[Recorded by Electronic Apparatus]
Wednesday, October 9, 1996
.1536 
[English]
The Chairman: I would like to call the meeting to order.
It is a great pleasure to welcome the Minister of Labour. I believe, sir, this is your first outing to this wonderful Standing Committee on Human Resources Development. I welcome you on behalf of the members who are here to listen to the minister in relation to Bill C-35, an act to amend the Canada Labour Code in reference to the issue of minimum wage.
Minister, as you probably know by now, we are quite an efficient committee, so we will give you approximately ten minutes to speak to us, to tell us about Bill C-35, then we will move to a ten-minute round starting with the opposition, the Bloc Québécois, then we will go to the Liberals and then the Reform.
Welcome, Minister. Would you kindly introduce the officials who are with you?
Hon. Alfonso Gagliano (Minister of Labour and Deputy Leader of the Government in the House of Commons): Let me first introduce my two officials who are here with me. To my left is Judith Weinman. She is a legislative consultant, part III review task force, Labour Branch. Also with me is David Head,
[Translation]
Director General, Parts II and III Review Task Force.
Dear colleagues, Mr. Chairman, as you said, this is the first time I have the pleasure of meeting with you around this standing committee's table and I am delighted to be here. I did previously have the opportunity to attend a meeting of the sub-committee of this committee. I am also pleased to be able to discuss Bill C-35 with you.
[English]
This bill is designed to protect the working poor, the most vulnerable workers. I believe that the minimum wage is one tool, among others, to reduce poverty. It sets a minimal standard. It builds a floor under which wages should not fall. Yes, it's just a floor, but from there workers can begin to improve their skills and reach for better-paying jobs.
With this bill I have tried to achieve a balance among raising workers' income, encouraging employment opportunities and being sensitive to provincial economies.
[Translation]
This bill aligns the minimum wage for workers under federal jurisdiction with the minimum wages in effect in the provinces and territories.
In theory, this means an increase in the federal minimum wage across Canada and, in the future, automatic adjustments whenever the rates set by the provinces and territories change.
In practice, this legislation enables us to bring the law in line with reality. Employers under federal jurisdiction have already realized for some time that they cannot pay their employees less than the going rate in their region.
The economies and labour market conditions vary from one region to another. So does the minimum wage. Therefore, making the rates in a single market consistent becomes a simple question of justice and fairness for both workers and employers.
As I mentioned in the House, workers who do comparable work deserves to be paid the same wage regardless of whose jurisdiction their industry comes under. And, for their part, employers under federal jurisdiction must fulfil the same obligations as their competitors. It is a question of fairness on both sides.
We must also remember that more than 50% of employees under federal jurisdiction are not unionized and therefore depend on us for their minimum working conditions. Of course the measures that we are looking at today are limited in scope because the industries covered by the Canada Labour Code are mainly involved in leading-edge sectors: telecommunications, transportation and banks. Only a very small percentage of these employees received minimum wage.
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The reality is that 98% of the workers who are paid minimum wage come under the jurisdiction of the provincial government. Nevertheless, this harmonization will have a positive impact on reducing the complexity of government regulations and will facilitate compliance with the standards in place.
[English]
Bill C-35 is an amendment to part III of the Canada Labour Code. I would like to take this opportunity to inform you of another initiative I have taken that at the end of the process will bring us suggestions for another amendment to part III.
On August 31 I launched a Collective Reflection document, aimed at exploring the changing workplace. We want to foster public dialogue and discussion in order to identify trends, options and opportunities related to the new realities in the workplace. In short, we are actively searching for the appropriate responses to the challenges arising from the fast-evolving work environment.
The Collective Reflection is operating in two main channels. First, there is an advisory committee made up of six part-time members representing business unions, university youth and industrial relations specialists. As a sign of my commitment to this issue and this process, I have chosen to chair the committee and therefore to participate in its consultations.
The second channel of input to the Collective Reflection is an interactive Internet site. This is designed to reach the growing number of Canadians who use Internet to communicate an exchange of views with each other. Our site complements the more traditional means of consultations used by the government and parliamentarians.
