EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, December 5, 1996

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[English]

The Chairman: I call this meeting to order.

Welcome, everyone. We are here to study Bill C-66, an act to amend the Canada Labour Code, part I, and the Corporations and Labour Unions Returns Act and to make consequential amendments to other acts.

This morning we have the pleasure to have with us representatives from the Canadian Federation of Independent Business: Mr. Garth Whyte, vice-president, national affairs; and Mr. Dan Kelly, director of provincial affairs.

Welcome, gentlemen. You represent a very important organization, and we look forward to your comments. You may begin.

Mr. Garth Whyte (Vice-President, National Affairs and Research, Canadian Federation of Independent Business): Thank you, Mr. Chairman. On a personal note, I'd like to thank the committee and especially Luc Fortin for accommodating my schedule and allowing us to appear today.

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We were going to have two other colleagues. One was Pierre Cléroux, vice-president for Quebec, who is currently doing a press conference in Hull. And Peter O'Brien, our executive director from Atlantic Canada, was supposed to be here, but he's currently working with Department of Finance officials on the HST. We're trying to deliver the message and to work out solutions on that tax, which we're all familiar with.

But back to thanking you, Mr. Chairperson and the committee, for accommodating us. We flew these people in from across the country. My colleague Dan Kelly came in from Winnipeg. He is, as you said, our prairie region spokesperson. We flew in, and the only two days we could appear were yesterday and today. We couldn't make it yesterday, so it was going to be today. I told him it had to be in the morning because I have to fly back to be at my four-year-old's first Christmas party presentation.

The Chairman: Where will that be held, Mr. Whyte?

Mr. Whyte: That will be at Three Valleys school.

The Chairman: Which riding is it in?

Mr. Whyte: I believe it's in Mr. Collenette's riding.

The Chairman: Oh, okay. But you live where?

Mr. Whyte: I think the point I wanted to make was that this is a very important topic for us and the committee was very accommodating to us. We thank you very much for allowing us to do that, and we're happy to be here.

As I think most people know, we are a non-partisan, non-profit organization with 87,000 small and medium-sized business owners from all sectors and all communities in Canada. We operate on the principle of one member, one vote. Our policy positions are determined by the majority of our members. We're continually serving our members, and we're pleased to share some of our research information with the committee today concerning Bill C-66 and changes to part I of the Canada Labour Code.

Some have asked why the Canadian Federation of Independent Business and small business should care about the Canada Labour Code, which deals with federally regulated industries. There are several reasons.

[Translation]

Mr. Ménard (Hochelaga - Maisonneuve): Excuse me, Mr. Chairman. It would be easier for everyone...

Ms Lalonde (Mercier): Did you not submit a brief? This document is not the brief.

[English]

The Chairman: Do you have a brief?

Mr. Whyte: No.

The Chairman: The interpreters will not have the opportunity -

Mr. Whyte: I apologize.

The Chairman: That's not a problem. They can still interpret. Go ahead.

Mr. Whyte: I'm going to highlight five reasons why we should be concerned with the Canada Labour Code.

First, we are members of the Canada Labour Code review committee, but we were not involved with the working group, which is comprised of large businesses and large unions that came to a consensus concerning this bill. Second, we have members who are federally regulated, including sectors such as air transportation, broadcasting, trucking and communications. We have many members in the Yukon and Northwest Territories who fall under the Canada Labour Code. Third, all our members are significantly impacted by large government entities such as the post office, grain handling and port operations and railways. Fourth, we represent taxpayers who are concerned that changes to the code may increase government costs. Fifth, we are concerned that changes to the code will accommodate unions that have openly stated that they are targeting SMEs, small and medium-sized enterprises, because big business and governments are downsizing. I'll refer to the graph you have before you to talk about that.

The government's throne speech stated that part I of the Canada Labour Code should be modernized to promote a proper climate for economic growth and jobs. The federal government, and in fact all governments, recognize the important impact small and medium-sized enterprises have on economic development and job creation in Canada.

Yesterday we appeared before the House of Commons Standing Committee on Natural Resources to talk about rural economic development and job creation. We have appeared with you, Mr. Chairperson, on your initiative on youth employment, as we were involved with that.

Everyone has received a copy of this book. You can't forget the cover; it's called On Hire Ground: A Study of Job Creation in Canada's Small and Medium Sized Business Sector. We wanted to put forward our members' position. It was a message from the job creators about job creation because we wanted to educate ourselves and virtually everyone on what's happening with job creation.

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We have been involved with job creation and are concerned that this issue has been seriously overlooked with the review of the Canada Labour Code. The Sims committee recognized that the Canada Labour Code must be broad enough to govern the labour relations of a variety of sectors and employers, from firms with four employees to those with tens of thousands of employees. However, there was no acknowledgement or consideration of this in the report, and that was a huge concern.

The report dedicated a significant portion to discussing the new labour relations environment and the importance of finding a balance. But its view is a balance between big unions and big employers. Where do small and medium-sized enterprises and their employees fit into this balance?

The committee talked about the public interest and the impact on the economy, but there's no mention of the devastating impact that prolonged strikes by Canada Post, grain handlers, port operation, and railways have on small and medium-sized enterprises and their business, and the impact on job creation.

They talked about power relationships and how the Labour Code must be careful to maintain the natural balance of power. Where do small firms fit in with this relationship? Nothing was said about the growing importance of small and medium-sized enterprises. This is a major oversight and a concern of our members.

If you refer to the first graph in the report I have, it shows the change in total employment from the third quarter in 1995 to the third quarter in 1996. It shows that governments of all levels created 10,000 jobs, and small, private sector employers created 32,000. That is the net gain. You'll find that small firms created much more than that, but a lot subtracted from larger firms that were downsizing.

But the big, big area is the self-employed. You can see there were 112,000 new jobs created because of self-employment.

The second graph shows the change in total employment between December 1994 and December 1995. Again, it showed that government at all levels downsized by 70,000 employees. Self-employment increased by 133,000 and the private sector increased by 39,000.

Many - particularly union representatives - will argue that small workplaces and individuals who are self-employed or work out of their home need union representation, because their interests are not adequately protected. They will argue that employees in smaller workplaces have poorer working conditions and therefore legislation should be modernized to better enable unions to organize employees in this area.

In fact, CFIB studies and other research have found the opposite is true. The report you have in front of you, called ``Good Things Come in Small Premises'', was a survey not of our own membership, but one that we commissioned to be done of the general public, of employees. It found that employees in smaller, non-unionized workplaces tend to be more satisfied with their workplace conditions than employees in large, unionized workplace environments.

There are a lot of committee processes going on now, and when you listen to those committee processes - whether it's the reflections of the changing workplace, whether it's dealing with part I of the Canada Labour Code - you will hear the opposite.

If you look at page 6 of this report you will see the figure entitled ``average levels of job satisfaction - comparison of union and non-union employees''. It has several categories, and in almost every category non-union employees were more satisfied than union employees. Small-workplace employees were more satisfied than large-workplace employees.

We're not trying to do this in a negative way. We're just trying to show that small businesses are not little big businesses; they're different. You can talk to your employer directly.

When you look at the self-employment figure.... Again, there was a recent survey of self-employed people by Angus Reid, of whom I'm sure you're familiar, and 76% said it was their own personal choice, 77% said satisfaction with their work had improved since becoming self-employed, and 73% said they were better off now that they were working for themselves.

I'll get to the punchline soon.

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The background summary of Bill C-66 states that the purpose of the changes is to provide a framework for collective bargaining that enhances the ability of labour and management to focus their own agreements and to quickly resolve workplace disputes.

Now, often labour legislation is seen as a means to protect employees from the coercion and power of large corporations, but what instruments are in place to protect small employers from the coercion and power of large unions? At the very least, this bill should not make it easier for unions to organize small firms. Our question is this: we think the change to the Canada Labour Code is to ensure a balance not just between big employers and big unions but also between small employers and big unions.

If you look at the next graph, you can see our members do not support giving powers to the Labour Board to provide unions access to names, addresses and e-mail addresses of off-site employees. Only 8% of our members support this initiative.

I want to read something. We feel we are being targeted. We have to focus on what the goal is. We believe you should either take this section out or severely restrict this section. This is dated, but we have before us the action plan for the Canada Labour Congress. If the committee would like to see it I'll send you a copy. It sets out the action plan for the Labour Congress.

I want to quote from that action plan. It says:

Increasing trade union membership in all sectors of the economy is vital. Nonetheless, the current rapid growth of the service sector and its low rates of union membership suggest that if unions do not succeed in organizing this sector, then the trade union movement will be a declining force in the years ahead.

One of the major problems of organizing in the service sector, is the large number of small employers and restrictions in Canada's labour codes. In order to help trade unions deal with these problems, the Congress and the federation of labour will review the relevant labour codes to see how they should be amended to facilitate organizing in this sector.

I refer back to the second graph, which shows that governments have been downsizing. I can show you a graph that big business has been downsizing and self-employment has been increasing. Then I refer to the section on off-site workers. There's no definition of off-site workers. Then I also refer to this quote from unions stating that they have to target this sector if they want to increase their membership.

The question I put before this committee, and what we would ask you to look at, is: was this section included to protect the employee or to help union growth? We feel it should either be taken out or at least explicitly stated that small employers and the people who are self-employed are not included under this section.

The second major concern among our members is related to restriction of replacement workers in proposed subsection 94(2.1). We believe it's too broad and too vague. Again, what is the purpose? Is it to deal with exceptional circumstances or is it to be used loosely at the discretion of the board? We believe this section should be eliminated or be more restrictive.

We can understand it being more restrictive if employers are not playing fair and something has to be done, but even since the Sims report recommendations, we've seen some key words taken out. For example, it says, ``for the purpose of undermining'', instead of ``the demonstrated purpose'', or that it can be proved they're doing this. As well, the phrase ``in the pursuit of legitimate collective bargaining objectives'' was taken out, and we think it has to be very tightly stated.

We surveyed our members on whether there should be a ban on replacement workers during strikes and federally regulated workplaces - this is the next graph - and 84% of our members, in a sample size of about 15,000 members, stated no. This is dealing with smaller workplaces.

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In terms of larger workplaces, we asked our agriculture members whether agriculture transportation should be exempt from strikes, and 90% of our agriculture members said yes.

The next graph we threw in was on Canada Post. I know you're thinking, ``Where's this guy going?'' But we're involved with the review of Canada Post. We asked the question of whether Canada Post should be allowed to keep its mail monopoly; 58% of our members said no and 32% said yes. There was somewhat of a split in our vote.

The committee and the minister - and we believe the government - came out and said no, it should keep its monopoly power, because it delivers an essential service. It should keep its monopoly power because 95% of people open the mail every day.

One way to deal with the replacement worker issue is to deem the post office an essential service. We're concerned that at the end of July next year there will be a strike. The casualties, as usual, will be our members and the general public.

There are two other clauses I would like to talk about. I think it's probably better we should then get to questions and answers.

Clause 47 on page 36 states:

104.1 The Minister shall meet...with a group consisting of experts in industrial relations, and representatives of employers and of trade unions

This also refers to clause 2 on page 2, which deals with the make-up of the board.

We strongly recommend that they explicitly state that small business representatives should be included. As I said before, small businesses are not little big businesses.

We are also concerned, Mr. Chairperson, with the elimination of part II of the Corporations and Labour Unions Returns Act. Why is this being repealed? We don't understand why. Perhaps that can be explained to us. It relates to the collection and reporting of statistical information for Statistics Canada on labour unions. It allows it to make Stats Canada publicly report that information, and we don't understand why.

One of the issues our members are concerned about is that Stats Canada sure surveys our members a lot for information on small business, and we don't see why it shouldn't be on unions. Having said that, we don't know why. Maybe there's a legitimate reason. We think it's important.

