Human Resources Committee on Feb. 15th, 2011

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

But you wouldn't have to go that far.

[The Chair, Conservative, Candice Bergen]

I'm sorry, Mr. Komarnicki, that's all the time.

Thank you very much to the witnesses.

I'm going to suspend for two minutes while we bring in our new witnesses.

Once again, thank you all for being here. We appreciate it.

[The Chair, Conservative, Candice Bergen]

We will resume our meeting. We have 45 minutes for another set of witnesses.

Thank you all for being here.

From the Air Canada Pilots Association, we have Paul Strachan, president, and Bill Petrie, executive director; from the Department of National Defence, we have Karol Wenek, director general of military personnel, and Brigadier-General John Madower, assistant chief of military personnel. Via video satellite, we have David MacGregor, a professor at the University of Western Ontario. Thank you for being here, and welcome.

We will begin with the representatives from the Air Canada Pilots Association.

[Capt Paul Strachan, President, Air Canada Pilots Association]

Thank you, Madam Chair. It's our pleasure to be here today.

Members of the committee, it's nice to see you.

We're here, obviously, to speak to an important contemplated piece of public policy, which is Bill C-481. We support the intent of the bill insofar as it seeks to defend individuals from arbitrary or discriminatory practices, specifically termination of employment by virtue of age.

This is obviously a noble cause, and specific to our case, we agree that paragraph 15(1)(c) is too broad a provision of the Canadian Human Rights Act, because in our instance, there are some 3,000 Air Canada pilots, making up more than half the airline pilots in the country. So we could then unilaterally or de facto set a normal age of retirement for people in similar positions. If under the act that serves as justification for a different employer to terminate the employment of an individual who does not have the benefit of the robust collective agreement and pension provisions that our members do, then it is clearly not appropriate.

So while we agree that paragraph 15(1)(c) is too broad, we must implore the committee to consider careful exceptions to this bill for fear that this bill also is too broad. It's the role of Parliament to protect human rights, but we don't talk specifically here about individual rights. We're talking about human rights in the broad sense, and that includes collective rights of the members of an organization such as our own. So Parliament's task then is to find a balance between those rights that properly protects the interests of all.

Our members have negotiated, as I said, a robust collective agreement, of which its pension plan forms part. Our pension plan is a very generous one. It goes to the limits of the Pension Act and the Income Tax Act and then beyond. We have a supplementary employee retirement plan, and in fact incorporate a retirement compensation agreement into the overall scheme as well, so that the vast majority of our members expect to retire from their employment at Air Canada with a pension that places them still in the top 1% of income earners in the country, with pensions of six figures in the vast majority of cases.

Insofar as Parliament may seek to protect the rights of the individual, you must be cognizant of the fact that you will necessarily impact the collective rights of our 3,000 professionals, who have told us, by a margin of almost 85%, that they favour the current ability to retire at their negotiated age of retirement, which is 60.

Concomitant with our pension provisions, which I say are very generous, we have a true deferred wage scheme, and by that I mean we have a ladder of progression on our wage scale that starts very low--artificially low--in the early years of employment and ramps up over the course of one's career to in fact overpayment in the final years, which allows our members to maximize their retirement earnings, because their final average earnings, their FAE, are calculated on the basis of those five final years.

If you stall the progression up the ladder, it stagnates for some period of time, and the transfer of wealth that occurs is significant. Not only is a member now stagnating at some lower level on the ladder, but unless you're in the top 15% approximately, unless you've achieved your highest progression expected up that ladder at the point of stagnation, you will lose to some degree. In the case of our most junior members, the transfer of wealth is measured in seven figures, because not only are they suffering from the lack of progression in their income during the period of stagnation, but they lose the time value of that money and can never recover. So insofar as you're allowing those few individuals who might like to change the rules and stay longer, you're now impacting the rights of all those other members, because now you're forcing them to stay longer if they want to equalize their career potential and expected earnings, but you're also taking away the time value of that money forever. It's a zero-sum game, so you need to be very careful that this bill does not create unintended consequences.

So it's for that reason that we propose an amendment to this bill. Rather than strike paragraph 15(1)(c) from the Canadian Human Rights Act, it would be more thoughtful and appropriate to amend it to allow for specific exceptions such as in the circumstances in which we find ourselves.

Our proposal would be, then, that paragraph 15(1)(c) be amended to read that it is not a discriminatory practice if the termination of employment or refusal to employ is because of the terms or conditions of a bona fide retirement or pension plan, and that this is justifiable and balances the rights of the individual with the collective rights of a very large group of people.

Thank you.

[The Chair, Conservative, Candice Bergen]

Thank you very much, sir.

We will now go to the Department of National Defence, please, for five minutes.

[BGen John Madower, Assistant Chief of Military Personnel, Department of National Defence]

Thank you, Madam Chair.

Committee members, ladies and gentlemen, it's a pleasure to be here today to discuss the proposal to terminate mandatory retirement and its effect on the Canadian Forces.

