[Recorded by Electronic Apparatus]
Tuesday, May 14, 1996
.0931 
[English]
The Chairman: Order, please. We have a quorum for hearing witnesses.
Today we have with us, from the Treasury Board, Jean-Claude Bouchard, deputy secretary, human resources branch; Ric Cameron, assistant secretary, strategic planning and analysis, human resources branch; and Sharon Hamilton, assistant secretary, pensions division, human resources branch.
We very much appreciate the fact that you've come before us. Our request to have you arose out of the testimony of previous witnesses who dealt with the issues of, first, lack of arbitration, and, second, whether the alternatives program or substitution was actually taking place as this committee had suggested a year ago.
[Translation]
Will you lead off, Mr. Bouchard?
[English]
Mr. Jean-Claude Bouchard (Deputy Secretary, Human Resources Branch, Treasury Board): Thank you, Mr. Chairman. I will try to address those points in my short presentation and then be available with my officials to answer questions.
[Translation]
I'd like to thank you, Mr. Chairman, as well as the members of this committee for giving me the opportunity to meet with you today. I know that you have had some discussions and questions about Part I of Bill C-31, the human resources management part, and I wanted to provide you with information that I hope will assist you with your deliberations.
There are two issues in particular which have received attention - the arrangements for public service employees affected by alternative service delivery and the suspension of binding arbitration. I will address these primarily and briefly touch upon some of the other issues that have been raised.
You are all aware of the government's commitment to "getting government right" and the various initiatives that entails. Program review has already and will continue to have a fundamental impact on the operations of government, both from the perspective of reducing spending and in the sense of revisiting what services the federal government delivers and how they can be delivered to Canadians in the most efficient and effective manner. In this regard, we are examining whether our traditional means of delivering services - generally through a federal public service department - is the most appropriate. Indeed, the Minister of Finance announced in the budget, three "candidates" for what we call alternative service delivery: Parks Canada, the Food Inspection Agency and the Canada Revenue Commission. We are currently examining with these organizations a range of options which will best meet their operational and service requirements while at the same time retaining an appropriate accountability relationship with Parliament. As we continue on the "getting government right" path, other candidates for alternative service delivery will most certainly emerge.
Some countries, most notably New Zealand and the United Kingdom have moved quite dramatically to change their administrative structures. Our government, however, has decided that each case will be examined on its own merits, each structure will be fashioned to meet its particular requirements and Parliament will have the opportunity to review the enabling legislation for each organization. It's important to point that out.
[English]
We recognize that the introduction of alternative service delivery mechanisms will affect employees who are currently performing functions within the traditional public service environment. We want to ensure that these employees are treated fairly and responsibly when their employment situations are changing, but we must achieve a balance with the interests of taxpayers and the need to respect fiscal integrity.
.0935
We must also ensure that new alternative service delivery organizations have the tools and systems they require to get up and running.
We believe that these interests could best be balanced through negotiations with the public service unions, and I am pleased to say that we were able to conclude an agreement with thirteen of the sixteen unions.
Through Bill C-31, then, the government seeks authority to put in place the entitlements in the workforce adjustment directive and the other arrangements that it has agreed to with these unions, as well as authority to put in place entitlements for employees represented by unions that have not signed an agreement.
It also seeks authority to extend successor rights, the continuing application of collective agreements and union representation when public service employees are transferred to other employers within the federal jurisdictions. Thus, where successor rights apply, employees will have a great deal of continuity in the terms and conditions of their work.
In determining the entitlements for employees, criteria were set to categorize job offers from new employers into one of three types. The entitlements available to employees will therefore depend upon the type of job offers those employees receive. Generally, the greater the degree of job continuity for employees, the fewer additional benefits they will receive.
The government's position has been that it will ensure fair transition measures for all employees whose functions are transferred to alternative delivery situations, but that members of unions that signed an agreement would benefit from the enhanced arrangements resulting from negotiations. Through the provisions in Bill C-31, the government intends to respect its good faith negotiations with the signatory unions by implementing this agreement.
In addition, we will be recommending to Treasury Board ministers and to the Governor in Council that the entitlements for the non-signatory unions be consistent with those tabled by the employer during the negotiations on January 12, 1996.
Specifically, this means that for type one and type two situations the notice period for employees who decline the offer of employment in the new organization will be three months instead of the negotiated four months, and that the salary top-up available in type two situations will be twelve months instead of the negotiated eighteen months, with the possibility of an additional six months in some cases.
I note here, Mr. Chairman and members, that the types I have referred to are included in our agreement but are not specified in the legislation, so of course we will be pleased to provide you with more details if you wish.
