[Recorded by Electronic Apparatus]
Monday, May 6, 1996
.1531 
[English]
The Chairman: Can we come to order?
The finance committee is looking into Bill C-31, an act to implement certain provisions of the budget.
Our first witness today is the Public Service Alliance of Canada: national president Daryl Bean, executive vice-president Nycole Turmel, and executive assistant to the alliance executive committee, Stephen Jelly. I've missed one, I'm sorry.
Mr. Daryl T. Bean (National President, Public Service Alliance of Canada): It's the regional executive vice-president for Quebec, Joane Hurens.
[Translation]
The Chairman: Before we begin, Mr. Loubier has something to say.
Mr. Loubier (Saint-Hyacinthe - Bagot): I'd like to table a notice of motion. I'd like to debate this motion tomorrow at the end of the proceedings of the Finance Committee.
The Chairman: Did you give it to the steering committee?
Mr. Loubier: No. There's no need for me to do that. I can table a notice of motion with the Finance Committee, as I'm doing right now, and ask that we debate the motion tomorrow following the hearing of the witnesses on Bill C-31.
This is a motion that sets out a list of 16 regular witnesses along with four special witnesses. The notice of motion that I'm tabling deals specifically with these special witnesses.
I move that Finance Committee invite the Minister of Finance and the Prime Minister to appear at a two-hour televised meeting of the committee, for each witness, as well as the members for Broadview - Greenwood and York South - Weston at a one-hour televised meeting for each witness, to explain to committee members the agreement on the harmonization of the GST between the Maritime provinces and the federal government and their views, both before and after the reaching of this agreement, with respect to the commitments made by the Liberal Party of Canada.
The reason why I'm tabling this motion, Mr. Chairman, is that there is a great deal of confusion at the present time.
On the one hand, the Deputy Prime Minister handed in her resignation saying that her government had not fulfilled the commitments made by the Liberal Party and the present Prime Minister. On the other hand, the Minister of Finance apologized for not being able to scrap the GST as was promised by his government and his Prime Minister.
At the same time the Prime Minister states that there's no reason for him to apologize because he delivered the goods and when he recognizes he did not do so, he claims that it was because of an act of God.
So I think it's necessary for this matter to be clarified and I am tabling a motion so that we can debate it tomorrow until we've exhausted the matter. I hope that a vote in favour of this motion will enable us to obtain the clarification we are seeking.
I am willing to make the following concessions with respect to our examination of Bill C-31. We will limit ourselves to 16 regular witnesses provided our four special witnesses, that is the Prime Minister, the Minister of Finance, Dennis Mills, the member for Broadview - Greenwood andJohn Nunziata, the member for York South - Weston are present at the committee hearings.
I am tabling this notice with the Committee Clerk. Tomorrow, I will be pleased to present our views at greater length.
The Chairman: Is there any discussion?
Mr. Loubier: This is just a notice of motion that I am tabling. The motion itself is not tabled. It'll be debated tomorrow.
.1535
The Chairman: It is a notice of motion.
The Committee Clerk: Yes, it is done in certain committees.
Mr. Loubier: We did inquire and this is the proper procedure.
The Chairman: Thank you. Is that all?
Mr. Bean, please.
[English]
Mr. Bean: Thank you, Mr. Chair and members of the committee. Thank you for giving us an opportunity to appear before your committee.
At every opportunity since the budget was tabled on March 6, 1996, the government has gone to great lengths to congratulate itself on the announcement that the Public Sector Compensation Act will end as scheduled when the legislatively extended collective agreements expire over the next year or so.
Let me say at the outset that PSAC does not share the government's euphoria. While we are pleased that the government is ending the wage control program, we do not believe there is a charitable way to describe the Public Sector Compensation Act. As back to work legislation it was more repugnant than most, as wage control legislation it has the distinction of being the longest in Canadian history, and as a vehicle for legislative intervention into collective agreements it remains unparalleled.
With that qualification clearly in mind, let me start by saying that the two aspects of the current legislation, namely the return to collective bargaining and pension reform, are positive from the perspective of federal public sector workers and are welcome by PSAC. Even here, however, the elation that should have greeted the return to collective bargaining has been muted by the fact that the government is doing everything possible to ensure that return to collective bargaining is anything but free.
Moreover, while the proposed pension reforms are long overdue, the timing of their implementation leaves a lot to be desired. As a result, thousands of federal public service workers who are being terminated under the government's 45,000 person staff cuts will be needlessly penalized. We provide a more detailed comment on this issue in our submission and make recommendations. Recommendation 9 on page 26 of the English version is to change the implementation date.
With regard to the return to collective bargaining, the government's proposals are flawed in at least three fundamental ways. First, the government has done nothing to remove the Public Sector Compensation Act restrictions on negotiations of job security and workforce adjustment provisions. Second, through Bill C-31, the government is intent on eliminating important workforce adjustment provisions for thousands of federal public sector workers who are to be transferred to other governments and agencies and the private sector. Third, the return to collective bargaining is being undermined for many workers because the government is intent on removing arbitration from the dispute settlement option available to bargaining groups.
In this short statement, I will quickly address the arbitration issue and then provide PSAC's assessment of the complex provisions related to alternate service delivery.
In our opinion, the government's proposal to suspend the arbitration route for the next three years is seriously flawed. When drafting its amendment to the Public Service Staff Relations Act, the government was surely aware that it has historically designated sufficient numbers of some bargaining units so as to effectively eliminate the conciliation strike option for members in those bargaining groups. By any reasonable criteria the government should not be allowed to have it both ways.
Hence, in our opinion, the government should only limit or suspend arbitration if it is prepared to simultaneously limit or suspend the designation process. No other alternative is fair or reasonable for workers in a bargaining group who are likely to face a high level of designation.
The only exemption to the suspension of the arbitration route that will be permitted under Bill C-31 is for workers whose right to unionize was established under the Canadian Security Intelligence Service Act and the Parliamentary Employment and Staff Relations Act. If the government is going to proceed with a suspension of arbitration, these two exemptions make sense because both groups are explicitly denied the right to strike under existing legislation.
.1540
But the government has chosen to legislatively limit the ability of arbitrators to arrive at a fair arbitral award. It has done this by asserting that the arbitration board must limit pay and other benefit increases to the increase agreed to for comparable federal public sector bargaining groups. The PSAC believes this limitation on the role of arbitrators for groups that have been denied the right to strike is a clear infringement on freedom of association and collective bargaining. It is particularly insidious coming as it does at the end of a long-term legislated suspension of collective bargaining.
As a result, we have proposed two amendments that address the arbitration issue, and they can be found in recommendations 6 and 7 on pages 21 and 22 of the English version.
Before addressing the government's specific Bill C-31 proposals, I should like to briefly discuss the government's motivation and intent with regard to the alternative service delivery. Members of the committee must understand that Bill C-31 is designed explicitly to allow the government to terminate federal public sector workers in the event that it decides to transfer their functions to other government agencies or the private sector. What the government has avoided saying is who will be affected by the alternate service delivery system.
While the government has told PSAC and other federal unions that it is considering the transfer of at least sixty government functions, the budget addresses only three. Hence the government has told Parliament and the public that it has three agencies - Food Inspection, Revenue Collection and Parks - in mind for more or less immediate transfer, while it is actively pursuing the transfer of countless other unnamed agencies.
Even when it does name an agency or a function as a target for transfer, the level of details it provides is insufficient. It is insufficient for the workers who may be affected, insufficient for the proper parliamentary debate, and insufficient for the public at large.
It is instructive to note as well that while Bill C-31 provides the government with the legislative ability to transfer workers without following the procedures and processes contained in the collective agreements and the workforce adjustment directive, it is silent on the types of transfer arrangements the government is contemplating. In fact the legislation gives the government power to transfer workers under any terms and conditions it chooses.
Initially, we suspect, the government will stick to the three types of transfers it outlined during the meetings with PSAC prior to the March 6 budget.
Type one transfers continue the so-called core benefits and collective agreements. Type two transfers are the same as type one except the average wage can be fully 15% less than the wage was prior to the transfer. Type one and type two transfers will be considered reasonable job offers, essentially forcing the workers to transfer or lose their rights and entitlements under the workforce adjustment directive.
The third type of transfer, type three, will not be considered a reasonable job offer, but workers who transfer will receive less than 85% of their current wages and a seriously reduced benefit package.
All of this is being implemented by a series of amendments to the Financial Administration Act, the Public Service Staff Relations Act and the Canada Labour Code, and are contained in part I of Bill C-31. When considering the various options, I believe it is important for members of the committee to understand that they are permanent, interrelated and designed to facilitate an unspecified set of alternate service delivery measures and transfers.
In our submission we group the amendments under four headings, namely, terminating authority, workforce adjustment directive changes, severance and successor rights. Although I cannot possibly do the issues involved justice in the short time available to me this afternoon, I will briefly address PSAC's position on each one.
The government is granting itself the authority to terminate transferred workers under subclause 5(2) of Bill C-31. In our opinion this provision is unnecessarily vague with regard to the terms and conditions under which the government can terminate transferred workers. As a result, we recommend an amendment that would limit the terminating authority to situations in which the terms and conditions of employment mirror those applied in the federal public sector - and that can be found on page 10 in the English version.
