Good morning, committee members. It's always a thrill for me to be here and appear in front of any committee. I studied politics many years ago and am a non-partisan political junkie. I spend way too much time watching CNN and related media.
I am the president and CEO of FETCO. FETCO stands for Federally Regulated Employers - Transportation and Communications. We are all federally related firms in the transportation and communications sectors. We've existed as an organization for over 30 years. We're generally large employers in the federal sector encompassing over 500,000 employees. FETCO members are household names to many of you: Air Canada, Bell, CN, CP, FedEx, UPS, WestJet and Telus, to name just a few.
Today, in my limited time with you, I'm going to spend a couple of minutes on two key issues in this bill: division 14, on the pay equity bill, and division 15, on the Canada Labour Code. I'm not going to comment clause by clause on provisions within the bill. Time today doesn't permit me to do that, nor did the time in terms of reviewing the bill allow me to do that.
I want to talk about four key messages in terms of our messaging to you today. The first is about, and I think this has been discussed at your committee, the use of omnibus budget bills. Here we are going to be equal opportunity criticizers. This is an issue on which we were critical of the previous government, and we will raise it again today.
This bill is nearly 900 pages long, and it includes enormous diversity. To review it in one week and provide any sort of meaningful feedback to you is difficult, so we're looking specifically at two critical issues that affect our members. Both have been the result of consultation efforts the government has undertaken, but at this point, I'd say that this feels a little bit rushed. We've gotten to this point where legislation has been introduced, and we are very quickly going to go through this bill, and let's be real, it's a budget bill, so it's likely to pass with only limited amendment.
The other thing, of course, as I think has been pointed out, is that the modern labour standards piece in this bill related to part III was not specifically referenced in budget 2018, so it is likely inappropriate in this space.
It would have been our preference if both of these bills were stand-alone pieces of legislation. The government has committed a lot of energy to pay equity and to part lll of the code. We've been engaged quite extensively with our counterparts in the labour movement, and it certainly would have been our preference to see these introduced as separate pieces of legislation.
My second point is really about business costs. Our concern with this bill is that there are some indications that due consideration is not being given to business costs. I raise this as a broader issue to the government as a whole.
We've seen a lot of major workplace-related changes over the past three years. I'll give you just some examples, for which there are major cost implications for the employer community: paid personal leave, family responsibility leave, expanded vacation leave, caregiver leave, indigenous practices leave, leave for victims of domestic violence, medical leave, changes to the EI program, accessibility legislation, flexible work arrangements, pay equity, termination compensation, and the elimination of wait periods for certain compensatory benefits. We're now starting to talk about a new statutory holiday. All of these have major cost implications.
On an individual basis, I think it's quite rational to look at them and logically conclude that they are reasonable, but there's a cumulative effect from a number of these changes that is having a real, major effect on the business community. As we're having a national dialogue on issues like business investment, workplace productivity and economic competitiveness, it's tough when we're simultaneously driving up the cost of doing business. To us that seems like a contradiction, and we think it is reasonable that business costs would be factored into any of these discussions.
Specifically, on the bill in front of us today, I have some comments on both the pay equity bill and the changes to the Canada Labour Code. On the pay equity provisions, I want to be very clear, and I hope there is no misunderstanding between us today. Our organization, FETCO, is very supportive of the concept of pay equity, equal pay for work of equal value. We believe that closing the wage gap is of critical importance. It is the right thing to do. It makes business sense.
The concern we've been raising for the two years we've been having this discussion, specific to this bill, is about the methodology. I recognize that the ship has likely sailed, since it is now contained in the bill, but we have been concerned that a proactive approach to pay equity may not be the best approach to root out wage discrimination where it does exist.
The government has clearly committed to it, and our concern, which we have raised repeatedly, is that this may be a costly and potentially overly bureaucratic solution that many not close the wage gap.
I reflect back to the Special Committee on Pay Equity. I presented on behalf of employers at that table. Some representatives from Statistics Canada presented shortly before me, and they indicated some data that I thought was particularly useful. They indicated that we have a wage gap. When they looked at the sectors of Ontario, Quebec and the federal sector, they indicated there is a wage gap in Canada, and I think we all agree that's a problem. They also indicated that the wage gap is narrowing. That's a good thing, but it's not narrowing at a fast enough rate. What is most interesting about the data that StatsCan presented was that the gap in wage rates in the Ontario, the Quebec and the federal models was essentially narrowing at the same rate.
We recognize the current approach we use, the complaints-based model, is not working as effectively as it could be. The question we raised is why we would throw it all out and replace it with something that isn't proving to be any more effective than the current model that we're using. I'm happy to talk specifics about the bill, if you have questions later.
The last thing I'll talk about is the changes to part III of the Canada Labour Code. The fundamental issue that we've had throughout this process, as it relates to part III of the code and the minimum labour standards that exist therein, is that we think the government has largely applied a provincial lens to the federal sector, and they're really not the same. The point we've made is that in some cases we're solving a problem that actually doesn't exist. The government speaks a lot about precarious and vulnerable workers. While we do recognize that issue does exist in the country, it's largely an issue that exists within provincially regulated sectors. In fact, the government's own data indicates this. The government's own data, in its discussion paper leading up to these changes to part III of the code, indicates that the vast majority of jobs in the federal sector are permanent, full-time unionized jobs with full pensions and benefits, and many exist in the context of a mature collective bargaining system.
Bill introduced a series of changes to the code that are going to raise the standards. The challenge this presents to us, as large employers, is that it will create a couple of key challenges. We think it's going to create conflicts in collective agreements where similar provisions already exist, and what might happen when that conflict emerges; and second, we are worried about the inflationary pressure that elevating labour standards over here for what is a small group of employees may have over here for the bulk of the federal sector.
I'll leave it at that, and I'm happy to take your questions. Thanks you for your time.
Good morning, Mr. Chair, honourable committee members and fellow witnesses.
I would like to begin by acknowledging that we have the privilege today of gathering on the traditional and unceded territory of the Algonquin and Anishinaabe people.
My name is Adam Brown. I am the chair of the Canadian Alliance of Student Associations, or CASA. I am also the vice-president external of the University of Alberta Students' Union, and a fourth-year student completing a business degree majoring in business economics and law.
