Finance Committee on May 17th, 2021

[Ed Fast, Conservative, Abbotsford, BC]

Thanks so much for that explanation.

Could you go back to talk a little more about the de novo model? I think what you're saying is that it would allow an appeal to be conducted in a manner that would turn it almost into a new proceeding, with either new or maybe additional evidence being presented. Is that right?

[Lorraine Pelot]

Yes. In fact the de novo model still has a “leave to appeal” requirement, and so there is a need to show that there's an arguable case, based on new evidence, to be provided to the appeal division.

[Ed Fast, Conservative, Abbotsford, BC]

What impact will that have on the timeliness of hearings and the cost to the taxpayer of providing for, effectively, an opportunity for a second trial? Just give us your assessment. Surely you've done some costing on this.

[Lorraine Pelot]

In terms of timeliness, 80-some per cent plus of the appeals heard before the Social Security Tribunal are related to CPP disability benefits. The stakeholders, during consultations, requested the de novo approach because for many of these appellants, their medical conditions and situations and ability to function evolve over time. Timeliness, for many of these appellants, is not necessarily faster; it's actually having the appropriate amount of time to gather any new and evolving evidence, such as new diagnoses, and more information about diagnosis or tests.

[Ed Fast, Conservative, Abbotsford, BC]

Before you go on, because my time is short, who are these stakeholders you're talking about?

[Lorraine Pelot]

A third party review was conducted by KPMG back in 2016-17, followed by a report with recommendations, and then further consultations with stakeholders to reach the options that were put forward.

[Ed Fast, Conservative, Abbotsford, BC]

I want to drill down. Are the stakeholders disability groups, primarily?

[Lorraine Pelot]

They're disability groups, groups representing seniors and other stakeholders in the appeals process.

[Ed Fast, Conservative, Abbotsford, BC]

Instead of doing a de novo model in which you're replicating an earlier proceeding, effectively, with leave, why wouldn't you simply focus your efforts on making sure that the original hearing is robust and that it protects fully the ability of claimants to make their case?

[Lorraine Pelot]

There are a couple of points about that.

The original tribunals that were combined into the SST had this model where there were two levels of appeal where appellants were allowed to introduce new evidence. Historically, there was a desire by stakeholders to return to that.

Also, at the general division, the entire process is being made more efficient and more client-centric. Clients will be able to put a good case forward at the general division but it was felt that, again, as their medical case evolves, they should have an ability to bring in new evidence to the appeal division.

[Ed Fast, Conservative, Abbotsford, BC]

Okay. Thank you.

[The Chair, Liberal, Wayne Easter]

Tamara, I'll come to you in a moment.

Just while you're on the subject, how do you see the system being more client-centric?

I'll tell you my bias. I believe in the old system. I've done a lot of Canada pension plan disability cases. You did them in your local community—in Charlottetown, in my case—where you had one or probably two local persons, with a person who had come in from Ottawa or wherever. You actually saw the person in the hearing. The person with the disability walked into the room, many of them were in tears, and that was where the client could go before the body and make their case. I assisted many in that. I think that was really client-centric.

Now it's more impersonal. It's more paper. It's more computer. How do you get client-centric out of this new system?

[Lorraine Pelot]

There are a number of changes that have already been made by the SST to make it more client-centric, including the plain language used in communications on the website. The biggest one is case navigators, who are employees of the SST and the administrative tribunals support service, ATSSC, who actually assist clients through the process, answering their questions and letting them know how it goes.

The tribunal currently, for the most part, allows the choice of form of hearing for appellants. Following this legislation, if passed, we are going to be introducing a regulation to ensure that the choice of form of hearing remains with appellants, whether it's in person, video conference, teleconference or on paper.

[The Chair, Liberal, Wayne Easter]

Thank you for that.

Ms. Jansen.

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

Thank you.

You had mentioned, and I think you used the term a couple of times, that this is going to be more efficient. Does that then mean there will be no need for extra employees to make the system work?

[Lorraine Pelot]

There is an additional cost. Actually, I didn't answer the question about costs.

The expected additional cost would be $11 million in fiscal year 2021-22, and $10.6 million ongoing. Much of this is related to an anticipated increase in number of cases at the appeal division. Much of that funding, some 90% of it, would come out of the Canada pension plan fund because it's related to Canada pension plan cases, and about $1 million per year related to old age security appeals.

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

I fail to understand. You're going to be more efficient, but you're doubling the number of cases. I fail to understand how that's more efficient.

[Lorraine Pelot]

The current system has a very legalistic approach to allowing people to access the appeal division. It's one that many appellants and stakeholders criticized for being extremely legalistic, requiring representatives to have legal support, and so on. It's based on error of law, and so on.