.1545
Bill C-31 also contains an extensive array of changes to the workforce adjustment directive that will apply to workers who are terminated as a result of a transfer under the government's alternate service delivery program. The first workforce adjustment change that I should note in this regard is that the workforce adjustment directive is defined as being either agreed to by the parties or legislated under Bill C-31 or any other act. This change will fundamentally alter the nature of the workforce adjustment directive and provide Treasury Board with almost total power with regard to subsequent changes. In short, the workforce adjustment directive can be changed by agreement between the government and union representing its workers, or by government fiat.
Subclause 5(4) of Bill C-31 seeks to amend section 11 of the Financial Administration Act to allow Treasury Board to arbitrarily change the workforce adjustment directive when the government cannot secure an agreement with one or more bargaining agents. This provision is designed to carry through on the government's threat that it will penalize PSAC for not agreeing to the alternate service delivery employment transfers. In our submission, we add the label ``vindictive'' to this provision, and we urge your committee to do the right thing and amend the clause so as to ensure the government cannot amend the workforce adjustment directive in a way that penalizes federal workers who do not voluntarily accept the government's proposals. I draw your attention to recommendations 2 and 3 on page 13 of the English version.
The second observation that I would like to make with regard to Bill C-31's workforce adjustment directive provision relates to the government's attempt to ensure that the workforce adjustment directive and other NJC provisions cease to apply when an employee is terminated on transfer. By legislating this provision, the government is using its power to eliminate a substantial number of benefits that form part of the existing collective agreements. That this provision is detrimental to federal workers is obvious, but the impact is compounded by virtue of the fact that successor rights provisions of Bill C-31 prevent the timely renegotiation of the workforce adjustment directive and NJC agreements. As a result, we recommend that the legislation be amended to ensure that the workforce adjustment directive and NJC agreements continue to apply until a collective agreement is negotiated with the new employer. That is recommendation 4 on page 14.
I should like to raise one more substantive issue. Under clause 4 of Bill C-31, Treasury Board is to be provided with the authority to make regulations with regard to severance pay and other amounts payable to former employees whose employment is terminated. While the legislative provision is open-ended, PSAC has been told that the government intends to use it to violate existing collective agreement provisions and defer the payment of severance on termination. This proposal raises numerous questions in terms of government's liability and fair treatment of terminated workers. We address these questions in detail in our formal submission and recommend that the provision be deleted from Bill C-31. That's recommendation 5 on page 17.
In conclusion, I should like to urge members of this committee to take a careful look at the government's legislative proposals and understand them in the context of the government's motivation and intent. I believe the ten PSAC recommendations that propose amendments to part I of Bill C-31 improve the legislation in the sense that they are fairer to federal workers, while facilitating the transfer of federal work to other government agencies and the private sector.
Thank you, Mr. Chair. We're certainly prepared to respond to questions.
The Chairman: Thank you, Mr. Bean.
[Translation]
Mr. Loubier, would you like to begin?
Mr. Loubier: I'll start with a simple question and reserve my time for later on, Mr. Chairman.
Are you telling us, Mr. Bean, that since the first budget in 1994 where the rationalization of the public service was already mentioned, the federal government has simply been improvising its review of government services and its decisions relating to layoffs, privatization and contracting out?
.1550
In other words, I gather the government does not have a well-articulated plan, particularly a plan for the redeployment of members of the public service and there is no assurance that it was indeed saving money by resorting to contracting out and that the same situation prevails in 1996. This seems to be the main point that you are making in your presentation, if I've understood you correctly.
[English]
Mr. Bean: Yes, it's very true that in our view the government has improvised as it's gone along. I guess that's pretty evident by the fact that we're now facing the third set of legislation to take provisions out of the collective agreement while at the same time contracting out has continued to expand, as it did under the previous government.
If we go back to 1984, the bill for contracting out was something like $2.5 billion a year. Based on the figures we've been able to gather, which are certainly not up to date, it's now somewhere in excess of $7 billion a year, creeping towards $8 billion. So it hasn't really resulted in savings in terms of expenditures, with all the cutbacks. I think it's simply about the fact that this is the third time we're facing legislative changes to signing collective agreements. One would have to conclude that they were improvising and changing as they rolled along.
[Translation]
Mr. Loubier: So when the government claims that it has a very specific plan and that it discusses with union representatives the best way to carry out this rationalization and redeployment of staff, or layoffs and retirement, it doesn't know what it's talking about.
[English]
Mr. Bean: Again, we met with the Treasury Board officials fairly extensively on the alternate service delivery program, and we've said we're prepared to sit down and negotiate an agreement on that, as we did with the air navigation system, which was transferred over to a commercialized or private function.
When it came to these other ones, all we could get out of them was that there were sixty or more functions, perhaps as high as eighty, we've been told, that in fact will come under this alternate service delivery and may well fit in between type one, type two and type three. For some of them we don't even know if they fit in there at this stage.
Again, we've never been able to have them identify what these functions are. The first we really learned about some of the functions was when the budget was tabled and it started talking about this revenue agency or commission, as it is now called. Again, we have no details. We now know that there's something about a single food inspection agency, but again, no details.
We know they're talking about an agency in Parks Canada, and it appears that the major part of that agency is really not an agency at all, but in fact bids to have employees take over the services in various parks. I don't know what kind of an agency you have when you contract it all out. That appears to be where they're going.
The Chairman: Thank you, Mr. Loubier.
Mr. Grubel, please.
Mr. Grubel (Capilano - Howe Sound): Thank you, Mr. Chairman.
Mr. Bean and other members of the Public Service Alliance, it's good to have you here. Your submission is kind of heavy for someone who isn't into collective bargaining. I'd like to take advantage of your expertise for problems that I face as an MP.
Whenever the W5 program runs, I think a welder is shown and a whole building allegedly full of people who are receiving $30,000 a year or something like this and have been sitting there for a number of years, going to the office every day, reading stacks of novels, and never getting employed. My constituents are phoning up or writing and saying ``Herb, go and do something about this; this can't go on''. They find there is somehow something wrong with the system. I wonder whether you could tell me what I should tell my constituents when I receive contacts like that.
.1555
Mr. Bean: The first thing I'd tell them is to take everything they get from the media with a big grain of salt. That's where I'd start.
The Chairman: We would certainly agree with you after the last two weeks, Mr. Bean.
Mr. Bean: Good.
Mr. Grubel: Even Reformers.
Some hon. members: Oh, oh!
Mr. Bean: The truth of the matter is in the situation on which W5 did their program, the welder involved was working at the Land Engineering and Test Establishment in Orleans. In February the government decided they were closing that facility, without any planning. It doesn't take a genius to understand it would take time to have those people gainfully employed.
Mr. Grubel: How long?
Mr. Bean: Probably anywhere from about three months to six months at the most under the workforce adjustment directive, and that's exactly what happened in that situation.
By the way, you might be interested to know that when they closed that establishment, they contracted out the work to a company in California, which doesn't do a hell of a lot for employment in Canada.
Mr. Grubel: That's a separate issue, but can you give me somehow -
Mr. Bean: But I wanted to talk about economy because you wanted to talk about it.
Mr. Grubel: Do you have any idea or do you keep statistics on how long it takes for people to be warehoused like this, on average, before they find a job again?
Mr. Bean: Anywhere from about one month to six months. Normally under the workforce adjustment directive, when it was functioning properly, we had people placed. There was the odd exception - and people will probably be able to find it - where people went a year, but that was the exception. Anywhere from one to six months has been the working time period.
Mr. Grubel: You qualified your statement a little bit.
Mr. Bean: Yes.
Mr. Grubel: You said ``when it was working properly''. How long ago did it stop working properly?
Mr. Bean: It stopped working properly when the government started legislating changes to the workforce adjustment directive. It's still working, but not as effectively as it was.
Mr. Grubel: I repeat my question. During the period it has not been working properly any more, what is the average length of time workers are warehoused before they find jobs again?
Mr. Bean: I wouldn't use the term ``warehoused'', but before they are slotted in to other jobs, again, it doesn't change a whole lot, except that now we have people being laid off rather than in other gainfully employed situations. The timeframe still remains the same - it can run anywhere from one month to six months - but the fact is now they start getting laid off rather than finding alternate employment.
Mr. Grubel: Mr. Bean, you would do a great service to me and I'm sure to the other members of the finance committee if you could have someone in your office dig out the numbers, not just a range of one to six months. How long does it take, on average? How many of them are placed in jobs within the same bureaucracy or in the government, and how many have to leave the field altogether? I personally would appreciate that very much. I could send it to my colleagues and say ``See? This is another incidence of the media not telling quite the truth.''
Mr. Bean: The Public Service Commission has those figures. We can certainly send them to the committee, but they're readily available through the Public Service Commission.
Mr. Grubel: I would appreciate that.
The Chairman: That's a wonderful suggestion, Mr. Grubel.
Mr. Grubel: Thank you.
The Chairman: I know we haven't quite taken up the full half-hour, but since we have three public sector unions with us today, I was wondering if it would be possible for you to stay, and perhaps we could come back to each group after we've heard from all three. We'll have questions as we go along.
Mr. Bean: I have other commitments to go to. That's the difficulty I have.
The Chairman: To deal with workplace adjustment?
Mr. Bean: To deal with union business, it's called, yes.
The Chairman: Okay.
Mr. Bean: I had to change the schedule to get here today. If we had had a little more time it might have been helpful too.
