Evidence of meeting #4 for Human Resources, Skills and Social Development and the Status of Persons with Disabilities in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was unions.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Anthony Giles  Assistant Deputy Minister, Policy, Dispute Resolution and International Affairs, Labour Program, Department of Employment and Social Development
Blaine Langdon  Chief, Charities, Personal Income Tax Division, Tax Policy Branch, Department of Finance
Costa Dimitrakopoulos  Director General, Legislative Policy Directorate, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency

3:30 p.m.

Liberal

The Chair Liberal Bryan May

We're going to get moving here as we have a very busy schedule. I thank everybody for being on time. We are going to have to be on time if we're going to get through everything. So, without any preamble, I believe we have a motion.

Mr. Robillard.

3:30 p.m.

Liberal

Yves Robillard Liberal Marc-Aurèle-Fortin, QC

Thank you, Mr. Chair. Good afternoon everyone.

The motion I am submitting reads as follows:

That, pursuant to the order of reference of Monday, March 7, 2016, the committee undertake a study of Bill C-4, An Act to amend the Canada Labour Code, the Parliamentary Employment and Staff Relations Act, the Public Service Labour Relations Act and the Income Tax Act, which should include the following:

That four meetings be scheduled for the consideration of the bill, including this meeting;

That this first meeting be devoted to a briefing from the Minister of Employment, Workforce Development and Labour, and department officials;

That the second and third meetings be devoted to hearing various panels of witnesses;

That the clause-by-clause consideration of the bill be scheduled for the fourth and last meeting; and that any amendment proposed by members of the committee be submitted to the clerk of the committee no later than 48 hours prior to the start of clause-by-clause consideration of the bill;

That each witness meeting consist of two panels of witnesses consisting of up to three witness organizations who shall be selected by the committee using the regular witness apportionment and selection formula based on House of Commons representation and that members of the committee submit their witnesses lists to the clerk by no later than 5:00 p.m., Friday, March 25, 2016;

That the study commence immediately following the passing of this motion, as legislative studies take precedence over other activities for the committee and because the minister is readily available;

That the clerk of the committee be directed to work with the chair to ensure witnesses are invited and ready for the start date for the study and subsequent meetings as identified by the chair.

3:30 p.m.

Liberal

The Chair Liberal Bryan May

Thank you.

Are there any debate, questions, or concerns before we move to a vote?

(Motion agreed to)

We are going to pause while we get the cameras all set up. We'll get back here as soon as the minister and the technical people tell us we're ready to go.

Thank you.

3:40 p.m.

Liberal

The Chair Liberal Bryan May

On behalf of the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities, I would like to extend my thanks to Minister Mihychuk for joining us today. Thank you very much.

Minister Mihychuk, without any preamble or further ado, I turn it over to you for your introduction.

3:40 p.m.

Kildonan—St. Paul Manitoba

Liberal

MaryAnn Mihychuk LiberalMinister of Employment

Thank you very much. It's a real pleasure for me to be here with so many of my colleagues who are obviously interested in one of the most important areas of our work, the welfare of Canadians.

One of the relationships that's very important is our relationship with organized labour, and so we will be talking about Bill C-4 and exactly that, building a stronger relationship with our organized labour movements in Canada.

I'm proud to be here today to present for your consideration Bill C-4, an act to amend the Canada Labour Code, the Parliamentary Employment and Staff Relations Act, the Public Service Labour Relations Act and the Income Tax Act. This bill, if passed by Parliament, would repeal Bills C-377 and C-525, both of which have been a detriment to unions and labour organizations.

Bill C-4 helps deliver on our commitment to restore a fair and balanced approach to labour relations in this country, one that balances the rights of unions with the rights of employers. Bill C-377 and Bill C-525, two bills adopted during the last session of the 41st Parliament, upset that balance, and we believe must be repealed. These bills have serious ramifications for workers and unions in Canada. They put unions at a disadvantage. They also bypass the tripartite consultation process involving employers, unions, and governments, a process that has traditionally been used for federal labour relations law reform in Canada and which contributed to stable labour relations in the federal jurisdiction.