CASA is a non-partisan, not-for-profit organization that represents roughly 350,000 students at colleges, universities and polytechnics across the country. Through a formal partnership with the Union étudiante du Québec, we are a trusted national student voice. We advocate for a post-secondary system that is accessible, affordable, innovative and of the highest quality.
Today I will be speaking to two important aspects of this bill.
The first relates to the Copyright Act and its impact on the quality of education here in Canada. The second relates to education as a missing component of the government's poverty reduction strategy.
These are two key elements that will significantly impact the quality and accessibility of student post-secondary experiences.
Bill , part 4, amends part of the Copyright Act relating to the Copyright Board by improving the timelines and clarity of its proceedings and decision-making process. Students are pleased to see this as CASA highlighted it as an issue in its Copyright Act review submission to the Standing Committee on Industry, Science and Technology earlier this year.
In fact, students are directly impacted by the decisions of the Copyright Board, specifically when it comes to fees associated with copyrighted materials. Post-secondary institutions will either pass the costs of copyrighted works onto students through increasing ancillary fees, or they will pay out of their operating budgets, which will affect the quality of the education being given.
Despite the fact that the Copyright Board's decisions directly impact the accessibility and affordability of education, students are often left in the dark about the fees that are levied on them.
Tuition is only one piece of post-secondary cost that students are expected to cover, and students will continue to struggle with unpredictable education costs if these high ancillary fees, such as those coming from copyright costs or the high costs of textbooks, remain.
While CASA is pleased to see reforms to the Copyright Board, the question is still up in the air as to whether the existing statutory protection of education as a component of fair dealing will remain following the Copyright Act review.
Fair dealing for the purposes of education specifically helps Canada offer an accessible and high-quality post-secondary education system by not subjecting information and knowledge to unreasonable restrictions.
The way it accomplishes this is twofold. First, fair dealing for education purposes ensures that students can access a variety of quality learning materials with varying perspectives throughout their studies.
For example, I've taken a few classes where professors use a variety of text, audio and visual materials from different sources that do enhance the quality from diverse perspectives.
Second, fair dealing for educational purposes keeps in mind the financial realities of students. As you're likely aware, students already face significant costs to their education. The average undergraduate student with loans in Canada graduates with approximately $27,000 in student debt. Without fair dealing, students would lose because they would face overly burdensome processes and fees to access integral education materials. Faculty would lose as they're not able to have the same freedom to provide their students with affordable and diverse learning materials. Industries would lose because the incoming talent would lack exposure to a diversity of ideas throughout their learning. Finally, Canadian post-secondary institutions would lose to their foreign competitors who are making larger strides with respect to providing their students with affordable and accessible education materials.
Content creators are important. As a matter of fact, many of us students will go on to become those content creators. However, unnecessarily restricting students' access to learning materials is not a good way to protect those materials. CASA welcomes Copyright Board reforms but calls upon all members of Parliament to do what they can to protect education as a component of fair dealing in the Copyright Act.
To move to my second point, we're pleased to see the inclusion of the poverty reduction act in Bill . CASA believes that post-secondary education is an important tool for reducing poverty in Canada.
Earlier this year, we also submitted recommendations to the government's poverty reduction consultation and in this submission, students suggested ways to increase the usage of the Canada learning bond to help families in need save for their children's education. The government currently supports low-income families by providing Canada learning bonds that contribute up to $2,000 to a child's registered education savings plan. While the bond provides much-needed support to aspiring students from financially disadvantaged backgrounds, sadly, only 31% of eligible families access the benefit.
In Ontario, RESP registrations are now linked with online birth registration to ease the process of accessing this Canada learning bond. This is a step in the right direction to making the bond more accessible to families.
CASA strongly encourages the Government of Canada to begin working with the provinces to increase the uptake of the Canada learning bond as well as the number of young Canadians able to access post-secondary education in the future.
Thank you for inviting us to appear before the committee to discuss the concerns of post-secondary students regarding copyright and Canada's poverty reduction strategy, which are addressed in Bill .
Thank you, Mr. Chairman.
Good morning to the members of the committee. FAIR Canada is a national charitable organization dedicated to putting financial consumers first. As a voice for financial consumers, FAIR Canada is committed to advocating for stronger consumer protections and advancing investors' and financial consumers' rights.
We are here today to speak briefly to some of the provisions in division 10 of Bill , the proposed financial consumer protection framework.
As the members of this committee are well aware, banks hold a trusted position among Canadians because of the role they play in the savings, mortgages, loans and investments of all Canadians. Our banks are in a unique position to have a significant impact on the long-term financial security of most Canadians.
Today, financial products are complex, whether they're mortgages, investments or even deposits, such as market-linked guaranteed investment certificates. This means that people go to the bank, not just to conduct transactions, but with the expectation that they will be provided with advice that helps them meet their financial goals and the banks market themselves and their services in this manner.
Trust in banks is vital. It is important.
As you're aware, in 2017 the CBC Go Public series on bank employees and the FCAC's domestic bank sales practices report, which was published earlier this spring, found numerous risks of “mis-selling” by banks of products and services to customers.
The FCAC report showed that the retail banking culture is predominantly focused on selling products and services and that consumers' interests were made secondary to those of the bank and their employees and contractors. The report demonstrated the need for strengthened consumer protection for Canadians and their bank dealings.
In our June 9, 2017, letter to this committee, FAIR Canada urged the adoption of a best interest standard for those engaged in providing financial advice to banking clients.
Bill , at section 627.06, introduces a requirement that banks establish and implement policies and procedures to ensure that products and services are “appropriate for the person having regard to their circumstances, including their financial needs”.
Among our concerns about this standard is that strict adherence to the proposed consumer protection provision set out in Bill , on consent, no undue pressure, coercion and disclosure, will be seen as being sufficient to meet Bill 's appropriate requirement, while the product or service being sold may still not be in the consumer's best interest, given its cost, net return or other factors.
A product or service may be appropriate, but it may still be suboptimal for the bank's customer. We are concerned that this appropriate standard will not advance consumer protection, beyond that found by the CBC Go Public series and the FCAC report.
