CANADIAN PAPERWORKERS UNION, LOCAL 101
DURHAM REGION MANUFACTURERS ASSOCIATION
AUTOMOTIVE PARTS MANUFACTURERS' ASSOCIATION OF CANADA
CANADIAN INSTITUTE OF PUBLIC REAL ESTATE COMPANIES
WATERLOO REGIONAL LABOUR COUNCIL
CONTENTS
Thursday 13 August 1992
Labour Relations and Employment Statute Law Amendment Act, 1992, Bill 40
Canadian Paperworkers Union, Local 101
Gary Buccella, labour consultant
Rubber Association of Canada
Brian James, president
Bryan DeMarchi, manager, industrial relations, Goodyear Canada Inc.
Durham Region Manufacturers Association
Desmond Newman, president, Cametoid Ltd
Automotive Parts Manufacturers' Association of Canada
Neil De Koker, president
Tom Dattilo, president, Hayes-Dana
Gary M. Ferlecki, president, Hull-Thomson
Guelph Chamber of Commerce
Robert J. Green, president
Robert A. Richardson, co-chair, labour reform committee
Vernon Yorgason
Canadian Institute of Public Real Estate Companies
Ronald Daniel, executive director
Ron Meiers, chairman, labour legislation committee; senior vice-president, Cambridge Shopping Centres Ltd
Cambridge Chamber of Commerce
Hugh Ferguson, chair, government relations committee
Oshawa Group Ltd
David Joffe, vice-president, industrial relations
Tim Carter, director, public affairs
Waterloo Regional Labour Council
Tom Rooke, president
Sandra Ellis, executive board member
First Line Trust
Brendan Calder, president
STANDING COMMITTEE ON RESOURCES DEVELOPMENT
*Chair / Président: Kormos, Peter (Welland-Thorold ND)
*Vice-Chair / Vice-Président: Huget, Bob (Sarnia ND)
Conway, Sean G. (Renfrew North/-Nord L)
Dadamo, George (Windsor-Sandwich ND)
Jordan, Leo (Lanark-Renfrew PC)
*Klopp, Paul (Huron ND)
McGuinty, Dalton (Ottawa South/-Sud L)
*Murdock, Sharon (Sudbury ND)
*Offer, Steven (Mississauga North/-Nord L)
Turnbull, David (York Mills PC)
Waters, Daniel (Muskoka-Georgian Bay/Muskoka-Baie-Georgianne ND)
Wood, Len (Cochrane North/-Nord ND)
Substitutions / Membres remplaçants:
*Carr, Gary (Oakville South/-Sud PC) for Mr Turnbull
*Daigeler, Hans (Nepean L) for Mr McGuinty
*Fawcett, Joan M. (Northumberland L) for Mr Conway
*Ferguson, Will, (Kitchener ND) for Mr Wood
*Fletcher, Derek (Guelph ND) for Mr Dadamo
*Ward, Brad (Brantford ND) for Mr Waters
*Witmer, Elizabeth (Waterloo North/-Nord PC) for Mr Jordan
*In attendance / présents
Clerk pro tem / Greffier par intérim: Decker, Todd
Staff / Personnel:
Anderson, Anne, research officer, Legislative Research Service
Fenson, Avrum, research officer, Legislative Research Service
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The committee met at 1000 in room 151.
LABOUR RELATIONS AND EMPLOYMENT STATUTE LAW AMENDMENT ACT, 1992 / LOI DE 1992 MODIFIANT DES LOIS EN CE QUI A TRAIT AUX RELATIONS DE TRAVAIL ET À L'EMPLOI
Consideration of Bill 40, An Act to amend certain Acts concerning Collective Bargaining and Employment / Loi modifiant certaines lois en ce qui a trait à la négociation collective et à l'emploi.
CANADIAN PAPERWORKERS UNION, LOCAL 101
The Chair (Mr Peter Kormos): Good morning. It's 10 o'clock. We're ready to resume. We're scheduled to resume at 10 and we will. The first participant is the Canadian Paperworkers Union, Local 101. Gentlemen, seat yourselves and tell us your names, your title with respect to the union and tell us what you will. We've got a half-hour. Your written material has been distributed and will be an exhibit in the hearings. Please try to save at least the last half of the half-hour for questions and exchange. Go ahead.
Mr Gary Buccella: On my left is Rick Catterall. He's the president of Local 101 of the Canadian Paperworkers Union. On my right is Don McSween, who is the vice-president of that same local. My name is Gary Buccella. I act as their consultant, and they've asked me to make a presentation on their behalf.
We really only have one major concern as far as this presentation I'm making on behalf of this particular local. The section of the act that we would be addressing is the combining of bargaining units, if you refer to our written submission to you as a way of background.
On behalf of Rick Catterall, president of Local 101, and his membership affiliated to the Canadian Paperworkers Union, I would like to thank the Chairman, Mr Kormos, and the committee members for the opportunity to address them on the contents of Bill 40.
By way of background, Local 101 represents the papermakers at the Quebec and Ontario Paper Co, located in Thorold, Ontario. At the present time this operation is a producer of newsprint and employs approximately 500 unionized employees. At this location there are approximately eight different local unions. Three are chartered to the Canadian Paperworkers Union.
First, let us say that in principle we welcome many of the changes in the act. Most were long overdue. However, there is one particular area of concern. We would like to share our thoughts with you on this important point. Specifically, we would like to address section 8 of Bill 40, the repealing of sections 7 and 8 and the substitution found on page 5, which reads:
"Combining bargaining units
"(1) On application by the employer or trade union, the board may combine two or more bargaining units consisting of employees of an employer into a single bargaining unit if the employees in each of the bargaining units are represented by the same trade union."
It is quite clear that subsection 7(1) grants the board, upon application by the employer or the trade union, the authority to combine present units into one unified group, "trade union" meaning the parent body to whom the bargaining rights are held and to whom the local is chartered. Either party can simply apply to the board and, once successful, can literally impose changes to conditions that form a binding contract on the employees without the consent of one party that will be affected the most by such actions. This, in our opinion, is a complete denial of natural justice.
On the surface, the logic behind this part of the act may appear to be sound and wise. However, it is our opinion that the government has not put much thought and effort into the array of scenarios that may occur and the direct effect it will have on the security of the very people the labour act was created to protect.
We'd like to bring to your attention some of these possible scenarios.
We have a company not unlike the Quebec and Ontario Paper Co that has three local unions belonging to the same parent body. One local has about 300 members, a second approximately 100 and a third about 25. However, historically the bargaining strength of the three locals flowed from the middle-sized local. All three units, within their own right, have different priorities and reasons for their strengths and weaknesses.
The company, in this case scenario, is attempting to introduce sweeping changes that will affect the security and working conditions of those working in the middle-sized unit only. This unit on its own has been able to resist such changes. The company applies to the board to combine the three units. The OLRB grants the relief sought by the company and combines the three units into one. The company then proceeds to put forward its changes.
Since these changes have no real effect on either of the other two units, they are accepted and the result is simple and clear: The one unit that on its own had been successful in protecting the security of its members is now beaten into submission by sheer numbers, and the company reaps the rewards by merely using this section to overpower the smaller unit.
The smaller unit, having lost its identity and its right to defend its members, now suffers the consequences. The threat of change and job loss is no longer a challenge to be met in the future but a present-day reality.
Another example is where the parent body is at odds with one of its locals. The parent body can use this section to rectify the problem and suppress any legitimate opposition from any disgruntled bargaining unit. The smaller unit would be swallowed up by the larger one. The conclusion would simply mean no more problems for the parent body and it would also mean no more freedom for the local. That, in our opinion, flies in the face of a very basic freedom, the freedom to choose not only the right to maintain the conditions they had when they joined the union, but the right to decide on whether or not they want that particular union at all.
Since this new legislation does not have a grandfathering clause in it, it is quite conceivable that a parent body may, by using this section of the act, change the geographical structure of a very old, established unit for no other reason than to maintain control of a group that no longer wishes to continue that relationship. We do not believe that this piece of legislation was created to deny or harm any existing right that currently exists in the act or to weaken one's present defences, but given the above two examples it is clear that this could very well become the norm instead of the exception.
Another factor that would appear to have been overlooked by the government when it drafted this particular section is what happens to specific contractual sections of the two or more collective agreements that would be merged as a result of the granting of a combination application during the life of an existing collective agreement.
Each bargaining unit usually has its own collective agreement and each collective agreement has its own defined terms and conditions, such as seniority rights, job posting clauses, layoff clauses etc. Nowhere does this section in its amended form deal with the problems of conflicting contractual language. It may be okay to say that this is what we have arbitrators for, but whose language takes priority over the other's, since both would have equal status?
If an application was granted, say, for example, in the middle of a three-year contract, the parties could not address these areas of contention until the current contract expired some 18 months down the road. In the interim, it is quite conceivable that the company could benefit from such confusion at the expense of one or both of the now joined units. How can one defend this as being fair?
At the Q and O, as it is most frequently referred to, the current contracts have many built-in barriers. In other words, job postings may have certain restrictions presently on them due to separate jurisdictions. Members in one unit may not, under the present contract, be able to bump into another unit's jurisdiction when layoffs occur, even though the affected individual has more overall mill seniority.
This particular operation has been unionized almost since the beginning of time; I think 1912 is the year. Since that time, the bargaining units have put into place many safeguards for working in the mill with a number of bargaining units that exist there. Employees, over the years, have made decisions about their future working lives based on these current existing practices and barriers. With this one piece of legislation, all that can change. This may be considered to be progressive, but progress should never be at someone's expense, especially when that someone has no control over the end results.
We acknowledge that under section 2 it probably makes sense to expand an existing unit when a certification is put before the board, but that's a new certification. There is no collective agreement in place in the new unit, and the parties have first-agreement legislation to deal with whatever problems may arise as a result of this new inclusion.
With respect to the old or already established bargaining units, did anyone, during the preparation of this piece of legislation, ever think to ask the question, why haven't bargaining units or locals belonging to the same parent organization merged before this? The opportunity was there, and if the companies were and are sincere in their concern about the problems of multiple unions, then surely there would have been no problems getting an agreement from the company once the locals had been merged together.
In the long run, what is being proposed may very well improve the bargaining system for all concerned. But in today's world, with all the changes going on on both sides since this legislation -- something has happened here. What has happened is that a piece of paper got stuck in the Xerox machine. What it basically says is that on both sides of the table there are many changes going on. To introduce this piece of legislation into an organization or into a system that has existed for over 75 to 80 years at this time without any safeguards we believe would be detrimental to the welfare and also cause greater confusion than currently exists.
