[Recorded by Electronic Apparatus]
Monday, May 15, 1995
.1102 
[English]
The Chair: Order.
We are continuing our hearings on Bill C-76.
With us this morning from the Metro Toronto Chinese & Southeast Asian Legal Clinic and from the Ontario Social Safety Net/Work is Reverend Susan Eagle, member.
We welcome you, Reverend Eagle, and look forward to your presentation.
The Reverend Susan Eagle (Ontario Social Safety Net/Work): Thank you.
I believe that the Metro Toronto Chinese & Southeast Asian Legal Clinic will be sending you some written material, to go with what I have to present to you today.
The Chair: We look forward to receiving that. Thank you.
Rev. Eagle: First of all, my appreciation for allowing us to make a presentation today.
I'm going to read some of this, because I did not bring a French translation with me. I think it will be helpful if I read some of it.
I am here today representing the Ontario Social Safety Net/Work, and on behalf of that network I want to express some grave concerns about Bill C-76, which you are considering.
As a network, we believe it's going to spell the end of social programs for our country, and thus the demise of the kind of country and the kind of nation we have built over the decades.
Our Social Safety Net/Work has been in existence for a little more than a year, and we have about 471 members, of which 356 are organizations. We are a coalition and our membership includes community groups, social planning councils, social justice coalitions, first nations organizations, grassroots information and advocacy groups, legal clinics, faith groups, labour organizations, and multicultural groups. As you can realize, it's a comprehensive group that gathers and tries to cover the multitude of issues that face those organizations and groups. We have connections to about 71 communities in the province, and we are a growing network and coalition.
It's from that base of people and their concerns and the concerns of those organizations that I'm here today to raise with you a concern about Bill C-76.
We want to begin today by reminding you that Canada has already conducted a review of the social security system; it was undertaken just a few months ago by this government. The Standing Committee on Human Resources Development received 1,200 submissions and 25,000 workbook responses and had 637 witnesses come before it. That doesn't cover all those who wanted to present, because our Social Safety Net/Work was one of the organizations that wished to present but could not get time on the agenda. Many other organizations also could not. So it doesn't even begin to cover all the people who took an interest in the process and wanted to participate.
As a network, though, we did receive federal funding. We went across Ontario seeking submissions and opinions from organizations and individuals in communities as to how they felt about the process and the recommendations.
We were not surprised that the standing committee, when it reached its conclusions, suggested that social security reform was a fundamental priority; that there was great interest by the public in participating in any review of social programs; that there was a commitment to improving the quality of life for Canadian children, to addressing the child poverty issue; that there needed to be an addressing of the need for sustainable community development; and that there was a broad public perception there are fundamental inequities in our taxation system.
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The standing committee also acknowledged that social spending in periods of recession significantly lessens the impact of recession on the economy. It noted that Canadians have a traditional commitment to fairness and compassion. It surprised us then, when after thousands of dollars had been spent and thousands of Canadians had been consulted, and fairness, compassion, and public participation had been established as cornerstones for any reform of programs, the government should ignore its own advice and move unilaterally to rescind the Canada Assistance Plan, replacing it, from our point of view, with nothing more than vague phrases about provincial agreements to establish national standards.
These values of fairness, compassion, and public participation have not happened by accident but have evolved out of decades of struggle for survival and the lived experience of developing and sustaining community life in a northern climate. Decades ago, as Canadian people struggled to survive the Depression of the 1930s, a commitment to a social safety net evolved from the pain and misery of hunger, homelessness, and unemployment. It indeed would be a sad comment on our social history if a time of economic hardship now is to be used to justify destroying the very programs that a previous economic hardship made so necessary for survival.
In fact, we're talking about social programs and a vision of nationhood that was bequeathed to us by Canadians who survived the Great Depression and envisioned a future in which never again would children go to bed hungry, never again would the homeless languish in our streets, and never again would the sick be refused access to equitable health care.
We wonder if Canadians have today lost that vision. Do they believe social programs are not necessary any more?
In fact, we know from the statistics in poll after poll, including the most recent pre-budget government poll, that the general public has affirmed the need for a strong social safety net and has voted for parties that promised to preserve it.
I want to quickly go through the next section, which is what we find in legislation, and refer to several pieces of legislation.
One is our Constitution Act, which identifies the promotion of equal opportunities for the well-being of all Canadians; the furthering of economic development to reduce disparity and opportunities; and the provision of essential public services of reasonable quality to all Canadians.
Our Constitution says that Canada is committed to the principle of making equalization payments to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.
Internationally, Canada has signed several documents.
The Chair: There were no cuts to equalization payments. You realize that.
Rev. Eagle: We see cuts in transfer payments.
The Chair: Yes, but there are four different types.
Rev. Eagle: Right.
The Chair: Equalization is not touched.
[Translation]
Mr. Loubier (Saint-Hyacinthe - Bagot): Mr. Chairman, perhaps there are no cuts as such, but we have been imposing caps for six years and these caps where maintained by Minister Martin, so in real terms, there are cuts.
The Chair: Right.
[English]
Mr. Loubier has just indicated that by putting a ceiling or a cap on equalization payments, he feels that is equivalent to a cut.
Rev. Eagle: I think what we are also trying to point out, in talking about our Constitution and our legislative commitment, is the spirit in which Canada has evolved and the kind of commitment that has been made in trying to come up with a formula for fairness for provinces and for disparate peoples across the country.
I'm not prepared to argue the technicalities of the legalities of that. It's rather the spirt of the vision that we believe there then was an attempt to enshrine in legislation, both in the Constitution Act and internationally in the kinds of covenants that Canada has signed.
Several of them I'll list: the International Declaration of Human Rights; the International Covenant on Economic, Social and Cultural Rights; and the International Convention on the Elimination of All Forms of Racial Discrimination.
Pages 3 and 4 outline some of the commitments that Canada has made in those covenants: again, a spirit of fairness and equality for its people; and a commitment particularly to the rights of those who are most vulnerable in our country.
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The question then is how Canada can eliminate the Canada Assistance Plan, which is the vehicle by which it attempts to make good on its constitutional commitment and international covenants. How does Canada reduce already underfunded transfer payments, offering provinces flexibility instead of national standards, and still maintain its international and constitutional commitment to protect the inherent dignity of the human person and the right to an adequate standard of living, health care, and education? How does Canada reverse an already disporportionately high incidence of child poverty in our country by simply washing its hands of any responsibility for the provision and protection of its citizens? That's what we interpret Bill C-76 as doing.
The vague promise of maintaining national standards where appropriate without providing any definition of standards or process of enforcement will result in the unravelling of an already less than adequate safety net and the removal of a minimum set of standards that's already fragile and tenuous. Is it any wonder that the National Anti-Poverty Organization felt compelled to raise this issue in the international arena or that the international community has responded with grave concern?
