HRPD Committee Meeting

STANDING COMMITTEE ON HUMAN RESOURCES DEVELOPMENT AND THE STATUS OF PERSONS WITH DISABILITIES

COMITÉ PERMANENT DU DÉVELOPPEMENT DES RESSOURCES HUMAINES ET DE LA CONDITION DES PERSONNES HANDICAPÉES

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, April 2, 1998

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[English]

The Vice-Chair (Ms. Bonnie Brown (Oakville, Lib.)): Ladies and gentlemen, welcome to this session of hearings on Bill C-19.

This morning I'm happy to welcome representatives from the Grain Services Union, the International Longshoremen's and Warehousemen's Union, the secretary treasurer of the Grain Workers Union, Local 333, and the president of Local 514. Gentlemen, whichever one of you has arranged to speak first, please go ahead.

Mr. Tom Dufresne (President, Canadian Area, International Longshoremen's and Warehousemen's Union): Good morning, Madam Chair and the members of the committee.

My name is Tom Dufresne. I'm here on behalf of the Canadian area of the ILW. I appreciate this opportunity to make a representation to members of the House of Commons Standing Committee on Human Resources Development with respect to Bill C-19, an act to amend part I of the Canada Labour Code.

I'm especially pleased to be joined in today's presentation by my colleagues representing other unions involved in grain handling. First, let me introduce Mr. Ron Burton, secretary treasurer and business representative, Grain Workers Union, Local 333. Mr. Burton will follow my short comments with remarks of his own, as will Mr. Hugh Wagner the general secretary of the Grain Services Union. Finally is Doug Sigurdson, president of the ILW ship and dock foremen, Local 514. We will then look forward to an informative and constructive discussion with members of this committee.

First, let me provide some very brief background on the union I represent. The International Longshoremen's and Warehousemen's Union is the autonomous Canadian section of an international union. The international office offers a fraternal structure in which two equal parts can maintain a supportive and ideological relationship.

The Canadian area is presently made up of three divisions, which represent 14,000 workers in the four western provinces and Ontario. One of these divisions is the Grain Services Division representing 3,000 workers in clerical and elevator operations in the prairie provinces. The retail/wholesale division has 7,500 members and the longshore division has 3,500 members in 14 locals on the British Columbia coast. Each local is autonomous and deals with its employer apart from the Canadian area.

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We take our responsibilities very seriously and we take pride in performing them as effectively as possible.

With respect to Vancouver and Prince Rupert, we believe it is in the interest of our members and our country to promote the reputation of these ports as among the finest in the world, thereby allowing Canadian trade and commerce to grow.

As you know, Bill C-19 is the product of years of deliberation, consultation, and compromise. The ILWU believes that the consensus reflected in this bill strengthens the Canada Labour Code, so we look forward to the bill becoming law—as it is right now—when it's presented to the House.

There are certainly reservations we hold about elements in the bill, such as those dealing with strike notice or replacement workers, and there are further changes we could recommend to improve the welfare of our members. But we have participated in the process in good faith from the beginning, knowing that with all the give and take we could create an improved Canada Labour Code. It is for this reason that we oppose further amendment and recommend swift passage of the bill as it's been presented to the committee.

Perhaps I could use an analogy from our labour experience to clarify my concern. To dissect the recommendations and try to adopt them individually would be like trying to arrive at a collective agreement by reaching consensus on each single point. Negotiators in this context would not find it possible to conclude peaceful settlements in contract bargaining. The contract must always be viewed as a package and adopted as such. And so it is with Bill C-19. In short, if changes are made in this compromise package that we feel would negatively affect our position, we could no longer support the legislation.

I would like to refer in particular to proposed subsection 87.7(1), services to grain vessels, in which the flow of grain would be continued in the event of a strike or lockout in the longshoring industry. It is remarkable that this section has support from both labour and grain industry management as well as from the Government of Canada and the Federally Regulated Employers—Transportation and Communication, FETCO. The broad support from both labour and grain industry management is based on the recognition of the unique characteristics of the grains industry.

We in the ILWU have always been troubled by the fact that labour disputes bring harm to western Canadian grain farmers, not just because of delays in cash receipts from farm deliveries, but because of costly demurrage, lengthened rail car cycles, and the possibility of lost grain sales. No other commodity is so adversely affected by work stoppages. Grain is a perishable product and cannot be stockpiled by the buyer or seller in advance of a strike or a lockout, unlike coal, forest products, potash or sulphur. It is a food that many foreign consumers require on a continuous, well-programmed basis.

Also, export grain is the lifeblood of 120,000 prairie grain producers—and voters. That is why during the west coast port shutdowns in the past we have agreed to continue to load at terminal elevators to keep grain moving and why we have not picketed these locations.

We all agree, I am sure, that the extensive prairie farm community should not be held hostage as a result of the legitimate use of the collective bargaining process. Bill C-19 addresses this concern and we support this section of the amended act.

Madam Chair, I know that my time is very limited and that my colleagues have their own messages to deliver, so I will conclude my remarks at this point and defer to Mr. Ronald Burton of the Grain Workers Union. I look forward to the discussion period.

Mr. Ron Burton (Secretary Treasurer, Business Representative, Local 333, Grain Workers Union): Thank you, Tom.

Madam Chair and members of the committee, I'm the secretary treasurer and business representative for the Grain Workers Union and I welcome this opportunity to describe why we, the grain workers, are supporting the passage of Bill C-19 without further delay and without changes.

Let me say that we, the grain workers, are certified to represent employees at the six terminal elevators, five in Vancouver and one in Prince Rupert, along with Columbia Containers and Alberta Wheat Pool office staff. We employ close to 1,000 workers and conduct our operations through a charter that dates back to 1951. Our bylaws embody the democratic character of our union, with the membership acting as the ultimate decision-making body. The sole source of revenue for our union membership is the dues.

While we have worked hard in support of our member's interests, it's a point of pride that we, the grain workers, have been able to maintain an excellent labour record, with few work stoppages.

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If you look at our performance, we have never initiated a grain terminal strike. A 1991 lockout kept us away for five days, but only in Vancouver; Prince Rupert Grain kept working.

Then, again, in 1992, when our office workers went on strike at the Alberta Wheat Pool elevator for 23 days, we continued to operate normally at all elevators in Vancouver and in Prince Rupert.

Finally, I'd like to point out that between 1975 and 1995, a 20-year period, our productivity increased 266.5%.

Obviously, we've conducted ourselves with a sense of responsibility in the past, and we'll continue to do so in the future as long as the labour rules are fair to our members.

That's why we're pleased to play a role in the development of Bill C-19, an act to amend the Canada Labour Code, part I. We support the early passage of this bill as is, which is the product of difficult negotiation and compromise by all affected parties: our members, your voters, businesses, community groups, and parliamentary representatives such as yourselves. We commend the government on the wide consensus this bill has received.

We recognize that this package as a whole delivers an improved Canada Labour Code, something that's been needed for many years. For that reason, we support its immediate passage intact.

We at the Grain Workers Union play a small but vital role in the western Canadian grain economy. It used to be a generation or more ago that the bulk of Canadian grain shipments went eastward through Thunder Bay and the seaway to European destinations. But with a steady change in import demand away from Europe and toward Asia, the ports of Vancouver and Prince Rupert became increasingly important, to the extent that they now account for more than 60% of all Canadian export shipments of grains and oilseeds.

Grain exports from west coast ports in recent years have reached levels as high as 20 million tonnes, valued at more than $5 billion. When one considers the direct effect this has on 120,000 prairie grain farmers, each a shipper dependent on the movement of grain through the west coast ports, plus the enormous economic spin-off and multiplier with an impact running into tens of billions of dollars, not only in the west but across the country, it becomes readily apparent how a shutdown can adversely affect the entire Canadian economy.

Volumes of other commodities, such as potash, sulphur, and coal, are also large, but the impact on people's lives is nowhere near the same as that of grain. This is what has persuaded us to support proposed subsection 87.7(1) as part of a new Canada Labour Code package.

We've not taken this lightly. We've always given our support to an examination of the Canada Labour Code, with the objective of making it better. For that reason, we were an early participant in the Sims task force deliberations, and we have maintained our involvement ever since.

Our conclusion is that while it's not perfect, the Canada Labour Code, as amended by Bill C-19, is a reasonable consensus among numerous and diverse interest groups that should be acted upon immediately by the Parliament of Canada.

There continue to be great opportunities for growth in the export market of grains and oilseeds and their products throughout the Pacific Rim. We're looking forward to playing a role in making this happen.

I'll be pleased to respond with any details to any of your questions during the discussion that will follow this. I would now like to defer to Hugh Wagner, general secretary of the Grain Services Union.

The Vice-Chair (Ms. Bonnie Brown): Thank you.

Mr. Hugh Wagner (Secretary, Business Manager, Grain Services Union): Thank you, Ron, Madam Chairperson, committee members.

I welcome, as do my brothers, the opportunity to make this presentation to the committee with respect to Bill C-19. I'm particularly pleased that we're here together and working on a joint enterprise on the first occasion of all these unions in grain handling and transportation in western Canada appearing together.

Before touching on Bill C-19, I want to give you a brief sketch of the Grain Services Union. It comprises workers employed in western Canada's agri-service and grain handling sectors.

We began in 1936 as a workers' organization when the employees of the Saskatchewan Wheat Pool founded the union. One of their principal objectives was to gain improvements in working conditions in primary country elevators.

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We are headquartered in Regina, Saskatchewan, with a branch office in Calgary, and we represent approximately, depending on the season, 3,000 working people located in the three prairie provinces and in the Peace River region of British Columbia; 75% of our members work in country elevators and service centres, as well as maintaining grain-handling facilities. Approximately two-thirds of our members work directly in primary country elevators and the associated facilities or services. The workforce of course fluctuates to some degree depending on the season. But GSU does bargain for 50% of the workers in the primary elevator system, and our members also handle slightly more than 50% of the grain that is shipped primarily west, but also east through Thunder Bay and by rail to Montreal.

We're affiliated with the Canadian area of the ILWU, the Canadian Labour Congress, and the four western provincial federations of labour, and we're also a member of the Western Transportation Advisory Council, which is a tripartite organization examining and dealing with transportation issues.

As you know, Bill C-19 is the result of more than two years of consultation involving the federal government and the Canadian Labour Congress and its affiliates, together with federally regulated employers. All of us concerned have worked closely to develop a series of amendments to part 1 of the code governing industrial relations. That consultative or consensus approach to amending the code has resulted in a series of modest but widely supported reforms, which I don't need to enunciate to you.

As my colleagues have said, Bill C-19 does not contain everything that we would prefer to see in the Canada Labour Code, and of course we have our own bias; however, the spirit of consensus amongst the practitioners should be respected, we submit. It is this spirit of consensus that enhances the collective bargaining process in grain handling and the transportation sector.

The proposed section 87.7, which my brothers have referred to, preserves the right of grain handlers themselves and their employers, of whom we are among, to participate in free collective bargaining without outside intervention. The fact that grain movement would not be disrupted by third-party disputes in the longshoring industry enjoys the unusual distinction of being supported by employers and unions alike, and that I think, when it comes to Labour Code amendments—and I'm a veteran of federal and provincial battles on these kinds of issues—is an enormous distinction from previous efforts.

GSU supports Bill C-19 and we urge members of the House of Commons as well as the Senate to give swift passage to the bill.

Over the years many experts have examined the impact of industrial relations disputes on grain handling. Despite all of their deliberations, going back to Frances Bairstow back in the mid-1980s, Bill C-19 is actually the first practical step towards dealing with and resolving some of the problems. I believe the 120,000 or so farmers who ship their grain are looking on this aspect of Bill C-19 with great anticipation.

As I mentioned at the beginning of this brief presentation, we represent country elevator employees across the prairies. As a result of our close working relationship with farmers, who we deal with every day in the driveway of the elevator, we appreciate their concerns about grain handling and storage and movement of grains. Furthermore, as a result of our association with our sister unions in the business, we have an appreciation of their and our particular concerns. It's as a result of those associations and our respect for farmers and our sister unions that we support Bill C-19 in its entirety and urge its passage without amendment. We seek your support.

Thank you, Madam Chairperson. I know this is a brief occasion on which to present our views, and we stand ready to answer any questions. I now defer to my brother, Doug Sigurdson, of the foremen and dock local.

Mr. Doug Sigurdson (President, Local 514, International Longshoremen's and Warehousemen's Union): Thanks, Hugh.

My name is Doug Sigurdson. I'm the president of the longshore foremen's union. Thank you for the opportunity, Madam Chairperson, for allowing me to make this presentation, and I thank the committee for taking the time to consider and meditate over its content.

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The Ship and Dock foremen is the certified bargaining agent for a body of workers known as head foremen, foremen, mechanical foremen, electrical foremen, pier foremen, operations managers, and coordinators. There are about 470 members in our union, the longshore supervisory unit, and about another 40 within some smaller units.

Our duties are varied in nature, but the prime function is to supervise longshoremen and various longshore locals throughout the province of B.C. In addition, we supervise workers in other smaller bargaining units.

We were originally certified at a company called Vancouver Wharves in 1974, after major amendments to the Canada Labour Code. Prior to that time supervisors were considered to be managerial.

The major group of employers employing supervisors are represented by the Waterfront Foremen Employers Association, known as the WFEA. They were formed in 1977 and were called the Waterfront Foremen Employer's Group. Then in a few years they transposed themselves into the WFEA. They are an unaccredited association.

The functions of the WFEA are to represent its members at collective bargaining, as well as on arbitration, safety, pension, and welfare issues. Each employer is individually certified by the union and the union can, if it sees fit, negotiate individual contracts with each employer.

The ILWU Ship and Dock Foremen support Bill C-19 as it is and as a package. The bill has come before this House committee as a result of thousands of hours of hard work by employers, politicians and their staff, unions, commissions and their staff, as well as many other interested Canadians. There was a remarkable amount of give and take by all parties concerned while Bill C-66 was in its infancy, the predecessor to Bill C-19.

The relentless search by the Sims commission for acceptable solutions to all interested parties cannot go unnoticed when this House committee deliberates and gives sober thought to the outcome of the new Bill C-19. All concerned parties have acted in a most prudent manner regarding this bill. Canadians with different convictions, political beliefs, religious beliefs, and those with special interests, have been working together and are responsible for what this House committee has before it.

As a result of the diverse representation given this project, it must be viewed as a package. No one gets it all, and no one is getting it all with Bill C-19. Bill C-19 is a balanced view of the Canada labour scene and as such is supported by our union.

Proposed subsection 87.7(1) is probably the most controversial section in the bill. This will allow for the assured movement of grain products in the event of a longshore or foremen's strike or lockout on the west coast. Some, including the BSMEA and WFEA, are opposed to the inclusion of proposed subsection 87.7(1) and they will no doubt give their reasons to this committee.

We're not opposed to the inclusion of proposed subsection 87.7(1) as we feel the stoppage of grain at west coast ports is not necessary to our union in a labour dispute. We can make our point to our employers without shutting down grain operations.

Grain operations are affected by thousands of people throughout this country. As such, this product becomes very political when its usual smooth movement is interrupted. Those with self-interests lobby hard for legislation when there is a west coast disruption, and in the past Parliament has been accommodating with back-to-work legislation on several occasions.

This interference has resulted in a negotiating climate in the west coast longshore industry that is not conducive to peaceful settlement. The employers do not bargain with the interests of a settlement in mind and do not normally put forth a position a union can accept. In turn, the members are reluctant to accept the employers' offers, as they feel they are holding out. There has been evidence of this in the past. If grain is to continue within the negotiating equation on the west coast, there will surely be more of the same. The foremen feel that if grain no longer remains an issue the parties will endeavour to reach a collective agreement without disruption.

As previously stated, grain is a unique product in Canada that affects thousands and accounts for millions of dollars in profit and taxes. That is also true with other products, although none have such a high profile nor individual volume. However, grain is a food source for millions and interrupting this product can cause severe hardship.

Unlike coal, which is usually stockpiled, as lumber, pulp, sulphur, potash and most other cargoes are, grain delivery systems are much more sensitive. Grain is subject to infestation from insects if left in bins and silos. As well, grain is often contaminated by animal droppings if left unattended, and costs can soar when treatment has to be applied. Rat, deer, rabbit, pigeon, and other animal fecal infestations can become common in unattended grain. We're not the only animals who eat grain.