The Chairman: We appreciate that very much.
Are there any further questions you'd like to ask of Mr. Bean, quickly?
Mrs. Brushett.
Mrs. Brushett (Cumberland - Colchester): Thank you, Mr. Chair. I apologize for being late.
On the weekend, just a couple of days ago, some workers in Parks Canada came to me and indicated that a $50,000 cut of the front-line park workers means the loss of five jobs, so five families are out of work, yet a $50,000 cut at the medium or upper level is one person. I would like your opinion; perhaps we should be cutting at some of the other sectors or levels, rather than those front-line park workers.
.1600
Mr. Bean: I don't know how one would arrive at those figures, because I hope we have nobody being paid $10,000 a year.
Mrs. Brushett: Just to qualify that, Mr. Bean, there are, because these are seasonal workers. They work for six months a year and do the maintenance and so on.
Mr. Bean: Oh, they're seasonal. Even at that, it's pretty low, but certainly this is the situation with the seasonal workers of Parks Canada, depending on how many months of the year they work.
That is where the government is talking about trying to move to employee takeovers. This is not going to be beneficial to those workers because to begin with, the salary won't be as high as they're paid even now, and secondly, the loss of benefits like a pension plan, a dental plan, a medicare plan, or disability insurance will be a considerable loss for those individuals.
I haven't given much thought to where the government should cut, because in my view the government has cut too far already in the public service ranks, and again I don't think it would be fair for me to sit here and say go and cut managers because they're not our members.
Mrs. Brushett: Just to sort of regroup it for a moment, I'm not suggesting that you cut managers. I'm asking if not there, where? We ask the public this, and you're a taxpayer as well, so I pose the question accordingly.
Mr. Bean: I would certainly talk about cutting back in the area of contracting out. By the way, we've made submissions to this same committee as to where there could be substantive cuts made in contracting out and, in my view, substantial savings of money.
As we've submitted before to this committee, I would certainly talk about collecting some of the GST - and I know that's a bad word for some of you - and income tax, particularly when we know from our workers in Revenue Canada that in most cases it's repeat offenders who owe the money. So rather than cut back, maybe we should collect some of the money that's owed, particularly that which is collected from Canadians and not remitted to the government in GST.
The Chairman: How much is that figure?
Mr. Bean: The last time I heard it was about $4 billion.
Mr. Grubel: What! How did you come up with that number?
Mr. Bean: You've had it in your finance committee and we've had it out of Revenue Canada.
Mr. Loubier: That's true.
Mr. Bean: The last I heard it was about $4 billion. Again, I'm going by memory.
Mr. Loubier: Yes, it's $4.4 billion a year.
Mr. Grubel: A year?
Mr. Bean: Yes.
Mr. Loubier: No, it's accumulated.
Mr. Grubel: That's the cumulative outstanding sum?
The Chairman: It's the total outstanding.
I beg the indulgence of members. We have now run out of our half-hour with this group. Would you like to do something very quickly, or can we go on to the others?
Mr. Williams (St. Albert): Mr. Chairman, I just have one simple short question to Mr. Bean. I noted his opposition to the deferral of the severance package to people who are contracted out or who drop into other organizations such as NAV CAN.
Taking NAV CAN as an example, these highly specialized and technical people, by and large, will continue on. They left their government's employ on Friday and started working for NAV CAN on Monday, and there's every likelihood they'll be there until they retire. Why would Mr. Bean be opposed to deferring the severance pay where the taxpayer had to come up with about $200 million for the people of NAV CAN, which is basically a golden handshake for cash in their pocket when they didn't even lose their job?
Mr. Bean: Severance pay is not a golden handshake. It is part of the employment benefits that are negotiated. As a matter of fact, if they don't pay it out now they'll pay it out later at an even higher rate, because it changes as you get wage increases or promotions.
Mr. Williams: But if they're there until they retire, they're never laid off, so why pay?
Mr. Bean: Because the collective agreements we have negotiated entitle you to severance pay whether you're laid off or you resign or you retire. That is part of a negotiated collective agreement and it's not something that's not standard. It's a pretty standard provision in most collective agreements.
.1605
Mr. Williams: It sounds like the taxpayers are really being taken for a ride, Mr. Chairman. Thank you.
The Chairman: Thank you, Mr. Williams.
Mr. Bean, thank you very much. Is it possible for any of your people to stay in case we have some follow-up questions?
Mr. Bean: I don't know. We'll check.
The Chairman: In any event, we always learn from you, and we very much appreciate the opportunity to hear from you.
We realize that these are very difficult times for people in the public sector who have served us extremely well, and we hope we can work to find ways to ease this terrible transition that a lot of people have been forced into.
Mr. Bean: We'd be certainly satisfied if your committee were to adopt eight of the recommendations instead of ten. You just have to figure out which two we're not hung up on.
Some hon. members: Oh, oh!
The Chairman: Thank you very much.
The next witnesses are from the Professional Institute of the Public Service of Canada. We welcome Blair Stannard, vice-president, and Robert McIntosh, manager of collective bargaining.
Mr. Blair Stannard (Vice-president, Professional Institute of the Public Service of Canada): Good afternoon, Mr. Chairman and hon. members.
[Translation]
On behalf of the 33,000 members of the Professional Institute of the Public Service of Canada, I'd like to thank you for agreeing to hear our comments on Bill C-31, an act for the implementation of the budget of 1996.
[English]
Now I would like to invite Mr. Robert McIntosh, our manager of collective bargaining, to present our brief.
Please note that the green document is our complete brief, which you have accepted and included in your proceedings. Mr. McIntosh's speaking notes are contained in the white document.
Mr. McIntosh.
Mr. Robert McIntosh (Manager of Collective Bargaining, Professional Institute of the Public Service of Canada): Thank you, Blair.
Good afternoon, Mr. Chairman and hon. members. After nearly six years of wage controls, massive downsizing and privatization, public service unions expected the government to restore full bargaining rights for public service employees.
Instead, the government has fashioned a hybrid regime characterized by a fundamental imbalance between the negotiating parties. Under this regime, public employees will be forced into a process where strike action is the only means of resolving a dispute. The result can only diminish prospects for effective problem-solving and peaceful labour-management relations.
We are here today to seek your support in revitalizing labour relations in the public service. The suspension of the binding arbitration option under the Public Service Staff Relations Act will cause unnecessary confrontation and will undermine the balance and fairness in the collective bargaining system.
Binding arbitration is a process by which an impasse at the bargaining table can be resolved. It involves allowing either party to submit a dispute on a restricted list of subject matter to a three-person arbitration board for a binding decision.
With Bill C-31, the government will lose a rare opportunity to build a new partnership with the public service. By denying the legal option to resolve a bargaining impasse before an impartial third party, the legislation forces management employees into potential confrontation. In fact, the bill implies that a partnership cannot be trusted to work if both sides have equal rights before a third party. It insinuates without proof that collective bargaining under the existing Public Service Staff Relations Act cannot co-exist with fiscal responsibility. It says the government only believes in partnership and in collective bargaining when it can ensure the rules of the game are stacked against the other side. Surely members of this committee will recognize that public service employees deserve better.
.1610
The restoration of binding arbitration is a fundamental issue for members of the Professional Institute. As you know, the institute represents the professional employees in the public service, people who are dedicated, loyal and committed to serving the Canadian public. Most are career public service employees who seek only to dispense the best possible service to Canadians. In return, they expect to be treated justly by their employer through a fair and equitable collective bargaining process.
By suspending binding arbitration, all public service groups will be compelled to negotiate on the conciliation strike route, including many groups that have never chosen this route in the past. Traditionally, many institute groups have chosen binding arbitration as the method of choice for resolving an impasse at the bargaining table. Some of our bargaining units are very small, numbering fewer than a hundred employees. They, and a number of other larger groups, would not fare well in a classic contest that the strike route can demand.
In other cases, the government has used the public safety and security designation process under the Public Service Staff Relations Act to prohibit all or most of the employees in a group from participating in a strike. In these cases, there is no ability to conduct a successful strike.
The institute strongly supports the right to strike as one of the available dispute resolution options, but this option is credible and effective only where there is a reasonable prospect of balance between the parties, as well as risks for both. Balance and risk compel both sides to negotiate seriously in order to avoid a failure of negotiations and an undesired work stoppage.
Because of the size and the history of some groups, and because of the ability of the employer to negate the possibility of effective strike action through the safety and security designation process, there is no balance between the parties and no risk for the employer. The rules completely favour the government and open the door to abuse of the bargaining process, which can lead to an unfair outcome.
Binding arbitration is a necessary option to retain balance in the system and an equitable distribution of risk between the parties. For some groups, it is the only possible option for fairness in the bargaining process.
Why does the government wish to prevent employees from using binding arbitration? It wants to control the outcome and to ensure strict adherence to its fiscal policies. It wants to be seen as supporting free collective bargaining on the one hand, while enforcing its own interests on the other. Underlying this approach is an unfounded fear that arbitrators will ignore fiscal consideration when they make decisions about appropriate wage increases for the public service.
The record of public service arbitral awards provides no evidence that it is an undisciplined process that fails to take into account the fiscal conditions of the government. Indeed, data for the period immediately preceding the current round of wage controls suggests, if anything, that wage increases were slightly lower for groups that consistently chose the arbitration process rather than conciliation strike.