We haven't really tried to target or to take on all these issues in the Labour Code. We're just opening up some questions. We're saying we strongly urge this committee to consider the following key principles when considering changes to the Labour Code.

1) Flexibility: Will changes to part I impair flexible and innovative work arrangements, especially small business job creation?

2) Competitiveness: Will legislative reforms hurt small business growth and job creation, which in the throne speech was one of the key reasons for doing the changes?

3) Cost: Will changes generate unmanageable business costs during times of fragile economic recovery?

4) Boomerang effect: Will the reform package actually end up hurting the very people you tend to help? Higher youth unemployment, less seasonal jobs, business out-migration, job loss.... I know a lot of this will apply to part III, when we come back and meet later, but these are certain principles we keep asking ourselves.

5) Policy myopia: Will reforming the code conflict with the government legislation initiatives in other areas? We spent over an hour on rural economic development issues with the committee on natural resources yesterday, talking about ways to improve job creation in the rural areas.

We feel the bill can be changed and amended to meet the needs of not only large business and big unions but also our members' small businesses. These are the challenges we're putting forward to the committee.

Thank you very much for your time.

The Chairman: Thank you very much, Mr. Whyte. You've raised some very interesting questions.

We'll move to the question and answer session, starting with

[Translation]

the Bloc Québécois. Ms Lalonde.

Ms Lalonde: Thank you, gentlemen. That was interesting, especially since I used to be a trade unionist and after that I taught labour relations. I was also an employer for a short period of time. One could agree that in an ideal world for employers, there should not be any unions. If I have understood you correctly, you said that it would be preferable not to have unions for SMEs.

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History has taught us, however, that unions are not born without reason, by chance. They came to be because serious problems existed, especially in large corporations, I must admit, and governments realized that if they did not regulate these corporations, there would be disturbances according to the strength of the union and management. Basically, the codes we have are well established, because they allow us to meet the objectives we seek, i.e. to ensure what we call industrial peace.

Allow me to point out that when you quote a survey like you did, I'm inclined to ask you about the chicken and the egg. Are people not unionized because they are quite happy on the job, or are they happier on the job because they are not unionized? I would be more inclined to say that the first question is the right one.

Based on my experience, when a business runs smoothly, and things often go well in an SME, the relationships with the employer are direct. Even if an employee earns less, he feels more involved; he benefits from more flexibility and he does not think about joining a union. When does he think about joining a union? He thinks about it when he feels that he is not being treated the way he should be, that the employer is unfairly making money on his back, money that should be distributed differently. In short, workers think about joining a union when injustices occur.

When the large unions you mentioned are called upon to set up union movements in small businesses, it is very costly for them. Some large unions do not invest in small businesses. Workers say that unions should invest in small businesses to assist in unionization. In small businesses, not everything is hunky dory. Some employers are good, whereas others are not. When employers do not act appropriately, employees want to unionize.

We understand your situation, and note at the same time that the fact show that the situation for SMEs is different. Their relationship with the union is also different. I am inclined to ask myself what exactly it is you want. Your presentation was quite general, as were my comments. That is why I allowed myself to respond using the same tone.

I have not been brief, Mr. Chairman, but do we have an hour to discuss these important issues. They must be categorized and put on the record. I feel that it is important. What exactly do they want for SMEs, given that we do not live in an ideal world, but in a world where even SMEs have employees who want to join a union, because they feel they are being taken for a ride? What exactly do they want?

[English]

Mr. Whyte: First off, I agree with almost everything you say. We did a handout for our members about five years ago on what to do if you want a union - for example, mistreat your employees; don't communicate with your employees; don't include them. Then they deserve someone coming into their workplace.

So I can't disagree with anything you've said. The issue is, though, it's a power relationship. A union is very powerful. I find it ironic; it is expensive for unions to get into small firms, but once they do, it can be devastating for a small firm.

I have an example of a small employer who had three employees. The union tried to unionize the workplace. They had to hire a labour lawyer and had to expend a lot of time. There was disruption in their workplace, with three employees.

It turned out it was a disgruntled employee who was not happy. Two voted not to have a union. It cost him $30,000. It almost devastated his business and it was stressful for six months.

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Now, what do we want? If you give the names and addresses and e-mail addresses of off-site workers, that is opening up the power relationship. We suggest that the board could direct an employer to give an announcement through the e-mail system, or to those off-site employees, that there is a certification process going on, but to give the e-mail addresses, and addresses of individual employees, you are sending an imbalance to that power relationship.

As well, with the statistics on self-employment, it's not explicitly stated in the legislation that this cannot be targeted at the self-employed. Right now at provincial levels there is a debate going on about the definition of ``employee'', and there's a debate going on about the self-employed at the federal level. There are, or were, committee hearings run by Mr. Gagliano on the changing workplace, on how we deal with non-standard work. We are concerned that this is the tip of the iceberg.

What do we want? We want to see that clause in there. We think it should either be taken out or amended so that the board can require the employer to inform those off-site employees. The issue is access for the unions. If that's the case, fine, but you should not be giving out the personal and e-mail addresses of off-site people. That's number one.

We also want representation. This is to be modernized, and to modernize it you have to have some representation for small employers so that there will not be deals cut and then a consensus between...and they like the words ``management'' and ``union representatives''. We don't talk in those terms. We're from a completely different planet. We talk about ``employers'' and ``employees''.

Even in the press release we talked about a consensus that was made. We weren't part of that consensus. Later on we talked to employers who said, gee, we weren't sure how the off-site worker issue got in there. They don't care about that issue.

They do now. We think there should be representation there.

In terms of the replacement worker issue, we are concerned that if it's too loose this issue can be used to the disadvantage of those people who have the right to supply, the right to work, the right to keep their business operating, the right to do business.

We are also concerned, though, if you look at the Sims report - unfortunately, I don't have a copy and I can't remember the page - and at the past history of certification in the Sims report and graph it out.... It's not referenced, but there is a graph in there talking about the size of firms that have been certified over the last five years. The vast majority are less than 100 employees. I think 95% of them have less than 185 employees. It's the small workplace that's now under the certification process. So we're concerned about that as well.

I think those are the three specifics.

Dan, do you want to say anything?

Mr. Dan Kelly (Director, Provincial Affairs, Canadian Federation of Independent Business): Yes. I'll add one more point.

While I share the opinion that we have to try to ensure that we're not making changes that are going to tip the balance of power in favour of employers, one of the things we have to be concerned about is why the labour movement is so interested in these amendments, and why there has been such great support for these amendments.

In general, it's the stated intention of the labour movement to try to increase its concentration in small and medium-sized enterprises. They have seen their market share deteriorate quite rapidly in large business and in the government, which are their traditional sectors. One of the reasons we are so concerned about some of these amendments is that exact reason: because it may be the tip of the iceberg.

What is intended is to give the labour movement increased access into workplaces where there may be presently a harmonious atmosphere and there may be no problems. That is the concern we have, from what we might see: is the labour movement trying to get into more and more workplaces where in fact there is no other cause that has created that?

Certainly there are employers where the union is exactly the best thing that's happened to them, but what we have to ensure is that this isn't extended beyond, into other territory where in fact that may not be appropriate.

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The Chairman: Thank you, Mr. Kelly and Mr. Whyte.

Mr. Johnston.

Mr. Johnston (Wetaskiwin): Thank you, Mr. Chairman.

Thank you, gentlemen, for your presentation. Because we're talking about off-site workers here, perhaps I'll just continue along that line for a moment and ask if you would have as much concern with the information, as far as off-site workers are concerned, if the workers were asked if they would allow that information to be made available.

One of the things I've noticed in this legislation is that there is no provision for asking the consent of those off-site workers. I'd like to hear what you have to say on that.

Mr. Whyte: We think that's probably a good compromise: first, if they're employers; and second, if they give their consent. Then it shouldn't be a problem.

To us, one of the keys is ``Ask the employee''. We're concerned - legitimately, we believe - about harassment not just from the employer side on employees but also from the union side.

Mr. Kelly: That's very much in keeping with some of the general sentiment that is going on right now in this debate. In Manitoba, the province I'm from, we've just been through a major set of labour law reform, one that was quite controversial.

The general premise in all of the reforms that were made by the Manitoba government was to put the power back in the hands of employees rather than in the hands of the union bosses. That is, I think, the overall sentiment we share. It should be the employees who are making these decisions. We should try to allow the employees to have as much power themselves, personally, rather than relying upon some union boss who may not reflect their stated desire whatsoever.

We don't need to look any further than to the issue that's going on with Canadian Airlines right now to find a very good example of the fact that we have given as a nation, and I think by means of provincial government legislation as well, far too much power to union bosses and to the union hierarchy and not enough power to the individual union members. Allowing some legislated means of allowing employees to bring forward their views and to force their union to hold a vote when the employer is trying to renegotiate an offer to stay in business is very much something that should be looked at as part of this legislation, but it's not.

A large number of other changes possibly could come forward to shift that balance. Rather than deal with this typical hierarchy of big business fighting with big labour and big labour bosses, to allow employees to take greater control of their own affairs is something that is very much in order and something that's desperately needed right now.

Mr. Johnston: I notice you made no comments on the successor rights provisions in this bill. Maybe you could just expand on how successor rights, as spelled out in the amendments to the Labour Code, would impact on the members of your organization.

Mr. Whyte: Would you reference the section, please?

Mr. Johnston: Ah, you've caught me unawares. I think it's clauses 22 and 23.

Mr. Kelly: I can speak to one issue with respect to successor rights that is of great concern. Recently, in my province of Manitoba, CN Rail has basically taken the position of trying to sell off some of its lesser-used tracks. They've sold them to an American company that is going to operate it as a short-line railway. One of the issues that was of significant concern was whether or not the successor rights provisions would mean that the new short-line railway operator was going to have to take on the collective agreements from CN Rail - very rich agreements that I think would necessitate that the lines become inoperable.

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The recent decision that was made with respect to CN Rail was a very positive one. I think it will mean an increased likelihood of keeping that port open and keeping the vital services the north depends upon.

We are concerned, though, if the successor rights clauses are going to mean it's going to make it more difficult for the private sector to take on former government operations, or for areas where it makes no sense for a large federally regulated company to operate something...and that should be taken over by a smaller company. I don't want to see a system put in place that's going to make that more difficult, because I think the people who depend upon those services are going to suffer.

What we want to ensure is that the vital services, the links to the north, as with this railway example I have raised, aren't impinged upon by successor rights clauses.

Again, I'm speaking in great generalities.

Mr. Johnston: In terms of the replacement worker reference in this bill, it's been indicated here by some witnesses that any use of replacement workers could be looked upon by employee groups as being an undermining of the ability of the union to operate - in other words, union-busting.

With that pressure being put on the board to rule in favour of the unions, do you see any way to delineate, I guess, or to specify when replacement workers are undermining the ability of the union to operate? How would you like to see that amended?

Mr. Whyte: One of the impetuses for the replacement worker legislation was the Giant Mines issue along with the Ogilvie Mills issue. We all know about that. The Sims committee said that the circumstances have to be totally illegitimate activities in the most exceptional circumstances. When there was a consensus document, that seemed to be one of the principles for the consensus on this replacement worker issue.

Some key words have been taken out of the legislation proposed by Sims. The words ``demonstrated purpose of undermining'' the union, etc., are not in there. It's very loose. Secondly, the phrase ``in the pursuit of legitimate collective bargaining objectives'' is also not in there. This was supposed to be the exception, not the rule. We're concerned that it's so broadly put in now that it is more the rule than the exception.