We believe this will meet the government's commitment to fair transition measures for employees, and it should not be seen as a punitive measure for non-signatory unions. I should point out that the non-signatory unions are still welcome to sign the same agreement with the employer that other unions have signed.
[Translation]
The second issue I want to discuss is the proposed suspension of binding arbitration as a dispute resolution mechanism in the collective bargaining process. Although the government is well on target to meet its fiscal objectives, there is a continuing need to remain fiscally responsible. The introduction of the Public Sector Compensation Act in 1991 with its accompanying wage freezes has certainly been an important factor in allowing us to meet those targets. The government is confident that it can now return to collective bargaining with the public service unions and fully intends to do so. But, it should be noted that binding arbitration puts financial decisions into the hand of independent third parties who are neither accountable to the government nor to Canadian taxpayers. There is a risk, in the government's view, of arbitration decisions that the fiscal framework would simply not be able to accommodate. There is a further risk but after five years of wage freezes, adjudicators might be inclined to render "catch up" awards thus negating to some extent the effects of the restraint legislation.
Although the government is proposing the suspension of binding arbitration, the conciliation/strike and dispute resolution process will remain. Some unions are particularly concerned that the suspension of binding arbitration will have a very significant impact when a high proportion of their members are designated employees for reasons of safety and security of the public and are therefore prohibited from striking. They argue, and quite rightly, that in these cases a strike can have little effect. We are certainly aware of this situation but I should point out that the identification of designated positions has not yet commenced and it will only be at the conclusion of that exercise that the potential impact of specific groups will be known. We would not want to prejudge the outcome. We are committed however to working with the most severely affected groups to decide how to proceed.
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I should point out that either option that can be employed when the negotiation process fails. The government is confident that, for the most part, the negotiation process will be successful. Indeed, as we prepare for the return to collective bargaining early next year, we will be working with the unions and other key partners to design a collective bargaining process that will provide all of us with the greatest chance for success.
[English]
There are just two other points that I briefly want to touch on because these have been raised by previous witnesses. The first is the issue of student employment and, specifically, the proposal to remove students from the provisions of the Public Service Staff Relations Act.
Public service managers are expected to ensure that, as they use students to get work done, more importantly they provide them with training and learning opportunities and help them to develop good work habits and employability skills. Managers and staff make a significant investment in enhancing students' employability by guiding the skill development process through their roles as trainers, mentors, and educational resources.
The proposal in Bill C-31 recognizes that, as trainees, students should not have all the benefits and entitlements of full-fledged employees.
Since the mid-1980s students have constituted about 2.2% of the federal public service workforce. The government's intent is to preserve and foster this historical representation of students in its workforce, but it is not the intention of the government to displace fully skilled employees.
Finally, suggestions were made to this committee about some of the proposed changes to the Public Service Superannuation Act with respect to adopting retroactivity for two-year vesting and an increase in the rate of interest paid on returns of contributions so that it might include all those employees who have left since 1995. Such a proposal would cost an additional $55 million and would have significant administrative implications.
Concerning the request that the government consider making the pension account interest rate applicable to all past contributions rather than just from January 1997, I would point out that the purpose of the public service superannuation plan is to provide former employees with a pension. Retroactively increased interest rates would not serve this purpose to the extent that it could encourage employees to take a return of contributions rather than a pension.
In addition, operationalizing this proposal would be very difficult since there is no historical record of quarterly contribution balances.
Mr. Chairman and members, I would like to thank you for your time today. Of course we'll be pleased to answer your questions.
The Chairman: Thank you.
[Translation]
Any questions, Mr. Pomerleau?
Mr. Pomerleau (Anjou-Rivière-des-Prairies): Yes, I have a question about the suspension of binding arbitration. You realize that in these circumstances, in the absence of an independent adjudicator capable of making decisions that might place the government in an unfavourable financial position, the government is acting as both judge and party.
Mr. Bouchard: The negotiation process must always follow its course to its ultimate limit, to an agreement - and that's what I hope to arrive at - or to a strike. The power play between the two parties eventually happens. At the end of the day, we'll have to come to an arrangement and find an agreement with the unions.
Binding arbitration is a formula that we can allow, but in our case we have to limit costs. If we ask an adjudicator for a binding decision, we're committed to implementing it, whatever it may be.
In such a case, our dilemma has to do with what we can afford to pay. So we have suspended - and I emphasize suspended and not abolished - such recourse until the end of our program review exercise, in other words until we've finished staff and mainly budget reductions in the public service.
