The Chair (Mr. James Rajotte (Edmonton—Leduc, CPC)):
I call to order the 63rd meeting of the Standing Committee on Finance. Our orders today, pursuant to the order of reference of Monday, May 14, are for a discussion of Bill C-38, An Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures.
We want to thank our witnesses for their patience in waiting for us to return from the vote in the House.
We have with us here this morning four organizations. First of all, we have the Canadian Association of Professional Employees, then Democracy Watch, Merit Canada, and the United Food and Commercial Workers Union.
Thank you very much for being with us. You each have up to a maximum of five minutes for your opening statements, and then we'll have questions from members.
We'll start with the Canadian Association of Professional Employees, please.
Mr. Claude Poirier (President, Professional Serving Canadians Coalition, Canadian Association of Professional Employees):
Good morning. My apologies to the interpreters because I will have to cut my speech short. Please bear with me.
My name is Claude Poirier. I am the President of the Canadian Association of Professional Employees, but I am here to talk on behalf of the Professional Serving Canadians Coalition, which comprises six unions representing more than 75,000 professionals employed by the federal government: The Canadian Association of Professional Employees, the Association of Canadian Financial Officers, the Association of Justice Counsel, the Canadian Federal Pilots Association, the Professional Association of Foreign Service Officers, and the Professional Institute of the Public Service of Canada.
We wish to thank the committee members for agreeing to hear our concerns regarding the passing of many of the measures contained in Bill C-38, An Act to implement certain provisions of the budget.
Our union members have been affected to various degrees by the provisions in the budget. Here are a few figures. So far, 3,291 of the approximately 13,000 CAPE members in the EC occupational group have received an affected employee letter, including no fewer than two-thirds of the economists and analysts in the EC group of Statistics Canada. On April 30, 95 federal lawyers working for the Department of Justice received notice letters. At the Professional Institute of the Public Service of Canada, 2,949 members have received letters, including 349 at the Canadian Food Inspection Agency, 384 at the Department of National Defence, and 455 at Statistics Canada. Even though the members of the Canadian Federal Pilots Association have not received a significant number of letters, the budget still had a significant impact on those employees. The operating budgets have been significantly reduced, including a $62 million reduction at Transport Canada alone.
All public service workers understand the cold hard reality behind these raw data: these employees, hired at the conclusion of rigorous selection processes in which they had to demonstrate their qualifications, expertise and competencies, will now have to start over again and compete against the very people they have been working side by side with for months or even years. We feel that many of these cutbacks don't make sense economically, but are being made strictly for ideological reasons.
On April 3, CAPE revealed that its analysis of an economic model developed by Statistics Canada predicted that the loss of 19,200 jobs in the public service would put as many as 40,000 Canadians from the private sector out of work across the country. You will see in our written document the number of jobs lost in both the public and the private sectors.
We are not the only ones to be concerned. The parliamentary budget officer has since stated that federal spending cuts, combined with those announced by the provinces, will lead to the loss of 108,000 jobs in Canada in 2015. The Canadian Centre for Policy Alternatives published a report that places the total number of federal public service job losses at 29,600 once the cuts from the 2012 budget have been fully implemented. The plans for the future of some 30,000 Canadian households are going to fall through.
But beyond the figures themselves, we are concerned about the issue of reduced services to Canadians. Here are some examples: the National Council of Welfare is being eliminated; the National Round Table on the Environment and the Economy is being abolished; new employment insurance eligibility rules are being brought in; changes are being made in the rules surrounding the slaughter of animals and food inspection; the number of aviation safety inspections will be reduced; the section that monitors the mental health of members of the Canadian Forces and focuses on suicide prevention will be closed; and there are cuts in the Department of Justice described by the AJC as an elimination of essential services.
Mr. Tyler Sommers (Coordinator, Democracy Watch):
I'd like to begin by thanking you for the opportunity to speak with you today and to take questions regarding Bill C-38. It's a pleasure to be here.
Democracy Watch is a national non-profit, non-partisan organization, and Canada's leading citizen group advocating democratic reform, government accountability, and corporate responsibility. Our work for democratic reform is aimed at winning changes so that everyone in politics and business is effectively required to act honestly, ethically, openly, representatively, and to prevent waste.