We'd like to see it very restrictive, but at the same time, we do appreciate everybody's frustration when you can't get in there and get them to clean up their act, for management or a larger firm to do this. You want to shake them up and tell them to do something. We understand that. But that has to be the exception, not the rule. As a matter of fact, we believe many jurisdictions are pulling back from a replacement worker type of legislation model.

So we could see this as a very restrictive clause, in there for fairness, I suppose, in unique circumstances, but it has to be tightly put down.

Mr. Kelly: I think that also speaks to a larger issue. When designing public policy and putting in place legislation, one of the things we have to be careful to avoid is putting in place rules or laws that are designed to try to target certain situations but that take such a broad brush it includes everyone.

This is something that I think is very much here with respect to labour law amendments. There may be certain cases that are so huge and so important or have gone way too far. The answer to that, rather than trying to design policy that is going to target those specific cases and arm, on an exception basis, policy-makers to try to deal with that, the bill to a certain extent puts in place a huge framework by which this could be expanded to any workplace in Canada and could be used in cases where it was never intended.

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I can tell you that when the labour movement, through the Canadian Labour Congress, has the stated objective of trying to get into small and medium-sized companies, it becomes very clear why these kinds of things are of such great interest to them.

To a certain extent they piggyback the legislative requirements based on some of these large cases that we've all become familiar with. That is one of our great concerns. We should be trying to deal with them as exceptions. We should possibly be arming the minister with some powers in certain circumstances where it's a well-known case and these things have gone too far, rather than sort of putting in place a situation that is going to apply to a company with as few as fifty employees. We have to be careful about that.

The Chairman: Mr. Johnston, your final question.

Mr. Johnston: Thank you, Mr. Chairman.

Just so I'm absolutely clear on this, you have no objection to this legislation as long as it's specific and says in the legislation what it sets out to do and is not sort of a precedent-setting, catch-all type of a phrase. Do I understand you properly?

Mr. Whyte: We have our vote from our membership. We are driven by our membership. The vast majority does not support replacement worker legislation, period.

But yes, we realize that there are certain circumstances where something has to be done, so in that case, with those types of parameters, we could probably live with it.

The Chairman: Thank you, Mr. Johnston.

Thank you, Mr. Whyte.

We will now hear from Mr. McCormick.

Mr. McCormick (Hastings - Frontenac - Lennox and Addington): Thank you,Mr. Chair.

Thank you, gentlemen, for being here today. I will admit to the fact that I was a member of your organization for many years, and I do believe our government should do everything we can to support and encourage small business, SMEs and entrepreneurs.

I'm always glad to hear people talking about the entrepreneurs. Today, we can finally use that word in public here in Canada.

I think our HRD committee has recognized you and given you good support. With the employment insurance bill, part II, I think there are measures that will make a great deal of difference to small businesses. I realize that large strikes and small strikes can have a great impact on your businesses, but on the replacement worker issue I want to make my responsibility here very clear.

Is it your view that employers should be allowed to use replacement workers for the purpose of undermining a union's representational capacity?

Mr. Whyte: No. But the bill is so broad that the interpretation of a board - not even accountability - once it leaves this committee, could be open to abuse.

Quite frankly, our members do not go to the labour board on a regular occasion. We don't have labour lawyers on staff to make representations to the labour board to defend our interests. We're trusting that the legislation will put the parameters in place rather than leaving it to the very broad discretion of a board.

We don't see any problem with putting in some more restrictive words to hit the real issue if it's demonstrated that they're doing that and also if they're undermining collective bargaining objectives.

Mr. Kelly: Let me add something to that about the reason an employer would use a replacement worker in the first place. The employer is concerned about getting his or her products to market, is trying to meet the company's payroll, and is trying not to lose the customers they've built for years. Their interest in trying to undermine the union or trying to screw around with public policy or trying to have some great arguments before the labour board is far less than this: they want to make sure they can meet their customers' demand and guarantee some form of salary and work to their workforce as best they can.

Quite clearly, as we see with the Canadian Airlines situation, sometimes where there is a union involved - and I'm not saying this happens in every case - the union leadership has prevented a company from making sure it has some work to offer its employees in the long term.

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Especially in small workplaces we don't want to see our members having to try to fight to keep their companies in business because they are messing around in some complex negotiations in a hearing before the labour board.

The issue that is of greatest concern to us is why employers use replacement workers in the first place. They don't use them to try to undermine the union. They use them because they don't want to lose their customers. They've worked many years to try to build up a company and they don't want to see it ruined.

Mr. McCormick: I have another question. Again, to put the cards on the table, I have been involved in a national mail order business and I do realize that postal strikes can be challenging, but I want to ask you about the Canada Labour Relations Board. There are going to be regional representatives on this board, so I think it should, could, and will be a very fair vehicle to review these decisions as they arise. I want you to comment on the labour board. Do you not think it's well set up and will be very fair for all involved?

Mr. Whyte: First, there's the process. A lot of our members are not familiar with the labour board until they're hit between the eyes with this issue. I'm sure when you were running your business you weren't thinking about studying labour board issues. That's number one.

It was rightfully pointed out that we did do a broad presentation on principles. The reason we did so is that it's kind of like we're not even considered...not that we're not considered. Even on the board side they may not appreciate or understand the different relationships in a smaller workplace versus a larger workplace.

And that's fair. If you're working only in government or if you've worked only in a large entity, you may have a different perspective. If you're on the board and you're only seeing potentially acrimonious issues between the employer and the employee, you may have that different perspective. So one of our concerns is that we're putting a lot at stake with a board we don't know very much about.

Second, a lot of these representatives refer to the act and to their terms of reference, and if the act is very loose, the discussion we're having here is lost. They're not going to worry about the reason this is in there in the first place: because of a large company that was using replacement workers to undermine the union. That gets lost in the translation when it comes down to a board hearing, so we think you have to be explicit on what you're trying to achieve in this legislation.

The Chairman: Thank you, Mr. McCormick and Mr. Whyte.

Mr. Nault.

Mr. Nault (Kenora - Rainy River): Thank you, Mr. Chairman.

I wanted to deal with the issue of your opening comments about your sense that the section that deals with off-site workers is an attempt to allow unions to unionize small and medium-sized businesses.

I want to read you a part of the preamble to the Canada Labour Code. Tell me whether in fact you agree with this statement, because I think it's important to start from this premise. If you agree or disagree with this, I think it follows that I have some questions. The preamble says:

And whereas Canadian workers, trade unions and employers recognize and support freedom of association and free collective bargaining as the bases of effective industrial relations for the determination of good working conditions and sound labour-management relations;

It goes on to talk about the international convention number 87, but that particular clause in the preamble is the relationship between us as a democratic nation and the ability to have freedom of association and freedom for collective bargaining. Does your organization believe in that particular theory and premise?

Mr. Whyte: We have no argument with that preamble. The trick is, though - and this is why we spend a lot of time talking about non-unionized workplaces and satisfaction of employees in smaller workplaces - that there's something missing in that preamble. The ultimate goal is to have a good employer-employee relationship. There are workplaces where it isn't a labour relations environment.

Mr. Nault: I don't disagree with you.

Mr. Whyte: That's the exception.

Mr. Nault: And that's fine. I don't have any problem with that. I don't have any difficulty accepting the Angus Reid numbers that you've given us.

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My point is this. If you're so confident that most people don't want to belong to a union, why are you afraid to allow unions access to individual employees across Canada to see whether they can convince them...? Let me make it very clear to you. There seems to be a perception here that unions are Draconian or are somehow trying to undermine the abilities of employers to make a good dollar, when in fact I look at unions no differently than I look at businesses. They're in the business, they're hired and elected by their memberships to do a good job on their behalf, they're paid very well to do it, and part of their mandate is to go out and get new members.

Having said that, if you believe in the preamble then why would you want to restrict, under the Canada Labour Code, the ability of the new fad of the future, which is off-site workers, and the inability of people to know who they are or where they are? Keep in mind, we're confident that the Labour Relations Board will come up with a process that maintains the privacy of individuals, and I'm very confident that can be done under the modern technology we have today. I don't buy that business's argument. But if you are so confident in your numbers, why would you be afraid to allow people to have the ability to talk to somebody?

Mr. Whyte: We're not afraid. If the employee has no problem with you giving out his or her address and e-mail address, that's not a problem.

What is the committee afraid of? We work on the principle of one member, one vote. If our members are not satisfied with what we do, they quit. We're totally funded by our membership - that's it. If you join a union and want to vote, it's a different story. You can't quit.

It's one thing to say the board will control or make sure there's no harassment, but once the person's address and e-mail address are out there, it's up to the individuals. There has been harassment, and to say there hasn't been harassment and why you should join or how you should join is the second issue.

On the third issue, let's say I don't want to do this and I want my name taken away - I'm self-employed and was misidentified as an employee. The union has my name and address and I want it taken away. I don't want to spend lots of money or time to go to the labour board to do that. I don't see what the problem would be to have some sort of amendment that says the employer must inform off-site employees that the union is certifying and they should contact their union. To me that's the ultimate democracy. The person picks up the phone and says, ``Okay, here's my name and address'', and it's given out, or the person gives permission to the employer to give out his or her name and address.

Mr. Nault: We're not debating that.

I think, quite frankly, you do a disservice to the Canada Labour Relations Board and to our system of democracy, where we maintain that people have the right to privacy. I'm convinced, as are other people around here, that a process will be put in place that meets those needs. That's not what I was asking. I was asking you something more fundamental than that.

In your opening comments you made it very clear that you don't think the union should have a right to even know that some 30% of employees who are going to be out there in the next number of years - it's getting that high now - will be off-site workers. It has no right to see that, so that undermines the freedom of association and the freedom of collective bargaining. It undermines the rights of employees to collective bargaining, if they so wish.

Either you're a believer in the democratic process, in the sense that people have rights, or you're not, and that's what I'd like to know.

Mr. Whyte: We can argue about believers in the democratic process - we've proved our action.

Mr. Nault: As long as it's skewed on the one side of the equation.

Mr. Whyte: We gave you Statistics Canada information that showed the growing sector is in self-employment. You just said that 30% of jobs will be for off-site workers. That is the problem. We are intimately involved with part III of the Labour Code, and that number is bandied about. It doesn't dissect it and say the vast majority of those 30% are actually self-employed, not off-site workers.

So, first of all, get your statistics straight.

Secondly, we've been involved in the reflection of the changing workplace and you should look at the transcripts of what has been said there and why the unions have to get a non-standard work week. It certainly doesn't talk about the democratic process. There are assumptions about what has been happening out there, that we have to go after these types of employees because they are not represented and they're working in terrible conditions. We argue they're working out of their homes.

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Mr. Nault: I can't sit here and listen to this nonsense.

Mr. Whyte: I agree, Mr. Chairman.

Mr. Nault: Let me tell you that's not why people ask to be given the right to collective bargain. You're suggesting we give people a list to allow them to collective bargain, and if they want to belong to a union they can. It's not because they think you're a nasty employer. They may just think it's more effective to have one union, one individual or one negotiating body to work on their behalf. Is that such a bad thing?

Mr. Whyte: No, it isn't. I imagine you have staff in your office. Are you unionized?

Mr. Nault: I'd love to be, but I can't talk my colleagues into it.

Mr. Whyte: Why would you be unionized? You're probably a good employer and they want to talk to you directly. They don't want a middle person.

Rather than debate that, if the employees give consent to the employer to hand out their addresses, by all means let's do it. Why can't you put that in the legislation? You're giving the unions access to look into the employer's system. The board has a lot of powers here on this particular issue, and that's a lot of trust you're giving to some people who you don't know directly.