[Translation]
At the end of the Collective Reflection next spring, we will prepare a series of proposals that we will discuss openly with our partners in the workplace. After we have done this, we will then be able to define a workplace strategy that will serve to sustain the efforts that Canadians must make to adapt to the realities of the workplace in the 21st century.
Thank you Mr. Chairman for your words of welcome. I will now answer any questions you have.
[English]
The Chairman: Thank you very much, Minister.
We'll now move to some questions and comments by Mr. Ménard from the Bloc.
[Translation]
Mr. Ménard (Hochelaga - Maisonneuve): I would also like to join with the Chairman in welcoming the minister. He will not be surprised to learn today that, as we stated at second reading, we are generally in favour with the principle of the bill.
However, there are a certain number of points we would like to have clarified today, particularly with respect to proposed paragraph 178(1)(a). There could be situations - indeed these could be wide-spread - where people could be doing work which does not place them under a particular province. I am referring here to the issue of interprovincial mobility which the minister raised on a number of occasions.
Therefore, might there not be a difficulty if the workplace were not defined. Could the minister assess, together with his officials, the impact of that clause? What will happen in practical terms when an individual is doing a job which might cause him to be located in two or three different places?
Mr. Gagliano: I will answer part of your questions and then ask my officials to go into more detail.
In such cases, the current practice is that the wage rate for the province or business is always established either... I will give you an example. If a trucking company located on the other side of the river, in Hull, employs people in Hull who have to go to Ottawa to make deliveries, my interpretation of the provision is - and if it is not accurate my officials can correct me - , that the employee will be paid on the basis of the minimum wage in Quebec so long as the province has set a minimum wage.
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Ms. Judith Weinman (Legislative Consultant, Part III Review): I would like to add that the wording of the bill refers to the rate fixed under an Act of the legislature of the province where the employee is usually employed. In the case of truckers, which was the example given by the minister, they are attached to a terminal and the applicable minimum wage will be that of the province where the said terminal is located, regardless of the location where the rest of the work of the trucker is performed.
Mr. Ménard: Could it be assumed that there may be situations which would not be covered by that definition? Our initial concern, and I think the minister will remember that I raised it at second reading, was with the term ``usually''. The comparison we spontaneously tended to make concerned transportation. There may be no problem as it is worded, but have your legal specialists advised you not to define the workplace? And given your knowledge of legal decisions in this area, does the term ``usually'' refer to something specific?
Ms. Weinman: I cannot cite legal precedents here, but I know that this was one of the things which did worry us. We discussed it with the minister of Justice who assured us that it included the situation to which we refer.
Mr. Ménard: If I understand the minister correctly, that will really depend on the location where the link between the employee and the employer is established, far more than on the location where the employee performs his work.
Ms. Weinman: Yes. This wording was also chosen to indicate that it is not the province where the employee lives that counts, but rather the province where he usually works.
Mr. Ménard: My colleague, who has considerable experience in the area of labour relations both practically and through his work teaching the subject, and I am sure that his contribution is very valuable for the committee, asked whether there is a regulatory schedule which might throw a somewhat different light on paragraph 178(1)(a).
Mr. Gagliano: In a bill, there is always a draft regulation, but the intention conveyed here through the word ``usually'' is that an individual, when he or she is hired, is hired in a specific location. If he travels in more than one province, at the end of his trip he returns to the depot, in the case of a transport company. Therefore, it is easy to determine.
Mr. Ménard: That is the physical location, for all practical purposes. That does not concern the kind of work done or seniority. That is the physical location. That is consistent with what you said at second reading. In any event, I think that my colleague will ask you for further details about that.Mr. Minister, I would also like to discuss with you the proposed subsection 178(3).
Can you explain to us how you interpret that clause and in what circumstances you intend to use it? If no wage was set, you could fix it by Order in Council. You said at second reading that it applied especially to situations where you considered that there was no minimum wage or -
Mr. Gagliano: That's not the case, because all provinces and territories have a minimum wage. However, if there were none, we could see to it that there were one. In passing this bill, we are not waiving our responsibility as federal government if we want regional economic activity to be considered in the regions.