As you may be aware, for more than six years, the security sector has been engaged in trying to strengthen the standard owed to clients beyond that of suitability, given that the suitability standard has not worked in the interests of consumers and clients of securities dealers.
We do not want to spend several years determining what is appropriate for clients of banks, when a clear standard of best interests could be introduced and work for the benefit of bank consumers.
A second area of acute concern to FAIR Canada is the existing consumer dispute resolution system for banking complaints.
Simply put, the consumer dispute resolution system is flawed, both the banks' internal dispute complaint handling systems and the external mechanisms. The FCAC report earlier this year found that:
Weaknesses in policies, procedures and systems for handling complaints limit the ability of banks to adequately monitor, identify and report complaints to management, boards and FCAC.
Externally, as you're aware, the Bank Act's regulatory oversight of external complaint bodies permits multiple external complaint bodies and results in one-sided competition. The banks are able to choose their referee of choice in order to handle customer complaints outside of the bank.
In light of the above, the Bill updating of the consumer-related provisions in the Bank Act is a critical first step in strengthening consumer protection for Canadians in dealing with their banks. We are optimistic that the government will continue to look at this area in light of the evidence produced by the CBC Go Public series and the content of the FCAC domestic retail sales practices report and that further reforms will be considered in the future.
We do want to acknowledge a number of provisions in the existing—
Just quickly, with respect to the committee that's been created, we would like that to have a specific name. Its duties should include establishing policies, not only procedures, and ensuring that it reviews the implementation and compliance by the bank with the policies and procedures.
With respect to complaint handling, we recommend that the banks should have to report total complaints received, not simply the number and nature of complaints that reach the most senior person, so that a fulsome understanding of the number of complaints that banks are receiving is made public and understood.
We think that there should not be multiple steps that a bank makes a customer go through internally in order to address their complaint. There should be one process, not two. This has been the way that reforms have occurred in other leading jurisdictions. Time periods for internally handling complaints and for external bodies to handle complaints need to be clear, transparent and objective.
With respect to disclosure, we recommend that information about all charges or fees for a product or service be in dollars and cents. We recommend that interest or returns be disclosed on an annual basis.
With respect to the whistle-blower provisions, which we see as a positive development, we strongly recommend that one office be created in order to receive and address whistle-blower complaints and tips, not several bodies or organizations or entities as set out in the bill.
We understand and agree that confidentiality is a critical component, and this should be extended to all individuals who come forward in good faith with information regarding possible wrongdoing. Other authorities or agencies should be subject to the same confidentiality provisions as those binding the office we believe should be created, and assurances of confidentiality should be obtained prior to sharing the confidential information, to protect the identity of the whistle-blower.
Individuals should be able to come forward on an anonymous basis through legal counsel. With respect to protection from reprisal, the office should have the ability and the legislative authority to bring an enforcement proceeding against a bank that retaliates against a whistle-blower. It shouldn't just be that the whistle-blower himself or herself, having lost their job, has a right to pursue litigation against a bank, given the economic power disparity between an individual and the bank. We recommend that there be a statutory right of action and that there be the ability of the office to bring a proceeding, in order to deter retaliatory actions.
Finally, we recommend that agreements that limit an individual's right to report wrongdoing, whether an employment contract, non-disclosure agreement or otherwise, should be deemed unlawful so that individuals have the right to report wrongdoing, and so that they know they have that right and that it's not limited through contract.
Thank you very much for the opportunity to present our views here today.
Good morning. Thank you for the invitation to appear before you on Bill .
My name is Phil Benson, lobbyist, Teamsters Canada. With me is Stéphane Lacoste, general counsel, Teamsters Canada.
Teamsters Canada is the largest private sector union representing workers in air, rail, road, bus, couriers and more, in the federal jurisdiction.
I will be briefly addressing the proposed amendments to part III of the Canada Labour Code and Mr. Lacoste will discuss the pay equity act.
Teamsters Canada supports the Canadian Labour Congress presentation and our written submission will follow. The proposed amendments to the Canada Labour Code were a long time coming and we congratulate the government on moving forward. It is a step in the right direction.
The most important change for Teamsters Canada is dealing with contract flipping. The new section 189 will reduce the ability of companies presenting low bids on federal contracts, based on reducing workers' benefits and entitlements under the code, rather than bringing their managerial expertise to improve efficiencies. The proposed changes will not fully address the problems faced by unionized workers at airports, where contract flipping affects bargaining rights, compensation and terms and conditions of employment. Teamsters Canada was very pleased when announced the government will move forward with regulations, under part I of the code, to address this problem. Teamsters Canada will participate in all consultations on the regulations and we encourage the government to move quickly in bringing them forward.
Misclassification of employees by employers removes workers from the protection of the code and also creates an uneven playing field for companies. The prohibition and reverse onus on employers provided by proposed section 167.1 will enhance existing legislation jurisprudence. This is an issue especially important in trucking and Teamsters Canada welcomes the change.
Proposed section 173.01 provides some scheduling protection for non-union workers. It is not applicable to unionized workers and even if it were, it would not be applicable to unionized workers falling under Transport Canada power to regulate hours of service in air, rail and road. Fatigue is both a public and a health and safety issue for workers. The Transportation Safety Board placed fatigue on the transportation watch-list.
Teamsters Canada demands that all workers in federal jurisdiction enjoy the full protection of the Canada Labour Code and that the Department of Labour fulfill its mandate to protect transportation workers. Transportation workers work long hours and a major irritant is when a workday is extended, forcing them to work instead of attending family responsibilities, which is a common practice for couriers. Notwithstanding the limitations of proposed section 174.1, the right to refuse overtime to carry out family responsibility is progressive and shows the government understands the pressures placed on workers. Further evidence of this is proposed section 181.1, on page 452 of the bill, dealing with breaks for medical reasons and nursing.
I will deal with the proposed pay equity legislation in the bill.
It was high time for Parliament to pass a proactive pay equity law. We welcome the government's desire to correct the discrimination suffered by women workers. We also agree with the position of the Canadian Labour Congress and make ours their representations.
We must insist on two points though. In a decision rendered on May 10, Quebec (Attorney General) v. Alliance of Professional and Technical Personnel in Health and Social Services, Justice Abella writing for a majority of the Supreme Court of Canada recalled that:
[t]he very premise underlying pay equity legislation is that women have suffered discrimination in the way they are compensated in the workforce.