Mr. Kelly: I think it also needs to be made clear that the Canada Labour Code - and all provincial labour legislation as well - provides enormous powers to unions that employers and employer associations never have. The fact that employees don't have the option to join a union once one is formed and don't have an option to take their dues elsewhere if they would rather do so are issues we haven't surveyed our members on. However, the unions have been given an enormous degree of power and we are very concerned that the legislation before you may increase those powers and tip that balance. That's our position.

With small employers, we stand on our track records. For a company in a small workplace, the worker and the employer usually have a very close, collegial relationship nine times out of ten. We want to see that that balance of power is kept. We don't want to see additional powers given to unions that are going to tip that balance in favour of the unions. I think the labour legislation across Canada may be tipped in the balance of the unions already. We don't want to see that go even further, and I think that is the reason why we are so concerned about some of the provisions in this legislation.

The Chairman: Thank you very much, Mr. Kelly, Mr. Whyte and Mr. Nault. Certainly, as a committee we've benefited a great deal from the input of people who see things from different perspectives. That is the reason why we have committees here in Parliament, so we can get the benefit of hearing the issue from both sides.

Your presentation clearly illustrates your point of view, and for that, on behalf of the committee members, I would like to express to you our warmest and sincerest gratitude for what I consider to be a very thoughtful presentation. Thank you.

We're going to suspend the hearings for approximately five minutes so that the International Longshoremen's and Warehousemen's Union can set up for their presentation. Thank you very much.

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The Acting Chairman (Mr. McCormick): I call the meeting to order. We'll continue with hearings on Bill C-66, an act to amend the Canada Labour Code.

I feel it's my obligation to mention that you may hear bells ringing in the room. There is a vote called for the House of Commons, which will be held some 20 minutes from now, but we need to proceed now. We can debate after your presentation and the questions and answers. We have quite a busy schedule.

Our presenters are from the International Longshoremen's and Warehousemen's Union, CLC.

Mr. Tom Dufresne (President, Local 500, International Longshoremen's and Warehousemen's Union): Mr. Chair, I would like to thank the committee for the opportunity to appear here today and put forward some of our concerns with the proposed changes to the code. We have a brief presentation and we would be more than glad to answer questions that arise.

Also here with the International Longshoremen's and Warehousemen's Union is the Canadian Maritime Worker's Council. We have Mr. Martin Campbell from Halifax, president of the Halifax checkers; Mr. Michel Murray from the débardeurs 375 in Montreal; and Mr. Doug Sigurdson from Local 514, representing the foremen on Canada's west coast.

The Acting Chairman (Mr. McCormick): Welcome. You may proceed.

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Mr. Dufresne: Thank you, Mr. Chair. As you'll note, the presentation will be in English and in French. We've supplied a document that reflects what the presentation is going to be. I'd like at this time to apologize for some grammatical errors in the English version of the document, but they will be corrected and made available to the committee, hopefully by Monday. We did a lot of the translation over the telephone between people who have English as a second language and people who have French as a second language.

[Translation]

Mr. Michel Murray (President, Longshoremen's Union (FCSP) - 375, International Longshoremen and Warehousemen's Union): We will need a couple of minutes to work out some technical glitches.

[English]

The Acting Chairman (Mr. McCormick): Okay. I might just put out a question here for a judgment.

Do you need a few moments to set up?

Mr. Murray: It's already done.

The Acting Chairman (Mr. McCormick): Proceed. We may have to cut in on you with the vote.

[Translation]

Mr. Murray: We represent the Canadian Marine Workers' Council and we will be presenting this brief. We have a visual presentation for you to try to speed up the process. It should work, which up until now wasn't the case.

The Canadian Maritime Workers Council unites the three main longshoremen's unions in Canada, the ILWU, the Port of Montreal Longshoremen's Union, which is also affiliated with others along the St. Lawrence, and the ILA, the International Longshoremen Association. As we mentioned, the Canadian Maritime Workers Council unites longshoremen and checkers, foremen, railway workers from the port corporations in the Montreal region and maintenance employees, working in the principal ports of Canada, from coast to coast, representing about 7,000 workers.

The Canadian Maritime Workers Council was recently formed out of the will of longshoremen workers to join together and work for the preservation of our specificity within a free, democratic trade union. Our council includes the ports of Vancouver, Victoria, Prince Rupert, Montreal, Contrecoeur, Sorel, Trois-Rivières, Thunder Bay, Quebec, Saint John (New Brunswick), Halifax, Dalhousie, Toronto and Miramichi.

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The three main unions representing these longshoremen are themselves longshoremen from the ILWU, the Port of Montreal Longshoremen's Union, and the ILA in Montreal and more specifically in the Maritime region. I will not name all of the locals that are listed, but I just wanted to give you a brief overview of the unions.

Several unions in some ports are members of the Canadian Maritime Workers Council. We are also members of the International Dockers' Council, an international round table of longshoremen who have met over the past two years specifically during the case involving our brothers from the Port of Liverpool. The document we have submitted briefly lists the members of the International Dockers Council round table.

On behalf of the Canadian Maritime Workers Council, we would like to thank the standing committee for the opportunity to address the proposed changes to the Canada Labour Code Part I. We appreciate that the committee has taken into account the consensus issues and has fashioned the Code in such a way as to be fair and equitable to all parties. Nonetheless, we feel that representations must be made and that you must pay specific attention to them.

The Honourable Alfonso Gagliano, Minister of Labour, through Bill C-66, has, we feel, namely attempted to modernize the Code, especially on the employers and union's rights and responsibilities, the negotiating process and the rights and obligations of the two parties during a work stoppage. We commend them on this initiative unions have long awaited. We do not think that the minister has strayed from his initial goal. However, in reading the various provisions of Bill C-66, it seems that the Department of Human Resources Development has misinterpreted the minister's intent to modernize.

In this respect, we would like to quote the North-American Agreement on labour cooperation which is part of NAFTA. Essentially, this agreement aims to ensure, among other things, the protection of the right of organized workers to freely engage in collective bargaining and the protection of the right of workers to strike in order to defend their collective interests. You will find these provisions in Annex 1 of the North-American Agreement on labour cooperation, under the heading "Labour Principles", articles 2 and 3.

However, we respectfully submit to you our questioning on these different points: administration of the Canada Labour Code, voluntary multi-employer bargaining and geographic certification in the longshoring industry, the bargaining cycle, the rights and obligations during a legal work stoppage, and the maintenance of services.

We will start with the administration of the Canada Labour Code. The new Board will have the ability to set the rights of the parties in the use of replacement workers, as stipulated in sub-section 94(2.1). We believe that a law exists to safeguard a right, whereas an authority such as the Board exists to ensure the implementation of this right and not to judge, and as a last resort, determine if it exists or not.

As regards voluntary multi-employer bargaining and geographic certification, we support the amendment to section 34 regarding the financial contribution employers must make to their employer representatives. This strengthens the said Act and will definitely put an end to acts of piracy at the dawn of the 21st century.

However, we believe that the addition of sub-section 34(1), ``employers actively engaged" could lead to dangerous interpretations. Remember the problems that the Canada Labour Relations Board was confronted with in the Maritime Employers Association versus Bellemare Ciment. This case dealt specifically with the definition of "employers actively engaged.»

The addition of the term ``employers actively engaged" in sub-sections 34(1) and 34(2), instead of solving the problem that is identified in the new Code, may well enable occasional employers to avoid the multi-employer certification and the application of the collective agreement already enforced.

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The bargaining cycle: the aim of the new Labour Code was to modernize and to provide parties with flexibility in their negotiations. However, we point out the introduction of restrictive measures that, instead of relaxing the negotiating exercise, will bring it an element of rigidity.

The main sources of rigidity and inflexibility of the bargaining cycle in the new Code are as follows: the secret vote for the right to go on strike and the irregularities in the conduct of the vote; no declaration or authorization of a strike within the prescribed 60-day period; and the 72-hour advance notice to the employer before declaring a strike, contained in sub-section 87.2(1).

Based on our understanding of the bargaining cycle, there must be negotiations between the employee representatives, who are employees themselves, and an employer association or an individual employer. During the bargaining cycle, there comes a time, after the conciliation report, when the Minister decides to let the power relationship between the parties learn its course. The right to strike or walk out is authorized 14 days later. The parties still continue to negotiate. Despite the fact that the Minister grants the parties the right to strike or lockout, they continue to negotiate.

A measure we consider restrictive is being introduced into the new Code; I am referring here to the 60-day period following a vote, within which the right to strike or lockout must be exercised. We feel the measure is restrictive, especially since it is linked, particularly in our industry and for all other workers, to a notice that must be given to the employer 72 hours in advance.

We also feel that combining the 60-day period and the 72-hour advance notice, once the Minister has granted the right to strike or lockout under the bargaining cycle, will hinder and perhaps sabotage the said process. Thus, the 61st day following a secret vote, further negotiations are held and the peace is firmly established at the negotiating table. By asking workers to go back to their locals for a new strike vote, according to the new provisions of the Code, whether the outcome of the vote is positive or negative, we are changing the power relationship around the negotiating table, and in some cases, negotiations that were running smoothly will be sabotaged.

The right to strike, in our view, is a fundamental right, and regardless of what you've been told in the past, it is considered by trade unions, like the Longshoremen's Union of Canada, as an ultimate option during the negotiating process. In fact, the Minister allows it in order to give the parties the power to exercise their bargaining power and therefore accelerate the negotiation settlement.

Instead of accelerating a negotiation settlement at this stage, since the right to strike or lockout has already been obtained from the minister, the amendments raised earlier may instead hold it up.

Our submission is that subsections 87.2(1) and 87.2(2), which require 72-hour strike or lockout notice, are impractical and specifically prejudicial, because in our industry, they systematically give marine employers the advantage and eliminate for all intents and purposes the power relationship for long shoremen's unions.

Moreover, we feel that section 87.3 does nothing to enhance the process and will lead only to the introduction of purely administrative and unnecessary measures. We feel that the provisions of the current Code regarding the bargaining cycle are more than adequate as our experience of the last few years has shown.

As for rights and obligations during a legal work stoppage, we would have liked to have seen a provision in the bill aimed at banning the use of replacement workers. The presence of such a provision in both the Quebec and the British Columbia codes has served to make the parties involved in the bargaining cycle aware of their responsibilities. We believe that to modernize working relations, we must make the parties aware of their responsibilities and not simply introduce legislation.

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However, we are aware that the bill contains the beginnings of a framework for the use of these so-called replacement workers.

Concerning the maintenance of services, the notion of continuing the supply of services, which is dealt with in section 87.4, should apply only to public services. The power relationship between the two parties should not be compromised by the maintenance of presumed essential services in the private sector.

As for the economic viability of an enterprise which does not have any connection with the safety or health of the public, we recommend provisions that already exist in provincial labour codes, i.e. the annual publication, with the help of the Canada Industrial Relations Board, of a list of public sector certifications subject to the maintenance of services essential to the safety or health of the public. In our mind, maintaining services goes hand in hand with completely eliminating replacement workers.

A new provision in the Code, section 87.7, stipulates that employees and their bargaining agent in the grain sector, shall continue to provide services they normally provide to ensure the loading of grain vessels and the movement of grain vessels in and out of a port. We consider this an appropriate exception and do not object to it. The ILWU Canadian Area and other Canadian Maritime Workers Council's members believe that this proposal is workable in its present form and could improve the bargaining process.

In conclusion, we wish to reassure the committee immediately. We recognize the tremendous amount of work that was done in order to try and make Part I of the Labour Code a progressive tool. Incidentally, we participated in the public forums in Regina, Calgary, Vancouver, Toronto, Montreal, and twice in Ottawa.

However, in order to do so, the wording of the bill must endorse and represent the spirit of change. Moreover, the specificity of certain groups, like ours, which have already required exceptions in the said Code, must be maintained. How can we apply general concepts to an exception?

