Human Resources Committee on April 18th, 2016

[The Chair, Liberal, Bryan May]

Good afternoon, everybody. The committee will come to order.

I have the pleasure of introducing a number of guests here today. From the Industrial Contractors Association of Canada, we have Tony Fanelli, vice-president and manager of labour relations. From Federally Regulated Employers - Transportation and Communications, otherwise known as FETCO, Derrick Hynes, the executive director, is here today. Thank you both for attending today.

From the Canadian Federation of Independent Business we have Daniel Kelly, president and chief executive officer. Thank you, sir, for again appearing. You're our first repeat customer in this Parliament. We didn't scare you too much the last time apparently, or you're a glutton for punishment; we're not sure which. No, I'm just teasing.

Welcome, MP Benson. Thank you for joining us today. I'll acknowledge John when he arrives as well.

We're going to get right into questions. We are back on Bill C-4. Let me ask the witnesses to introduce themselves and give a brief opening. We'll start with Tony Fanelli, please.

[Tony Fanelli, Vice-President and Manager of Labour Relations, Industrial Contractors Association of Canada]

Thank you.

My name is Tony Fanelli. I represent a number of organizations in the construction industry in Canada.

I put down Industrial Contractors Association on the application form, but I also represent a broader organization called NCLRA, and I'll get into that.

Would you like a presentation now from me, or do you want to go through introductions?

[The Chair, Liberal, Bryan May]

Let's do presentations.

[Tony Fanelli]

Fair enough. Okay.

Who is the NCLRA? While people in our industry have a pretty good handle on the alphabet soup of organizations that we have, it's a bitter fact that beyond our immediate group, people know nothing about how we are organized and how we bargain. The NCLRA is the acronym for National Construction Labour Relations Alliance of Canada. It is the umbrella group for the various provincial and national contractor associations from across Canada.

We are the unionized contractors, and account for somewhere in the vicinity of 50% or more of the commercial and institutional sectors of construction. We employ roughly half a million workers. Some contractors employ one or two. The companies that I represent, including our own, go from employing hundreds to employing thousands, and back to hundreds again, in an unending cycle of build up and build down. This makes our business very complex and requires us to be able to deploy workers in a way that makes sense. Frequently the difference between success and failure on the job is how we are able to deploy that workforce.

Each provincial and national contractors group represents a significant number of contractor groups. For example, there are 60 contractor groups within Ontario, 32 in Alberta, 35 in British Columbia, and 28 in Saskatchewan. Each of these contractor groups represents from hundreds up to thousands of individual contractors. The contractor associations bargain on behalf of all the contractors with their labour counterparts.

Our various trade sectors have created a complex network of relationships with our union partners. We are almost inevitably one half of the board of trustees of pension funds, health and welfare plans, training trusts, education trusts, industry improvement funds, supplementary unemployment benefit funds, and a host of others. This is where one of the complicating factors of Bill C-377 would have arisen. The definitions that amend subsection 149.01(1) of the Income Tax Act are very broad. From the legal opinions our various contractor associations received from their legal counsel, these are broad enough to include both contractor groups and individual employers as labour organizations or labour trusts. Surely that is not what anyone would have envisioned.

Our business is highly competitive. Virtually every job is as a result of a tender process. The successful bidder is required to be the tenderer that offers the best price. I personally have never doubted that the rationale behind Bill C-377 was to give our non-unionized competition an advantage. In the bidding process, we are on the training trust funds, the education funds, the industry improvement funds. We make contributions into these funds, and we receive a considerable amount of training support from the training trusts. It is absolutely clear that when the value of our contributions on a trade-by-trade basis, or the support we have from a training fund, becomes a matter of public record, it is a very simple thing to reverse-engineer as to how we've been doing certain work, or how we develop a crew mix, or how we develop or deploy workers, or how we actually manage the work that impacts enormously on our commercial confidentiality. This alone ought to be a significant enough reason to repeal this legislation.

The cost to contractors is really one of the most important issues I want to dwell on. The costs to our contractors in and of itself are massive. In my company, as a general contractor, we hire all trades. We remit to the various trust funds for each of the unions in the construction industry. Each union has four or more such trust funds. There are 16 unions. In some cases, each union represents more than one bargaining group, so our company, which works in six jurisdictions as we speak, will have to file 500 reports annually, and in such detail that some of the reports will be the size of a city phone book. To what end?

If the Construction Labour Relations association of Alberta or the Industrial Contractors Association of Canada are held to be a labour trust and have to make the reports and returns required by Bill C-377, then both our confidentiality and our bargaining strategies are laid open.

