NDVA Committee Meeting

STANDING COMMITTEE ON NATIONAL DEFENCE AND VETERANS AFFAIRS

COMITÉ PERMANENT DE LA DÉFENSE NATIONALE ET DES ANCIENS COMBATTANTS

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, February 3, 1998

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[Translation]

The Chairman (Mr. Robert Bertrand (Pontiac—Gatineau—Labelle, Lib.)): This is our first meeting in Ottawa in 1998 and I would like to start by welcoming everybody and I hope that everybody is in good spirits for the new year.

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[English]

This afternoon we will be meeting with the Union of National Defence Employees, Mr. Brian Molsberry, vice-president.

Before we do that, we have one housekeeping duty, and that is a motion that the committee pay for certain meal briefings with the base commanders from its travel budget. For those who were travelling last week, sometimes when the base commander would take us out it ended up that we had to pay for half the meal. I don't know why that was. This will be done again in future, so what I would like is a motion for the committee to be able to pay its half of the meals.

An hon. member: I so move.

(Motion agreed to)

The Chairman: Thank you very much.

Mr. Brian Molsberry, please. I believe you have a slide projection.

Mr. Brian Molsberry (Vice-President, Union of National Defence Employees (Manitoba-Saskatchewan)): First, I would like to say thank you to the committee for giving us the opportunity to make a presentation.

I never like starting a presentation with an apology, but because of the short timeframe we didn't have time to get the translation. We will make sure that the translation of my presentation will be given in French and sent to the committee.

I would like to introduce two of the other representatives. The executive vice-president with the union is Mr. John MacLennan. Ms. Debby Graham, who is vice-president for New Brunswick and Newfoundland and Labrador, is here also.

We are a bit askew, but hopefully that won't reflect on the presentation as I get into it.

As I said, I'm vice-president of Manitoba and Saskatchewan. I am also an employee with the department and work at CFB Shiloh. Obviously I have sent letters to most of you. Hopefully you have had a chance to look at them.

There are just a couple of things that we want to make clear to the committee, as a union. We agree that Canada needs an efficient and well-equipped military. We also believe that the operation of the core portion that was identified in the white paper in the 1994 budget is a primary concern not only of civilian employees but also, I'm sure, of our counterparts in the uniformed side of the house. Civilian support members feel very strongly about the static support freeing up military to do core responsibilities, and the values and savings that can bring not only to the department but obviously also to the Canadian taxpayers.

I'll make just a quick overview of the ASD reviews. I'm sure you are all aware of the identified bases being Borden, Gagetown, Gander, Montreal, Shiloh, Suffield, and Wainwright. There have been some requests from commanders. The land forces western areas asked, because they are on area support, that they include Garrison Edmonton into the land forces western areas review—that hasn't been decided by the director general of management renewal services, General Gartenburg—and also Valcartier to be included in the area support review in the province of Quebec.

Supply and distribution review has been defined to us by our meetings last week as being literally end to end from the industry to the end user, which will be the uniformed personnel on the other end of the process.

Using departmental figures, base support services encompass jobs done by approximately 2,025 military and 2,200 to 2,700 civilians. On the supply system review, it encompasses 4,600 military in the first briefing that we were given, and 1,900 civilian personnel. Because those positions are double-hatted, with supply sections that are actually part of support services, those numbers on the military side of the house very well may have to be addressed, but those were the global figures the department was looking at originally.

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These were FEGDEPA numbers. I can't say exactly what that acronym stands for, but they are departmental figures as of January 2. The total military regular force number is 66,269. The total military reserve force number is 44,096, civilian being 25,546. Officer ranks are 11,662; reserve officer ranks are 6,013; general officer ranks are 72 on the regular side; and reserve officer ranks are 11. We draw that to compare those numbers to the 1994 budget and to the white paper. Did we achieve those targets we were heading for as a department?

Basically, when we look at the existing organization of base support and supply systems, they fall under a military hierarchy. They've been split into different demands and different areas, by and large separate from the operational side, although there is obviously combat support: operational readiness on the air force side and ship-to-shore ratio, that whole argument, which is still trying to be defined right now in terms of core and non-core.

This is an example of an organization chart. They are similar on the supply side and the support side. There's an operation entity, an administration entity, a technical services entity, and obviously the financial or comptroller entity. Some may change—there may be more breaks in the way it's broken up—but those are by and large what they cover.

I identified a base that I obviously know, which is Shiloh. The following numbers will give you an idea. As I say at the bottom, most bases and wings aren't exactly the same, but the differences really are minimal. The tables at the end are actually cost factor manual numbers that I added for you to have a look at, for your information.

There are 172 military personnel right now with a full cost, including all pensions, all benefits, using the department's figures of $11 million and a cost of $64,428 per person. There are 274 indeterminates and 50 term, and of that it's apportioned which ones are nine months and six months in the table I've left with you. The total cost to the base in salary wage envelope is $13.5 million roughly, and it averages out to $42,623 a person.

As I said before, these are departmental figures, and they are this year's figures, from the 1997-98 cost factor manual. That's what we will be using if we are costing ourselves against the private sector. Those are the numbers we will use in an in-house scenario, whatever avenue we plan to go down.

I know this committee is looking at the quality of life, and obviously it's geared at the quality of life for the military on this side of the house, and we appreciate that, as a union. But there's another team behind that, and that is obviously the civilian entity. We want to look at the quality of life for those people, and those are the people we represent, knowing that we support the military process at the end of the day.

I wanted to have a look at some examples of where this department has decided to head in privatization. The example that has been used by the department to us on the union side of the house has been CFB Portage la Prairie, which I have become very intimate with over the last year. It was a private contract with Bombardier Aviation on Canadair, and the financial information was available on that.

As for ATC Meaford training centre in Ontario, we've had a lot of trouble getting numbers out on Meaford. They didn't have a base cost line, so it was hard to do comparisons, but that's been an ongoing debate between us and the department, senior management within. We've asked for an audit and we've asked to get some accountability there, but to date we don't have that information.

Those are two of the examples of privatization that the department has put in front of this union as saying that they were great wins and that it was the way to go. For the Canadian taxpayer and for the government as a whole, the department felt privatization was the way to go in this scenario.

I just thought I'd highlight what Portage was before and what it was afterwards. Portage la Prairie had a lot more responsibility than it has now as Southport Aerospace and the CATC flight training that's done in Portage now. It had a dental unit, with military dentists who did dental work in the prairies. It had other lodger units.

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The base personnel, the support personnel at the time, were 439 military and 170 civilians. There were also 218 military and 26 civilians in lodger units or tenant units within the base. The personnel costs at the time were $33 million, as you can see. Operation and maintenance costs were around $10 million and the total was just about $44 million.

The base was sold to Southport, a non-profit organization. The infrastructure, rolling stock, and equipment were sold for $2. On that board sat members from the chamber, from the province, and there was federal representation. There was also representation from air command at the time.

Our contract with Canadair for support services and flight training was at $32,328,000. It's now in its two years negotiation. It was a five-year with a two-year option. They're now into the two-year scenario. 3CF FTS is the flight training school, which is still paid for and owned by DND, and the costs are incurred outside the contract. There are lodger units back in that base, where there used to be four of them, but they are attendant to Southport now. The total was $36 million, and the perceived savings—and I highlight perceived, because that's how it was sold to us—were around $8 million.

Southport also generates some revenue, and that's what I wanted to touch on. When we get into different scenarios of offering up support services to the private sector, there are some other options. We fall away from the regulations and the policies that have shackled us in the past. You can rent out PMQs to the public, which they've done with Southport. You can lease out buildings. There are a lot of possibilities. So the private sector got some gains by it not being a non-profit organization and they obviously gleaned some money out of it, and maybe some ideas that could be looked at in the future, whoever supplies the service in the future.

Is there really a savings? This union has said for the last two years we never felt there was. We finally, through some digging and trying to find out where it was, discovered that the 439 military personnel were not released from the department, so there was no direct savings to the Department of National Defence. In fact we don't have a number. There may have been a small increment of those people who actually were released, but there were transfer costs in moving them to other worksites, other wings, those types of scenarios.