Our work is based on a number of principles. Canadians need access to full and timely information about government and business activities. Canadians need meaningful rights to participate and be represented in Canada's political system. Canadians need easily accessible remedies against government and corporate waste, abuse, and misrepresentation. Accountability measures are needed wherever there are concentrations of power in society, and measures must be enacted to help Canadians band together as citizens, consumers, and taxpayers.
Now, our position on budget bills has been laid out for many years. It's very simple: the inclusion of changes to other laws in the budget bill should be prohibited; and budget bills must focus on government spending.
The reasoning for this is simple and straightforward. By including changes outside of government spending, the bill becomes convoluted, and dialogue and debate suffer as a result. It's also virtually impossible for many members of Parliament to represent their constituents accurately when voting on omnibus legislation. There are simply too many things to consider.
In order to ensure that the changes the government makes are properly debated, that participation by the public is thoughtful and thorough, and that MPs have the opportunity to properly represent their constituents, the budget bill should focus solely on the budget. Other aspects should be removed and included in other pieces of legislation.
It's also important to ensure that politicians and advocates addressing issues such as these don't address them simply on a case-by-case basis. In this situation, for those advocating against an omnibus bill, the goal shouldn't just be to have this one bill broken up; the goal should be to address the cause rather than simply the symptoms.
This is an approach that should be embraced by all parties in all they do: solve the core rather than address the symptoms. I understand that this is not an easy task. It is monumentally difficult at many times. But it's something that's important to ensure that our Parliament and government operate effectively and efficiently for all Canadians.
Thank you. I look forward to taking your questions.
Mr. Terrance Oakey (President, Merit Canada):
Thank you, Mr. Chairman, for your invitation to appear here today to discuss Bill C-38, as it contains measures that we support and that are very important to our members.
My name is Terrance Oakey and I'm the president of Merit Canada. Merit Canada is the national voice of eight provincial open shop construction associations. Open shop construction in Canada represents roughly 70% of the industry, and our member companies directly employ approximately 60,000 Canadians.
I want to begin by saying that Merit companies do in fact pay a fair wage and have a competitive benefits plan, including retirement savings, that is transferable between Merit companies. Our members compete every day for labour, so in terms of pay and benefits there's little difference between our companies and the ones affiliated with unions.
Our members are united by one common vision: that construction contracts, employment, and individual compensation should be based on merit, regardless of employee affiliation. For the benefit of all honourable members, “open shop” does not mean non-unionized. It means that we have both union and non-union employees and do not discriminate against workers simply because they choose not to join a union.
I will address the specific issue of the so-called Fair Wages and Hours of Labour Act, which will be repealed as a result of the adoption of Bill C-38.
Wages and working conditions today are a far cry from 80 years ago when this law was brought in. Back then, there were few, if any, laws and regulations in place at any level to protect the interests of construction workers—although today we have a host of provincial measures in place to enhance and protect working conditions, wages, and hours of labour.
Our companies believe that employees are our best asset, and our members cannot successfully bid or win contracts without a highly trained workforce that operates with safety as their number one priority.
We support the repeal of the act because we believe that free and competitive labour markets are the best way to establish wage rates. Therefore, there is no need for federal government regulation in this area. This is borne out by Statistics Canada, which indicates that construction workers are paid an average rate of $28.35 per hour, making them the second-highest-paid workers in Canada. This rate exceeds the national average by some 30%.
Another reason we support the repeal is that most small, family-run construction companies are reluctant to establish a dual wage structure within their company for private work and public sector work. Many open shop companies simply refuse to bid on federal projects, and this results in lower levels of competition and increased construction costs for the government.
Thank you, Mr. Chairman, for the opportunity to bring to your committee our perspective and our support for the measures contained in Bill C-38. We would welcome any questions you may have.
Mr. Bob Linton (Director, Government and Political Affairs, United Food and Commerical Workers Union):
Thank you, Mr. Chair.