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In summary, Local 514 strongly favours a swift passage of Bill C-19. We bitterly oppose any form of final offer selection, as this method is only useful where one or two issues of money are at stake. Negotiating is too sensitive to have it fall prey to final offer selection, and final offer can and has left the parties with difficult problems to deal with after the dance is over.

The bill is a reasonable consensus of several years of hard work by all concerned. We respectfully urge this House to recommend passage of this bill forthwith.

Thank you for your indulgence. I'll answer any questions if I'm able.

I have attached to our presentation—and I won't go through it—a bargaining history of Local 514 since its conception. Thank you.

The Vice-Chair (Ms. Bonnie Brown): Thank you very much, gentlemen. It must be a rare situation indeed when representatives of four organizations can come together and ask for the same thing, which is swift passage.

Unfortunately, we've used quite a lot of the time allocated to your group, so I will ask my colleagues, as they ask their questions, to limit their words. I will also ask you to answer as succinctly as possibly because we only have about 10 minutes left and we have all these people who might want to ask you questions.

We'll begin with Mr. Johnston.

Mr. Dale Johnston (Wetaskiwin, Ref.): Thank you, Madam Chairman. Thanks to the group for its presentation.

I am an Alberta farmer and am very much in favour of seeing grain move unimpeded from spout to spout, I think the term is. However, we've had groups contend that the loading of grain will be used in effect to subsidize work stoppages at the port. In other words, people will be loading some grain and having an income. Members of this board—Mr. Nault has brought it up several times—have said we may possibly have to endure a very prolonged strike in order to get the collective bargaining going again.

I would like your comments on that, please.

Mr. Tom Dufresne: The assertion that people continuing to work the grain could subsidize the rest of the longshore industry on the west coast is a fallacy. Less than 10% of the membership work servicing grain vessels. So there's no way there would be enough money from the people loading the vessels, who supply 10% of the person hours available, to distribute amongst the rest of the workforce. It wouldn't happen.

Also, the ILWU does not have a strike fund as such and never has. We think proposed section 87.7 will lead to fewer disputes and to real collective bargaining without having to drag Parliament into it all the time.

Mr. Dale Johnston: I would certainly be in favour of a method that would not require back-to-work legislation. I'm no big fan of that. I did support back-to-work legislation the last time around because I wanted to see the grain moving again and I wanted to see the ports opened.

Mr. Tom Dufresne: Bill C-19 will do the trick. Both ministers of labour, previously Gagliano and now MacAulay, and all the people working for them have done a good job.

Mr. Dale Johnston: I'd like to be able to debate that with you, but time is of the essence here.

Some hon. members: Hear, hear.

The Vice-Chair (Ms. Bonnie Brown): Mr. Rocheleau.

[Translation]

Mr. Yves Rocheleau (Trois-Rivières, BQ): I would like to point out, Madam Chair, that only two of the four papers are in French.

My question is about the proposed section 87.7. I would like to know how, as unionists and employee representatives, you can approve this Bill without reservation. The proposed section 87.7 is of course favourable to corporate interests, but we know that this Bill authorizes the hiring of strikebreakers, or as you say, replacement workers. How, as unionists, can you totally approve this Bill? This is the main reservation of the Bloc Québécois. We are indeed prejudiced in favour of workers, and we do not wish to hide this. How can you write that you totally approve this Bill?

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[English]

Mr. Tom Dufresne: We appreciate the Bloc's concern and we share the Bloc's concern on the use of replacement workers or scabs, as they're more properly known. We don't endorse people using them or their inclusion in the bill, but the bill is a compromise package. It's a consensus issue, and the CLC supports the package, as you heard last week when they testified. We believe it's the best that could be accomplished after all the hearings that have taken place, and therefore we accept the package—as a package. But we don't endorse the use of replacement workers or scabs.

Mr. Ron Burton: Quite frankly, that's the one issue in the bill that really upsets the trade union movement, as you pointed out. We had thought the government would have gone farther in terms of addressing that issue.

The Vice-Chair (Ms. Bonnie Brown): Thank you.

Mr. Nault.

Mr. Robert D. Nault (Kenora—Rainy River, Lib.): Madam Chair, I guess there's only one question I would like to ask, which is based on the submissions we've had from other producers across the system. They're basically saying that with the inclusion of 87.7 there will be a significant economic loss because there will be some major strikes. Now that you're out of the picture to some extent—or grain—there's nowhere to hide, in the sense that collective bargaining will have to take place and there will be prolonged strikes, and they're saying that is in fact unfair to the other producers, etc.

Can you tell me, from your own experience, obviously, how you see this all unfolding on the west coast as it relates to the whole collective bargaining process? Can we in fact crystal ball this down the road and see what people are...? The doom-and-gloomists who of course don't agree with 87.7 are suggesting that in fact that is going to be reality in the next year.

I'm very curious about that, because you guys on the west coast know better than anyone just how little collective bargaining has taken place over the years, but the way people are talking now it's as if what we're doing is making it worse. I certainly would like some assurances from your end of it, I suppose, if you can, from your own experience as unionists, that this certainly will help the collective bargaining process on the west coast.

Mr. Tom Dufresne: Yes. We're committed to making the process work, and in regard to our history, for the last 35 years we have always attempted to keep grain moving.

When Bryce Mackasey was Minister of Labour in the 1970s, at one point he actually nationalized the grain industry for a day to get the grain moving again.

We think this process will lead to fewer work stoppages and we believe it will lead to real collective bargaining. The majority of the work stoppages on the west coast have in fact been lockouts, not strikes. Sims commented in his report that, for whatever reason, the companies always use grain as the key or the trigger to bring Parliament back into it and get the politicians into the process.

We think there will be fewer work stoppages and real collective bargaining. The whole bill is a result of all the consultations that took place right across the country. A lot of people had input into this, and it is the consensus of the people who were involved as stakeholders that this will lead to fewer work stoppages.

Mr. Robert Nault: Thank you.

Mr. Ron Burton: I would like to add that in terms of improving labour relations on the west coast, it can't do anything but help. In 35 years we've settled one contract without government intervention. I think that in itself speaks volumes about the need for the passage of this bill.

The Vice-Chair (Ms. Bonnie Brown): Thank you, Mr. Nault.

Mr. Martin.

Mr. Pat Martin (Winnipeg Centre, NDP): Thank you. I know we don't have much time, but I'd just like to start by saying how heartening it is for me to hear such a thoughtful and balanced presentation. We've heard some extreme views, and it's interesting for me to know that labour's briefs to us seem to have the tone and the sentiment that we're all sort of striving for in labour relations, which is some kind of a balance within the labour relations community without compromising our principles. I found it very helpful.

I also noticed too that the group that gave a representation yesterday from the farmers' alliance is here listening today. It would be interesting if you two groups could talk later, because I think they'd be interested in hearing not only your views today but some of the bargaining history that led to where we are now and the movement here.

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If we have a couple of minutes left, I'd like you to go through some of the myths and misconceptions associated with your recent bargaining history, and maybe for the last decade; for instance, the types of stoppages you had, the nature of them, and how they are resolved. I think that would be a helpful way to use the last few minutes we have.

The Vice-Chair (Ms. Bonnie Brown): You've pretty well used the last few minutes in your intro. We could have maybe one myth from one witness.

Mr. Ron Burton: I have a summary here that I can leave for the members. It indicates that since 1982 there have been nine strikes and two lockouts for a total of 127 lost days. Of these, two shutdowns were with two elevators, so two disputes counted for 65 of the 127 days and they only involved a couple of elevators. I think they had 127 days lost in 16 years, which is a remarkable record.

The Vice-Chair (Ms. Bonnie Brown): Thank you very much.

Mr. Doug Sigurdson: If I could just add very quickly, our local was certified in 1974 and has been bargaining ever since. There has been a total of nine days of disruption until today from 1974. In our opinion, that is an admirable record.

The Vice-Chair (Ms. Bonnie Brown): Thank you very much.

Mr. Doug Sigurdson: We take a lot of heat we don't deserve.

The Vice-Chair (Ms. Bonnie Brown): Thank you, Mr. Sigurdson, Mr. Burton, Mr. Dufresne, and Mr. Wagner.

Mr. Hugh Wagner: We're the guys, if you will, who started by sending it to the port. This compromise presents the first opportunity for a real, practical solution that we've seen in twenty years of batting this issue around, and we see it as a good positive step.

The Vice-Chair (Ms. Bonnie Brown): Thank you very much. I think there were few questions because your presentations themselves were very clearly written and easily understandable. We are very grateful to you and I thank you for your presence.

I would now declare this section of the meeting over.

Mr. Tom Dufresne: Madam Chair, I would just point out that we have longshore workers here also from Halifax, Montreal, and Vancouver, broadly representing longshore workers from right across this country. Thank you.

The Vice-Chair (Ms. Bonnie Brown): Maybe they'd like to stand up so we can see the real longshoremen. Thank you very much.

Mr. Tom Dufresne: Thank you.

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The Vice-Chair (Ms. Bonnie Brown): I want to welcome representatives of the Air Canada Pilots Association. This morning, we have Jean-Marc Bélanger, a captain, and Clyde Shaw, a first officer.

Gentlemen, as you have seen, we are running behind, so if you launch forth into your presentation, we would be grateful.

[Translation]

Mr. Jean-Marc Bélanger (Aircraft Commander, Air Canada Pilots Association): Madam Chair, Members of the committee, Ladies and Gentlemen, thank you for allowing the Air Canada Pilots Association to make this presentation on Bill C-19.

Before I begin, I would like to draw your attention to the presence of my fellow pilots from Air Canada, who have come here on their own time to support us. I thank them for their presence, and I would like to ask them to stand up so we can see the number of pilots who have come to support us today. Thank you, gentlemen, for your presence.

[English]

We will not be reading from the presentation, the documents that have been put in front of you. I will be speaking from the heart. All the information I will be giving you in this presentation is part of the document, but I would like to address some of the concerns. I will be going beyond that presentation.

I will be glad to answer any questions, in both official languages.

First, I would like to tell you who we are. My name is Jean-Marc Bélanger. I am a captain on a DC-9. I have been with Air Canada for 19 years. With me is Mr. Clyde Shaw, a first officer on a Boeing 767, who's been with Air Canada for 11 years.

We are not labour relations specialists. We are not professional staff members of our association. We are pilot volunteers doing work for the association. Every once in a while we put on the blue suit and we do the flying. We fly a regular schedule. We are elected officers of our association.

I am essentially what we call the master executive council chairman, the chief executive officer for our national executive, and Mr. Shaw is the representative of the Toronto pilot base on that same national executive.

Who are the Air Canada Pilots Association? We represent the 2,100 Air Canada pilots of what we call the Air Canada main-line carrier. We broke off from the former organization in 1995, precisely because of a major dispute with respect to a proposed merger of pilots' seniority lists, and also because we had a major problem with the poor representation of our group in the political structure of that organization. So now we are the only Canadian-based organization representing airline pilots in this country. The remnants of the other organization have since left and have merged with an American organization that is based in Washington.

We represent, and we're proud to be, Air Canada pilots. In my view, we're the best qualified and most professional, the most productive airline pilot group in the world today.

Let's talk about the problem. The problem is that when we were recertifying a bargaining unit in 1995-96, we did not... Frankly, we had to start an organization from scratch on very short notice. We were not able to participate in the Sims task force, but we understand the need to revamp the Canada Labour Relations Board.

We are willing to support Bill C-19, with the proviso that the two amendments we're putting in front of you be adopted. The two amendments we propose to you are interrelated and pertain to clause 7 of the bill, which deals with section 18 of the Labour Code, and you'll see that the wording and the language—everything—has been laid out in the documents we've sent to you.

The first amendment has to do with the one-step process that is proposed for negotiating, once you have other single-employer declaration and acquisition of assets or the merger of two companies. The bill presents a one-step process that we think is unmanageable and would lead to an unproductive negotiating process. You cannot have different bargaining units going to the main table with a new employer and trying to solve the issues with respect to the representation rights and the collective agreement at the same time. What you have to do is solve the representation problem beforehand—and I might say that would be preferable if it was done in a democratic fashion as opposed to a forced solution.

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With the present state of the bill, we could see a situation in which the board would impose a choice of bargaining units on a group of people. Members of our association might have to join a different organization against their will. Even if the majority of our pilots wanted to remain with the association, that might not be possible. We find this process to be undemocratic and unfair, and we don't think it would be good for either labour and the employees or management and business.

The second amendment we'd like to talk about is the provision in the bill that deals with the merging of seniority lists. I must tell you that, for airline pilots, seniority means everything. It's our life.

You may not know this, but an airline pilot is only qualified for one type of aircraft. When we switch types of aircraft, it takes us three or four months of requalification training. For that reason, we fly the schedules, we fly the routes, in that particular aircraft type in which we are qualified. We fly domestic or transborder as opposed to trans-Pacific or oceanic flying, for example—long range, short haul.

Our seniority number dictates when we get to take our vacation, the productivity of our schedule, if we fly weekends, or where we live. I'm a French Canadian. I'd prefer to live in Montreal because we have a base in Montreal, but our seniority number might dictate that if I'm not senior enough, I'd have to live in Vancouver or Toronto or Winnipeg.

Our seniority number also dictates the possibility for us to upgrade and to get promotions within our ranks in the pilots' system. For example, to get promoted from first officer status—co-pilot—to captain status is very important to us. It has been so important for the last sixty years worldwide that when you join an airline as a professional pilot you join at the bottom of the seniority list. There is no other jurisdiction in the world where you have a main line and a bunch of regional airlines with some kind of an agreement between them; where the regional pilots, when they transition and move up to the main line, go anywhere else but at the bottom of the list of the main-line pilots. That's the case everywhere else in the world.

I'll give you an example. Here in Canada, Canadian regional airline pilots transitioning to Canadian Airlines go to bottom of the Canadian Airlines seniority list. For American Eagle pilots going to American Airlines, it's the same thing. It's also the same thing for United Express, United Airlines, and for those going from Lufthansa CityLine to Lufthansa. As a matter of fact, if we were going to do something else here in Canada, we would be the only jurisdiction in the world where this would be allowed.

It's the same case for somebody coming from another airline or another branch of work. Our pilots are already very well qualified when they come to Air Canada. We have examples of our colleagues who are commanding officers in air force squadrons of CF-18 fighters. That's a very high-profile job in the air force. When they leave the air force and decide to become airline pilots, if they get accepted at Air Canada, they join at the bottom of the list when they arrive.

If you are a jumbo jet captain with a charter airline and you decide you want to make a career move and come to Air Canada, you join at the bottom of the list when you do. I did. Clyde did. We all have for the last sixty years. That is part of the game. We all make sacrifices.

At this point, I would like to turn the floor over to Clyde Shaw so that he can give you his perspective as to the importance of the seniority number for an airline pilot.

Mr. Clyde Shaw (First Officer, Air Canada Pilots Association): Thank you, Madam Chair, Jean-Marc.

How important is seniority to me? All my life I've wanted to become an Air Canada pilot. From age 10 I've been in the workforce to obtain this objective. I worked to obtain the necessary education and experience. This includes twelve years as a pilot, with seven years as a regional pilot—most of those as a captain with that regional airline—before obtaining my goal of becoming a pilot with Air Canada.

Part of the understanding on becoming a pilot with Air Canada is that you sacrifice all previous experience. You join as the most junior pilot at the bottom of the seniority list, as Jean-Marc has just indicated...and the future benefits that come from it.

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While employed at Air Canada, they transferred many traditional routes we flew. Many of them you are quite familiar with and have been on: Sudbury, Val d'Or, Victoria, and 18 other routes—from Air Canada to the regional airlines.

Employment languished at Air Canada for pilots and other staff. All the while, employment rapidly grew at the regional airlines.

In 1993, I was laid off with 243 other Air Canada pilots. There was all the despair that comes with the lay-off.

Times got better and I was re-employed with Air Canada after two years.

The bill would create a situation where other pilots would be able to jump the queue ahead of me and other Air Canada pilots, with no entitlement, no earning. This would be unfair and would create bitter animosity between the main line and regional pilots operating in the same cockpit.

Mr. Jean-Marc Bélanger: I would just like to conclude, Madam Chair.

I would like to stress that, historically, Air Canada, the main line, is on a major expansion. It has major growth: Air Canada hired 600 pilots recently.