Appended is the letter from Philip Alsten, Chair of the UN Committee on Economic, Social and Cultural Rights, reminding Canada that it does have obligations under this international covenant.
We believe that Bill C-76 flies not only in the face of the commitment that Canada has made in legislation but also in the face of the famous red book. There are two quotes I have pulled out, which suggest that the Conservative Party created a polarized society but that the Liberal Party would not do that.
I quote:
This is not the kind of country most Canadians want to live in. Liberals will work towards greater equality of social conditions among Canadians.
The second quote suggests that the previous government focused obsessively on one problem, that of the deficit, without understanding or caring about the consequences such as lost jobs, increased poverty, social costs. These social costs are real.
The February 1995 budget is a clever one. It hides the reality of social cuts under the guise of provincial flexibility and program restructuring. It takes the heart and soul out of Canadian nationhood. It reduces us to isolated entities, each squabbling for dwindling dollars in a world of reduced revenues. The vulnerable are increasingly sidelined and even the aggressive have to fight to survive.
We unequivocally reject this new vision of a divided nation, because it is mean-spirited, demoralizing, undemocratic, and ineffective. It is also plainly unworkable. It reduces us, as Canadians, to a competitive labour pool in a world where only the fit survive.
What does moving to flexibility instead of standards really mean? It means that as the federal government washes its hands of responsibility for the well-being of Canadians, it allows provinces to do the same, again using the excuse of tough financial times ever to push the obligation downward and away from the public revenues that should be used to give support and assistance to Canadians.
The next section is just a very quick look at facts I'm sure you already know: that one out of every six Canadians is poor; that we have a very high poverty rate for families; that the poverty rate for single-parent mothers had never dropped below 50%, but that in 1993 it was at 59.8%; and that we have such a very high percentage of poor children in our country it has become an international statistic.
As well, we work with a provincial network that acknowledges that in Ontario things are very difficult.
The next section, at the bottom of page 6 in the brief, identifies some reasons why we don't think the budget is even going to work when it cuts costs.
One is that cuts in training programs cut in fact into the kind of revenue the government is going to need. Statistics indicate that 75% of those going through training programs find jobs. That then provides taxes and also a contribution to the Canadian community in terms of spending. If you take that away, people don't find jobs. Not only do you have that lost income in terms of revenue, but you also have people in need of social assistance.
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For newcomers and refugees, in spite of promises to the contrary we believe the vulnerable have been hardest hit by this budget. Cutbacks in settlement services and language training, coupled with the landing fee, mean that newcomers simply take longer to adjust to their new environment and that it takes longer for them to become productive members of Canadian society.
A study done on immigrants coming to our country discovered that they are self-employed at a higher rate than the Canadian-born. There can't be any reason for delaying their goal of self-sufficiency in our economy by creating additional barriers.
Another reason we don't believe the budget's going to work is that it targets the wrong people. Yesterday's Toronto Star reported that 1% of our Canadian population owns 25% of our wealth. It seems that it's the poorest of the poor who are going to be paying for our deficit.
On page 8 we have a definition of the social deficit provided by one of our legal clinics in Ontario. I want to read it to you, because it is important for us to weigh it against financial deficits.
Critics of the budget say it's unfair to pass our debts on to our children. I have children too, and this argument always tugs at me.
The truth is that our children will be much worse off if, instead of a deficit, we bequeath to them a country plagued with poor health, a destroyed environment, joblessness, poor-quality schools, and crumbling highways. The social and physical infrastructures are real assets to pass on to our children.
An often-overlooked aspect of government debt is that the burden is largely offset by a country's assets. Debts secured by assets are investments in the future wealth of this country. They also make our country productive and competitive. In fact, in a global economy there are only two economic advantages any country can give itself: a highly skilled workforce, and a highly developed public and social infrastructure.
Will a budget that further impoverishes our poor really give us healthy workers and a stable economy in the years to come? Enshrining short-sighted thinking in legislation will simply make it all the more oppressive.
Finally, we also believe that the budget will not work because drawing the wrong conclusion can lead you to offering the wrong solution. We have a story that was given to us by one of the participants when we did our province-wide consultation. I want to share it with you. Even in the midst of pain we sometimes have some humour.
A scientist spent some months training a frog to jump on cue to prove that frogs' ears are located in their back legs. Every time he told the frog to jump, it jumped. He then cut off one leg and told the frog to jump. The frog jumped on cue. He then cut off the other leg and told the frog to jump. Of course, without back legs the frog couldn't jump. So the scientist concluded that when the frog's back legs were cut off the frog went deaf.
The participant went on to say this is funny, but in real life it isn't so because this is how our social programs work. Recipients are told to work by the system. If they find themselves a job and it pays too little to live on, they're penalized by a cut in their benefit cheques.
They're told to seek more work or go to school. The moment they go to school full time their assistance gets cut off, forcing them back on the system. The system concludes that, despite being told to work or go to school, people on social assistance don't want to work or get an education.
Can we conclude that Canadians aren't working because they want to be poor? That seems to be the thinking behind a budget that serves only to widen the gap between rich and poor, the working and the unemployed or underemployed of this country.
In light of that, we felt we could not come to you without offering alternatives to the budget, so we have looked for alternatives. We have talked to Ontario people who came out to the consultation about alternatives.
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We were very disheartened and upset to discover that the Alternative Federal Budget Group, which worked as a coalition, was refused a meeting with the minister. They have provided documentation that they believe provides an alternative to the kind of budget we are now dealing with.
The Chair: We'll be happy to receive their representations.
Rev. Eagle: I believe some of them have already been before you.
We believe Bill C-76 is a regressive piece of legislation, which must not go unchallenged in its present form. Those of us who are proud to call this country home and who have roots in the social movement that has been part of our history cannot remain silent while the government considers abdicating its responsibility both to Canadian citizens and to the international community.
Those of us who are newcomers remind this government that it has an international reputation as a public promoter of justice and human rights. Together we invite this government to ensure that domestic legislation reflects international proclamations.
We leave you with six recommendations:
First, there should be a delay in the implementation of parts IV and V of Bill C-76 until there can be a full, broad, public inquiry. We believe the government has much to gain from that kind of an inquiry.
Second, we encourage that standards be set in any new piece of legislation that is developed, especially one that insists on the principles that assistance be provided based on need and that there be a right of appeal.
Third, we believe if the CAP legislation is terminated, any new legislation must have enforcement of standards built right into the legislation.
Fourth, we think it's important that there be some kind of a comprehensive social cost analysis of this budget, of any future budgets, and of any financial decisions the government takes so that we can see the long-term impact of the decisions we make.