According to recent academic analysis settlement trends:
- Bargaining units which selected the conciliation strike route between 1985 and 1990 received
annual wage increases of 3.88% compared to annual increases of 3.84% for groups selecting
arbitration.
For many reasons, the institute contends that there is no good public policy purpose to be served by eliminating binding arbitration as an option in public service collective bargaining. It is an option that continues to be available under other public sector labour statutes. For example, the Alberta Public Service Employee Relations Act, the Manitoba Civil Service Act, the Northwest Territories Act, and the Nova Scotia Civil Service Collective Bargaining Act all permit one party to a dispute to refer an impasse to binding arbitration.
.1615
We are appealing to you, members of this committee, to restore binding arbitration. Accepting this request will go a long way toward revitalizing labour relations in the public service. The institute, over recent months, has shown its commitment to resolving thorny issues such as the workforce adjustment deal of February 7, 1996, which alters the job security provisions of public service employees. We are appealing to the government, its sense of fair play, by requesting the restoration of binding arbitration.
If the government insists on suspending the arbitration option, other alternatives short of elimination should be considered. These alternatives include inserting ability-to-pay criteria into the mandate of arbitration boards or adopting a final-offer selection process for arbitration. Both these options are explained on pages 9 and 10 of our brief.
Another important factor to take into consideration is the fact that clause 19 may impose a potentially greater penalty on some bargaining units than others. Depending on the exit date from the wage controls program and on developments at the bargaining table, this may lead to one round of negotiations under the altered rules for some groups and two or more rounds of negotiations without access to arbitration for others. For example, the institute's law group returns to bargaining on March 1, 1997, and might face at least two rounds of negotiations before the three-year suspension of arbitration.
The patent group, on the other hand, will begin negotiations in May 1998. It would likely experience a single negotiation cycle without access to arbitration. The government may have intended the three-year suspension of arbitration to have equal impact on all, but the reality is that employees will be differentially treated. This will inevitably lead to unfair bargaining outcomes for some bargaining units.
A further note must be made concerning the bargaining units covered by the Parliamentary Employment and Staff Relations Act, including two groups represented by the professional institute. Clause 11 of the bill retains arbitration as the only dispute resolution option for parliamentary employees but provides that an arbitral award for these employees must:
- limit the aggregate amount of any increase in pay and other benefits...to that concluded through
collective bargaining or otherwise by a comparable bargaining unit in the Public Service,
Should the government choose to proceed with the removal of binding arbitration, the remaining option of the conciliation/strike route should be made more equitable by revising the process of determining essential services and by expanding the scope of subjects that may be negotiated.
One of the most significant sources of imbalance in the conciliation/strike route is the operation of the safety and security designation process. Historically, the government has succeeded through the courts in greatly expanding the scope of a designation provision to prohibit ever larger numbers of employees from participating in lawful strike activity.
As previously stated, for some bargaining units, most or all employees are designated as performing duties that, in some part or other, affect public safety. The net effect of the designation process has been to negate the conciliation/strike route as a real option. Without a fairer process for determining essential services, the government has every opportunity to make a mockery of collective bargaining on the conciliation/strike route.
The institute is committed to the concept of protecting truly essential services for the public. As occurs under the Canada Labour Code, the parties should freely negotiate an essential services agreement to define a limited number of positions essential for public safety and security in emergency situations.
Revitalizing labour relations in the public service far extends the issue of restoring binding arbitration or changing the designation process. In fact, a total revamping of the Public Service Staff Relations Act, as described in our brief, is required. We implore the government to undertake this overhaul to achieve a modern and effective relationship in the public service. Thank you.
.1620
The Chairman: Thank you, Mr. McIntosh. Mr. Loubier.
[Translation]
Mr. Loubier: Mr. Chairman, I don't have any comments. It's very clear.
[English]
The Chairman: Thank you. Mr. Williams.
Mr. Williams: Thank you, Mr. Chairman. Yes, I have a question. I noticed that you were talking about the need to balance the risk and that the government should be more careful in designating essential employees and should not enforce this elimination of the right to arbitration.
The government has already stated that it is giving up the wage freeze. If it were to give up the waiver of the arbitration, would your union be amenable to the idea of building into the collective agreement, and to the wage scales applicable to your members, a differential to recognize merit where it is applicable? This is so that people whose performance is above and beyond the average can be compensated accordingly, and of course the converse would also apply. For those whose performance is less than adequate, that perhaps would be reflected in their income as well.
Mr. McIntosh: We are quite prepared to sit down and negotiate those sorts of provisions in a fair and balanced bargaining process. We have in fact, in our scientific research collective agreement, a provision that is a form of merit pay.
We have had major problems with merit pay. There are many conditions that need to be met to make sure that it's an objective and fair process with access to resolving problems and inequities in its application. But we are certainly prepared to sit down and talk to the employer across the bargaining table on whichever position it puts forward, as long as they're prepared to talk to us and, if we are unable to reach an agreement, that there is a fair method of resolving that dispute.
Mr. Williams: So you're prepared to acknowledge that merit would play a real role in the compensation of employees, if one could differentiate between good employees and less productive employees, in a collective bargaining system if the government were to allow for binding arbitration?
Mr. McIntosh: Yes. I'll just again emphasize the condition that there is a fair process of resolving any disputes that arise in setting up the rules to establish some system of merit or other pay adjustments.
Mr. Williams: If we carry that point one step further, if we recognize that merit is beneficial in a situation where perhaps the government is downsizing and some people have to be let go, is it appropriate for the government to focus on those who are less productive and keep those who are highly motivated?
Mr. McIntosh: On that particular point, we are mixing two issues here. There's the question of the Public Service Employment Act, which is not on the table here. That is under section 29, which is the lack of work or discontinuance of a function or transfer of work to outside. It's the basis on which the employer decides on a redundancy and eventually the risk of a lay-off.
The other side is the question of performance. As for a person who is not performing, there are measures already in existence under the act for management to deal with an unproductive employee.
Mr. Williams: I was talking of those who were less productive than others, not necessarily non-productive. if we have to decide who is to be let go and who is to be retained, wouldn't it be appropriate to keep the best and let the others go?
Mr. McIntosh: In fact, I think this issue is already addressed, with due respect, under the existing authorities of the employer. There is a reverse-order-of-merit process under section 33 of the Public Service Employment Act, which determines that management makes a determination in the event of a reduction of similar jobs. Some of those positions will carry on, but the decision as to who goes is on the basis of a reverse order of merit. So that judgment is already explicit in the process of defining or identifying who is to be laid off.
Mr. Williams: Thank you, Mr. Chairman.
The Chairman: Thanks, Mr. Williams. Mr. Fewchuk.
Mr. Fewchuk (Selkirk - Red River): Just to follow up that question, you said you ``define''. What do you mean by that? Is it seniority in the job? How do we qualify one as better than another?
Mr. McIntosh: I'm sorry?
.1625
Mr. Fewchuk: Merit. How do you qualify that? What is it under union...?
Mr. Stannard: In the normal process, I'll give the example of the current exercise, where you come down to an area and they determine that a certain number of employees will no longer have employment. There are various ways, because of course all the jobs differ. It can range from a combination of a panel sitting down and looking at job reviews, looking at job descriptions, performance appraisals, and in some places they may even have some type of test, or exams, or papers published. Because we represent a wide variety of employees, it does vary, and usually it's the manager of the department concerned that will select the exact mechanism in consultation with the union representatives.
Mr. Fewchuk: Thank you.
The Chairman: Mr. Williams or Mr. Grubel.
Mr. Grubel: No, I don't....
The Chairman: You've heard the report from Mr. Bean. Do you essentially agree with the provisions there? You've limited your comments to us to arbitration alone.
Mr. McIntosh: As you know, the institute, along with other bargaining agents, did reach an agreement with the employer on those issues, so we have deferred comment on those provisions of Bill C-31. We respect, of course, Mr. Bean's views and -
The Chairman: I didn't have time to ask this of Mr. Bean, but as I understand it, all unions except PSAC and the Social Science Employees Association did sign agreements on workforce adjustment with the government.
Mr. McIntosh: Yes, in fact there was a third one, but all others did. I believe it's fourteen.
The Chairman: Fourteen unions signed?
Mr. McIntosh: Out of seventeen, yes.
The Chairman: That represents what percentage of our public service workers?
Mr. McIntosh: If memory serves me correctly, I can give you the figures. I think it was 40%, which would be roughly 20% or 25% of the total employment.
The Chairman: Signed that contract.
Mr. McIntosh: Correct.
The Chairman: Okay. By far the largest union, then, is PSAC -
Mr. McIntosh: That's correct.
The Chairman: - which represents approximately what percentage of our public servants?
Mr. McIntosh: I believe it's perhaps 150,000 within Treasury Board's jurisdiction. I'm not certain of that figure, but we can always provide that to you.
The Chairman: Do you have any figures on contracting out?
Mr. McIntosh: Shortly after the current government took office in 1993, there was some discussion with bargaining agents under the chair of Ms Catterall looking into the contracting-out practices of the employer. At that time - I believe these were 1993 figures - in the order of $5.2 billion was being spent annually on contracted services. Some of those, of course, are services that could be provided, in our view, more efficiently by members of our respective bargaining units, and I refer to my colleague, Vice-President Stannard, a member of the CS community, who lives with this daily. If you wish to indulge Blair, he could give you more detail on that.