At the regional airline level, at the beginning of the hiring program, there were 800 regional airline pilots with the four regional airlines. Of the 800, 400 of them came to Air Canada under the terms and conditions of our collective agreement, which is at the bottom of our list.

So half the original number of pilots have done that transition. They accepted the fact. Some of them are here today and can prove it.

I'd like to reinforce the fact that with the animosity and the strike problem and the difficulties we've had on this very, very important issue, I'm telling you that if you force a merger of the seniority list, that theoretical list—this is that piece of paper about Clyde and I flying together—might not be enforceable by law or by air regulations.

That's because we're professional pilots; we will not degrade the quality or the safety of our operations. Because it's so important for pilots to work together with no animosity and to have an understanding of one another, pilots will just not do that. When faced with the prospect of having poor cockpit discipline or animosity in the cockpit, they just will not fly together.

So you will have a nice theoretical list of two people supposedly flying together, but the fact is that if they can't get along, they're just not going to take passengers in the air with them. We just can't do that. We won't operate in an unsafe environment. The air regulations demand it. Our code of ethics, moral obligations as airline captains, and responsibility to the safety of our passengers demand it as well.

So what we're asking, Madam Chair, is that this provision empowering the board to force a merger of seniority lists between two bargaining units should be removed from the bill.

Thank you. We await your questions.

The Vice-Chair (Ms. Bonnie Brown): Thank you very much. You've been very clear.

I'm at the committee's convenience, but I'm wondering if you would consider the other strategy we used last week when we got behind. It was that each party was allowed to ask a question in turn and then the witnesses would answer sort of all of them.

Mr. Dale Johnston: Agreed.

The Vice-Chair (Ms. Bonnie Brown): Would that be okay? Fine. We'll start with Mr. Johnston.

Mr. Dale Johnston: Thank you very much for your presentation, gentlemen.

I think you made your presentation very clear in my mind. I would be interested, however, to hear the government's rationale behind getting into an area that appears to be very much a union function, particularly the seniority thing.

The Vice-Chair (Ms. Bonnie Brown): Thank you, Mr. Johnston.

Mr. Rocheleau.

[Translation]

Mr. Yves Rocheleau: I would like to ask a question on an issue which, as I understand, is very touchy and divisive. There is question, with respect to seniority, as to wether or not to merge lists of employees. Let us call this the two extremes.

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Is there any way of achieving a compromise that would satisfy the two groups of employees, who have their own professional lives and development to deal with? Is a compromise possible, or must it be either one or the other?

[English]

The Vice-Chair (Ms. Bonnie Brown): We'll take note of it.

Mr. Nault.

Mr. Robert Nault: Give us a better explanation of your problems with clause 7. I understand the one you are concerned about is proposed paragraph 18.1(4)(d) found in the bill on page 13. It says,

amend, to the extent that the Board considers necessary, the provisions of collective agreements respecting expiry dates or seniority rights, or amend other such provisions;

I understand where you're coming from, but if you go back to the original part of the agreement of parties, it makes it very clear in proposed subsection 18.1(2):

If the Board reviews, pursuant to subsection (1) or section 35 or 45, the structure of the bargaining units, the Board

(a) must allow the parties to come to an agreement, within a period that the Board considers reasonable

Then of course it goes on to say in proposed paragraph 18.1(2)(b) “may make any orders it considers appropriate to implement any agreement”.

There seems to be a sense within proposed section 18.1 that the board will give two bargaining units a reasonable amount of time to come to some sort of conclusion as to what they want to do. But in the absence of that particular agreement, you're basically suggesting we remove in the code the ability of the board to deal with seniority rights.

You must understand, quite frankly, that in a lot of cases when two bargaining units come together the biggest problem is the issue of seniority rights. If you can't somehow arrive at a reasonable compromise yourselves, the board may have to make that decision on your behalf. Obviously, it would not want to.

I'm just trying to get a sense of whether I have it clear in my mind what you're asking for. Why would you not feel comfortable if, in the beginning of the section, the board gives you a reasonable amount of time to try to come to some sort of understanding of how you would put the two bargaining units together?

It's a very serious matter you've brought up and it's one I'm very concerned about if it works in a way we didn't intend it to. I just want some clarification as it relates to that, Madam Chair.

The Vice-Chair (Ms. Bonnie Brown): Thank you.

Mr. Bélanger, would you like to begin with Mr. Johnston's question?

Mr. Jean-Marc Bélanger: I'd like to be able to give you a rationale for the government, but unfortunately you'll probably have to ask that question to the government side of the House. Sorry.

[Translation]

Mr. Rocheleau, major compromises have already been worked out. The problem is that a solution is impossible if we move in the opposite direction of what has been established in practice. There are very numerous problems. About 400 of the 800 pilots have already accepted this state of affairs, and this is what is done everywhere in the world. When we begin to contemplate the integration of the pilots' seniority lists, what do we do about our own 243 pilots who have lost two and a half years of seniority because they were laid off?

At the Air Canada Pilots Association, we have negotiated regional to main line transfer conditions which are clearly better than the conditions offered to someone arriving from Air Transat or the Armed Forces, for example. We have already done that. We have already worked out the compromise, and this was accepted by our members when a collective agreement provision was ratified.

Four years of service in terms of salary, pension plan and holidays are given to our regional pilots, 400 of whom have already accepted this. This has already been done. However, they are at the bottom of our seniority list when they join us.

I will give you an example. Until recently, an F-18 captain who arrived at Air Canada started at $29 000 per year. That is where we start at Air Canada. Incidently, in certain regional lines, the starting salary is higher than that of Air Canada. A regional pilot who joins us will start at $45 000 or $50 000 per year. There already is an enormous difference. We try to attract people from regional lines. That is how we responded to the need to be a little more flexible.

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When people step ahead of others on a seniority list and are forced to work side by side with them in a professional way, the situation is difficult. In our case, this situation cannot occur. This is why it is now recognized everywhere in the world that, when they start, new people are placed at the bottom of the seniority list. I hope I have answered your question.

The compromise has already been worked out. We have gone very far in that direction.

[English]

Mr. Nault, in terms of reaching a compromise, the problem is that nowhere in the world is there a final ruling about seniority assistance. Some arbitrators have been making some rulings, but when it comes to the particular problem we're identifying here, moving from a regional line to a main line, the precedent has been set. Nowhere else in the world can you do anything else but have a transition from the regional line to the main line at the bottom of the list. You can't do that.

Some of the reasons, as I've explained to Mr. Rocheleau, are that you have length of service time and you have pilots, for example at Air Canada, who were laid off from Air Canada and during the time of lay-off got jobs at Air Ontario, for example. The service time they accrued when they were at Air Ontario does not qualify them to be in competition with their confreres at Air Ontario who have more time than they do. So they've lost two years in the Air Canada system. If you want to integrate a seniority list, where are you going to put those pilots?

In another example, when our guys left their jobs at Air Canada, initially the regional airlines did not want to hire any one of our 243 pilots. That was because it costs money to train a pilot, as I explained to you. It takes three or four months of down time to train a pilot. The regional airlines knew if they took an Air Canada pilot who was laid off and put him on a course for the turboprop airplane, it would take two or three months. But the regional management knew that once things got better at Air Canada they would lose that pilot, so all that training would be lost. They would have preferred to have hired people from outside of the Air Canada system.

It was only after very direct involvement by management at Air Canada that they started hiring pilots who were laid off from Air Canada. Where, I ask you, did those pilots who were laid off from Air Canada fit into the regional pilot seniority list when they were laid off from Air Canada? You've probably guessed the right answer. When they went to Air Ontario they were at the bottom of that list. So if it works one way, it has to work the other way.

Mr. Robert Nault: Thank you.

My question is not about the peculiarity of your seniority list. I come from the railway business and in the railway union we had our peculiarities and seniority list as well. My point is, how do you expect the ratification of a particular collective agreement or the merging of two collective agreements if there is no mechanism in place to deal with the issue? You're suggesting we take that mechanism out of there so the board does not have to deal with it. There would therefore be no way of fixing the problem. You would certainly go in front of the board to make your argument as to how you see the seniority list working, after it's been proven you can't come to an accommodation of your own.

The question I'm asking is, if you don't want this, who's going to make the decision if you can't make it yourself? You get the first option of trying to do it yourself, as two unions trying to come together on what the seniority list will look like. If you can't come to that accommodation, who are you expecting to resolve this difficult issue for you if you take it out of the code? I think that's the question I'm asking. I don't know the answer to that because you really haven't told me. At least I can't tell by your submission.

The Vice-Chair (Ms. Bonnie Brown): Mr. Shaw, would you like to answer?

Mr. Clyde Shaw: The solution has been in place for as many years as the labour code has been in place. Every resolution has been resolved outside of the board, as far as seniority is concerned. The problem we see from this particular bill is that any party that feels it has the most to lose will not come to a resolution. It will not participate in the collective bargaining process and will revert to the board. It will load it up on the board and say, “Come on, solve our problems for us”. That's the problem with the way the bill is written.

On top of the way the bill is written, it will, at the same time, try to resolve seniority bargaining unit issues with the employer. It is impossible. Seniority is part of a collective agreement, as you are well aware from your experience. One party negotiates with the other party for the terms of that agreement. Before that can take place, the unit has to determine who is going to sit before the employer to get the terms of seniority. It costs the employer a tremendous amount of money at Air Canada when you start shuffling those lists around—possibly $120,000 to change equipment and retrain somebody in order of seniority. It is a tremendous cost burden on the employer. So it's going to be a tough negotiation with the employer to implement provisions of seniority.

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What we have as the first problem is that we may get an undemocratic resolution from the board. We may just throw it on the board's hands. The three parties are not going to agree, because the one party that's disadvantaged is going to throw it at the board. So the board's now loaded with the possibility of a two-year hearing. Ours is three years right now before the board, I believe—two and a half or three years. It really has no end in sight. The reason it has no end in sight is because there has been no operational merger. All the units are separate. All the pilots operate as separate airlines. They were hired separately in different seniority lists at the bottom of their airlines. They were owned by different companies, including Canadian and PWA and a mixture of owners throughout time.

So to answer your question, with this section it is always the disadvantaged party who will throw it to the board.

The second question regarding the bargaining units is that we may have 90% of Air Canada pilots vote in favour of the Air Canada Pilots Association and a very small number... Regarding combining the units, you've got to remember that of 2,100 Air Canada pilots, there's only roughly 750 regional pilots. Air Canada, technically, will come out in a representational vote as the representative. However, the board can overturn that. The board now has the power to say that even though the members don't want this particular other agent, you're not going to become the agent for this bargaining association. That's one problem.

The second problem in regard to seniority is when there is an operational merger. I'll just use an example. Suppose Canadian and Air Canada merge their operations and there are some buyouts, some provisions. The parties then have to sit down and resolve these issues: the first one is the bargaining agent; the second one is with the employer, with the collective agreement.

By putting language in this bill like this, you are going to circumvent the collective bargaining process. We will not be able to engage our employer in this process and come to a resolution. It will be taken out of our hands.

The Vice-Chair (Ms. Bonnie Brown): Thank you. Could you answer Mr. Martin's question, please?

Mr. Pat Martin: Is there time?

The Vice-Chair (Ms. Bonnie Brown): You didn't come in on the round?

Mr. Pat Martin: No.

The Vice-Chair (Ms. Bonnie Brown): Oh, okay. I'm sorry, Mr. Martin, please do it now.

Mr. Pat Martin: Okay.

My question is regarding your collective bargaining contract. You must have some language in there that talks about the continuous length of service being the determining factor for all matters pertaining to seniority or promotions or vacations. You must have the clause language and there must be credit given for past service if there is any kind of merger. Those things would be bargained for. You're saying if it went to the board you wouldn't have the opportunity to bargain that out.

I guess my question would be, with the new composition of the board, is that any comfort? It would be a representational board or there'd be a labour nominee, a management nominee, and a neutral chair. Does that new configuration of the board give you any comfort, that if it does wind up at the board you might get satisfaction still?

Mr. Jean-Marc Bélanger: No. The new composition of the board will give us some level of comfort. That's why we were willing to support Bill C-19. But the empowerment of the board to make an arbitrary ruling with respect to seniority gravely concerns us. When you say credit is given to length of service when there's a merger, there is no credit given to length of service when you have a move from a regional airline to a main line. It doesn't happen. In our collective agreement and in each and every one of the other main line collective agreements around the world, when you transition from a feeder line, a connector line, to a main line, you transition at the bottom of that pilot seniority list. That's the way it's done. It has to be that way.

Mr. Pat Martin: No credit for past service is given.

Mr. Jean-Marc Bélanger: No, unfortunately. Actually, we do in some ways... As I explained, in our collective agreement we do that. We're the only airline in the world, the only group of professional airline pilots in the world, that does that, recognizing length of service at the regional line, not for seniority but for pay, working conditions, and vacations, for example.

Mr. Pat Martin: Where you're plugged into the pay structure.

Mr. Jean-Marc Bélanger: No, they come at the bottom of the list. But in the pay structure, we pay them higher.

Mr. Pat Martin: That's nice.

Mr. Jean-Marc Bélanger: If you have somebody who's an F-18 fighter pilot who comes over and somebody else comes in from Air Ontario behind him in one number, they may make $15,000 a year difference. But the Air Ontario pilot is below him on the seniority list.

Mr. Pat Martin: I understand. Thank you.

The Vice-Chair (Ms. Bonnie Brown): Thank you very much.

Mr. Shaw.

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Mr. Clyde Shaw: Our seniority article in our collective agreement was a negotiated process with our employer. To get the language for that what we had to give up was substantial. One of the things we gave up in the collective bargaining process was allowing the regional airlines the four-year credit, the pension credits, all the stuff, giving them entitlements over and ahead of anybody else from any other airline or from the military or for pilots coming into Air Canada.

Our language is very clear. It even states any CLRB order, any purchase or merger of airlines. They come sequentially at the bottom of the list. That's what we were talking about as far as negotiations are concerned. We had to negotiate that with our employer. That was a three-week process. I actually signed that article of the collective agreement and was part of the process. It was an attempt, a compromise, to try to resolve the issue. Nothing we've done since 1988, the compromises and entitlements we've given, has resolved the issue. The only way it will be resolved eventually is when there's an operational merger and the employer recognizes the fact that he has to negotiate with the bargaining unit.

The Vice-Chair (Ms. Bonnie Brown): I want to thank you very much for your presentation. I think you have piqued everyone's interest with this thorny problem, which of course isn't new; it's something you've been carting around within your association for quite a while. Now it's having an impact on our bill and our bill is having an impact on your problem.

I think most of the members will want to pursue this particular subject further until they're absolutely comfortable that they have a good understanding of it and they're absolutely comfortable with the solution the bill provides. If they're not, they might want to amend. I don't know.

But I thank you for your clear presentation, for coming today, and for your team of supporters who added to our room this morning.

Mr. Jean-Marc Bélanger: Thank you, Madam Chair.

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The Vice-Chair (Ms. Bonnie Brown): I would like to introduce to you representatives from the University of Toronto, from the Port of Saint John Employers Association, and from the Fraser Institute.

I believe we'll begin with Professor Brian Langille from the University of Toronto.

Professor Brian Langille (Faculty of Law, University of Toronto): Thank you very much. I'm a professor of law at the University of Toronto and have been actively involved as a labour law teacher, researcher, and part-time arbitrator for 20 years. I'm very pleased to have been invited to speak to the committee this morning and to offer my views on the proposed amendments to the Canada Labour Code, part I, dealing with collective labour relations in the federal sector.

I am familiar with the provisions of the existing labour code, although I should add that I was much more familiar with them 20 years ago when I acted as the first legal adviser to the chair of the board for a period of one year when I was fresh out of graduate school. I've read Striking a New Balance: Review of Part I of the Canada Labour Code, more commonly referred to as the Sims report. I've also reviewed the provisions of Bill C-19.

Let me just add a disclaimer, however, which I didn't place in my written remarks. Even a close reading of Bill C-19 is no substitute for living with it, as the new labour board will do in the future. No doubt problems, minor inconsistencies, and details will emerge, and perhaps 20 years from now we will all be back in this room undertaking another process of reform.

Secondly, let me add another disclaimer. What I'm offering here is a legal analysis. There are many ways of analysing the impact of C-19. My expertise is in law, and I want to emphasize that I'm not offering any other kind of analysis. In what follows I remark upon three aspects of the current reform exercise: the process leading to reform, the reform of institutions, and reform of the substantive law. But before turning to these topics, I begin with some general remarks about the place of labour law reform in modern Canadian society.