Fifth, we would like to see this committee direct the Minister of Finance to meet with those proposing alternative budgets. Tax reform, job creation, the Tobin tax - there are many suggestions for alternatives. We do not believe we are devoid of alternatives.
Sixth, we have a question for you about national values. We want to know if the red book is still operative, if the government is still willing to stand by the commitment it made to the Canadian public at the time of its election. It is our firm belief - and this is based on spending hundreds of hours with Canadian people - that Canadians want a country that is just, humane, and tolerant, a country in which all citizens have equal access to resources and opportunities, are able to provide for themselves and their families, and can live with dignity and pride.
The remainder of the submission I have is in the form of appendices. If there's time I'll take you through those, but I think they're self-explanatory.
The Chair: Thank you very much.
[Translation]
We'll start the questions with Mr. Loubier.
Mr. Loubier: Thank you, Mr. Chairman.
Before asking my question to Mrs. Eagle, I'd like to introduce to you Mrs. Grace Hoo, a trainee from the Michigan University who is going to help me during the next two months.
So, I introduce Mrs. Hoo to you.
The Chair: Hear, hear.
Mr. Loubier: Thank you very much, Mrs. Eagle, for your excellent presentation which is well documented and which has a great value in my opinion. I was listening earlier when you spoke with much compassion for the most disadvantaged in our society and it's good to see some compassion instead of the habitual cynicism to which we are accustomed in this committee.
I'd like to tell you, Mrs. Eagle, that I was very impressed by the number of statistics you have in your submission, mostly the ones which tells us about the trend in poverty in the last ten years. I was reminded, when I looked at your table on food banks, that within one year, 20 new food banks were added to the 436 in existence, and that while the government had given itself the mandate to reduce poverty, we added 20 new food banks.
.1125
I looked further on at federal revenues and the situation did not change, this year or last year. We see again that we perpetuate inequalities and injustice.
I look for example, to the corportate tax which represents 8% of the federal fiscal bases. To this, we must add perhaps another 8% as contributions to unemployment insurance, so half of this 16%, you have it here. Altogether, the corporations account for 16% of the fiscal bases compared with 44% representing the part of private individuals.
Some 40 years ago, 45 years to be more precise, corporations and individuals contributed 50/50 to the federal tax bases.
So in the light of those two statistics which impressed me, I'll ask why this government is not answering one of your recommendations which is to conduct a public inquiry and I'll add, not only on the bill which is before us, but on the whole situation of poverty in Canada, on all the transfers made specifically to reduce its impact and also on the whole tax situation, for it is not right that in 1995 we have on one hand a philosophy from the Red Book which, in my opinion, has been set aside by the liberals for about 15 months and on the other hand, we perpetuate injustice?
I'd like you to somewhat comment, on the information you have in your brief, the necessity to review everything we're doing in Canada in the fight against poverty and fiscal injustice.
[English]
Rev. Eagle: Maybe I can make two or three comments. First of all, you refer to the second-last page, which has the chart on the corporate income tax. The reason I included that was not so much to show the pie chart as the chart at the top, which indicates that we only and continuously compare ourselves with the Americans.
You point out a very good thing about the corporate tax rate, too. If you flip back to some earlier pages, you will find that those looking at alternative budget possibilities have compared Canada with European countries. We find that our share of the tax burden is much less than that in many other countries. Yet continuously we as a public are offered only comparisons with the United States, which lead us to believe as a public that we are overtaxed.
Thank you for also pointing out the corporate tax rate, because that is also one of the things suggested in the alternative budget that we need to review. This needs to be part of the whole tax reform.
In terms of a public inquiry into poverty, in 1984 I began to participate in a public inquiry, known as the Thomson inquiry, in Ontario. Ten years later there have been no reforms, but we have three times as many poor people. So it is important for the government not only to talk but also to act. When we're talking about a public inquiry, it needs to be grounded in a firm government commitment to act on the kind of information it discovers and it hears from Canadian people.
We have recommended the inquiry because we don't believe Canadian people really realize what is at stake in this legislation. They will someday, but they should have the opportunity to participate now while there's still a possibility that their voices can be heard and can make a difference.
On a personal level, perhaps I could say this. I work half the time in two congregations of the United Church. The other half of my time I do outreach work in the northeast part of the city of London, in Ontario. It is known as an affluent city, and yet I spend all my time in that part of the job with people who are struggling to survive at the end of the month and who do not have enough food to eat now.
So it is with some horror that I personally look at the impact of what cutting transfer payments will do to the people in the community I work with. Unfortunately, those people don't often have a chance to come here and to speak to you personally, so the best we can do is bring you stories of the kinds of personal encounters we have.
In fact, one of the projects of our Ontario Social Safety Net/Work right now is to collect stories of people across the community, because we believe stories are as important a way of telling the truth about what's going on in Canada as statistics.
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[Translation]
Mr. Loubier: I really like your recommendation number 4 asking for a social cost analysis of the fiscal and budgetary policies the government has announced. This is a significant recommendation because I have felt for the past year and a half that the federal Department of Finance is like a huge bush league organization where all budgetary decisions are made without any analysis whatsoever. And I'm not even talking about social cost studies, I mean, studies made on the direct impacts of the budget.
Many times, we have asked the Finance Department officials for impact studies of some measures they took, more particularly last year when they did away with the capital gain exemption for the first hundred thousand dollars, a decision that really hurt senior citizens whose only asset is a duplex. They live in the first floor apartment, but the top floor that they rent is an asset according to the legislation. Before the department made that decision, it had no impact study done. Can you imagine all the work that would have to be done if we had to implement your recommendation? It would be akin to a revolution.
I want to congratulate you for your suggestion, and as the Official Opposition spokesman, I intend to circulate it, because I think that this is the best way for governments to make enlightened decisions that do not cause people to be worse off, such as what happened following the decisions made by Minister Martin last year.
[English]
Rev. Eagle: I am still a great believer in the Canadian people, that they want a country that works. I am still part of that general public in the middle of the poll that suggests not only that the government still has responsibilities to achieve a workable economy and society but also that the government can still accomplish that. The gap between rich and poor in this country has not reached the proportions that make it impossible for us to achieve that.
I believe if we do some kind of social cost analysis, people will really see that in the long run it is in our best interests to maintain social programs and to get serious about eliminating the causes of poverty, not simply deal with the symptoms, which are far more expensive.
[Translation]
Mr. Loubier: Thank you, reverend Eagle.
The Chair: Is that all for the time being, Mr. Loubier?
Mr. Loubier: Yes. Thank you.
[English]
The Chair: I want to go through a couple of the alternatives you referred to in recommendation 5 on page 10.