The Chairman: Mr. Bean said it was about $2 billion, up to $7 billion. You're saying it started at $5.2 billion in 1993. What is it up to now?
Mr. McIntosh: I don't have any more recent figures. We watch that. I do not find the figure he mentioned of $7 billion-plus surprising.
Mr. Stannard: In our investigations a couple of years ago we found that one of the problems was the way that Supply and Services - I guess it was that department in those days - classified some of the contracts. There was no standard way across the government of classifying service contracts; therefore it was very difficult to go through the public finances and separate out the goods contracts from the services contracts.
If you go to a department, they can very often select out -
The Chairman: It's a very easy thing to do. You just use the goods and services tax manual.
Mr. Stannard: We were being told in those days that the numbers that came out varied greatly, in a magnitude of one to two almost, in some cases, as to what people were saying were contracts covering services.
.1630
Some departments gave personal service contracts only, as opposed to a large company where you might contract for the services of 300 people. Certainly, in the case of the computer systems group, we've seen all types of different arrangements, which made it very difficult.
But it was in the billions, and it was increasing annually. The figures are usually two years behind by the time they're available to the public.
The Chairman: Thank you.
Mr. Grubel.
Mr Grubel: If I may be sort of rough in my description of what unions do for their employees, it is to bargain for the level of compensation and then all of these other things, like contracting out, termination conditions, and that kind of thing.
Can I address the question of the level of compensation? I know they're interrelated.
I have two questions. Since about 1990 the crisis has hit Canada. What has been the development of the level of compensation of your members relative to that in the private sector?
Secondly, I wonder what your organization's view is with respect to institutionalizing a set of rules that would maintain the relationship between private sector compensation and what your union would receive with respect to level.
Mr. McIntosh: That's a large question, but first of all, the pay research bureau was disbanded by the previous government. The pay research bureau's mandate was to make comparisons in a systematic fashion between a public service job and a comparable private sector job. So we don't have consistent reliable data for many occupations in the public service.
The second point I should make is that the wages in our membership, and indeed across the public service, have been frozen at zero for five of the last six years, so there has been no increase. In fact, since 1994 there has been no movement even within the pay ranges that apply to those members.
Thirdly, what data we do have for our membership, such as professional engineering societies and for informatics professionals, tends to show that as time goes on it's getting more difficult to recruit specialized professionals to the public service.
So the question really comes down to this. What kind of public service does the government wish to have? One that is depreciating as wages sink relative to the private sector?
We feel we need quite desperately at this stage a resumption of full bargaining rights where we can have the opportunity to debate these issues with the employer and try to negotiate a successful conclusion, and if not, at least have access to an objective third party that will resolve those disputes.
Mr. Grubel: But in principle your organization is ready...instead of subjecting it to bargaining automatically determining wage increases relative to how comparable groups are doing in the private sector. Is that something you reject?
Mr. McIntosh: No. What we do as part of the bargaining process is make those comparisons. We don't pick a figure out of the air; we come to the bargaining table with what we consider to be a reasoned position that we engage then with the employer in negotiations as to what is a fair and reasonable rate of pay for those employees.
Mr. Grubel: Fair and reasonable are weasel words. It's all in the eyes of the beholder. What I'm trying to suggest is that in order to take these words out of the bargaining process and make them objective.... I would just urge this.
I'm sure there is no answer to my comment, but I would just like to say that we've also heard witnesses here who were saying that the private sector also has difficulty hiring good people in information sciences, and the reason obviously is that our wages in Canada, relative to those in the United States, are too low and the taxes are too high. Is this only in that one field, or are there also other fields where the government is having difficulty recruiting people?
Mr. McIntosh: Of course, the government is going through downsizing, but as it becomes clearer that in certain key areas - and those are expected to expand as the downsizing period, hopefully, concludes - there is going to be a continuation of the delivery of certain public services, and you need qualified, capable employees to deliver those services.
Mr. Grubel: That's clear.
.1635
Mr. McIntosh: We're already seeing the problem in a few strategic areas, such as informatics and certain types of engineering, and of course the AU group in Revenue Canada.
Mr. Grubel: Do you actually have objective information on this, or is this just looking forward to what might happen?
Mr. McIntosh: As I was saying, since the demise of the Pay Research Bureau we don't have data that is commonly accepted by the Treasury Board and ourselves as factual. We could probably pull out some surveys from Ontario professional engineering societies, for example, and some across the country.
Mr. Grubel: I was referring to your second point as to the difficulty the government has in hiring in certain fields because the wages are inadequate.
Mr. McIntosh: We definitely have growing anecdotal information -
Mr. Grubel: Anecdotal.
Mr. McIntosh: - of problems hiring people, particularly in the CS and AU communities.
Do you have any, Blair?
Mr. Stannard: Within about the last ten days I attended the Public Service Commission-sponsored session, Vision Conference on Staffing. It was made up of union reps, management reps, commission reps and Treasury Board reps. One of the things we identified as a major issue is how the public service of the future will be able to meet a number of challenges, given that we don't know what the scenario will be down the road.
Given the changing nature - and I speak in the generic way here - of the employment contract, how will the public service attract qualified, non-partisan, competent people when we will be living in a world where a career may span many jobs?
Mr. Grubel: This is the future, not now.
Mr. Stannard: Well, this is what we have to address now, because the problem is already arising, and if we are not positioned as a public service - and I'm speaking here of the way the commission is looking at it - then we will not be able to recruit the people, period. There are already gaps in some of the communities within the government. However, due to the downsizing exercise and the massive moving around of people, it's very difficult to get actual statistical data, again. They may be available after all the moves have been done, after the three-year period.
For example, I sit on the board of REDO, which is helping this community move the people who are leaving the government into the private sector. The largest industry in this region is basically high-tech, and those are the jobs you are going to lose people to. We set up an inventory, part of the PSC having one, of people who are interested in doing job swaps, and we are getting a large number of your informatics professionals, for example, volunteering to leave when really more services were being demanded of them within the government. So the problem is they're already trying to get out, the good people especially.
The problem in comparing the salaries to those in the private sector - and I'll use the example of computer systems, because that's the field I am in - is there are not large bodies of unionized computer professionals within large organizations of government. You don't have companies that, for example, hire 7,000 computer professionals, as the federal government does. Therefore comparing them on a unit-by-unit basis is very difficult. You do have unionized and non-unionized shops, depending on the company or the employer you're dealing with, but the number of employees varies greatly.
We are also now into a global marketplace, where in fact the Government of Canada will have to compete with outside markets in the United States or elsewhere.
Mr. Grubel: Exactly.
The Chairman: Thank you, Mr. Grubel.
Mr. Dhaliwal, please.
Mr. Dhaliwal (Vancouver South): Thank you, Mr. Chairman.
I was going to ask this question of Mr. Bean, but unfortunately he had to leave. I don't know if you can answer this question.
I'd be interested to hear your views on how your members or how members in general have coped with this downsizing. Have some of them opened small businesses or gone into other business or to the private sector as a result? I wonder if you have any information. Do you follow up with your employees who have left as to how they've coped with the changes and what the results have been, in general? It's just to give me an idea.
Mr. Stannard: I don't have any statistical information per se, but of course all employees are people, so you see the normal range of family problems arising from any kind of massive change of employment, the way we're seeing in this community. Sitting on the board of REDO certainly brings that to my attention.
.1640
We have, in the public fora that we have sponsored in order to assist public servants in their transition, come across members who have left. Some have fared very well. Some have fared not so well. There's a lot of interest, particularly amongst our members, and that may be because they all come from professional backgrounds.
We provided, for example, the equivalent of a person-year to assist the Ottawa-Carleton Entrepreneurship Centre in answering calls, because the number of calls they got in the last year doubled - a 100% increase. Approximately 9,000 of those calls came from people who were working within the Canadian public service. So there were 9,000 inquiries in this town alone from people wanting to find out about starting their own business. We don't track individual cases per se, so we can't really say how many actually did it, how many were successful. We still have two or three more years of transition to go through. Maybe at the end of the five years some type of statistic will be out there.
We also know, within the region, what types of industry sectors are growth ones - and I'm including the Outaouais here, as well as Ottawa-Carleton. There are basically two industries, tourism and high-tech, and the servicing of those industries, so those are the areas that you'll look at if you're going into and want to have a fair chance at a market.
On the other hand, there are people who have always wanted to take up a second career in a certain field unrelated to those, and they are doing so. One way of tracking these is through the use of the training allowances provided under the severance arrangements. But again, those figures are just starting to come in, in terms of which courses people are taking.
What we're trying to do is tell people which companies within their region will be hiring and what types of skills they will need. We tell them that we understand the types of skills they have and inform them of the training resources that offer them transition training to get from point A to point B. But we aren't an individual placement service per se.
It may depend on their personal characteristics, but some people cope better than others. It may have been that they planned to do so. If you have someone who was going to retire at age 55 and is now age 53, he or she is probably in a better position to go through the transition than someone who, say, is 24 years of age and suddenly finds out that he is not going to have a job.
So it's being tracked, and certainly it does vary from person to person, but we haven't seen a trend yet because there isn't a large enough body of data.
The Chairman: I certainly agree with you, Mr. Stannard, that older is better.