The bargaining process continues to apply in the meanwhile because there is a possibility that employees might strike if our offers are not reasonable or if our position is unacceptable. So there is a process that's not as biased as some would like to believe.
.0945
The Chairman: About this playing "catch up", would it be possible to put something about that in the recommendations and forbid it.
Mr. Bouchard: Trying to impose such limits on adjudicators has been tried by other levels of government. In many cases, those instructions were not followed and the employer, the government, in other words, did not have munch recourse. We looked at a certain number of possibilities but rejected this one because it's too much of a risk for us.
The Chairman: Thank you. Mr. Benoit.
[English]
Mr. Benoit (Vegreville): Did you look at other types of binding arbitration, for example a final offer arbitration scheme of some kind, best last offer?
Mr. Bouchard: It amounts to giving specific instructions to arbitrators and we didn't believe that something like that could work. It is a formula that could work with conciliators. We may have to explore something like that.
The groups of employees that have a majority of members who are designated, or were designated previously, represent 10,000 to 15,000 public servants. As I said in my presentation, the process of designation, the decision we make jointly that some people will have to work if there is a strike, has not taken place yet. So we're presuming that the situation that occurred in previous years will occur again, and those same groups will see their employees designated in a majority. I don't know that.
We want to be fair. Definitely we want to be fair to this small group of employees, and we will explore with them, if it's required, mechanisms by which they will be treated fairly. But it's difficult to presume what those mechanisms will be.
Mr. Benoit: In reality, though, if these employees go on strike for a prolonged period, wouldn't the government end up stepping in and legislating them back to work anyway in all likelihood?
Mr. Bouchard: I'd be speculating. This is a possibility, as a government can legislate. I can tell you that our objective is to reach an agreement at the table with all the unions. The President of the Treasury Board, the minister, has announced a return to collective bargaining. That means we're willing to bargain at the table. We want to redesign with the unions a different process for bargaining, but we definitely want to bargain and reach an agreement with them.
Mr. Benoit: Could you explain the type of process?
Mr. Bouchard: Very briefly, historically in the federal public service, wages were negotiated and a few terms and conditions of employment like holidays and sick leave were negotiated. That's what we call negotiation. But a whole series of benefits that are given to public servants were negotiated separately from that, for example health care plans, dental care, the travel directive. A whole series of benefits were negotiated separately.
By a different collective bargaining process, I mean that at one table I would like to discuss with unions total compensation, not only wage increases or an increase of one week in holidays. I want to make sure that if we do that, we also take into account potential changes to the health care plan or the dental plan. There's a cost associated with everything and I want to make sure we're discussing that at the same table. That has not taken place before.
Mr. Benoit: How did same-sex benefits get into this package?
Mr. Bouchard: Same-sex benefits are not in this package as far as I'm concerned. We haven't talked about that.
Mr. Benoit: But some employees governed by the Treasury Board have been given same-sex benefits.
Mr. Bouchard: The government made a decision recently to extend some benefits to employees for compassionate reasons, but we were very clear that we're not changing the definition of a couple in the legislation. For compassionate reasons we've extended certain types of benefits to people living in homosexual relationships.
Mr. Benoit: Have other changes been made for compassionate reasons in the past?
Mr. Bouchard: Not that I can think of...maybe. I would have to research that.
Mr. Benoit: So this is setting a precedent.
Mr. Bouchard: The past is a long time. I was not there, but I could research that.
.0950
Mr. Ric Cameron (Assistant Secretary, Strategic Planning and Analysis, Human Resources Branch, Treasury Board): I guess the answer would be that if you look at the history, bereavement leave used to be very narrowly confined: spouse, parent. That's been extended now to in-laws and various things.
But compassion relates from the individual affected and outward. As an employee, your relationships then are dependent on your family and other circumstances. So beyond the extension of widening recognition of issues where compassionate things might arise, I don't think there is other group recognition, because it all involves the employee and the relationship outward.
So beyond the specific one with regard to this extension, again based on recognizing the personal relationship as was done in other situations, no, I don't think the board has done that.
Mr. Benoit: You're not indicating that this is an arbitrary decision on the part of the employer?
Mr. Bouchard: No. We rarely make arbitrary decisions - I hope.
Mr. Benoit: I was wondering.
Mr. Bouchard: We have made a decision to extend certain types of benefits to employees, but again for compassionate reasons. We of course reflected upon this and discussed it widely before making the decision.
Mr. Benoit: But when Parliament had just soundly shot down legislation in the House of Commons so this will not happen, how on earth could it happen in the Treasury Board?
Mr. Bouchard: I won't deal with the first part of your question, which is a judgment on what has happened in Parliament, on which I'm not qualified to comment.