In terms of tax reform, do you have specific areas where you feel we should make changes?
Rev. Eagle: We were very impressed by the material provided to us by the Paying For Canada Coalition, and I'm not prepared to leave you this document - it's the only one I have - but we can certainly send it to you. A number of things in tax reform were suggested by the Paying For Canada Coalition.
I do not profess to be an expert in the tax reform area, but I have followed very closely what economists - and I consider them to be credible ones - have proposed to us. They certainly make sense to me, as a lay person looking at the tax reform issues.
The Chair: You mentioned job creation. Do you have specific proposals as to how we might go about creating jobs? None of us in any party are pleased or happy with the level of unemployment in Canada, and we have often said that the best social program is a good job.
Rev. Eagle: In recommendation 5, where I am suggesting that the government look seriously at the alternative budget, I am not saying that because I think it is very likely we can reverse the trends we have and start suddenly simply to create jobs.
Again, in the alternative budget a number of suggestions are made as to where job creation could happen, and if you'll bear with me for a minute I'll highlight a couple of them.
One is reducing and redistributing working time; another is identifying public services as prime sites for public investment; another is encouraging the private sector; another is returning savings from offshore. Then we start to move into the Tobin tax, in terms of having more money to invest in job creation.
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A number of these things are spelled out far more comprehensively than I can do in a couple of minutes here.
It seems to me that what we need is a commitment not only from our government but also from private industry, from the private sector as well, to work in partnership. I know from the community that it is certainly prepared to work in partnership with the government around job creation.
I have yet to meet people on social assistance who want to be there. My experience constantly in the community is that people say: give us jobs, help us find jobs, we want to be productive participants in the Canadian economy. That's not to say there aren't always a small percentage of those who don't - I readily recognize that - but by and large our experience has been that people are willing to work, even to put in the extra in order to make our economy work, if the government and the private sector can also work in partnership.
The Chair: You mentioned the Tobin tax. I don't know of anybody on our committee.... I don't want to speak for the Bloc on this, but we would love it if we could impose a tax on all financial transactions and get away with it. But if we were the only country in the world doing it, then all of these financial transactions would take place outside Canada.
We're looking for the pot of gold. We're looking for the possibility of balancing our budget in a painless way, and we've explored a number of options and we're trying to find these ways with a great deal of sincerity.
Rev. Eagle: I am aware that Canada is able to meet with other countries and find its way into signing international agreements. So it seems to me there is some spirit of international cooperation in which there are other governments who are also equally concerned about the vulnerable in our midst, because they also sign these covenants. It would seem to me that Canada perhaps can be working more with international partners on not being the only country that's trying to make some of these changes.
I am aware that when the last budget was announced, the seven-and-one cuts - the $1 increase in taxes for a $7 cut in programs - was far more rigorous than in any of the other countries, certainly the G-7 countries. Sweden implemented a one-and-one solution, because it also was dealing with deficit issues.
So, even while Canada is saying that it doesn't want to be out there by itself taking risks, it seems to me that Canada is already out there by itself, in terms of the solution around cutting social programs that it has initiated. So I would encourage the government to look at not being out there by itself on that end, but on the other end if a risk needs to be taken somewhere.
The Chair: In the fall we looked at Sweden with a lot of interest. We found that the top marginal tax rate in Sweden, which had been well over 70% at one point, is actually lower than it is in Canada today. They've reduced their top marginal personal tax rate to 50%. The top rate in Ontario is 54%.
Rev. Eagle: Again, I have a feeling that there are some other trade-offs in there, too. That may have been part of their negotiation.
The Chair: Yes. They hit the wall on their debt, too, and had a real problem. You'll remember that at one point their interest rates were up to about 95% for a brief period.
[Translation]
Mr. Loubier: I do have one concern, Mr. Chairman.
I was not following very closely what you were saying although your comments are much to the point. However, we must be very careful.
We have been saying for a year, and more and more people are saying like us, that we must always be very careful when comparing marginal tax rates for high income and corporations. The first study on Canadian taxation in the last 25 years shows that there is a significant difference between the official rate and the effective rate.
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Because of tax loopholes and of the many deductions that are not available elsewhere in Sweden or in the United States, for example, the effective net rate is probably lower in Canada than in other countries.
This is one of the reasons why we have been demanding a tax reform for the past 15 months. We could make comparative studies, but we have to compare apples with apples and oranges with oranges, otherwise it can be very tricky.
The other thing is corporate taxation, more particularly the posted rate. Following Mr. Campeau's budget in Quebec last week, that was being considered at the provincial level, we realized that there were incredible differences between provinces. In some, corporate tax is double what it is elsewhere. Right now, our federal capital tax is lower than what it is even in the United States.
This will have to be reviewed eventually whether we want it or not. People have to put up with more and more cuts; they are being told to tighten their belt, while not doing anything about taxation which could be used to create employment.
When you announce that you will be reforming taxation so that underground labour will decrease and employment will increase, it can only have a positive affect over and above the rest.
I think that has to be considered.
The Chair: Yes, I agree. You are right in saying that it is a very difficult question.
Maybe we could put that on our agenda for the fall?
Mr. Loubier: Mr. Chairman, given your good will, I would propose that we vote on a motion asking the Minister of Finance and the Minister of Revenue to initiate a joint complete review of taxation.
The Chair: Of all taxation in Canada?
Mr. Loubier: Indeed.
[English]
Rev. Eagle: I am not an expert on taxation, but I consider that I am somewhat of an expert in terms of the pain people are feeling. I don't believe there is anything to be gained by our government or by the private sector avoiding dealing with what's happening in this country, and that is the growing gap between rich and poor.
There is nothing to be gained for corporations down the road by having a lot of unhealthy and uneducated and poor people in the country. They won't make good workers. They won't make productive Canadians.
So it is an appeal, I guess, for us to start to look now at what is in the benefit or the interest of all of us in creating a healthy, stable community. It means dealing with social programs now and making sure that we do not unravel that social safety net.
The Chair: Reverend Eagle, you are a very eloquent spokesperson for those in our society who have the greatest claim on our resources, those who are in need. I want to thank you, on behalf of all members here, for a very forceful and eloquent presentation.
What stands out most, in my mind, is that you said that in your experience you don't know anyone who is on welfare who wants to be there. I suspect that in many cases we have overstated the abuses and not dealt with the realities.
On behalf of all members, may I thank you very much for an excellent presentation.
Our next witness is the Social Science Employees Association: Bill Krause, president; Marvin Gandall, executive director; and Ian Mackenzie, research officer.