Since this legislation will probably become law in the next few months, Local 101 would like to see some amendments that would provide safeguards to units like themselves, so that when this amendment becomes law it will not create the disruptions that will occur in any of these mills or plants if such safeguards are not incorporated into the act.
We respectfully submit to you that the following proposals be considered before this bill gets final reading:
1. That there would be a grandfathering clause for established units that would require a vote of all parties concerned who would be directly affected by an application, and that the board would require a simple majority vote of each of the individual units before such a merger could take place.
2. In the alternative, that a window be provided for existing units. In other words, if an application was granted by the board, it would not become effective until the signing of the next collective agreement following such a ruling. This way, the affected units would know ahead of time, going into negotiations, what the new bargaining unit would look like and they would have an opportunity to amend their collective agreements accordingly.
3. The act should further provide that any bargaining issues pertaining to the board's decision cannot be the cause of a strike or lockout. Failing agreement of the parties to resolve, any and all matters related to the board's decision would be submitted to a third party for final and binding settlement, as is the case for first-agreement legislation, because in reality, under this new bargaining unit, it is, for all intents and purposes, a new first agreement.
We can see no reason for any opposition to these proposals from the employers, because in the end they would have their problems solved. If it is done in this manner, it also eliminates the confusion, hostility, disruptions and emotional frustrations that would build up among the workers if, during the collective agreement, this merger took place.
I'd just like to say that on behalf of Mr Catterall and his membership I once again thank the committee members and Mr Kormos for the opportunity to express their viewpoint on this extremely important matter. If you have any questions, we'd be pleased to try to answer them.
The Chair: I'm sure there will be.
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Mrs Elizabeth Witmer (Waterloo North): Thank you very much for your presentation. This is the first time I've heard this concern expressed by the unions in the days that I've been here.
I would simply like to say that the concern you've raised concerning the most appropriate bargaining structure for the employees is a concern I have been expressing all along. This is one of the areas where I believe employees do lose local autonomy and could lose control over their destiny when they're forced to become part of a much larger bargaining unit that is located at different geographical locations.
I guess I would say to you that if the amendments you have proposed here were to be accepted by the government, would you feel comfortable, then, with the rest of Bill 40? Do you feel there are any other areas where individual rights and local autonomy are infringed upon where you have concerns?
Mr Buccella: First of all I'd like to apologize, because there's one sheet of this presentation that must still be in the Xerox machine back in the office. I'll try to get it to you and correct that.
With respect to your question, unfortunately I'm here to make a presentation on behalf of this particular local union. Since they have been organized since 1912, with respect to the rest of the parts of the act, with the change in the organizing end of it or the first-agreement legislation, none of those things really affect them. So I don't think it's appropriate for me to make comment on those points. I would like to have made a presentation on a number of the issues on my own, but since I'm not here in that capacity, I won't.
The one area, though, that we believe is practical and logical with respect to the anti-strike or scab legislation, as they say, to stop the company from replacing workers -- that probably makes sense and it is a deterrent to companies to try to provoke strikes. We're not too sure, though, whether that's an appropriate approach in the present-day situation.
We've read the government's budget papers and the dawning of new-tech change, of cooperation; we hear that every day. It would seem that although we are preaching this cooperative relationship and this management-union employee involvement, we then go out and set the stage for war with respect to legislation.
We're not too sure that strikes in 1992, or the utilization of strikes or lockouts, are the solution in today's world. A mechanism should be there to settle our differences. Obviously, when two parties are at odds or at loggerheads over an issue, they need some mechanism -- no different than the United States and Canada on free trade. They have set up a tribunal.
We think that possibly suggesting legislation for first-agreement legislation only -- it may have been better off to have been expanded and given a certain set of guidelines or rules. The parties could have been able to submit their differences to arbitration, because I think over the years we've found out that nobody really wins in that type of scenario, especially today, with the shrinking -- I'll speak mainly to the private sector and the manufacturing end of it -- of the marketplace. Although you may be able to put pressure on the company, in the same light that type of pressure may, in the end, be your own downfall as the operations may decide to move out and relocate someplace else.
I don't think anyone will argue the point that in order for the unions to survive they have to have companies and employers to survive. This is certainly not the chicken-and-egg scenario. We know who came first and who came second.
That's one area where I just felt, in reading it, that we seem to be professing peace and tranquillity and cooperative relationships and then we seem to go out and put legislation in place that actually dictates the strategies of war.
Probably, if the government would have looked at that particular area, the resistance that's been met in the media and by the corporations may not have been as severe. The campaigning and the lobbying to kill this act in its entirety may not have been there if we had taken a different approach.
Mrs Witmer: What approach would you have suggested?
Mr Buccella: As I said, I think there's a more amiable way of resolving your differences. Why has the government suggested first-agreement legislation? Obviously, they felt it's a mechanism that helps the parties resolve their differences in the early stages. I'm not too sure it has to be restricted to the early stages. I'm not too sure that is in itself a solution. But there should be a mechanism which you can go to in a peaceful way to resolve your differences rather than the employees suffering on the picket line and the employer suffering a loss.
I think you'll find in most cases the moneys and the emotions and the long-term effects of a work stoppage are never worth the price that's paid, and in the end the issues that really created the fight in the first place were not really issues that were strong enough to do the job that was done on the people and the companies at that time. I think we're into a new era and we should be looking at new ways of resolving our differences, that's all.
Mrs Witmer: What type of relationship have your locals had with the employer?
Mr Buccella: If you go back to 1912, when they were organized, and take the number of strikes that have taken place, I think there have probably been three or four at most, but they have basically come since 1975. I think Mr Strathern was here a few days ago making a presentation on behalf of the Quebec and Ontario Paper Co. They've come off a strike in 1990, they had another one in 1975, and there might have been a shorter one earlier than that.
All in all, the relationship hasn't been that bad, but when it does come apart, it comes apart and falls heavy, and it takes a long time to recuperate.
Mrs Witmer: Thank you very much for your comments. I appreciate your input.
Mr Gary Carr (Oakville South): Thank you very much for your presentation. It was very clear and distinct. There was no rhetoric.
Mr Buccella: Even short a page.
Mr Carr: What has happened to your membership over the last little while? Has it increased or decreased? Where are you at with your membership?
Mr Buccella: Maybe I can address the question a little differently. In 1980 this operation had approximately 1,200 employees, for all local unions there. They downsized and mechanized the operation between 1980 and 1982 and lost approximately 300 to 400 people at that time. In 1987 the company made a decision to get out of the chemical business, shutting down the chemical operations, which caused a further 250 to 300 people to be lost, so they've lost about 700 in the last decade, give or take a year.
They are now attempting to implement a program that is not uncommon; it flows from the philosophy of the team concept. This is one of the concerns that we have over this legislation and where there is at least some degree of fragmentation within the operation. There are certain restrictions that the companies can't explore and implement because of the jurisdictional differences.
With this legislation, if they could succeed in the applications, we're probably putting in jeopardy another 50 to 100 people's employment at this particular operation just as a result of their successfully being able to obtain a merger of the three locals belonging to the CPU.
Mr Paul Klopp (Huron): Thank you very much for your presentation. We had the owners or the managers, I guess it would be, in yesterday or the day before.
Mr Buccella: Tuesday, I believe it was.
Mr Klopp: I was interested in the history of this organization. They have a lot of unions at that spot.
One of the issues that you touched on a little bit, but I would like a little more clarification on, is the provisions that have been added to the act with regard to replacement workers. Are you thinking that's a reasonable addition? Could you expand on that, please?
Mr Buccella: I think what I was trying to say to you is that if the government is going to pursue that avenue, it's a very responsible part of the act, if they're pursuing that philosophy. I think my comments were more inclined to the overall philosophical approach to the parties getting together and working in a more cooperative way. I understand that the best defence is an offence or the best way to stop a war is to build a war armament, but I'm not too sure this particular government ever supported that philosophy. I think it always says disarmament is better than armament.
In effect, what we're doing in that section of the legislation, at least from a corporate point of view, is arming the working force with a stronger piece of legislation, yet in the same breath, we submit other documents, through budgets and so on, saying that the labour force in the province and companies have to learn to work together in a more cooperative atmosphere because of what's going on out there in the real world. So although you may be walking down the same street, you may be on the wrong side of the road on that particular one.
If we're going to continue saying that strikes and lockouts are an alternative at the bargaining table, then I believe the legislation is good and it should remain there.
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Ms Sharon Murdock (Sudbury): Thank you for an interesting view. If strikes and lockouts are not the measures to be used in this day and age -- actually, I'm not disagreeing with you, it's just that in the present system we have set up, it has historically been very adversarial, and in many instances unfortunately that has not changed.
I'd be interested in hearing your views as to the type of mechanism that could be used as an alternative. Would that be mandatory negotiation? I don't know what other mechanism you could use. I'm sure, since you've talked about it so well, you must have thought about other avenues to pursue.
Mr Buccella: I honestly believe the government has considered that and I don't think you have to go very far to look at it. It does grant first-agreement legislation. In the beginning, there had to be a case proven of bad-faith bargaining, but the decisions that have flowed from that over the last few years have diluted that argument of bad-faith bargaining. There have been decisions now even to the point that first-agreement legislation is granted where there's a loggerhead between the parties. Basically, a loggerhead is determined when the two parties just don't agree on something.
In the new legislation, under Bill 40, you're literally saying, "You have access to first-agreement legislation." I guess my question to the people who put that legislation together is, why did they restrict it to first-agreement legislation if it is a mechanism to help stabilize the workforce and the working environment? Why should it be restricted to just that instead of making it available to other parties?
With free trade between the United States and Canada, especially in the southern Ontario area and the border towns, by granting anti-scab legislation, are we not really just turning the screws more on employers to transport their work south of the border in order to offset strikes?
We had a strike in the corrugated sector of the Canadian Paperworkers Union in 1982 and none of the operations ran. We didn't need the legislation for anti-strike. What the companies did was transport the work and buy their paper south of the border -- they had 63% of the corrugated box plants shut down -- within 30 miles, and they ran all the work there for seven months. We had over 70% of Canada's box plants down and could not be successful after eight months.
Ms Murdock: It's interesting again that first-agreement arbitration is a form of solution that you see.
Mr Buccella: It's a suggested solution. At least it should be an alternative.
Ms Murdock: Employer groups have appeared here and are quite concerned about the whole idea of imposing a 30-day arbitration, or after first agreement, having arbitration after 30 days. I'm paraphrasing a number of groups. I just want to make that clear on the record. They think the unions would not meaningfully negotiate knowing that in 30 days from a day of impasse, they would end up having it arbitrated for them. You'd have basically third-party intervention. With that kind of view, how do you respond?