We gratefully thank the committee. Respectfully submitted by the members of the Council.

[English]

The Acting Chairman (Mr. McCormick): Thank you. I would never want anyone to think this committee operates in the dark. You had an excellent presentation and I thank you for that.

I want to thank our broadcast team for their work in putting all this together on such short notice.

We have to take a short break. We'll resume as soon as possible.

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The Acting Chairman (Mr. McCormick): Good afternoon, ladies and gentlemen. Sorry for the interruption. Those things do happen here in Ottawa, and they've certainly happened with this committee when we have sat sometimes for more than 16 hours a day. We hope not to do that.

The International Longshoremen's and Warehousemen's Union just appeared before us and made a great presentation - up to date, using high technology. I suggest we proceed to a short round of questions, starting with the official opposition.

[Translation]

Mr. Ménard: Thank you, Mr. Chairman. I would like to join you in welcoming our guests and in expressing our appreciation for their comments that combined both clarity and technology, which is not always the case.

You were very clear on the 72-hour advanced notice. You said unequivocally that this advanced notice gives the employer the advantage, that it was a cause of concern for you, and that you truly felt you would be put at a disadvantage in terms of the power relationship. So I would like you to clearly tell the committee how this 72-hour advanced notice could cause the situation you are afraid of.

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Mr. Murray: Obviously, the marine industry does not have a set place of work like the automobile industry does. The ships travel across the ocean.

As we said in our presentation, longshoremen do not go out on strike just for the fun of it. When we exercise our right to strike, it is because we think that the employers are negotiating in bad faith. One of the two parties has to be acting in bad faith, since the minister has granted the right to strike.

Let me give you a specific example. Once it is agreed that we can strike at the Port of Vancouver, and we give the 72 hour notice, the ship or ships are at 160 degrees of longitude. The ships heading for the Port of Montreal would be at Cape Race, in Newfoundland. If we had to give72 hours notice to the employer in the case of a rotating strike or any other kind of strike, we believe that these ships would be rerouted to other ports, and the balance of power between the two parties would be completely off, and this would be to our disadvantage.

I would like to quote the management representatives from the shipping industry who said quite clearly that in 72 hours, they could empty the port, be it Vancouver or Montreal. So this is bound to put the longshoremen at a disadvantage.

Mr. Ménard: I believe that you even made representations to the Minister.

Mr. Murray: Indeed, we did share our concerns with him.

Mr. Ménard: Did you have the impression that he listened to you?

Mr. Murray: As we said in our presentation, we think that the minister wants to modernize the Code. Right now we are telling the committee about our concerns regarding the 72 hour notice. If the idea is to use the Code to empower the parties and to maintain the right power balance between them, you have just destroyed that for the longshoremen.

Mr. Ménard: You made an interesting proposal about essential services. Do you want the Board to identify certifications relating to essential services each year? Could you tell us a bit about this proposal, which you yourself brought up as a witness? It's very interesting.

Mr. Murray: In our view, maintaining essential services or certain services goes hand in hand with legislation prohibiting the use of strike breakers. Since the new Code does not have any clause prohibiting the use of strike breakers, even though its does provide a certain framework for these so-called replacement workers, one cannot associate the two right at the outset. If services are to be maintained, employers must not be able to use replacement workers. Otherwise, how are people going to co-exist within the same company?

We don't have a problem with maintaining services, as set out in the Code, as long as this is to protect the public's health and safety, in the public sector. We belong to the private sector, and the balance of power between the parties should not be altered so as to put workers at a disadvantage by maintaining the supposedly essential services.

We suggest that in the public sector, when collective agreements expire, the Board asks the parties to negotiate the maintenance of services, each year. We believe that would be the best way of ensuring that essential services are maintained.

Mr. Ménard: My colleague has a question.

[English]

The Acting Chairman (Mr. McCormick): Thank you. We need to proceed to your colleague.

[Translation]

Ms Lalonde: Thank you very much for your presentation. It really was impressive. It shows us that we could modernize here on Parliament Hill.

Could you explain the apparent contradiction between the minister's wish to modernize the Code, which you already stated, and the fact that the 60-day provision and the 72 hour notice could harm the negotiations, rather than helping them. Could you tell us about that?

[English]

Mr. Dufresne: We feel that the 60-day provision adds a bureaucratic hurdle to the negotiations. It could lead to the slowing of negotiations, because if you're in the final stages of negotiations and you have your eye on the 60-day provision instead of on the table where it belongs, it could detract from the whole situation.

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We feel it's unnecessary, given the new provisions and the conciliation period. The period for the minister to consider used to be seven days and now it's 14 days. We feel that at annual elections and things like that, where the members elect the negotiating committee and have confidence in it, they would indicate that.

The Acting Chairman (Mr. McCormick): Thank you.

We will now proceed to Mr. Johnston of the Reform Party.

Mr. Johnston: Thank you, Mr. Chairman, and thank you, gentlemen, for your presentation.

In your brief I understood you to say you had some concerns about the secret ballot. If I misunderstood you, perhaps you can enlighten us all in that regard.

Mr. Dufresne: At the outset, let me state that all our voting on collective agreements is conducted by secret ballot. We feel there hasn't been any evidence put forward that the unions conduct voting in a disreputable way. To throw it in there, people would assume there have been allegations of massive fraud or something, and that hasn't been the case.

[Translation]

Mr. Murray: Regarding the secret ballot, each union has a provision saying that only one person needs to ask for a secret ballot at a union meeting. Allowing anyone to challenge the results of the vote because of irregularities and the way it was carried out, as is provided for in subsection 87.3(4), a challenge that adds ten more days to the period during which the unions cannot use its power, will increase the delays even more.

There even are voting irregularities when the President of the Republic of France is being elected. We wonder how this provision could be managed within the labour movement. How we will be able to challenge possible irregularities that might occur during a vote held by an employer's association? We believe this could open the door to mandatory voting by ballot and that possible irregularities will lead to other delays, which once again will throw off the balance of power that has to be there between the parties, and be used responsibly, as far as we're concerned.

[English]

Mr. Johnston: However, I believe you said all of your ballots were secret ballots. If that's the case, what's the problem with just formalizing it?

Mr. Dufresne: It's like writing a law just for the sake of writing a law.

I'll just speak on what happens at the International Longshoremen's and Warehousemen's Union. If we call a general meeting to bring a proposal or the lack of progress to the membership, there would be a standing vote to have a secret ballot, and the ballot would take place after that to have a ballot, because we have to have a ballot by our constitution. It would be an insult to the unions if that were to be put into the law.

[Translation]

Mr. Murray: In addition, Mr. Johnston, there would be another delay. We said this in our presentation: whatever might have been said in the past about longshoremen's unions, you can see that nowadays we are far from being great big tattooed guys who just want to call wildcat strikes. We think that going out on strike is the last resort.

There is an additional 14-day delay when the minister grants the right to strike or lockout. Voting irregularities are possible, which could lead to an additional 10-day delay. There is a 60-day waiting period, plus a 72-hour notice required.

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So according to our analysis, when you add all this up, you can see that attempts are now being made to diminish the right of workers to strike. Yet this is a fundamental right that protects our job. As you have seen in the past it's also sometimes the only recourse that workers have to make employers think about the issues. Last year, in the shipping industry, both in Vancouver and Montreal, it wasn't the longshoremen who went out on strike; the employers locked them out. Perhaps the right to lock out employees should be limited as well.

[English]

Mr. Johnston: Do you gentlemen feel that Bill C-66 strengthens the union, overall?

Mr. Dufresne: We feel the minister and his senior people in the administration have tried to come up with something that's fair and could be accepted by both parties. We don't feel it gives any additional strength to the union. It may give individual members more protection, but it doesn't really strengthen the union.

The Acting Chairman (Mr. McCormick): There's a question from the government side. Mr. Nault.

Mr. Nault: Thank you, Mr. Chairman. Before I start I'd like to ask that the presentation of the ILWU foremen's group be put into the record as an exhibit, because of course it wasn't part of the whole process.

I'd first like to thank the folks we have before us for coming. It's always nice to see some high-tech once in a while. It kept us awake anyway. As you know, it's hard to listen to one after another, so you did get our attention.

I want to deal with the 60-day situation and the fact that you have 60 days to put forward some sort of secret ballot to deal with the ability to go on strike. Can you tell me, just so we get a sense of what we're dealing with here, how long it normally takes for your group to get a strike mandate through a ballot of some kind? If it's at the end of the process where you have a collective agreement and go back to the membership for its concurrence, how long would that take and what would it cost?

Mr. Dufresne: We have all the different cases among the different unions that are here today. In the case of the Canadian area, under the longshore ILWU/BCMEA collective agreement, votes would have to be held in Prince Rupert, Vancouver, Port Alberni, Victoria, Chemainus, New Westminster and Stewart. You would have to wait for the boxes to be mailed down. In some cases, I guess, the locals could count the vote and phone it in, if that would be acceptable. But then again, if somebody challenged that, maybe you'd have to send the boxes down.

For other unions the cost factor is a bigger problem. I imagine with unions like the railway unions or the postal unions, where there are people spread all over Canada, because of the potential for challenges it could run into a considerable period of time and very severe expense.

Most unions are running pretty close to the edge on what to do with their membership dues, so you spend the dues on holding these ballots. It could impact pretty heavily on the people, especially people working for less than top wages.

Mr. Nault: You think I'm talking about the fact that there's going to be a secret ballot. I want to know whether you have a ratification process now.

Mr. Dufresne: Yes, we do.

Mr. Nault: You could be a little more specific.

How long would it take you at the present time to ratify a negotiated settlement that you've had with the companies, and how much would it cost? That ratification process would obviously be similar to some sort of secret ballot. In my mind, you must take the negotiated settlement, send it to all the membership, give them an opportunity to read it, look at it, dissect it, and present their views on whether it's acceptable to them or not, as representatives of that particular union. I would like to know how long that normally takes and roughly what it costs, to your mind.

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What I'm getting at is if you have to do it twice, for example if there's a protracted negotiation and you miscalculate and you go and get a strike mandate and the 60 days runs out, and you're going to have to do it twice, that's a very large expense. I would like to know how long you think it would normally take you, so we can get a better feeling for what this 60-day scenario is going to do to the dynamics of negotiation. I'm trying to get a better handle on it.

Mr. Dufresne: Since we're all different.... Brother Sigurdson is in a unique situation with the longshoremen's locals. Maybe he could give the more direct costs.

Mr. Doug Sigurdson (President, International Longshoremen's and Warehousemen's Union): In our case we can take a strike vote in four hours. We have officers positioned on Vancouver Island, in Prince Rupert, and in Vancouver. For example, a meeting can be called at9 a.m., an explanation can be given to the membership at that meeting, and a vote can be taken right there. That's not normally the case. We usually give the membership a bit more time to look at the package before they make a decision.

The expense to the industry is quite large, because to do this the industry would have to go down for a day, which would cost loss of production throughout the industry. But as for the length of time for us to take a vote, it doesn't take long at all. We can do it right away.

The larger unions, I understand, have a major problem.

Mr. Nault: Some of the larger unions. Can you give me an idea of how long that takes?

I'll give you an example. For the United Transportation Union, on the railway, my understanding is that it takes about 45 days. They send the ballots out by mail and it's the railway right across the country. It takes 45 days and it takes roughly $50 million or more for this whole process to unfold. I'm trying to get a sense -

Mr. Sigurdson: You mean $50,000.

Mr. Nault: Yes, $50,000. What did I say? Did I say $50 million? Would the UNT ever love to have $50 million. They're wealthy, but not that wealthy. I meant $50,000.