Labour law is that part of our law that aims at building a better Canadian society by focusing upon the productive activities of Canadians. Our goals as Canadians are to further improve our model of a just society, by which I mean a liberal, democratic, and, in a distinct Canadian sense, a capitalist or market-oriented one. Insofar as the law of productive relations has anything to do with producing such a society, that law is labour law. In my view, labour law has a lot to do with producing such a society.

Globalization and perhaps its discontents are the defining concepts of the late twentieth century. In a world in which most factors of production—capital, ideas, services, goods, etc.—are highly mobile and in which revolutions and communications in transportation technology are evident, it is more, not less, crucial that the Canadian economy focus upon the relatively immobile factor of production that is labour. As many have noted, in a globally integrated economy, a nation state's human capital policy is more, not less, significant to national success or failure.

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This insight must be tempered by another. Labour law systems are embedded in industrial relation systems, which are further embedded in very complex economic systems.

Almost everywhere in various modes, if I can use that term of capitalism, it's highly unlikely, given the complexities of the social, cultural, and economic contexts in which labour laws must reside, that there is a universal, single model of labour law or labour relations.

It's also true that reform is, in its very nature, incremental and evolutionary. Transplanting ideas from elsewhere, while often seemingly appealing, can be counterproductive, because what seems on the surface to be simple is actually part of a larger, almost organic, whole.

The Canadian system of collective labour relations, as reflected in the Canada Labour Code, is now a mature system. Because it's essentially a system of bargaining, it's by and large a system of self-regulation that's quite capable of self-improvement and self-driven evolution and change.

Part I of the code does not establish substantive terms and conditions of employment. Rather, it establishes a right to a process. It's a process that basically leaves it to the contracting parties to determine how best to adjust to changes in the global economy and their Canadian consequences.

That's a very basic point, in my view. Nonetheless, it is essential for the code to define that process in a fair, clear, and sensible way.

In my view, Bill C-19 is a sensible package of reform. It's incremental and evolutionary. It contains much by way of minor clarification, modest improvement, and codification of existing decisional law.

It's by and large, in my view, a fine-tuning exercise. As such, it's timely and useful as an exercise in law reform. It does not—in my view, it should not—radically alter the process as we know it, if indeed we could radically alter the process as we know it, which I doubt. It makes more explicit the fundamental ground rules of the process. It's the purpose of the code to put that in place.

Years of experience with the original version of part I of the code have created a long list of minor problems to be corrected. Bill C-19 does that. I think it's to be commended for its sense of balance, precision, and general usefulness.

Let me add just one other general remark. One of the great virtues of teaching labour law is that one can always test one's intuition by putting the shoe on the other foot. This is something I often do with my students. When someone suggests that a provision in the law is unfair to employees, unions, or employers, one can always ask the question: what would your reaction be if the parallel restriction or entitlement were granted or imposed upon the other side? That is, in thinking about labour law, one must always think of the balance required in establishing a system of collective bargaining. I believe that, true to the Sims report, Bill C-19 does strike such a balance.

Let me just add a brief note on the process of reform, because I expect you've heard of this before. I'm sure others have pointed out that the process of reform utilized by the federal government is in stark contrast to the non-consultative, unilateral, and, as a result, unbalanced reform efforts elsewhere in the country.

As I indicated, the federal labour law system is a mature one. The employers and unions involved are often large and very sophisticated. So too are the federal civil servants in HRDC, and in FMCS in particular, intimately involved with the realities of labour relations in the federal sector. I believe the Sims process was an extremely useful one, and I believe the results show it.

Just a brief note on institutions. A number of the specific reforms in the bill are aimed at reforming institutions. In particular, there's a complete overhaul of the Canada Labour Relations Board. I believe this reform is widely welcomed. I believe the central thrust of these reforms is valid.

It was a common view almost from the beginning that the structure of the previous board, departing from the national trend to tripartite representative boards, was an unfortunate legislative change. Putting the board back on a tripartite basis is I think important for the maintenance of the required balance in our labour law.

Let me add a note of caution, however. As others have recently pointed out, there is an enormous cost to the politicization of the administration of labour relations in any jurisdiction. The quality of the people appointed and the non-politicization of the process of appointment is fundamental.

In Canada, we have been mostly very fortunate to avoid the politicization so evident in the American regime, which is similar to ours. It is vital the new board continue what has been, at least until very recently, a prominent virtue of the Canada labour relations scene.

Let me skip now to a few comments on the substance of the law. Obviously, I could not and will not undertake a review of all, or indeed most, of the provisions. As I indicated above, many are minor clarifications and improvements or codifications of existing jurisprudence.

Some examples are proposed section 29, regarding voting by replacement workers, and proposed subsection 99(1), regarding remedial orders and bargaining cases. Other provisions are simply reflecting existing rules and putting them in statutory form.

There are other amendments, such as those concerning the arbitration process, the so-called open seasons for the renegotiation of existing collective agreements, or the length of an imposed first contract, are minor adjustments to existing regimes.

Let me instead focus upon two of what I take to be higher-profile amendments.

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The first is proposed subsection 94.(2.1). This is the replacement workers/anti-scab provision. I support subsection 94.(2.1) as a necessary part of the statutory regime. On the one hand, it is my view that the new provision does not add anything to our law. What it prohibits was already an unfair labour practice under the general unfair labour practice provisions of the code. Why, then, do I support this provision and not some more general prohibition? I think this provision is the right provision because it fits best with the other provisions of the Canada Labour Code.

I refer especially to section 29 codifying the rule that replacement workers cannot vote in certification or decertification elections, subsection 87.6 codifying the results of the well known EPA decisions.

Let me try to put the point shortly. The legal—and let me underline the word “legal”—gravamen of the replacement scab issue is that the use of such workers opens up the potential for employers to do an end run around the provisions of the legislation. This happens when an employer hires replacement workers, waits out a strike, and those replacement workers are permitted to vote in a decertification application in which they are essentially voting, not on union representation but on their right to keep the jobs as opposed to the original incumbents. That avenue is prohibited by other provisions of the Canada Labour Code to which I have referred.

The Canada Labour Code, unlike some other labour codes in the country, forestalls this end run around the legislation. Therefore, a broader band of replacement workers is not required in order to give legal coherence to the code. While such a broader band might be justified on other non-legal grounds—and I offer no comment on that at all—it is not required as a matter of legal interpretation given the other provisions of the code. I should note that there are other rules, not addressed by the code, that are also implicated in this overall understanding of whether our labour law strikes the right balance on the question of replacement workers.

The replacement worker issue is best understood by comparing it with the parallel phenomenon on the union side. Here I go back to one of my original points of putting the shoe on the other foot. That is, the issue at stake is best thought of as to what extent an employer can appeal to third-party employees to render assistance during a strike. But there is also the parallel issue of what extent unions can appeal to third-party employees for assistance during a strike. These two issues ought to be thought of together and a balance should be sought.

A comprehensive review of the code would require the reversal of the current jurisprudence holding that refusal to cross a picket line is a right. It would also require addressing common-law jurisprudence on secondary picketing and secondary boycotts, because those are rules telling employees or unions to what extent they can appeal to third-party workers for support, just as the replacement worker provision is a rule speaking to employers, telling them to what extent they can appeal to third-party employees for support. There should be a balance between those two sets of rules.

The code cannot and does not address the common-law jurisprudence. If the code were able to do that, I think it should attempt to achieve the balance to which I have referred.

On another substantive provision, and I'm very close to the end of my remarks, let me turn to subsection 99(1). This is the empowering of the board to certify a union in the face of severe and unfair labour practices by the employer. This is a necessary supplement to the regime put in place by the Canada Labour Code. It is a provision that the code must provide. It is a bulwark for protecting employee free choice enshrined in the code.

Many people often misperceive such a provision and view it as an insult to, rather than a protection of, employee free choice. This is profoundly wrong, and I use the word “profoundly” advisedly. Subsection 99(1) is the best version of such a provision that we have in Canada. It precisely articulates a “but for” test, which is the crucial judgment involved here: “But for the employer's interference, the employees would have voted for the union.” It is explicitly tied to respect for employee choice when that choice is significantly violated or interfered with by an employer. Objections to this provision on the basis that it interferes with employee free choice are most generously viewed as misconceived.

This reform is clearly on the mark and provides the correct answer to a problem that must be addressed.

In conclusion, my view is that it should be clear that this package of reforms is sensible, timely, and balanced. I look forward to your questions on any of the views I've expressed or any other issues I was not able to address or make some remarks about. I may not be able to answer all of your questions, but I look forward to them. Thank you.

The Vice-Chair (Ms. Bonnie Brown): Thank you, Professor.

We move now to the spokesperson for the Port of Saint John Employers Association.

[Translation]

Mr. Joseph Day (Legal Advisor, Port of Saint John Employers Association): Thank you, Madam Chair. We are from the beautiful city of Saint John, New Brunswick.

[English]

My name is Joseph Day and I'm in-house legal counsel with the J.D. Irving group in Saint John, one of the users of the port. We have with us in making this presentation, Mr. John King, who is chairman of the Employers Association for the Port of Saint John, and Mr. Lorne DeGaust, who is the vice-president and general manager of the employers association for the port of Saint John.

• 1035

Mr. King will be giving the presentation and we're all here to take any questions you may have. We have, I believe, an exciting story to tell about the employers association in Saint John, and then we'll discuss a couple of issues that are of concern.

Mr. King.

Mr. John King (Chairman of the Board, Port of Saint John Employers Association): Thank you, Joe. Good morning.

The Port of Saint John Employers Association is pleased to have this opportunity to present its views on Bill C-19.

As Joe said, my name is John King and I'm the chairman of the board of the association. In real life, I'm the general manager of Courtenay Stevedoring Inc. one of the contracting stevedores in the port of Saint John.

Accompanying me today is Lorne DeGaust, who is vice-president and general manager of the association.

In November 1996 the Canada Labour Relations Board certified our association as the management representative for the contracting stevedores in the Port of Saint John. We replaced the Maritime Employers Association, who had been the management representative in our port for many years.

As management representative we are responsible for the negotiation and administration of labour contracts with the three international longshoremen's association locals that provide labour in our port. We also, jointly with labour, administer the pension and welfare plan for the longshoremen. We are also responsible for the dispatch of labour.

The association is composed of ten member companies involved in stevedoring, ship operation, and agency. It has a full-time staff of five and is governed by a five-person board of directors taken from the member companies.

There are approximately 350 employees active in longshoring in the port of Saint John, of which approximately 220 are members of the three ILA locals.

The port of Saint John is the second largest port in Canada, having handled slightly in excess of 21 million tonnes in 1997. It is the largest port in eastern Canada in terms of tonnes handled. That being said, it is important to note that operations are effectively split into three areas: petroleum; bulk, which is largely potash, sugar and salt; and general cargo, which is mostly forest products. Eighty-six percent of our tonnage is petroleum, handled either as inbound crude through an offshore buoy outside of the harbour or outbound product from a privately owned and maintained terminal in Courtenay Bay.

The vast majority of the employment opportunities in the port arise from the handling of the remaining 3 million tonnes. Of these 3 million tonnes, only slightly over 1.3 million were in the higher labour usage areas of containers and break-bulk cargoes.

The point of all of this is that in terms of cargo that pays the majority of the bills, we are a port that handles slightly over 1 million tonnes of cargo and we have to work very hard for every pound.

What does all of this have to do with labour relations and Bill C-19? Quite a lot actually. Up until recently, labour relations in this port were like those in other eastern Canadian ports and I suspect western Canadian as well. They were locked in a 1960s or 1970s time warp of hostility, antagonism, and confrontation.

I'd like to tell you that we are moving away from that type of labour relations because of the enlightened management and leadership, but that's not entirely true. We are moving toward a more positive relationship with our employees and their unions because we have recognized that we cannot grow the business while fighting amongst ourselves and with our employees. We are too small and the business is too fragile for that in this age of globalization and fierce competition.

As one of the founders of the republic to our south said during their revolution, we must hang together or we shall surely hang separately.

The competition is not only other ports, it is other modes of transportation and the changing markets of our customers—the shippers. As an example, the newsprint mill in Saint John, a little more than a decade ago, sent two-thirds of its production to market over our docks. It is now less than one-third. The other third has been lost to overland transit to U.S. destinations.

How are things different now in labour relations? Let me give you some examples.

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In late 1995, prior to our creation but after the separation from the MEA process had begun, we negotiated a new three-year agreement with our largest ILA local prior to the exploration of the old agreement. No big deal, I can hear you say; it happens everyday. Not in our industry it doesn't. To our knowledge, never before in Canada had that been done in a port covered by geographic certification. Since then we have implemented an employee assistance program, started grade 12 equivalency training programs for our employees, met regularly with our union executives, and generally had an improved labour relations climate. Does that mean the millennium has arrived? Unfortunately not. It does mean that we're moving in a different direction, a direction that we think is positive for our businesses and our employees. It is in that context that we speak about this legislation.

Let me start by saying that we support and applaud the majority of the provisions of this bill. We think that, overall, it provides a better context for the advancement of cooperative labour relations in the federal sector. In particular, we are pleased with the increased emphasis on the parties resolving their differences without intervention. Too often in the past, both parties negotiated with the objective of getting a good report from the conciliator, as opposed to an agreement.

There are other aspects of this legislation that we are less pleased with, including provisions related to replacement workers and provisions of off-site employee information to unions. We would like to see these changed, but frankly we can live with them. Other presentations to this committee have no doubt spoken about them in any case.

There are two provisions, however, that we have serious problems with, both on practical and philosophical grounds. They are the provisions relating to grain handling and successive contracts for service. The port of Saint John no longer handles any significant amount of grain, although a new bulk terminal proposed for the port in the 1998-99 timeframe may very well bring back grain handling. However, we feel very strongly that the singling out of any cargo for special consideration is a dangerous and divisive precedent.

As you know, longshoring is the only industry in Canada that is subject to mandatory employer associations in ports so designated by the Canada Labour Relations Board. In part, this was instituted to ensure that employers who share a single pool of labour act in concert. You will appreciate the difficulties that arise when competitors find themselves required to associate and act in mutual interest. Nonetheless, the ports with geographic certification have managed this with varying degrees of success. The success has been a result of the realization that we are all in the same boat and must, at least in some sense, succeed or fail together.

At the heart of it, we all need labour to load and unload ships, and the contract conditions apply to all. The longshoring provisions of the current act, while not unflawed, have resulted in relative labour peace on the waterfront in most of our major ports. Any provision that mandates the handling of some cargo in a labour dispute but not others will inevitably split the employers' associations, rendering the existing structure unworkable. The fundamental alignment of interests of the employers will be broken, and it is inevitable that the functionality of the associations will decline.

We strongly urge that the national interest in the continuing movement of grain be addressed in some other way that preserves the principle of equal treatment under the law. It is our opinion that the current legislation already provides sufficient remedies, including the appointment of a mediator and the ultimate sanction of back-to-work legislation.

Provisions of Bill C-19 relating to successive contracts for service are also of concern to us, not so much in their current scope—although we do object on philosophical grounds—but for the precedent that is established in what we fear is their inevitable expansion. It should be noted that in Saint John, at least, there have been discussions relative to the combination of port and airport authorities into a unified transportation authority. As we are already bound by geographic certification, our concern does not relate to the longshoring activities that form the core of our business, nor do we view this issue in terms of some retrograde ability to drive down wages to minimum levels.

• 1045

We are concerned, however, with the ability of our contracting stevedores to obtain the ancillary services they utilize in support of longshoring operations under competitive conditions. These ancillary services include fire protection, security, snow removal, construction, road repair, data processing, equipment repair, and the like.

As I stated at the outset, we live in a fiercely competitive environment. Any restriction that would reduce our ability to obtain goods and services at the most competitive levels will have the most profound impact on our ability to compete, grow the business, and provide employment for all employees. The provisions of this section, if expanded as we fear, would lock in the labour cost component of these ancillary services. The impact on our ability to fully utilize competition is obvious. We urge the elimination of this provision.

The objective of the Port of Saint John Employers Association is simple: to provide an environment where our members can grow their respective businesses and our employees can have stable careers in this industry.

We are supportive of this bill in general and urge your favourable consideration of the two changes we have articulated.

Thank you for your time and your attention.