The military base support portion of the personnel costs at the time was around $26 million; the civilian costs were approximately $7.5 million. The whole argument that the great savings were made on the back of personnel costs that were by and large non-existent.... This is a common theme in DND costing arguments, and as we start to learn more about Moose Jaw and Goose Bay, we will try to make sure this committee and this government are made aware of what exactly those arguments are.

Did the privatization of CFB Portage incur costs rather than savings? Well, I guess our argument is if you eliminate the cost of military support personnel—and this was not the operational side; this was the support side—as a contractor is allowed to do.... That's what Canadair does. They don't have a military contingency part of their organization, which is part of that $32 million contract. Had that been a choice of the previous organization, there would have been a $27 million drop from the personnel cost.

The cost of running the base and allowing for the need of certain expertise that we know we don't have in the civilian portion of our organization.... We would have to get a different type of managerial and cross-function between the military and the civilian side. We'd need that expertise. Adding that to the total cost of owing them $7 million, and about $3 million, we figure, to get the expertise, it would have cost $23 million.

But further argument went on in the Portage la Prairie scenario that $2.5 million a year over a 15-year period was saved on the two types of planes that were bought in Portage la Prairie. Had we used the previous entity that we're bringing to the forefront now, being a civilian in-house with the proper expertise to supply the services, the difference would have been $10 million a year. Obviously those planes could have been purchased over three years rather than 15 years, saving the interest costs and the rest of it associated with that purchase.

As for other privatization scenarios in DND to keep an eye on, CFB Moose Jaw is a $3.65 billion contract for 20 years, which includes the purchasing of planes. It's been quoted. I haven't hammered the number down, but I imagine this committee could find out what it is. It's around 1.6, but I don't have the exact figure on that. It's the purchasing of plane and support services for Moose Jaw over 20 years.

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This process by and large has been run by Bombardier. They've written a statement of work. They've written a contract. By and large they've been authoring this whole process. Although Public Works and departmental project teams have been overseeing this process, by and large Bombardier has been running this.

Goose Bay was won by Serco, a company from the United Kingdom that won the bid by cutting specifically wages. What's happening in Goose Bay, for those of you who don't know, is they shut Goose Bay down today. People are not very happy in Goose Bay. The civilian employees are not happy. The businesses in Goose Bay are not happy.

When I speak about Serco, the company, anywhere they have holdings or businesses, because of the labour laws in England, France and Germany, there are successor rights. They cannot come in and cut wages and cut benefits and attack that whole social fabric as they have in Labrador right now. But obviously it's open house in Canada.

I guess this is a question you've asked for many years. Is it really about saving money? This union has been involved with one command, that being air command, in socio-technical systems that proved to save money in Shearwater and in a lot of other wings around the country. We did that, but it didn't seem to help the process.

I would suggest it's more about poor stewardship of this defence budget by the senior management. That's the conclusion this union has come to.

We feel the government is duty bound to make this department accountable. We've probably let this beast run for too many years. I think this government has an opportunity maybe to shine a flashlight in the corner and see what comes out.

The Department of National Defence must be held accountable for decisions they have made in the past and are making at present. We feel that when those decisions are made, the rationale has to be obvious not only to us, the employees, but also to the Canadian people.

So, in conclusion, I'm for this committee taking into consideration some of the things that we've brought to the forum. I've also put in your package the names of all our elected officers across the country who are available to carry on these conversations in your constituencies in every province of this country.

I thank you for this opportunity.

A voice:

[Inaudible—Editor].

Mr. Brian Molsberry: Right now we have about three provinces that have successor rights. We don't have it in Labrador right now. Nowhere through the process were we allowed to negotiate or be part, as a shareholder, in this process to talk about what those types of job offers should have been. So we weren't there to influence it.

In Moose Jaw we got a type two offer, which is a better offer. It's not the best we're happy with, but it's better. Now there's a transition period of, I guess, roughly two years that's going to be a type three offer, which basically says they can attack the wages. We're into a bidding game on wages and nothing other than that.

The Chairman: Mr. Hanger, you had a comment?

Mr. Art Hanger (Calgary Northeast, Ref.): Yes, a couple of questions that have arisen.

The Chairman: Questions regarding the presentation, Mr. Hanger?

Mr. Art Hanger: Yes.

The Chairman: Okay. I would just like to remind everybody of the way it goes. It's been a few months since we last met. We start with the Reform Party. They have ten minutes. Then we go to the Bloc for ten minutes and to the Liberals for ten minutes, and then ten minutes for the Progressive Conservatives and the NDP. Then we come back with five-minute sessions.

Mr. Hanger.

Mr. Art Hanger: As a matter of interest, since you've followed the privatization route for some time, to my understanding, before I even saw these numbers, there were about 850 personnel at Portage La Prairie.

Mr. Brian Molsberry: Yes. The numbers have actually been quite flexible from about 1988 to 1991. We hammered it down to the 439, and I believe it is 216. Those were the numbers that we could actually go back on through air command. For anything prior to that, we couldn't pull any more numbers out. But you very well may be right. There might have been at least 100 or 150 more in larger units, but that information was not made available to us.

Mr. Art Hanger: I see. That's what I was told recently, anyway.

Mr. Brian Molsberry: Okay.

Mr. Art Hanger: I'm kind of curious. As the civilianization process proceeded, was there a recruiting effort on the part of the contractor for personnel that were previously employed in the military?

Mr. Brian Molsberry: On the Portage scenario, you have to appreciate that that base was closed approximately three or four months prior to being contracted out, thus the whole question of successor rights.

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We have legislation that protects us from contracting out. We have to be at the table. But Portage was one in which we were never given that opportunity. We challenged it. It was done through a grievance that went through approximately a two- or three-year process before we finally got an answer. We lost the grievance because we couldn't prove intent, going from the closing of the base to the contracting of the base. So we were never given that opportunity to sit down.

After the fact, after it was done, we had conversations with Bombardier and we tried to get as many people hired as we could.

Mr. Art Hanger: And how successful were you?

Mr. Brian Molsberry: How successful? I guess it comes from ideology. We didn't think we were very successful. We feel the numbers they have right now—approximately 136 people, with about 30 to 40 part-time or seasonal—very well may be all they need to supply what they're doing in Portage right now.

Mr. Art Hanger: Yes, because it's somewhat less than what it was.

Mr. Brian Molsberry: It's considerably less, yes. They're actually using about 40% of the previous infrastructure. A lot of the buildings have come down, so it's not really an apple-and-apple scenario.

I would suggest that workforce is probably not a bad number for the amount of work they're doing, the amount of infrastructure and the flight training they're supporting.

Mr. Art Hanger: And that's the primary flight training for basically the cadets?

Mr. Brian Molsberry: Yes. Primary flight training is now done by Canadair. Previously it was done by 3CF FTS. 3CF FTS does multi-engine and fixed-wing helicopter because Portage has leased fourteen helicopters back from DND, so there's a separate entity. The actual contract does a portion, which is primary training, and the DND part of it does the other two. For the multi-engines, because we never really had multi-engine training, Moose Jaw did the Tudor training prior to this. But that's what the DND portion of it is doing right now—the multi-engine and fixed-wing.

Mr. Art Hanger: Moose Jaw is next on the list, right?

Mr. Brian Molsberry: Shiloh is one of the ones.

Mr. Art Hanger: Shiloh is next on the list.

Mr. Brian Molsberry: Sorry, on what list, sir?

Mr. Art Hanger: On privatization and with a civilian contractor taking over training.

Mr. Brian Molsberry: Moose Jaw is the next one on the list. It has already been sole-sourced to Bombardier. They're the ones that have the contract. The contract doesn't start until 1999, and there is a transition contract that we're trying to get into place right now. We're having trouble getting that in, but that's a story I unfortunately don't have enough time to regale to you, because it is one of my workplaces that I represent.

Mr. Art Hanger: I'm just kind of curious. Has Bombardier been recruiting?