Mr Buccella: I think I basically say, "So what?" If they don't negotiate in 30 days, then maybe you'd have to come back and amend the act to say, "Let's eliminate the 30 days," if that's what the parties want to do. They can't speak out of both sides of their mouths. They can't come here and say they won't negotiate for the 30 days in order to get access to this first-agreement legislation or legislated settlements and in the same breath come here and say: "We want all these other things, because we don't like the anti-scab legislation. We should be able to run our factories. We don't like strikes." They can't have it both ways. In effect, if you follow that logic through to its end, what they're really telling you is they don't want unions in their factories if they try to shut all the doors down around them. I don't think that's appropriate either.
What I'm saying is that if their objective or goal is to maintain their operations and have them working and functioning, supposedly being productive and profitable, then they should welcome any sort of resolution to differences between the parties rather than having a fight.
Mr Steven Offer (Mississauga North): Thank you for your presentation. You've certainly raised a very specific concern with the legislation, not only raising a concern but also -- and I thank you for this -- offering a way in which the concern can be addressed.
I want to be very clear in my mind. You're concerned, with respect to the combination of bargaining units provision, that the board can just combine the two units, which may have the result, unintended but still most possible, of subverting the rights and interests of a group of workers in a less populated or a less strong unit. Is that the concern?
Mr Buccella: That's one of the concerns, plus the other concern that you would eliminate certain barriers within the particular operation, which would give the company the opportunity to cross-apply themselves, where under the present circumstances they can't do that.
If I just may add one point, what I'm really concerned about when I read the legislation is that it deals with companies applying -- in a trade union basically the parent organizations is applying -- but the end result, the net result, affects the people in the factory. They have no say in this when it happens. When you go out and organize a factory, you sign the people up, you have a geographical area, and the people believe that is their nest that they're going to work out of. Then, lo and behold, a year later or six months later, during the first term of that collective agreement, the company or the union applies to absorb it into another area.
What would happen if in a case four years down the pike those people no longer wanted to be represented by that union but they've been absorbed in a thousand-man local union? They could never get out. They would be imprisoned.
Mr Offer: And not only that. The other issue that you raise is, what happens when there are competing and conflicting collective agreements in each of the units?
Mr Buccella: That's very serious.
Mr Offer: The third area is one we have discussed almost from day one, and that's a simple majority vote. You are saying that this could be accomplished if each of the workers in each of the units was able to freely cast a vote, whether they wish or do not wish to be combined. You're saying that can be accomplished. Are you concerned about influence one way or the other being put on a worker?
Mr Buccella: Well, no, not in this day and age. I don't believe so. I believe the people have minds of their own. The media, the communications, the logic are all there. They have been unionists probably for a period of time, so that type of influence wouldn't be there as if it were an unorganized place just coming in. I don't really have a problem with that.
I guess the message I was trying to get across to the panel was that they have to allow the workers, the rank-and-file workers in the factories, to be involved in this decision-making process. That's the main thrust of what I was trying to say. What mechanism you apply, I'd leave up to the panel, but they have to be involved. They can't just be the recipients of someone else's actions.
Mr Offer: Mr Chair, there are two areas I'd like to deal with. One is not a question, but rather a request through you to the ministry staff. The deputants here have raised a very specific issue as to the change in the combining of units and what it means to collective agreements. I would ask that the ministry staff provide a response to this concern if the concern that we have heard today is one which is not dealt with in the legislation.
Mr Buccella: I couldn't find it.
Mr Offer: Through you, Mr Chair, to the ministry staff, who I know are here, perhaps they could provide that information.
My second area is, is this not exactly the same question that we have been posing in principle for the full-time/part-time groups, that there can be a full-time unit and a part-time unit, both unionized, each with its own collective agreement, and there can be an application for merging of those two units?
We don't know now, because of your presentation, what happens to collective agreements, and in fact the solution you have, that there should be a majority of both, is one which is not allowed in the legislation. I don't know if you have directed your mind to the full-time/part-time.
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Mr Buccella: I would address that probably more in the way of saying that if there are existing full-time/part-times, then yes, they should have that right, that evolvement. As I said, I don't think the legislation is as severe against new certifications, because it's all there in front of you. We're not dealing with something that we've agreed to before. Now we have no way of dealing with it.
The Chair: Thank you. We've got to end our discussion because of time constraints. I want to thank the Canadian Paperworkers Union, Local 101. Mr McSween, Mr Catterall and Mr Buccella, you have made a forceful and effective case for your views as they represent the views of the membership of Local 101. We thank you for participating. You have made a valuable contribution, and we trust you will be keeping in touch not only with the members of this committee but with ministry staff and with other members of the Legislative Assembly to make sure that your ongoing views are first and foremost in MPPs' minds. So thank you.
Mr Buccella: I'd just like to thank you, Peter, and the rest of the panel as well for hearing us out today. Thank you.
The Chair: Take care and have a safe trip back home.
RUBBER ASSOCIATION OF CANADA
The Chair: The next participant is the Rubber Association of Canada, if they'd come forward and seat themselves. I want to remind people that there are coffee and soft drinks over at the side. That's so that people attending here can make themselves comfortable. Please seat yourselves in front of a mike, tell us your names and your titles, if any, and proceed with your submission so that we have some time left in the balance, at least 15 minutes, for discussion.
Mr Brian James: First I'd like to thank you very much for giving the rubber association an opportunity to make a submission today. My name is Brian James and I'm the president of the Rubber Association of Canada. I have with me Glen Maidment, who is my assistant, Bryan DeMarchi, manager, industrial relations, for Goodyear Canada Inc, and Jim Young, vice-president, finance and administration, Dayco Products Canada Inc.
By way of background, the Rubber Association of Canada is the trade association for the rubber manufacturing industry in this country. Our association has some 70 members, including rubber product manufacturers and supplier companies, of which the predominant concentration is in the province of Ontario. The membership includes Canadian-owned and foreign-owned, unionized and non-unionized company members. Our manufacturer members are strongly involved in the automotive business, although this is by no means the only sector which is involved.
A majority of our manufacturing members are foreign-owned, largely by parent companies in Europe, the US and Japan. Despite this, I want to make it crystal clear to the committee that the association represents the Canadian subsidiaries and that I am not here to represent the interests of foreign owners. Our purpose and our mandate is to support and further the interests of the Canadian entities and only the interests of the Canadian companies.
Although we have had some major closures in our industry in the last few years, we have also enjoyed major expansion and modernization with investment of over $1 billion to allow Canadian companies to compete successfully in the North American market following the introduction of the free trade agreement with the United States. The Canadian industry has become substantially rationalized with US production in order to achieve major savings in costs both for manufacturers and ultimately for consumers.
I'm sure you appreciate that the rationalization means that certain key sizes are made in Canada and a majority of them exported to the United States, and in return we bring tires back from the US to this market. I should mention that we are none the less a net exporter. This business is both capital intensive and labour intensive, employing approximately 10,000 people in the province.
It should be noted, however, that to the extent that we have lost plants to other jurisdictions, it has been almost exclusively to plants in the southern US where right-to-work laws are in force. We are reluctant to see Ontario labour legislation which could well have the effect of removing more jobs from this area and transferring them to the southern USA.
Our association has worked extremely hard in recent years to preserve and create jobs in the Canadian industry. We believe that we have been very successful in doing this and that any move which would appear to contradict our efforts and encourage business to leave this country, and more particularly this province, is of very considerable concern. You should understand, however, that the point of issue is not my view of the current proposed legislation but the likely repercussions of this legislation on employment in our industry, in this country and in this province.
I'll touch on some points within the legislation, but it's only fair to tell the committee that I'm not an expert in labour negotiations or labour management and I am not closely familiar with labour law. I'm sure you are aware that association presidents are knowledgeable in a large number of areas in great detail and in a few areas very little.
My knowledge and expertise, however, lies in the rubber industry and the rubber products that we make. My concern is with the perceptions that this new legislation is creating within my membership, and I can tell you very clearly and sincerely that these perceptions are very bad for the future prospects of our industry in this province.
The key perception is that this bill is a piece of legislation designed to support big unions in the province without protecting the democratic rights of workers. The bill is perceived to be the most powerful pro-union legislation in North America, coming just at a time when Canada needs to be at its most competitive versus other manufacturing areas on the continent.
The damage in our industry would not be sudden or dramatic because we depend on major capital investment, as I have pointed out earlier. What is more likely to happen is a lack of modernization and expansion which could lead to a return to the pre-free trade situation when we had plants operated with old equipment behind a tariff barrier so that when the safety net inevitably came down, plants that were not competitive simply went out of business and put workers out of jobs.
That, in our view, will be the longer-term result of this legislation unless some major, and we do mean major, changes are made to the present proposals. If labour reform has the effect of restricting Ontario businesses from producing and delivering quality products at competitive prices, we shall inevitably pay the price in lost business and therefore in lost jobs.
We believe that labour legislation must be fair and balanced, favouring neither unions nor employers. The right of the individual to full and complete information and democratic free choice is essential. An individual should be able to make the decision to join or not to join a union based on free choice and adequate information from all sources.
If there is a need to change current labour legislation, it should be in the area of protecting the workers' democratic rights. By this we mean that all major decisions such as the certification of the union, strike votes and other major decisions should be by means of a controlled, secret ballot. There is a belief that the individual worker, given the democratic right of freedom of decision with full information from employer and union, together with the protection of the secret ballot, will make an informed decision. Any other route is undemocratic and gives excessive opportunity for coercion.
The union movement has of course played an extremely useful role in the development of greater balance in the workplace over the years, but governments must realize that many things have changed since the early days of the union movement. With improved education, workers are no longer the uninformed masses supplying brawn to uncaring Dickensian masters. The process of creating efficiency in the workplace involves workers increasingly in the decision-making process.
Teamwork has become a watchword in modern industry and it's very important that the old confrontational attitude between union and management not be encouraged but rather replaced, as it is in many concerns, with quality circles and similar cooperative management techniques. It is important to remember that the Japanese, who have become leaders in world industry, have developed a system of worker-management relations which is increasingly being adopted by more progressive companies in the west.
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Perhaps the most contentious issue in the bill for our members is the certification process change. The membership card basis for support of unionization is wide open for coercion. Certification should be based on a supervised, secret ballot. Consumers are protected from high-pressure salesmen by the three-day cooling-off period. No such escape clause protects the employee from union pressure.
The elimination of post-application petitions will prevent such employees from having a voice. The $1 card fee was designed to make employees think about the implications of joining a union. Without the fee, which in these days of inflation is regrettably rather small, an employee may be persuaded to sign without having any real understanding of the implications of his individual action.
We believe that any change in the labour legislation should require a secret ballot vote in all cases for certification, ratification of a collective agreement and the decision to strike.