The Vice-Chair (Mr. Dale Johnston): Thank you, Mr. King, for your presentation. There will be some time allowed afterwards for questions.

Now I'd like to go to Fazil Milhar of the Fraser Institute. You have about ten minutes to make your presentation, Mr. Milhar, and then we'll go to the question round.

Mr. Fazil Milhar (Director of Regulatory Studies, The Fraser Institute): Thank you, Mr. Chairman and members of the committee. The Fraser Institute is certainly very grateful to have the opportunity today to make a presentation on the proposed changes to the Canada Labour Code. I will basically deal with some of the broader issues emanating out of the Canada Labour Code and will take an economist's perspective on this issue.

Issues obviously pertaining to labour market operations in Canada have been of considerable research. Attention has been diverted to it by the Fraser Institute, among others. Over the years, of course, we have studied the impact of the labour code on the unemployment insurance system and youth unemployment and so on, and given the plethora of laws and regulations that affect the labour market, it is not surprising, of course, that this subject has received wide attention.

Given that labour market operations are of vital importance to ordinary Canadians—let me stress the importance of that phrase “ordinary Canadians”—it is not surprising that there are many calls for action on the labour front.

Without doubt, as all the members of the committee know, the major problem facing the Canadian economy today is a high and sustained unemployment rate. Research evidence drawn both from economic theory and empirical evidence suggests that the main cause of this problem is inflexible labour markets.

Given these findings, it follows that government policies that introduce flexibility into employment relations will likely help alleviate Canada's persistent unemployment problems. These findings are detailed in greater length, of course, in our submission document entitled “The Case for Liberalizing the Canada Labour Code: Why Enhancing Union Security is Inconsistent with Employment Creation”.

With approximately 1.4 million Canadians currently in search of work, there can be little doubt that there is a problem with our labour market operations. This number of jobless translates into an unemployment rate that is very high by OECD standards and nearly double that of the United States.

Perhaps of even greater concern is the fact that in spite of the fact that we have had a relatively good economic performance, the labour unemployment rate has been largely unresponsive. Given the high economic and social costs associated with unemployment, job creation has certainly become a priority for many governments.

An important question that needs to be asked at this juncture, however, is why would a government that is so concerned about unemployment adopt changes to the Canada Labour Code that would have the effect of actually increasing unemployment?

One possible explanation is that governments continue to focus on the lack of demand or insufficient activity or technological change. In my view, these explanations are misguided, to say the least. The persistence of Canada's high unemployment rate is largely due to excessive regulations that have imposed considerable rigidities in the Canadian labour market. Politicians and policy makers, if they're very interested in and very genuine about creating a climate conducive to job creation, should be addressing this question.

Getting to Bill C-19 now, the research evidence strongly suggests that the proposed amendments to the Canada Labour Code, Bill C-19, are inconsistent with the general objective of job creation. Let me stress again that unions are one of the primary sources of rigidity in the labour markets and the proposed changes to the Canada Labour Code would increase privileges and powers of unions under the auspices of federal legislation.

• 1050

As we speak right now, the Canada Labour Code has certain provisions that include the existing right of exclusive representation and mandatory union dues from all employees, irrespective of a worker's desire to be a member of a union or not. In addition, the amendments now would include a partial ban on replacement workers. I think there should be a footnote added to this. As the Sims report detailed, there hasn't been much use of replacement workers over the last 10 to 15 years.

The amendments would oblige employers to provide names and addresses of off-site workers as well as access to any electronic communications system the company may have to assist unions in the drive to certify these remote workers. They would also impose wage flows for successive contractors in the federal transportation sector and introduce provisions for remedial certification based solely on the opinion of the Industrial Relations Board.

I'm going to deal with those. Those four provisions, in my mind, are very detrimental in terms of creating more rigidity in the labour code.

I must admit up front that I'm all for collective bargaining, as long as it's voluntary and not mandatory. While unions benefit members, they also impose substantial costs on society, primarily in the form of higher unemployment. There is substantial evidence—in fact, 30 years of research evidence—documenting the fact that unions, through a variety of mechanisms, negatively impact employment. The most immediate and direct effect is on wages, which as a result of monopoly bargaining power are typically higher in unionized sectors than in non-unionized sectors. Wages above market rates, in turn, reduce aggregate levels of employment.

Empirical research also indicates that employment in unionized industries is indirectly reduced through lower firm profits and a lower level of investment. Let me give you a couple of examples. In some cases, unionized firms have profit margins 10% to 20% lower than comparable non-unionized firms. In addition, the average unionized firm has capital investment 6% lower than non-unionized firms. Moreover, the average unionized firm also has 15% lower annual investment in research and development.

This reduction in physical capital and R and D, which is a necessary lubricant for long-term economic growth and job creation, should be of real concern to policy makers. What we have is a vicious cycle. If you're not working with high levels of capital and more innovation, you are reducing productivity. When labour has less capital to work with, or new technologies to work with, you have less productivity. Less productivity means you have less profitability. If you're producing fewer profits, that means you have less investment for R and D and capital investment and expansion. The final consequence of that is less employment. It's simple and does not require rocket science.

The negative employment effects are also found to spill over into non-unionized sectors as non-unionized firms pay wage premiums in an effort to avoid certification of their work sites and subsequent increases in the costs associated with the unionized workforce. Not surprisingly, this threat effect is more pronounced in industries with higher proportions of unionized workers. A case in point is the auto workers. Of course, the CAW is trying to unionize the Japanese auto plants in Canada—successfully, I might add.

Amendments to the Canada Labour Code affect all federally regulated industries. Industries regulated by the Canada Labour Code include bus operations, trucking, shipping, air transportation, broadcasting, telecommunications, banks, and postal services.

This is an important point I want to make. With exports basically constituting 40% of Canada's GDP, the Canadian economy is heavily reliant on stable and efficient transportation and communications systems. Disruptions to any of these industries caused by excessive union power would have the potential to cause significant disruptions in the Canadian economy, writ large; not just the federally regulated industry, but across the board.

In recognition of this fact, it is interesting to note that the proposed amendment to the Canada Labour Code, part I, provides special protection to grain exports in the event of work stoppages at Canada's ports. This provision ensures that grain exports are not disrupted during strikes and lockouts.

• 1055

Let me take a regional perspective on this. This special provision for grain is puzzling, in my view, and in others' as well. Grain constitutes about 1.8% of the dollar value of Canada's exports. In contrast, the automotive sector constitutes 25.8% of Canada's exports; machinery and equipment, 19%; and forestry products, 13.7%. Yet none of these industries receives special provisions or special protection in the event of a work stoppage. These “omissions” will impact certain regions and industries disproportionately.

Let me give you an example. Coming from British Columbia, the forestry sector constitutes 63% of our exports. Meanwhile, the automotive sector in Ontario constitutes 40% of our exports. Given that these two industries are vital to these provinces' economies, it is clear that the costly impact of the proposed changes to the Canada Labour Code will be spread unevenly across the country.

Let me give you a quick example as to the practical impact of this. Let's take Thailand or Indonesia or any one of those countries. They import a lot of intermediary products from Canadian manufacturers. Canadians produce a lot of intermediary products, and these countries obviously rely on these products for their production processes. If they feel that is going to be disrupted at some point because of some problem in a Canadian port, they will have to diversify their supply base. We know that businesses, once they lose their market share, have a rather difficult time getting it back. To that extent, our exporters tend to lose.

What we are in some sense doing is asking our exporters to do a trapeze act with one hand tied behind their backs. It's an increasingly competitive world marketplace. Our wood products, for example, right now are highly prized and not very competitive, and we are going to add another layer of burden.

Much can be learned from examining the effects of the labour market reforms in other countries. The general finding alluded to earlier obviously is that Canada's high unemployment rate is largely due to the relatively inflexible labour market. The way ahead must involve a concerted effort to liberalize the Labour Code. This is supported by international experience.

Consider, for instance, the impact of actual labour market reforms that occurred in the United Kingdom and New Zealand. We don't have to reinvent the wheel. We can learn from other countries.

Prior to the legislative changes introduced by Mrs. Thatcher, Britain's unions had an inordinate amount of power, which culminated in very weak economic growth and high rates of unemployment. By slowly reducing or balancing the labour code to some degree, eliminating mandatory union membership, and ultimately protecting an individual worker's right to negotiate his or her own contract, economic prosperity has largely been restored to the United Kingdom. Today the United Kingdom has the lowest unemployment rate and the highest job creation rate in western Europe.

Labour market reforms introduced in New Zealand as part of a more comprehensive package have also reduced its unemployment rate by at least four percentage points in the last five years.

Certainly, I am not sitting here arguing that protecting an individual's right to work in federally regulated industries will be a panacea for the unemployment problem we have. To be fully effective, similar legislation would have to be adopted by the provinces and incorporated into the provincial labour codes as well.

There are other distorting factors, such as obviously employment insurance programs and social programs, which tend to reduce labour market flexibility.

When asked, most Canadians would tell you that Canada's number one public policy problem is a high and persistent unemployment rate. The persistence of this problem, in spite of several years of solid macro-economic expansion, suggests that the conventional remedies to unemployment are not working. The international evidence strongly suggests that reforms that increase flexibility of labour markets must be introduced if the trend is to be reversed.

I'm not talking just about Fraser Institute studies. There have been studies done by the World Bank, the IMF, and the OECD, among others, all of which suggest that Canada's labour market is relatively rigid compared to that of the United States. Clearly, we will have to look at the international evidence to look at turning this around.

In light of this evidence, I would suggest that this committee consider eliminating some of the following provisions. One is the partial ban on use of replacement workers. Second, oblige workers to provide names and addresses of off-site workers as well as access to any electronic communication, which would of course assist unions in their drive to certify these workers.

I would suggest also that the committee should consider eliminating the wage flow for successive contractors in the federal transportation sector, which of course makes the transportation sector not very competitive.

Finally, the introduction of the provisions for remedial certification based solely on the determination of the Industrial Relations Board should be scrapped.

Thank you very much.

• 1100

The Vice-Chair (Ms. Bonnie Brown): Thank you very much.

I'm at the committee's convenience. Would you indeed like to proceed in the way we did with the last group, with one question from each party, and then the witnesses will answer those questions in order? Is that agreeable?

Mr. Dale Johnston: I guess that's perhaps the only way we can handle it, as we have so much jammed into such a short period.

The Vice-Chair (Ms. Bonnie Brown): Yes. If we could get succinct questions and answers, we might have time for another round of questions, but it would require everybody to be really disciplined in their interventions.

We'll begin with Mr. Johnston's question.

Mr. Dale Johnston: Thank you, Madam Chairman.

Thank you, gentlemen, for your presentation. I apologize that we wound up jamming you all together as a group.

I would like your individual comments with regard to the privacy issue that was brought up by the privacy commissioner of Canada, in that names and addresses of off-site workers can be handed over to union organizers.

The Vice-Chair (Ms. Bonnie Brown): Mr. Rocheleau.

[Translation]

Mr. Yves Rocheleau: Madam Chair, I would like to draw your attention to the fact that two documents out of three are presented to the committee in English only. My question is to Mr. Milhar.

Mr. Milhar, I knew the Fraser Institute from a different angle. I know it better today from the angle of socio-economic opinions. Are you conscious that you share the single line of thought that is currently shaping the evolution of the world, and that if such ideas were to be implemented, this would mean globalizing poverty and moving into a Third World assimilation process? In fact, what you recommend is concentrating wealth and widening the gap between the rich and the poor.

[English]

The Vice-Chair (Ms. Bonnie Brown): Mr. Charbonneau.

[Translation]

Mr. Yvon Charbonneau (Anjou—Rivière-des-Prairies, Lib.): I would like to ask a question to the Port of Saint John Employers Association.

Gentlemen, you have heard the point of view of the Fraser Institute, which is inspired by the thoughts of Mrs. Thatcher and certain very right-wing governments that we have seen in recent years. According to the Fraser Institute, employees should be entirely free to join a union, there should not be any certifications, etc. I ask you, Port of Saint John employers, would you be able to manage your operations in a labour relations context organized as the Fraser Institute recommends? Would that be going in the right direction? These gentlemen of the Fraser Institute say: “Not only from a theoretical point of view, but from an empirical point of view, this is what we propose.” We can therefore assume that this is based on a certain experience of things. Does your experience also support their theory?

[English]

The Vice-Chair (Ms. Bonnie Brown): Thank you. Mr. Martin.

Mr. Pat Martin: Thank you.

This is difficult when you have such a broad range of presentations within the same period.

I would like to ask the first presenter if he would expand on the comments regarding automatic certification in the instance of interference by the employer.

If there's time, I'll ask him to expand also on the thought that to have any balance, there have to be equal restrictions or equal liberties, for instance, if there is going to be no general ban on replacement workers. The employer is actually seeking some kind of relief by having a third party intervene in the form of scabs. Would it be more fair, then, to grant equal access to third-party relief by having...? The point, I believe, was picket line secondary strike privileges, sort of sympathy strikes.

Thanks.

The Vice-Chair (Ms. Bonnie Brown): Thank you, Mr. Martin.

As for the first question, we'll take three answers on the privacy issue of the employer handing to the union the list of names and addresses of the workers.

We'll begin with Professor Langille.

Prof. Brian Langille: Thank you very much.

Just very briefly, I view the provision as non-controversial and not raising any fundamental human rights issues or privacy objections.

• 1105

The provision I was looking for in the code is the pre-existing subsection 8(1), which says:

Every employee is free to join the trade union of his choice and to participate in its lawful activities.

That's the foundation of the code.

I could search further and find the unfair labour practice provision, which prohibits employers interfering with section 8. The question in labour law class we inevitably discuss is why if an employer refuses a reasonable request it wouldn't be an interference with the right of the employees under section 8.

It's highly unclear to me that this is doing anything other than articulating what a sensible adjudication under existing provisions would be. I don't find it controversial.

The Vice-Chair (Ms. Bonnie Brown): Mr. King.

Mr. John King: We do have privacy concerns with that. I don't think it's a major issue, but we would prefer that it not be in the legislation.

The Vice-Chair (Ms. Bonnie Brown): Mr. Milhar.

Mr. Frazil Milhar: I think Mr. Terence Corcoran of The Globe and Mail put it memorably when he said, “Ding-dong, union calling”.

The reality is that it's an infringement on the privacy rights of individuals. Clearly, I agree with the privacy commissioner's concerns and I think that should be eliminated.

Thank you.

The Vice-Chair (Ms. Bonnie Brown): The second question was to Mr. Milhar, and I believe you jotted it down. Would you care to answer, please?

Mr. Frazil Milhar: Yes.

To address the first point, I did send a copy of the submission a week ahead so that it could be translated into French. The Fraser Institute doesn't publish things in French—resources don't permit it—but we certainly would like to in the future. In terms of the most substantive question, the one on the issue of Canada turning into the third world because of globalization and free trade, etc., and of course liberalizing labour markets, the point that has to be made is that all the research evidence suggests that in fact Canada has a lower unit labour cost than the United States or Mexico, or Malaysia or India for that matter. When people talk about wage levels I think it is misguided, because you can't compare a dollar in Mexico to a dollar in Canada. You have to compare what it would purchase, what sort of basket of goods and services the dollar can purchase in Mexico as opposed to Canada.

If you take what economists call “purchasing power parity” and then adjust for productivity differences across the countries, what you see is that Canada's unit labour costs and the United States' unit labour costs, surprisingly, are lower than those in Malaysia, India, and the Philippines.

So anybody who sits there and rhetorically asks how we can compete with a dollar wage in Mexico compared to sixteen bucks in Canada is talking nonsense, because it is not comparable. You have to look at unit labour costs. For example, in Malaysia the average manufacturing wage is about 15% of the United States' or Canada's, but their productivity also is 15%.

So we are not going to turn into a third world country, because we are going to specialize in things that we are much more efficient at producing. That is exactly what international trade theory will tell you and that's exactly what's happening.

Let me finish with this. People said we are going to see a wipe-out of all the shoe manufacturing plants in the western world because of Chinese cheap labour and Chinese products coming into the market. The reality is we do specialize in high quality. For example, Britain produces Rockports and Germany produces Rohde. Britain also produces Clarks and Italians produce Ferragamo. We go for niche markets. We leave the cheaper labour-intensive products to the Chinese or to Hong Kong, and then we produce the more sophisticated items and add value. There's no question of our being completely eliminated. That has not happened in spite of all the rhetoric.