Mr. Brian Molsberry: Yes. Bombardier and its secondary and tertiary contractors have tried to meet the 70% hiring agreement we had that the future workforce would be previous civil servants. It's the type-three offer that's going to be part of the transition, so there is no continuity for the people that would be working when the actual end-state contract starts in 1999. Tying those two together is what we're having trouble with right now. It goes from being a type-two to a type-three, which I would suggest to you is unacceptable. That's an opinion that I feel very strongly about, but....

Mr. Art Hanger: Sure.

Again, when you're looking at service delivered, with the present scenario in Moose Jaw, the training aspect is going to be somewhat different again with Bombardier, including different planes, is it not?

Mr. Brian Molsberry: Yes, it is. The Tudor is going to be phased out. On the actual type of plane they're going to use, one of them is changed in the process of this contract coming to fruition. So yes, the planes are going to change. I believe the Snowbirds will still be there, and there will still be a 300-person military contingency left in Moose Jaw.

You have to appreciate that we're in the fleshing-out part of this process right now, be it the union, the department, or the contractor.

Mr. Art Hanger: In your experience anywhere, whether it's in Canadian jurisdiction or American or elsewhere, has this level of training been contracted out before?

Mr. Brian Molsberry: They do some training in the States, but I don't think I have the background to give you an honest comparison of whether it's good, better, or....

Mr. Art Hanger: Yes, that's fair enough. Thanks.

Mr. Leon Benoit (Lakeland, Ref.): You must be concerned for your union with the number of jobs that are being lost. Are you concerned that there will come a point when you just won't really be able to continue? There seems to be a real determined effort here on the part of the military to privatize, to contract out.

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Mr. Brian Molsberry: It's been a concern for a long time. I feel there's another option here. I think we've jumped into the pool the United Kingdom and Australia got caught up in in the 1980s. Now if you go back there you'll find out just exactly how much is being contracted out and what capabilities they've brought back in-house.

I don't think the in-house option in static support has really been given an opportunity.

Mr. Leon Benoit: Could you explain that a little bit more, please?

Mr. Brian Molsberry: Well, because we have military intertwined, and the belief is that military should be doing things when they're not deployed.... And I have no argument with that. But I also have a background of being a PMQ brat: my father was in the artillery, so I would suggest that I've been around long enough to be able to make a fairly well-informed decision of what probably is the best way to supply the service.

The in-house option—total public service, giving an option, doing that for complete support on a base—has never been given an opportunity. So we've never been able to have that opportunity. When they did the in-house bid in Goose Bay, they included 51 military personnel in the in-house bid. There were transition costs that were attached to those military people that we're still trying to flesh out, because we've just got the documentation. Hopefully in the near future we'll be able to make a presentation on the Goose Bay scenario.

What Goose Bay ended up being was out-and-out attacking the wages and the benefits the people had on the civilian side of the house, because at the end of the day, the military, if they're not released, get moved to another work site, but the civilians don't get that opportunity. So that's been our frustration.

We have come to the forefront and said we want an opportunity to compete, and if we lose, we lose. But I think, given the opportunity.... We know what our wages are; that's no top secret. I know the arguments with wages, and I agree, there are some people on the uniform side of the house who should be remunerated better than they are. But I would suggest that it's not the only part of the house that could be looked at as far as wage for value of work.

Mr. Leon Benoit: So you're saying you don't believe you've been given a real chance to compete fairly.

Mr. Brian Molsberry: Not at all.

Mr. Leon Benoit: Just explain a little bit more.

Mr. Brian Molsberry: Well, we felt that if we were given an opportunity, if we could identify, say for an R4P, and they suggested an R4P—which by the way is now being written in most cases by a contractor.... The one in Goose Bay was written by the department, obviously with help from consultants. When they identify senior administrative positions, say an executive officer of a base, they identify that with skill sets that are by and large military skill sets. You would have to have been in the military to have them. We don't have a problem with that; there are a lot of ex-military out there who could bring those skill sets to the forefront. But we think it should be a total civilian entity, and we should be given an opportunity to address the competition that way so that at the end of the day we can put together a package that will be seriously considered. We have not been given that opportunity. Our frustration level is obviously elevating as days go by.

Mr. Leon Benoit: When you say “we” should be given a chance to compete, do you mean that if a contract is won, the people involved would still remain union members?

Mr. Brian Molsberry: Yes, for sure they would still—

Mr. Leon Benoit: Or would they have an option?

Mr. Brian Molsberry: We could still do it with the collective agreement and we can take on anybody that wants a profit out of this scenario. I think we can still do it with the collective agreement. If we don't, then we were given an opportunity to do it. We have not been given that opportunity.

If a private contractor comes in, they separate the military from the process completely. That's what happens. We're saying give us the same opportunity. Give the Canadians across this country who have the skills, who have the corporate knowledge and who have been working in the base support and supply system the opportunity to put a package together that gives the service that's being required. That's the opportunity we're looking for.

Mr. Leon Benoit: Okay. Just to do with your union and its survival, if you're losing members at quite a rapid pace, and it seems that's going to continue, are you looking at any other places in the military to expand membership?

Mr. Brian Molsberry: No.

Mr. Leon Benoit: No?

Mr. Brian Molsberry: No.

The Chairman: Madame Guay.

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[Translation]

Ms. Monique Guay (Laurentides, BQ): Good morning, gentlemen. To put a more humane face on the dismissal of the Defence civilian employees whose contracts are being transferred to the private sector, have any programs been created to transfer or train the civilian employees so that they may continue to make a living in the Department of National Defence or the public service? Are there any programs currently in this regard? If yes, could you please tell us about them?

[English]

Mr. Brian Molsberry: There are other programs, it's just unfortunate that there are not really any other jobs for them to go to. We can train them for a lot of places, but the public service is downsizing at an amazing rate. Even within this department, we've realized cuts in the vicinity of 40% since 1993. Although we do have training capabilities in some scenarios, there are not really any jobs within the government they could go to.

[Translation]

Ms. Monique Guay: You have told me that programs exist. Do they cover the military members? You have said they cannot be transferred? Are there other possible types of programs? Can your union not negotiate with the government to find other programs that would enable these people to go elsewhere?

[English]

Mr. Brian Molsberry: Yes, if this union were given the opportunity to negotiate at that level, I think we could come up with some answers to those questions. However, we are not at the table, nor are we at the negotiating table coming up with these types of scenarios. They're all valid concerns, and I appreciate them, but we're not at the table, nor are we given the opportunity to be at the table to do this negotiation.

[Translation]

Ms. Monique Guay: Who negotiated these programs? Did the Department of National Defence offer these programs directly to the employees without consulting the union? Is that what you are telling me?

[English]

Mr. Brian Molsberry: No. The type one, two, and three job offers have come out of Treasury Board and they cover all departments. We are saying that the disconnect is that we are not sitting at the table with the department before these decisions are made to make sure we're making them not only for the best interest of the department but for the best of interest of getting the best bang for your defence dollar.

The agreements as far as training and training capabilities, buy-out packages—those types of things are done through the Public Service Alliance of Canada for all departments. We are a component of that organization, but we need to negotiate with the department, because they are the ones who are making the decision as to the future of how these services will be supplied within the Department of National Defence.

[Translation]

Ms. Monique Guay: So, if I understand correctly, the Department of National Defence requires much more specific programs. This relocation cannot be carried out under the auspices of some general government program. Under the terms of the private sector contract, could it not be specified that a certain number of employees have to be rehired and trained so that they can work in the company?

[English]

Mr. Brian Molsberry: Yes, we've had the opportunity.... I think I mentioned it earlier in the Moose Jaw scenario. We came to an agreement with the department that 70% of the future workforce would be from the existing workforce. We've had those negotiations.

What has thrown this askew and has headed it off in another direction is the type-three offer, where, without negotiation, the contractor is allowed to assign a wage level to those jobs without anybody being at the table representing the people who are going to have to take those jobs.

[Translation]

Ms. Monique Guay: As you know, the Bloc Québécois has proposed since 1993 that civilian control of the military be strengthened. What do you think of the idea of creating an annual forum on national defence?