This cannot be good for labour relations or good for either party in the labour relations continuum. I've been a labour relations practitioner in Canada for nearly 40 years. During that time there have never been any issues arising in respect of this subject. If this hasn't been an issue in the past, what is going to be gained by such significant public disclosure? That public disclosure will impact thousands of unionized contractors across Canada represented by NCLRA-affiliated organizations.

The view of the contractors is that this is just another competition strategy launched by our most vociferous competition, which hopes to use the power of the Government of Canada so they can come up with unique ways to undercut our bids.

We are also responsible for the privacy of our employees, and the legislation compels us to decide which law we breach: the Income Tax Act or the various provincial and federal privacy laws.

In closing, it might be different if there were some wrong or right in this area, but there simply isn't. The unionized contractors in Canada see no obvious value in any part of Bill C-377, and therefore support the repeal of that legislation under the bill being considered today, Bill C-4.

Thank you.

[The Chair, Liberal, Bryan May]

Thank you, sir.

Now we're going to hear from Mr. Hynes, from the Federally Regulated Employers.

[Derrick Hynes, Executive Director, Federally Regulated Employers - Transportation and Communications (FETCO)]

Thank you, Mr. Chair.

Good afternoon to all honourable members seated around this table today. It is with pleasure that I present some thoughts to you today on Bill C-4 on behalf of FETCO.

For those of you who are not aware, FETCO stands for Federally Regulated Employers - Transportation and Communications. With that mouthful of words, I'm sure you can appreciate why we tend to shorten our name to just FETCO.

FETCO member organizations are all federally regulated firms in the transportation and communications sectors. The common area of interest that binds us together is labour relations under the Canada Labour Code. We have existed as an employers' association for over 30 years. We are essentially the who's who in the federal sector, encompassing over 400,000 employees and representing many well-known firms such as Air Canada, Bell, CN, CP Rail, and Telus, to name just a few. Most of our member companies are heavily unionized and have a long and successful track record of tripartite engagement in federal labour relations, and I'll speak more on this issue a little later.

As you are all aware, Bill C-4 will repeal two pieces of legislation passed during the last Parliament, Bill C-377 and Bill C-525. FETCO believes that both of these bills resulted from an inappropriate process, one that did not take advantage of a pre-existing and well-established tripartite approach to labour relations.

However, given its significant labour relations implications I will spend my short time with you today focused solely on Bill C-525, the union certification and decertification bill.

FETCO was heavily engaged in the process that brought C-525 through the parliamentary process and has spoken on the record on this bill on several occasions. If I can leave but two key messages with you today that sum up the FETCO position on Bill C-525, it would be the following. Please note that I do recognize these appear to be contradictory, and I hope to explain that throughout my presentation.

First, FETCO had and continues to have concerns regarding the manner in which Bill C-525 was enacted. Second, FETCO supports the basic principles proposed in Bill C-525.

I'm sure at this point some of you are scratching your heads wondering how we can simultaneously support Bill C-525, but at the same time have concerns regarding the process used to enact it in the first place. Please let me explain.

FETCO has consistently argued in concert with organized labour, I should add, that the process used to enact Bill C-525 was inappropriate. Bill C-525 brought in a revised certification and decertification process for all federally regulated organizations via the use of a private member's bill.

While we do not view the use of private members' bills as in any way undemocratic, we do feel they should not be used for changes to the Canada Labour Code. For decades, a meaningful, tripartite, consultative mechanism has existed for such changes, where the three key stakeholders—government, labour, and management—take a deliberate approach to changes under the code and its associated regulations by consulting extensively ahead of time.

Changes to the code should only be considered after a meaningful, upfront dialogue that contemplates all related implications and assesses any change within the greater context of the entire collective bargaining environment. By using this approach via a government bill, a greater degree of rigour is applied to the process. Committees tend to have access to research and analysis and can tap into key internal resources, such as the expertise that exists within the labour program at ESDC and across other government departments.

While a private member's bill does proceed through parliamentary committee and the related process, it does not receive the same level of scrutiny as can be achieved through a meaningful consultation with all stakeholder that is represented by a government-wide approach. We have a system that works. Our suggestion is that we use it.

This brings me to my second key takeaway, which may sound contradictory, but FETCO ultimately did support the basic principles presented in Bill C-525 and is supportive of these changes within the federal collective bargaining environment.