I would suggest that the committee read a book called Globaphobia, just published by the Brookings Institution, which gives you an idea of how this works.

The Vice-Chair (Ms. Bonnie Brown): Thank you very much.

The third question was to representatives from Saint John. Could one of you answer that question? Could you operate in the type of a labour system Mr. Milhar described?

Mr. Joseph Day:

[Editor's Note: Inaudible]...in that labour climate. As a practical matter, I don't envision us doing that. I don't see the necessity to do that. We have the ability to work cooperatively with our unions. I believe they want to work cooperatively with us in the common interest. As far as we're concerned, that's not an issue.

The Vice-Chair (Ms. Bonnie Brown): Thank you.

The fourth question was to Professor Langille. Could you answer that for us, please?

Prof Brian Langille: I'll do my best.

There are two technical points here. One is about automatic certification. I actually think it was a very cleverly and accurately drafted provision.

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It is a real-life problem that there are some employers—not many in this room, I expect—who systematically violate workers' section 8 rights, to put it bluntly. The ultimate purpose of the provisions Mr. Martin prefers reflect a very fundamental legal principle; that is, that one should not profit from one's own wrong. The employer shouldn't get the resultant seats as a result of the illegal act of violating section 8 rights. This is a remedy that must be provided.

These cases are rare. I was looking at some statistics in Toronto. The Ontario board had something like 6,500 applications for certification over a certain span. In 31 cases that provision was actually raised, and I'm uncertain of in what percentage it was actually invoked.

So it's for what I would refer to as the rogue or outside-the-pale kind of employer who is doing quite extraordinary things to violate section 8 rights. But I think it's absolutely essential that it be there.

I think it's very accurately drafted. I commend the drafters for getting it just right. The provision in other provinces, such as Ontario, is not as finely or as accurately drafted. I'm going to leave that aside.

Secondly, the principle about equal treatment regarding the replacement scab worker issue is fundamental. I'm offering a legal analysis, but I think the key to all legal analysis is, if you like, equality, or treat like cases alike or, in labour law, treat both sides the same.

There are many places where one could draw this balance. One could ban all replacement workers, but you would have to then put a lot of restrictions on unions and their ability to have picket lines, for example. One can allow employers to hire replacement workers, but then you must allow workers to equally appeal to third-party support and ask those workers not to go to work. It has to cut the same no matter where you slice it. But I'm saying, given that this code slices it one way on certain issues, you then have to slice it for the other side in a parallel way.

Given the provisions in the code that prohibit what I call this end run around the legislation, I think the major legal argument for a more comprehensive replacement scab worker ban is taken away.

It's not perfect. There are other issues out there, as I say. The code doesn't address the way judges regulate strikes and secondary picketing. If it could do that, it should—it should fix some of those rules, too—but it doesn't. But on balance, I think it's the right provision.

Thank you.

The Vice-Chair (Ms. Bonnie Brown): Thank you.

I have a request for more questions. I'm going to limit it to the official opposition and the government.

Mr. Johnston, a quick one.

Mr. Dale Johnston: Professor Langille said he did not support patronage-type appointments. I'm assuming he was referring to the CLRB or the CIRB, if the new act goes through. Very briefly, what sort of process would you recommend to select these people?

Prof. Brian Langille: I'm not an expert on this approach. I'm speaking at a fairly general level and I don't want to get into too much institutional detail.

I note that Bill C-19 does very briefly mention a process of consultation with the relevant parties, and I think that tripartite, balanced consultation approach is one that was used, historically, in Ontario to great success. Recently, unfortunately, under the current government and the preceding government that was there, there was a departure from the normal process of consultation. I think we're paying a price for that now. There's actually court litigation about various appointments and removal of appointments from the Ontario Labour Relations Board. I think it's crucial that you avoid that kind of controversy. I do think the major parties are well known. They've had a broad role in consultations about Bill C-19. I urge you to look for quality and also for acceptance in the relevant communities.

Mr. Dale Johnston:

[Editor's Note: Inaudible]

Prof. Brian Langille: I think this is as wide as you can get it.

Mr. Robert Nault: I wanted to ask Professor Langille about comments made by the presenters from Saint John. This is a quote:

Any provision that mandates the handling of some cargo but not others in a labour dispute will inevitably split the employers association and render the existing structure unworkable.

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In your presentation, you did not mention anything at all as it relates to proposed section 87.7, which is of course a very large issue from a legal perspective and from a purist point of view. It singles out one particular cargo and one particular structure within the ports itself, in order to allow them to continue during a work stoppage. Do you have any comments as to how you perceive this working? Considering the fact that there must be a lot of discussion with your students as it relates to the lack of collective bargaining going on out on the west coast to start with, I'd be wondering what your point of view would be as it relates to 87.7.

Prof. Brian Langille: I'm actually from Nova Scotia, so the west coast grain disputes seem a long way away in some ways. I was hoping you were going to ask me to comment on the Fraser Institute submission, which I would like to do, but I'll refrain from doing that.

Mr. Bob Nault: I'm sure you would.

Prof. Brian Langille: I think you raise a nice point, and I want to go back to one of my first disclaimers. What I tried to offer you in my opening remarks was a legal analysis, and I'm really trying to stick close to what I see as the coherence of the system: it is a system, and if you tinker with it in one place, it'll blow up somewhere else. I don't think it's a system in which you can just throw away this idea of going...

Let me just say that I think one of the answers that could have been given earlier to your question was that we actually did live in the world recommended back in the thirties. In some sense, a little bit of history here is a good reminder of how certain suggestions for reform might actually go. We've actually tried them, just not with great success.

To come back to your point, though, with all respect, I view this as a political—and by that I mean non-technical, legal—element of the code. From a purely legal point of view, I take it that there are arguments about consistency.

Also, this was an interesting new point to me. I hadn't thought of the idea that within employers organizations, this kind of selectivity may actually drive a wedge between what is otherwise a common set of interests. I don't have any comment on that. It was actually just kind of an interesting revelation to me, a new insight for which I express my thanks.

What I'm trying to say is that I don't feel I have the expertise to even comment upon that kind of selective tinkering. I'm in favour of legal principle and legal analysis, but I'm also a pragmatist. At some point, I think you have to say that not everything in the code can be made into a coherent whole. There are saw-offs and trade-offs and bits and pieces that are there for obvious reasons, and for which I don't have any of the particular expertise to critique or recommend.

The Vice-Chair (Ms. Bonnie Brown): Thank you very much, gentlemen. It was interesting to have three representations from three such different angles, forcing us to look at our proposals here from those three angles simultaneously.

I thank you for coming and I thank you for your attention to each other. I assure you that we take your briefs very seriously, and they will go into the mix of thinking that goes on as we go forward and begin to review the legislation.

Prof. Brian Langille: Thank you.

The Vice-Chair (Ms. Bonnie Brown): Members of the committee, there has been a change in our schedule. Because of a flight arrangement and the courtesy of the Business Council of British Columbia, we are now going to bring forward the Mining Association of Canada. I invite Ms. Jacob and Mr. Keenan to come to the table.

Our presenters have been extending the supposed ten-minute presentation, so I want to caution you that you are indeed limited to ten minutes. That will allow for a freer exchange of views with the members.

Which one of you is going to start? Go ahead, Mr. Keenan.

Mr. John Keenan (Chair, Human Resources Committee, Mining Association of Canada): Madam Chair, ladies and gentlemen, I'm pleased to be here on behalf of the Mining Association. My name is John Keenan and I chair the association's human resources committee.

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In my other life, I'm the vice-president of human resources with Falconbridge Limited. Falconbridge is a major international integrated base metals company, Canadian-owned and -founded, with a long history in this country. We employ 6,800 people in over 12 countries, including in excess of 4,500 in this country.

So hopefully I speak with some knowledge of the subject on behalf of both the Mining Association and Falconbridge.

I am accompanied today by Ms. Gisèle Jacob, who is vice-president of public affairs for the Mining Association.

The Mining Association is the national organization of the Canadian mineral industry. Our members are engaged in mineral exploration, mining, smelting, refining, and production of metals, industrial minerals, and mineral fuels. The member companies account for the vast majority of Canada's output of metals and major industrial materials.

Mining is an industry that is truly Canadian. Over 70% of the industry is controlled and managed by Canadians. Our sector has made and continues to make a significant contribution to the country's economic activity.

Overall, the mining/mineral sector contributed some $23.7 billion to the economy in the year 1996, which constitutes some 4.3% of the GDP of the country. We provide 350,000 jobs, from exploration to mining and metal fabricating. The average wages in the industry are over $1,000 weekly, and those are the highest average weekly wages paid by any industrial sector in the country. Mining is a mainstay of employment in 150 communities in this country, which are mostly in rural and more remote areas of the country.

Something of which we are inordinately proud, of course, is the fact that in the decade that ended in 1996, labour productivity in our industry increased by close to 50% and in smelting and refining by more than 37%.

Most importantly, for the purpose of these hearings, mining is a key player in the transportation network. Some 65% of the volume of all products loaded at Canadian ports for international trade were mineral-related products. Minerals and fabricated minerals provide significant tonnage and revenue for Canada's transportation system, particularly bulk commodities such as coal, potash, sulphur, and iron ore. In 1995, shipments of crude and fabricated mineral products transported by the Canadian railways amounted to 140.5 million tonnes, which represents 55% of the total freight revenue in Canada.

Bill C-19, therefore, is important to the Canadian mining industry for two reasons. First, many of our member companies operate mines north of 60° and therefore fall directly under the provisions of the code. Second, all of our member companies are extensive users, as I've just indicated, of Canada's rail, sea, and air transportation systems, which in turn are regulated by the code.

Let me start my comments by emphasizing that the mining industry in Canada is not opposed or in any way against organized labour. As a matter of fact, our working relationship is both productive and constructive. We are a highly unionized industry. In addition, in recent years, we have cooperatively, with the major unions in our industry, put in place the Mining Industry Training and Adjustment Council, MITAC, which brings together employers, employee representatives, and unions to develop training and skills upgrading programs focused on the needs of the mining workforce Canada-wide.

Unionized labour is a reality of working life, and as long as there are equitable checks and balances in the labour relations system, we can work in a harmonious fashion with our union colleagues.

The Canada Labour Code used to provide these checks and balances, but unfortunately we believe that the proposed amendments, as presently worded, are biased against employers.

We are not here to ask you to favour the employer position with regard to the proposed amendments, but we do ask that you do your utmost to restore the balance and fairness in part I of the code. As it is now proposed, we believe that the revised code will polarize labour-management relations and bring us back to the dark days of the fifties and sixties, when labour relations were at a very low ebb in this country. We've made a lot of progress and it's not appropriate to turn back the clock.

There are a number of issues of concern to our industry in this bill. They primarily include remedial certification, services to grain vessels, the virtual ban on replacement workers, and successive contracts for services.

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I don't want to go into a lot of detail on these issues as I know you have heard from many employer organizations as to how they affect the normal operations of business in Canada. I would be pleased, however, to answer any questions you may have on those particular provisions.

I want to be on record as having deep concerns about the provisions and their impact on Canada's competitive edge at a time when our government—this government—emphasizes global competitiveness in all of its economic policies. One might ask, why bother taking Team Canada around the world if domestically we do not support our businesses with sound labour legislation?

So rather than go over these provisions and speak to you about their impact on business, I want to focus on two other topics. First, I want to express our frustration with the government's so-called consultation process. Second, I'd like to offer some suggestions as to how to bring back balance in the proposed amendments to the code.

With regard to the consultation process, despite the government's constant reminder to the public and the media that it has consulted extensively on the bill, I'd like to state very clearly that we—a major national organization such as ours—have never been given the impression that our concerns were taken at all seriously. If we had, I believe you would not have had so many requests for presentations to your committee.

In fact, the government has not responded to any of our concerns. The minor adjustments made in Bill C-19 attest to that fact. Concerns about privacy, about the freedom to vote on joining a union or not, about respect for the cultural practices of aboriginal employees—these fundamental rights of our society, we believe, have been bent to fit a flawed legislative framework. Our arguments are not all economic. We have grave concerns about the consequences that this law will have on workers' rights to work in an open, transparent, and fair system.

If, as the government claims, the bill is so balanced, why then are you hearing concerns from the privacy commissioner, from the CEO of CN Rail and the CEOs of most major mining companies, and of course from many others?

Why is the government on the one hand determined to give preferential treatment to grain in Bill C-19 but on the other hand putting in place a review of the entire grain issue? Why is Minister MacAulay not waiting for the results of this review before putting in place regulatory provisions that could well be in conflict with Justice Estey's recommendations?

I like to think that the members of this committee are asking themselves these same questions. If this bill is going to do what it should be doing, that is—

to provide a framework for collective bargaining that enhances the ability of labour and management to frame their own agreements and allows workplace disputes to be resolved in a timely and cost effective manner

—then why are so many employers deeply concerned about it?

Please ask yourself that question and look at ways to bring back the lost sense of balance and equity in the legislation.

We have a few suggestions that we believe could bring back the balance.

One would be to consider all three parts of the Canada Labour Code as a package. In today's global economy it is difficult to imagine that we would be reforming the entire infrastructure of this country in such a piecemeal fashion. You are presently reviewing amendments to part I of the code in complete isolation of the work that is under way on part III, the labour standards section, and with no regard whatsoever to part II, the workplace health and safety sections.

I suggest that the government, with your help, perhaps develop a vision that encompasses all three sections of the code and propose amendments to support that vision. The consultation process would then be of a much more strategic and global nature, with both employers and unions having a chance to comment on the big picture.

With regard to the grain issue, I would suggest either of the two following options: remove this provision from Bill C-19 completely, since this and other fundamental issues relating to grain will be reviewed by Justice Estey, or consider the alternative proposal that has been provided by the coalition of employer associations. We have copies here if you have not received this already.

On the question of remedial certification, this provision runs counter to the principle that certification should be based on the majority support of the employees in the bargaining unit. We support this principle and believe that the provision should, in the first place, make very clear that all efforts will be made to ensure that the voting procedures are carried out in an environment free of coercion, and second, that the Canada Industrial Relations Board will only invoke this provision in cases of extreme intolerable conduct on the part of the employer.

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In addition, I recommend you review the provisions of the bill, specifically those on replacement workers and the union certification process, and assess their applicability to native employment. I believe the bill could be considerably improved by its attention to the particular employment considerations of the vast north of our country, where so many of our members operate.

I hope you will find these suggestions useful and will recommend to Parliament a bill that is balanced and well connected to the other two parts of the Canada Labour Code.

Ladies and gentlemen, thank you.

The Vice-Chair (Ms. Bonnie Brown): Thank you, Mr. Keenan.

Would the committee like to go back to the old system or are you happy with this series of questions?

Mr. Dale Johnston: Are we on time?

The Vice-Chair (Ms. Bonnie Brown): No. We're about half an hour late. We should be finishing this group at 11.30. We're probably 20 minutes late.

Mr. Dale Johnston: How many minutes do we have for questioning, Madam Chair?

The Vice-Chair (Ms. Bonnie Brown): If we don't want to lose any more time, we probably should do this in about 10 minutes.

Mr. Dale Johnston: I have very brief questions.

The Vice-Chair (Ms. Bonnie Brown): Why don't you lay them out and we'll do a round.

Mr. Dale Johnston: Okay. Thank you, Madam Chairman.

Thank you for your presentation today.

I see you're concerned about four different things. On the first three I'm pretty sure where you're coming from, but I'd like to give you an opportunity to expand on how successive contracts for services would affect your industry—successor rights.

Mr. John Keenan: I think the easiest answer is that specifically to our industry we don't see that would have a significant effect. We're concerned that these kinds of provisions have been tried in other jurisdictions. One of the things that really concerns us is that much of what is in this bill has been tried and has failed in various provinces in this country, and that doesn't seem to have been taken into account.

In terms of the mining industry in Canada, a lot of the bill is much more relevant to the concerns of transportation, the banking industry, and so forth. Our concerns, as I pointed out, deal primarily with the north and primarily with the impact of the transportation system on us.

Mr. Dale Johnston: Thank you.

The Vice-Chair (Ms. Bonnie Brown): Mr. Rocheleau.

[Translation]

Mr. Yves Rocheleau: Madam Chair, I would like to point out from the start that the copy was only tabled in English.

First, I would ask the witnesses what proportion of mining employees are unionized.