As written, the bill would repeal paragraph 15(1)(b) of the Canadian Human Rights Act, which authorizes mandatory retirement once an individual reaches a maximum age provided by law or regulation. Repealing this paragraph would pose a significant challenge to the Canadian Forces operational capability, not to mention to the efficient management of military personnel and cost containment.

The question of mandatory retirement is both important and complex. This is particularly true for the Canadian Forces. The Canadian Forces reflect Canadian society as a whole, and we are thus bound to also follow its social evolution. We must embrace change, and make along the way innovative and strategic decisions. However, the Canadian Forces must also ensure that the ability to fulfill its mandate is not compromised.

As you know, the Canadian Forces are a unique employer. We must deliver on our core mandate, that is, readiness to undertake any mission, either domestic or overseas, in order to protect Canadian interests and the population. People, as always, are the core of this ability. It is our people who ultimately determine our success or failure. The Canadian Forces human resource management is unique in that it rests solely on the hiring of recruits, both officers and non-commissioned members, and then trains and develops them along a career path to become the senior leaders of the organization.

In other words, we do not hire mid-level or senior management from the street. We grow our own from the bottom up. This requires a continuous flow of personnel to ensure appropriate experience and expertise throughout all rank levels. Stagnation at any level negatively affects the entire personnel management structure, particularly if this occurs at the senior ranks. It also affects the operational expertise flow to those specific senior positions. We need leaders who are skilled and experienced but who are also current with the ever-evolving operational and strategic knowledge of the time.

A second aspect is that the Canadian Forces is governed by the principle of universality of service. Each member of the Canadian Forces must, at all times and under any circumstances, carry out any functions that they may be required to perform, above and beyond the duties of their occupational specification. This includes the obligation to carry out military duties, such as combat, under extremely dangerous circumstances. In simpler words, we are all soldiers, sailors or airpersons first, and workers in our specific trades after. In operations, all individuals are called upon to pick up a weapon and participate in the fight; nobody stands back. Other federal government employees or members of the general public are not required to carry out this important duty.

These unique characteristics of the Canadian Forces require a special approach to human resource management. To maintain a homogeneous and effective combat force, the Canadian Forces must apply a mandatory retirement age to ensure a steady supply of personnel with the current knowledge and experience required at each level. As I mentioned earlier, fighter pilots, submariners, and tank commanders cannot just be hired overnight. These people must devote many years to mastering their occupations within the Canadian Forces structure. These are men and women we are counting on to become our future leaders.

Removing mandatory retirement age will result in the Canadian Forces not being able to manage the succession planning efficiently and effectively, creating stagnation and greatly affecting the effectiveness of the entire fighting force, and thus the mandate of the Canadian Forces in protecting Canada, its values, and its interests.

The alternative to a mandatory retirement age would be to develop bona fide occupational requirements particular to each of the ranks and hundreds of occupations and specialties in the Canadian Forces, in order to ensure that individual age does not affect the ability to perform the specific function at the time, and then administering the testing of individuals on a one-by-one approach on a regular basis, as well as prior to any particular assignments. The burden of such administration and the time resources on the force itself would again negatively impact on the operational effectiveness of the entire force.

Moreover, the longer members serve, the more wear and tear they incur from the rigorous physical and psychological demands of military service. And thus, the greater the risk will be of individual performance failures, whether physical or psychological, with their attendant adverse consequences on mission success and the health and safety of others.

[The Chair, Conservative, Candice Bergen]

Sir, your five minutes are up, so if you finish quickly, that would be appreciated.

[BGen John Madower]

Thank you.

I would like to conclude my remarks today by saying, first, I am proud to state that the Canadian Forces are delivering well in their mission, but the proposed amendment would significantly impact our ability to continue to do so.

Merci.

[The Chair, Conservative, Candice Bergen]

Thank you very much.

We'll now go to Professor MacGregor from the University of Western Ontario, for five minutes, sir.

[Prof. David MacGregor, Professor, Department of Sociology, King's University College at the University of Western Ontario, As an Individual]

Thank you for this opportunity to speak to an issue of critical importance for Canadians, amending the Canadian Human Rights Act to eliminate the retirement age.

Over the past four years, virtually every province and territory in Canada has eliminated mandatory retirement, with the exception of Quebec and Manitoba. These provinces, along with the Public Service of Canada, eliminated mandatory retirement more than two decades ago. The U.S. abolished mandatory retirement in 1986; Australia removed retirement age in the late 1990s.

As you know, under subsection 9(2), the Canadian Human Rights Act permits employee organizations such as unions or associations “to exclude, expel or suspend” workers on account of age. Moreover, the compulsory age of retirement is at the discretion of employee organizations within the regulated industry under this act. This is surely one of the most egregious examples of ageism on record. Under the provisions of the Canadian Human Rights Act, older workers may be terminated just as Canada is facing a generational skill shortage of enormous depth. More Canadians are living longer, healthier lives, and in many cases they have knowledge and capabilities that exceed those of younger workers. There is absolutely no sense in expelling them from the workforce.