We wanted to be easier to manage. However, if a province were to decide tomorrow morning... You never know what can happen. The government could change. If there were no minimum wage, we could set one for employees under federal jurisdiction.
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Mr. Ménard: You are right in reminding us of how fragile governments can be. Life does offer lessons in that area. I have two questions for you before handing it over to my colleague.
When you came before us, the positions of Quebec and a certain number of provinces had not yet been set. As far as Quebec's position, it is now clear. There is firm support for the bill. So are you coming before us with the support of all the provinces?
Mr. Gagliano: My officials have undertaken consultations and, based on the information I have, there is no opposition from the provinces or territories to this bill, and everyone accepts this initiative. Unless there have been last minute changes, if I'm not mistaken, the provinces are in agreement with the bill.
Mr. Ménard: Without abusing it, perhaps we could use the opportunity of your presence here.I think it's well known that you would like to reform parts I, II and III of the Code. Could we know what your deadline is? You know how impatient we are to work on part I. Could you give us an idea of the deadline?
Mr. Gagliano: I have already stated publicly that I hoped to be in a position to table the amendments to part I either in late September or in early October.
Unfortunately, I was told this morning that because of the time it will take to come up with the wording for certain rather important technical amendments, we will only be in a position to table them during the first week of November.
I do hope that the next time I won't have to change things around again. I'm as impatient as you are to table these amendments, to get the debate underway, not only in Parliament, but across the country, because the way we work affects employers, employees and society as a whole.
In this new economy, it's important that the Canada Labour Code be amended. Part I hasn't been touched in 20 years. As for part II, we're working very hard on it.
We're not as far ahead as we are for part I, but a lot of the work has been done in any case. I can tell you that 90% of the amendments have been accepted by both parties. A few amendments are almost finalized. Within the coming weeks, we should be in a position to go to Cabinet and have the draft accepted and then start drafting the bill.
We hope to be able to table amendments to part II either for the end of this year or the beginning of next year. It's very interesting, because part II deals with health and safety in the workplace. So it's a very important chapter.
As for part III, we're preparing amendments. I launched operation Collective reflection that is winding up at the end of March, and a report will be made to the committee in April. We will call upon all our partners, employers, unions, academics, to come up with specific proposals, and will then proceed to legal amendments if necessary.
Mr. Ménard: On page 3 of your text you state:
- We must also remember that more than 50% of employees under federal jurisdiction are not
unionized and therefore depend on us for their minimum working conditions.
Generally speaking, the Canada Labour Code affects 10% of the Canadian workforce. So 90% of the workforce is not affected. You're seeming to say that 50% of that 10% of the workforce which is under federal jurisdiction is not unionized. So one might think that the working conditions are relatively precarious and that wages are low. Could we get a bit more information on that?
Mr. Gagliano: Yes, of course. I don't know if we have those documents here with us, but we can get them sent to you.
.1555
However, I would like to emphasize that even though they are not unionized, it should not be taken for granted that they are getting minimum wage. For example, in the banking sector, there are very few unions. I think there's only one credit card centre of one bank that is unionized.
The great majority of bank employees are not at minimum wage. I don't know if we have statistics on that, but I will ask my officials to look into it. We can send you some information.
Mr. David Head (Director General, Parts II and III Review Task Force): Unfortunately, we don't have the exact statistics, but we know that less than 2% of the work force are receiving minimum wage. Federally speaking, that's less than 20,000 people. Most are now getting the provincial minimum wage. I imagine we might find a few, here and there, who are getting minimum federal wage. In my opinion, that represents less than 2,000 people.
Ms. Lalonde (Mercier): Let's go back to clause 178(1). As we know that some employers try to exploit the legislation and even go so far as not implementing it sometimes - minimum standards are a sad example of cupidity and pressure on employees - it's not impossible that some take advantage of the fact that we come up with a minimum wage that's not the same.