Again, what we have done is what approximately 600 large employers in Canada have done; that is, extend those types of benefits to employees in those relationships, again in many cases for compassionate reasons. So we were following a signal that has been given to us by large employers in Canada for a long time. Again, the decision was made after due consideration.
Mr. Benoit: When you're looking at the balance between Parliament clearly rejecting the concept and what's happened with some large employers, as you put it, I would think Parliament should outweigh what any large employer has done.
Mr. Bouchard: Also, one element of that decision was the fact that we had been receiving arbitral decisions to do so. The Public Service Staff Relations Board had indicated to us that in a very specific case we had to grant those benefits, so we decided to extend them for compassionate reasons. We had been receiving an order from the Public Service Staff Relations Board in a particular case.
Mr. Benoit: That indicates a problem in the process, if the Parliament of Canada has shot down the idea of that happening yet it still happens within the civil service.
Mr. Bouchard: I think that once the Parliament of Canada decides to change the acts, and particularly the definition of "couple", if Parliament does that, then it will open up a whole series of benefits that will have to be extended.
Again, in that particular case, for specific types of benefit - bereavement leave is one that comes to my mind - for compassionate reasons we decided to extend it. Again, an arbitral award was telling us to do it anyway, in a case.
Mr. Benoit: Again, there is a problem with the arbitration system. If the courts have said no to same-sex benefits being granted, and Parliament has also, then it seems as if the Treasury Board is really out of touch with the decision-makers, who are Parliament first.
Mr. Bouchard: Again I stand to be corrected, but I don't believe that Parliament has decided in a piece of legislation that same-sex benefits would not be extended. I think Parliament has not considered that yet, but I could be -
Mr. Benoit: We did, in the last six months. A private members' bill was soundly defeated.
The Chairman: Just so I will understand it, is it your position that you would be totally against extending bereavement benefits to a same-sex couple or to two people of the same sex who live together whether they're in a sexual relationship or not.
.0955
Mr. Benoit: No. It's my position that Parliament should make that decision after ample debate, and that it shouldn't be made by civil servants or bureaucrats. That's my position.
The Chairman: What would your decision be if it came before Parliament? Maybe we could -
Mr. Benoit: Okay, we'll talk about it. I'll listen to debate and I will debate. Hopefully if this does come before Parliament, which I don't think it should, there will be wide-ranging debate, not like some other legislation where closure has been invoked and it's been shut down without proper debate across the country - not just in Parliament, but across the country.
The Chairman: Let me go on record and say that if I were living with my brother and my brother were to die, and I were working for the public service, I would want and expect bereavement benefits.
Mr. Benoit: Again, that's a decision for Parliament to make.
The Chairman: I'm quite prepared to go on record and say that. Thank you, Mr. Benoit.
Mr. Duhamel.
Mr. Duhamel (St. Boniface): Correct me if I'm wrong, but when one talks about bereavement leave and other such negotiated benefits, that's possible because it is an agreement between the employer and the employee group. Unless there is a statement from Parliament that this should not take place, then it can indeed take place. Have I interpreted that correctly?
Mr. Bouchard: Yes, you're right.
Mr. Duhamel: I just want you to refresh my memory. You said there were 600 companies in Canada that do...what? Would you tell me that?
Mr. Bouchard: Yes, 600 of the major employers in Canada have extended same-sex benefits of some type to their employees. Amongst them you have the major banks. Last summer when I was appointed to this job, I read in the paper that the Toronto Dominion Bank had extended those benefits. That has taken place in Canada in the last few years.
Mr. Duhamel: That's because the bank in this particular case, to use it as an example, decided to negotiate that with its employees.
Mr. Bouchard: In some cases the employers do not have a unionized workforce. I believe that in the case of the Toronto Dominion Bank there is no union, so it was a decision of the employer.
Mr. Duhamel: What about other provincial and territorial governments? Does this exist at those particular levels, with municipal governments? If you don't have the answer today perhaps you could -
Mr. Bouchard: I could give you the answer. I don't remember. I know it exists, but I wouldn't be able to give you the list right now.
[Translation]
Mr. Loubier (Saint-Hyacinthe-Bagot): They have that in Montreal.
[English]
Mr. Duhamel: Okay.
[Translation]
I'd now like to put a few more questions, if you don't mind, Mr. Chairman.
The Chairman: Only six more.
Mr. Duhamel: Agreed. On page three of your brief, you state:
- We believed that these interests could best be balanced through negotiations with the public
service unions and, I am pleased to say, we were able to conclude an agreement with 13 of the16 unions.