The use of replacement worker provision in the bill has received a great deal of publicity. In our industry, I'm not aware of an incident when non-company workers were ever brought in from other facilities. The fear of this provision, however, is in itself sufficient to lose a product mandate where just-in-time delivery is critical.
To give you an example, although I cannot identify the member, I am told that one auto parts member will likely have its mandate for North America withdrawn and given to a sister company in the United States if this bill goes through in its present form. The company in question is unionized and has never had a strike, but the parent company in the States simply will not take the risk of losing vital contracts by leaving the mandate in the hands of its single Canadian plant when it is in a position to affect the entire company's relationship with the auto companies. They feel it's a lot safer to transfer the production to the United States. Without that particular mandate, however, there is insufficient production to maintain the Ontario facility.
The fact is that the proposal shifts the balance of power very clearly in favour of the unions. The Ontario economy, and the auto sector in particular, is largely dependent on just-in-time supply and that is frequently sourced through sole-supplier, long-term contracts. Because this is feast or famine, it puts an unreasonable bargaining power in the hands of the unions. Multinational concerns will simply not run this kind of risk and will decide not to place mandates with Ontario companies. If a company can't accept the risk, it will simply avoid it.
It has been suggested by government that the ban on replacement workers is needed to reduce picket line violence. The fact is that it may even increase violence because of the right to refuse to do strike work. Strikers' anger may be intensified from knowing that employees working had the full right to have declined to do so.
Bill 40 introduces sweeping new powers to the Ontario Labour Relations Board. Without going into the details of these new powers, the fact is that they appear to transform the board from an impartial judicial body into an advocate for organized labour.
Currently the board attempts to establish collective bargaining structures that balance an employee's right to unionize with the employer's business environment. We fear that these new powers, and indeed the major thrust of the bill, will increase union strength in the province without regard to the effect on the company's competitive position and therefore the longer-term effect on employment.
In conclusion, we're very concerned that the effect of this legislation in its present form will be a loss of jobs. We fear that instead of encouraging harmonious relations between management and unions, it will in fact do the opposite. In particular we lament the lack of mandatory secret ballot to ensure the individual worker's right to a fair say.
There is currently no public demand that we can recognize or any economic need for labour reform, but there is a great deal of public concern for the retention and expansion of job opportunities in the province. If it could be demonstrated that there is a need for reform, then it should be fair and balanced, which this legislation clearly is not.
Furthermore, it should respect freedom of choice and protection of privacy of individual members and respect for the employer's need to produce and deliver goods at competitive prices.
Labour legislation will only protect and encourage more employment provided that it does create workplace harmony, cooperation and flexibility while improving productivity and competitiveness. No matter how much labour reform we indulge in, the only real chance of greater workplace satisfaction and greater employment will come from Ontario business success. Competitiveness breeds profitability and profitability creates and maintains jobs. The encouragement of greater confrontation through some of the changes contemplated in Bill 40 is a formula which can do the opposite.
I'm bound to tell you that in my eight years as president of the rubber association and almost 40 years in the rubber industry, I can not recall witnessing such unanimity of view within our membership as I see over this proposed legislation. The industry has spent considerable effort and money to retain a prominent position in the North American market for the Canadian manufacturing companies.
The overwhelming perception, especially in boardrooms outside this province, where investment decisions are made, is that Ontario has had its day. It's no longer a good place for investment. The rubber industry, after all, does not need to be located in this province or even in this country. There's nothing to keep the investment here except our ability to be competitive. We have proven that we can be competitive, but if this legislation is passed in its present form, we will be perceived as being non-competitive and that can only cost us jobs.
What can you do about it? Well, I would say, ladies and gentlemen, start again. Get business and labour leaders to review the current legislation and look for reasonable alternatives that meet real workplace needs and avoid the gigantic negative impact that these proposals bring with them.
If there's one thing that's needed, it's to democratize the union movement, and, through mandating secret ballot on certification, strike votes and other key issues, give the worker his right to a private vote following free access to information from employer and union.
The fundamental basis for the Ontario economy is manufacturing. Service industries have little future without the primary industries to serve. This legislation is likely to cost us jobs in the rubber industry and it's therefore a very serious cause so far as we're concerned. For our part, we're anxious and willing to do whatever we can to assist. Certainly, what is needed is understanding and a climate of real cooperation. We need to put confrontation aside, behind us, and work together for the common good. Thank you, Mr Chairman.
Mr Brad Ward (Brantford): I'd like to thank you for your presentation. I think it's very worthwhile that people like yourselves come down and make this committee aware of your views.
In Brantford we've been hard hit not only by this recession but by the previous one as well, with a number of plant closures due to corporate restructuring or bankruptcies. But we've had some good news as well, and one of the good news items was Gates Rubber, which announced a $4-million investment in the plant in Brantford -- we have two plants -- to upgrade and expand its belt production lines.
This announcement, I think, shows that there is confidence in what the rubber industry can do in Ontario and be competitive. I really believe they made the announcement -- because the plant is privately owned with the headquarters in Denver -- based on the skill level and the cooperation that has been shown with the employees and the management. The employees are represented by Local 733 of the United Rubber Workers. Workers. The idea of the expansion is that it's the team concept where the employees become multiskilled and are able to work various components of the line rather than simply doing one singular job. Part of the reason we feel it's important to update the labour law is for this very reason, that the workplace and the workforce are changing. Do you have other examples or do you agree that the workplace, if it hasn't been changed, should be changed if it's to remain competitive in today's global environment?
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Mr James: I would say that within the industry we've had a very substantial change in the workplace. That's absolutely true. As I said in the presentation, we've moved away from its being a matter of brawn to being a matter of ability, technical ability and so on. But I'm sure you'll appreciate that it's not for me to comment on any individual member. What I'm here to do is to present to you the views that come to me through the membership. I'm bound to tell you that I haven't had any plaudits in regard to Bill 40 from any single one of my members.
Mr Will Ferguson (Kitchener): Thank you very much for attending this morning. I have just one question. I want to use as an example some of your current members. Let's take, perhaps, Uniroyal Goodrich. Right now the plant that will continue operation in Kitchener has about 1,000 employees. I'm aware that when they decide to withdraw their services or go on a legal strike the company doesn't hire replacement workers. It's virtually impossible, not unlike General Motors. I also understand that of course the plant's already organized. How is Bill 40 going to directly impact a company like that? I mean, you don't use replacement workers now, you probably wouldn't, in any event, in the future, and the company's already organized.
Mr James: Again, it's very difficult for me to talk about an individual company's situation. However, the kind of information I get back from all the members is that this sort of move -- I agree in the case of Uniroyal Goodrich and I don't know of a company that's used replacement workers. But certainly I have had cases cited to me where they say, "We simply cannot take the risk." In the case of the tire companies, they probably can find product from other plants, but that's not true of every organization. Certainly the one I was referring to --
Mr Ferguson: Excuse me. You said they can't take the risk. You know, if the company goes on strike, it goes on strike. They can do that today under the the present legislation. Bill 40 isn't going to change that.
Mr James: Yes, but if they have a just-in-time delivery program, and they happen to be the only plant producing that product, then they're going to fail in their just-in-time delivery.
Mr Ferguson: But they would fail regardless of whether we implemented Bill 40, wouldn't they?
Mr James: No, not necessarily, because they take the view that without it they would be able to use workers from other plants. I'm not talking about outside ownership, but people who have experience, or sufficient of them, to be able to run the operation. That is the perception.
Mr Offer: I want to stay on that same area because, as you will most likely be aware, this whole issue of just-in-time suppliers, especially in the automotive sector, is one which really was raised as almost a first concern with the proposed changes to Bill 40 in the replacement worker area. The last comment you made was that if there is a work stoppage, there is no example of replacement workers being brought in. But did you go on to say that there has also been the example of other workers from other plants being brought in to do the work?
Mr James: I can't quote you an example -- I don't know whether my colleagues can -- but certainly some members have indicated that without the opportunity to do that -- in extremis, I accept; I mean, this is not the sort of thing one hopes will happen -- if you are a manufacturer with a number of plants in the States and simply one in Canada which has been given a sole-product mandate to supply a part and you fail to supply that on a just-in-time basis, it could have very serious repercussions on the other plants and therefore on the business as a whole. That's the view which is being taken by some people about this just-in-time, even though they may never in fact have ever employed workers from another plant.
Mr Offer: When we speak about just-in-time -- I am totally ignorant on this -- is it something new or is it something which the economy and the new challenges of competition have dictated, so it's something for which you can't really use past examples or past experiences on, an area which is really new and becoming a little more severe in terms of the just-in-time aspect?
Mr James: It's relatively new. I couldn't say when it was introduced; I really don't know. But it's certainly relatively new, and obviously the idea is to reduce the cost of work in process and the cost of money tied up in parts. Effectively, an automobile company, which basically assembles parts that come from other people, says: "We need your tires" or your gaskets or whatever. "They've got to be here by 4:30 in the afternoon to meet that production schedule; 5:30 won't do. We've got to have them on the dot of 4:30." That way the scheduling is pushed back into the supplier companies. Obviously, they schedule very tightly so as to reduce their work in process and reduce cost. But that becomes critical, because if the vehicle cannot be made because they're missing a few gaskets, clearly the cost to the automobile assembler is very high. The chances of that supplier retaining his contract are slim.
Mr Carr: Thank you very much for your presentation. It was very clear. Just to clarify, one of the concerns isn't with the individual company going on strike and shutting down. What people have said is that it's the suppliers. If I'm a company -- this is along the same lines -- and I can't rely on you to get parts to me, then I'm not going to get you as my supplier.
Can you actually see this? Let's talk from a business standpoint. You're XYZ Co. If you have two suppliers, one union and one non-union, do you think decisions will be made to go to the non-union company because you know if you go to the union company, it won't be able to bring replacement workers, so you won't be able to get your product for just-in-time? Do you see that as being a major decision on the part of companies that may be union, to go to non-union companies to get around this replacement worker ban? Can you see that happening?
Mr James: It's clearly an option. This is a surmise on my part, really. My surmise would be that companies would probably continue to do business with a long-term supplier, provided that it has given them reasonable service. I think the more likely scenario is that the parts manufacturer may try to transfer his business out of that plant, if he feels the business is in any danger, into a plant which doesn't have the same kind of risks. Based on the fact that this is Ontario legislation, then the chances are that that plant would be outside this province.