Fair, balanced, and evidence-based policies must be developed through real consultation and engagement. Our government believes this is essential for the prosperity of workers and employers, Canadian society, and the economy as a whole. When it comes to labour law reform in the future, we are firmly committed to meaningful engagement with unions, employers, other stakeholders, the provinces, the territories, and the Canadian public.

To make sure the federal labour policy works in the best interest of Canadians, we felt it was our duty to seek the repeal of Bill C-377 and Bill C-525. These bills were a solution in search of a problem. First let me explain what these bills do. I'll start with Bill C-377.

Bill C-377 amended the Income Tax Act to require all labour organizations and labour trusts, including those under provincial jurisdiction, to file detailed financial and other information with the Minister of National Revenue which would then be made publicly available on the CRA website.

This raises significant privacy concerns because it would include detailed information on organizations, assets, and general financial health as well as liabilities. This includes individual transactions over $5,000, the salaries of certain officers, directors, and trustees, as well as time spent by certain personnel on political or non-labour relations activities. Failure to comply with these reporting requirements could result in a fine of $1,000 for each day of non-compliance up to a maximum of $25,000 per year.

In addition, Bill C-377 creates unnecessary red tape for unions that are already financially accountable to their members. Section 110 of the Canada Labour Code requires unions as well as employer organizations to provide financial statements to their members upon request and free of charge. Most provinces have similar requirements in their labour laws, so Bill C-377 duplicates accountability measures that already exist. The bill also puts unions at a disadvantage during the collective bargaining process by giving employers access to key information about unions without being required to reciprocate.

Bill C-377 has tilted the playing field in favour of employers. For example, employers would know how much money the union has in a strike fund for a possible work stoppage and how long they could stay out if it came to a strike; so, the union's most important negotiating lever is undermined. There have also been concerns raised about the constitutionality of Bill C-377, because the objective of the bill could be seen not as taxation, but as the regulation of unions, which is in large part a matter of provincial jurisdiction. Seven provinces spoke out against Bill C-377 for that very reason. Bill C-377 is problematic for many reasons, but if it is inconsistent with the Constitution then that alone should be reason enough to repeal the legislative changes it made.

This brings me to Bill C-525. This bill changed the unions' certification and decertification systems under the Canada Labour Code, the Parliamentary Employment and Staff Relations Act, and the Public Service Labour Relations Act. The bill replaced the existing card check system with a mandatory vote system, despite the fact the old system worked well for decades and there was little pressure to change it. Bill C-525 makes it harder for a union to be certified as a collective bargaining agent, and makes it easier for a bargaining agent to be decertified. Previously, the Canada Labour Code required at least 35% support to trigger a union certification vote. If the organization could show they had the majority's support, they were automatically certified as a bargaining unit. Now under Bill C-525, a party seeking to become a certified bargaining agent faces more difficult odds. To be certified as a bargaining agent, they need to demonstrate the support of at least 40% of the employees and must proceed to a certification vote in all cases, even if majority support is expressed. Previously, decertification was possible if the party seeking the revocation of the unit certification demonstrated majority support. Now representation votes must be conducted in all cases when at least 40% support for decertification is demonstrated.

When we asked stakeholders what they thought of the new certification rules, many said the previous card check system not only was faster and more efficient, but it was also more likely to be free of employer interference. Some have suggested that moving away from the mandatory vote system and reverting to a card check system is undemocratic. Statistics show that from 2004 to 2014 the Canada Industrial Relations Board dealt with 23 cases involving allegations of intimidation or coercion during an organizing campaign, and only six were upheld. That's six cases in 10 years. Of these six cases, four involved intimidation and coercion by an employer. The other two were situations where two unions were competing to represent the same group of employees, and one union made allegations against the other. The card check system is a perfectly democratic way of gauging support as it ensures that an absolute majority of employees support the union, not just those who come out and vote. In addition, the Canada Industrial Relations Board and the Public Service Labour Relations and Employment Board can order a vote if there are doubts about employees' support for unionization. A union will not be certified unless the labour board is satisfied that there is support for it by a majority of employees.

By repealing Bill C-377 and Bill C-525, our government would restore a fair and balanced approach to labour relations in Canada. Successful collective bargaining and fairness in the employer-employee relationship are at the foundation of our economy. They provide stability and predictability in the labour force, two vital elements of a strong economy. To put it simply, good labour relations are good for everyone. The issue is simple: Bill C-377 and Bill C-525 diminish and weaken Canada's labour movement.

