Finance Committee on Nov. 6th, 2017

[Lorraine McKenzie Presley]

That's a very good question.

We looked at a number of different options, including the regulatory option. The way it works is that the Northern Pipeline Agency has one proponent, and the NEB does not, so it's a different scenario there. With dramatic fluctuations in the way that the agency has to bill the proponent, it causes it to over-collect based on the estimated costs that it bills the proponent on.

At the end of the year, we're looking at actual costs so that the proponent would only be billed based on actuals. That puts more efficiency in the system so that we're not billing up front, four times a year, based on estimates. We're actually billing once at the end of the year based on actuals. It would be more transparent to the proponent as opposed to using the formula that we have right now, which would perpetuate the problem that we're dealing with at the moment.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Okay. Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you, Lorraine and Victor, for your information. We will release you and go to division 8, Canada Labour Code.

Mr. Gagnon is a senior policy analyst with the labour program at Employment and Social Development Canada. Ms. Hill is a senior director in the labour program at Employment and Social Development Canada, as well.

Welcome. I'm not sure who's starting off, but the floor is yours. Ms. Hill, go ahead.

[Margaret Hill, Senior Director, Strategic Policy and Legislative Reform, Department of Employment and Social Development]

Thank you, Mr. Chair. I will begin.

Division 8 of part 5 of the budget implementation act is focused on proposed changes to part III of the Canada Labour Code, and the need in particular to provide greater flexibility for employees to give them more ways to balance the demands they face at work and outside of work.

Part III of the code, as you may know, establishes minimum working conditions for about 900,000 employees in the federally regulated private sector. That includes industries such as banking, telecommunications, interprovincial and international transportation, as well as federal crown corporations. Part III sets out the rules for things like maximum hours of work, minimum wages, hours of work, scheduling, and a number of leaves and provisions with respect to termination of employment. There is a total of about 18,000 employers who are covered by part III.

Nearly 60% of Canadians regularly say they are overloaded due to the pressures associated with the multiple roles they play at work and outside of work. Allowing employees to seek changes to where, when, and how they do their work, and also to take time away from work to deal with family and other responsibilities without fear of losing their jobs benefits employees and employers. There are benefits through improved well-being, reduced absenteeism and presenteeism, better recruitment and retention of labour, better employee engagement, greater labour market attachment, and increased productivity in innovation.

With this in mind, division 8 proposes three sets of changes to part III of the code.

The first is to introduce a right for an employee to request changes to the terms and conditions of their employment related to the number of hours they work, their work schedule, and the location of their work, on a temporary or permanent basis. An employee would be able to make an unlimited number of requests, subject to any regulations that may be set at a later point in time. The employer could refuse a request on specific grounds, such as the cost being burdensome, or that accepting the change would have negative impacts on business performance. The employer would be prohibited from taking reprisal against an employee who makes a request for flexible work arrangements.

The second set of changes relate to the creation of three new unpaid leaves that would allow employees in the federally regulated private sector to take job-protected time away from work. The first is an unpaid family responsibility leave of up to three days. The second is unpaid leave for victims of family violence of up to 10 days. The third is unpaid leave for traditional aboriginal practices of up to five days. The existing bereavement leave under part III of the code would also be enhanced, adding to unpaid days, and giving employees more flexibility with regard to when they actually take their bereavement leave.

The third and final set of changes is being proposed in order to implement the right to request, codify certain existing practices, and remove a provision that is outdated. These changes would amend provisions related to hours of work, annual vacations, and general holidays—again, to allow more flexibility. The changes would also repeal an existing provision that requires a commission of inquiry to be established before certain hours of work regulations are put in place or changed.

[The Chair, Liberal, Wayne Easter]

Thank you, Ms. Hill.

We turn to Ms. O'Connell for the first questions, then Mr. Dusseault, and Mr. McLeod.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thank you, Mr. Chair.

My first question is in regard to the consultations you had on this, whether it was the unions or other labour departments.

Can you speak to the consultation that was done in coming up with these changes?

[Margaret Hill]

Extensive consultations were held in 2016. More than 1,000 Canadians and stakeholders participated. The previous minister held round tables in five locations across the country, one of them by video conference. We also ran a survey, which was open to all Canadians, all associations, all organizations, to get their views on what flexible work arrangements the federal government should move forward on. In total, there were over 1,000 representatives of labour and employer organizations, university experts, not-for-profit groups, advocacy organizations, and of course, individual Canadians.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thanks.

Were the public service unions involved and consulted?

[Margaret Hill]

Yes, certainly the Public Service Alliance of Canada was involved. I would note that these changes to part III do not apply to the federal public service. But yes, they were involved and they were very helpful.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thank you.

In regard to the change around unpaid leave for victims of family violence of up to 10 days, who does that include? I would assume, for example, that there could be a number of scenarios that this could impact, sadly, but it could be individuals who had violence done to them or also, I would assume, a family member. Are there provisions around who this applies to or where this would be applicable?

