moved:
That, in the opinion of this House, the government should not reinstate the wage schedules under the Fair Wages and Hours of Labour Act, but allow the provincial wages and hours to prevail.
Madam Speaker, in 1935 the Parliament of Canada passed the Fair Wages and Hours of Labour Act. It applied only to private sector contractors working for the federal government on construction projects. An example would be a new post office or some federal government public works project.
In those depression era days, when jobs were scarce and the labour market was plentiful, such legislation may have been justified to some extent to ensure that labourers were not exploited and underpaid for the work performed.
In 1983 Canada was in the midst of another depression, probably the worst one since the dirty thirties. Since the legislation did not stipulate that wages and hours of work schedules were mandatory, the Liberal government of the day suspended all activity relating to schedules for construction projects on federal sites. Those we will remember as the days of six and five, the wage and price control program the Liberals told Canadians they would never implement but did.
It seems the Liberal government has a long history of broken promises.
Schedules were frozen at 1982 levels so contracts would remain within this six and five range. When the Liberals were defeated in 1984 the new government re-evaluated the need for these schedules.
This evaluation revealed that the legislation was largely irrelevant and affected only a small segment of the construction sector, approximately 3%, and that the wages, hours of work and overtime problems it was designed to address in 1935 were being dealt with quite adequately under provincial legislation through collective agreements and by the marketplace.
Wage schedules and the survey on which they were based were found to be expensive to administer and statistically unsound. In 1987 the government officially suspended the issuing of schedules for a three year trial period. That trial period found that the introduction of wage schedules would likely increase so-called fair wage compliant levels only marginally. However, the cost to the department of those schedules was estimated to be approximately $270,000.
We know these approximations are just that and generally they tend to run a lot higher than originally set out. It was felt this high administration cost did not warrant a continuation of the practice of maintaining wage schedules.
Fast forward the VCR to April 24, 1997. The prime minister was just a few days from calling a federal election, and the government's olive branch, Bill C-66, otherwise known as amendments to the Canada Labour Code, was in the process of going down in flames in the other place.
The Liberals, it seems, were in a bit of a panic mode. The Reform Party was gaining momentum. The Liberals feared that their reign was in danger of collapse and that one of the wise things to do was to dispatch the Minister of Labour to Hamilton, the centre of the universe, of course, and home of the former deputy prime minister.
In an attempt to curry favour with the left and secure the Hamilton area seats, the minister announced the reinstatement of those expensive, outdated, unneeded, unnecessary schedules. This was the same government that, only months before, announced with much fanfare that it would no longer set minimum wage rates.
Almost exactly a year ago, on October 30, 1996, the House passed Bill C-35, which aligned the federal minimum wage with the general minimum wage rates established by the provinces and territories.
The rate paid to an employee is based on the employee's province or territory of employment. That is a concept that the Reform Party agrees with, that the going rate in Alberta, British Columbia or even in areas of Alberta or British Columbia or Ontario should be the going minimum rate.
However, the portion of Bill C-35 that Reformers did not agree with was that, if the governor in council did not agree with the rate in the provinces, it could interfere. We say, hands off. If it is good enough for private enterprise and if it is good enough for the provincial governments, then it should be good enough for the federal government as well.
The government showed that it had at least a reasonable amount of faith in the ability of the provinces to set minimum wage, therefore we have to wonder why it would take the opposite approach on wage rates and hours of work in the construction industry.
If the provincial minimum wages are satisfactory, why are the provincial laws governing construction wages and hours not adequate? In other words, if someone is a contractor and had a job in Ontario working for the provincial government doing a public works project, then the federal government would not interfere. It would be a deal between the contractor and the wage earner, the trades people or the labourers.
If someone had a job in the private sector in Ontario—same contractor, now—then the marketplace would determine what those people were paid for their services. However, the minister is suggesting that if that same contractor had a job working for the federal government in the same province with the same crew, it would be subject to the fair wages and hours of work schedules.
I really cannot get a grip on this because what is the rationale? We have been led to believe that not only will the reinstatement of these schedules cost the government the bare minimum, $270,000, and very likely more dollars in administrative costs, estimates are that implementation of the wage schedules will add 2% to 5% to the tab for all construction projects.
That is at a time when the country can ill afford increased contract prices. Why are the contractors going to do this? They are simply going to hedge their contracts. They are going to build this in. They are going to say, it is possible that the federal government is going to impose something on us later so we are going to have to build in something to protect ourselves.
They simply cannot, as a contractor, as an employer, take on a contract for x dollars and then have the person who they are working for, in this case the federal government, come back and say that it has decided because of a complaint that as contractor you did not live up to the schedules and it will cost x dollars. The end result is that these contractors are going to build that extra price into the contract right up front.
If we are to believe the things that the finance minister says about not embarking on a spending spree, and we would like to give him the benefit of the doubt on that, higher costs brought on by the implementation of this outdated practice will mean fewer projects and fewer jobs everywhere but in the labour program of Human Resources Development Canada. We can expect to have more bureaucrats as a result of these schedules.
Let us look back into history a bit more. In 1996, the average hourly construction wage for union and non-union workers in Alberta was higher than what the government was paying its trades people. That hardly seems to be rationale for bringing in schedules called fair wages and hours of work, when the construction industry is already exceeding what the federal government is paying its trades people. There is no rationale there.
I believe this is a blatant attempt by the government to interfere in the marketplace. It will cost taxpayers millions of dollars in unnecessary costs and ultimately, lost wages and lost jobs.
Perhaps a lot of workers complained about unfair wages so let us take a look at that. In 1990 an evaluation revealed that during the three-year trial from 1987 to 1990, six complaints were registered involving fair wages. Two of these were in Newfoundland and Labrador where further investigation turned up that these people were in compliance. In other words, there was no basis for the complaint. Four were in Yukon where violations were found and arrears were collected. During this period, the Department of Public Works awarded 4,622 contracts with a greater value of $30,000 per contract for a total value of $1.428 billion. The fair wage arrears amounted to $31,401, an amount that is .00002% of the $1.428 billion total of other contracts.
I am told that over the last three and a half years in Alberta and the Northwest Territories there have been a total of 26 complaints involving this legislation, virtually all concerning overtime and a few concerning wages. Of these 26 complaints, six were said to involve so-called fair wages and two violations were found. One violation involved wages in the amount of 40¢ an hour and the second is said to involve wages of less than $2 an hour.
Are you confused yet, Madam Speaker? Because this is rather confusing to me. Here are examples of workers who say they are not being remunerated fairly. They make their complaints and in the last three and a half years, 26 of them were in Alberta and in two cases it was found that they were not coming up to the rates. These two cases are out of all the contracts that are awarded by the federal government.
If this process can be put in place, why is it that we need to implement these schedules? This is more than I can comprehend. This sort of rationale escapes me.
In a letter to the Minister of Labour, the president of Merit Contractors stated:
Two fair wage violations over a three and a half year period, involving millions of dollars of work, present a strong case for not using additional resources or mechanisms such as schedules to address the matter that is not problematic.
I would like to have seen this motion as a votable item. However, it is not. The only thing I have at my disposal now is to urge the Minister of Labour to reconsider this rather unnecessary, expensive consideration.