[English]

Mr. Brian Molsberry: As a Canadian, I have a fear of the Canadian way of doing politics with royal commissions, but I guess that's what we fall under.

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My big fear is that if we get caught up in a process that takes any longer than six to twelve months, it will be a fait accompli. Most of these decisions will have been made. Our jobs will have been out the window and we still won't be sitting at the table.

I think it's more urgent. Although we all agree we should be accountable, this department has a good group of military and civilian personnel that I think are doing their job. I think it's being mismanaged. I sincerely think it's an inept management, and I have problems with that. Those are the people we represent, and we feel that this is what we have to address.

[Translation]

Ms. Monique Guay: You have said that you don't have enough time and that you are not going into negotiations. In other words, this is critical for you. Could you make a specific suggestion to the committee to improve the situation of the military members and the situation in general? Do you have something specific to propose to us today to stop the haemorrhaging and to provide a positive reaction?

[English]

Mr. Brian Molsberry: One suggestion from this union is I think you can separate the military as it was defined in previous defence papers, including the white paper. The core element.... I think it's the insurance cost to this country that we have a military in time of need, be it for civil disaster or threat from outside. I think we can separate the military from these processes, such as support services and supply systems, but still keep them doing military things in a static support. I think we can find other things that can be good quality of life that they can do.

If it goes to the private sector, it will do the services without the military. They will have a contract, and this government, through this department, will have to negotiate at the end of every contract for those services. There's a great fear of a monopoly falling into the hands of four or five defence contractors.

I think that our people feel that if given the opportunity to compete, we can compete, but it has to be straight across the board. We'll do it with civilian entity against civilian entity to support the military side of the house, which is obviously our reason for being here.

[Translation]

The Chairman: Thank you very much.

[English]

Mr. Wood.

Mr. Bob Wood (Nipissing, Lib.): I guess the picketing that's going on at Goose Bay today involves both employees and the local community. Am I right? There are problems, I guess, partly because some of the defence department officials went ahead with some ASD plans without properly informing and maybe consulting with the members of the community.

Because of what went on today, the committee has just learned through the minister's staff that the Minister of National Defence will be meeting with representatives of Goose Bay tomorrow to discuss the process and hear suggestions. Hopefully this will defuse the situation, but do you have any comments on what the minister will be confronted with tomorrow?

Mr. John MacLennan (Executive Representative, Union of National Defence Employees): I can answer that question. I was in Goose Bay two weeks ago.

A lot of the picketing is being generated from the community up there, who are starting to wake up to the reality of what kinds of wages are being offered to these people, in some cases 40% less than what they're getting now. It is an isolated area. It's a critical situation. I can testify in front of this committee right now that what I witnessed there is something I've never seen in Canada before.

With the conversation with the minister tomorrow, we're quickly putting together a lessons learned package for the department, and the department is also generating the same package of lessons learned from what has happened here. The details that are coming out are the wages being offered, the types of jobs.

An example that comes to mind is the base commander's secretary, who was a dedicated government employee for a period of 15 years. She went for a job interview with the company taking over the base and was interviewed for a secretarial position, but she has been offered a job as a cleaner. That's inhuman to do to an individual who dedicated themselves to serve the public working for National Defence in one area.

There's no way anybody could survive with the wages that are being offered. Gasoline prices up there are 75¢ a litre, and the housing isn't great.

So those are the kinds of areas we're going to be discussing with the minister tomorrow.

• 1615

Mr. Brian Molsberry: Just to add to John's statement, we obviously have Debbie here—and by no means do I want to speak for her—and she's living it; she's from Goose Bay. But we were told that we could have a meeting with the minister. We haven't got back to the national office—I know they're getting back to the local—and we have representation here in Ottawa, so we're hoping that the minister will know we have people here who would be fully willing to meet with him to talk about some of the issues that John's talked about. Hopefully we can take advantage of that in short order.

Mr. Bob Wood: Apparently that meeting is going to take place sometime tomorrow.

Something else that has.... We have been on the road for the last week or so, and we've heard a lot about the merits of and the problems with alternative service delivery. I guess the reason for ASD is primarily to attain a cost savings for the defence department, and I understand that in some areas ASD is being aggressively pursued. I'm also interested in your opinion as to the actual savings achieved by ASD. Do you have any financial data or any audit reports proving or disproving the value of ASD?

Mr. Brian Molsberry: It's definitely not because we haven't requested them. Obviously, on the scenarios that I've given you from Portage, we can back up that information to the best of our ability. We haven't been able to compare the Meaford thing, as I suggested in my presentation. We haven't been able to audit that. I would think that an audit done on any of the ASDs to date would probably shine a better light onto the scenario.

I think you have to go back to the fact that this department was budgeted for a personnel level, this department was budgeted to meet these budgets. By and large, they have not done it, and now they're going under the face of the process by saying their capital budget has been hit too hard, they need more money. Well, I think they have to be held accountable to the direction that they were given by this government. If they are held accountable and they start addressing their own in-house problems, obviously they'll serve the government well and this government won't be in the news about DND because it will have made the people who work for it accountable.

I don't see any wins out of ASD. Obviously the department gives one twist to the Portage scenario, but when it is actually asked where each and every other military person went from Portage, and when it says it doesn't have that information, that it was too long ago, those are unacceptable answers to us.

Mr. Bob Wood: I have a bit of extra time. David, did you or George want to pick it up?

The Chairman: George.

Mr. George Proud (Hillsborough, Lib.): Thank you, Mr. Chairman. I just want to follow on that a little bit.

As you know too well, between 1994 and the end of next year, the budget of the Department of National Defence will have been cut by a total of 23%. In the letter you wrote to me, you stated that you feel the department has mortgaged our future by not dealing with the infrastructure cuts or the personnel cuts in a way you feel they should be done.

I wasn't one of the ones who jumped with glee when these cuts were announced. I come from Atlantic Canada, and I believe we took a hit down there that was really severe in the military, with the bases and personnel and things like this. Of course every time you have to cut—and we did have to make some drastic cuts in everything—when you want to sell cuts to the public, it's a lot easier to sell cuts to the military than it is to some other areas. So this was the one that really took a hit on this.

Do I understand you to be saying you feel that if your organization had had the chance to bid on some of these contracts and won them, you could do the job? I've no doubt of that, but what would you do with pay and with the numbers of employees, for instance? How would you be able to do that?

Mr. Brian Molsberry: I think that when we've sat down and done it in previous areas, such as in the Canadian Forces Housing Agency, we've won bids from the private sector. We've identified people, and at the salary they're making now. If we feel there are negotiations, such as those going on right now with the public service, we obviously add those contingencies to our bid and identify them.

I think you have a workforce on the civilian and on the military side, because we've obviously had our military counterparts help us with this process. Some are helping, and I find those a lot easier to identify at the base level than I do up here in Ottawa. I guess the big concern is that I think we've been responsible in that process. I think we can identify even increases in wages, we can identify where our costs are, and we know exactly what the job is because we've been doing it for years.

We've also committed to the process to the point that in some cases when we've taken these jobs on we knew we were going to lose people. We knew we were going to have to get smaller, but we were willing to do that. If you want to look at the numbers, 76,000 military went down to 66,000 and almost 37,000 civilians went down to 25,000. I would suggest a civilian entity has come to the forefront and done what they had to do.

• 1620

There was a comment made by a fellow Atlantic Canadian who said that while we greased the slide and opened the door, we forgot to make sure the door was left open; it was locked behind us. Now we're saying let us into the process and we will bring you a quality of service that I'm sure will meet the requirements of this department.

Mr. George Proud: Thank you.

The Chairman: Madam Vautour.

Ms. Angela Vautour (Beauséjour—Petitcodiac, NDP): First I want to thank you for the presentation. Having been a working PSAC member for 14 years—and still a PSAC member—I'm quite happy to see you make a presentation.

I'm really concerned today with the Goose Bay situation. Have you done an analysis of the impact of what is happening today on the Goose Bay area—the economic impact, the monopoly effect? Has any study been done on that?