Mr. Dhaliwal: May I just make one comment? Generally, I perceive that people think - and I don't know if you agree - that the government has done a pretty good job in trying to create this transition, aside from the fact of whether or not we should lay off this many people and all that. But I think if you accept the fact that we have to do it, there has been actually a pretty good program put in place to help people through the transition process of moving on to other things. Generally, that's been accepted fairly well by the general membership.
Mr. McIntosh: I think we'd have to reserve judgment on that, with due respect. Certainly, the whole downsizing agenda - and there are many problems - has created a great deal of anxiety in the workplace. It has really adversely affected productivity. I could give you a litany of problems with it.
As part of an adjunct to the REDO process we also have the joint adjustment process in place. It is working to try to resolve some of these difficulties, but we've run into many obstacles with the employer, such as the substitution program. If a full and free substitution program, which we were seeking at this time last year, had been in place, we may well have cut into the number of people who are involuntarily laid off. We feel there are enough people, at least in certain groups, to accommodate those who are being laid off. In other words, there are enough volunteers prepared to exchange their jobs with people who need to stay, who need a job.
Mr. Dhaliwal: Thank you, Mr. Chairman.
The Chairman: Thank you, Mr. Dhaliwal.
Is there any chance you could stay until after the next witness?
Mr. McIntosh: Sure.
The Chairman: Would that inconvenience you greatly? I have a number of questions I'd like to ask you.
Mr. McIntosh: Okay.
The Chairman: Thank you very much.
Our next witnesses are from the National Federation of Nurses' Unions, Kathleen Connors, president, and Carol Richardson, executive director.
.1645
Welcome, and we look forward to your presentation.
Ms Kathleen Connors (President, National Federation of Nurses' Unions): Good afternoon.
By way of background information, the National Federation of Nurses' Unions was founded in the early 1980s and we now represent over 50,000 unionized Canadian nurses in a federation of six provincial unions with one federal component.
Part of the reason for being of the National Federation of Nurses' Unions, as expressed in our constitution, is to provide a national voice for promoting progressive legislation and policy on matters of national importance to unionized nurses. In pursuing this objective, we address a broad range of issues related to Canada's social security system. When we refer to the social security system we consider medicare and the social program a very important part of Canada's social security safety net.
The NFNU believes the federal budget presented in February 1996 represents the political values and priorities of the current government. The budget is a tangible expression of a political vision and it must reflect the values and concerns of the majority of Canadians. It should meet the needs for decent and secure jobs, incomes, housing, child care, health care, education, and a clean and safe environment. This is our vision for Canada and its people.
The Budget Implementation Act being considered by the Standing Committee on Finance, as well as both the 1995 and 1996 budgets, falls short of this vision in our eyes. We have examined the budget as presented by the federal finance minister and the modification and elimination of various pieces of legislation that will take place through the Budget Implementation Act.
The guidelines of the 1996 budget and the federal analysis of the economic conditions in which the country finds itself are faulty. This problem, coupled with the problematic analysis of government finances, has led the government to adopt an economic plan that is inconsistent with our vision of a just society. The primary solution to the flawed 1996 federal budget would be to eliminate this legislation and present a federal budget that would be consistent with maintaining a just society.
Not only should this legislation be eliminated, but changes in the intent of both the 1995 and 1996 federal budgets should: restore the universality of old age security; restore the right of federally employed nurses to binding arbitration; eliminate changes to various pieces of federal legislation that were made pursuant to both the 1995 and 1996 budgets in order to establish the new Canada health and social transfer system; restore the Canada Health Act to its 1994 form; and amend the Established Programs Financing Act in order that the federal funding formula for health care would return to that which was established under the EPF Act when it first became law.
The cash floor proposed in the 1996 budget is insufficient for all the CHST programs it is meant to cover. I'd like to comment on those four points a little more in depth.
With respect to the issue of binding arbitration, the nursing group of the Professional Institute of the Public Service of Canada is affiliated with us. The 1996 budget eliminates the right to binding arbitration for those nurses. It is the federal government's intention to suspend access to binding arbitration for a three-year period.
The nurses who are members of the Professional Institute nursing group are designated and cannot go on strike, so how are they to resolve a dispute? Collectively beg? There needs to be binding arbitration there for those nurses to deal with a dispute resolution in the negotiation process. They have no access to binding arbitration and they cannot go on strike because they're designated as essential employees.
.1650
With respect to unemployment insurance, according to budget documents, Ottawa plans to raise $18.8 billion in UI premiums from employers and employees in the 1996-97 fiscal year, but that does not include the impact of the UI reform on premium payments. This move will boost UI premiums about $20 billion in the first year, ending March 31, 1997. Speeding up UI premium payments in the first three months of 1997 would mean between $1.5 billion and $1.8 billion in additional revenues in 1996-97. That would be in addition to the estimated $4.5 billion surplus in the UI fund that is already expected in 1996. Obviously the money for real job creation exists, in our minds.
With respect to the issue that concerns us most, health care, since 1982 the provinces have lost almost $41 billion from transfer cuts, resulting in major health care cutbacks by provincial governments and further offloading onto municipal governments, voluntary organizations and families of this country.
Downsizing of hospitals through bed cuts, staff lay-offs and contracting out is accelerating. The list of de-insured medical services and drugs grows longer. As provincial governments withdraw from such areas as drug and dental insurance plans, private companies are moving in to fill the vacuum. We heard about the debacle here in Ontario last week with that issue.
Piece by piece, Canada's health care system is being privatized, and it is this insidious erosion of the system that is the greatest threat to medicare and to our public, single-payer, universal health insurance system.
The concept of a cash floor was established in the 1996 budget. The concept here was to ensure enough cash remained in the federal portion to make sure the federal government could always ensure the medicare national standards. That's a laudable endeavour, but this cash floor was set at $11 billion. This amount is for all the programs covered by the Canada health and social transfer. It is inadequate, as currently health alone is $7 billion. This would only leave about $4 billion for federally assisted social assistance and post-secondary education.
Quite frankly, as a nurse, I can tell you the three are interrelated. If people do not have access to social assistance, if they do not have access to post-secondary education, there is a health care impact, and the health care system will ultimately bear what isn't borne by those other two systems if they're not available.
There should be a cash floor as well as national standards for all three programs in the CHST, not just health. The cash floor should be calculated using the 1987 EPF formula.
The 1995 budget allowed for cuts in cash transfers of $700 million, and these will continue for two years before that $11 billion cash floor is established. So while Canadians wait for the cash floor, $700 million will be cut. That means many nursing jobs will be lost and patient care will suffer.
The goal of recommendations 3 and 4 is to eliminate the CHST and to ensure federal financing measures are strong enough to protect national standards.
The Chairman: Excuse me, Ms Connors. Do you have a written brief that's been circulated to members? We don't seem to have it.
Ms Connors: It has been provided to the clerk, I believe.
Ms Carol Richardson (Executive Director, National Federation of Nurses' Unions): Yes, she has it.
The Clerk: I gave it to translation.
The Chairman: Okay, fine. Thanks.
Ms Connors: The fact that Canada has a world-class medicare system is primarily based on the progressive federal funding mechanisms that were established in the original EPF legislation.
Our fifth recommendation is that the budget implementation legislation be set aside and a royal commission that would travel across Canada be established to determine how much Canadians value their social safety net.
From our recommendations it is clear that the NFNU does not accept the budget implementation legislation or the last two budgets presented by this government.
We would be pleased to answer any questions.
The Chairman: Thank you, Ms Connors.
Mr. Loubier.
.1655
[Translation]
Mr. Loubier: Ms Connors, if you were to suggest any immediate measures to change Bill C-31 with respect to all the problems and issues you have raised, what would they be? What adjustments, improvements or repeals would you suggest to the provisions of this bill?
[English]
Ms Connors: I would repeat that I think there are five fundamental issues we would see. The first would be the restoration of the universality of old age security. Second is restoring the right of federally employed nurses to binding arbitration as a means of dispute resolution. Third would be elimination of changes to various pieces of federal legislation that were made pursuant to the 1995 and 1996 budgets in order to establish the Canada health and social transfer system. We just don't think the system that is proposed under CHST is going to work and we would prefer to go back to EPF and CAP.
Fourth is restoration of the Canada Health Act to its 1994 form. Amend the Established Programs Financing Act so that the federal funding formula for health care can return to that which was established when EPF first came into law in 1977. The cash floor proposed in the 1996 budget is insufficient for the CHST programs. Fifth, we say the legislation should be set aside and a royal commission be established.
[Translation]
Mr. Loubier: But you did refer to the erosion of universal health care and the fact that needs are becoming greater while resources are decreasing. What direct link can be established between this situation and Bill C-31 that we are now studying?
[English]
Ms Connors: With respect to that, the reduction in the cash that is going to the provinces is now being offloaded onto health care facilities. There is some relationship between the deficit reduction agendas of federal and provincial governments.
What we're seeing played out in our communities across this country, in nursing homes, in acute care hospitals, and in home care, is closure of beds, lay-off of nurses, and no allocation of increased funding for home care programs when more people are being discharged home quicker and sicker. The money isn't there to care for these patients.
In terms of the impact, I've talked to nurses recently as I've been at meetings in the provinces. The workload that nurses are bearing is quite back-breaking, and there isn't the time to provide the kind of safe, competent, ethical care that nurses are educated to give. That's a direct impact of what we're seeing.