This observation is well reflected in section 2 of the proposed legislation, but there is also a passage that has no place in a statement of principle such as this one. Teamsters Canada believes that the phrase “while accommodating the diverse needs of employers” is fundamentally at odds with the true objectives of the law and even contrary to the Canadian Charter. The bill must be amended to remove this passage.
The bill must take advantage of Quebec's experience, since the early 2000s, with proactive pay equity legislation. We believe that it would be preferable for the bill to impose a similar obligation to that contained in section 15 of the Quebec act:
The employer, the certified association or a member of a pay equity committee shall not, in establishing the pay equity plan, act in bad faith or in an arbitrary or discriminatory manner, or be grossly negligent of the employees of the enterprise.
It seems to us that government lawmakers should get back to work to include such obligations in the bill.
These two amendments would make it possible to avoid endless litigation and achieve the true objective of the Pay Equity Act.
Teamsters Canada will continue to monitor the development of the bill and work with the minister to improve the situation of women workers across Canada.
On behalf of the United Food and Commercial Workers of Canada, I would like to say thank you to the committee for the opportunity to share our perspective today.
Before I put forward some of our thoughts, perhaps it might be good to say a few words about who we are. UFCW Canada is the voice of Canada's food workers. We are one of Canada's largest unions. We are proud and privileged to represent more than a quarter-million hard-working people across Canada, and 1.3 million workers in North America, as we are an international union. About 80% of our membership works in food-related sectors. As we like to say, you can find UFCW members everywhere in the food chain, from the field to the fork.
Also, within our membership, we are very proud to include more than 10,000 members covered within the federal jurisdiction. They are G4S employees at airports. They work at banks. They're workers in the transportation industry, in grain milling, and at many of the Canadian Forces bases across the country.
Today I'm going to focus on the issues of pay equity and changes to the Canada Labour Code. We were very pleased with the announcement of the pay equity act. This legislation will go a long way in helping our members and their families directly. I mentioned that we have 255,000 members across the country, but what I may not have mentioned is that 52% of them are women. For many years, UFCW Canada has advocated for closing the gender wage gap. Specifically, we have recommended pay equity at the federal level as one way to begin addressing closing the gender wage gap.
We do however echo the concerns raised yesterday by the CLC, and we support their call for changes to the amendments to the bill. Very quickly, once again, they are within the purpose clause, which is clause 2. There's a qualifying phrase that says, “while taking into account the diverse needs of employers”. UFCW Canada thinks it should be deleted or amended. We recommend or prefer using some of the language in Ontario's pay equity act as an example.
Two, as for the requirement of unanimity of employee groups on pay equity committees, we would like this to be amended to bring it more in line with the language in Quebec's pay equity act.
Three, regarding retroactivity in pay equity maintenance, we simply echo the comments made yesterday by the president of the Canadian Labour Congress, Hassan Yussuff, asking for amendments that take into account the recent judgment on a similar provision in Quebec's legislation that was struck down.
With regard to the changes to the federal labour code, UFCW Canada was very pleased with the announcements, as were our members who are covered by those changes. In particular, the domestic violence leave provision is an issue that UFCW Canada has long advocated for on behalf of our members. Our members will also benefit from the equal pay for work of equal value and vacation entitlements, just to name two.
Many of these changes will benefit women and newcomers to Canada, many of whom become members of the United Food and Commercial Workers.
However, we also can't leave without mentioning our concern with the announcement on contract flipping, an issue very important and familiar to our members in the security sector and the building services sector. While we are happy with the protections for non-union workers, we do respectfully ask the government to go further by ensuring protections for all workers in the federal jurisdiction, including union members in collective agreements. This would go a long way in achieving fairness for everyone, and would provide stability and employment security for many of our members' families.
That will conclude my remarks for today. I'd like to thank you again for your work and the opportunity to be here.
Thank you very much to the committee for inviting me to address you today.
I am an associate professor and chair of the department of political science at King's University College at the University of Western Ontario.
My research centres on international political economy, trade, development and global governance. Recently I have been doing a lot of work on the global gender and trade agenda. I have two collaborative projects with researchers from the U.K., through which we're exploring initiatives that are aimed at achieving gender equality and women's economic empowerment. We're trying to identify best practices and develop policy recommendations on how international organizations in countries like Canada can best pursue gender-sensitive and socially progressive policies.
In this vein I'd like to focus my comments today to the committee on the gender dimensions of Bill , and particularly as they're relevant to international trade.
I'll make four arguments to which I'll return one at a time.
First, Canada is a leader on the gender and trade agenda and many elements of the bill—the gender-based accounting, the pay equity act, and the establishment of a department for women and gender equality—are reflective of Canada's progressive and gender-sensitive approach to trade.
Second, at the same time I'd like to strike both a congratulatory tone and also a cautionary tone with respect to the bill. While these elements can be characterized as auspicious I think we're at risk of over-promising and under-delivering on the trade and gender agenda specifically.
Third, a pay equity act is meaningless for many if trade liberalization is pushing women into increasingly low paid and precarious work.
Fourth, from a budgetary perspective, using trade as a lever for gender equality and women's economic empowerment will require more ambitious commitments on capacity-building and knowledge transfer both in Canada and abroad.
Canada's gender-sensitive trade policy is aimed at supporting women's economic empowerment, it's aimed at closing gaps in welfare distribution, and it's aimed at minimizing the adverse impact of trade liberalization on vulnerable women.
There are multiple such initiatives under way that we can discuss in the question period, but it's fair to say that Canada is at the very forefront of this agenda. In the February budget, as you well know, Canada committed to subjecting its free trade agreements to gender-based analysis plus, or GBA+, an assessment that takes into account gender and other intersectional identity characteristics.
This is very important because, as we know, the impacts of trade liberalization are gendered, especially in terms of employment and wages, but also in terms of job segregation and working conditions, in terms of consumption, and on the provisioning of public services. This also has to include a consideration of how these things have the potential to increase unpaid labour in the household.