Mr. John MacLennan: As I mentioned, I was up there two weeks ago and it was communicated back to us that the housing market had dropped 10% at the time of the announcement of the contract. That's one thing that comes to mind right away.

Economically, as far as businesses go, the people in the local community are concerned. I guess they have been talking to their MP up there, Lawrence O'Brien. The alarm bells are going off; reality is setting in.

To answer your question, the value of the homes there have dropped by 10%.

Mr. Brian Molsberry: I would just make one comment about Mr. O'Brien, who all of you know is not well. He has been very supportive in this process. We appreciate that he has asked for the same thing you've asked for, to have analysis.

We've just received the R4P at the union. We've received the in-house bid and we're trying to identify.... At this point we haven't been given Serco's bid, so it's pretty hard to compare, but we know by the job offers they're making right now that the wage scenario obviously is going down the tubes. Our analysis will be forthcoming and the alliance will be supporting us in that process.

Ms. Angela Vautour: I have numbers here and I think it's important that these numbers be confirmed. I think the whole committee could benefit from this.

The population of Goose Bay is approximately 8,600. The unemployment rate is 23.5%. If I have this right, jobs are going down to 335 from 700, approximately.

On wages, am I right that women seem to be taking the cuts? Are there are up to 60% wage losses in these offers?

Mr. John MacLennan: That's right. For example, a clerk would be making $14 an hour and they're being offered jobs at $7.50 an hour. I think they are hiring 15 females out of the 75 on the base. Those numbers are pretty close.

Ms. Angela Vautour: Was there any kind of consultation with the community, outside the workers, when this ASD happened, or were only the employees told it was happening?

Mr. John MacLennan: There was a presentation done by the company, which hired ex-military personnel to talk to the business community: if they were awarded the contract they would go to the local community for supplies, etc. Obviously what was communicated back to the local communities is not unfolding. So there's a lot of distrust of this company within the community right now.

Ms. Angela Vautour: Are there any bigger employees in Goose Bay than DND?

Mr. John MacLennan: Yes, there is another local employer there. I believe Woodward's is the name of the company.

• 1625

Ms. Angela Vautour: So what are the chances of—

[Translation]

Ms. Monique Guay: I think that she disagrees with...

[English]

Ms. Angela Vautour: You said you weren't in agreement with something.

A voice: DND is the major employer.

Mr. John MacLennan: Yes.

Ms. Angela Vautour: It is the major employer?

Mr. John MacLennan: Yes, it is the major employer.

Ms. Angela Vautour: So for the people who are without a job, where that service is going down, what are the chances of them getting a job in Goose Bay, knowing that 16,000 people in Newfoundland left the province last year? What are the chances of them getting decent jobs? What is the impact on the community on that?

Mr. Brian Molsberry: I think the impact is going to be that you're going to see 23% unemployment will get a little bit closer to 40% unemployment. That's what the impact is going to be.

Ms. Angela Vautour: What is your opinion on why these cuts are happening?

Mr. Brian Molsberry: I can give you three or four opinions.

Ms. Angela Vautour: I think just one here.

Mr. Brian Molsberry: I'm going to suggest to you that Portage la Prairie and Moose Jaw were about buying planes and nothing else, because there wasn't enough capital budget and the air command felt that they could get involved in buying planes by going down that road.

Does that mean we're going to get submarines from England if they work a deal with Suffield because that's where the English train? Maybe that's the case.

I don't think it's as much about money as it's been about the poor stewardship of the budget by the senior military and civilians within the Department of National Defence. I think that if an accounting is done—and I sure hope it is, and I hope this committee can influence that—you will find exactly what I am saying is true.

Ms. Angela Vautour: I have another small question.... I just lost my question; I forgot it. I do that once in a while. I'll pass. I want to thank you for the presentation.

Mr. Brian Molsberry: Thank you.

[Translation]

The Chairman: Thank you very much, Ms. Vautour. Mr. Price.

[English]

Mr. David Price (Compton—Stanstead, PC): Thank you. I just have a couple of quick questions.

You mentioned that 70% was the figure that was supposed to be recycled. What happens if they aren't? What's the incentive there?

Mr. Brian Molsberry: The agreement was 70% of the future workforce, whatever that number is. If they go from 300 to 100, then obviously 70 of them should be previous.

If the contractor can't meet the skill sets—obviously that's one of the parts of the contract they have to meet—if they can't meet them, as long as they identify that the skill sets were either not available, the willingness of the employee is not to work for the contractor, or whatever, they have to define what that process is.

We haven't run into that yet. I don't know if they will be challenged on that 70% because we haven't experienced it at this moment.

Mr. David Price: It's not only skill sets, because in actual fact, as you mentioned about the secretary in Goose Bay, they control the purse strings if you go through that.

Mr. Brian Molsberry: In Goose Bay it's going to leach out into a whole different world. I would suggest to you that if you can take somebody who has computer administrative clerical skills and say that we offered you a job for half your wages, and that is considered that I made my offer, I met my commitment as a contractor to the department, and then that will be considered as part of the 70%....

Mr. David Price: In a case then where a person doesn't fit in, who are they going to get to fit in at the wage they are willing to pay?

Mr. Brian Molsberry: Using Goose Bay as an example, you've got 23% of the population who don't have a job.

Mr. David Price: But there's probably a good chance that the 23% are not that skilled.

Mr. Brian Molsberry: Yes, I would suggest to you that may be the case, but....

Mr. David Price: And there's not much chance of moving somebody in there.

Mr. Brian Molsberry: Serco obviously felt that they could find Canadians to work for those wages, and the department felt that they could too by accepting the bid.

Mr. David Price: Overall—I just want to get this straight now—there's going to be job reduction. Is there major job reduction overall if you add up the existing jobs now that are going to be replaced by the contractor? There's nobody else filling in between here, so that's overall job reduction—

Mr. Brian Molsberry: Yes.

Mr. David Price: —and overall salary reduction across the board.

Mr. Brian Molsberry: Yes.

Mr. David Price: We're saving on the salary reduction, but on the job reduction we're putting more people on the market.

Mr. John MacLennan: I would just add to part of your question on type of employment. We discovered one example last week through our fact-finding mission, let's call it, up there. We interviewed the people who are firefighters who work at the airport. They have not been provided a written job description, but it was communicated to them by Serco that they would be expected to drive fire trucks in an emergency situation. They are expected to do snow removal and grass cutting and also ambulance driving. They are questioning the safety standards that are going to be implicated here if that type of scenario unfolds. There are lots of people in the community who definitely could cut grass and do snow removal. Those skill sets are there.

• 1630

Mr. David Price: They were full-time firefighters.

Mr. John MacLellan: They were full-time firefighters.

I think we are prepared to provide this committee with the lessons learned when we get our package together of what type of scenario is unfolding up there. The Canadian government has to be sensitized to what's happening to these people in this isolated area. And we do have seven more bases, as Brian explained in his presentation, to go through the ASD process. Before we go that route, let's try to fix as much as possible what's going on in Goose Bay.

The Chairman: Mr. Hanger, five minutes.

Mr. Art Hanger: Thank you. I just have one question I'd like to ask these gentlemen and then pass it on to Mr. Benoit.

My question is this. Not every time that there is a privatization effort made is it necessarily the right route to go. I think the opportunity should be provided for members of the union or unionized personnel to compete. I think that's kind of a healthy scenario. Do you know of any other situation in the military where this has happened?

Mr. Brian Molsberry: Canadian Forces Housing Authority were taking the private sector on directly. It's being done. The department has hobbled us with audits and everything else, but that's fine; we said we wanted to be accountable at the end of the process, because this is a new swim in this pool for us.

Mr. Art Hanger: Sure.

Mr. Brian Molsberry: I think we've had some good wins from seven bases. They unfortunately came down and said that if you didn't bid last year you can't bid this year, so other bases that wanted to get involved in the process were not allowed to bid. So they've kind of hobbled us as far as where we're headed with this process.

Mr. Art Hanger: It's not an even playing field then.