On behalf of the membership of UFCW Canada, Canada's largest private sector union, I welcome the opportunity to comment on Bill C-38.
UFCW Canada represents more than 250,000 members across the country. As Canada's largest private sector union, UFCW Canada is a leading force for workers in the retail, food processing, and hospitality sectors. As one of Canada's most progressive unions, our membership lives in communities from coast to coast and in every province.
Given the size and number of subjects covered in this bill, it's quite absurd to expect anyone to make suitable comments in five minutes on the far-reaching changes that will take place in Canadian society if this legislation is enacted. However, given the time allotted, I would like to focus on three areas of Bill C-38: changes in eligibility to the GIS and OAS, changes in employment insurance, and changes in the temporary foreign worker program
I would like to mention that our initial communication with the clerk's office was to have us speak on part 4 of the bill relating to the labour code. However, since we are a private sector union with small numbers that would be affected by the labour code, on that we'll defer to other labour organizations who have much more membership in that area.
With respect to the changes in eligibility to the OAS, we believe that the rationale to make the change is as a result of an artificially created crisis. We know that this will have a negative impact on both younger and older workers. Many of the jobs available to younger workers in today's labour market can at best be described as precarious.
What will these changes to the OAS mean for younger workers? When older workers retire, will their jobs, and the benefits and protections afforded them, also disappear and be replaced by precarious jobs?
Most UFCW members have the benefit of being members in a jointly trusteed employer-union multi-employer pension plan. They see the CPP as part of Canada's three-pronged pension system of public, individual, and private sector plans that will allow them to retire at age 65. They are fortunate to be in a workplace pension plan, but with the great recession and its after-effects, many find difficulty in saving for retirement as individuals.
Those older workers who are in their forties and fifties are now facing a further two years of work to qualify for OAS, which they see as a failure of the public system. They also face the reality that as the federal and provincial governments make changes to pension plans and download the costs of those changes, there is less money for benefits.
These same workers are facing another phenomenon in Canada's retirement system, which is the increasing number of employers who want to change existing defined benefit plans to defined contribution plans—a benefit change our union defends against on a daily basis.
There is ample evidence from the Parliamentary Budget Officer, the federal and provincial finance ministers working groups, and respected economists from the Canadian Centre for Policy Alternatives and the Canadian Labour Congress that Canada's public pension system is financially stable and there is no need to increase the eligibility age from 65 to 67.
As to the other issues mentioned earlier, changes to the EI program and changes to the temporary foreign worker program, it is our belief that both will do nothing more than undercut the wages and employment conditions of all workers. Fast-tracking employer applications and allowing them to pay migrant workers up to 15% less than the prevailing rate shows that the government believes migrant workers are not equal. They are supporting wage discrimination. What is even worse is that with the majority of migrant workers being racialized people, they will be promoting wage discrimination based on race.
Instead of filling long-term labour needs with a short-term disposable workforce that does not enjoy the same rights and protections as other workers, Canada should be giving these workers the opportunity to become permanent residents as part of our nation-building.
Furthermore, instead of making changes to the TFWP that unfairly skew the program in the interest of employers over workers, the government should be enforcing stronger compliance, monitoring, and enforcement measures to protect the rights of migrant workers while in our country.
The changes announced by the government relating to employment insurance are similar to the changes to OAS and TFWP: they are seriously flawed. The government plan to replace 1,000 part-time members of the EI board of referees who currently hear 25,000 cases per year with 39 full-time members will be, in our opinion, unworkable. It will lead to a large volume of complaints against the system and a large delay and backlog in the hearing of the cases.
Of major concern to UFCW members is the government's failure to address the problems of Canada's unemployed and the decision to seemingly blame the unemployed for being out of work. Recent figures released by StatsCan paint a different picture from the federal government's. StatsCan reports that there were 5.8 unemployed workers for every reported job vacancy.
Giving the minister the power to set regulations as to what constitutes suitable employment for various categories of workers, and also to define reasonable and customary efforts to find work, will result in claimants being cut off EI if they decline suitable employment or do not make reasonable and customary efforts to find work. We believe this is intended to drive workers to take jobs that are now being filled through the TFWP, whereby workers can be paid up to 15% less than the prevailing rate. It is our belief this will cause the 15%-less rate to become the new prevailing rate.