Although we know this about the gendered nature of trade liberalization, it's only recently been acknowledged that we need to adopt an evidence-based approach to generating sex-disaggregated data and reliable methodological tools for measuring the gender impact of existing and proposed trade deals.
I'll say again that I think the risks of over-promising and under-delivering on this agenda are quite real.
We're truly at the cusp of establishing best practice in the field. But conducting rigorous GBA+ analysis is best described as ad hoc and aspirational at this time. It's never been applied to a free trade agreement before. That means that this is a really good opportunity for us, and while Canada is using GBA+ to conduct an ex ante assessment of its FTA with Mercosur, most experts, including the chief economist of Canada, acknowledge that we lack reliable and sufficiently granular data to fully assess the impact of proposed trade deals.
This means that in the absence of a well-established methodology in sex-disaggregated data, we're relying on anecdotal and voluntary reporting, mainly from businesses, but also from academics and non-governmental organizations, including women's rights organizations.
The government's commitments to fund evidence-based policy on gender equality are absolutely crucial, so this is the celebratory tone. That $6.7 million over five years to StatsCan to fund a centre for diversity inclusion statistics is absolutely essential. That $5 million per year to the department of women and gender equality is absolutely crucial. And $1.5 million over five years to fund coordination among the departments of Finance, women and gender equality, and StatsCan is essential.
The priority of the department of women and gender equality and its new minister needs to be better coordination between all of these agencies.
And further, if we're to make good on our claims about intersectionality in GBA+, then we need data on the impacts of trade agreements on other vulnerable groups in Canada, including indigenous populations.
It's also notable that we've only committed to conducting GBA+ on new trade agreements. This tells us nothing about the gendered impacts of the many trade agreements to which we already belong, many of which are named in this bill.
The pay equity act and the establishment of a department for women and gender equality are among the most exciting, progressive and important dimensions of the bill, and considered in tandem with the gender budgeting act, they have the potential to greatly improve the lives of many women. However, there's a lot at stake if we fail to get the GBA+ right in the field of trade, and this has direct implications for the pay equity act.
I said before that pay equity will be meaningless if, by the same token, we're concluding trade deals that push women into jobs that are precarious and low pay and/or shift the burden of care work more squarely onto their shoulders. Similarly, Canada's approach to negotiating investor protection in deals like CPTPP and CETA, for example, may be considered socially regressive because of the dangers associated with regulatory chill. We need to ensure that investor protections do not curtail government's duties to protect women's rights or work at cross-purposes with other elements of our gender equality agenda.
We could take a minimalist approach. We could take a “do no harm" approach. A minimalist approach is to conduct good GBA+ to simply ensure that new trade agreements do no harm, that they do not increase gender-based or other forms of inequality. This would mean conducting ex ante GBA+ using sex-disaggregated data along four dimensions in terms of employment and wages, consumption, access to public services and effects on entrepreneurship.
It's worth noting that most gender-based assessment of free trade agreements focus only on the first category—employment and wages. I think Canada can do a lot better, and focus on the impacts on those other three dimensions as well.
A maximalist approach would have us using trade as a lever for gender equality. This a circumstance where we could conduct both ex ante and ex post assessments of free trade agreements along those four dimensions. We would look at how proposed free trade agreements would impact women and other vulnerable groups, and then we would take stock of how existing free trade agreements have been affecting women and other vulnerable groups.
It would involve introducing measures to mitigate the adverse gendered impact of trade liberalization. This is where the buck stops in the bill. We've committed to conducting assessments of the impacts of free trade agreements, but we're saying nothing about mitigating the adverse effects of trade liberalization on women and other vulnerable communities.
We need a proactive approach, an approach that would have us working with our trade partners, and finding ways to use trade in a meaningful way as a lever for gender equality and creating new opportunities, not only for women entrepreneurs but for other women who are engaged in the Canadian economy.
From a budgetary perspective, Canada would be working at home and abroad to engage in capacity-building and knowledge transfer to reduce the barriers to women's economic empowerment and to reduce their precarity.
To conclude, I would say that we're saying all of the right words, and these words are reflected in Bill . We have promised to submit federal budget items to gender and diversity impact assessment. Given that trade is a social justice issue and that trade policies affect women and other vulnerable groups differently and profoundly, this is a welcome move.
If we are to deliver on these words, however, then we have to have reliable trade-related, sex-disaggregated data. We need to take concrete measures minimizing the adverse impacts of trade on women and other vulnerable groups, and we need to identify and fund pathways for using trade as a lever, both for sustainability and gender equality.
I think that successfully delivering on this agenda could really improve the lived experiences of women in Canada and abroad.
I thank the committee for inviting me to appear. I will just note that I don't represent anyone because I don't consult to anyone or anything anywhere. I'm merely a poor professor.
Today, I will focus on only one issue in this mammoth budget implementation bill, and that's the federal deficit of the Government of Canada.
I'm old enough to remember the previous time that the federal government had a balanced budget—in the early seventies. The justification then was the same it is as today: Canada had a large, robust and growing economy that could readily finance the deficit. Indeed, we did, and we do.
This was the seventies, when the boomers were young, there were millions of us and the economy was growing incredibly rapidly. However, as our spending ran ahead of our revenues and government deficits started to grow, inflation crept into the economy and became embedded—or “anchored”, as the governor would characterize it—and the Bank of Canada and the Federal Reserve started to increase interest rates. Rates peaked at 20% when I was a mortgage manager at BMO, one block from here, which is now the building owned by you people for your receptions, the Sir John A. Macdonald Building.
Nonetheless, due to the magic of compound interest, the monetary intervention—which it was—to embedded inflation of around 15%, while brutally effective at killing the metastasizing cancer of inflation, did not address the compounding, rapidly escalating federal debt in Canada, or in the States, for that matter. That required a second massive government intervention 15 years later, a fiscal intervention, which was the unprecedented and largest downsizing in Canadian history—by the Chrétien administration—in laying off 80,000 people.
Both were essential responses to the emergence of deficits that were added to and compounded the national debt and that drove inflation upward and then caused negative blowback from the capital markets, bond markets, currency markets and investment markets.
