Finance Committee on May 15th, 2017

[Bill Morneau, Liberal, Toronto Centre, ON]

Well I'm glad to hear that you're getting that question. It means that people are seeing the advantage of the policies that we're putting into place, the flexibility that it's going to create for families, the opportunity that it's going to create for women to have the ability to stay away longer, or come back earlier, depending on their personal situation.

Our answer is that we want to move forward with this bill as soon as possible. Our goal is to have this committee review it, to get the bill passed as soon as possible, so that we can help more women to have that flexibility sooner. That's why we want to move forward quickly. With your support, that's what we'll get to, and it will make a real difference for women and families.

[Vance Badawey, Liberal, Niagara Centre, ON]

With regard to those women currently entering in the system, on maternity leave for their first month or two, will they have the opportunity to tap into that 18 months, versus the current 12 months?

[Bill Morneau, Liberal, Toronto Centre, ON]

We're working towards getting the transition rules done as rapidly as possible. Clearly, moving forward quickly is going to make a difference.

[Vance Badawey, Liberal, Niagara Centre, ON]

Wonderful, thank you.

[The Chair, Liberal, Wayne Easter]

Thank you both.

To be balanced, Mr. Dusseault, you have time for one question, and I told Mr. Albas—because people were talking over each other—we'd have one question on the “of interest” issue.

Mr. Dusseault.

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

Thank you.

We talked earlier about the Infrastructure Bank and about generating revenue for infrastructure projects. You mentioned the REM project, which is targeted at returns of 8%, which gives you an idea of the revenue investors want.

In this regard, BlackRock is one of the major players among those consulted about the creation of this bank. You have consulted this firm several times. It seems to be very close to the advisory council on economic growth, which suggested that you create this infrastructure bank and the model we know today.

Given that BlackRock has been very involved in the creation of this bank in many ways and is going to benefit from it, do you think there is a potential conflict of interest?

We are talking about companies that invest money in this bank, that have been involved in the development of that same bank, and that will benefit from returns of 7% to 9% on their investment.

Is that a conflict of interest?

[Bill Morneau, Liberal, Toronto Centre, ON]

Thank you.

We decided it was very important to consult with people who are really experts in this area. Quebec experts, for example, have a very good understanding of the current situation in that province when it comes to infrastructure investments.

We also consulted pension plan representatives, investors in several regions of Canada and investors from international institutions. It was very important.

Still, each project will be different, and the level of risk and the return on investment will vary from one to the other. In terms of determining the project and what the investment will be, the decision will be made every time by the government.

It is very important to note that this will be our decision. We have had consultations certainly, but governance will rest with the government. We will certainly have some choices to make on the projects and in different situations. Our government's only goal is to ensure that Canada and Canadians across the country benefit as much as possible from major infrastructure projects.

[The Chair, Liberal, Wayne Easter]

Thank you, Minister.

Make it a short, concise question if you could, Dan, on the countering positions on excise tax.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Thank you, Mr. Chair.

I was in Halifax, Nova Scotia, which has the highest number of microbrewers per capita in the country. One of the persons who started in the industry in the eighties said that back when he started there were about 20 or 30 microbreweries. In the first budget by the Harper government, Mr. Flaherty put in place excise tax relief. Now there are well over 600 of these microbreweries right across the country. They are also, obviously, subject to excise tax provincially.

When you add these costs to their structure—in addition to the money that they pay in corporate income tax and in addition to the GST, etc., that's generated and the income taxes by all the jobs—when you take more money out with excise tax, Minister, you're effectively making it more difficult for them to invest and grow.

What do you say to those microbrewers who've just gotten into the market and have invested their life savings to grow a business only to find out that many of them may not have the margins that they did to be able to grow?

[Bill Morneau, Liberal, Toronto Centre, ON]

We know that we need to create a tax system that's fair and a tax system that keeps up with the times. We know that we need to have a system that creates government revenues appropriately and creates a predictable and understandable way of dealing with changes in the economy. By making sure that excise taxes in this sector are changed with the consumer price index, we are just doing what we know is most straightforward, like with every other thing that we purchase or every other item. We're seeing that inflation is keeping the real value of these excise taxes consistent.

In real terms, for that investor, we're saying that their excise taxes will be consistent over time because as inflation changes, these excise taxes will stay consistent and won't move in an erratic way unrelated to that factor.