Having the appeal division open up to de novo cases reduces that legalistic barrier yet allows evolving evidence to be placed in front of the hearing. It's more client-centric from that perspective.

A number of other changes have been made. For example, the Social Security Tribunal has regularly reduced its delivery standard or number of days to get through hearings. There have been a number of other ways in which the tribunal has become more efficient.

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

Are you saying that they won't require a lawyer?

[Lorraine Pelot]

They may choose a representative of their choice, but in fact the legalistic aspect of getting in the door for an appeal division hearing will be much reduced.

[The Chair, Liberal, Wayne Easter]

Okay, I see no further questions from members. Thank you, Ms. Pelot.

We will now turn to part 4, division 22, which is the Canada Labour Code equal remuneration protection.

Ms. Moran.

[Barbara Moran, Director General, Labour Program, Department of Employment and Social Development]

Thank you, Mr. Chair. My name is Barbara Moran. I'm the director general for strategic policy, analysis and workplace information at the labour program at ESDC. I'm joined today by Lori Straznicky, who's an executive director with the labour program.

I'm here to discuss amendments that are being proposed in part I of the Canada Labour Code. Part I of the code governs industrial relations and establishes the framework for collective bargaining between unions and employers in the federally regulated private sector. Part I applies to industries such as air transportation, interprovincial and international transportation, banking, telecommunications and broadcasting.

Amendments are proposed to better protect employees in the air transportation sector affected by contract retendering at airports. Many employees in the air transportation sector have continued to work through the pandemic, deep-cleaning aircraft, safely handling baggage and performing other critical services that have allowed essential air travel to continue.

These employees are at risk when a service contract changes hands between contractors. This practice, known as contract retendering, can result in employees being paid less when they're laid off and rehired, even if they're rehired to do the same work.

There's currently an equal remuneration protection in section 47.3 of part I of the code that ensures that after a case of contract retendering, the new contractor cannot remunerate pre-board security screeners at a rate lower than that provided by the previous contractor under the terms of the collective agreement.

The equal remuneration protection currently only applies to employers covered by part I of the code that provide [Technical difficulty—Editor] by way of a contract for services with another employer.

The proposed amendments will extend equal remuneration protection to all federally regulated employees covered by a collective agreement in the air transportation sector who are working at airports. This will ensure that when a service contract changes hands, affected employees are not paid less than employees of the previous contractor who provided the same or substantially similar services.

I'm happy to take any questions.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Barbara.

Are there any questions?

I see none. There was a fairly good discussion on the evening briefing.

I believe you're off the hook, then, Barbara. Thank you very much.

We'll turn to division 23, which is the Canada Labour Code and federal minimum wage.

Mr. Charter, please go ahead.

[David Charter, Director, Workplace Information and Research Division, Labour Program, Department of Employment and Social Development]

Good afternoon. Thank you, Mr. Chair.

My name is David Charter. I'm the director of the research and innovation division at the labour program at Employment and Social Development Canada. I'm here today with Sébastien St-Arnaud, the manager of policy development at the labour program. We're here to talk about the proposed amendments to part III of the Canada Labour Code in division 23 of the budget implementation act related to minimum wage.

Part III of the Canada Labour Code establishes minimum working conditions, such as hours of work, annual vacations, various types of job-protected leave. It also sets the minimum wage for employees in the federally regulated private sector. The federally regulated private sector includes about 6% of all Canadian employees, employed in industries such as banking, telecommunications, interprovincial and international transportation and most federal Crown corporations and in certain activities on first nations reserves. Part III does not apply to the federal public service.

Currently, part III of the code sets the federal minimum wage as the general minimum wage established by the province or territory in which the employee is usually employed. The mandate letter of the Minister of Labour includes a commitment to raise the federal minimum wage to at least $15 per hour.

Budget 2021 announced this legislation, which amends part III of the code, to establish a federal minimum wage of $15 per hour, which would rise with inflation, and with provisions to ensure that wherever provincial or territorial minimum wages are higher, such a wage will prevail. The new minimum wage would come into force after royal assent.

To ensure that the federal minimum wage remains relevant and rises with inflation, on April 1 of each year after the year the amended minimum wage provisions come into force, the minimum wage would be adjusted based on Canada's consumer price index for the previous calendar year.

I'll finish my remarks by mentioning that our estimates are that approximately 26,200 employees in the federally regulated private sector earn less than $15 per hour and will benefit from the new minimum wage rate.

Thanks. I'm happy to take any questions you might have.

[The Chair, Liberal, Wayne Easter]

Thanks very much, Mr. Charter.

We're going to Mr. Julian.