We believe the changes discussed in our submission are about austerity and cuts and will do nothing to address job creation or revenue growth to sustain social programs. Rather than continuing to attack the unemployed or underemployed, the government should be focusing its attention on a job creation program that will add to tax revenue and create and provide decent jobs so people can earn a decent living instead of falling into the country's rapidly growing ranks of the working poor.
Mrs. Cathy McLeod (Kamloops—Thompson—Cariboo, CPC):
Thank you, Mr. Chair.
I'd like to thank the witnesses, and for their patience in particular, as our start was slightly delayed due to the bells.
I would perhaps like to start with Mr. Poirier.
I represent a community that's rural and urban with a lot of mining and forestry, and during the recession there were significant challenges, especially during 2008 and 2009. I saw that the owners of these businesses had to make many difficult decisions regarding viability.
To a greater degree, government also has to look at the long-term future. We look at what's happening in Greece with the deficits there, and around the world if governments don't have their fiscal houses in order.
Given the fact that our public service has increased by one third from 1998 to 2011—and there was certainly a huge increase during the time of the economic action plan—are you saying that it's not appropriate for government to look at the long-term future of the country and that all jobs within government must be protected? Is that what you're saying, that there's no room for government to look at how they are doing things?
Hon. Scott Brison (Kings—Hants, Lib.):
Thank you very much, Mr. Chair.
I appreciate each of you joining us today.
I appreciate Mr. Poirier's recognition that in fact there was a period of significant budget surpluses and paying down of debt. In reality we were in deficit before the downturn in the fall of 2008, as a result of tax changes and spending increases.
But on the issue of EI, I'm told in regard to the proposed change to the EI board of referees that the current approach is working well. It's decentralized. Decisions are being made closer to the citizens, the workers, and the employers affected by those decisions, and it's a very low-cost structure—probably lower than it will be later.
What's the rationale being given to make this change, to centralize this decision-making?
Hon. Scott Brison:
Unless it's that you want to control all the decisions centrally from Ottawa and you have an agenda.
In terms of the seasonal work issue, whether you're in food production in agriculture or in agrifoods or in a fish plant, you can limit seasonal workers but you can't eliminate seasons. I represent the riding with the largest agricultural production of any riding in Atlantic Canada. There is significant agriculture and horticulture, and I'm hearing from the horticulture industry, particularly, about the effects the change will have on their operations. I'm also hearing from food-manufacturing businesses in New Brunswick—for example, Ganong in St. Stephen, New Brunswick—and from the tourism industry that there are going to be a lot of unintended consequences for their businesses.
On the temporary foreign worker side, I'm also hearing from the same businesses—as I spend quite a bit of time visiting the farms in my riding—that the temporary foreign workers program has, within agriculture, been a very valuable program. Temporary foreign workers are an important part of the production chain and the value chain. They're part of a global reality around the production of food, and it actually costs more to hire them than it would cost to hire local workers. In some cases, the costs all in are $14 to $15 an hour, and the temporary foreign workers aren't taking a job away from a local Canadian worker. For instance, strawberry picking is back-breaking tough work at which they work 12 to 14 hours a day, but Canadian workers are involved in packing the strawberries or driving the trucks that transport the strawberries, so there's some value added there.
Do you see the reality of temporary foreign workers as part of the production chain, and do you acknowledge that they're not really taking jobs from skilled Canadian workers in these instances?
Mr. Brian Jean:
Yes, actually, a crime reporter. I saw that as well.
At any rate, I was impressed; I didn't know there were so many of you around.
I come from the riding in the country that has, I would suggest, the most difficulty getting employees. In fact, I can assure you that the number one issue in my riding over the last six or seven years has been to find people, because we can't find people. We can't find people for many, many different jobs.
I see that there are approximately 2,600 jobs being let go in Red Deer. Is that correct?
Mr. Brian Jean:
I understand; it's plus or minus the standard deviation, etc. I understand totally.