[The Chair, Liberal, Wayne Easter]

Thank you, Minister.

That ends our round.

I don't know whether or not you could assume that there won't be questions at question period today because all the answers have been given here. I doubt it.

[Bill Morneau, Liberal, Toronto Centre, ON]

I'll be waiting with bated breath.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you, Minister.

We'll suspend for a couple of minutes for officials.

First up is part 4, division 17.

[The Chair, Liberal, Wayne Easter]

We'll reconvene now please.

With us to deal with part 4, division 17, on labour and employment laws, are Mr. Advokaat and Mr. Rochon.

Welcome, folks.

I see you cover about 50 pages in this budget implementation act, so we'll see how long it takes.

The floor is yours.

[Eric Advokaat, Senior Director, Occupational Health and Safety, Workplace Directorate, Labour Program, Department of Employment and Social Development]

Thank you very much, honourable members.

My name is Eric Advokaat. I'm the senior director of the occupational health and safety division for the labour program within Employment and Social Development Canada. I'm here with my colleague Charles Philippe Rochon, a senior analyst.

My area of expertise is really in part II of the Canada Labour Code, which is the occupational health and safety aspect of it. Charles Philippe will be able to address some of the detailed proposed changes in part III, which is really the labour standards portion of the Canada Labour Code.

Division 17 of part 4, as has been noted by the chair, is a large portion of the budget implementation act.

Number one, it proposes to amend the Canada Labour Code to update the suite of compliance and enforcement tools aimed at deterring non-compliance with occupational health and safety and labour standards requirements. This is to ensure that workers in federally regulated industries suffer fewer accidents and injuries at work, and that they receive the pay and benefits to which they are entitled. It will also consolidate the various adjudicative functions that exist under the code, under the Canada Industrial Relations Board.

There are three key changes that I'm going to speak to before I turn it over to Charles Philippe. These changes will apply both to part II, which, again, is the occupational health and safety aspect of the code, and to part III, the labour standards standards parts of the code.

These three amendments are to establish, under a new proposed part IV of the code, a system of administrative monetary penalties to promote compliance with occupational health and safety and labour standards requirements. This would include giving the Governor in Council regulation-making powers to designate violations and determine the associated penalties, up to a maximum of $250,000 per individual violation, and also setting out processes for the issuance review and appeal of notices of violation.

The second aspect is to provide authority to publish information about employers who have been found guilty of an offence or who have violated occupational health and safety or labour standards requirements. The type of information that could be published would also be spelled out in regulation after consultations with stakeholders, but could include, for instance, the employer's name, the nature of the violation or offence, and the associated penalties. Information would be published only once all review and appeal processes have been exhausted.

The third aspect of the change is to, as I've said, consolidate under the Canada Industrial Relations Board the functions of appeals officers under part II and of wage referees and unjust dismissal adjudicators under part III of the code, as well as the functions of adjudicators under the Wage Earner Protection Program Act. This entails some changes as well to part I of the code, which speaks to industrial relations, and would be necessary to adjust the board's powers, duties, and functions. We believe this measure would streamline the appeals process, better use existing expertise, enhance consistency of decisions, and promote a timely resolution of issues.

Those are the three bigger changes that apply to all aspects of the Canada Labour Code, and then there are several others that Charles Philippe is going to speak to that are proposed for part III of the code.

[Charles Philippe Rochon, Acting Manager, Labour Standards and Wage Earner Protection Program, Workplace Directorate, Labour Program, Department of Employment and Social Development]

Thank you.

Several other amendments would be made specifically to the part III labour standards of the Canada Labour Code. This is in order to ensure that employees can avail themselves of existing labour standards rights and protections and more effectively recover unpaid wages.

More specifically, these amendments will bring a number of changes. First, they will provide a new recourse mechanism to deal with employer reprisals. This will allow employees to make a written complaint to the Canada Industrial Relations Board if their employer has engaged in reprisals against them for trying to exercise a labour standards right or providing assistance to an inspector or the Minister of Labour.

Second, there will be a new power that will permit the Minister of Labour or a delegated official to order an employer to conduct an internal audit and to report within a specified period whether it is in compliance with one or more provisions of part III. The employer would also have to indicate what steps have been taken to address any instances of non-compliance as part of the reporting.

New powers will also be conferred on inspectors, in particular to notify employers of compliance orders specifying the time limit for terminating a situation that contravenes labour standards and, where appropriate, the measures to be taken to prevent the situation from recurring.