I'm trying to get a handle on the effects of this change on unions across the country, especially in the federal jurisdiction. My understanding is in the provincial jurisdiction it's sometimes much easier. If you have any ideas or suggestions, now is the time to tell us.

Mr. Sigurdson: It was the rail unions I was thinking of; they have a difficulty with this clause. I can speak only for our union. For us it's not a major problem. We can jump that hurdle.

Mr. Dufresne: In the longshore industry we would have an upward meeting, because people are going to want to know, well, why do you want another strike vote; where are you in the bargaining process? If you shut the industry down for a day, I don't know what the cost would be;$10 million or $11 million for a one-day work stoppage, with the ships having to wait, because you have to give the information to the people and allow them to ask questions about it. That's the most practical way for us to do it.

The Acting Chairman (Mr. McCormick): Thank you, gentlemen, for the very valuable views you have shared with us. I'm sure they will be taken into due consideration as we proceed with the bill and the clause-by-clause and debate. Thank you for appearing.

Mr. Dufresne: Thank you, Mr. Chairman. Just one last item, if I could. All the longshore unions are represented by rank-and-file members. Each and every person here representing a longshore union is in fact a worker who has been put into office for a period of time to represent those people.

The Acting Chairman (Mr. McCormick): It's good to put that on the record.

We'll have a two-minute break, please.

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The Acting Chairman (Mr. McCormick): Good afternoon, ladies and gentlemen. We'll resume hearings on Bill C-66, an act to amend the Canada Labour Code. I believe our first witness in this session is from Day and Ross Ltd., Mr. Rex LeDrew, the president.

I welcome you, Mr. LeDrew. I'm sure you know how we usually proceed. You have perhaps ten or fifteen minutes if you wish to make a presentation. Then we can have some questions and answers around the table. Is that satisfactory?

Mr. Rex LeDrew (President, Day & Ross (Newfoundland) Ltd.): Thank you,Mr. Chairman. I've distributed written copies of a few words I'd like to say. Thank you very much for the opportunity to be here.

I want to assure you that I did see the previous demonstration of the technology. I want to assure you that when Brian Tobin went back to Newfoundland he brought back all that technology to us and we use it every day -

Some hon. members: Oh, oh!

Mr. LeDrew: - just in case you think we don't have it or something like that.

I'm president of Day & Ross (Newfoundland) Ltd., a trucking company that operates across North America. In addition to this role, I'm vice-president of the Atlantic Provinces Trucking Association, the membership of which crosses into Newfoundland, via its ferry services, over 60,000 times a year, and it's under this guise that I wish to address you and perhaps show you a non-traditional item that you probably haven't been looking at up until now.

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As the committee is aware, Bill C-66 is a very significant piece of legislation to the employees and the employers who are involved in the Canadian transportation industry. Labour relations of all federally regulated industries, such as interprovincial trucking transportation, are governed by the code.

I acknowledge that this bill addresses several important issues that have been identified as problem areas by practitioners of labour relations in Canada. In very broad terms, it appears to me to offer a very reasonable balance of options to all parties in the collective bargaining process.

Balanced labour relations are extremely important to the creation of an environment that fosters economic growth and job creation. If a business such as ours is to grow, we feel that this balance is essential.

The amendments contained within the revised code deal with, among other things, the administration of the code itself, the bargaining cycle, essential services, the scope of collective bargaining, and finally, the substantial redesign of the Corporations and Labour Unions Returns Act.

My sole focus today, however, is not to pass judgment on what has been proposed within the amendments, but to alert the committee to an additional labour issue. I also note that in my opinion there is no remedy being offered to ease it from within the current or the proposed legislation.

The issue, ladies and gentlemen, is the issue of labour relations as they pertain to the operation of certain interprovincial ferry services. I would also like to point out that this issue has not manifested itself in all interprovincial ferry services. It is unique to those ferry services that have been constitutionally guaranteed and protected. My brief focuses on this point.

The Canada Labour Code regulates, among other things, the labour relations environment of all federally regulated industries. According to the definition found in section 2 of the code, a federal ``work, undertaking, or business'' specifically includes, in paragraph (d), ``a ferry between any province and any other province''.

As you know, there are several interprovincial ferry services found throughout Canada: between British Columbia and the northwest United States - and this is not considered interprovincial - between Ontario and Quebec, and in Atlantic Canada, New Brunswick and Nova Scotia. The province of Newfoundland, of course, is also linked by a ferry service that runs from North Sydney, Nova Scotia, to Port aux Basques, Newfoundland. The Newfoundland-Nova Scotia ferry service, which is also known as the gulf ferry, is somewhat unique among this list, however, on the grounds that it is considered to be an extension of the Trans-Canada Highway to the province.

Newfoundland is an island. The gulf ferry is an important transportation link to the province that enables trade and movement of goods and passengers to and from the province. It allows those Canadians who are resident within the province to have ready access to other parts of their own country. As a member of the trucking industry, I well understand the importance of this link.

Other than fish products, which are mostly an export item, Newfoundland is not a great food-producing province. In fact, as a result of our poor agricultural climate and the limited amount of suitable soil for farming, food imports greatly outweigh all exports. Perishable foodstuffs such as milk, fruit, vegetables, meat, and, yes, even fish, are imported almost exclusively via the only truck transportation link to the rest of Canada, the gulf ferry service. In most cases, both the shipper and the receiver prefer to ship goods by ferry because it reduces the cost associated with intermodal transit and allows greater dependability in most cases of delivery of time-sensitive products.

The value and importance of this service cannot be underestimated when you consider that even the food produced within the province is fully dependent on the regular shipment of feed grains via the gulf ferry link.

In addition to this, other important products are regularly shipped into the province that are of an essential nature. Propane and medical gases are frequently imported into the province via the ferry. We are even a net importer of milk.

I would also like to point out that Newfoundland, as the committee is aware, is a province not without its economic problems. Of those industries that have been able to produce competitive goods for export, a high percentage of these goods are exported via the ferry.

The reason for this is quite simple: most manufacturing is done on a relatively small scale. Shipments are often less than container loads and are therefore expensive in terms of transportation cost by container vessel. It is also worth pointing out that Newfoundland has only three such container ports. The option to ship via other means is quite limited for most locations within the province.

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The ferry therefore provides a critical mechanism for the existence and growth of badly needed economic opportunity.

About tourism development, it cannot go unnoticed that the very existence of this service is critical to this industry achieving its full potential within the province. It has been demonstrated that even a rumour of disruption brings drastic volume reductions in this sector.

Having noted that the Newfoundland gulf ferry service is unique by virtue of the fact that it links an entire province of Canada to the rest of the nation, that it has a central role to play in the provincial food supply, and that it is necessary for the stability and growth of an entire provincial economy, I would like to point out that another point makes this particular ferry system unique. With the completion of the P.E.I. fixed link, the Newfoundland gulf ferry service is now the only constitutionally required service remaining in Canada.

Three provinces in Canada received constitutional guarantees of water transport when they joined Confederation. British Columbia, through term 4 of the B.C. terms of union, and subsequently through a joint federal-provincial administrative agreement, is given an annual lump-sum subsidy from the federal government for the operation of the domestic ferry service. No specific obligation, though, is attached to any specific ferry service. The subsidy is now used for delivery of services at the complete discretion of the province.

The schedule set out in P.E.I.'s terms of union included the provision of a ferry link with P.E.I., but as you know, with the completion of the fixed link in 1997 this will not be necessary. In term 32 of the Newfoundland terms of union, however, more specific language is used to describe the nature of the service that would be required of the federal government. Section 2 of term 32 states:

Canada will maintain in accordance with the traffic offering a freight and passenger...service between North Sydney and Port aux Basques, which, on completion of a motor highway between Corner Brook and Port aux Basques, will include suitable provision for the carriage of motor vehicles.

This Newfoundland gulf service is now the only constitutionally guaranteed interprovincial service that falls under the scope of the Canada Labour Code.

Before I begin my discussion on the constitutional aspect of the issue, I would like to discuss some important issues in the actual operation of the gulf service, specifically in the context of the past, present, and future labour relations situation.

For the trucking industry, all the industry sectors, and all the people they employ within the province of Newfoundland, the possibility of a suspension of the gulf ferry service is alarming. A simple two-day shutdown, which we regularly experience because of weather, can result in waiting lists and backlogs of several more days. During these times perishable goods can be compromised. Fruits, vegetables, and meat waiting in Nova Scotia can and will go bad in time. Fish sitting in Port aux Basques will lose value or rot. All delays will result in economic loss. The losses are almost always borne by the end-user or consumer. In addition to this, the cost of importing products such as medical gas or animal feeds increases when the shipper is required to shift to alternate transportation modes such as air freight or cargo vessel.

It is worth pointing out that in other provinces if one ground transportation route is blocked you usually have several other options available to continue the highway link. In Newfoundland there is only one way in and one way out, and that's through the gulf.

Division V.I of Bill C-66 continues the provision dealing with obligations relating to strikes and lock-outs. In the event of a strike or lock-out of an essential service, a proposed new section 87.4 is being added to help ensure public safety. As is normal practice, essential services as would be defined by the board in such cases will rarely be broadened in scope beyond that of the direct provision of ambulatory services and food to remote areas where traditionally ambulances are essential.

I've tried to make the point that in comparison with the rest of Canada, Newfoundland is very remote. I fear, however, my argument is not likely to hold up within the context of the purposes of interpreting essential services. Unfortunately, it is unlikely a remedy exists here to this terrible situation, because it would likely be perceived to broaden the scope of interpretation for other applications as to what might be considered an essential service. Others may see it to be too dangerous a precedent.

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The minister has proposed an additional section to the legislation for a specific industry sector. A specific exemption is provided by proposed section 87.7 for the handling of grain in the event of a work stoppage at ports holding grain.

Instead of taking the tack that because grain is considered to be in the national interest and therefore the well-being of an entire province should be in the national interest, I will propose a different test, a sensible test, as to whether extensions to such provisions should be provided. I will convince you that other reasons exist as to why similar provisions should be afforded constitutional protection under interprovincial ferry services.

In 1973, a nationwide strike resulted in the shutdown of the New Brunswick to Prince Edward Island ferry services for ten days at the height of the tourist season. At the time, this ferry service was constitutionally protected, so the P.E.I. government brought an action in the federal courts for damages it suffered as a result of interruptions in the constitutionally mandated service.

The Federal Court of Appeal found that the constitutional obligations set out in the P.E.I. terms of union are legally enforceable and that the provincial government has a right to monetary compensation from the Government of Canada for losses resulting from that breach.

At present, the fixed link between P.E.I. and New Brunswick is nearing completion. As such, obligations on the part of the federal government will be relieved. This leaves Newfoundland's gulf ferry service as the last remaining constitutionally protected ferry service in the country.

Now consider this. Since 1973, Marine Atlantic, a federal crown corporation, has been aware of the fact that any interruption in a constitutionally obligated ferry service will result in a federal breach of these obligations.

This provides quite a bargaining position to any employee of Marine Atlantic. It also makes it more difficult to argue that there is a balance between the employee and the employer during the collective bargaining process whenever a constitutional obligation comes into play. Employees may not be quite as concerned about the viability of the business aspect of the service. They can afford to discourage others from using the ferry service as it is constitutionally obligated. It will exist whether it makes money or whether it doesn't.

This constitutional obligation also eliminates any possibility of a lockout of employees by Marine Atlantic. A federal crown corporation is not likely to initiate a breach of a terms of union with a province, given that it has been court-tested and the federal government will ultimately be on the financial hook anyway.

Given that an obvious imbalance has been identified, I urge the committee to consider amending Bill C-66 to extend similar protection to the Port aux Basques to North Sydney ferry service in a manner similar to that extended to the transportation of grain from terminal points. The reasons for doing this stand on their own. They interject balance, are fair to all involved, and assist with the process of fair collective bargaining.