Mr. Bill Krause (President, Social Science Employee Association): On behalf of the Social Science Employee Association, I'd like to thank the Standing Committee on Finance for affording us this opportunity. I'm Bill Krause, the association's president, and I'd like to start by introducing my colleagues.
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First, Mr. Martin Gandall, our association's executive director: he'll be summarizing our brief and our legislative recommendations.
Next is Ian Mackenzie, our research officer, who prepared our submission.
Our association, the third-largest federal government union, represents more than 5,000 economists, sociologists, statisticians and social science support staff, as well as researchers at the Library of Parliament, who assist members of Parliament and committees such as this one. In effect, our members collect data, conduct research and prepare evaluations and policy papers on the economic, social and policy issues facing the nation.
Since the time of the last federal budget, we have faced the reality that the federal government would impose program cuts. Rather than resist the inevitable, our efforts have been targeted at minimizing the negative implications of the program review, by advocating a comprehensive program that deals with downsizing and the work environment of those employees remaining in the post-downsizing period.
Our program advocates that on a comprehensive basis, across the public service, downsizing objectives should be achieved through attrition rather than lay-off. Early retirement incentives should be used to stimulate attrition. Pension penalties should be waived to facilitate retirement.
The freeze on external recruitment should be deepened and extended. Work normally contracted out should be performed by surplus employees. Management should be compliant with requests for various forms of part-time work, phased retirement and family-related leave. Overtime work should be limited.
Funds for training should increase and be targeted at surplus individuals and those whose jobs are being substantially restructured. Employees should transfer with their jobs, benefits, and...[Inaudible]...security intact as programs are transferred out of the federal jurisdiction.
The management category of the public service should be delayered.
Finally, union management committees should monitor the retraining and reappointment of surplus employees in keeping with the current workforce adjustment directive.
In addition to this program, our association, responding to the government's intentions and the challenges of downsizing, has recently created a register that might allow our members wishing to leave the federal government to swap positions with those wishing to continue their career.
We have circulated these lists to all departments and agencies and are urging all government departments to accommodate the wishes of these employees in reaching the downsizing targets. It is clear from our program and recent actions that we advocate voluntary workforce reduction measures.
We believe they are more than just human, fair and reasonable. They are inherently more conducive to the stability of organizations. They reduce stress and anxiety, which is essential to employee moral, productivity, and the commitment to professionalism that underlies the work of government employees. Thank you.
I will now ask Mr. Gandall to summarize our brief and our legislative recommendations.
The Chair: How many members are in the group?
Mr. Krause: Over 5,000.
The Chair: How many people have responded to your invitation to submit themselves for early retirement?
Mr. Krause: We have approximately 50 people who have done that.
The Chair: So that's 1%.
Mr. Gandall.
Mr. Martin Gandall (Executive Director, Social Science Employees Association): You already have our brief before you. I regret that we weren't able to get it to you sooner, and I hope you'll have the opportunity to read it for a more complete statement of our position on this legislation.
My colleague, Mr. Krause has already alluded to our program on downsizing, which we have advanced publicly for the past year and a half. It's reproduced on page 1 of our brief, and I would like to frame our comments on the government's actions in the budget legislation within this context.
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Our submission acknowledges that the government has made some positive statements and has taken some steps in the right direction. Most notably, the government has waived pension penalties to encourage early retirement, which is point 3 of our program. But the public may not know that the money to pay for this will come out of the employee pension fund in the form of reduced government contributions, so that it is the employees rather than the taxpayers who are paying for this benefit. Moreover, there are some serious restrictions on its availability which will limit its effectiveness, a point to which I'll return shortly.
We also think the government is serious about limiting outside hiring, which is point 4 of our program, but it has not moved to a total freeze and will still allow departments to hire university recruits, co-op students, and casual workers at a time when long-standing employees are being laid off.
Now, we accept that, in very specific circumstances, departments need to hire specialized help from the outside that is not available inside. But there is some question as to whether departments will genuinely restrict their outside hiring to these situations or whether they will take advantage of the loophole so that the whole downsizing exercise becomes little more than an excuse to replace a permanent, more experienced, and better paid workforce with a younger, inexperienced pool of cheap labour.
Some people call this exercise public service renewal and think it is a positive development. For our part, while we have an evident self-interest in protecting the jobs of our current members, we also believe the Canadian public has a parallel interest in ensuring that working conditions, pay, job security, and morale do not deteriorate to the point where the public service is no longer able to recruit and retain the kind of skilled, motivated, and experienced workers it requires. That does not suggest renewal but decline.
We are already seeing evidence of the decline. Some of you may have read the article in the weekend Ottawa Citizen detailing how difficult it has now become to interest very capable younger people in a public service career.
We should acknowledge, too, that the government seems committed to curbing the abuse of contracting out, a practice that was promoted vigorously by the Mulroney government. We applauded the new government last year for ordering a review of contracting out under the auspices of the House Standing Committee on Government Operations, but the waste of taxpaying dollars through unnecessary contracting out is still going on on a daily basis while qualified employees face lay-off. Consequently, we think the government should move quickly to implement the recent interim recommendations of the government operations committee, which are reproduced on page 7 of our brief.
Finally, we think government statements in support of more opportunities for leave and for part-time work, for limits on overtime, and for delayering the senior management category, all of which we call for in our program, are also positive. But again we have to caution that, given the progressive weakening of central agencies such as Treasury Board and the Public Service Commission, it remains to be seen whether any of these measures will be implemented in a serious way by line managers in the work units.
Our greatest disappointment, and the major reason for our appearance here today, is the very restricted nature of the early retirement and early departure incentives announced by the government last month. As you know, the ERI, the Early Retirement Incentive, which was introduced by regulation last month, is being offered only to those older workers who are declared surplus, while the EDI, the Early Departure Incentive, which will be introduced by virtue of the legislation you are examining, is being offered only in the eleven government departments and four smaller agencies that will bear the brunt of the job cuts.
In our view, this makes a mockery of the incentive program. It has nothing in common with the incentive programs offered in private industry to cushion the impact of downsizing on employees, and its effect in the public service will be limited at best.
As you know, the purpose of an incentive program is to encourage voluntary departures so that job vacancies are created that can be used to absorb personnel whose positions are disappearing because programs and services are being cut. This is why they are commonly offered on a widespread basis and are aimed primarily at work units where jobs are not disappearing so as to create openings for employees in work units where jobs are being lost.
But this is not the case with the public service program. By restricting the ERI to older employees who are losing their jobs and the EDI to the hardest hit departments, the government is turning things on their head. The ERI should instead be directed at those older employees who are not losing their jobs, who occupy positions that are not being cut and that can subsequently be filled by younger surplus employees.