It will also be possible to clarify aspects of the salary recovery process and to confirm that inspectors do have the power to make decisions regarding wages owing, in particular where an employer fails to keep or provide pay records.

In addition, a significant change will be to extend the period that may be covered by payment orders issued by inspectors. This will allow for the recovery of unpaid wages and other amounts owed to an employee over a period of up to two years prior to the date a complaint was filed, the date employment ceased or the date an inspection started. This is a change from the current standard, which allows going back up to a year. So we're doubling the time frame.

The other changes to part III would provide for the issuance of a notice of voluntary compliance where an employer has voluntarily paid to an employee amounts found owing by an inspector during an investigation. This would be without the need for a payment order. Allowing the issuance of a notice of voluntary compliance would open the current review and appeal mechanism for employees who may believe they are actually owed more wages than what was assessed by the inspector.

Changes would be made to allow the recovery of unpaid wages stated in the payment order by ordering any person indebted to a director of a corporation—for example, the director's bank—to pay amounts owing directly to the Minister of Labour, which can then be disbursed to the affected employees. This would be an expansion of an existing power that allows for debtors of employers to be asked to provide any amounts due.

New administrative fees would be imposed on payment orders, and these administrative fees would be equal to the greater of $200 or 15% of the amounts due. These fees would apply to payment orders issued to an employer, not to a director. Moreover, these administrative fees would be reimbursed to the employer if a payment order is subsequently rescinded on review or appeal.

In addition to that, with the consent of the Minister of Labour, employers and directors of a corporation would be given the option to provide a security, as opposed to a cash payment, if they seek to have a payment order reviewed or appealed. This would give a bit more flexibility to employers, who in some cases may have difficultly putting the full amount together.

All of the proposed enforcement tools under the code can be found in other labour jurisdictions in Canada and other countries, so we are not reinventing the wheel here.

The proposed amendments would come into force by order in council. This is expected to be done on a staggered basis over the coming 36-month period after royal assent. This would provide time for consultations with stakeholders to develop the required regulatory amendments. We are aware, for example, that for administrative monetary penalties we will need to set out all of that in regulations. It would also give time to design and develop the new compliance and enforcement regime, and educate employers, employees, and others.

Thank you, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

Thank you both.

Turning to questions, I have Mr. Sorbara first, and then Mr. Dusseault.

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

I have a clarification question, more of an educational question for myself.

These amendments apply to federally regulated workforces, not outside of that sphere. Is that correct?

[Eric Advokaat]

That's correct.

Perhaps it should be clarified that part II, which is occupational health and safety, applies to federally regulated employees in the private sector as well as the public service, whereas part III does not apply to the public service. There is other legislation that applies to them for labour standards provisions.

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

I'm just curious. What is the rationale for proposing to add an administrative fee issued against the employer under payment orders? Is that the $250,000 fee that you referred to, or is it another fee?

[Charles Philippe Rochon]

Actually, it's a $200 fee, not a $200,000 fee, just to be absolutely clear.

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

Sorry, that's the clarification I was asking for.

[Charles Philippe Rochon]

Basically, the rationale, the objective here is to improve compliance and to encourage employers who owe wages to their employees to pay up as early as possible.

We are aware that there have been circumstances where certain employers, perhaps more unscrupulous, would actually try to delay the process and therefore wait for a payment order to be issued and then ask for their full review, appeal, etc., which can take quite a bit of time. The objective here is to create an incentive so that, if employers actually do owe wages, they pay them up as soon as possible after the investigation by the inspector, before a payment order has to be issued.

That said, we do recognize that there may be reasons why employers in some cases disagree with the inspector's assessment, and therefore if they wish to have the payment order reviewed and appealed, and if they successfully appeal it so that it is rescinded, no administrative fees will be owed by the employer.

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

Okay.

I have a follow-up question. I'm thinking about federally regulated sectors, the airline industry being one of them. Do these sets of changes make the system more efficient and less bureaucratic for both employers and employees?

[Charles Philippe Rochon]

Yes.

The objective is to be much more effective at recovering wages. Part of the issue is how quickly we can recover wages that are owed to employees, rather than having a process that really is very long and onerous. This is to improve effectiveness. It is not a money-making scheme in that sense. It's really to improve compliance and ensure that employees receive what is owed.