Especially since the financial crisis of 2008, pension plans are under pressure, and many Canadians do not have financial resources to afford a lengthy retirement. Forced exit from work under these circumstances is an extremely cruel and senseless destiny. Elder Canadians no longer accept the stereotypes of aging. They are forging brand new lifestyles that require continued participation in the workforce. The Government of Canada ought to encourage this exciting new development by abolishing barriers against full participation by older workers.

As a first step, the Canadian Human Rights Act must be amended to exclude age discrimination in employment. A proactive program to encourage longer working lives should be a priority at the federal level. The human rights of older Canadians deserve to be fully recognized. People over 65, or over 60 in some cases, should no longer be treated as second-class citizens.

Thank you for your kind attention.

[The Chair, Conservative, Candice Bergen]

Thank you. You still have two minutes left, but I'm sure there'll be some questions for you.

We'll begin our round of questions, and I think we have time for a seven-minute round. Again, if you'd like to split your time with one of your colleagues, that would be fine, or take the whole amount of time.

We'll begin with the Liberals and Madam Folco, please.

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

Thank you, Madam Chair.

Welcome to all members and our witnesses. I would like my first question to be addressed to the Air Canada pilots group, either Mr. Strachan or Mr. Petrie, as you wish.

You came to see me the other day, and in our discussions and what you presented here today you mentioned several times that the pyramid scheme--excuse me for calling it that, but it's not negative, it's just a way of describing it--they go through was important to the Air Canada pilots. The system is organized in such a way that the apex is in the last five years of the career of that air pilot.

But this isn't the only kind of pension scheme airlines have. I understand that other airlines have different types of pension schemes. WestJet, for example, and Air Canada Jazz have different kinds of compensation schemes.

If you were to change over to a compensation scheme like that of WestJet or Air Canada Jazz, how long would it take? Would you still be against mandatory retirement if you'd had one of those two schemes originally?

[Capt Paul Strachan]

Compared to other groups, you are correct that there are different pay systems out there, and many different types of retirement compensation schemes and pension plans. None that I can think of are as generous as our own, in terms of pay or pension. That, of course, is by design, and it flows from our collectively bargained provisions.

We're a democratic organization. We take our strength and mandate from the wishes of our membership. Certainly on this issue they are very clear that they see all of the provisions of their employment, including the negotiated age of retirement at 60, as benefits. They are able to draw a very generous pension plan at an earlier age than many others. It does not preclude them from seeking work elsewhere. It's just the provision of employment we all agreed to the day we signed on the dotted line. We knew what it was. We all saw the rationale behind it, because it was of great benefit to all of us.

In essence, if you were to repeal paragraph 15(1)(c) simply to direct that a fixed age of retirement was bad in all cases, you'd be telling our members that they were discriminating against themselves.

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

That is the second part of my question. In your presentation you said that in a study you carried out there was a margin of 85% in favour of the continuance of this pension scheme. Is that correct?

[Capt Paul Strachan]

We actually conducted two.

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

The 85% was when?

[Capt Paul Strachan]

It was not quite 85%. It was more than 80% and less than 85%. That was some three or four months ago. The one we conducted initially was when the complaints were first made to the Human Rights Commission. We sought our membership's direction on where they wanted us to go. At that time the majority was greater than--

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

How was that pension scheme brought into your plan originally?

[Capt Paul Strachan]

I believe that happened long before I was born, so maybe I'll let Bill speak to that one.

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

Mr. Petrie, I hate to ask you your age.

[Bill Petrie, Executive Director, Air Canada Pilots Association]

The pension plan has been around since the 1950s. The airline, like all federal employers, introduced a pension plan.

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

How was it introduced? That is the gist of my question. Was it put to a vote by Air Canada employees?

[Bill Petrie]

I wasn't there, obviously, because I'm not that old. I understand it was part of the negotiations. All changes that have been made to the pension plan--and we have made several changes over the years since its inception--have been ratified in the bargaining process. So they were voted upon by the members when they voted on the collective agreement. The pension is just one aspect of the collective agreement that we seek changes to. When it is changed, it goes through the ratification process.

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

The reason I asked that question to either Mr. Strachan or Mr. Petrie is that I've had a chance to read the notes that Mr. Vilven had given to us.

On page 4, he says, “The age-60 mandatory retirement provision was implemented at Air Canada by fiat of the Air Canada management in 1957.”

So it's definitely before all of our time. He also says:

There was no negotiation involved. As late as 1980, the mandatory retirement provision was not yet located within the collective agreement or within the Air Canada Pension Plan. It existed simply within the policy documents of Air Canada. In the mid-1980's, the mandatory retirement provision was inserted by reference into the collective agreement itself. When that occurred, at no time did the pilots' union place the question of mandatory retirement before the general membership of the union for discussion or for ratification. It was simply inserted without ratification, and without even advising the membership that that had been done .

Would you care to comment?

[Bill Petrie]

Go ahead.