Mr. Bouchard: With the unions, we negotiated the terms and conditions that should apply, when the government decides to transfer one of its programs to another employer - it could be a public or private sector employer or another level of government - to those employees whose position is transferred to an other employer. That's what we discussed with the unions last summer to try to agree on those terms and conditions. Those discussions led to very intense negotiations from January to mid-February.
Broadly speaking, those terms and conditions stipulate that the employee whose position is transferred to another employer must accept any job offer considered to be reasonable, for example a salary equivalent to 95 per cent of that offer in the public service or almost similar marginal benefits. We discussed those provisions that we were ready to grant employees in such cases. I'm only summarizing the broad outline of what was said.
Mr. Duhamel: Is there any possibility of coming to an agreement with the other three unions or is there a great big question mark at this point?
Mr. Bouchard: We're still hoping, just as our Minister is, to arrive at an agreement. We're repeating it here this morning.
.1000
Mr. Duhamel: Could you tell us if what is now being followed is the same process as during negotiations in a normal situation except that you can't call upon it an adjudicator if no agreement is reached? Is that what has been suspended? Did I understand this correctly?
Mr. Bouchard: Before the negotiations start, the union must decide that if no agreement were reached, a conciliator might be requested and a strike might eventually be called or whether an adjudicator would be used whose decision is binding. We have withdrawn one of these possibilities and have decided that binding arbitration will no longer be available to the unions until the end of 1998.
Mr. Duhamel: I'd like some details concerning the three candidates you mention in your presentation. Who are they? Is this a new way of looking at remuneration or salaries?
Mr. Bouchard: It can be all of that. Some countries like New Zealand and the United Kingdom have changed the way a great part of the public service works. They have granted very particular status to some programs while giving them very different human resources management tools or funding systems to help provide better service. That's what we're trying to examine with those three agencies.
Mr. Duhamel: So these are three pilot projects?
Mr. Bouchard: Yes, they are three pilot projects.
Mr. Duhamel: I'm sorry to interrupt, but I want to understand this properly. Did the majority of employees agree to be part of that kind of pilot project? How many were in agreement?
Mr. Bouchard: In those specific cases, the decision was made by the government. Those three federal public service programs will gradually be transferred to a new kind of employment. We did not consult the employees; it was a government decision. What we did negotiate was, according to their status, what terms and conditions will apply for those employees transferred to this new employer.
Mr. Duhamel: Thank you, Mr. Chairman.
The Chairman: Thank you very much. Mr. Dhaliwal.
[English]
Mr. Dhaliwal (Vancouver South): Thank you, Mr. Chairman.
Just for the record, let me state that I don't think Parliament has to legislate compassion. Part of your job should be that you be compassionate, and if certain benefits have to be put forward on compassionate grounds, it's quite acceptable. I don't think Parliament would be against you making a decision based on compassion. I don't agree with the comments made by one of my colleagues here.
Let me bring up the other issue, though, of binding arbitration. A number of unions have come forward and, as you know, have objected to it, and perhaps rightly so. Under the collective bargaining process you have a number of tools that can come into place if you're not able to agree. One of those is mediation, there are some in between, and the final one is binding arbitration, when both parties feel they're not moving anywhere.
Does not the fact that you have binding arbitration as an option help to resolve the situation, because both parties understand that this final arrangement is still there - that binding arbitration is still available - and therefore it brings the parties closer together in coming to a resolution?
Binding arbitration is the final step, if all along the way you're not able to get a collective agreement. Wouldn't you say just having that option available helps bring parties together, as experience shows in the collective bargaining area? Once you remove that option, that may make it more difficult to come to a resolution and for parties to come together and have agreement. The fact that it was sitting on the table, experience has shown, helps make sure a resolution comes about.
.1005
Mr. Bouchard: It's difficult to pass an overall judgment on something like that. It depends on the parties. In our experience we have seen negotiations not going very far or very well because there was this possibility of going to a third party and getting a decision. So I'm not sure I can draw the same conclusions.
In some cases you are probably absolutely right, but it depends on the parties. Some unions have in their constitution that they must always go to binding arbitration. In other words, they don't make that decision. They've already decided, in establishing their unions, that it will be binding arbitration. There's one union like that.
I'm not sure it helps. I would venture to say if we don't have it, it will force us to try to reach an agreement at the table and not rely on a third party to do it for us. But it's difficult to draw a generalized conclusion on that. It depends on the parties.
Mr. Dhaliwal: I know, but I would think that in the normal collective bargaining process, binding arbitration in normal cases is the final step. A number of steps have taken place, and in most cases items don't go to binding arbitration, simply for the reason you've stated: if you don't know what the final results are going to be, a negotiated settlement is better than having to accept the decision of a third party.