Second, with the potential hiring of replacement employees, do you not expect to see violence on picket lines during conflicts? Do you not fear that labour conflicts would last longer? Have you thought about the job atmosphere that would prevail following the settlement of a conflict during which replacement employees would have been hired?

Ms. Gisèle Jacob (Vice-President, Public Affairs, Mining Association of Canada): For the moment, approximately 35% of mining employees are unionized.

As for the speculation about violence, the Canada Labour Code applies to all our operations in the Far North, where a large proportion of our employees are Natives, and where operations are limited to certain specific months of the year.

It is not so much a question of having violence when we replace employees. The period during which mining operations can take place is very limited, and we have employees who themselves prefer temporary work. Operations are more difficult when we cannot hire replacement employees, specially because of weather and season conditions for mining operations in the Far North.

[English]

The Vice-Chair (Ms. Bonnie Brown): Thank you.

Mr. Wilfert.

Mr. Bryon Wilfert (Oak Ridges, Lib.): Thank you, Madam Chair.

First of all, thank you for your presentation. I was a bit struck by the tone of your presentation, particularly in terms of your comment that this bill would put us back in the fifties and sixties. I have not heard any employer or organization come forth to say that to this point.

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I was a bit surprised to hear your view that the bill is obviously so unbalanced, which I have not heard to this point. It's not perfect, but on the other hand, having all of these organizations come to us, many on the second and third rounds of presentations in some cases...we've heard or they have said that certain things have been modified.

Maybe your concerns have not been integrated for various reasons, but I understand in terms of the consultation process you were involved with Bill C-66 in terms of the House and the Senate. You didn't participate in the consultation process leading to the amendments of part I.

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

Mr. John Keenan: Your question is relatively a matter of degree. I believe it has been long accepted, going right back to the Woods report on labour relations in this country, which is now more than 35 years ago, that the balance in labour relations is the balance between the union's right to strike and the employer's right to continue operations.

Once that balance is undermined by taking away the employer's right to continue operations, you create an environment that in the first place discourages investment. My point about the lessons of the provinces is quite clear on that. With the nature of employment and the nature of growth and the environment in British Columbia and the climate to attract investment—it's the same in Quebec—the statistics are there, and we saw it in Ontario. When you upset that balance, you dissuade and discourage investment. That point was outlined and distinguished in that report. Probably the most significant event in the evolution of labour relations in this country was the Woods task force and the report that issued from it.

I don't think an employer should be able to undermine a union's legitimacy, but the fact is we're not talking about undermining a union's legitimacy. The various labour boards within the country are fully charged, under virtually every piece of legislation, to determine if unfair labour practices have occurred. That should be sufficient to create, within the language of the act, a provision that essentially tilts the balance, because it says the labour board must look beyond what labour boards have traditionally looked at. That will upset the balance with regard to determining what is undermining the legitimacy of the union.

Right now, the Canada Labour Relations Board or any other labour board in this country can make determinations upon allegations of unfair labour practice on these issues, and it works very well. So why does it have to be changed?

That's a long-winded answer to your question. I'm sorry.

The Vice-Chair (Ms. Bonnie Brown): We'll have Mr. Martin now.

Mr. Pat Martin: Thank you. My points are along the same lines. You have four bullet points on page 4 as your main issues of concern. Number three is the virtual ban on replacement workers. I would point out there is no general ban on replacement workers.

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On the example that was cited by Ms. Jacob, that in isolated camps where there might be a winter road and it's necessary for access to materials or a short opportunity to restock or to refuel, I can't imagine the Labour Board ruling in a case like that having any problem with you bringing on extra people to make sure those necessary functions take place. I just argue that it's less of an issue than the way you have indicated it here.

The other thing I wanted to raise is one of the things you cited at the bottom of that page—that this bill fails to recognize respect for the cultural practices of our aboriginal peoples. There's nothing about fair wages and working conditions that's inconsistent with aboriginal cultural values. In fact, I'd argue that the redistribution of wealth and issues of social justice and employment equity are things that the labour movement shares with the aboriginal community and that they would want reinforced.

I've noticed that in almost all of the presentations from the mining industry, they cite this problem with the aboriginal community, or that somehow Bill C-19 is acting in a way that's going to have a negative impact on the aboriginal community. If you do have any comment on that, I'd like to hear it, but I just want to state that I disagree that there are any negative ramifications for aboriginal people in here.

The Vice-Chair (Ms. Bonnie Brown): Very quickly, please.

Ms. Gisèle Jacob: I think it's an issue on which you might want to check with native peoples directly. I think we've given you the views of the mining industry in the north, and the cultural differences, and the adaptation to working conditions in the north because of the aboriginal communities and native cultural differences. You might want to check that with native people directly and not just take our word for it.

The Vice-Chair (Ms. Bonnie Brown): Thank you very much.

I want to thank you very much for representing your association and making your points clearly to us. We appreciate the time and effort you've put into this, and we'll take your brief into consideration. Thank you very much.

We'll now call forward the representatives of the Business Council of British Columbia, Mr. Tim McEwan and Mr. Doug Alley. I will remind you that the total time for your presentation is 10 minutes maximum and then we'll move to questions. We lost some time earlier this morning when we had seven people at the table, and because you are two, I'm going to try to save a little bit of time. I think that's fair, considering the distance everybody has come to do this. Go ahead, please.

Mr. Doug Alley (Vice-President, Human Resources, Business Council of British Columbia): Thank you, Madam Chair. Thank you for the opportunity to speak with you and express the views of the Business Council this morning.

My name is Doug Alley. I am the vice-president of human resources with the Business Council, and with me is Tim McEwan, our senior policy analyst.

I'll just give you a very brief description of what the Business Council is. We were established in 1966 as an association representing approximately 165 large and medium-sized enterprises within B.C. We are a cross-sectoral association, active in all the major sectors of the provincial economy. These are listed in our brief. We represent employers both in the public and private sectors.

We do represent within our membership 24 federally regulated enterprises, and they are engaged in telecommunications, financial services, and interprovincial, seabound, and air transportation. Since its inception in 1966, the Business Council has taken an active interest in labour relations issues, both provincially and federally.

Mr. Tim McEwan (Senior Policy Analyst, Business Council of British Columbia): The Business Council participated in the Sims task force review deliberations on the Canada Labour Code, part I, and appeared before the Standing Senate Committee on Social Affairs, Science and Technology, which deliberated on Bill C-66 last spring.

The Business Council has also met with and made written representations to the current Minister of Labour, the Honourable Lawrence MacAuley, and his predecessors the Honourable Alfonso Gagliano and the Honourable Lucienne Robillard.

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The quest for balanced labour legislation is a key theme of the Sims task force review. The Business Council is generally pleased with the overall balance that the task force achieved in its recommended reforms for the Canada Labour Code, part I. The need for balance in the Canada Labour Code, part I, is very important given the nature of the undertakings covered by the legislation—industries that are, I might add, very key to the competitiveness of the Canadian economy.

The Business Council notes some improvements in Bill C-19 over Bill C-66. These include changes to the off-site worker provisions in proposed section 109.1. Also, the wording of the replacement worker prohibition is more in keeping with the substantive recommendation of the Sims task force report.

Despite these modest improvements contained in Bill C-19, the Business Council is acutely concerned about two carry-over provisions from Bill C-66. We believe these provisions effectively undermine the balance sought, and in our view achieved, by the task force review. These include proposed section 87.7, which requires the longshore industry to continue services to grain vessels during a strike or lockout, and proposed paragraph 47.3(1)(b), on successive contracts for services. As a side note, we'd like to note that neither of these provisions has a substantive base within the Sims report. There is no express recommendation for the grain exclusion, and proposed section 47.3 is simply not dealt with in the report.

Mr. Doug Alley: Just to give you a bit on my background, before I came to the Business Council, I used to negotiate for the major fish processors on the west coast for seventeen years. I've been at the bargaining table a lot, and I just wanted to let you know that when I look at proposed subsection 87.7(1), I find it to be a major infringement in free collective bargaining. I don't think it's good for anybody, because it allows for the selective right to strike for employees. If they're to work on grain today, what are they going to work on tomorrow? Is it going to be coal? Is it going to be potash? Is it going to be pulp? To selectively single out grain is, I think, an infringement on the employees' right to strike.

From an employers' point of view, just let me state for the record that, contrary to popular opinion or perceptions, bargaining does go on at west coast ports currently. As a matter of fact, during the last round of collective bargaining, there was an agreement reached at expiry. Just because you don't hear about it, it doesn't mean bargaining doesn't happen.

What I'm concerned about as a negotiator is what will happen under the provisions of proposed subsection 87.1(1). By allowing grain to be handled, it alters the balance of the collective bargaining relationship by removing the pressure on unions to bargain responsibly and expeditiously, and it places pressure on the employers to settle for higher-cost collective terms and conditions than would otherwise be the case. For our member companies within the Business Council, it could undermine our reputation as a reliable supplier worldwide. We work hard to get these contracts, and if the port is interrupted for great lengths of time—which I believe will happen by removing the grain provision—there will be no incentive for the unions to settle when people are still working. The damage to our reputation will be very difficult to overcome over a period of time.

I think, too, that it's bad public policy. It's very difficult to justify to the workers in B.C. why a prairie farmer has his grain moved through the port while the worker up in 100 Mile House sees the lumber from his sawmill sitting on the dock. From my point of view, I'm beginning to wonder whether grain has become a distinct commodity.

I would like to refute something the minister said to you last week. I understand that he referred to grain as the ace in the hole. Grain may be the ace in the hole to some people during this round of collective bargaining, but is it going to be coal next time? The time after that, is it going to be pulp? The farmers have an effective lobby if you've had phone calls from them in previous disputes, but if producers see grain going through the ports, you're going to have even more phone calls from the people in the pulp industry, from the lumber industry, the potash industry, the sulphur industry, the petrochemical industry. It goes on and on.

We do offer a solution. First of all, we ask that the clause be deleted in its entirety. If it is not, then we base our alternative proposal on a recommendation that was given to you, as Mr. Keenan alluded to, through the coalition of employers. That was really based on the recommendations from the inquiry into the west coat ports.

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As a final note, we just have a question: why is the federal government proceeding with this provision given Mr. Justice Estey's comprehensive review of grain handling and transportation? We feel this is putting the cart before the horse.

Mr. Tim McEwan: Just turning to our last issue, successive contracts for services, Bill C-19, as you're probably aware, includes a provision that will require designated federally regulated contractors who replace a previous contractor to pay remuneration rates that were provided by the previous contractor.

Although the immediate application of the provision is limited to pre-board security screening services within the aviation industry, cabinet can designate other industries to which it will apply.

We're very concerned by proposed paragraph 47.3(1)(b), by which cabinet can extend the successorship to other industries. We believe this paragraph effectively allows the Minister of Labour to suspend collective bargaining and open tendering within the federally regulated contractual sector.

It's simply not reasonable, in our view, that the minister should be allowed the authority to predetermine a wage-cost structure for a business outside of collective bargaining and open-tendering processes. Fundamentally, federally regulated enterprises should not be inhibited from contracting with least-cost service providers if their cost structure dictates this is necessary.

There have been examples in recent years, particularly within the airline industry, where cost relief has been necessary. This is one key component or provision that would undermine their ability to get on with doing that kind of cost restructuring, if necessary.

In conclusion, the Business Council of British Columbia would just like to see that this paragraph is removed in its entirely. That's proposed paragraph 47.3(1)(b).

That's it.

Mr. Doug Alley: We would just like to conclude by saying that we believe the balance in Sims is undermined by the grain provision and the provisions for successive contracts for services. You heard our recommendations on those two.

While the Business Council of British Columbia's remarks have focused on the grain provision and the provision for successive contracts for services, there are a number of other aspects of Bill C-19 being raised by other employers and employer associations that we ask the committee to carefully consider.

As a final comment, I would say that the process leading to Bill C-66 and Bill C-19 demonstrates to us that the future processes for legislative change to the Canada Labour Code, parts II and III, should be inclusive and representative of other regional and national employer interests. The Canada Labour Code does have an effect on provincially regulated employers, and their voice should be heard.

On behalf of the Business Council of British Columbia, thank you for the opportunity to outline our concerns this morning.

The Vice-Chair (Ms. Bonnie Brown): Thank you, Mr. Alley and Mr. McEwan.

I think we'll each lay out a question. We'll have one round, and you can answer all of them. So perhaps you wouldn't mind just jotting down what you're being asked.

We'll start with Mr. Johnston.

Mr. Dale Johnston: Thank you, Madam Chairman. Thank you, gentlemen, for your presentation.

Mr. Alley, you noted that you have quite an extensive background in negotiations, and you mentioned the west coast ports inquiry.

In that inquiry, there was a recommendation that there be a dispute-settlement mechanism, which is noticeable by its absence in the bill here. I wonder if you'd like to comment on whether or not you would agree with such a provision.

The Vice-Chair (Ms. Bonnie Brown): Mrs. Chamberlain.

Mrs. Brenda Chamberlain (Guelph—Wellington, Lib.): I was wondering whether the business community could comment on whether they were happy with the new composition of the new board. Also, what faith now do they have with this new representational model? I'd like their comments on that.

The Vice-Chair (Ms. Bonnie Brown): Thank you. Mr. Martin.

Mr. Pat Martin: Under proposed paragraph 47.3(1)(b), I guess I first have a comment and then a question.

The idea here, I believe, is to take the wages out of competition so that contractors can bid on their skill, ability, and productivity, not on their ability to find cheaper and cheaper labour. I think that's the whole purpose.

There are recent examples, like the alternative service delivery at Goose Bay, for instance, where people were laid off at $15 an hour and hired back at $7 an hour because there was no such protection. I think that's what they're getting at.

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Do you have any further comment you want to make on that?

The Vice-Chair (Ms. Bonnie Brown): Thank you very much. Now, Mr. Alley or Mr. McEwan, perhaps you could take those questions in order, Mr. Johnston's first.

Mr. Doug Alley: As far as the dispute-settlement mechanism recommendation of the west coast ports, we agreed with that. Unfortunately, Mr. Johnston, we don't know why it didn't show up within this particular legislation.

My understanding, reading the Sims report, is that Sims put off making a recommendation until the matter was studied further, and the west coast ports inquiry did study the matter further. I understand there's a further recommendation in Sims that it should be discussed. But how we got to this prohibition...we're not sure where the link was made.

So I can't answer your question in that regard, but we did support the dispute-resolution mechanism in the west coast ports inquiry.

The Vice-Chair (Ms. Bonnie Brown): Ms. Chamberlain's question now.

Mr. Doug Alley: The representational board is very much like B.C.'s board and it's widely accepted within B.C. as the right way to go. But what you have to be very careful of is who is the chair and who are the people who are representational. It takes a special person to be able to park their agenda at the door and then adjudicate fairly. We've seen it work very well in B.C. but with some exceptions. As far as the members of the Business Council are concerned, we support a representational board.

The Vice-Chair (Ms. Bonnie Brown): Mr. Martin's question.

Mr. Doug Alley: Under this provision, Mr. Martin, what ends up being certified is the work rather than the employees. This argument is going on in B.C. currently. We've just had a panel look at this in B.C. to change the provincial code and they've recommended against such a move because it keeps the prices artificially high. The example I used when I talked to the commission in B.C. was, why should, say, a janitor receive protection but not a sawmill worker? The sawmill worker or the person who is doing moulding for further manufacturing to somebody else's final product doesn't have this kind of protection. They compete on the basis of price and quality. So we would argue that that's how any job should be based. The question should be, can you do the job at a fair price and at fair value?

Now, did you want to add, Tim?

Mr. Tim McEwan: I'd just add, as I alluded to in our comments, that there are certain industries, when they're on the edge, where that can make the difference between the loss or the retention of jobs. There was a high profile example, as I say, within the airline industry a couple of years ago. It's admittedly hypothetical, but if the airline industry, with some of the contracts they have around airport facilities and what not, needed cost relief, they shouldn't be precluded from that option. That's what this clause would effectively do.

Mr. Pat Martin: Why can't they bargain that after the fact? After they win the contract based on other factors, their skill and their ability, why can't they talk to their workforce after the fact and try to...? Really, what we're talking about is the winning of the...in a case like Gagetown or Goose Bay, where they're actually bidding on this type of work. We're saying take wages out of the competition. Don't you think that would be more reasonable? Then, if after the fact you still have a problem with too high a payroll burden, you're at the bargaining table and you can deal with it there. Maybe we're talking about two different things.