Mr. Brian Molsberry: Yes. I think we're willing to fall under the audit and we're willing to use the cost factors manual and carry the overhead and take the private sector on. We've done it in Canadian Forces housing; we can show the wins we've done there. I believe we've got five bases that are left, because Goose Bay's now off the screen. There are five bases that are bidding, and we should find out in the near future how we did in this round with our lessons learned. Hopefully we got a little bit better at what we're doing.

Yes, there are examples out there. It's trying to find out what the regulations in policy are, because it's never been.... The in-house bid policy was a draft for two and a half years.

Mr. Art Hanger: What about food services in Trenton?

Mr. Brian Molsberry: Trenton's a perfect example, where the military and the civilians got into the process to take on food services with significant savings.

The question we run into is that the military that are part of any in-house bid are non-deployable, and it's coming up saying that if you bring a skill set and you're a cook and a cook is one of the things they are saying they need so many for ship to shore, if you're a cook but we still have your primary reason for being.... Is it to serve the contract, or is it to serve the military? If you can be deployable, then it's working those things out.

But we won. We have enough leeway in Trenton to now figure out how we can best do that and handle that. But there are questions we haven't got all figured out yet. We're trying.

Mr. Leon Benoit: You said that there is a rule that if you didn't bid last year at a certain base you can't bid this year. What was the rationale behind that?

Mr. Brian Molsberry: The belief by DGMRS, who is by and large pushing this policy, is that there should be no spare capacity at any work location right now in DND, because we've met all our cuts.

Mr. Leon Benoit: What's DGMRS?

Mr. Brian Molsberry: Director General, Management Renewal Services. General Gartenburg took over for Commodore Nason, and he's now in that position. That's by and large who's running and quarterbacking this ASD review.

The argument was used that there was no spare capacity. But on the union side we said that as a military base there is always spare capacity, because we have to react. I'll use Shiloh as an example, with the German training. With the training that has to be done, militia numbers go up and down. We have the ability to bring in term employees from the area to generate employment and supply that service. We've been able to react to that. But their argument is you should have no spare capacity, so you can't bid.

Has it been frustrating? Have our letter-writing campaigns fallen on deaf ears? I don't know. But that's the definition they're struggling with right now.

• 1635

Mr. Leon Benoit: Just to change the line of questioning a little bit, did you have any contract workers affected by Pierre Lagueux's decision to not pay for two and a half days as a result of shutting down for the ice storm?

Mr. John MacLennan: We haven't received any complaints at all, no. I think the department has been very cooperative in that area. I know the indeterminate workforce were—not excused, but it was recognized that they were caught up in the ice storm.

Mr. Leon Benoit: So you're saying that people who couldn't work because the department was shut down in certain places are going to be paid?

Mr. John MacLennan: My understanding is that a directive came out from the department on that.

Mr. Leon Benoit: Who was the directive from, do you remember?

Mr. John MacLennan: I believe it came out of General Kinsman's office.

Mr. Leon Benoit: And you haven't heard of anything since that?

Mr. John MacLennan: I haven't heard of anybody being refused, no. One directive was submitted the week after the ice storm, allowing managers to accommodate these people if they were stuck in a situation where they couldn't get into work.

Mr. Leon Benoit: And you've heard nothing about a reversal of that?

Mr. John MacLennan: No.

Mr. Leon Benoit: Okay.

Mr. John MacLennan: If I do, I'll come back and tell you.

Some hon. members: Oh, oh!

Mr. Leon Benoit: All right.

I have one final question. I'm just wondering how the leak-of-the-month contest is progressing.

Mr. John MacLennan: That's kind of interesting. It's generated a lot of conversation in the department. It was a military person who approached somebody and said “You should hold a leak-of-the-month competition”. We don't want to get into a Scott Taylor identity here, but the survey did go out—and it was a survey only—to see if there would be interest. That's all the study was. It wasn't generating any leaks from our position; it was just a survey.

I know the reaction in the department was now the union is going in there, looking for dirt in the department and all this stuff, but that wasn't it. It was just a survey. It got the attention. I know our national president has tried several times in writing to meet with the Minister of National Defence. That has never been addressed; he's never said “Yes, I acknowledge you're there, union. We'll speak to you or we'll set up a meeting.” Hopefully tomorrow will be the start of something.

Mr. Leon Benoit: I was just wondering if I could get in on that.

Some hon. members: Oh, oh!

Mr. Brian Molsberry: We'll give you a card.

The Chairman: Mr. Pratt.

Mr. David Pratt (Nepean—Carleton, Lib.): Thank you, Mr. Chair.

My first question is not to the witnesses but rather to the staff. I'm just wondering if members of the committee would find it helpful to get a bit of information, perhaps from the military attachés of the British High Commission and the American Embassy, with respect to their experience with contracting out and ASD. I don't think we need anything terribly elaborate, just a few press clippings and that sort of thing, as well as the types of areas that were involved within their own militaries.

A voice: Good point.

Mr. David Pratt: The other question I have relates to the issue of operational effectiveness, and I don't think it's been touched upon by anybody around the table today. I'm wondering if, in your opinion, operational effectiveness has been affected in any way with respect specifically to the loss of corporate memory in some of the services that are being contracted out.

Mr. Brian Molsberry: Operational effectiveness is defining what percentage and what portion of the military is actually in an operational capacity. There is corporate knowledge; that argument is maybe wearing a little bit thin. It's defining the operational effectiveness.

I can only use an example. In the Shiloh case we have an operational regiment of 488 people. Over the last six months, I believe 81 people have been in operations in Bosnia or in different types of operations. On the base support side, of 179, nine have been.

I'm saying that we have an operational unit and a support unit, and it's defined what portion we need. The operational scenario, which I mention in my brief, is the air command scenario, and that is 30% in operations, 30% in training, and 30% in support capacity of some kind so that there's a turnover. I would suggest that in the air command side of the house, that was reverse mathematics. First it was “How many do we have?” and then “Let's divide it by three.” That's exactly how it was done on that side of the house.

• 1640

As for combat support units, we're supposed to define what core capability was in this department. Those numbers move around more than a balloon. It's sometimes a small balloon, sometimes a large balloon.

If you identify your operational capability—and I'll take Land Force Western Area, which is a garrison, a service battalion that has a supply maintenance transport capability separate from the base support side of the house—that operational capability very well may be enhanced by taking those personnel and those numbers and moving them to the operational side of the house and saying that's the cost of having a military.

The Chairman: Mr. Proud, you had a small question.

Mr. George Proud: Yes, thank you again, Mr. Chairman. It's not really a question, but it's a comment I want to make, and if the witnesses would like to respond to it, I'd appreciate it.

I just want to say to the members of the committee and to the staff people who are here that some of the biggest success stories in this country and in other countries are companies in the private sector that closed or had to close for one reason or another and were taken over by the unions, or if there was no union, by the employees and the management of those companies. Some of them have become pretty successful stories.

I don't know if governments anywhere have done that when they're offloading some of this stuff, but I would like to find out why this organization we're meeting with today hasn't been included in the negotiations and the bidding for this new way of doing things. I would ask the staff, through you, Mr. Chair, if they could bring us that information. Why has this organization been excluded, which has the expertise and the people to do the job?

Thank you.

Mr. Brian Molsberry: If I may, I'll respond, and I'm sure John will have something to say to it.

As I've said before, we have been supported by military people in management positions at support levels and base levels who have helped us get involved in the whole business idea, the way of doing business. That's helped the process.

We've also had people who have moved up in our administration on the civilian side of the house who have carried that corporate knowledge ahead. So yes, we can do the support services.

We have to look really seriously at how we run a base and a wing. Do we need a base commander or do we need a civilian superintendent? Because by the way, the base doesn't go anywhere if we go to war. The base doesn't go anywhere if it floods in Winnipeg or if there's an ice storm in Quebec and Ontario.

There's an opportunity here for the government to have control of the budget, because it will be supplied by a civil service that, yes, will want more wages, but it won't be driven by profit and it won't be driven by a monopoly. If we can get there....

The Abitibi obviously is a scenario where the employees got back and took it over and now it's been resold. There are some good Canadian stories. We've brought those to the forefront in the last three years. But again, are we getting an opportunity to sit at the table and an honest opportunity to give you the best bang for your buck?