I'm just curious, because I also have more union members, I think, than anybody else in the country. In Fort McMurray I have a lot of unions and I get 72% of the vote, which I think is one of the highest in the country as well.
An hon. member: Now you're just bragging.
Voices: Oh, oh!
Mr. Brian Jean: I am bragging, you're right. A lot of my constituents come from Scott Brison's riding—
Voices: Oh, oh!
Mr. Brian Jean:—so I'm very proud of that.
Mr. Scott Brison: They can't wait to come home.
Mr. Brian Jean: My curiosity is this. I don't have very many constituents who are Canadian government employees. In fact, I would say I probably have under ten employees who are, but I could be wrong. I have some Service Canada offices, but I really don't have a lot of government employees.
So my people, the people whom I represent, pay the bill for the government employees....
They don't pay the bill?
Mr. Brian Jean:
Okay. You're not certain. I understand that our public sector is very efficient in what they do compared to other democracies.
Mr. Claude Poirier: Yes, and—
Mr. Brian Jean: To get to my question, I went on your website, and it appeared to me that you were suggesting a lot of doom and gloom relating to these layoffs in relation to the job industry. What I'm saying, I guess, is that there are 4,000 job layoffs expected in Alberta, but I can't find people for any of my businesses, and nobody else can either.
So isn't this a good-news story for the rest of the country? We did pay $8.9 billion, I think, in transfers last year out of Alberta—
Mr. Claude Poirier: Alberta, Saskatchewan—
Mr. Brian Jean: —most of which was generated by the private sector; in fact, I would suggest all of it.
Mr. Wayne Marston:
Okay. Let's say there's a substantial cut expected in that, with a consequent loss in institutional memory.
But I want to take us back, because we were talking before about the errors of the nineties and that kind of thing, and the wall that we hit. We had two reductions in the GST of roughly $14 billion. We had the corporate tax rates of Canada changed, at roughly $16 billion. So roughly $30 billion a year was taken out of the income of the federal government. It's little wonder that they hit a wall; they mismanaged themselves right into that corner. It doesn't have to do with the recession; it has to do with the cuts to income taxes.
Anyway, I'd like to go to Mr. Linton for a second.
Your membership in the service sector is not sitting on big pockets of money in the bank. We know very well that their earnings, because they're unionized, are substantially more than what the average person in the service sector earns, but we have 12 million Canadians that don't have pensions and don't have savings. I would suspect that on the saving side some of your members are in that boat and that they have enough trouble just getting by.
You were talking about the Parliamentary Budget Officer and others who looked at the changes to old age security. Are you aware, sir, that the OECD pension team also has said that it's sustainable and that the issue, from the Parliamentary Budget Officer's point of view, is the fact that when the government talks about the changes....
And their numbers are correct; I'm not saying there's anything wrong with your numbers. It's roughly $39 billion going to roughly $108 billion in costs, so about 2.6% of GDP. The 3.11% of GDP, that's the change. But when they talk about all of this, they don't talk about the projected growth in GDP over a period of time, the period of time until this peaks, and then after that it's going to go down. It's almost like they don't trust their own numbers and their own chances of their economy responding the way they're proclaiming. I'd like your comments on that.
Mrs. Shelly Glover:
I'm trying to understand your organization's predictions because they change so frequently. I'm having a hard time keeping track. Let me be very straightforward with you.
Before the tabling of the budget, your organization released a report that predicted that the budget would eliminate 116,000 jobs. Then following the tabling of budget 2012, you admitted that you were wrong and lowered the number by half to about 60,000. Now, here today you say 29,600 jobs and then you also round that up and say 30,000 families.
Your numbers, frankly sir, leave me without much confidence in what you have to say. I'm making a comment, not asking a question, but you can see how most Canadians are looking at what you're saying with some confusion. I'll leave it at that.
Nevertheless, I would like to turn my attention to Mr. Oakey. Mr. Oakey, you come from the construction industry, and I would like you to tell us very briefly about the shortages of skilled tradespeople and general skill shortages in your industry. Then I'd like you to comment about how you think the changes to EI and immigration might help address your shortages.