When you look at minimum wages, you'll find, for example, that in New Brunswick it's $5.50 an hour while it's now $6.70 an hour in Quebec and $6.85 in Ontario. If the wage is set by regulation, any business that has its people travelling could find it profitable to set up its terminal in New Brunswick rather than in Quebec or Ontario. Would the workers then have any kind of recourse because $1.20 an hour adds up at the end of a 40-hour week.
Mr. Gagliano: Of course, when we table a bill we can't provide for all the loopholes an employer or a citizen might think up. If such a case were to occur, we could always look at the situation but I would say that your question is very hypothetical because, especially under federal jurisdiction, there are enormous expenditures in the trucking business. Since we've announced our bill, two provinces have already changed their minimum wage.
Any employer using this scenario is running a lot of risks. It would have to be proven that the whole business is being moved, not just the terminal. There has to be a physical work site.
Ms. Lalonde: By definition, where minimum wage applies, it's because there is no collective agreement. That means that each working man or woman stands alone before the employer when wages are set. That's why the whole matter of standards is always difficult to deal with, no so much for setting the standards themselves but especially in having them applied.
I feel I must put this kind of question. Did you think about that when preparing the bill? It seems to me that, in any case, it shouldn't be used to decrease salaries which otherwise would be higher.I don't have any amendment to suggest but it seems to me there's a real problem there.
.1600
I am waiting for your answer but while I have the floor, just to speed things up, I'd also like you to explain clause 179 concerning conditions of employment set for persons under 17 years of age. Is there any regulation on that? It would be good to have it. If you had it right now, it would be good to have it.
Ms. Weinman: It's clause 10 of the general labour regulations. These deal with the circumstances under which a youth can work. Of course, a young person cannot work while in school, nor underground, in a mine. A young person could work in an establishment under the Atomic Energy Act. Generally speaking, these clauses of the act and regulations concern the health and safety of young people. The only thing different now is that the possibility to assess a lower wage rate for young people has been done away with.
[English]
The Chairman: Mr. McClelland.
Mr. McClelland (Edmonton Southwest): Thank you very much.
I'd like to follow up on Mrs. Lalonde's question. I wonder if the department has done any studies to determine whether or not the established minimum wage is in fact the average minimum wage in any particular jurisdiction. We know, for instance, in Alberta the minimum wage is $5. The question is how many businesses actually use $5 as a minimum wage, other than perhaps hospitality.
In a more global question, I have read reports that say minimum wage laws in fact reduce the amount of entry-level employment, especially for part-time workers. I'm not making a case for or against minimum wage. I'm just wondering if the department has statistics that speak to this kind of data.
Mr. Gagliano: I'll ask my officials to add to my answers, but on the federal level, the jurisdiction in labour the federal government has is in transportation, telecommunications, and banks, plus crown corporations. So the minimum wage is really.... We're talking about a couple of thousand people who would be affected, no more than that. We don't have detailed statistics, because really there hasn't been a major concern. Probably that is the reason why the minimum wage has not been increased for many years. That's why we're taking this route. I think it would be fair for everybody to have a provincial rate that fluctuates according to the needs of the province.
.1605
Mr. McClelland: I have a question, then, that may or may not be directly related and that is off topic, but since you are here, this might be an opportunity to take advantage of it. That is the whole notion of labour mobility and the ability of Canadians to work in one jurisdiction or another. I'm told it's easier for some Canadians to work in the United States than it is to work in neighbouring provinces. Is this a priority of the Department of Labour, to make our economy more efficient by breaking down and taking a lead position in breaking down these barriers to labour mobility?
Mr. Gagliano: My colleague, the Minister of Industry, has the responsibility and has been negotiating.... Currently negotiations are going on with all the provinces so we can have mobility across the country.
On policy, I say yes, we favour mobility, but it has to be negotiated, because of the nature of the labour laws in the provinces. We hope in the near future it will be easier to move within Canada than it is to move to the United States or Mexico and so on.
The Chairman: Mr. McCormick.
Mr. McCormick (Hastings - Frontenac - Lennox and Addington): Welcome to the honorouble minister and the department officials.