If, given that opportunity, as I've said before, we don't win, then we tried. But I would suggest to you that we have enough corporate knowledge that we could take this beast on.

Mr. George Proud: Thank you.

The Chairman: Mr. MacLennan.

Mr. John MacLennan: Just to respond further on that, we did have a scenario in 1995 in which we tried to generate an employee takeover of certain services and functions. We had one small example in Camp Vernon in British Columbia, where employees submitted an interest and it was rejected by the department because it was premature. That was acceptable, but two weeks after the decision was made that it was premature, the whole organization went out for tender. That discouraged a lot of people right there about gaining their entrepreneur skills, starting up their own businesses, etc. There are those skills in the department.

There are no success stories for employee takeovers, but the corporate knowledge is there.

The Chairman: Mr. Benoit.

Mr. Leon Benoit: I guess maybe it's more a comment to you, Mr. Chairman.

I think it would be very worthwhile to this committee to pursue in any way we can information that would allow us to evaluate whether contracting out is saving money and whether it's leading to the best service possible being provided. It's just a gut feeling I have, gained over the last couple of months, that it isn't working. It's important that it is evaluated before it continues until we end up with all of the services contracted out. This is coming from a person who says, and tends to say, that the private sector can do it better, but I don't believe that's always the case. I believe it's really important that the people who are working there now have a fair shot at things. I don't think it's happening. I get a gut feeling that it's not happening, but I have nothing concrete to base that on. I think we need some more information to evaluate that.

• 1645

The Chairman: To start with, I think we can do what Mr. Pratt suggested, which is to get the information from other countries that have gone with ASD and see what that has brought.

Mr. Art Hanger: I have another question. I know you wanted to respond to Mr. Benoit, but I want to ask a question first, if I may.

I've been with the committee as we travelled across western Canada, and of course a lot of the concerns expressed by military personnel, their spouses, or associates dealt with housing problems, accommodations. In fact, it really took me by surprise, to be honest with you, just how many complaints there were about housing.

There is a housing agency that monitors.... It really picked up from where the military left off, I suppose, in dealing with these concerns. Are you familiar with that agency? I understand that before it was actually administered by DND.

Mr. Brian Molsberry: Yes, it was in-house, handled by the base commander or wing commander responsible.

Mr. Art Hanger: Yes. Now there's no input from the base commander per se, given the fact that this agency is operating out there.

Some of the complaints are so severe I wonder what this agency is doing. It's contracted out. When I say “severe” it's just total condemnation of how they're responding to some very basic concerns that anyone might have when renting a piece of property. It's not right across the board that way, but it's in enough places that it would sure leave me sitting back and saying, either you go out there and do the job you're contracted to do or you will be fired, or you will lose your contract; you're not living up to your contract.

Have you heard any such things? I know you brought the housing issue up before, and I'm kind of curious about how it ties in with the agency that exists out there right now.

Mr. Brian Molsberry: There are a couple of things I think you have to be aware of. They separated the PMQs because they thought they could handle the revenue and the maintenance better. There are PMQs within the Canadian Forces realm of responsibility that are in better shape than others. I'm sure as you travel across the country you will be made aware of that.

This agency has gone out...and private contractors have never been asked to give the same level of service that was previously given by the public servants, which is a preventative maintenance inspection every year, trying to keep the level and the quality of the infrastructure up.

The other thing that I think is shackling the CFHA is that there seems to be a large number of private companies that have defaulted in certain areas on this. They don't want to work in that game because they bid too low, or whatever the process is. So the level of service being given through that agency right now, as they are trying to learn the ropes too, is just having an exacerbating effect on the whole of the process.

I didn't think then and I don't think now that the agency brings anything different to this process. I don't think separating it and giving it to anybody else was....

Mr. Art Hanger: It seems to be frustrating the process.

Mr. Brian Molsberry: I'll give you an example. As I said, I'm a PMQ brat. I was brought up in an armed services environment. I know for a fact that four previous base commanders in Shiloh felt strongly enough about the quality of life that they found money in their budgets, which may not have been assigned to those PMQs, to bring the level of PMQs up. They were supported by their leaders at the next level up. CFHA does not have that capability. All they've got is base commanders and wing commanders bitching at them.

Where the sole chief executive officer of that establishment before—be it a base commander or a civilian superintendent in the future...if they had that capability, they would know. They're there, they address the concerns, and it doesn't have to go all the way to Ottawa and all the way back.

Mr. Art Hanger: Understood.

The Chairman: Mr. MacLennan, do you have a comment?

• 1650

Mr. John MacLennan: I was just going to add a comment about doing an analysis on the contracting out. Brian mentioned that we were trying to get the true figures for Meaford. Since that contract was awarded there have already been eight amendments to it. We have been chasing the department to give us those figures. Is it a real life success story for alternate service delivery? It would be interesting to see what those figures are.

Also piggybacking on that is looking at Goose Bay. There's a $1 million performance bonus tied into that contract for the contractor at the end of each year, for a five-year period. We've requested that the department look at the wages people are making now, because there's a top-up on their salary for the first year, and look at what wages are going to be offered as an increase when they do the evaluations to take into consideration the value of the bonus. If you have a multinational company coming into Canada and they're going to keep people at pretty near the minimum wage and are going to collect these bonuses and not reflect them in employees wages, we have a concern. All Canadians should have a concern.

The Chairman: Madame Vautour.

Ms. Angela Vautour: I have to go back to the Goose Bay situation. Has the government put in place any type of job strategy, job search? Definitely they're in a crisis at this point. There are no other jobs there. They're losing their jobs. They're going after the salaries of the ones who are keeping their jobs. Has there been any structure or program put in place to help these people? Is there something?

Mr. Molsberry: We've tried to make our point so strongly, especially to this committee: let's separate the government and the department. The department was honour bound to have a strategy for this process. Have they met that? No, they have not. Now they're reacting to what's happening in Goose Bay.

So, no, there wasn't a strategy. They're saying they never expected this scenario to happen in Goose Bay. It's the Department of National Defence that has to be brought to the line. Bring the clothes to the line and let's find out who's doing what in this process.

I have to make a comment about asking the United Kingdom, New Zealand, and Australia for information. I beg this committee, get all the information you want, but number one, make sure it's timely, make sure it's today's information; two, make sure you know exactly what the labour laws are and what they're dealing with, so it's apples and apples; and number three, it's far better to serve yourself by analysing what they're doing in Canada first, because they've been holding the U.K., Australia, and New Zealand up. Let's have a look inside before we go looking too far. But look where you have to look.

The Chairman: Final question, Mr. Benoit.

Mr. Leon Benoit: Just back to the question I asked earlier about the two and a half days of the ice storm, when some people couldn't go to work. My question came from an article in the Sun, which says that in fact the first commitment to pay the two and a half days has been overridden and that department official Brian Watson sent a second memo retracting the pay for the two and a half days.

Mr. John MacLennan: That's the first time I've heard that. I knew there was conversation in the media, but you don't always pay attention to everything you hear in the media.

I knew I'd get a charge out of that.

A voice: That's the best statement you've made all day.

Mr. Brian Molsberry: We hope it's not the best statement we've made all day.

The Chairman: Madame Vautour.

Ms. Angela Vautour: I just want to make the committee aware that there is a person in this room from Goose Bay—Debbie—who is going through this crisis at this time. I find it very unfortunate that she wasn't able to make a statement today, because I think we probably could have learned a lot from her.

An hon. member: Why couldn't she?

The Chairman: We never prevent anybody from speaking in this committee. We just time them, that's all.

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Ms. Debbie Graham (Individual Presentation) I do want to bring to your attention what is happening in Goose Bay, because the government is definitely at fault for allowing this to happen.

By legislating the changes in workforce adjustment, it has allowed a company from outside this country to come in and treat us like third-class citizens. And that's solely because of the greed; lining their pocket has overridden their compassion for us as people.

This company has been allowed to come in under this government's legislation on workforce adjustment and through the ASD policy. They have come in, and not only have they taken away our dignity, they have taken away everything we have ever worked for.