Because the collective bargaining process has been around, it concerns me that we're saying we don't trust the independent decision in binding arbitration and therefore we're going to take this instrument off the table because the final conclusion may not be acceptable. We're questioning the whole collective bargaining process, where the third party in fact takes into consideration all the items on the table and makes a final ruling. We are saying we don't trust the system and we don't think the collective bargaining process or binding arbitration have really worked.
Binding arbitration is an option for both parties. It's not just that we have an option and the unions have an option. They both have. It's served us well in the collective bargaining process, and we're taking it away.
Mr. Bouchard: I would like to add one comment. The history of collective bargaining in the federal public service dates back to 1967. When we have a look at what has taken place in almost thirty years, we find that a true and pure collective bargaining process has not taken place very often. In many cases we the employers have decided it would be a fixed wage increase: 0%, 0%, 3%, 6% and 5%. Every time we make decisions like that, they're difficult decisions.
In closing, I'd like to say this. An independent arbitrator could decide that after six years of wage freeze of some sort in the public service, given what has happened in the private sector... The private sector has seen wage increases during all that time, and we have data to explain that. An arbitrator would take that into account and come in with a settlement of - I don't know; I'm speculating - 6%.
Each percentage point of increase in the wage bill of the government is $160 million. So a binding decision of 6%, for example, would be significant, given the fiscal reality of the government. Frankly that's what we've taken into account. We didn't feel we could take a risk like that.
Mr. Dhaliwal: Obviously you have other options to deal with the financial parameters. You can reduce staff and do other things if those types of decisions are made. It's not as if you have no other options. Other options are available to deal with the financial situation when rulings come about that are not within the agreement or your expectations.
Mr. Bouchard: There are always other solutions to problems like that, but the public service is going to be 45,000 smaller pretty soon. That also has an impact on services. All of those things have to be taken into account.
Mr. Dhaliwal: Thank you very much.
The Chairman: Thank you, Mr. Dhaliwal.
Mr. Benoit.
Mr. Benoit: I'd like to comment on Mr. Dhaliwal's statement that the fact that you have the option of arbitration should encourage an agreement under collective bargaining. History right in his own backyard with the grain handlers has shown just the opposite is true. They've come to count on a legislated conclusion to a dispute. They've done very well with these legislated settlements, and because of that, it really isn't honest collective bargaining that takes place.
.1010
I know I'm not speaking about exactly this situation, but I think it's really important if you are going to rely on collective bargaining - which you should - that both parties can feel pretty comfortable that nobody is going to step in really quickly. In fact, hopefully nobody will step in at all, and you'll let the collective bargaining process take place.
If there is a need for some kind of a settlement outside of collective bargaining or for a modification of collective bargaining, I think final offer arbitration really is a model, where you take all of one or all of the other. It makes that last offer a very serious offer.
In fact, when both parties know that someone is likely to step in, I think that just really makes collective bargaining a less legitimate process.
I'd like your comments on that. Is that why you are moving away from the arbitrated settlement?
Mr. Bouchard: The question was a financial question. Again, the fiscal situation of the government being what it is, we did not want to risk having a decision imposed on us whereby all the savings of the last few years from salary freezes and downsizing would be put in jeopardy. That was strictly a fiscal consideration.
Mr. Benoit: Then isn't it legitimate for a government to say it has so many dollars it can spend, period, and it has to reach an agreement within that spending limit? The government can say there are different ways to do it, but it has to be within that spending limit. Isn't that a legitimate position for government to take?
Mr. Bouchard: Obviously, when we start negotiating, we will discuss the fact that there is an amount of money with the unions, the employees' representatives.
Also, there are savings that could be generated. The other benefits that I discussed very briefly in one of my answers - the foreign service directives, the health care plan, the dental plan - could be better administered, in our opinion, and savings could be generated by doing that. If we can generate savings there, maybe we can add to the modest budget that we have for wage settlement. That's where we think the collective bargaining process can take place. And we want it to take place.
Mr. Benoit: Thank you.
The Chairman: Thanks, Mr. Benoit. Are there any other questions?
Perhaps I missed this, but on the issue of substitution, if that's the proper term to use -
Mr. Bouchard: Yes.
The Chairman: - we heard from PIPS that it's working well in some departments and in others it's a non-starter. PIPS specifically mentioned that Statistics Canada is not prepared to do any substitution.