A moment ago the legislative consultant referred to Bill C-7, I believe, and our chairperson was selling the many worthy attributes of this committee by saying we run a very efficient committee. Our chair certainly does, but I thought I'd just drop in the comment that if the minister checks the records, some of us had the opportunity to sit on a subcommittee having to do with Bill C-7, and I think it also was very efficient, thanks to the help of the parliamentary secretary and a very supportive and knowledgeable staff. I just thought I'd thank him for that.
Even though this bill doesn't affect a lot of people, when I get home the people, constituents, are going to ask me why the federal government took so long to increase the minimum wage. I can understand their asking that, but I'd like to hear if you'd like to enlighten them.
Mr. Gagliano: I can't speak for previous governments. The only thing I can say is that as soon as we took office we were concerned with the issues and therefore we consulted the provinces. When you have to consult ten other governments and two other territories it takes a bit of time. My predecessor, Madam Robillard, moved as soon as possible, establishing the principle, and having the government accept the principle, that the minimum wages should be the minimum wages of the province. While the legislation was prepared and introduced we announced the decision by Order in Council, and if I'm not mistaken, since July 17 the federal minimum wage has been the provincial minimum wage in the province where they work and reside.
Mr. McCormick: Thank you for the answer.
I have one more question. I don't doubt you've addressed my question. But again, many of these same faces toured the country on our social security review. We all found out in those 35 days, in 24, 25, or 26 cities, in ten provinces, two territories, and the eastern Arctic, that it is a very diverse country. But in every province people asked about national standards for every facet of Canadian society and the workforce. I believe we have very mobile and very eager workers in Canada. I just wonder whether, with these twelve different minimum-wage levels, inequities will be created. How are people going to feel we've addressed this situation?
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Mr Gagliano: We address it first of all by moving this way. The federal minimum wage was increased substantially from $4, going in some provinces to $6 or $7. I believe that in the near future we will see the provinces moving forward and adjusting their minimum wages. But we have a regional economy and people work in a region, in a province, and that's why we moved it, for two reasons. One was to increase the minimum wage and follow what the rest of the country was already doing. Because of an indication of what provinces were doing, we went that way. So the federal minimum wage went up and now Canadians can, within a region, have their minimum wage reflect their own region and their own local government.
Mr. McCormick: Mr. Chair, I thank the minister for sharing his vision of regional parts of Canada.
Ms Augustine (Etobicoke - Lakeshore): I too want to welcome the officials and the minister to this committee.
I want to ask about paragraph 178.1(b). Perhaps you could in plain language speak to how this would apply to someone who is doing piece work, or someone who is being paid on time outside of hours. I just want a bit of layperson's language around this.
Ms Weinman: Shall I?
Mr. Gagliano: Yes, I think you have a better answer than I.
Ms Weinman: I don't know about that, but I'll -
The minimum wage is set at an hourly rate, and there is provision in the bill for paying an equivalent rate where employees could be paid on a monthly or weekly basis.
Within the act as it stands, there is already regulatory power to determine what is the hourly rate, and that is already done. If a person is paid on a basis other than hourly, on a piece basis, the current regulations say you simply take the salary the employee has earned and divide it by the number of hours spent to earn that rate.
Ms Augustine: The provincial could be calculated in one way and the federal regulations apply in a different way. Is that it?
Ms Weinman: I'm not too conversant with how the provinces set their piece rates, but I think ours is fairly common, fairly accepted. You just look at how many hours a person has worked and divide that into their salary for the time.
Ms Augustine: Going back to the minister's statement on page 3, I was a little surprised by the last paragraph:
- The realty is that 98% of the workers who are paid minimum wage come under the jurisdiction
of the provincial governments.
Mr. Gagliano: As I explained it before, the 98% is in the provinces because of the nature of the federal jurisdiction's activity. For example, in banking, telecommunications and transport we're dealing in the federal area. I think only in the trucking maybe you'll find.... But most of the industries that are under federal jurisdiction are large corporations that are unionized and have their own system. We don't have exact statistics, but we believe that maybe about 2,000 people are really working under the federal jurisdiction at minimum wage, so it's very minimal.
Ms Augustine: So this is affecting a minimum number of people.
Mr. Gagliano: Oh, yes, very minimal.