Mr Bryan DeMarchi: Mr Carr, if I can just turn the corner a little on that, maybe the other question we have to ask as Ontario employers and employees is that we have a great concern with keeping jobs in Ontario. We don't make the investment decisions, as Mr James commented earlier. Right now the legislation gives both management and union baseball bats. We fight each other and we generally come up with solutions to most of our problems. We and our parent companies, the ones that hold the purse strings, see this legislation as giving a bigger baseball bat to the union. That scares us, because what that means to us is that, given that everything is equal, they're going to put their investment dollars where the union does not have as big a bat or where there is a non-union plant. So from our concern, we see the Canadian operation and the Ontario operation being jeopardized largely because of this legislation, largely in investment dollars, and that's a major concern. It means loss of jobs. Hopefully not, but we can see that. That's a fear. Maybe it's unfounded, but I'll tell you right now, it's the perception of all of us manufacturers and of our parent company investors.
The Chair: Thank you to the Rubber Association of Canada for its interest in this matter and for attending here today. We appreciate very much your coming.
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DURHAM REGION MANUFACTURERS ASSOCIATION
The Chair: The next participant is the Durham Region Manufacturers Association. Please come forward and seat yourselves in front of a mike. Tell us your names and your titles and carry on with your submission. Try to leave the last half of the half-hour for exchanges and comments.
Mr Desmond Newman: Mr Chairman, ladies and gentlemen of the committee, thank you for receiving us. I'd like to introduce my colleagues who are with me today: Elaine Minacs, president of the Minacs Group, a Canadian human resources company, and David Lim, president of Pacific Engineering, a Canadian company involved in trading in the Pacific area. Mr Roger Wright, who is the president of Dowty Canada, an aircraft systems manufacturer which is British-owned and trades internationally, was called away this morning; he offers his regrets. My name is Desmond Newman. I am president of Cametoid Ltd, a Canadian company involved in advanced materials and coatings.
Second, I want to introduce our organization, the Durham Region Manufacturers Association. Our members include manufacturing firms, banking, transportation and the service industries. The companies are as large as General Motors of Canada, which employs some 17,000 people in our immediate area, and as small as J. Mulcahy Enterprises, which has some 17 persons on staff. Specifically, we represent the direct interests of some 160 member firms.
We believe that the DRMA was the first management organization in the province to choose the route of cooperation rather than confrontation after the proposed amendments were announced. We agree with the Minister of Labour that the workplace has changed, we recognize and understand the enlarged role of women and minorities, but we think it is also important to understand the massive changes which have taken place in the marketplace. In order to survive today, companies are becoming leaner, with an eye to greater flexibility, reduced overhead and increased specialization.
Let me tell you a story about Kim. Kim is the owner of a small Japanese die-making company. His company makes dies from which are produced thousands of automotive parts, on occasion millions. Over the last five years he has organized himself around an electronic network that links him both to some giant automotive customers as well as to a highly specialized family of suppliers.
One of his customers sketches out the outline of a new part which he needs urgently and sends it to him by fax. One of Kim's engineers generates the specification on a computer-aided design system in a couple of hours and sends it to one of his suppliers who has a particular piece of numerically controlled equipment well suited to that job. The die is completed, again in a matter of hours, and made ready for shipment to Kim's customer by overnight courier. It is not uncommon for all operations to be completed in one working day.
There is nothing really noteworthy about Kim and his story, except that his customer is in the greater Toronto area and one of Kim's principal competitors used to be in Concord, just north of Steeles Avenue in Toronto. That was until last Christmas, when that company closed its doors because it could no longer serve competitively a customer who was only 20 miles away.
I didn't tell you that story because we like black humour, but to underline the fact that our world has changed dramatically in manufacturing in a few short years.
Before coming here we asked ourselves, what can we as the DRMA bring to this committee that will really mean something, something that will cut through the rhetoric and the noise and the exhausting emotional and factual input that is pouring in around you? What can we say that you haven't heard before or that will impact those of you who see the present form of Bill 40 as a fait accompli, with no room or time for significant change?
I don't know if we can deliver something new or powerful enough to change something that has been in the works for so long, certainly not I nor the DRMA alone, but I hope you will listen to what we have to say in the context of what has become a consistent and desperate appeal on the part of business, particularly small and medium-sized businesses, to save their industries and ultimately to protect the jobs in this province.
The majority of our members are small and medium-sized firms; 80% employ fewer than 100 people. In fact it is those companies that represent the majority of firms in this province and are recognized by this government as being responsible for creating 75% of the net new jobs in Ontario, as set out in the recently published An Industrial Policy Framework for Ontario.
We acknowledge that labour issues and legislation must change in response to our changing economy. We understand and we do not oppose labour reform. But it is in the difficult areas of balance and timing that we wish to focus. The issue is, how much and when? How much is too much? What is the right time? How do we even find out? I hope it is on the issues of that kind that you are focusing.
Do you recognize that the perception out there is that this legislation is union-driven and that the government is serving its own constituency rather than the Ontario community, and do you agree that perception must be dealt with along with reality?
What is the perception in our marketplace today? How do our customers in the United States and elsewhere see us today? We know that they are deeply concerned by what they consider to be onerous labour legislation. We have been told by one of our members that on every visit to major American customers the question comes forward, what has happened to the labour legislation in Ontario? We often think Americans ignore Canada. The reality is that in business dealings they are acutely aware of the environment in which we operate.
With respect to timing, why is it imperative that we proceed at this moment, in the middle of the harshest recession anyone in this room has ever known, to choose to change the balance in the delicate business of management-labour relations?
That is why in our earlier submission to the committee chaired by Sharon Murdock, the member for Sudbury, we made what we thought was a constructive suggestion, that because of the complexity of the legislation and the intense reaction from business, the package be referred to a tripartite commission made up of government, business and labour representatives.
Following that suggestion, the Premier, Mr Rae, appointed a Labour-Management Advisory Committee to assess ways in which labour and management can work together to improve the workplace for all Ontarians. Surely the matter of the amendments to the Ontario Labour Relations Act can be put as a first order of business on the agenda of that committee, and surely it is capable of reporting back a package of amendments which can accomplish the end of workplace improvement. Why is that process not an acceptable one? We see that as a logical and essential step to a rational solution, for solution we must have, because we have a particular worry as manufacturers.
We are worried that our businesses are threatened, but it worries us a great deal more that manufacturing overall in the country and in this province is in serious difficulty. Economists agree that a sound manufacturing base is paramount to a developed economy. The more successful the manufacturing sector, the more wealth is created, the more jobs are created and the more everyone benefits. We want a province and a nation where everyone has well-paid, secure employment. After all, in addition to well-paid employees being effective on the job, they are consumers with money to spend. If the manufacturing base continues to erode, it is inconceivable that any real recovery is possible.
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One of the essential keys to that recovery, we believe, lies in greater cooperation with our workforce, in all of us working together.
In the province's recent industrial policy it says, quite correctly, "The provincial government's economic and social responsibilities put it in a unique position to help develop creative partnerships among business, labour, communities and government to create competitive advantage and overcome structural weaknesses."
That partnership has to be fostered.
Later on, the policy document says: "The industrial policy is not a budget, a blueprint for the economy or a short-term countercyclical policy. It is a made-for-Ontario industrial policy with many distinctive features."
One of the features, it notes, is that, "It emphasizes fairness in the restructuring and adjustment process." That's worth repeating, "fairness in the restructuring and adjustment process." That is what we're talking about.
We're finding ourselves in an increasingly tough battle to thrive and grow, indeed even to stay even. Competition from abroad continues unabated. It appears to be profound, it's growing, and especially with free trade and its recent expansion to include Mexico, it is unavoidable. The intensity and seriousness of the situation cannot be underestimated, for this province is facing its largest economic challenge since the Depression.
This, then, is clearly not the time to introduce measures that may have an adverse effect on the economy. Now is the time for the exact opposite. Innovative labour legislation should make a positive difference, but only if it is developed consultatively and implemented effectively by all the affected parties.
In this context, we make three points:
First, the legislation should be used as a pivotal opportunity to forge a fundamental improvement in the trust and cooperation between labour and management. As stated so many times by the provincial government, the key to recovery lies in greater cooperation between the parties. We do not believe that the process used to date, nor some of the proposed changes, are fostering a more cooperative approach. Indeed, they appear to have done the opposite. Witness the reaction from the employer camp. But Ontario can no longer afford to have camps. We must move from camps to teams. We believe that industry and business should be invited to sit down with labour and government to discuss ways to effect greater cooperation in the workplace. Anything worked out in this manner has a greater chance of success.
Second, we understand the need for improvements to the act, but the speed of implementation and the lack of acceptance by all parties may doom it. Time is needed for a more meaningful approach.
Third, if the government deems that some aspects of the proposed legislation absolutely must be introduced, then we would urge that the initial implementation strategies exempt those sectors most at risk. Foremost among those is manufacturing, for serious damage to manufacturing is a possibility, and should that possibility become reality, then the consequences will remove the province from its first rank in the nation.
In Mr Rae's January address, he said:
"We have to get this province moving again. If we're going to keep and improve services to people, if we're going to build that fairer society, we have to get the economy going. And I commit this government to working with you to this end."
In response, we believe therefore that we need to do the following things: allow a more genuinely consultative process so that it can be used as an opportunity to forge fundamentally better relationships and cooperation between management and labour; amend the timetable so that all parties can ascertain the true and full impact, and amend the initial target sectors to exempt those who are most at risk and who add strategic value to the economy.
We understand that this government is facing a greater challenge than any Ontario government in recent decades, and we agree with the Premier that none of us can tackle that challenge alone. That is why we pledge to assist the government in any way we can. We believe the goal should be to encourage job creation, investment, employment stability, competitiveness and economic growth so we may all enjoy a more healthy economy. That is the message we heard from Mr Rae on January 21 and one we can endorse.
But let us turn for a moment to our own region. It has gone from being one of the fastest-growing regions in Canada to one which now has three million square feet of empty industrial space in just three short years. It is heavily automotive-oriented. It is the birthplace of General Motors and the sustenance of our region.
That industry, as you are aware, survives on just-in-time procurement. In four hours a car seat of a certain type and style and colour can be manufactured, packaged and delivered to General Motors in Oshawa. In short, as GM goes, so goes the region.
Can you imagine what would happen if any of those suppliers is struck and cannot use replacement workers to fulfil its contractual requirements? General Motors of course cannot wait until that strike is settled. It must continue to have access to a supply route. To many of these suppliers, that would be the kiss of death. Therefore the issue of replacement workers is obviously of concern.
Associated with that issue is the question of picketing on third-party premises.
Those issues simply underline the problem of the legislation's impact on long-term investment and the atmosphere for that investment. You know the Big Three have made commitments in recent days with respect to the automotive industry. Those commitments, however, are not guaranteed in the long term. For example, only $500 million of Ford's $2-billion commitment has been implemented. General Motors' decision on plant 2 in Oshawa only goes until 1994.
