of strikes in Canada at this point.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Yes, I misinterpreted that.

Ms. Roy, you had a line that stayed with me: the dismissal of grievances before they were heard. I find it strange.

We have heard some excellent testimony from this group, but if you had really knocked one out of the park on a particular issue...the deadline for amendments was this morning at 9 o'clock. It's too late to close the door after the cows have left the pasture.

What strikes me about both sessions of today's testimony—and when we fall into the trap of changing laws when we cite a particularly egregious case.... The Canadian Taxpayers Federation was here today and they identified one particular case and this is why we have to change the rules. But the evidence you shared with us today...the harmony and the progress we've seen over the years has been a result of consultation, consensus. Employers, crown corporations, FETCO—everybody is buying into the process.

Do you see the departure being driven by, for example, the testimony that was given today by the Taxpayers Federation? He's not an expert; he doesn't seem to have any background in labour relations or anything. This is a hijacking of the process, but the outcome further impairs relationships going forward, not just now.

Would anybody like to comment on that?

[Lisa Blais]

We rush to change for the sake of change. It creates bad law and bad law creates bad situations. I think now more than ever we need to take a step back and really think about what we're doing and why we're doing it, because these changes will impact labour relations for years to come.

Make no mistake, 17 contracts are up in 2014 and they will all be impacted if this legislation goes through as is.