Reductions in social service moneys in the provinces are literally putting people onto the streets, and when people live on the streets and don't have enough money for food and housing they end up ill. When jobs are eliminated and there isn't this kind of social safety net to provide for assistance, then we see that come to the health care system in the forms of increased family violence, alcohol and chemical substance abuse, and break-ups of families. These are the realities we're seeing as nurses every day in the health care system as it relates to these financial initiatives taken by governments, federally and provincially.
Ms Richardson: I have one particular example that happened in Ontario. What we have always advocated is a universal medicare system, accessible to all based on the same terms and conditions. There was a recent case in Ontario where a woman was seeking MRI services and was able to obtain a priority for those services on the basis of the fact that the private insurer put her higher up on the waiting list.
One thing we have been proud of in the Canadian system is that it gives the same services to all people. What's happening is that with the cuts in federal funding, there's more pressure for these services in the provinces and there seems to be a breakdown in that universality in that some people, in terms of having these kinds of services, are able to get to the front of the line based on private insurance. That is not medicare as we envision it.
.1700
Mr. Loubier: Merci.
The Chairman: Merci, Monsieur Loubier.
Mr. Duhamel.
Mr. Duhamel (St. Boniface): Thank you, Mr. Chairman.
Thank you for your presentation, Ms Connors. Hello, Ms Richardson.
My question is as follows. Regarding the changes you would like to see, the five points and particularly the first four, do you have any sense of the cost it would entail? I know it is no doubt a very tough question, but there are a number of programs, if you wish, that I think are probably quite costly.
Here's the difficulty. I think most MPs I know, perhaps all of them, conceptually and philosophically would have no difficulties with your vision, if you wish, and some of the things you would like to have done. On the other hand, we have government saying, look, our deficit and our debt are really out of hand, they are out of control, and we need to reduce; we need to cut down our expenditures.
Is it your argument then that it's a false kind of economy, a false kind of reduction, because of the points you've just made? That is, you have additional disintegration of the family, additional costs that are hidden that in fact are greater than that which is ``saved''.
Ms Richardson: One of the points we have made at many of our presentations to the finance committee and other legislative committees is concerning the taxation within the Canadian system. Really, we believe the solution to the problems is a fairer taxation system, rather than approaching debt and deficit problems through the cutback of social programs.
When you have the cutback of social programs, what you find is that you adversely affect the socio-economic status of your population. When you affect the socio-economic status of that population, research shows us that the health of that population is affected in such a way that medicare services are used more. So in fact, doing cutbacks, particularly as it applies to health services and particularly with our aging population, is going to get you in a situation where the costs are more, not less. You're robbing Peter to pay Paul.
Mr. Duhamel: As a slight clarification then with respect to increases to taxes, are you talking at the corporate level and the individual level, or both levels? I want to make sure I did not misunderstand.
Ms Richardson: Actually, we are talking at the individual level in terms of a wealth taxation, as well as looking at the corporate level.
When we look at taxation and compare it, for instance, from the 1950s to our status now in 1995, what we find is the corporations are paying a much smaller percentage of taxation towards social programs. So it's very problematic. There has to be a fair development in terms of taxation policy.
Mr. Duhamel: Thank you.
Ms Connors: Further, Mr. Duhamel, on that whole taxation issue with respect to corporations, the corporations are very quick to claim they have a competitive advantage in Canada comparing themselves to the United States because of the existence of a universal health care system. In my mind, they can't have the best of both worlds. If you want the corporate advantage of having a medicare system that provides competitive advantage over not having to apply individual health care insurance for each of your employees, then you have to be willing to put some money into the system to pay for that universal system. I think that's one of the realities corporate Canada is going to have to address quite quickly.
We heard the claims about competitive advantage, and I would suggest that Canadian corporations want to remain competitive in this global market in which we find ourselves.
The Chairman: Thank you, Mr. Duhamel.
Mr. Dhaliwal.
Mr. Dhaliwal: Thank you very much, Mr. Chairman. I have two questions I'd like to ask. I think this is a very interesting debate in terms of the financial resources for our medicare system.
There are some people who argue that it's not the money factor as much as it is our having to explore new ways of delivering the service. Already provincial governments are finding new ways. You're finding community clinics that were never open before to reduce the number of people who go to emergency. You're providing more home care, which is at a lower cost. There are new initiatives and that's what we have to work towards: new initiatives to reduce the cost and some restructuring.
.1705
The real problem is the way we deliver it, and there are ways of better delivering our medicare services. Health care workers and the government need to get together as a group on how we can improve the delivery of the services. That is the first question.
As to the second question, I recently met with a doctor, a specialist, who has moved to the U.S. He has informed me that a lot of our good health care workers have moved south, which is very unfortunate.
In the States they provide this international clinic and they're using some of our best people to run the international clinic, serving the international community. His solution was that because we have some of the best care in the world, perhaps we could look at a similar process or structure where we could also have international clinics. That could help preserve some of the infrastructure we have today by also serving some of the international markets and having international clinics like the U.S. has.
I wonder if you could comment on that, keeping in mind that we do have to deal with a financial situation in Canada and that all governments are trying to deal with it. Maybe there are other creative ways and solutions to deal with it. We're not going to get a heck of a lot of money because it's just not available at this time. What are the alternative solutions to dealing with some of the problems in the health care area?
Ms Connors: With respect to your first question and comment, I am very proud to say that five of our member organizations have worked together to create a model for community health centres, which they are now working actively to promote with the provincial governments, the regional health authorities, and whoever will listen to them at the community and provincial levels.
I firmly believe and our organization firmly believes that there is a role of national leadership required in this area. While we certainly agree that we need improvements, and I'd be pleased to talk at length about the kinds of visions we have that could in fact improve the health care system, I think it's incumbent that there be federal leadership on this issue and that the issue of the cash floor and the continuing loss of dollars to health care and social programs are very real issues that have to be addressed.
I think things like the fact that pharmaceutical costs in this country now equal the costs of physicians' services and the fact that there are monopolies provided to transnational drug companies through the patent legislation are issues that need to be addressed. I know there's a review coming in 1997 and I would encourage this government to take a very hard look at the kinds of dollars and the kinds of monopolies that have been created under this legislation.
We also know that there are discussions occurring with respect to the issue of fee for service. Until the issue of reimbursement of physicians is addressed in this country, there's an open-ended cheque there that drives health care costs, and we have to do something about that issue.
Looking at the social determinants of health, the federal government is getting out of social housing. Housing issues are a health issue. Those sorts of things are there.
The second point you raised was the issue of the loss of our world-class educated health care workers. That's one of the direct results of cutbacks in funding to post-secondary health care education. People are being educated as nurses in our post-secondary education...which is publicly funded, and they're not able to find jobs. Then they go to America, which gains world-class educated providers with no social investment in this. They get them ready to run.
My last comment is that I get kind of emotional with respect to the idea of an international clinic. Immediately the concept of Alberta's Hotel de Health comes to mind. One of the things that Canadian people say time and time again is that we want our system publicly funded and universal; we don't want it Americanized. That is something that is repugnant to us in our organization and is also repugnant to very many Canadians, because if you put those kinds of systems in to be the safety valve, that is not what you're going to get. You're going to get what has happened in Australia and New Zealand, where more and more services are being provided in the private sector. It's a two-tiered system.
.1710
We have lost the gem of a social program that medicare was and that the Liberal Party played a role in founding.
Mr. Dhaliwal: Thank you.
The Chairman: Thank you, Mr. Dhaliwal.
Are there any other questions?
Ms Connors and Ms Richardson, on behalf of all members, may I thank you very much for coming before us. We appreciate it very much.
Ms Connors: I hope you give due consideration to those recommendations. There are only five of them.
The Chairman: They're very important recommendations, and I'm sure they will receive the consideration they deserve.
Fellow members, we are beyond time by ten minutes. I wanted to ask some questions of PIPSC and perhaps of PSAC, if there's anybody here from PSAC. We need only three members for a quorum. There won't be any votes, but if anybody wants to, please stay.
Could I ask you to come back? Gentlemen, would you mind?
Please don't feel you have to stay, members. You might have other things you want to do.
Thank you. There may be other members who want to ask you questions.
You said on page 6 of your submission to us that there are areas where some of our workers are designated as essential for safety or things like that and that this is a trick that's used to give you no power to bargain with us. Can you give us some examples of where this has been used and it's just absurd that a person would be required for safety?
Mr. McIntosh: Yes. There are many individual situations, but probably the best example would be our nursing group, where no less than 110% of the bargaining unit was designated for safety and security reasons. That is, some vacant positions were also designated as essential to the safety and security of the public. That's how absurd it was. Even though they were empty, the Treasury Board put forward that list.
One would naturally think that certainly a good percentage of registered nurses are performing a service that's essential to public safety and security, but there are also members in that unit who are developing policy and doing substantial administrative work as well. We feel confident that the safety and security of the public would be ensured with a much lower number; perhaps 40% or 50% of that unit could assure safety and security.
That's an example, but there are many others.
The Chairman: Thank you.
You mentioned the freeze on wages and the impact that has had on morale, and I can understand that. Our public servants' salaries, our salaries and our staffs' salaries in particular, have been frozen for five years now. Is that right?