Mr. Doug Alley: My experience at the bargaining table—and as you know the west coast fishing industry is not as healthy as it has been. Years I was at the table we were trying to bargain reductions in the collective agreement and got absolutely nowhere. It's only where a particular firm has gone bankrupt in the last couple of weeks has the jobs protection commissioner been able to come in and negotiate the kinds of collective agreements we were trying to negotiate 10 years ago when I was in the industry.

People are reluctant to see their wages drop. To take wages out of the model somehow doesn't sit right in the free collective bargaining model.

Mr. Pat Martin: We could go on, but we're probably out of time.

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The Vice-Chair (Ms. Bonnie Brown): Yes. Thank you.

Mr. Alley, would you like any concluding comments? Mr. McEwan.

Mr. Tim McEwan: That's fine, thank you.

The Vice-Chair (Ms. Bonnie Brown): Thank you very much for dealing with the questions so efficiently and thank you for coming and sharing the position of your association with us.

We will now call forward the representative from the Coal Association of Canada, Mr. Downing.

Welcome, Mr. Downing, and please go ahead.

Mr. Donald O. Downing (President, Coal Association of Canada): Madam Chairman, my name is Don Downing and I'm the president of the Coal Association of Canada. I appreciate the opportunity to speak to the standing committee today on behalf of Canada's coal industry.

The Coal Association of Canada is the body that represents coal producers and exporters and many organizations that provide service to the industry from coast to coast. In total, the association membership includes 70 organizations representing all aspects of the industry.

Ladies and gentlemen, my presentation will be brief. The purpose of my presentation is to address the proposed amendments to part I of the Canada Labour Code, in particular amendments proposed for subsection 87.7(1) entitled “Services to grain vessels”.

As context for my comments on the proposed legislation, I would like to describe the key attributes of Canada's coal industry. In 1997 coal production reached approximately 78 million tonnes from 29 mines in 5 provinces. Total consumption was 55.5 million tonnes, mainly in electricity-generating stations in 6 provinces and in the steel industry in Ontario. Approximately 15 million tonnes of coal are imported in central and eastern Canada. Exports total 37.5 million tonnes. Production, consumption, and exports were all records again in 1997.

Coal is a bulk commodity, highlighting the importance of transportation to the industry. Coal is the largest commodity by volume, approximately 40 million tonnes, moved by the major railways, and is a major generator of revenue for the railways. There is a strong reciprocal dependence between coal and the transportation system; each requires the other to be successful.

Exports in particular require efficient cost-effective transportation because the international market for coal is extremely competitive. Exports from west coast ports now exceed 36 million tonnes annually. Asian countries are the primary markets for this coal, principally Japan, Korea, and Taiwan, but Canada ships coals to over 20 countries around the globe.

Our main competitors in metallurgical coal are Australia and the United States, and in thermal coal, Australia, South Africa, Indonesia, and Columbia. Each of these countries offer some natural advantage to their producers over Canadian producers, not the least of which is a much shorter rail distance to tidewater—typically 100 to 300 kilometres as opposed to 1,200 kilometres in Canada.

In terms of economic impact, coal mining employs 7,000 people directly, and they are among the highest paid workers in Canada. Just as importantly, the mining of coal creates a strong economic ripple effect or multiplier. Our most recent economic analysis completed in 1995 shows a 3:1 multiplier in mine support services, which translates to total direct and indirect employment in the mining sector of over 24,000.

Coal transportation, rail and marine, results in another 28,000 direct and indirect jobs. Every coal-mining job leads to more than six additional jobs in the mine support and transportation sectors. The economic impact of coal mining and transportation taken together is approximately $4 billion 1997 dollars.

It is the seaborne exports that create the interaction with the ports and marine service providers. Coal exports are valued at $2.5 billion, not insignificant by any measure.

These comments are intended to inform the committee of an important sector of the Canadian economy, a contributor to investment, growth, employment, and trade earnings and a mainstay of the transportation sector. Coal is an important commodity to Canada.

I point out as well that there is little slack in the coal transportation system, because mines, located mainly in the Rocky Mountain region, have limited storage capacity and rely on rapid takeaway by the railways. With the volumes we're moving today, coal moves to export terminals at an average rate of 700,000 tonnes per week and the storage capacity at mines is limited—more limited than storage capacity for grain on the prairies, for example.

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Other commodities, while important exports, are smaller in volume and have more storage flexibility. The storage capacity for sulphur, for example, is extremely large at the producer sites. The potash exports are smaller, and exports have rail and port options available.

The amendments proposed for part I of the Canada Labour Code appear to reflect a view that grain is more important than coal. Indeed, one could be led to believe that grain is the most important commodity in the country. That is clearly not the case. The proposed amendment, by attempting to make a special case for grain exports, diminishes the importance of the coal industry and all other commodity industries.

Ironically, because this is labour legislation, it underscores the value of one worker over another. An individual working in grain is more important than one working in coal, potash, sulphur, copper or petrochemicals.

These comments are obviously aimed at proposed subsection 87.7(1), services to grain vessels. This amendment should not be allowed to stand, as it discriminates between commodities and makes a special case for one. It suggests that the Government of Canada places a priority and special status on grain that would be impossible for us to explain to valued coal customers in over 20 countries.

I am not expert in labour matters and do not pretend to be qualified to offer alternatives for resolving complex situations in port labour. I believe, however, that employer groups expert in these matters have tabled viable alternatives. A coalition of employer groups offered an alternative to proposed subsection 87.7(1) in September, 1997. None of these alternatives included setting up one commodity over another in terms of national interest or economic impact.

I submit, with respect, that any such discrimination between commodities should be removed from the amendments plan for part I of the Canada Labour Code. Thank you very much for the opportunity to make these remarks.

The Vice-Chair (Ms. Bonnie Brown): Thank you very much. I think we'll carry on with the system we've been using for most of the morning. That would require you, Mr. Downing, to take a few notes as the questions come. Since we can't spread them among a few responders, you're it.

Mr. Johnston.

Mr. Dale Johnston: Thank you, Madam Chairman, and thank you, Mr. Downing, for your presentation.

I'm a farmer, and proposed section 87.7 is pretty tempting to support, because it will help. It is a small step forward in the farming community in transporting its grain. But we have been suggesting that rather than singling out a commodity, we should be looking at a dispute-settlement mechanism that would encourage negotiations between the parties involved. If they couldn't come to a resolution, they would be compelled by legislation to pick an arbitrator they mutually agreed on and go to a settlement that way.

In our view, this would not single out a commodity but would encourage earnest negotiations between the two parties to come to a solution. I would welcome your comments on that.

The Vice-Chair (Ms. Bonnie Brown): Mr. Rocheleau.

Mr. Yves Rocheleau: No questions.

The Vice-Chair (Ms. Bonnie Brown): Mr. Nault.

Mr. Robert Nault: The question I have relates to the view of the coal industry and others who have made presentations here this morning, that somehow proposed section 87.7 reflects the view that grain is more important than coal. First, that's not at all the case as it relates to this piece of legislation. The intent is, because of a lack of collective bargaining on the west coast, to get collective bargaining back into the mix of discussion between employers and employees.

We have the Reform Party's option of a dispute mechanism that brings in a third party on all occasions. There's the continuous option we have now of no collective bargaining and back-to-work legislation in every case, or almost every case. The end result is the same mechanism the Reform Party is advocating, which is in fact a dispute-settlement mechanism, because a third party comes in and tries to fix the solution.

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Based on the submission you've made, you're suggesting that you made an alternate proposal, but in fact you have not. The proposal is basically the same as Mr. Johnston's, which is a third party deciding for you instead of the employer and employee coming to some sort of resolution of their difficulties.

So I'd like to know whether you in fact believe there is no collective bargaining going on now on the west coast, and if so, would you not be willing to accept that the proposal being made in this amendment is an attempt in good faith by the Government of Canada to get out of the business of third-party arbitration, which is what has been the case in the last number of years?

The Vice-Chair (Ms. Bonnie Brown): Thank you, Mr. Nault.

Mr. Downing, do you want to start with Mr. Johnston's question?

Mr. Donald Downing: From the perspective of an individual who is representing a commodity, not either an employer or the union representatives directly, I'd be making a personal observation when I say that we would support the mechanisms that best promote active collective bargaining and encourage the earnest resolution of labour disputes. I think from what we've seen on the table the mechanisms aligned with what you've described would seem to meet that idea more than the provisions as they are currently written in the legislation.

The Vice-Chair (Ms. Bonnie Brown): Now for Mr. Nault's question, Mr. Downing.

Mr. Donald Downing: I think they're similar. It's obvious...I think if the intention of the government is to address a very serious and complex labour dispute situation, the idea of promoting the continued work for one single commodity that represents a minority in terms of percentage of the volume going through Vancouver, for example...that would not in my view seem to assist the resolution of complex labour situations. It seems to me that whatever the core of the dispute is would still remain in those cases.

I think the concern of the coal industry is that the provision as currently written could lead to extended labour disputes because persons would have the ability to continue to work in the port while a labour dispute is going on and affecting other commodities. That, in our view, is more negative than it is positive.

The Vice-Chair (Ms. Bonnie Brown): Mr. Nault.

Mr. Robert Nault: The other question I wanted to ask—and I wanted to ask the B.C. business group the same question as well, because in essence they are the ones who brought this up, along with your organization. I'm sure you're aware that there was an employer group called FETCO at the table, which is a federally regulated employers group, and that group has a lot at stake in this particular piece of legislation. This group has come to us and said they approve of 87.7.

Your companies, of course, are all provincially regulated and legislated.

So on the one hand, we have employers on the federal side who are saying this is a pretty good balance. On the other, we have provincial employers coming to us who are tied peripherally to this, because of course we're an exporting nation so we ship a lot of goods out of the country, and they are saying they totally disagree with this. So we have two employer groups, one provincial, one federal, with very different slants on the legislation.

Let me ask you this. If in fact you feel so much attachment to this federal legislation called the Canada Labour Code, why is it that business groups like yourself and the B.C. Council are not advocating having one labour code in this country? Why do we have eleven? If in fact that's the rationale you're using, that this applies to you equally, then we may as well just have one code and get on with it and not have all these different codes all over the place.

I'm having a difficult time taking an employer group seriously that comes here and has not been at the table and has not come up with this balance, whereas the other group employers have, and they told us just a few days ago that this is a very good piece of legislation and that we should get on with it—and very quickly. What are your comments related to that?

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Mr. Donald Downing: I don't feel...I haven't given any thought to that, to tell you the truth, and I'm not experienced in provincial or federal labour codes, generally speaking. I would defer to the other employer groups in terms of answering that question.

I would look to the volume. There are millions and tens of millions of tonnes of commodity going through the port of Vancouver. As far as coal is concerned, it requires rapid take-away. We have customers in 20 countries who rely on us to deliver the product on time. If there's a labour dispute, I don't think one commodity should be distinguished from another in terms of the movement of the goods.

The Vice-Chair (Ms. Bonnie Brown): Mr. Johnston.

Mr. Dale Johnston: There is a distinct possibility that we could be facing a disruption in the rail service very soon, as I'm sure you're aware. That, in effect, would prevent the flow of your product to port. Could you let the committee know where you anticipate you could lose your markets to? You have talked about other areas, but the loss of product to market that you would suffer from a strike of that nature would be to what country? I know this is very hypothetical, but of the customers you might lose, what would be the chances of getting them back? Is your product similar to that of other countries?

Mr. Donald Downing: Canadian metallurgical coal, for example, is the bulk or probably 80% of Canadian exports, and Australia and the United States are our main competition there. It's an extremely competitive marketplace. While there are relatively few countries, there are many suppliers in Australia and the United States who participate in this market.

As an illustrative example, in 1992 we had the bankruptcy of one of our largest exporters—Weststar Mining in B.C. closed. It operated two mines and had about 8 million tonnes of coal exports. As a result of that, the two mines were closed for some nine months while the receiver attempted to sell those assets to other companies.

Eight million tonnes of coal exports were lost during that time period, and it took about four years to reclaim those markets. We just barely got back up to the 1991 level of exports by 1997, the year in which we established our export record for metallurgical coal. It takes years to get back the markets lost, and an awful lot of hard work. There is no guarantee in a competitive marketplace that we will reclaim lost markets.

The Vice-Chair (Ms. Bonnie Brown): Mr. Nault.

Mr. Robert Nault: Mr. Downing, I was just curious, for information's sake. Your organizations—the coal mines, especially in B.C.—are they all unionized?

Mr. Donald Downing: Yes.

Mr. Robert Nault: How do you normally negotiate with them? Is it through third-party arbitration, or do you have collective bargaining with your unions?

Mr. Donald Downing: There's collective bargaining at each mine. There are different unions, and there are locals of different unions. They tend to bargain on a mine-by-mine basis.

Mr. Robert Nault: On occasion they do go on strike, though?

Mr. Donald Downing: There have been strikes, the last of which was in 1992.

Mr. Robert Nault: Has the province of B.C. legislated you back to work, as related to those strikes?

Mr. Donald Downing: I have no knowledge of a mine labour dispute ever being legislated to a conclusion.

Mr. Robert Nault: Based on that, why would we want to treat somebody else differently, then, in the sense of forcing the Government of Canada to continue to legislate back to work, when in fact it doesn't happen in your industry?

Mr. Donald Downing: The coal industry is not in favour of a legislated resolution to collective bargaining, as a rule. I suppose in the cases where a strike could be so severe in terms of its regional or municipal impact that one party or another could invite a third-party resolution—that hasn't happened in my memory. The parties tend to bargain it through to a conclusion. Some of the strikes have been long; some are short, obviously.

One of the reasons that situation prevails, I think, is that if one mine is on strike it doesn't necessarily have any impact on other mines or on other commodities. If you have a strike in the port, everything is shut down, and so the pressures and tensions tend to be a little bit different there.

Mr. Robert Nault: Based on the fact that you believe in collective bargaining more so than you agree with the Reform Party's position of no collective bargaining—

Mr. Dale Johnston: Come on now, that's not fair.

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Mr. Robert Nault: —could you then accept this as an argument that if proposed section 87.7 does work the way it's intended, that if it in fact does bring collective bargaining back to the west coast port, that you would then be willing to write us back—I don't expect you to do it today—and say that, “I humbly apologize for suggesting that it won't work, and that it was a bad thing to do”?

Quite frankly, what the Government of Canada and the legislature here are trying to do is exactly what you want, collective bargaining, and to get third parties out of your hair so you can get on with doing your business and having a negotiation with your own labour force. We're trying to do the same in the federal jurisdiction.

So if it does occur—because that's the argument being put forth here by the government, that this will work and will improve collective bargaining—would you then be willing to accept that?

Mr. Donald Downing: Well, Mr. Nault, we don't think this provision will work. That's why we're arguing against it. Hopefully it will be removed, so we won't have the situation where we'll have to consider writing you back on the success of the implementation of the provision. We are in support of resolutions that allow all the commodities to move under the same set of rules, or not move, as the case may be.

The Vice-Chair (Ms. Bonnie Brown): Mr. Johnston.

Mr. Dale Johnston: On a point of privilege, Madam Chair, if Mr. Nault doesn't choose to look at the idea that we've put forth—this dispute settlement mechanism—I guess that's his business, but if he wants to accuse me of not supporting collective bargaining, that's my business.

He has misstated that completely. The Reform Party is fully in favour of collective bargaining. We think a dispute-settlement mechanism would be put in place only when the collective bargaining does not work and only in cases where the ports are the only game in town, where there's no alternative to these ports.

So for the record, Madam Chair, I object to him putting words in my mouth.

The Vice-Chair (Ms. Bonnie Brown): You've come to your own defence, Mr. Johnston. I wasn't the least bit worried about it.

Any further questions? Is everyone satisfied?

Thank you very much, Mr. Downing, for your presentation. It was clear, and you answered the questions so that everyone seems to be quite satisfied. Thank you for coming and presenting your association's point of view.

Ladies and gentlemen, our next witness is not scheduled to appear until 12.30 p.m. and is not present yet. I feel we have an obligation to be here at least until 12.31 p.m., to make sure we're not absent when this person shows up. I declare a six-minute break.

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The Vice-Chair (Ms. Bonnie Brown): Our witness has not appeared, so I'm going to declare this session of the meeting over.

We'll reconvene in the West Block, room 306, at 3.30 p.m.

The meeting is adjourned.