The purpose of this very brief walk down memory lane is to remind parliamentarians that those who argue that federal deficits are of no concern—because Canada is a very large modern economy with a printing press called the Bank of Canada to print money if necessary—do not fully recognize the danger of compound interest, or sudden unexpected recessions requiring major new government stimulus, or the reaction of capital, currency or investment markets to governments that become heavily indebted. Andrew Coyne developed these arguments more fully in an op-ed about two weeks ago.
However, the strongest rebuttal to my arguments is provided by this response, “Yes, Professor Lee, you're correct about the seventies through the nineties, but that was then, this is now, and those conditions no longer pertain.” This is absolutely correct, and I will now turn to the following.
Indeed, the past 40 years or so were wonderful for most of us, with steadily increasing wages, an increasing standard of living, increasing prosperity, increasing levels of education, and improving health care. Life, at least for the boomers in Canada for the last 30 to 40 years, has been a beach, but now we face dramatically different times than the seventies, times that are much more bleak and foreboding.
The most obvious threat to Canada and the entire western world is the aging crisis, which the IMF has stated in writing will dwarf and greatly exceed the cost of the 2008 financial crisis by many magnitudes. Per the OECD, the dependency ratio in 1968 of seven workers to one retiree will collapse to less than two and a half workers to one retiree. Today, Florida has the largest average age population of one in four over 65; within approximately 20 years all of North America is going to look like Florida, without the nice weather.
The second related problem of the aging crisis—and this really affects all of you in this room—as confirmed by numerous OECD, IMF and scholarly studies, is that economic growth that generates the tax revenues that Parliament spends is going to decline significantly going forward, at around a 1.5% decline in GDP annually. This is going to reduce the tax revenues available to governments and your degrees of spending freedom.
It gets worse. As the PBO demonstrated in a fiscal sustainability report of only two weeks ago—and this is a direct quote—current provincial government expenditures “are not sustainable” over the long run. In the not too distant future, the numbers demonstrate—as I have predicted on CBC and elsewhere—that the Parliament and the Government of Canada will be called upon to bail out or assist the Government of Newfoundland and Labrador, and/or the Government of New Brunswick.
Per the latest Newfoundland and Labrador budget statement of this year, that government and its 500,000 residents now owe a net debt of $15 billion, and the Muskrat Falls bills are not fully paid or haven't flowed in yet. By contrast, the City of Ottawa—I know it's not a province and I recognize that, but we're all in Ottawa and I had the numbers at my fingertips—and its one million people, twice as many as Newfoundland and Labrador, owe $2.5 billion in net debt, with about half of the LRT already funded.
I'm not picking on Newfoundland and Labrador. As the PBO said, none of the current expenditures of any of the provinces are sustainable. For those who object and say that I don't understand that provinces can't go bankrupt, I am not discussing bankruptcy, which is a legal concept. We are discussing solvency, which is an accounting concept. Can the province pay its bills as they become due? Puerto Rico today is insolvent; it is not bankrupt. Detroit was insolvent for many years before it finally became bankrupt.
As I assume that no parliamentarian will realistically refuse to bail out an insolvent province and its people, how will each of you respond to such a request if it means—which it likely will—killing some of the federal projects you want financed? This means we must confront the question of whether we should, can and ought to continue to add roughly $20 billion year after year to the national debt of Canada, which is reducing our degrees of future spending freedom, while knowing, if we are going to be honest, that bailout demands from some provinces are on the near horizon and will be on your desks in the relatively near future—I predict within five years.
In the words of John Donne, do not ask for whom the bell tolls; it is tolling for thee.
The question is, ought we? Should we? If you assume, as I do—and I don't think it's a big assumption—that public resources and public revenues are scarce and they're not infinite.... You have a finite amount of revenue, and as Aaron Wildavsky, the late great dean of public policy at Berkeley said, government is about making choices.
Budgets are about making choices, and right now, yes, I am very critical of pouring $20 billion into the economy. We're stimulating in this country.... The Government of Ontario has been running a significant deficit for many years. I'm talking post-recession, post 2008-09. The Bank of Canada has had rates—monetary stimulus—at historically unprecedented low levels, and the federal government has been pumping it in throughout that period, so here we are, to use a metaphor, pouring gasoline on a roaring fire.
I'm not a purist who says not to put gasoline on a fire to get it going, although it's probably not very environmentally responsible, but I don't see the need once the economy.... We're going flat out right now. The economies of the U.S. and Canada are just going gangbusters, so there's no justification. This isn't some kind of ideology. This is straight out of John Maynard Keynes, the great liberal macroeconomist at Cambridge, who made that argument. You go into deficit when times are bad, when the economy goes off the cliff, as we did in 2008-09, and you run up surpluses when the economy is doing strongly.
In past recessions, we did it: in 2008-09, 1990-91 and back in 1980-81. Those were appropriate. I'm not a person who says that governments should never run up a deficit. When they go into a recession, yes, but there's no justification right now. There is no academic, scholarly, theoretical or pragmatic justification for running a significant deficit.
My other concern is that we are reducing our degrees of freedom in the future, because resources are finite. They're not infinite, and if they're not infinite, then that's money we're spending that we're not going to have available down the road to spend on something else.
There are two or three questions in there.
I know that there are some people who think that deficits and national debt are bad. I simply don't subscribe to that. I think there's a very substantial body of economic theory that would argue against that. It's not the idea that there is a national debt or a deficit; it's partly whether there's a need for it. Right now, there's no need for it.
To deal with your larger question, when you are not running up surpluses, again, it's not about paying off the deficit or being very ideological, if you will, about paying off the deficit or the debt; it's that you are reducing your degrees of freedom for the future. That's my biggest argument that I want to make to parliamentarians today. You may think that this is free of consequence, but it isn't, because what we're doing is reducing our degrees of freedom in the future when—who knows?—we have to bail out the next automobile company in the next recession.
I'll say very quickly that this is the second-longest recovery in economic history in Canada and the United States. We are already on statistical borrowed time, if you will, before the next recession. When it comes, we're going to have to stimulate. It could be 2% of GDP or it might be 3% of GDP, but it's going to be very significant, because there's an expectation that governments have to do something. Then we're going to be looking at $20-billion deficits like they were nothing. We're probably going to be looking at deficits of $50 billion, $60 billion or $70 billion in the next recession. Again, then along comes the problem with the maritime provinces that are the most challenged, so we have some crises down the road. Also, tax revenues are going to start to fall as the growth rates start to decline because the boomers are all heading off into the sunset.