The importance of those matters should not be underestimated, because we live in an economy where major decisions are made elsewhere, and we cannot continue to presume on the goodwill of those decision-makers. As you know, some of that goodwill has been and is related to Ontario's preferred cost position with respect to things like electricity. The present expectation is that we will lose that cost advantage by 1994 and we will have little then to offer beyond improved performance and productivity.
In summary, we ask that in considering the impact of the legislation, the government give priority to fostering economic growth, ensuring employment stability, creating good jobs and building confidence for investment.
We would respectfully make three recommendations: First, recognize that cooperative labour relations must become a key strategy for Ontario's economic renewal; second, use the legislation proposed as a pivotal opportunity to forge a fundamental improvement in labour-management relations in Ontario, and third, use the Premier's Labour-Management Advisory Committee to review the legislation and make binding recommendations to achieve the above.
Ladies and gentlemen, we've appreciated the opportunity to be here. We thank you for your attention. My colleagues and I would be pleased to try to answer any of the questions the committee may have.
Mr Offer: Thank you, Mr Newman, for your presentation. It certainly does send out a message of consultation and cooperation and balance. I agree with you that this is not the time, nor is it ever the time, that management be painted in one corner and labour in the other. I think that is most destructive for the growth, harmony and enhancement of rights for workers in this province.
You may be interested to know that as we hear concerns about the legislation, it is not just from the management side or the business side that we hear concerns; it is also from school boards and children's aid societies and municipalities and municipal hydro services. They too share some very deep concerns with the legislation.
I note in your recommendations that you think the Premier's Labour-Management Advisory Committee would be a very good place to review this legislation. I agree with you wholeheartedly. It is unfortunate that the Premier has indicated that this committee, which was set up on June 5, one day after this bill was introduced, will not do the type of work you've asked that it do. I believe it's unfortunate that they have taken that position.
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My question to you is on the issue of an impact study and economic analysis -- not just economic but job analysis and those things. Is that necessary for a bill of this kind, before proceeding with the bill?
Mr Newman: Mr Offer, I frankly don't know. I think it would be an irresponsible thing to do. I think many of the pieces of workplace legislation which this or any other government would introduce in this kind of economic environment would need to have regard for that kind of effect. I do not think, however, it ought to be used to string out the process. I think if we are serious about having some labour legislation changes then let's go do it, but let's do it in an environment where the players are equally presented and have an equal opportunity to agree and compromise, if necessary, on some material changes.
The time is not available to us to play games. We are in a very serious, dirty recession. The blood is still very thick out there. People are still being put out of jobs. We as manufacturers have little heart for this process.
The thing that maybe does not quite come through in our presentation is that even the Premier's labour-management committee, if you look at the composition of that committee, is big labour and big business. Where is small and medium-sized business in that committee? It needs to have representational balance. It's not good enough to simply put the big guns at the table. Hell, they can make all the arrangements and accommodations they want, but then the small guys get squeezed out.
The small guys happen to be Canadian companies in Ontario and they are being hurt desperately. They can't fend off the bank on the one hand, the new environmental regulations on the other hand, the workplace legislation and the department of revenue. Everybody's at their throats but nobody is defending them, not even this government.
Mrs Witmer: Thank you very much for your presentation, Mr Newman. I appreciate your attempts to encourage the government to work cooperatively together with all the players.
I think what you've indicated is certainly true. From the initial outset of the process it has very much been big labour and big business, and the small business person in this province has been ignored. We've heard from the retail sector and the hospitality-restaurant sector the tremendous implications this legislation could have, particularly in the area of replacement workers. We've already heard of hotels that are moving their 800 numbers to the south because of fear of this legislation. We're hearing from the automotive sector that fear of this legislation is going to cost us jobs.
Certainly your concern is one that hasn't been addressed. We can't wait. We need to deal with the issue but we certainly need to involve all the people in this province, not just the big guns at the top.
I think you've made an important point here. You indicate that the automotive industry, although it has made some commitments -- the government is saying, "Look at Ford, look at GM" -- only $500 million of Ford's $2-billion commitment has been implemented. I think we forget that. We also forget that the General Motors decision on plant 2 only goes until 1994. There is no guarantee that those two automotive manufacturers are going to continue to invest in this province.
Have you given any consideration at all to the right of the individual to a secret ballot vote on certification? This is an issue I've been concerned about, because although under this legislation unions get more power and responsibility, it appears that individual rights are being infringed upon.
Mr Newman: Answer: yes. One of the things we tried to avoid was getting into the details of the legislation, because we felt it was inappropriate and we were not sufficiently competent to address the interrelated issues here. But there is little question that you're correct. The rights of individuals in a voting process, for example, as to whether they want to be part of that strike mandate or not and their right to work if they do not sympathize are certainly individual rights for which we should have some regard. The reason it isn't present clearly is that we tried not to address those kinds of requirements or questions which we felt had to be points of negotiation between the stakeholders. That is why we think that any commission -- if the government accepts a recommendation to move this batch of amendments to a tripartite commission -- whether it be the Premier's Council or another, ought to have a balance in representation, because those issues are clearly issues of importance.
Mr Bob Huget (Sarnia): Thank you very much for your presentation. It was very thoughtful.
On the issue of investment, it's at least worth mentioning, and Mrs Witmer raised it, the Ford investment and the General Motors investment. Those are significant investments to the tune of $1 billion. That says something about the attitude of investors towards this province and what we have to offer. There are a number of other major investors -- Canadian General Electric, Glaxo Canada, Northern Telecom, 3M, Kraft General Foods -- besides Ford and GM that have made significant investment announcements in the last short period of time. That says there is investment in Ontario and there is some investor confidence in Ontario.
One of the problems I have, which I think I share with you, is that small and medium-sized business in this country has been in an uphill struggle for a long time. You mentioned in your presentation on page 9 that the importance of investment matters should not be underestimated because we live in an economy where major decisions are made elsewhere.
Mr Newman: Precisely.
Mr Huget: In my view, and I'll be non-partisan, the fact that the Canadian situation is indeed that presents us with many problems. We have seen a shift of the decision-making process away from Canada and away from Ontario. This province and this country does not have enough Ontario business and Canadian business, and Canadian businessmen and Ontario businessmen, to have a truly Ontario or Canadian economy.
It's a difficult problem and what we've done as a society in this country is we've tended to subsidize energy, transportation, research and development and we've paid precious little attention to forcing the need, as government policy Canada-wide, for upgrading and innovation in a number of areas, and one of them is labour relations and labour-management innovation. Regardless of whose responsibility, federal or provincial, that's an approach that has been sorely lacking. We've had a tendency in this country to encourage the inability or the reluctance to upgrade anything, including one of business's major inputs, which is labour.
My question to you is, what is your view about the role of the workforce in the workplace in small and medium business? I agree with you 100% about the need for new relationships and cooperative approaches. I would like to hear more of your views on that issue as it affects small business and particularly Ontario's small business and manufacturers. Is there a positive thing that can come out of increased workplace participation by workers helping their businesses and thereby their employers become more competitive, more effective, more productive and therefore survive?
Mr Newman: There are any number of things. As a matter of fact it's an essential requirement today, because we cannot and we will not be able to compete internationally unless we are able to use the skills and ideas of the people who are in our businesses, and I'm talking about small business. I don't think there is a single small business left in Ontario that has any respect for itself which does not already solicit the views of its people. People on the floor, doing the job, know a great deal more about the intricacies and the need for dexterity and initiative than the owners in many cases. Certainly the owners got there because they understand the business, but the actual mechanism of performance on a day-by-day basis in production surely comes out of the hands of the people who perform the work, and they have many ways to facilitate that process.
This is the kind of thing that we need to get the government to orient to the small and medium-sized companies more directly: facilitation and financing. Show me which bank you can go to today to get $1 million for small business. Show me any bank where you don't have to give your wife as security and your house and everything else that you possess, apart from the hard assets. Show me anyplace where any bank will finance R&D for small businesses. They run from that kind of process.
But in terms of your specific question, small businesses now have to rely on their employees; they have no alternative. If we would create in the province the kind of environment we're talking about, a more reasonable business-labour relationship, we would facilitate that process.
Let me tell you what my colleagues and I have been trying to do in the last six months since this matter became a matter of issue. We've had four private meetings with senior labour leaders in our region in an attempt to try to build bridges and discover what we might do jointly in order to solve and address precisely some of these problems and to persuade the government with respect to legislative effort. The thing that is a bit discouraging is that they are wonderful people, willing to talk about anything, save and except the amendments to the Labour Relations Act.
The Chair: All right. That having been said, I want to thank the Durham Region Manufacturers Association for its participation in this process. The committee has listened carefully, I'm sure, and you've made a valuable contribution to the process.
Mr Newman: Mr Chairman, ladies and gentlemen, thank you very much; we appreciate the time.
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AUTOMOTIVE PARTS MANUFACTURERS' ASSOCIATION OF CANADA
The Chair: The next participant is the Automotive Parts Manufacturers' Association of Canada. Would the spokespeople for the Automotive Parts Manufacturers' Association please seat themselves, tell us who they are, what their titles are, if any, and proceed with their submissions, leaving the second half of the half-hour for questions and exchanges.
Mr Neil De Koker: My name is Neil De Koker and I am president of the Automotive Parts Manufacturers' Association of Canada, or APMA. With me is Tom Dattilo, president of Hayes-Dana. Tom is also currently serving as chairman of the board of APMA. Also with me is Gary Ferlecki, president of Hull-Thomson. Gary serves as chairman of APMA's human resources committee, which has been deeply involved in developing the APMA position on this bill.
We are pleased to have this opportunity to talk directly to this committee. It is our sincere hope that maybe through this process someone here will recognize that there is a genuine tragedy taking place in our great province that will have a long-lasting and detrimental effect on all of us.
The automotive industry in Canada, in fact in North America, is undergoing a major transition. Global competition has resulted in a major loss in market share by the traditional North American auto makers. Taking over this market share are the transplant manufacturers, primarily from Japan. For every job that the Japanese assemblers have created, two jobs within the traditional industry have disappeared. This is largely because the Japanese assemblers import a much larger number of parts from outside of North America.
While there has been a major increase in auto assemblers in North America, there has also been a major increase in auto parts makers. This has resulted in intense competition in a depressed market with much excess capacity. These pressures during a period of economic downturn have resulted in the closing of 50 automotive parts plants in Canada and a loss of some 20,000 jobs permanently during the last three years, primarily in Ontario.
I should add that over 80% of the Canadian automotive parts business is with companies in the United States. Any actions that reduce the competitiveness of Ontario as a place to do business compared to neighbouring provinces or states will result in a movement of companies to the lower-cost areas, as dictated by these global competitive pressures.