By the same token, the EDI should be primarily directed at employees in the least affected departments, where jobs will continue to be found, and not to the most affected departments, where jobs will be in short supply. In other words, the net being cast by the incentive programs and the potential pool of vacancies that will be created will be too small to avoid lay-offs.
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We share the view of other witnesses before this committee that if the incentive programs were extended to all employees in the 240,000 positions that comprise the public service rather than to just the 45,000 slated to be cut, enough vacancies would be created to absorb the tens of thousands of employees being displaced without the need for a single lay-off.
It appears that the government is aware of the program's limits but is trying to take the easy way out. It is easier to terminate employees in the most affected departments, albeit with improved severance in the form of early retirement/early departure incentives, than it is to provide the financial and administrative support necessary to support a genuine incentive program and to open jobs for them elsewhere in the public service.
We also think the government is not receiving the necessary cooperation from departments such as Statistics Canada, which are less affected by the cuts and which would be the likeliest new employers of surplus employees from the hardest hit departments. These less affected departments do not appear to be willing to let their older employees leave voluntarily, to be replaced by surplus employees from the most affected departments. Fifty years after World War II, the attitude of these better-off departments bears a disturbing resemblance to the western democracies that refused, out of narrow self-interest, to accept refugees from war-torn Europe.
As a result, as we note on page 3 of our submission, the government is creating two large groups of disaffected employees, one comprising younger surplus employees in the most affected departments, many of them women, who will not be able to find jobs in other departments and will be unwillingly forced onto the unemployment rolls with mortgages to pay and children to raise, the other consisting of fed-up employees in the rest of public service, many of them older males in the less affected departments, who can better afford to take the incentive packages and who would like the opportunity to leave but are being effectively prevented from doing so.
Incidentally, the fact that women may be more adversely affected than men by the government's restrictive incentive policy is something we have begun to examine very seriously, and we expect to have more to say on this in the near future.
Our nine recommendations for changes to the bill are on page 10 of our submission.
The committee will note that our first one is for an amendment that would allow the ERI and EDI to be made available to all public service employees. We are also calling in our third recommendation for interdepartmental cooperation to slot surplus employees into positions vacated by employees who volunteer for the incentives.
In our view, these amendments would eliminate the need for lay-offs, at no extra expense to the taxpayer. The ERI and EDI are already accounted for in the budget. The taxpayer has little interest in on whom the money is spent, and in our opinion, if asked, would argue that it should be spent on those able and willing to leave voluntarily in order to create jobs for those wishing and needing to stay.
The immediate and self-interested needs of some of the better-off departments should not be permitted to dictate government policy in this area.
I want to close by directing your attention to our final recommendation on page 10, which calls for the amendment of proposed subsection 7.3(1) of the legislation, which states that the Work Force Adjustment Directive should not be the subject of collective bargaining for three years from the passage of the bill. The proposed subsection also says that the directive should not be embodied in any collective agreement, which is not necessarily the same thing.
We understand that Parliament may not wish us to have the right to negotiate changes to the directive during the downsizing period, but we do not believe it is your intent also to remove the current right of employees to challenge before a third party any arbitrary or unfair abuse of the directive as it is amended by Parliament. Yet that is the interpretation that could be placed on this proposed section as it currently reads, and we are therefore asking the committee to remove any ambiguity that might surround this issue by adding a provision to the bill affirming the present right of employees to have disputes related to workforce adjustment referred to adjudication.
For purposes of greater clarity, we are also asking for the deletion of the words ``or to be embodied in a collective agreement'' from proposed subsection 7.3(1).
Thank you for providing us with this opportunity to express our concerns. We'd be pleased to respond to your questions and comments.
The Chair: Thank you.
[Translation]
Mr. Loubier, please.
Mr. Loubier: Thank you, Mr. Chairman.
Mr. Gandall, Mr. Krause, Mr. MacKenzie, may I welcome you to the Standing Committee on Finance and thank you for your excellent presentation.
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I am somewhat surprised because the Minister of Intergovernmental Affairs, Mr. Massé, had told us that when decisions concerning layoffs of Public Service employees would be made, such decisions would have been well thought out, that we would be aware of the employees' severance packages, that there would also be decisions based on a very specific plan. The first people concerned would be notified well in advance since it would be with them and thanks to their cooperation that we would set up such a plan.
But in your submission, you say precisely the contrary. You even say on page 7 of your submission, and I quote:
- The particulars of the early departure bonus have been announced more than one month
after the budget. Some details have not yet been finalized. Therefore the guidelines on
post-departure contracts have not yet been finalized.
There is no concurrence between governments and most of the Public Service employees' representatives. The Minister also said that, on top of the Public Service Alliance, all the other unions agreed with us.
[English]
Mr. Krause: I think it's quite clear from the facts on this issue that the announcement of the details on the EDI program occurred weeks after the budget came out. It was even further down the road that we had our briefing with Treasury Board officials. So there was a serious delay there and a lack of information, which affected the ability of employees to make decisions.
Even at this late date, we don't have the details on what the contracting practices will be during the downsizing period, which also affects the employees' ability to make informed decisions. So the facts clearly state we haven't received the information we should have had when we needed it, and some information is still not there.
[Translation]
Mr. Loubier: No, it was all improvised. We were not being told the truth when told that everything had been thought out, planned and that employees and their representatives were kept aware.
What the Minister of Intergovernmental Affairs and the President of the Treasury Board have presented us is also a joke. It's a real farce!
[English]
Mr. Gandall: I think it's important to draw a distinction between what the government and the central agencies have said and when they said it, and what the departments have subsequently said and done.
We knew well in advance, as the government has indicated to this committee, what the broad outlines of the program would look like. There was discussion of the early retirement incentive and the early departure incentive.
I might add that our union never took a position in support of the package when it was announced by the government. We wanted to put any package that was agreed to by the unions to our membership for a vote, but that's another issue.
The problem is that we were given only the broad principles well in advance, and it turns out on closer inspection of the details of the legislation, and also based on what the practices and policies of the departments are, that there are some very serious omissions in terms of the kind of information we and our members need in order to make intelligent decisions about their future. That is really the point we were trying to emphasize in the submission.
[Translation]
Mr. Loubier: I had two other questions, Mr. Chairman if I may.
On page 4 of your recommendations concerning the replacement and substitution exchanges, you say:
- We recommend the implementation of a substitution and exchange program in all
departments in order to curb the number of involuntary lay-offs.
Secondly, did you ask again, recently, to the President of the Treasury Board, Mr. Eggleton, if he intended to have a clear and specific policy with a built-in control mechanism for contracting out? Or did you leave all this in abeyance since the beginning of April?
[English]
Mr. Krause: On the first question, to give you the best explanation, we give you the example of what we've done as an association.