The economy of today and the growth of today are not going to be there in two, three or four years. We are facing a structural transformation over the next five or 10, 15, 20 or 30 years, but we're spending like there are not going to be any changes occurring.
Thank you very much, Mr. Chair.
Thanks to all of our witnesses.
As a number of witnesses have indicated—Mr. Hynes in this panel—this budget bill is badly flawed and has been rushed through Parliament. We've been given a few hours with witnesses, and we really appreciate your coming forward.
Today, witnesses have identified a whole variety of flaws. The government has given absolutely no indication that it will do anything other than bulldoze this through in a few hours, a week from next Tuesday. The special handcuff legislation it brought in means that anything that hasn't been amended is simply adopted full scale at the end of the day. It's a ridiculous approach to policy-making.
Mr. Hynes, thank you for your comments.
The Speaker has rebuked the for doing this. Certainly Mr. Trudeau promised that he would act differently from Mr. Harper. This is twice as bad as anything Mr. Harper pulled. We have to try to adjust these incredible flaws.
I'd like to start by asking Mr. Benson, Monsieur Lacoste and Mr. Hennessy about pay equity. You raised very important issues about the flaws in the bill.
Mr. Lacoste, you said that the two amendments you proposed would avoid endless litigation. You fear that women will be forced to go back to court if this bill is passed as it stands.
My question to the three of you is this. What happens if this government just rams through this legislation without making the essential changes that you and so many other witnesses have suggested?
Thank you for the question.
Effectively, in our opinion, the few changes we are proposing are essential, as this would save time. We have seen, for example, that Quebec's pay equity legislation has given rise to many challenges in the courts. We could now take advantage of this experience and avoid making these mistakes again.
I'm thinking in particular of the wording of clause 2, from which I recommended that the words “while taking into account the various needs of employers” be removed. Indeed, if these words remain, they become an interpretive tool for the entire proposed legislation, which is contrary to the spirit of such legislation and to the Constitution, for the reasons to which I referred and presented by Justice Abella in a Supreme Court decision.
The purpose of such legislation is to restore balance and justice. Women workers have the right to be paid based on the fair value of their work on the same basis as their male colleagues. If these words are included in the proposed legislation, they will have the opposite effect and will serve those who oppose such a rebalancing exercise, essentially employers who do not want to pay women what they should receive. So there will be legal challenges that will go all the way to the Supreme Court in I don't know how many years, eight, ten years, before a final judgment is rendered that will confirm that we were right. There is no reason why these words should be included in the proposed legislation.
The situation is the same with respect to retroactivity of payments as part of the process. My colleague Mr. Hennessy and the CLC talked about it. The Supreme Court has just rendered a decision on this issue, the same one I was referring to last May. This court ruled that Quebec's legislation was unconstitutional and contrary to the Canadian Charter of Rights and Freedoms because it did not allow for retroactive payments. However, the bill contains provisions that say exactly the same thing, and there is no reason to justify it because it forces us to restart at the federal level the debate that was held at the provincial level.
These few changes, like what I had written on the issue of good faith, are basic principles. If this is not clearly reflected in the proposed legislation, the obligation to do something and whether or not it is a fault will be debated in court.
Thank you for your question, Mr. Fergus.
Yes, the real purpose of legislation like this is the one that Justice Abella mentioned, and which I quoted to you. It's about restoring justice to allow women to be paid what they should be paid based on the value of their work in the same way as their male colleagues in similar positions. No system will ever be perfect in its way or methodology to achieve this. We know it's difficult. In this regard, the bill is very good, because it allows us to move forward.
However, this part of clause 2 you mentioned has no place. It is a concept foreign to that of pay equity. Pay equity legislation aims to restore justice and end discrimination, which is unconstitutional. Indeed, the latter provides that laws must protect people—in this case women—against discrimination.
However, the passage you quoted has no place in a clause like this one, nor in light of the principle of such legislation. This legislation isn't for employers; it's for women workers. Of course, in all this, we must take into account employers and how their companies operate, but employers aren't the ones who need protection, it's workers. The purpose of passing this legislation is to protect them and give them what they are entitled to, as quickly as possible, in a process that is as correct and satisfactory as possible, although not perfect. Including this passage in clause 2 is at odds with these principles.
What it also means—and I'm speaking more as a lawyer here—is that when it comes to interpreting a law, lawyers consult certain sections, such as section 2, under the heading “Purpose”, to understand the purpose of the legislation. These provisions then serve as a tool for interpreting the entire act. In this case, the inclusion of this passage in clause 2 somehow pollutes what should be a human rights act. Every time this interpretive tool is used to reduce the rights of women workers, it will be contrary to the Constitution, as the Supreme Court told us in its decision last May on the case involving the Quebec legislation.
Dr. Hannah, you suggested that governments need to take action to mitigate the damage that free trade, in your view, causes to women.
I found that approach rather surprising, given that the data points in the opposite direction. In countries where there is more free trade, women, minorities and the less fortunate are all significantly better off than in countries where there is limited trade.
For example, the highest life expectancy in the world for women, according to the World Bank, in a document entitled, “Life expectancy at birth, female (years)” is, incredibly, Hong Kong, a place with one of the highest population densities on planet earth, with no natural resources whatsoever—they even have to import their own water—where you have a space that is a fraction of the size of the city of Ottawa, with eight million people clustered and sharing space. There, female life expectancy is 87 years old.
What is interesting is that for men it's only 81 years old, so in terms of inequality between the sexes.... We see that women in this jurisdiction actually live longer than in other places. Hong Kong, of course, is the freest economy in the world and has the most free trade. It has almost no tariff barriers whatsoever, almost no quotas and a very limited and simplified tax regime.
I don't just point to this example. The top 10 countries in life expectancy for women are: Hong Kong; Japan; Macau, a jurisdiction within China; Spain; France; South Korea; Bermuda; Singapore; and Switzerland. All of them are actually free-trading nations and almost all of them are free market economies.
So I'm wondering why you seem to think that free markets and free trade are bad for women when, at least when it comes to life expectancy, the data demonstrates precisely the opposite.