A vital key to success in recent years is the broader recognition that employees truly are a company's most valuable asset. More and more, companies recognize that when people are truly empowered to be all that they can be, the company can achieve global competitiveness in all respects. This means that employees and management work toward common goals, share information openly, focus on the customer as number one in all aspects of the business and share in the risks and the success of the company's results.
The Minister of Labour, Bob Mackenzie, has stated strongly that he believes it is essential to promote harmony and a partnership between labour and management in order for us to be competitive in the decade of the 1990s and beyond. We couldn't agree more.
Minister Mackenzie has also stressed his belief that a labour-management partnership can best be attained in organizations where employees are represented by a union and that a union is a positive force for labour-management partnership. I'm sorry to say there is much evidence to dispute this, much more so than there is in support of it. On the basis of this fundamental belief, however, Bill 40 promotes and facilitates the formation and powers of unions and, in so doing, seriously shifts the balance between unions and management at the expense of democratic principles.
It is our fundamental belief that strengthening the power of unions will not enhance labour harmony or a labour-management partnership. In fact, this shift in the balance of power will drive a wedge between us that will further frustrate the already onerous mandate of bringing employees and management closer together to achieve common goals, a mandate that is essential for our long-term survival.
We are angry and we are frustrated. We know that Ontario's recovery is dependent on consumer confidence and on investor confidence. Anything that scares away investors will have a severe impact on Ontario's economy. From the time of the release of the Burkett report, business has voiced its overwhelming concern about the principles that underlie Bill 40 and the impact on investment and jobs.
Despite our continuous requests to do so, this government has not once brought the workplace parties together to openly discuss workplace issues. They say there is little use in bringing the parties together because there is such complete disagreement on the issues and on the solutions. If this is so clear, why then is this government imposing legislation that so strongly tips the balance in favour of one of these parties, traditional big unions, a party that represents only one third of the workforce? Where is the mandate?
Union leaders have called our concern about Bill 40's impact on investment and jobs fearmongering. In fact, Gord Wilson of the Ontario Federation of Labour has stated it is similar to business opposition to child labour legislation at the turn of the century and business opposition to women's suffrage a little later.
While this kind of rhetoric is taking place, we are also faced with union leaders who publicly state they prefer an adversarial relationship with management and to work outside of the corporate system. Buzz Hargrove, the new president of the CAW, is quoted in the July 27th issue of Automotive News as saying he wants no part of joint operating programs in which union and management work as a team to administer solutions to problems at plants. He further states, "We reject the philosophy that workers' wages somehow have to be tied to the success of the corporation."
The July 17th issue of the Labour Times contains a major article quoting a number of union executives as being against total quality management and just-in-time production because they are "synonymous with union-busting."
Bob White, president of the Canadian Labour Congress, has stated for years that workers don't join unions to lead them backwards, in his fight against workplace changes that recognize global competitive requirements which are almost always referred to with the inflammatory term "concessions."
This strong opposition to change in the workplace demonstrates a lack of acceptance of economics and the dynamics of global competitiveness. It also demonstrates a real lack of commitment to people. Change keeps our businesses globally competitive, thereby strengthening our economy, which results in growth in new businesses, technologies and services that will require many people for the jobs of the future.
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APMA members cannot support a bill that would facilitate such negative thinking. Workers, companies and countries do not need and will not survive with unions that are unwilling to face the realities of global competition, that refuse to believe in partnerships and common goals, and who continue to operate within the traditional outdated rules of adversarial relations in order to maintain their traditional strengths.
This is not an attack on the millions of unionized workers in Ontario, as Minister Mackenzie claimed last week. In fact, we find that our people are generally very supportive and eager for more workplace participation and involvement, whether they are unionized or non-unionized. In the case of many of our unionized companies, however, the big problem is generally in getting the third party -- the union -- to not oppose these kinds of programs.
The fact is that Bill 40 makes our customers in the automotive industry less likely to deal with us. Our customers have said it will disrupt just-in-time concepts. In fact, shortly after Bill 40 was introduced, the Deputy Minister of Labour presented the contents at a briefing of business leaders in Detroit, many from the automotive industry: our customers. The result was that these business leaders are very concerned about their investments in Ontario and about sourcing their business with companies based in Ontario. We know this because they have told us so.
Our customers, the assemblers, are already under pressure to further rationalize the supplier base and to buy American. Let's not give them more reasons to stop sourcing from Canadian-based companies.
Time does not permit me to discuss each element of the proposed changes to the Ontario Labour Relations Act. Let there be no doubt, however, that this legislation will accomplish the exact opposite of what is needed to achieve a partnership for success and will result in reduced investor confidence in Ontario as a competitive place to do business.
The entire bill is of major concern to APMA members including: restrictions on the use of replacement workers during a strike; provisions that make it easier for unions to organize and obtain certification; new powers of the Ontario Labour Relations Board to consolidate bargaining units; a purpose clause that promotes the interests of unions; access to third-party premises for organizing and picketing; first-contract arbitration that assures a union contract with little consideration for business issues and the balanced interests of both parties; service industry contractors such as cleaning and catering, which must assume the employees and contract terms of the previous contractor; a major extension of the discretionary powers of the labour relations board in a number of areas; and security guards who are allowed to be members of the same union as the employees of the company.
Let me review just a couple of the areas in more detail to better illustrate our concerns about the bill.
Banning the use of replacement workers: The bill proposes fundamental restrictions on an employer's ability to operate during a strike by prohibiting the use of new hires, employees from other locations and contractors. Certain emergency operations are exempted.
The bill fails to recognize the interdependent nature of today's economy where businesses are largely dependent on just-in-time supply and delivery of goods and services which are frequently sole-sourced through long-term contracts. Over 80% of the Canadian automotive parts business is with the United States and operates on a just-in-time basis. If we fail to deliver products and shut an automotive assembly line -- at the cost of millions of dollars and impacting thousands of people -- the business will be lost, most likely for ever. Even more important, however, we won't get a chance to quote on future business unless we can demonstrate a plan to assure continuity of supply under all conditions.
Companies in the automotive industry are unique in that the final product that gets sold to a customer includes over 10,000 parts which come from hundreds and even thousands of suppliers from all over the world. Assurance of delivery on time to the automotive assembly plants is a critical element of being a selected supplier.
Competitive pressures have resulted in the elimination of waste everywhere, including inventories and just-in-time delivery. Traditional strike banks are a thing of the past and violate the principles of just-in-time manufacturing or lean production, which also demand employee involvement and participation in the business in order to succeed.
Replacement workers are rarely used in our industry due to the complexity of our business. However, when you take away a company's ability to service its customers, you take away its ability to keep jobs in Ontario. Our customers will decide to move the business unless we maintain our just-in-time delivery commitments to them. Furthermore, taking the balance of power away and shifting this to the union will result in uncompetitive agreements and the assured uncompetitiveness of the company over time.
Government's key argument for this change is that replacement workers who might be called upon to ensure just-in-time deliveries to keep the business going are a major cause of picket line conflict. We believe that if this is the case it should be addressed directly, without the far-reaching and economically disastrous consequences of outlawing replacement workers. Instead, set standards for picket lines and recognize that their purpose is for public information and not for production disruption, and provide enforcement through the powers of the Ontario Labour Relations Board as well as the law. At the minimum, we believe that companies in our complex and interdependent industry who deliver products on a just-in-time basis should be exempted from this restriction in an expanded definition under essential services.
Easier organization and certification: The bill puts forward several amendments designed to facilitate trade union organization campaigns. An employee's right to join a union and participate in its affairs is a fundamental workplace right. Equally important, however, is the principle that his or her decision should be made freely and with full information. The decision to join a union is not a decision for the employer or the union; it is the employee's choice. Employees are entitled to know the significance of signing a union card, whether they can change their minds, what it means to be a member of a union and what they can expect from collective bargaining.
Bill 40 amendments will severely limit the opportunity for information, reflection and a change of mind. At a time when critical decisions are being made, there is no balanced source of information. The most certain way to ensure fairness is a secret ballot vote, the basic democratic decision-making procedure. In addition, the labour relations board should administer a procedure whereby the employee can obtain the views of both management and the union prior to taking a vote. We would support a forum that would facilitate this kind of process. The challenge is to develop an open procedure that lets employees exercise their basic democratic rights without improper interference by either party. Bill 40 fails this test of fairness and balance.
On consolidation of bargaining units, the bill proposes to give the labour relations board a more general ability, upon application from a union or employer, to consolidate bargaining units, a change which would facilitate the ability of trade unions to organize small units and then quickly move for consolidation of those units to provide greater power in collective bargaining. The end result may be bargaining structures that compromise the operation of the business and fail to take into account the wishes of employees in each unit.
In today's workplace, an employee may or may not wish to be locked into a larger bargaining unit, where power over collective action may rest with employees at other locations. Furthermore, this greatly impedes the ability of employers to keep their businesses running. A minor dispute at any one facility could jeopardize the operation of the total business. It would not be possible to move work to another facility to keep from losing the customer as a result of possibly shutting them down, even though this is allowed elsewhere in the bill.
We believe more reasoned criteria are required in the bill that would respect the rights of employees in the individual bargaining units and would ensure the balanced interests of employers and the unions. These are only three examples that demonstrate that the bill, as written, will do nothing to achieve workplace harmony, the hallmark behind these proposals, according to the Minister of Labour.
So why is this government proposing this legislation? This government assumes that by giving unions a bigger club to wield, there will be workplace harmony and partnership; this government is wrong. Automotive parts companies are in a global industry; the pressures to compete are relentless. Business is won and lost every day among a group of competitors from all over the world who win on the basis of technology, quality, price and delivery. Passing the most pro-union labour law in North America is not only a disincentive to investment and job creation, but it places a serious impact on our members' ability to work with their people to achieve the continuous improvements needed to win business.
Ask the investors that I have here with me today. Ask the Deputy Minister of Labour, who went to Detroit to describe Bill 40 to our customers. Commission a study to look at the economic impact of this bill. A number have already been done, and the results are overwhelmingly negative. Don't believe us; do your own study. But don't proceed with Bill 40 in this form without knowing what the impact will be. Use this opportunity to tell your constituents, as their member in the Legislature, you care about protecting their jobs.
Many Canadian managers understand that empowering people is the way to move their companies forward. In the auto industry, it is essential to survival, but the people have to be provided with the opportunity to be the best they can be, and that has nothing to do with this labour legislation; you cannot legislate this. More traditional unions surely won't bring it about. Furthermore, you can't mandate jobs.
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There is no guarantee of success in the world, but creating an environment that allows plants to thrive provides the best chance. Plants don't close if they are striving to be the best and producing a truly world-class product and reducing costs to world levels; and that is the best for people.