We've surveyed our members and obtained from our membership a list of those employees who are working right now in a least-affected department who would like to leave the government but it appears they will not be able to.
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We have also obtained a list of those of our members who are in departments that are more seriously affected by the budget and are fearful of losing their employment and would like to stay.
Given these two lists of people, resumés, c.v.s, and knowing their group and level of employment, we were able to identify people who could potentially switch jobs. We've taken those lists and we've circulated the 50 or so people of our membership throughout all of government, to every department and agency.
It is our hope that those departments and agencies will look at those lists to see how they can accommodate some of these requests for movement. If they can accommodate these, they will effectively give an individual who would like to keep working the opportunity to work, while one of his colleagues retires instead. We think that's very humane, it's very reasonable and it creates little disruption in the public service.
On the second point - contracting out - we prepared a submission to the standing committee on contracting out, and we would hope the recommendations to that committee will be acted upon as soon as possible by the government.
Our interests in that area have already been put out in the public. The employer is well aware.
[Translation]
Mr. Loubier: Up to now, the President of the Treasury Board did not really warm up to the idea of having public control over contracting out and a cost-benefit analysis of contracting out, until he gets a comparison of the costs of those contracts when the work is performed by government employees.
[English]
Mr. Krause: We certainly favour a full costing-out and a proper cost-benefit analysis. One of the elements in our submission was to identify the full costs of contracting out, which we did not feel the government was taking into account when it awarded contracts. That was very essential to our brief.
[Translation]
Mr. Loubier: One final question. I'm lucky today; I have more questions than I usually do. That's why I'd like to ask one final question.
[English]
The Chair: Because you have to represent not just your party but the Reform Party, also, today.
Mr. Loubier: The Reform Party members do not need to be represented by anybody. Besides, I am really not in a position to express here the views of the far right.
You are talking of ambiguity when it comes to arbitration. We also mentioned that ambiguity concerning the provisions of the bill. Is it not true that when we succeed in filling positions from a list, department by department, and not on an interdepartmental basis, the workers depend on decisions made by their direct employer, even if he is the deputy minister, whereas before, we had a list which was based on seniority and reviewed by the Public Service Commission.
We are now talking about arbitration by high-ranking officials, which could lead to discrimination and favoritism. Are we wrong to portray things that way or is this a real possibility?
[English]
Mr. Gandall: The current situation is that indeed departments do make the determination as to which employees are declared surplus, and they also make determinations as to which employees can be slotted into vacant positions. When there is abuse of that process, we go to the deputy minister, but only as an intermediate step, and then we don't proceed to the Public Service Commission.
We do in fact have the right to go to the Public Service Staff Relations Board to have this matter arbitrated, and we prefer having that right, because the Public Service Staff Relations Board, whose members are appointed by Order in Council, in our opinion has a greater arm's-length relationship with the departments than does the Public Service Commission, and our concern about that ambiguous provision in the legislation is that it might take away this current right that our members have.
[Translation]
Mr. Loubier: Do you think that this is an ambiguity or that the government does not want to discuss with its employees any more and only wants to muzzle them, just as was the case with the railway strike, for instance, or when they took away your rights to negotiate and your right to strike? Is this an ambiguity or is it intentional? Personally, I doubt that this is purily the result of an ambiguity.
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[English]
Mr. Gandall: Of course, we don't know the answer to that as well, and our experience might suggest that it is something less than ambiguous. Perhaps there is a deliberate intent, but, as we've indicated, we don't know for certain.
It is conceivable that the framers of the legislation framed it in such a way that it would prevent the unions from bargaining any changes to the directive as it's amended by Parliament but, at the same time, didn't intend to restrict access to adjudication. Certainly, in the lead-up to the legislation and all of the consultations that we had with government and Treasury Board representatives, we were never given any indication that the right of employees to effectively challenge abuses of the directive by departments would be taken away.
We certainly had a clear idea that there would probably not be negotiations around the directives, but this other element was missing. When we looked through the bill and examined it, it came as somewhat of a surprise to us.
Mrs. Brushett (Cumberland - Colchester): I believe I have heard some of you as witnesses before with Government Operations, to look at the contracting out and some of these issues that are in reality common to both departments.
Coming back to the point of those who wish to take leave of employment as opposed to those who are declared surplus, Treasury Board probably had the option of going by various different ways here and have chosen the route to declare those persons surplus.
I must believe they were declared surplus because government will no longer be doing a specific job, or we have, in fact, contracted it out and disposed of government doing such for the future, that there is a scenario or a pathway to be followed through and therefore it wouldn't be absolutely possible, in all cases, to transpose someone, when there is no department or no job in that department because it's gone. So how could it work if we take your suggestion?
Mr. Krause: We don't want to look within just one department. We believe you have first to create the vacancies so that people whose work is affected can then be transferred to the vacancies that you've created. The best way to create vacancies would be to open the departure incentive and retirement incentive on a government-wide basis so that many older employees, or old employees past the age of 50, would then leave the public service and this would create the opportunities to move other employees.
The Chair: They're very old, you know.
Mr. Krause: I'm there myself. I appreciate that.
Mrs. Brushett: If there's a surplus by creating vacancies, is that always one and the same as having a surplus person for a job that no longer exists?
Mr. Krause: No. If the job doesn't exist and it's being cut, that's fine. You've now created an individual who doesn't have work.
What we're saying is that if you offer the departure incentives and the retirement incentives across the public service, then other employees whose work is still needed will chose to retire. When they do, you create the opportunity for that surplus employee to move into that job.
Mrs. Brushett: So you may integrate what we have done as a surplus position by eliminating that while at the same time allowing integration or cross-introduce both problems.
Mr. Krause: Yes, across departments.
Mrs. Brushett: Is your association in favour of whistle-blowing legislation?
Mr. Gandall: Well, we have -
The Chair: Does this deal with the railways or does it deal with... What is it?
Mr. Calder (Wellington - Grey - Dufferin - Simcoe): You blow a whistle only when you're at a crossing.
Mr. Gandall: We've traditionally supported whistle-blowing legislation. It's not a top priority for our association in the current climate.
Mrs. Brushett: Do you think there'll be any advantage in trying to allow our public service to have a better rapport with senior management and to get their ideas through the upper echelons?
Mr. Gandall: Certainly. If whistle-blowing legislation was introduced, we wouldn't be at the committee examining it and speaking against it. We would support it.
Mr. Krause: In the context of this committee's hearings, I think you should appreciate that the reason why other bargaining agents may have proposed it now is because there's a great deal of anxiety, tension and apprehension in the public service because we don't have the voluntary mechanisms in place that would help to get people out and keep the level of stress and anxiety low. With all the anxiety and apprehension and lack of security, people are looking at everybody else. Therefore, in this context a need is being created here for some whistle-blowing legislation. Believe me, if we had voluntary measures, there would be none of those concerns.