Bill C-4 would help return balance to labour relations and restore positive relations with provinces and territories. Our government strongly believes that Bill C-4 should be passed. I look forward to the committee's review of this important piece of legislation.

Thank you.

3:50 p.m.

Liberal

The Chair Liberal Bryan May

Thank you, Minister. I failed to recognize and introduce the deputy minister of labour, Lori Sterling, so I want to take this opportunity to do so.

Thank you for joining us as well today.

I believe our first question is coming from Mr. Deltell.

3:50 p.m.

Conservative

Gérard Deltell Conservative Louis-Saint-Laurent, QC

Thank you, Mr. Chairman.

Madam Minister, welcome to the committee.

Good afternoon, ladies and gentlemen.

Mr. Chair, today we are considering Bill C-4, whose objective is to undo two bills that had been adopted under our government. These bills were based on transparency and democracy, with a secret vote and accountability.

When you join a union, you get tax credits. If we subscribe to the principle that tax credits are public, in our opinion, accountability should be as well.

Since union fees receive a big tax break, we really think they should be made public, so the unions should be required to make them public, but when we look at some clauses of the bill, they say exactly the reverse. Let's talk about clause 12, which talks about the the organization's assets, liabilities, income, and expenditures.

I am wondering why the minister wants to keep those hidden. Why does she want to be sure that those assets and that information will not be made public?

3:50 p.m.

Liberal

MaryAnn Mihychuk Liberal Kildonan—St. Paul, MB

I want to thank the member for asking the question. Really we are not about hiding information; in fact, we are about having disclosure for the members. What was involved with the bill was onerous legislation that required fiscal reporting that jeopardized the business state of the union, and was cumbersome, exceeding what is the norm for other non-profit groups. For example, if we look at the registered charity information return, this is the normal. It's about 10 pages long. The previous government suggested that unions should have to provide 300 pages of fiscal reporting. That is burdensome, full of red tape, unacceptable, and completely not needed.

3:50 p.m.

Conservative

Gérard Deltell Conservative Louis-Saint-Laurent, QC

In clause 12, precisely, we're talking about.... I will say it in French.

This is about the remuneration of certain leaders.

My question is clear. Why does the minister want the salary of union leaders to remain confidential?

3:55 p.m.

Liberal

MaryAnn Mihychuk Liberal Kildonan—St. Paul, MB

Any member of any union can ask what the union boss's wages are. In the private sector, it's not so clear. If a worker wants to know how much the boss is making, that is confidential information. What's good for employers is good for the unions. We're talking about fairness and balance.

3:55 p.m.

Conservative

Gérard Deltell Conservative Louis-Saint-Laurent, QC

I will recognize the minister's experience in the NDP, but the point is that if you're talking about public business, well, it's public. We can't ask about the high salaries at Bombardier, just to give you an example. On the other hand, my question is also about the next point of clause 12.

This is about the time devoted by staff to political activities and lobbying and non-labour-related activities.

Why does the minister not want the unions to account for their partisan activities?

3:55 p.m.

Liberal

MaryAnn Mihychuk Liberal Kildonan—St. Paul, MB

The purpose of the legislation is to restore fairness and balance. The two bills were an attempt to make unionization more difficult at a time when we saw Canadians choosing free will to unionize or not. In fact, the overall unionization rate was dropping. The attack on unions was political, unwarranted, and unnecessary.

3:55 p.m.

Conservative

Gérard Deltell Conservative Louis-Saint-Laurent, QC

I would like to know how the minister can explain that it is more difficult to have good information and transparency. We are talking about transparency. We are talking about reddition de comptes, as we used to say in French, you know, in the democracy. When you receive tax breaks, union fees with tax breaks, you have to be transparent. My question is whether the minister thinks that the public money is well-served if you hide the political activities of the union bosses.

3:55 p.m.

Liberal

MaryAnn Mihychuk Liberal Kildonan—St. Paul, MB

Thank you for the question. In most jurisdictions where I've had the opportunity to participate politically, donations from businesses and unions are actually prohibited. Where they are not prohibited, the standard for disclosure needs to be fair and reasonable. What was expected here was unfair and unreasonable, and it jeopardized the business security of the union itself.