[Margaret Hill]

This new leave would provide up to 10 days of leave per calendar year for victims of family violence and parents of a child who is a victim of family violence.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thank you.

My last question is around unpaid internships. Are there changes to this? Can you speak about how this came about—I'm assuming through the consultations—and what these changes will mean?

[Margaret Hill]

We're actually going to talk about unpaid internships in the next division.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

I'll leave it there. Thank you.

[The Chair, Liberal, Wayne Easter]

Go ahead, Mr. Dusseault.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you, Mr. Chair.

I'd like to thank the witnesses for being with us today.

How much did you rely on 2006's Arthurs report?

[Margaret Hill]

I actually have it here, in front of me.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

To what extent are the amendments based on the report's findings?

[Margaret Hill]

The Arthurs report is obviously a touchstone for federal labour law and federal labour reform. The report in 2006 is linked to several of the ministers' mandate letter commitments. In the particular case of these sets of amendments, the right to request flexible work arrangements was one of the recommendations, and there was also a recommendation from Dr. Arthurs with respect to leave for family responsibilities.

The one thing I would highlight is that since 2006, more than 10 years ago, the world of work has changed significantly. In the meantime, some changes have been made to the code, particularly with respect to strengthening care-related leaves that employees are entitled to—compassionate care leave and things like that.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

The report recommends 10 days of leave for family responsibilities. Why, then, did you propose only three? What was the basis for proposing three days of leave, versus four, six, or 10?

[Margaret Hill]

Indeed, Dr. Arthurs recommended 10 days. As I said just a few moments ago, since 2006 the code has been amended to provide a number of new leaves related to caring for family members. For instance, there is now a 28-week compassionate care leave, 37 weeks for which employees are entitled to provide care for a critically ill child, and a new leave for employees who experience the death or disappearance of a child, of 104 weeks and 52 weeks respectively. Most recently, as of this December, a new 17-week leave to care for a seriously ill adult will come into force. The difference between three and 10 is partly due to these other kinds of care-related leaves being introduced.

I would also say that the family responsibilities leave in the immediate package is part of a package that would introduce a total of 18 days of leave for employees, some again related to family responsibilities.

Finally, if you look across the country in other jurisdictions, you'll see that provinces and territories generally provide from three to 12 days of family leave, so we're right in the ballpark.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you for your answer.

Overall, do you also look to provincial regulations in establishing Canada's labour standards? I would think you do a pretty comprehensive review of all the provincial rules. How much did you rely on those rules? Why do you decide to give more weight to one province's regulations over another's?

[Margaret Hill]

Part of our due diligence as public servants is to look at comparable leaves and, in fact, different kinds of leaves that are offered in jurisdictions across Canada, but also internationally. Sometimes it's a question of the federal private sector being quite laggard compared with other jurisdictions. Those are the kinds of things that we take into consideration, as well as the whole package of leaves and other supports that are provided under part III to employees and their employers.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

My last question has to do with something you mentioned. I am referring to the proposed flexible work arrangements provisions and new subsection 177.1(3), which lists the grounds on which the employer may refuse to make the requested change.

As I see it, the scope is so broad that the employer could, practically speaking, refuse to grant any request at any time, without having to provide any sort of evidence. It would be very easy for the employer to claim that the requested change would have a detrimental impact on the quality or quantity of work in the establishment. What's more, the additional costs mentioned are not clear. The employer may even cite “any ground prescribed by regulation”, which will open the door to a myriad of excuses.

Why did you choose to cast such a wide net in terms of the employer's grounds for refusing a request, as opposed to limiting those grounds, thereby giving the employee a recourse mechanism at the end of the process? To my mind, recourse will be limited given how many excuses are available.

[Margaret Hill]

I just want to be certain. We are talking about the right for the employer to refuse a request for flexible work arrangements? Yes.

It's proposed that there would be three reasons for which an employer could turn down a request for flexible work arrangements. The first is if it would cause additional costs that are burdensome for the employer or have a detrimental impact on the business. The second is if there would be insufficient work available for the employee as a result of the change in working arrangements. The third is if the work cannot be reorganized or replacements recruited. As you note, there is provision for regulatory authorities.

The model that was used for the right to request is very much informed by practice in New Zealand and the United Kingdom, which introduced a right to request several years ago. These provisions mirror very closely those that are in the United Kingdom. There is ample evidence that suggests they have been quite successful. Guidance is provided by labour inspectors about how these criteria should be interpreted.

I think it's also important to note that during the consultations that we held, we regularly heard concern from employers—small and medium-sized businesses, for instance—about what these criteria should be. There was an agreement amongst almost all stakeholders that there needed to be a formality around the process. There needed to be a way for employers to reject a request for flexible work arrangements.

The reason why the regulation-making authority is there is that, if we get it wrong, it will allow us to make adjustments, depending on the experience that evolves once the changes take effect.