Thank you. I will certainly answer any questions.

The Acting Chairman (Mr. McCormick): Thanks, Mr. LeDrew.

We will proceed to a round of questions of approximately five minutes for each party at the table.

[Translation]

Mr. Ménard: Mr. Chairman, if ever I don't use up my five minutes, I hope you will give them to the member of this committee who represents the province of Newfoundland. In any event, I would like to say that I'm very pleased to welcome someone who has given testimony such as the testimony we just heard.

You are formally asking one of us, either someone from the government side or the Official Opposition side to make an amendment to recognize the ferry service as an essential service.

Longshoring and the grain industry got somewhat special treatment in the bill, and representatives from other industrial sectors have made representations to us. In your case, you are not asking for preferential treatment as the representative of a particular industrial sector. You are saying that such treatment should be provided to the ferry service as a means of transportation.

At first glance, I think your argument is quite valid. I don't know how the government side will respond to such an amendment. Would you like to add anything to the information that you provided in your brief?

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The Official Opposition is not necessarily against an amendment such as the one you want so badly.

[English]

Mr. LeDrew: Thank you very much for that support. I will just sum it up by saying that I certainly believe the very nature of cutting off a province's flow of economy or food supplies is equally important, if not more important, than the supply of grain to or from Canada.

[Translation]

Mr. Ménard: If I have any time left, I would like it to be granted to the member for Newfoundland, Mr. Chairman.

[English]

The Acting Chairman (Mr. McCormick): Yes. Thank you, Mr. Ménard.

Mr. Johnston, of the Reform Party, do you have a question, sir?

Mr. Johnston: Yes, thank you, Mr. Chairman.

I certainly appreciate your presentation. For a westerner like myself it's a different perspective.

It seems quite obvious that you would like to see some changes in this legislation. Just for my edification, and so I don't misunderstand where you're coming from, perhaps you would just go over that one more time in regard to how you would like to see the changes apply to the Newfoundland ferry.

Mr. LeDrew: The matter of including it as an essential service is my issue, I guess, so that it won't be treated any differently from the grain issue. This way, it gives the unions in North Sydney and the company equal footing in the bargaining situation, but while they're protected under constitutionality, the company can't lock them out because the company knows it has to perform anyway. There's a conflict there that I think is cleared up if we do it my way.

Mr. Johnston: Excellent. Thank you, Mr. LeDrew.

Thank you, Mr. Chairman.

The Acting Chairman (Mr. McCormick): Thank you, Mr. Johnston.

Yes, the member from the rock, please.

Mr. Byrne (Humber - St. Barbe - Baie Verte): It's a wonderful rock, I might add,Mr. Chairman.

Mr. LeDrew: He'll understand everything I say.

Some hon. members: Oh, oh!

Mr. Byrne: I can actually translate it into English, of course.

Mr. Chairman, I'd just like to thank the witness for an absolutely exceptional presentation this morning.

Mr. LeDrew: Thank you. There's no prejudice at all here.

Mr. Byrne: To get right to the heart of the matter, there were a couple of things that interested me. You mentioned that there were two Canadian ferry services that were constitutionally obligated by the federal government in the terms of union with two provinces, P.E.I. and Newfoundland.

In 1973 we had an interesting test, I guess, of what exactly that commitment meant. In 1973 there was a national marine strike in which the Marine Atlantic ferry service, operated by a federal crown corporation, suspended their actual operations because of a strike action. Subsequent to the strike action, the provincial government of P.E.I. sued the federal government for breach of obligation under the terms of union with P.E.I. and won. The Supreme Court of Canada found that in suspending service during the strike Marine Atlantic in effect broke the terms of union.

So since 1973 to the present, Marine Atlantic has been operating in an environment such that it knows any suspension of service to constitutionally obligated ferries is a breach of the terms of union with two provinces, P.E.I. and Newfoundland.

Since that time we've had the establishment of the fixed link in P.E.I. A federal-provincial agreement has been offered by Canada and accepted by P.E.I. basically - not to use language that is too technical or too legal - exempting a specific ferry operation between P.E.I. and Canada in favour of the fixed link, leaving the Newfoundland ferry service as the only constitutionally obligated interprovincial ferry service in Canada.

I just want to get your opinion on this. If the Supreme Court of Canada found that the federal government was in breach during the course of a strike by not providing the service during the course of a lockout...if, for example, Marine Atlantic, which is a federal crown corporation...would they have the opportunity, as a crown corporation, actually to exercise the right of a lockout?

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Mr. LeDrew: I don't think they would. If I were the president of Marine Atlantic, I would be walking on pretty thin ice to do that, wouldn't I? As president of a crown corporation, how could I do that?

Mr. Byrne: So the net effect - and this is the point, if I'm reading your brief correctly - is that an imbalance currently exists in the collective bargaining process.

Mr. LeDrew: In the process of negotiation, yes, I believe so.

Mr. Byrne: So is it fair to say that in the operation of Marine Atlantic that would actually guide how they set the rate structures and so on, because in the collective bargaining process they have to maintain that service?

Mr. LeDrew: I suspect in rating it is considered, yes.

The Acting Chairman (Mr. McCormick): Mr. Nault.

Mr. Nault: It seems to me, from my knowledge, that there hasn't been a strike there for quite a long time. If that's the case, then what's the problem?

Mr. LeDrew: I agree, labour harmony is ideal. If we can have that forever, it will be just great. But last summer, just by rumour - and I alluded to that in my brief - there was to be a strike. Tourism passenger traffic to and from Newfoundland by that mode was down 10% because people panicked. They didn't want to get stuck on the rock for the rest of the winter. It just didn't go. Just the rumour caused that panic. If we could only have this established as an essential service we would be eliminating that rumour.

Also, how do you run your business on the fact that your trucks should be on one side or the other? It's now the situation that on a given weekend I could have thirty or forty trucks on either side of the ferry, waiting for the crossing. I pay those people to wait, and it costs me a fortune. If I have to live in the shadow of a labour problem, it just costs me a fortune to operate, which gets passed down to the consumer in the end.

Mr. Nault: I know Mr. Tobin was not available to come today so you came in his place, but if I were to ask Mr. Tobin and the Newfoundland-Labrador legislature for their opinion on this particular issue, what do you think they would say? Are you aware that they have communicated with the federal government in the past, asking it for some sort of exemption and to make this an essential service? Are you aware of any of those scenarios?

Mr. LeDrew: I do believe there has been some discussion.

The point that the ferry service is an extension of the Trans-Canada Highway to Newfoundland has always been maintained by every government of Newfoundland, and I think that point has been brought to Ottawa. In fairness, we consider it part of the road, and any disruption would be to cut the road in half.

Mr. Nault: Has any back-to-work legislation ever been passed by the federal government relating to this?

Mr. LeDrew: Not for the ferry service; not that I know of.

The Acting Chairman (Mr. McCormick): Ms Terrana.

Mrs. Terrana (Vancouver East): I want to apologize for not being here while you were making your presentation.

Because I come from the other side of the country - I come from British Columbia - I feel for you. I know what it would mean if we had to be cut out from our ferry in British Columbia. It would be very difficult.

Is there any other concern you want to bring up with us? Is this the only one regarding the new labour relations council and other issues in Bill C-66? Is there anything else you want to discuss with us?

Mr. LeDrew: I don't work in an organized environment, but it's not that I don't respect it. What I have read of the bill seems fair. To the extent that the changes apply to me they seem fair to me, although of course I wouldn't make them the subject of a lot of study if they don't apply. What I know of them I respect.

Mrs. Terrana: So you accept it in principle.

Mr. LeDrew: Yes, in principle.

The Acting Chairman (Mr. McCormick): Mr. Byrne.

Mr. Byrne: In fairness to the witness, Mr. Chair, as a committee I think we've asked him a few questions he probably doesn't have the technical expertise to answer. But from the questions that were raised I would like to make a very brief comment.

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The parliamentary secretary noted that there hasn't been a labour disruption since 1973. I would just like to note for the record that if you were a federal crown corporation and you had a Supreme Court-tested decision that said whether or not the service operates you're financially liable, you're obligated to provide the service when it operates, as a constitutional obligation, but should the ferry not operate, because of labour disruption, you're also financially liable, as per the 1973 agreement.... Therefore in terms of the collective bargaining process it would seem to me that as the federal crown corporation enters into these negotiations it's going to pay regardless. So it's better to reach a deal, and that potentially is an imbalance in the collective bargaining environment.

It also provides a situation where if Marine Atlantic were to opt for a lockout, they as a federal crown corporation would be imposing a breach of a constitutionally guaranteed provision of service. It would be a federal crown corporation breaching the Constitution. That can't happen. Therefore once again they have to go back to the collective bargaining process.

It's not a question, Mr. Chair. I just raise that as a comment, because at this level of discussion it probably is not within the purview of this particular witness.

The Acting Chairman (Mr. McCormick): Certainly they are interesting comments.

I thank you, Mr. LeDrew, for the unique perspective you bring to this committee and these hearings. I have crossed more than a few times on the ferry from North Sydney to Port aux Basques, one of the roughest parts of the whole Atlantic.

Committee, we will resume at 3:15 p.m.

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The Chairman: Order, please. Welcome back, everyone. We are still in this morning's agenda. As you know, we are starting Bill C-66, an act to amend the Canada Labour Code, part I, and the Corporations and Labour Unions Returns Act and to make consequential amendments to other acts.

This afternoon we have the pleasure of having with us, from Nordic Development Corporation, Don McDonald, chairperson; from Red Oche Development Board, Carolyn Lavers, chairperson; from Humber Economic Development Board, David Reid, president; and from Emerald Zone Development Board, Gerald Burton, chairperson.

Ladies and gentlemen, welcome to the committee hearings. As you know, we look forward to hearing what the witnesses have to say as we study this bill. Our view as members of this committee is to look for suggestions on ways and means in which we can perhaps improve the bill. You have approximately one-half hour - 10 to 15 minutes for the presentation, followed by questions and answers. You may begin. Thank you for coming.

Mr. Don McDonald (Chairperson, Nordic Development Corporation): Thank you,Mr. Chairman. Members of Parliament, ladies and gentlemen, before I begin I'd like to say that this is a joint brief done by all four of the zonal boards.

With me today is Mr. Gerald Burton, who represents the Emerald Zone Corporation; Carolyn Lavers, who represents the Red Oche Development Board; and Mr. Dave Reid, who represents the Humber Economic Development Board. All four of us sit on boards of similar organizations.

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The history of these boards began in 1994 when federal and provincial governments, in response to the need to implement cost-efficient and effective community economic development within Newfoundland and Labrador, sponsored a task force on community economic development called Community Matters.

This task force recommended the implementation of 20 economic zones to be set up throughout the province. These zones would represent an economic, social and cultural region. Collectively, the four zones represented here encompass a significant portion of western, northern and central Newfoundland.

Once identified, each economic zone was formally incorporated as a development corporation. Each brought together a board of directors made up of community representatives from the fields of business, labour, education, youth, municipalities, and other interested groups. The purpose of these boards is to formulate and implement an economic and social development strategy for each of the areas. These strategies will bring all areas of Newfoundland and Labrador into the 21st century.

The primary objective of each board is to identify strategic economic development opportunities and to develop them. Another objective is to identify impediments to economic prosperity and to eliminate them.

As the committee is aware, Newfoundland and Labrador is not considered to be a full and equal partner in a generation of wealth in this country. In fact, we are considered to be a have-not province. Instead of accepting this, however, we are rallying against it. We do not accept that this situation can continue, and we acknowledge that it's up to us to turn our own economy around.