It is a very interesting discussion, and thank you all for coming today.
For your information and the record, my colleague Mr. Julian brought up the few days there is left for you to make your submissions. I'm just confirming with the clerk. You have until November 15.
There are a couple of things. First of all, I want to follow up on Mr. Poilievre's comments about poverty, and the goal of moving people out of poverty and into the middle class. As you know, our government's done a number of things, and it flows back to Ms. Hannah's comment about data.
Whether it's the Canada child benefit, the increase to GIS for vulnerable seniors or the Canada workers benefit, as I listen to Mr. Lee and the talk about eliminating the deficits, I wonder where he cut. One of the things that help governments decide where to put those resources is data. It's one of the things we certainly recognized, when we came into government, as something we needed to improve. As you know, the long-form census was cut, and now it's back. That's helpful, but it's going to take time to build that dataset again.
You mentioned some studies and other things, but can you give us some suggestions about what you think is the most useful direction, where that data might best come from and maybe what it should be focused on?
Looking at the BIA legislation, we've heard some really good commentary on the changes to the Labour Code. This is the first time in a generation, or maybe two generations actually, that a government has made substantive and, what I would call, well-needed changes to the Labour Code.
However, as Mr. Hynes commented, we need to be careful, because we need to ensure competitiveness of our industries, whether they are federally regulated rail carriers or telecoms or banks. We also need to be fiscally prudent, because the folks working for the federal government are paid by an individual called the taxpayer. We need to be prudent about that.
I believe we struck a good balance on those measures. You can haggle about some of the details or measures, but I think, all in all, we have struck a really good balance, and we need to be proud of that.
I want to turn to the Teamsters.
There is an issue that I have spoken to you about—Unifor, as well—on contract flipping, contract retendering, which is basically outlawed in the U.K. and in several jurisdictions.
What else is needed in this legislation to make sure we are not be in a situation where workers' rights are basically stripped away?
The first comment is that to be very clear, part III of the Labour Code will not affect FETCO too much. Most of the large federal employers are unionized, and part III of the Labour Code deals with bedrock, base-level, non-union workers.
There are provisions in the code...and we welcome the changes. Funnily enough, I happened to work during the Arthurs commission to look at that. It's long overdue, and we thank the government for bringing them.
The contract flipping issue will be in part I of the Labour Code amendment. It is sorely needed. It disrupts life. It makes business less efficient. It's not really appropriate.
The one I would want to turn to in making things better would be the scheduling issue. Scheduling affects transportation workers. They are the people who drive trains, buses, the pilots. They are the people who move the stuff.
Because of a subrogation agreement with Labour Canada, Transport Canada sets those hours. So notwithstanding the clause that says this doesn't apply to collective agreements, it wouldn't apply anyway.
When I talk about fatigue, the major issue is this. We know from science that the workers who work these hours have cognitive damage, disease, social consequences. Transport Canada can't look at that, because their mandate is an efficient system and public safety for companies.
This is something that has to be fixed.
Thank you. I do want to move on, because there are other folks I'd like to get to.
One of my siblings is a member of the UFCW and has been a member of the union for a long time, I think over 30 or 35 years. The industry has changed. The grocery industry, if I can speak to that, has drastically changed in Canada. We've led on the federal side with legislation on changes to the Canada Labour Code.
Unfortunately, in the province of Ontario, Premier Ford has basically come in and stripped away the rights that workers earned and deserved in the last changes he made in his government. It's really unfortunate to see. I do need to make that point, because it's really taking workers' rights back in time, not forward, which we should be doing. That's the way we should build Canada, not in the way his government is doing.
I will turn to Mr. Lee.
Ian, I've always enjoyed your presentations here at committee. I've been on the committee since the beginning of our government. You know, we live in a really wonderful world. We have the best of all worlds, and sometimes the worst of all worlds. Global poverty is at record lows. Poverty in Canada has been trending down since the 1960s with the introduction of old age security, health care and GIS. We brought in the Canada child benefit. We've done a lot of measures, including a 10% increase in the GIS.
On trade, I agree with Mr. Poilievre to a certain extent. Trade tends to lift all boats. There are some losers, but it has reduced global poverty to what I would say are continuing lower levels.
What do you think of our government's trade agenda? Then we'll move on to the debt and deficit numbers afterwards.
I just want to get back to the amendments. Ms. Rudd, my colleague, made an intervention that was simply not correct.
In seven days to the hour, all of the amendments need to be in, submitted through an opposition party or if the government accepts any amendments to submit themselves. They're not actually obliged to adopt those amendments, but it's seven days to the hour.
We have a statutory holiday next Monday. It takes two to three days to do the translation and to finalize those amendments, so we're really talking about hearing back from you by tomorrow afternoon. That's the reality around the process that it takes for amendments.
For the government to pretend that there's all this time is simply false. They rammed this legislation through. They put the handcuffs on consideration of this bill.
I'm going to leave you with my home phone number, because I'm leaving for British Columbia tonight. It's 604-521-2171. Phone me anytime this weekend. We will be endeavouring to put these amendments in. We are hoping the government actually turns away from the cliff, allows amendments to pay equity, allows amendments around banking and consumer protection, and allows consideration of the important message that you have delivered about this bill and the flaws that must be corrected.
Please contact my office, because we want to work with you and with so many of the other witnesses who have come forward with very valuable proposals for amendments that will make a difference in the legislation. This is badly flawed legislation being rammed through the House in a way that even Stephen Harper never tried to do. It is beyond me that a prime minister who promised to bring an end to these undemocratic practices is accelerating, amplifying and doing even worse than what the previous government did.
Now, it's not just amendments that need to be considered. We can choose to delete clauses, and I want to come back again to Monsieur Lacoste and Mr. Hennessy. Proposed clause 181 of the pay equity act is basically the scissors clause. It would allow the current government, or any future government, to cut out whole sectors. The minister could decide, just on fiat, to exempt the entire banking sector from any provision of the pay equity act, to basically exclude women working in that sector from pay equity.
Would you recommend to this committee that the scissors clause, which would allow the minister in this government or any future government to exempt whole sectors, whole industries, be cut out of this legislation? Would you recommend that be deleted?