If you'll indulge me, I'd like to read into the record today some comments presented by FETCO to the Senate Standing Committee on Legal and Constitutional Affairs when Bill C-525 was being contemplated in December 2014:

Bill C-525 is a private member's bill. In its original form, it was unfairly constituted and prejudicial to unions and employees seeking [union] certification. In its original form, C-525 required that in order for a union to be certified, it would have to demonstrate in a secret ballot vote that the union had an absolute majority of employees in the appropriate bargaining unit as opposed to the majority of employees in the appropriate bargaining unit casting ballots in favour of the union. FETCO is [most] pleased that Bill C-525 was modified substantially...by the House of Commons Standing Committee on Human Resources...before passing third reading in the [House of Commons].

FETCO members prefer a secret ballot vote to a card check system for the purpose of determining if the union is to become the certified bargaining agent for employees. A secret ballot vote is the essence of true democratic choice and is entirely consistent with Canadian democratic principles. It allows each and every employee to express their true wishes without undue influence or disclosure of how they cast their ballot. This is the mechanism that is used for the electoral process in Canada. It is the fairest process. ...Furthermore, this certification process by means of a secret ballot vote based on the majority of votes cast is the standard that currently exists in the labour relations legislation in the provinces of Alberta, British Columbia, Nova Scotia, Ontario and Saskatchewan. It is a widely accepted method to determining certification in Canada. It is not new. The provisions in Bill C-525 regarding the threshold number of employees required before the Canada Industrial Relations Board will order a certification vote or a decertification vote is 40%. This is appropriate. These provisions are equally fair and are consistent with the rules for establishing certification and decertification vote thresholds in the various provincial jurisdictions. In sum, FETCO supports Bill C-525 as currently written.

Honourable members, I hope that you now better understand the genuine dilemma that Bill C-525 represents and represented for FETCO members. While we objected to the process used to enact it, we certainly supported the final language that was revealed following committee reviews in the House of Commons and the Senate.

Bill C-525 contains three key principles that FETCO continues to support.

First, it ensured that a secret vote would be required for all union certification and decertification efforts. The secret vote is fundamental in our democratic society. We cannot think of another approach that is more open and fair to employees when making these important choices.

Second, it ensured that unionization could not be achieved solely by the use of signed union cards. Employees were free to vote their conscience secretly, without fear of coercion. This approach is consistent with the majority of Canadian jurisdictions.

Third, it set the threshold for requiring a vote for certification or decertification at 40% of those that sign union cards. This is also consistent with the majority of Canadian jurisdictions. The 40% threshold is required in Alberta, Newfoundland and Labrador, Nova Scotia, and Ontario. In fact, 45% is required in British Columbia and Saskatchewan.

Bill C-525 brought the federal system in line with the majority of other jurisdictions in the Canadian labour relations system covering the majority of employees in the country, and it brought the democratic secret vote. This is why it was and still is, for that matter, supported by FETCO.

Thank you for your time and for the privilege of speaking with you today.

[The Chair, Liberal, Bryan May]

Thank you very much, Mr. Hynes.

Now we will hear from Daniel Kelly, president and chief executive officer of the Canadian Federation of Independent Business.

Welcome.

[Daniel Kelly, President and Chief Executive Officer, Canadian Federation of Independent Business]

Thank you, Mr. Chair. Thank you very much, members, for being here today.

I am keen to talk to you a little bit about why CFIB is concerned about the changes to the rules that are being contemplated and why we ultimately favoured the approaches that were taken in Bill C-377 and Bill C-525.

By way of background, we have 109,000 small-sized and medium-sized businesses as members of CFIB. All of them are independently owned and operated. None of them are publicly traded. These are true independents that are out there trying to make a living against incredible odds sometimes in your ridings across the country.

Union issues are tricky ones for many employers. Most of our members, the vast majority of our members, are non-union right now. Of course, that's true of most private-sector workplaces, as our data shows. Unionized firms in Canada are on the decline. But we did support the rules that were put in place in the two bills, and I want to give you a bit of background as to why we developed those positions.

It wasn't that we loved some of the provisions of Bill C-377. Typically, CFIB is calling on government to reduce regulations, not increase rules and regulations and red tape, so it was a bit unusual for us to support a bill that would add rules and regulations to a sector that currently has, I think, fairly few. The reason we did is to try to accommodate the gap that exists in Canada with respect to the fairness of our union rules relative to their international counterparts. It often surprises people to know that Canada is now the international outlier when it comes to union certification. In virtually every country in the world paying union dues, being part of a union, is a choice. It's not mandatory if there is a certified union in that location. In all of Europe, an employee can opt out of paying union dues. It's part of the European Union rules.