Mr. McIntosh: That's correct. It's been six years, really - since 1991.
The Chairman: It's only because of the dedication and loyalty of my staff that they even consider being here; it's certainly not because of the money.
To overcome this, would it be possible to go to some type of envelope approach? We know the overall amount of money perhaps has to be frozen, but managers would be given this envelope and they could either lay off or reduce salaries but give incentive pay within that. Would a system such as that work?
Mr. McIntosh: Our message here today is we're prepared to discuss, entertain and negotiate any kind of position the employer is prepared to put forward, as long as we have a process in place where we can address it. That has been the single most disturbing aspect of the freeze. Not only have people suffered, obviously, as you point out, but there's no formal legal process to address those concerns on both sides. That's why we feel strongly that if, as the member mentioned earlier about performance pay....
Personally I have a lot of concerns about performance pay, but at least establish a process where we can negotiate that.
.1715
The Chairman: Binding arbitration?
Mr. McIntosh: That means arbitration.
The Chairman: And that's all you need to get that going?
Mr. McIntosh: We'd need arbitration and/or a more realistic definition of designations. But arbitration would certainly be the answer.
The Chairman: Could I ask you one more question? You were the group that last year brought to our committee, when we were looking at Bill C-56.... Was that the bill? Or was it Bill C-76?
Mr. McIntosh: It was Bill C-17, wasn't it?
The Chairman: It was the budget implementation bill.
Mr. McIntosh: Yes, correct.
The Chairman: It was one of those funny numbers.
You were the ones who more than any group came to us and said ``We want the concept of substitution''.
Mr. McIntosh: Correct.
The Chairman: In other words, if you're going to lay off a whole bunch of people in one department that's become totally redundant because of your changing priorities, have a generous package that can be offered to public servants right across the entire 250,000. You just don't lay off everybody in that one group. You allow those who want to leave to take the package and those who want to stay to go into other jobs. People might want to take the retirement in other departments. That in effect was the concept you brought to us as a committee.
We were struck immensely by the reasonableness of that approach, and as a result of your representations to us we recommended to the government in a special side report when we passed Bill C-76 that they pursue the policy of substitution. I was a little distressed to hear today that you're saying it's not working as well as you would have thought or hoped. Why is that?
Mr. McIntosh: Well, I certainly want to recognize the tremendous impact the committee has had, because it was shortly after those discussions that the Treasury Board minister issued new instructions to allow for substitution.
The problem we have now is it's there at the discretion, in effect, of management. It's not being done in a systematic fashion. That has been our major concern. Also, some deputy ministers are not as committed as others to the process. Certainly, thanks largely to your efforts, at least the process is there on a discretionary basis, but we would like to take it the one step further and make it a more formal process with a commitment of resources to ensure that every opportunity is made.
For example, in the national capital region there have been good efforts within departments to allow for these exchanges, but as of the end of January we had something like 800 people facing surplus status, while we knew we had another list of in excess of 900 people who were willing to switch. Of course their qualifications don't always match up, but some of them do, and there has to be a commitment on the part of local managers to try to work out those exchanges.
So with good managers it's working and with not-so-good managers it's not working. It's a discretionary thing that has certainly saved some jobs but could be exploited to save more jobs.
The Chairman: We understood that the discretion left to management to say a person must go and can't be substituted was to be exercised only in very rare cases, where management might say ``There's no hope that this person from another department will have the skills or background I could ever need''. But you're saying the lack of substitution is more widespread than that.
Mr. McIntosh: To give you a more specific example, Statistics Canada will not accept any exchanges, period. That's one organization. We have brought that forward, as other unions have, but to no avail. That is their standing position. They will not accept it.
The Chairman: What reason do they give?
Mr. McIntosh: The explanation is not, as far as I'm concerned anyway, a very valid one, but essentially they feel the planning within their department would be adversely affected, which would not permit them to accept people from other departments. But everyone is in the same situation. We're not islands here. We are all part of the public service, and we have to help each other out in this time.
Mr. Stannard: I'd add that there was one exchange made involving that department, and it became a subject within the newspapers because it was at a managerial level. It was an abuse of the system. Therefore we received negative feedback, not only from that department but from the department that had been the other partner, NRCan, that they would be extremely reluctant to entertain any suggestions of swaps because of the political and public outcry at that one case of abuse.
.1720
The Chairman: Who was it who cried abuse?
Mr. Stannard: It was a swap done at a senior executive level. I don't wish to discuss the individuals concerned, but it was public domain information. Unfortunately, it had a ramification on thousands of public servants in two major departments.
The Chairman: Was it one of the departments that cried abuse? Was it the public media? Was it a member of Parliament?
Mr. Stannard: It was an abuse of the system that became then a matter of public knowledge.
The Chairman: I am sorry. I don't understand this. It was an abuse of what system, the substitution system?
Mr. Duhamel: It was charged, I believe, that it was taking advantage of the rules in place to the benefit of the person concerned.
The Chairman: The person who was given the job or the person who was moved out?
Mr. Duhamel: The person who was able to leave. I believe that's -
The Chairman: The person who was able to leave.
Mr. Duhamel: Yes.
The Chairman: Yes, Ron?
Mr. Duhamel: I want a clarification. That topic is an important one, exceptionally so to this committee because you were instrumental in having government look at it. Would it not be wise to ask for a brief report with respect to the number of substitutions? This could be a matter that could be examined by members here. I would so propose. I think it's worth pursuing.
The Chairman: I think that's a good idea. I think we should ask the minister to get that to us very quickly.
Is there anything else you wish to add?
Mr. McIntosh: Where do I begin?
I don't like to miss the opportunity to comment on the joint adjustment process that Minister Eggleton signed with bargaining agents on May 30, 1995.
We've had some difficulties getting it in effect, particularly in this region, the national capital region, but it has worked effectively in Quebec and in Manitoba. I think reminding deputy ministers and senior officials of government that there must be a commitment on their part to make the joint adjustment process really effective is valuable, especially coming from a body of this nature.
Mr. Duhamel: As a clarification, are we talking about substitutions here when you mention that, sir?
Mr. McIntosh: No, the joint adjustment process is a joint union-management committee that is looking at transition. Included in that is substitutions between departments, but it also includes working with private sector and community groups to try to find placement opportunities.
Mr. Duhamel: I think I understood most of what you said, but what I don't understand is why has it worked in Quebec, and why has it worked in Manitoba? What are the features? I had been led to believe that it was substitution that was causing the greatest difficulty, not necessarily by you people but by others. So why has it worked well in Quebec and Manitoba and not in the others, quite apart from substitution, which is something we'll look at separately?
Mr. McIntosh: To identify the key problems, I would say the commitment of management would be number one. In the other areas it has not been there.
The organization and authority of management has been a problem, particularly in the national capital region. People are appointed by managers to attend these meetings. They cannot speak beyond their own department, and there's only four, or five, or six departments that may be represented at that committee.
There's the question of resources, the time to do it. It takes time to make this system work. People are being cut all over, and they're very busy. It's a dedication of resources.
I'd say those are the three main reasons.
The Chairman: Mr. Fewchuk.
Mr. Fewchuk: I would like to follow this up a bit more. I was the chairman of a labour adjustment committee for the close-down of a big plant. I wonder if Manitoba followed this step. Did they have a board of six people with the union and all the people involved? They would evaluate the jobs and find replacements and also those who wanted to have a package. Was that done in Manitoba?
Mr. McIntosh: The package that was established by the Treasury Board is there to be used for people who are facing surplus status. But you're quite correct; it was a joint committee that looked at and is looking at alternatives within Manitoba, and it could be with other businesses and industry within that region.
.1725
Mr. Fewchuk: Does Ontario have that same type of group here that's going to do it?
Mr. McIntosh: That's correct.
Mr. Fewchuk: Do they have that set up now, the same as Manitoba?
Mr. McIntosh: Yes. There are eleven committees across the country, one corresponding to each province plus an eleventh for the national capital region.
Mr. Fewchuk: I'm just curious because some groups seem to work in this way. It makes me concerned about who's in this group, who the six people in charge are. I think that could be the problem.
Mr. McIntosh: True.
The Chairman: Thank you, Mr. Fewchuk.
Mr. Stannard.
Mr. Stannard: To carry on with Mr. Fewchuk's remark, I think part of the problem is that some of these committees were already up and running almost a year ago and some of them have had two meetings so far. One of the problems is that there's almost a one-year gap in the commencement of operation.
One of the problems, particularly in the national capital region, where a very large number of public servants will be exiting, is that we have never had a large-scale industrial downsizing like a steel company in Hamilton or an automotive company in Windsor, for example. These committees were well established within the private sector, but they are run according to government regulation.
Given the experience those committees had, it gave them a great asset in commencing the placing of the people, and they were well into the actual work before the committee within the national capital region had even had its first meeting. We have never had to have a committee in this region. I don't believe there has ever been one, and there has never been a massive downsizing in any major industry because the major industry in this town is government. I think part of the concern is that there's a time lag and a lack of experience.
The Chairman: Thanks, Mr. Fewchuk.
Mr. Stannard and Mr. McIntosh, once again, we've found your comments to us very appropriate and very helpful. Thank you very much.
Mr. Stannard: Thank you.
Mr. McIntosh: Thank you.
The Chairman: We're adjourned until tomorrow at 3:30 p.m.