They suggested that maybe we should have a report from each department on what efforts they have made to make this terrible transition of 14% of our public servants - 45,000 of them - much more humanitarian. This committee was strongly of the view last year that this substitution would be a much more humane way, because it would enhance the opportunity for voluntary retirement for those who wanted to leave from any department, thereby allowing those who didn't want to leave to substitute for the jobs that were still there.
I don't know whether you've done a study on how this has taken place or whether we should recommend what PIPS said. Maybe each department should be required to report on the amount of substitution that has taken place.
Mr. Bouchard: I will make a few general comments on substitutions and then my colleague, Ric Cameron, can give you specific data on how many substitutions have taken place.
First, the decision to reduce the size of government through program reviews was not an across-the-board decision. The decision was not just, say, 3%, and you can cut everywhere. The decision was to hit specific programs and services.
Therefore, as the employers, we had a responsibility to make sure that the people with the proper skills would remain in the workforce while others were leaving, so it could not be totally voluntary, which, unfortunately, the unions are advocating. They say it should be totally voluntary.
.1015
In the case of Stats Canada -
The Chairman: No, we never said that. Our committee recommended that it always be subject to ultimate rejection by the employer, saying that we will not allow a square peg into a round hole.
Mr. Bouchard: In the case of Stats Canada - and you may want to call on Mr. Fellegi, the chief statistician - Stats Canada can manage its reduction without laying off anybody. The chief statistician and his management committee have guaranteed all employees of Stats Canada a position in the organization. In other words, they're saying they have some reductions to go through, but they believe they can do it - in their case it's small - through attrition. Therefore if they allow substitutions of employees coming from outside, it's going to be very difficult for them to manage. That was the decision.
Other departments are entertaining substitutions quite a bit. Maybe we could give you a few examples of where it works.
The Chairman: Sure.
Mr. Cameron: As PIPS said, it is working to different degrees across the country. I would like to recall to the committee the range of initiatives that were put in place, which start with managing before people are declared surplus to try to identify people who would be willing to leave. There are the departure incentive programs with the ongoing debate about their relative generosity.
At the end of the day, the risk of unpaid surplus status for people who do not take one of the packages and for whom we are unable to find employment... If you look at the last quarterly report - and the new one should be out shortly - as of the end of December, we've reduced the indeterminate workforce by over 12,000. As of last week when I checked, there were 2 people across the public service on unpaid surplus. So I think the overall management is going quite well.
The Chairman: The first 26% or 27% is always the easiest, isn't it?
Mr. Cameron: I think it will get more difficult, but I'm saying there has been a real effort by departments to do all they can in placement.
I can leave a copy of this with the clerk, if you wish. We do have some data because we're working quite closely with all the joint adjustment committees that were put in place across the country. This is as of the end of December, with some departments updated. We're in the process of updating. It shows that in formal alternations, recognizing again the internal process that allows work units to identify people where you never really get into a formal alternation, but in those identified as formal alternations, in December, with a number of departments updated at the end of March, there were 996 alternations.
In that context, I believe most departments are working hard. Where we do see difficulties as identified through the joint adjustment process, we work with departments. Funding has been made available to support the joint adjustment committees. If they come forward and need resources to help manage the process, Treasury Board ministers have established a fund to facilitate that.
So I believe it is working quite well and is getting better as the departments and unions, particularly interdepartmentally, evolve better ways of working together, better information-sharing.
The Chairman: Mr. Duhamel.
Mr. Duhamel: I wanted to follow that up a bit. I understand the government was unwilling, and for some good reasons, to simply say that we'll accommodate those who want to go, and that was the union's position, which I respect. If I were working for the unions I would want to reach that objective as closely as possible.
My understanding was that finally, after some discussions, a bit of a hybrid was reached - and I say that in a positive way - whereby substitutions that would not jeopardize the human resource base that we require to provide quality service would in fact be maintained. I just want some confirmation that I've understood that well, or correct me if not.
Second, I was under the impression, Mr. Chairman, that we had asked for a formal report on those substitutions. If we have not, I would like to make that request formally today. I would like to know not only what the numbers are, but why there are high numbers in certain departments. There has to be a rationale. And why are there low numbers in others? No doubt there's a rationale there as well. It's important for me to know why they are high or why they are low, and whether I feel comfortable with the information that has been provided to me.
I have a final question as opposed to the requests I've just made. What are the three most populated departments within government and what are the numbers of substitutions there? For example, I take it that Revenue Canada would be fairly high, with approximately 40,000 employees, if my memory serves me correctly. How many substitutions do we have in Revenue Canada?