That often surprises people because we think somehow in Canada our union legislation is somewhere between Europe's, which is more restrictive, and the U.S., which might be a little more free. In fact, that's not true at all. Some states do require mandatory dues, as we do in Canada—a decreasing number of them—but Canada is now one of only a couple of countries that still require mandatory dues payment if there is a union in that workplace. That's the real issue that was behind our members' support for these two bills.

That a union can compel people to pay dues, through government law, we believe requires the highest levels of scrutiny, disclosure, and accountability. That's why we liked many of the provisions of Bill C-377. If that were taken off the table—and I'm not suggesting that the government is likely to go in that direction—I don't think Bill C-377, the provisions that are there today, would become necessary if employees were able to say, “I believe my union's doing a good job. I want to pay them dues” or they might say, “Hmm, I'm not sure. I'm going to withhold my dues or threaten to withhold my dues to ensure that I'm getting my questions answered properly from my union”. That is what's behind our support for these measures: the fact that Canada is now an international outlier, whereas perhaps in the past Canadian union laws were more in the mainstream.

Small firms, of course, strongly believe that union members should have the right to opt out of union dues. But I also want to share with you that employees, too, believe that additional disclosure is required. Some Leger marketing surveys suggest that 84% of the public agree that additional disclosure is required.

It wasn't a surprise that the new government has decided to turn back the clock on Bill C-377, but I have to admit it is very surprising that the new government is eliminating the right to a secret ballot vote in union certification. To me, that is the biggest issue that is on the table today.

One of the first things many provincial governments—for example, an NDP government at the provincial level that has been elected with the support of unions—do very early in their mandate is eliminate secret ballot votes in union certification. I cut my teeth on that issue back in Manitoba when a government changed there and Gary Doer was elected many years ago.

This is always a worry for small and medium-sized firms. The very principle of secret ballot votes, which we hold so near and dear in electing you, should be there for choosing whether or not to have a union, especially when that union has the power to compel absolutely everyone in the unit to pay dues whether they wish to or not.

That, I think, is the part I want to leave with you. Our biggest concern about this is the fact that this bill would end the right to a secret ballot vote in all circumstances before a union is certified. Even union members, when polled, believe that votes should be held prior to certifying a union. This isn't just the view of employers, among whom it might not be a terribly big surprise—small employers in particular—but is also, we believe, the view of the general public and of current and past union members.

My final thoughts for you are that as long as dues remain mandatory, requiring unions to provide additional detailed information is certain to bring more transparency and accountability—certainly more costs, certainly more red tape, I don't deny that one bit—and that because secret ballot votes are so fundamental to our democratic processes, we would urge you to maintain them on this very important and sensitive issue in the employer-employee relationship.

Thank you.

[The Chair, Liberal, Bryan May]

Thank you, Mr. Kelly.

Now we go over to Mr. Zimmer for his first question.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Thank you for coming today.

I just have one question. I think I know the answer to this from Derrick. Your position is very clear, and I thank you for it.

I will ask Tony. Is your group, or are you as a member of your group, supportive of voluntary union dues in your association?

[Tony Fanelli]

We are not really in a position to speak to it. Voluntary union dues, as far as we're concerned as employers.... We just go to the unions we work for and get the people we need to employ for our projects. How they run their business and how they do their affairs is their business.

There are certain local unions in which it is voluntary. There are others that do not have it as voluntary. It's not an issue for us, one way or the other.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

How about the second question, on the secret ballot? What's your position on the secret ballot?

[Tony Fanelli]

I don't take a position on that. We don't get involved. Most of our work falls within provincial jurisdictions, so it falls under the current provincial labour relations codes. This is under national or federal labour codes.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Here is a question for Mr. Kelly. I'm a former union member—

[A voice]

As am I.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

—and one of my concerns when I was a member was that our union dues were used to front certain political campaigns. I was one person who didn't really know where my dues were going. I would see in a paper or I would see in other locations what my union dues were going to support, without knowing the details. We saw the evidence that was there, but we never really understood how much was going to those campaigns.

Considering that most of these public sector unions avoid a lot of taxes—they're associations and so aren't taxed, accordingly—in our minds, when we brought forward this legislation.... I know that the people who brought these measures forward honestly brought them forward to see change in a positive way for folks like me and other members who have the same thoughts I have.

I would just ask you how, in terms of your membership, you square that circle. It hit me really quite hard when I saw supporting.... I'm not saying they didn't support my party and that therefore I'm angry about this; absolutely not. I was a teacher and thought that my classroom was a non-partisan place and that my association should be a non-partisan place as well. To see dues used for political purposes and not fully understand how much was actually going there was a hard circle to square.