Mr. Hoang Mai (Brossard—La Prairie, NDP):
Thank you, Mr. Chair.
Mr. Poirier, you represent some 13,000 economists and social science services employees who advise the government on public policy, 4,600 financial professionals in the public service, 2,700 lawyers, 450 pilots, and so on. I think we can trust your numbers.
Of course, the government is playing a bit with the numbers. They don't trust the figures submitted by the parliamentary budget officer. His figure was 108,000 jobs lost. Do you agree with that number? What are your thoughts?
Mr. Dave Van Kesteren (Chatham-Kent—Essex, CPC):
Thank you, Chair.
Thank you all for appearing this afternoon. We apologize for the delay.
I have just a few comments. I want you to understand that we really do get along, and actually quite well. It's just that sometimes, we kind of butt heads ideologically. But you know, some of the things that were said are really not helpful. For instance, and I say this as constructive criticism, when you approach government just to get their ear, it's not helpful to suggest, for instance, that what we're experiencing is an artificially created crisis.
I just came back from the Netherlands. We sent a delegation there. The Netherlands is a country of 16 million citizens. They live in a country the size of Nova Scotia, and they are trimming €15 billion. We're trimming $5 billion. We have really not seen austerity measures, not to the extent that some of these other countries have.
Our debt is a crisis. We're handling it. At this point, it's $650 billion. The U.S. has a total lack of control and is approaching $13 trillion. So we see around us the Europeans and the Americans, and we try, as a government, to get a handle on things before things spin out of control. I would suggest, too, that in 2008 and 2009, we were faced with horrific challenges. And we've managed to curtail those. I think that the government has to move forward, and there are certain things that we have to do. Again, I understand that you represent your workers. I understand that these things will create hardships. We know those things too. But I think we need to keep our comments to a level that is mutually acceptable.
Mr. Linton, I guess I'm asking, more than anything else, if you have actual cases of what you talked about regarding the spray. In my riding of Chatham-Kent—Essex, we have a lot of greenhouses, and I can tell you, as well, that we have 5,000 foreign workers. They have a consulate there as well. Most of the workers are from Mexico. If there are any problems, they can go straight to the consulate and they're addressed.
When I speak to my greenhouse operators, I challenge them continuously. And when I talk to the workers, I don't get what you said. I'm getting that they're very happy to be there; they're excited about it. We had a witness here last night, Mr. Manicom, who works for the government with the foreign workers. If there's any complaint by what I believe are called the offshore or foreign workers who come, for instance, from Thailand, who just hire themselves out. We recognize that there needs to be better monitoring for these workers. Again, if you see abuses, by all means, let us know, and we likewise will.... I'm not looking for a comment but am just saying that we can work together on these things.
I think I can wrap-up. I just wanted to get a level of civility here so that we all understand that we all do really care about each other and that we all want the best for our country.
I want to give Mr. Oakey an opportunity to talk about the changes we've made to red tape and to tell us why it's important for us to move in the direction you're suggesting with regard to those workers. I just want you to talk about why that is so important.
I hope members don't mind if I take the last round.
Again, there will be no motions, so if members do have to go, I understand that.
I just want to get in a few questions.
Mr. Sommers, you said in your presentation that budget bills must focus on government spending.
What does the government do that does not involve government spending?
It's a serious question. If you have anything further to say on that, I'd appreciate it.
Mr. Linton, I wish you could come to my riding and I'd take you out to Nisku and we'd do round tables. I say this because in every round table that I do with every size of business, from two people to 2,000, they say to me, “James, we need people.” They bang the table and say, “We need people—skilled, unskilled, all types.” This is an epidemic in western Canada—certainly in my area.
I hear a lot of criticism about what the government is doing. We've done a lot on the apprenticeship side.
But what is your solution then for the people in my riding—the hotels, the restaurants, the large businesses, PCL and others—who say, “We need 20 people”, “We need 75 people”, or “We need 1,000 people, James, in our business today. Do you know anyone?” We have so much poaching going on between various companies.
What is the solution, then? If you don't like what we're doing, what is your solution to that chronic situation in my riding?