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Mr. Bouchard: We can give you all those figures. Revenue Canada is a large department - you're right - with approximately 40,000 people, but it is not the department most affected. Revenue Canada is not a department that has to reduce its size so that it has a most-affected status. So the substitution would be lower there.
We could give you a detailed report on every department.
As for your first comment, originally the government's position was not to allow substitutions from one department to another, but then, through discussions with unions and further analysis, we decided to go ahead with it. But we also have set a number of rules. You can't substitute just anybody for anybody. There are rules.
We've evolved.
We don't have a lot of experience in downsizing an organization by 45,000. I'm the first to admit that it's the first time I've done this in my life. Hopefully it will be the last time. So we do proper analysis, but we are all learning how to do that properly. I think the data show that so far we've done not too bad a job.
Our thinking is evolving as we do proper analysis, and in two or three quarterly reports from now maybe we'll see that something funny is happening and we'll need to deal with it. So our policy is evolving because we're learning how to do it, but we're very careful before we change a decision.
Mr. Duhamel: Thank you for bringing to my attention that Revenue Canada was not a most-affected department. I needed to be reminded of that.
It seems to me - and I'm not picking on Revenue Canada in particular - that those departments that might lose people who are willing to go could be creating opportunities for others, assuming that they have the skills required. When you have large numbers like those, I'd like to see some evidence that an effort has been made. So within the report perhaps we could look at that dimension as well.
Mr. Bouchard: We will.
Mr. Dhaliwal: Is any information available on the effect on some of the people? Once they've been moved out of the public service, how have they fared in securing new employment? I would be interested - and it might be of interest to this committee, Mr. Chairman - to find out if any study has been done or will be done to see how those people have been affected.
I know that there's been a tremendous effort to try to make the transition as smooth as possible and that the government has made a lot of inroads. I guess that in the final analysis the results will tell us whether we've done a good or a bad job. It would be interesting to find out.
Mr. Bouchard: We are doing a study like that for the people who have left National Defence. They were the first to leave with some sort of incentive package. A study is going on and we are addressing that. We want to find out what people have done with their lives afterwards and maybe learn about the effect of our incentive packages.
We're also considering other studies for the rest of the public service. We're presently discussing what the content of those studies would be. It will take a bit of time for us to be able to report to you on the results, but let me see what we can come up with, particularly with National Defence.
[Translation]
Mr. Pomerleau: Mr. Bouchard, could you be more specific as to the percentage of employees represented by those 13 unions with whom you reached an agreement? Are they the 13 biggest unions or the smallest ones?
Mr. Bouchard: One of the three unions we could not reach an agreement with was thePublic Service Alliance of Canada representing almost 100 000 employees. So you are right; the13 unions with which we came to an agreement represent about 50 000 of the public services200 000 employees. I would like to emphasize that we are working with 16 unions and that we have to come to an agreement with each and every one of them.
I was particularly proud that we managed to come to an agreement with 13 of the 16 unions. You know that gathering 16 parties around a table has its own set of logistical problems. It's true that we still must reach an agreement with three unions. One of them represents the air comptrollers who did not sign an agreement because they are now part of the new NAV CANADA corporation and they had no interests in coming to an agreement. The terms and conditions for those of their members transferred to NAV CANADA were settled before we started negotiations. So they signed nothing because it wasn't necessary.
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As for the other two unions, there is the union representing some 5,000 economists and the Public Service Alliance...
Mr. Loubier: There are always problems trying to agree with economists.
Mr. Bouchard: I wouldn't care to make any comment about economists. Those are the facts.
Mr. Pomerleau: Fine.
The Chairman: Any further questions?
[English]
On behalf of all members, I thank the three of you.
I suspect that people from all sides of this table would welcome the suggestion from Mr. Duhamel that we be kept informed on some type of periodic basis. We don't want onerous reporting requirements.
I think probably even more important will be the ultimate result, after this horrendous downsizing has taken place, of how many people will have really been able to be substituted in or looked after in such a way that their lives are not destroyed. As a committee we feel this is really important for the morale of the Public Service on an ongoing basis and for our relationship with them as employer, co-worker, or whatever. I know you will be very assiduous in trying to encourage this type of humane and decent treatment for the public servants who have been so important to us, and the ultimate result will be what the actual figures are when it's all over.
If we can work together with you in some way to encourage this in a way that respects the fiscal restraints and respects the need for employers to have the best people doing the difficult jobs that have to be done, then I think we'll all be the beneficiaries.
On behalf of all members, I thank all of you for your presentation today.
Mr. Bouchard: Thank you.
The Chairman: We are scheduled to go into the steering committee and I'm quite prepared to have any members who want to stay.
We're adjourned.