3:55 p.m.

Conservative

Gérard Deltell Conservative Louis-Saint-Laurent, QC

Let me read the clauses to the minister—

3:55 p.m.

Liberal

The Chair Liberal Bryan May

You have about 10 seconds.

3:55 p.m.

Conservative

Gérard Deltell Conservative Louis-Saint-Laurent, QC

—because what she said was not important is quite important: “time spent by certain personnel on political, lobbying and non-labour relations activities”.

What is wrong with that? How come some union bosses will not tell the people how much time they spend on political activities?

March 21st, 2016 / 3:55 p.m.

Liberal

The Chair Liberal Bryan May

That's your time, sir.

3:55 p.m.

Liberal

MaryAnn Mihychuk Liberal Kildonan—St. Paul, MB

The suggestion by the member that somehow union leaders are choosing to withhold information, which would put them in contravention of the Lobbying Act or other disclosures of jurisdictions, is controversial and I would suggest unreasonable.

Union leaders and trade unions are subject to the laws and rules of the Lobbying Act, and each individual provincial jurisdiction has made it very strict. Whatever system occurs must be fair for employers and employees, and most jurisdictions actually prohibit active campaigning for parties. This issue perhaps is a bit of a red herring, as they say.

3:55 p.m.

Liberal

The Chair Liberal Bryan May

Thank you.

Mr. Ruimy, go ahead.

3:55 p.m.

Liberal

Dan Ruimy Liberal Pitt Meadows—Maple Ridge, BC

Thank you, Mr. Chair. Thank you, Minister.

We were talking about transparency. My understanding is that this information is available through most provinces already. Is it not?

3:55 p.m.

Liberal

MaryAnn Mihychuk Liberal Kildonan—St. Paul, MB

Absolutely. Most provinces have this in their own provincial requirements, and all the information is available to any member on request.

4 p.m.

Liberal

Dan Ruimy Liberal Pitt Meadows—Maple Ridge, BC

Thank you.

When you spoke with stakeholders, how did they react to Bill C-377 when it was passed last year? Did you discuss proposed amendments in Bill C-4 with stakeholders, and what was their response?

4 p.m.

Liberal

MaryAnn Mihychuk Liberal Kildonan—St. Paul, MB

Thank you for the question.

First, the key labour organizations, including the Canadian Labour Congress, criticized Bill C-377 on the basis that it would upset the existing labour relations balance between unions and employers by requiring unions to publicly disclose key financial information, including the strike fund, without requiring employers to reciprocate. Second, it creates unnecessary and redundant financial disclosure obligations, since union financial disclosure is already addressed in the Canada Labour Code and in many provincial labour statutes. Third, the bill is biased against unions and ignores other types of organizations, such as professional associations, which also receive favourable treatment under tax law. Finally, the bill invades the privacy of labour organizations and their members.

Several labour organizations indicated their intention to challenge the provisions enacted by Bill C-377 on constitutional grounds. The Alberta Union of Provincial Employees, AUPE, has launched a constitutional challenge to Bill C-377, which is before the Alberta Court of Queen's Bench. Due to the government's stated intention to repeal the Income Tax Act provisions enacted by the bill, the Alberta Union of Provincial Employees has agreed to adjourn the application without any further dates for hearings being set.

The Canadian Bar Association, not normally known to be particularly heavily unionized, and the Office of the Privacy Commissioner raised concerns that Bill C-377 could breach individual privacy rights. The Bar Association suggested the bill may be subject to legal challenges on these grounds. Many provinces—Alberta, Ontario, Quebec, Manitoba, New Brunswick, Nova Scotia, and P.E.I.—allege that Bill C-377 was potentially unconstitutional by encroaching upon provincial jurisdiction over labour issues. British Columbia did support the bill.

Some business organizations, such as the Canadian Federation of Independent Business, the Canadian Taxpayers Federation, and Merit Canada, did express support for Bill C-377. Market-orientated think tanks like the Fraser Institute and the Montreal Economic Institute had previously expressed support for expanding statutory union financial disclosure requirements.

4 p.m.

Liberal

The Chair Liberal Bryan May

Thank you.

Mr. Sangha, you have time for a quick question.