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Mr. Calder: Everything we're dealing with right now is all the donwsizing of government, which I like to refer to as the rightsizing of government. It's what we can afford now.
In the recommendations that are on page 7, which you said was put forward by the Treasury Board, they're talking about instituting guidelines for proposed contract work that is going to show savings. They want a process that will monitor that which is going to show efficiency, and they're looking on a basis of demonstrated need, which is all cost effective.
Then your recommendation is that the government institute meaningful controls over contracting out immediately and that the government adopt guidelines. I would like you to tell me what you're looking at here. In your eyes, how should we do it?
Mr. Krause: Do you mean control of the contracting process?
Mr. Calder: Yes.
Mr. Krause: The first decision has to be made about costing...[Inaudible]...to what contracts generally cost. We had a number of observations that said that it wasn't a full enough costing, that despite hiring contractors many of our people were involved in managing those contracts on a day-to-day basis as well, adding further to the costs of contracting the work out.
Other types of costs, administrative in nature, were genuinely being missed. We felt that if the fuller costs were taken into perspective, you would find in many cases that the cost of contracting out was far greater than the cost of our members doing the work.
Just to give an example, we had some data from one department - I think it was from Natural Resources - that showed professional contracts being let out, and the cost per day averaged about $575. Our members don't make anywhere near that. It would be far more efficient if our members were doing that work.
Mr. Gandall: The recommendation for greater controls and monitoring of the process is a recommendation by the House Committee on Government Operations. It's certainly a recommendation that we support and that we, amongst others, have proposed. They've had seven months of hearings on this.
I didn't want to leave the impression from the brief that it's our recommendation. We are supporting the recommendation that the committee has made.
The Chair: There is something that a lot of us have been really fighting with in our own minds. It's your recommendation 1. You referred earlier to the need to create these 45,000 vacancies. You said if this were done across the board on a voluntary basis, then those 45,000 vacancies, seeking the incentives, ERI or EDI, would occur. Correct?
Mr. Krause: That's correct.
The Chair: That's about 14% -
Mr. Krause: That's correct.
The Chair: - of public servants who would take these incentives. In your particular group, only 1% have taken these incentives. Why do you think it would get up to 14%?
Mr. Krause: First, it depends on the specific skill areas. It depends a lot upon the age demographics in the public service as well.
There's a logical way of proceeding on the downsizing issue, and that is to deal first with the voluntary ways -
The Chair: No. Just a second. You said here, ``...will eliminate the need for involuntary lay-offs''. That's 14% we'd get to if we just opened it up across the board.
Mr. Krause: Sure.
The Chair: In your group it's only 1% when you open it up.
Mr. Krause: With respect to our group and the 1%, we have considerably fewer resources than the departments have systematically to canvass their older employees and their employees who want to cash out and to make those determinations. We represent employees who are members of the association. We don't represent employees who just pay dues. They're not required to be members. So the access that we have to the employee population is somewhat less than that of the departments.
The other consideration to bear in mind is that employees are not stepping forward in greater numbers because they have already been told, in many cases by their departments, that there are not going to be interdepartmental swaps or substitutions. So in our view it's quite remarkable that we've actually had 1% of our membership express any kind of interest in the program at all when at this point it seems rather remote.
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The Chair: Excuse me. You asked them: if you got one of the ERI or the EDI, would you be prepared to retire and create a vacancy? Only 1% of your people said they would.
Mr. Gandall: No, we haven't done a questionnaire.
The Chair: You said you'd canvassed them.
Mr. Gandall: We said that we have sent a letter to our membership saying: if any of you want the association to act as an intermediary and circulate your resumés and your interest in cashing out to other government departments, we will do so. This is the response we received. I can assure this committee -
The Chair: What did this letter say? Did it say ``your interest in cashing out and being switched''?
Mr. Krause: We sent a letter to all our members. It was addressed to both communities of interest. We asked those who would like to leave the public service and wish to do so - and they were in the least-affected department - to indicate their willingness. Similarly, we asked those people who were in most-affected departments and wanted to stay also to indicate their willingness.
The Chair: I'm interested in one at a time, first in the number of vacancies that will be created. You agree we're going to have to create 45,000. It's a question of how we'll get there. What I still cannot understand is your statement in your first recommendation that if you offer this, as you did to your people, you'd get up to 14%. You got only 1%.
Mr. Krause: I have to explain further that many people were reticent to come forward because they felt that putting their name forward and having it distributed might actually jeopardize their chances and go against their management. I received many phone calls along those lines; I'd say that for each person who wrote a letter I probably had about two or three calls coming in from people who just wanted to know how it was going. They wanted us to keep them informed and said they might become involved later.
The fact that government departments don't support the activity and don't tell employees that it's okay makes them fearful of coming forward.
The Chair: I understand that.
Mr. Krause: Let's say that you're right and I'm wrong.
The Chair: I'm not saying I'm right. I'm using your figures.
Mr. Gandall: I'd like to answer your question directly, if I may. When we're talking about a 14% reduction in terms of the downsizing program, it's over a three-year period. We're talking about a reduction of roughly 5% a year. On average, even in a period of high unemployment we have an attrition rate in the public service of in the neighbourhood of about 2% a year. So we're looking at a 3% shortfall.
The 2% attrition rate is based on people who would resign or retire whether or not there's an incentive. What we're proposing is to accelerate this natural rate of attrition by offering incentives to employees who otherwise wouldn't do it. There we're talking about a 3% shortfall for every year of the downsizing program over the next three years.
If I can just finish my point, Mr. Chairman, we've indicated that we've already had 1% of our members come forward spontaneously. That's about 50 of our members. There is no doubt in our mind that if the ERI and the EDI were extended across the board, we could get an extra 2% of our membership - i.e., about 100 members - to be prepared to take either the ERI or the EDI to open up vacancies for those of their colleagues who are being declared surplus in the other departments. It's not as far-fetched as it sounds.
The Chair: Even if we didn't get 100%, as you said we would, -
Mr. Gandall: I said 100 members.
The Chair: - you're still saying it would be worth while. I have the feeling you might find some sympathy on this committee for that point of view.
Mr. Krause: Thank you.
Mr. Gandall: We appreciate that. It's important for us to make the case; we realize that.
The Chair: On behalf of all members, I want to say your presentation to us is very timely because we will have the minister before us this afternoon. Perhaps we can raise some of these points with him. Thank you very much for taking the time to appear before us.
Mr. Krause: Thank you.
The Chair: We stand adjourned until 3:30 this afternoon.