There are 347 people up there, a civilian workforce and their families, who are pushed out to the streets, or are being forced to accept job offers where we're seeing up to a 60% reduction in our wages.

Considering the fact that the federal government determines Goose Bay an isolated post area, we are entitled to extra compensation from the federal government, and these are through policies that have been negotiated with our bargaining agent, the PSAC. Those two policies are the isolated post directive and the leave travel assistance directive. What that did to us was put an extra $10,000 price tag on each and every one of our heads. Benefits and entitlements that have been negotiated, and for which we worked extremely hard, were used against us in the situation.

We in Goose Bay had that extra cost, whereas other federal government departments, other bases, will not have to face those costs. Because of those we in Goose Bay have been discriminated against, and now we are expected to live on $8.60 an hour instead of the wages we were making before that.

In my own personal case, I am paid $15.41 per hour as a CR-4 with the federal government. I'm also entitled to $3.03 extra per hour because of the isolated post directive. That puts me at almost $19 an hour. The wage offer being given to me would be $8.60 an hour, and that was the type of wage I was expected to live on.

John did start alluding to some of the prices we have to pay up there. Three bags of milk will cost you $6. For any of you in this room who smoke, a pack of 20 cigarettes will cost you almost $7. A loaf of bread is costing us almost $2. A dozen eggs is costing us $2.50 to $3.

We can't afford to live on the wages this company is offering us and expect to be able to survive, feed our families and our children, and make our mortgage payments.

You want to talk about the kind of impact it has on the community there? You go talk to those businesses right now, because they are the ones that have orchestrated this day of mourning going on in Goose Bay right now. It is the town and the chamber that closed this town down and asked that exactly what this government's policy is doing to this community be recognized.

We are going to a ghost town. We are losing our members, we are losing the people in this community. In the past two weeks we have already approved over fifty workers leaving that community. Fifty workers and their families are now gone and won't come back. They won't contribute to that economy ever again.

I think the provincial governments in Newfoundland and Labrador should be extremely upset by what's going on. They should be paying much more attention, because Newfoundland and Labrador is the only province that is seeing an out-migration. It is an out-migration, and nobody is coming in to replace those people, because there are no jobs left for us out there.

Taking the ASD policy and using Goose Bay as the pilot project—the guinea pig—was a mistake by this federal government. I can tell you, I have written letters to our ministers in the past, and I have proven to them that the workers in Goose Bay do not cost the taxpayers one cent, not one cent.

What you've done now is allow it to be privatized, and those people will now become a burden to the taxpayers, a 100% tax burden. I say that because in Goose Bay 60% of those costs are paid for by the allied forces. The Canadian government is reimbursed that money. The other 40% paid for by the Canadian government is reimbursed through our taxes. My personal tax rate is 31.5%, and when I'm finished paying all the other taxes the government has imposed upon us, my 40% that it's costing to employ me in Goose Bay has been paid back to the taxpayers of this country.

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So I honestly say that what you have done in Goose Bay is atrocious. What has happened there cannot happen anywhere else. The people up there are the ones who are going to suffer because of the policies and the lack of thinking about imposing those policies or putting clear thought to those policies and following through on it.

I am here to tell you that I am suffering. I have worked 24 years with this government, and through no fault of my own I am now facing the street. I don't have anything in Goose Bay to look forward to.

As Angela asked, is there a contingency plan up there? There is no contingency plan. They did not expect us to lose the bid up there. They did not expect to lose their major employer, and they did not expect to have to encompass over 200 workers into a workforce where we already have one in every four persons unemployed. And we're not counting the people who are no longer entitled to unemployment. I'm talking about the people who are collecting EI right now.

You want to talk about what's going to happen to us in this community? Trust me, that community is going downhill, because there is nowhere for us to go, there is nowhere for us to work. The only place we're going to be able to go to now is somewhere else in Canada, and then we'll start becoming a tax burden all over again.

Thank you.

The Chairman: Mr. Hanger.

Mr. Art Hanger: I have two questions. I appreciate your willingness to step up and express your viewpoints. I wouldn't mind if you clarified one of the comments you made: that the company that has been selected in the privatization bid there is slowly, greedily lining their pockets. Now, if you could explain that to me, I'd appreciate it.

Ms. Debbie Graham: Yes, I can explain that to you. Basically, what they have done is come in and bid under a type-three job offer where they have agreed to make 80.69% of the base salary. Now, the base salary is the combined salary of all those individuals up there working together.

Basically we would hope that would have meant that maybe for me, as a person who's making $30,000, my wages would have been reduced to somewhere around the $25,000 mark.

Actually what happens is that in order to maintain the people they really need.... Obviously they don't need as much administrative support staff as what is there at present. But we do need people to fix the elevators and to run the heating plant, and we do need environmental officers for hazardous materials. Those are the people who are going to see the bigger wage.

In fact, in some of the areas some of those people are going to be making more money than they were as federal government employees, but it's going to be at my cost. I will take an $11 to $12 drop in wage in order for that person to receive the extra compensation the company feels they need to give in order to keep that person employed in that area. In order to keep them attracted to the area, that's what they have to do.

Truly the costs are going to their pockets, not to ours. It's not coming to us. It's not going to the taxpayers. It's not coming back to anybody. It's coming off the backs of our workers and it's going directly to the pockets of the private sector. In this instance, this is a private company that's not even here in Canada. So I'd like to know where those dollars are going to go. I'm afraid that most of that money is not going to stay here in Canada; it's going to be funnelled out.

Mr. Art Hanger: What's the name of the company?

Ms. Debbie Graham: The company's name is Serco, and they're from Britain.

Mr. Art Hanger: Were they part of a bidding process that involved other contractors?

Ms. Debbie Graham: Yes. In the bidding process for Goose Bay there were five private sector bids and one in-house bid.

Mr. Art Hanger: And the in-house...? Well of course you wouldn't—

Ms. Debbie Graham: The in-house bid is the federal government, the Department of National Defence employees in the base getting together and putting in a bid.

Mr. Art Hanger: If this committee went up there, what would we encounter?

Voices: Oh, oh.

Ms. Debbie Graham: Well, especially if you tell them who you are—

Voices: Oh, oh.

Ms. Debbie Graham: No, I'll tell you, people up there are extremely frustrated, and, trust me, they have every reason to be. They have been duped, they have been messed with, and they have been treated terribly. Their dignity has been taken away. They have been told that they can either take a job at this low wage or they can leave.

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You tell somebody who's been living in that community for 45 years, who's invested everything they've had, who has their entire family there, that they now not only have to move themselves and their children out but have to move their mother and other people out, because those people are depending on the wages that our brothers and sisters are making. Because the unemployment rate in Goose Bay is so high, those people have to depend on whatever breadwinner happens to be there.

Mr. Art Hanger: And there's been no compensation?

Ms. Debbie Graham: Well, the compensation is next to nothing. As I said, I've been employed for 24 years, and I get a choice of walking out the door with $38,000, but what am I going to do with $38,000? I can't take that. The taxes are going to get me. I'm going to have to turn around and roll it over. That's what I'm supposed to live on for a year, $38,000, and I can't live on it, because if I take it, I'm going to be taxed on it.

So what do I do for income in the meantime? How do I pay my bills that I've been running up for the past 20 years because I've been making a half-decent wage and my standard of living has been quite nice? I'm just like almost every other Canadian: I've lived above my standard of living and I have a whole lot of bills to show for that. How do I do that when my wages are being reduced over 60%?

Mr. Art Hanger: Thank you.

The Chairman: Are there any more questions?

Mr. Art Hanger: I'd like to see our committee go up there.

A voice: So would I.

A voice: Can I go with you?

The Chairman: From what I hear, it was your office that couldn't—

Mr. Art Hanger: Not the week we were going to go.

The Chairman: Because we were going to go up.

Mr. Art Hanger: I thought it was off the list.

The Chairman: We'll put it back on.

If there are no other questions, I'd like to thank you all for appearing before us this afternoon.

The meeting is adjourned.