Given the level of government spending cuts that are currently being experienced within the province, however, our job is not an easy one. But instead of focusing on the cuts, we will continue to focus on opportunities for wealth creation.

Mr. Burton will further that point.

Mr. Gerald Burton (Chairperson, Emerald Zone Development Board): Newfoundland has a growing aquaculture industry that has significant promise for strategic growth. Aquaculture, coupled with the rebuilding of the traditional groundfish fishery, will breathe new life into many of our province's coastal communities.

Secondary processing of seafood products has now become a reality in our province. It is through initiatives such as these that new wealth is created, and we are well poised to do so. The sea will always be a mainstay of the Newfoundland economy - it is part of the essence of being an island - but new resources are also being developed.

In my area mining activity has resumed with the opening of three new gold mine sites in the past 18 months. The incredible mineral finds at Voisey's Bay in Labrador have brought a new sense of optimism and opportunity to much of the province.

Offshore oil is also becoming a reality. Hibernia is going on line in 1997. The Terra Nova platform will begin construction soon. Just yesterday Amaco announced it was drilling another well on the Grand Banks to look for oil. The prospect looks bright.

Newfoundland is also developing a diversified manufacturing base specializing in niche markets. Innovative products are being developed, and we are becoming a leader in ocean technologies and communications.

Carolyn.

Ms Carolyn Lavers (Chairperson, Red Oche Development Board): Mr. Chairman, one of the brightest spots in the Newfoundland economy is that of tourism development. The 500th anniversary of John Cabot first discovering Newfoundland and Labrador is in 1997. The occasion will be marked by an international celebration. Marketing efforts have promoted this event and it is well under way to being a tremendous success.

The American Bus Association has formally stated that next year Newfoundland and Labrador will be the premier tour bus destination of choice in all of North America. Literally tens of thousands of new visitors to the province are expected next year, with the end result of economic activity. The future is very bright indeed.

It is worth pointing out, however, that opportunity only becomes reality if all the infrastructure - the pieces of the puzzle - is put in order. As mentioned earlier, part of our job as members of the zonal boards is to identify opportunity. The other role is to identify constraints to opportunity.

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There is one issue that we all agree is a serious threat to achieving our full economic prosperity, which is the issue of transportation. Bill C-66, an act to amend the Canada Labour Code, has a direct impact on labour negotiations in the field of interprovincial transportation.

As the committee members are aware from your last witness, Newfoundland and Labrador is connected to the rest of Canada by a very thin thread. The Marine Atlantic ferry service between North Sydney in Nova Scotia and Port aux Basques in Newfoundland is to us an extension of the Trans-Canada Highway. Whereas most provinces enjoy multiple options for the transport of people and goods from one province to another, we have but one route.

If you accept this argument, then our Trans-Canada Highway has the highest toll on any public highway in the country. A family of four travelling between Newfoundland and Nova Scotia in their car will pay approximately $125 for a 90-mile trip one way. No other citizens in the country bear such a burden. But Newfoundlanders understand that this is part of being an island, and we accept it.

What is hard to accept, however, is that this marine highway is constantly being used as a bargaining chip by the service's employees during regular labour negotiations. For a tour bus operator or a trucking company considering travelling to Newfoundland, an island province with no other interprovincial ferry available to return by, the threat of a strike can be as effective as the strike itself, particularly when such a threat is reported in the press. Tourism can be adversely affected, as the travelling public will tend to avoid making travel plans on a route that may result in their being stranded with no way to return with their auto.

Unions will often use this fact to their advantage, especially around the time of collective bargaining. As members know, it's quite difficult to counter such a perception once it's publicly released and endorsed by the unions. Based on our previous experience, tour bus operators have cancelled tour plans to Newfoundland whenever the perception is created that the service may terminate abruptly due to a labour negotiation breakdown.

Mr. David Reid (President, Humber Economic Development Board): We would want to go on the record as stating that we're not against the collective bargaining process. Neither are we against the right of employers and employees to initiate strikes or lockouts in the event that negotiations are unsuccessful.

What we do raise as an objection is the ability of one party to such negotiations to hold the entire province captive to the process. The current operator on the Gulf of St. Lawrence is Marine Atlantic, a federal crown corporation that operates ferry services throughout Atlantic Canada.

The entire transportation industry in Newfoundland and Labrador, and indeed in Atlantic Canada, is aware of the main tactics used by the bargaining agents for Marine Atlantic's employees. One of the most effective tactics that affects the employers and users of this service is the threat of a strike.

As was talked about in this morning's session, we believe the Government of Canada has a constitutional obligation under the terms of the union to provide a reliable and constant ferry service to and from the island. The Crown also has the fiscal responsibility to compensate the province for a loss of economic benefit if that service is not operated.

We also have a serious concern with the imbalance in the negotiation process. As it currently stands, the employer will not be able to use a lockout in the negotiating process because they would be breaching the terms of the Constitution, whereas the employees are able to use the strike itself in their negotiating process.

This is an especially important service to the province of Newfoundland as it develops its tourism. Since this is a portion of our Trans-Canada Highway, it's our view that it's an impediment to economic development and must be addressed. We do not feel comfortable with the definition of essential service as it's outlined in Bill C-66.

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We believe that a provision should be included in the bill that would designate the Marine Atlantic ferry service from Sydney to Port aux Basques as a service that is not subject to service disruption. It's our view that this is critical as we move forward in developing the Newfoundland economy.

Thank you very much.

The Chairman: Thank you very much. Now we'll move to the question and answer session.

[Translation]

Mr. Ménard.

Mr. Ménard: First of all, I do hope that you had a good trip. I know that your member of Parliament is very proud to welcome you here. He is lucky, because you are the second witness in a row from his province. Welcome to the committee.

You argue that we need all the necessary information to make the right decision. You would like the ferry service to enjoy special status under the bill. For all practical purposes, you would like the ferry services to be declared essential, thereby protecting them against work stoppages.

The previous witness told us all about the links between road transportation and ferries and how, in the case of a work stoppage, food stuffs and medical supplies could not get through. We were told about such possibilities.

Obviously, this creates a problem for people who are concerned about the balance of power and maintaining the right to strike. I'm sure you understand.

Could you take two or three minutes to give us some very clear, straightforward arguments to convince us, the people around this table that, as legislators, we should declare ferry services to be essential services thereby protecting you from work stoppages.

[English]

Mr. Reid: The first thing I'd like to say is that I don't believe we're asking that ferry services per se should be exempted from strike action. We're specifically talking about the only constitutionally required ferry service that remains in the country after the fixed link is finished to Prince Edward Island.

This is a critical lifeline to the province of Newfoundland. We want to stress that there has to be a process whereby negotiations between the employer and employees can still be maintained and successfully brought to a conclusion. However, as this is so critical to us and a constitutional requirement, we believe it could be, without much difficulty, put into this act.

Mr. McDonald: I'll just further that. What we need here is a legislative change, special addition or whatever it takes such that even the threat of a disruption of service is removed. That's because the threat of a disruption in service from North Sydney to Port aux Basques is as destructive as an actual shutdown of the service itself. That's what we'd like to have addressed.

The witness prior to us who was in the other room earlier today went through this. I think this particular service from Port aux Basques to North Sydney would not qualify under essential services per se. So what we need is some means so that the service does not stop or is not interrupted, or the threat of interruption is removed completely.

[Translation]

Mr. Ménard: So if I'm following you, you aren't talking about ferries in general, but about your own specific situation. This morning we were also reminded that in fact, there hasn't been a strike in the past two decades.

There were rumours going around recently that concerned you and made the tourist trade drop somewhat. However, no actual strikes have been called in the past two decades. Am I right? That doesn't guarantee anything in the future. It's just a chronological reference.

[English]

Mr. Reid: That's an excellent question. We get that constantly. There has not been an actual work disruption, but we've come close to it.

The problem is with the tourist industry especially, and tour bus operators. As soon as a rumour or the possibility of a strike becomes apparent, we get mass cancellations of tours to the province. This has happened continually, and it seems it's happening almost annually. We may have a little longer an agreement now, but it has been going on for years.

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The Chairman: Mr. Byrne.

Mr. Byrne: I would like to welcome some members of my constituency here today. I appreciate it that you could come along.

This is a very serious issue, in the sense that labour relations in this country are not taken lightly; they're taken with extreme seriousness. What you are proposing here...and I've read your brief very thoroughly. This is a unique situation you are unfolding, the provision of ferry services, but particularly you mention the fact that they are constitutionally obligated services. Could you just give a recap of exactly what it means to be a constitutionally obligated ferry service in the scope of this particular issue you're addressing?

Mr. Reid: I won't pretend to be a constitutional lawyer or to having put that together, but it was mandated under the terms of union with the province. Of course some of it might be somewhat ambiguous on what the level of service would be, but it was a commitment to give a service that would meet the needs of the province as its economy grew and as its highway network was developed. It's something that really could be taken away only under a constitutional amendment.

That's where we find the legal responsibility of the federal government to be rather onerous. They have the financial and moral obligation to keep that service running.

Mr. Byrne: They have a moral obligation, you say, to keep the service running. Just based on the brief we received this morning, I'm informed that in this country there are currently two constitutionally inscribed interprovincial ferry services. One exists in P.E.I.; the P.E.I. to New Brunswick crossing. The other is the North Sydney to Port aux Basques crossing. Under agreement between the Government of P.E.I. and the Government of Canada the fixed link is now replacing the constitutional obligation, the direct financial obligation for conveyance, away from the ferry service and to the fixed link.

We've heard some testimony here this morning that said in 1973 there was a labour disruption. The labour disruption was a CN strike, and the constitutionally obligated P.E.I. ferry service was disrupted for a time because of strike action. Subsequent to that the P.E.I. government took the Government of Canada to the Supreme Court and to the court of appeal and won the case. The financial responsibility rested with the federal Government of Canada for financial losses in breach of its obligations under the Constitution - the terms of union with P.E.I.

So now we have this situation in P.E.I. where the ferry is no longer a requirement of the Government of Canada. They have the fixed link. The situation exists in Newfoundland, however, that the ferries still run.

I want to get your sense about the bargaining process. What mechanism do you feel is appropriate? Do you advocate strikes, for example? What is it you're asking for in the operation of that service?

Mr. McDonald: We're clear that we don't want to interfere or impede in any way the balance that should be there between the employer and the employee to have a normal labour relationship. What we would like is a service that is guaranteed; that the service would be maintained under any circumstances. To say it would be an essential service would not be enough under the definition of an essential service, so we need some special designation for that route.

Mr. Reid: I would like to add that we would be very specific that it's the operation of the ferry service itself. A number of things go on within Marine Atlantic that could be affected by a labour disruption, which we really feel should be within the operation of the union-management or employee-employer relationship, and we have no problem with that.

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Looking at it from the other vantage point, we re-emphasize the current imbalance in the negotiating position. The federal government and its crown corporation, Marine Atlantic, could hardly use a lockout because they would put themselves in a financial position or a legal position that might mean they would have to compensate the province substantially. On the other hand, the union or the negotiations on that side would not necessarily put them in such a position if it struck.

Mr. Byrne: Why wouldn't the union be placed in harm's way, for example, if it threatened a labour disruption?

Mr. Reid: I would think legally, since it didn't negotiate the terms of the union itself - the Government of Canada did - its members wouldn't be a party directly to that, other than being citizens of the country like the rest of us.

Mr. Byrne: Thank you, Mr. Chairman.

The Chairman: Thank you, Mr. Byrne.

On behalf of the committee, I would like to thank you very much for your contribution to Bill C-66. We certainly appreciate your comments and we'll be taking them into consideration as we find ways to improve the bill.

Ms Lavers: We thank you.

The Chairman: Have a good trip, by the way.

The meeting is adjourned.

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