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The Chairman: Mr. McClelland.
Mr. McClelland: Why did the minister feel it was necessary to retain the right to change rates by Order in Council? If this is an attempt to harmonize with the provinces, why was it necessary to retain the right to change rates by Order in Council?
Mr. Gagliano: That possibility is there only in case one province decides not to have a minimum wage rate or it reduces the minimum wage drastically. So the government and the minister leave open the possibility that by Order in Council they can assure a fair wage for Canadians who are in the federal jurisdiction.
Mr. McClelland: I have one other related question. It comes from my experience as an employer, but also I read just recently the Prime Minister of Quebec has identified in Quebec that the underground economy, le travail au noir, is perhaps as much as $2 billion. If it's that much in Quebec, it's probably that much everywhere else in the country. Is there a relationship among hospitality, restaurants, the hourly paid minimum wage, entry-level employment, and the underground economy, and do you have any knowledge if there's a connection between that and the minimum wage rates?
Mr. Gagliano: I don't have any statistical knowledge about what the underground activity is. We all know it exists and we would like to abolish it, all of it, as much as possible and as soon as possible. But the factors that determine why people go to the so-called under-the-table transactions in the economy...the reasons might be many, but I don't believe minimum wage is one of them.I think there are a lot of reasons. I think every government since time began has been concerned with that situation.
The Chairman: Mrs. Lalonde.
[Translation]
Ms. Lalonde: I'd like to add that my question has not been answered. You can say that the question I put was hypothetical, that the example of the transportation workers working in three provinces was hypothetical. In fact, the terminal which, according to the regulations, is supposed to determine their wages could very well be moved and located in New Brunswick rather than in Ontario or Quebec. It's not all that hypothetical. You have to see how the minimum standards are applied everywhere.
All employers are not like Mr. McClelland, I'm sure. There are some who try to use every means possible to exploit a situation, who avoid paying minimum wage by under-the-table agreements. It seems to me we should find a way to make sure this amendment won't be used that way. I have no amendment for the time being, but I will certainly think about it because we have to remember that workers stand individually alone before their employers when they're dealing with the application of the minimum wage.
Mr. Gagliano: If I didn't answer your question clearly, it's because I was trying to give you an example. As we usually say, it's where the person works that counts, but we'll see if it's possible to state that a bit more clearly in legal terms. If we could, I am sure we would. We have no problem. The intent is clear in our minds: we want the minimum wage of the province where the employee is hired and we want his work site to be respected.
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Now, how can we make sure there is no abuse? If we could improve the bill, we would be ready to examine amendments. That's why we're here before this committee. On the other hand, our officials will examine the possibility of clarifying the situation further.
Ms. Lalonde: Could we ask to have a copy of the regulations that apply as soon as possible?
Mr. Gagliano: Yes, and if we have statistics we'll also send them to you.
Ms. Lalonde: Thank you, Mr. Gagliano.
[English]
The Chairman: Mr. Minister, thank you very much for your presentation. It's certainly an important piece of legislation, one the committee will study very carefully. We'll look forward to suggestions from all members of Parliament for ways and means perhaps to improve it. I'd like to thank you and of course your officials for your time, and also for telling us we're going to be extremely busy in November. We can adjust our timetable accordingly.
The minister is about to leave, but the officials will stay for clause-by-clause. The privileges of a minister.
Are we ready to do clause-by-clause? We are.
Clause 1 agreed to on division
Mr. McClelland: A point of clarification. I wanted to do proposed subsection 178.(3) on division. I have an amendment to move. I won't move it, but I want to make sure the record shows it's on division.
The Chairman: It's already on division, but it's duly noted that the Reform Party did not support clause 1.
Clauses 2 and 3 agreed to on division
The Chairman: Shall the title carry?
Some hon. members: Agreed.
The Chairman: Shall the bill carry?
Some hon. members: Agreed.
The Chairman: Shall I report the bill to the House?
Some hon. members: Agreed.
The Chairman: That was quick. It's a very efficient group.
On behalf of the committee, I would like to thank the officials, not for the clause-by-clause part but for the other part.
The meeting is adjourned.