Do you have any thoughts on that? How do we make this better from now on? We think we know the direction it's going. How do you make this better for folks like me?

[Daniel Kelly]

There are some things. One thing that did happen is that I believe it was the previous Liberal government that did prohibit union and corporate contributions to political parties, and our members supported that. Most of our members are incorporated and they supported the idea of banning union and corporate contributions.

It's not so much the contributions. It is all the other ways that unions support causes that then help elect political parties. Certainly at the provincial level we see that happening absolutely every day. For example, unions routinely fly their executives to anti-Israel conferences around the world. There are all sorts of ways that causes, perhaps not shared by their members, are supported through mandatory dues.

Again, I've been asked many times, “What about this legislation as it would apply to my organization, as a voluntary membership group?” Certainly if governments ever chose to do that we would certainly comply. The difference is that for a business association or most groups that are out there, the minute somebody is uncomfortable with the views or the spending on my part or my association's part, they can quit the very next day and they can withhold the most valuable vote they have, and that is their money.

In the current legislative environment in Canada we do not allow that to happen. I have to say, the legislation that exists, which Bill C-377 is based on, largely exists today in the United States. Governments, even the current Democrat government, has not eliminated that legislation that exists in the U.S. today, so this isn't brand spanking new stuff.

As I said before, our fundamental issue is that with the power to mandate dues, to force dues through government law, we believe come additional responsibilities. Bill C-377 is only one way to do that. The other would be perhaps to prohibit political causes on the part of unions. That is essentially what's behind the legislation in all of Europe. The main reason unions have voluntary membership in all of Europe is to prevent unions from using mandatory dues for political purposes. That's another way that I suppose Parliament could explore.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Yes, and I think you've clarified that for all of us, too, because that would be a more extreme step for us to take, to make dues voluntary.

The problem I had.... I'm a former carpenter as well. I still call myself a carpenter first, by the way. I could just go to another union. I didn't need to go to just one particular union, but as a teacher in B.C. I had no choice. Whatever process that particular association was involved in, I was part of it whether I liked it or not. I think this was accountability that we wanted to see. If it's going to be done, at least...so that we can all see it.

Accountability measures are something we should all pursue and then, again, if there is nothing to hide, there is simply nothing to hide.

[The Chair, Liberal, Bryan May]

Thank you, Mr. Zimmer.

Now, we'll go on to Mr. Long, please.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Thank you, Mr. Chair.

Thank you to our three guests for presenting this afternoon, it was very informative.

I will say that when I did my campaigning as a potential new MP—I'm from Saint John—Rothesay and it's a very union, industrial town—certainly one of the things I heard consistently at the doors, most certainly from union people, was that Bill C-525 and Bill C-377 were anti-union, mean-spirited, and designed with an agenda in mind.

I'll start with Mr. Hynes. Can you tell me whether your view of unions is closer to adversary or partner?

[Derrick Hynes]

The latter, that it's more a partner.

Speaking on behalf of the member organizations of FETCO, we are 18 members, firms, most of which are very large within the Canadian context, and most of which are heavily unionized, almost all in fact. These companies have long-standing sophisticated relationships with their counterparts on the labour side. I would say that my members would be very comfortable saying that they view the union to be a partner in the relationship.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Just to follow up, your members indicated their support of Bill C-525 because it was promoted as a fair, democratic process by which employees can “express their true wishes”.

Critics believe this legislation was designed to complicate and thereby lower the rate of union certification. This seems to counter the fair, democratic process. Was FETCO doing a disservice to the workers it represents by supporting the legislation?

[Derrick Hynes]

The legislation put us really in a tough spot because there were principles in the legislation. It shouldn't surprise anybody around this table that the employers within FETCO were supportive of employees having the right to a secret ballot to vote their own conscience on whether or not they would join the union.

The fundamental problem we kept bumping up against was the process used to do this. As I noted in my presentation, we have a well-established tripartite process for legislative regulatory and policy changes within the labour environment within the federal sector. It works. There are many examples of it working. We would have preferred that these changes would have gone through that channel and had that discussion at the front end.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

The issue I have is legislation that actively creates weaker union representation. How can that be considered fair and democratic? Can you explain how it's not the case? I don't understand.

[Derrick Hynes]

As I noted in my presentation, the fundamental right we believe employees should have is the right to choose their union representation. Not unlike most decisions that are made in that context, these votes in the democratic system are done secretly where an individual has an opportunity to vote his or her conscience.

I don't believe there is a motivation among FETCO member companies to diminish the labour movement or to reduce the number of unions, but we do believe there should be an option at the front end for employees to have the right to vote their conscience secretly.