In earlier presentations to the Minister of Labour, I gave examples of companies which have (1) stopped an investment in Ontario, such as Hayes-Dana Inc, (2) invested outside of Ontario work which would normally have been placed here, such as Long Manufacturing and Seeburn Metal Products, and (3) companies which would not make further investments in Ontario due to the negative business climate making it too difficult to run a business competitively compared to that in competing jurisdictions, such as Peerless Cascade, Prince Metal Products and Falcon Tool and Die. Many others have contingency plans or are evaluating alternative plans to assure their survival, even if this would mean having to move business out of Ontario, even though this is not what they want to do.
If this bill, as it stands, becomes law, we will see further reduced investments in Ontario. This translates into fewer jobs and results in a lower standard of living for all of us. But particularly hard hit will be those with the fewest options, women, minorities and the disfranchised. They are always hurt the most when jobs are lost. If we wait for the statistics to prove this, it will be too late.
We believe the current Labour Relations Act may need revisions. Our preferred solution is to drop this bill and to bring the workplace parties together, along with government, with a mandate to develop a consensus on workplace changes and to target priorities that are beneficial for all and supportable in a globally competitive environment. We must move forward competitively into the next decade and beyond with progressive relationships.
The government of Ontario has an opportunity that has never existed before; this government has the trust of the union leadership. As such, this government would be able to bring labour and management together to discuss improved relations and workplace issues never before achievable. This could lead to improved competitiveness of Ontario industry, a stronger economy and improved quality of life for all Ontarians. Business is ready and willing to participate in this process. The opportunity should not be missed in favour of a bill that is so limited in whom it serves and in what it can achieve. Thank you for this opportunity to make this presentation, and we'd be pleased to answer any questions.
Mr Carr: Thank you very much for your presentation. I was interested in some of the companies on pages 16 and 17, in particular the gentleman from Hayes-Dana, Mr Dattilo. I was interested if you could maybe explain how much investment we've lost, specifically with yourself as well as some of the others, Long and the ones listed here. How much are we looking at? What was the factor in deciding not to invest because of this bill?
Mr Tom Dattilo: Neil can talk about Long better than I can, but as far as Hayes-Dana goes, within the last several years, we started a new facility in Ontario and went forward with two of the three anticipated stages of that facility. Stage 3 was in the planning stage to go forward when this legislation was introduced.
In our minds, it was another example of the increasing difficulty of doing business in the province, and we felt that before we went forward with that third stage in the plant, we would understand exactly what this legislation was going to do, whether it was going to be passed and how it made it more difficult for us to compete in the world. That was an investment that would be in the neighbourhood of $5 million to $10 million.
Mr Carr: Overall, looking at some of the companies we're looking at here, the problem is that many of them don't want to come out -- I must say it's good that you do that -- because unfortunately, you don't like to scare employees; nobody likes to do that. Looking at these companies you've listed, how many jobs do you think could be in jeopardy and what would the total amount of the investment be? Any ballpark figures?
Mr De Koker: It would not make much sense to just add up those companies and only refer to them, because they are relatively small. In the case of Long Manufacturing, Bill Nusbaum, the president, has indicated that about 200 jobs were involved and the decision was made to invest in the United States. This is a Canadian company where all its investments and its activities had been in Canada. They felt that this was just the last straw, that they could not operate and be assured of being able to deliver product to their customers on a just-in-time basis. They felt they had to make the decision to locate this in the United States. Subsequent to that, they have done an additional joint venture, in the last couple of months, with a US partner, with the facility located in the US.
This is a trend. When 80% of our business is in the US, you can see that it is easy in our business to justify moving closer to your customer. When 80% of our business has been here, it proves that we are competitive, that we are good. Let's not lose that edge. That's what we're losing.
Ms Murdock: In the same vein, because I do want to get into the just-in-time question, we have companies like Keep-Rite, which does industrial equipment and manufacturing, opting to close the Red Bud plant in Illinois and open up here, in Brantford, where employees are expected to double over the next three to four years. So just as many examples as you can come up with, I'm sure that there are equally as many proving that there is confidence in investing in Ontario.
But I want to get to the just-in-time question because you're one of the few, other than the one who just appeared before you, to have talked about it to any great length. How long have you been using that method, number one? And number two, then, given that some of your operations are unionized and some aren't, how has that worked, and have any plants or whatever closed down because of the just-in-time provisions due to a strike?
Mr De Koker: During the last half of the 1980s was when the just-in-time concepts and lean manufacturing and so forth started expanding very, very rapidly. Some plants, very progressive ones, were involved in the early 1980s. Today, a vast majority of companies have to operate on that basis. An example of shutdowns would be last fall, when we had the trucker blockade in Windsor and 500 truckers were able to shut down the automotive industry, or portions of it, which cost thousands of jobs temporarily and millions of dollars permanently lost.
Ms Murdock: That wasn't a strike situation, though.
Mr De Koker: It wasn't a strike situation, but it was an impact of just-in-time.
Ms Murdock: Yes, I understand.
Mr De Koker: You were asking about just-in-time.
Ms Murdock: But I want to know how the strike and replacement worker provisions of this piece of legislation will affect that.
Mr Datilo: We have just-in-time; every one of our 20 plants is basically a just-in-time operation. With the plants that are unionized, our customer requires us to have two months of inventory when we go into a negotiation, so that in the event there is a strike, there are two months of inventory that can be delivered to it.
Two problems with that, unfortunately: If there is a strike, it's very difficult to get it out; number two, it's tremendously expensive to put your money in two months of inventory. What typically happens, if you settle the strike, is that everybody comes back and you have to lay them off for six weeks to burn up the inventory. So it's not just the strike; it's the anticipation of the strike which ends up costing the company a lot of money and people jobs for some period of time.
Ms Murdock: You are operating under that present system now?
Mr Datilo: Yes, we are.
Mr Offer: Thank you for your presentation. I guess I too want to carry on in the line of questioning, certainly in the area of just-in-time. But before going into that, on the issue that you brought forward, the consolidation of bargaining units, you may be very interested to know that the point you've made is one which was made just this morning by unions, smaller unions concerned that the rights of their workers within their particular unit may be submerged with a consolidation with a larger union. They have concerns about that and they have concerns about what that means when there are conflicting collective agreements. How does the board decide? So you're not alone in that concern.
Just-in-time basis -- and I know we are very short of time -- I want to look not 1992 backwards, but 1992 forwards. It seems to me that the just-in-time issue is going to become more severe and more definite. The time is going to become narrowed as we move forward through technology and what not. I'm wondering if you can share with us what we should be aware of for the future. Where is this all going? In this regard, I guess a lot of us always thought of a just-in-time supplier as a supplier in Ontario supplying to a car manufacturer in Ontario. The point you are making here is that 80% of the supplies are going to the States. How does that bode for the future?
Mr Gary Ferlecki: What I see happening in the future and what's currently happening today is that if you have an interruption of supply and you're unable to supply the automotive companies with the parts in time, that business will be taken away from you and it will be placed elsewhere. It will not, in all probability, be placed in the same jurisdiction. It will be moved outside Ontario.
We've had tremendous fights within our own company on being rationalized, to get off those rationalization lists and to get back in the flow of things where we can have inquiries generated to capture new business. We've had jobs taken right out of our plant and moved to the US to another supplier which is producing the same part, and have not had the opportunity to quote on that business. It was just a decision that was made: Move it to the US, period. That's the reality of life and that's what's happening today.
The Vice-Chair (Mr Bob Huget): I'd like to thank your association for making its views available to the committee and thank each of you for taking the time to come down and appear before us this morning. We will resume at 1:30 pm with the Guelph Chamber of Commerce.
The committee recessed at 1202.
AFTERNOON SITTING
The committee resumed at 1330.
GUELPH CHAMBER OF COMMERCE
The Chair: It's 1:30. We're ready to resume. The first group this afternoon is representatives of the Guelph Chamber of Commerce. Gentlemen, please tell us your names, your titles, if any, with that organization, and proceed with your submissions. Please try to save the last 15 minutes of the half-hour for dialogue and questions, assuming there are people to put those questions to you and to dialogue with.
Mr Robert Green: My name is Robert J. Green, president of the Guelph Chamber of Commerce. With me is Robert Richardson, who is co-chair of our labour reform committee.
I'd like to thank the committee for allowing us to make our presentation today. Our group has been involved in the very lengthy process of studying the legislation from its beginnings until today. In my 10-year involvement with the chamber, I can't recall a topic that garnered more interest or polarized more of our members, from all walks of life, in opposition to this document.
The concerns I feel can be filtered down into four main areas. They are:
1. Individual rights and freedoms. This bill, if passed, will clearly restrict and/or eliminate the rights that individual employees currently enjoy regarding union membership and the freedom to pursue an economic livelihood.
2. This document is predominantly an instrument designed to foster the growth of big unions, with a lesser concern for individual members and their personal economic futures. It does little to encourage and stimulate entrepreneurial spirit, which the Ontario economy at this point in time so desperately needs.
3. The Guelph Chamber of Commerce is very concerned that this document has very little substance to support the spirit of its preamble. The reality of today's world economy is that it's in a massive transition from the industrial age to the information age. The old structure of employer-employee relationships quite simply no longer exists. The new reality dictated by this massive economic transition is that the survivors will have built an economic base based on partnerships of equals that tear down old walls of mistrust and build new foundations of cooperation which result in a win-win economic relationship.
The legislation may have been appropriate for the 1950s; nothing could be more inappropriate for the 1990s. It serves to stimulate and raise confrontational relationships, which perpetuate the old belief that someone must lose in order for someone to win.
4. Business investment in Ontario will be greatly curtailed or eliminated due to the perception of investors, resident and foreign, that the very existence of this legislation indicates the current government's understanding of the new realities in the world economy. Investment dollars, and consequently jobs, will flow to geographic areas that investors perceive to be more friendly towards business.
This dawning of the information age shrinks the world and was made very evident in an article recently in the press where a Mississauga firm was having boots manufactured at a Newfoundland manufacturing site while a significant level of the administration, including CAD software product design and manufacturing processing management, was done in Mississauga. The article concluded that the communication links were so good that everyone felt they were working in the same facility. Five years ago, this simply would not have been possible; consequently, those jobs would not have been lost from Ontario. This proposed legislation, if passed, will encourage manufacturers to pursue this level of business activity nationally and internationally.
I'd like to conclude my remarks by highly recommending that this committee report back to the Legislature and the government with a strong suggestion that this proposed legislation be rethought and that a new process be established to bring together representatives from every economic element within the province of Ontario. This group would develop a document that has the substance to more clearly reflect the spirit of this proposed legislation while taking into consideration the new realities of the world's economy and the new business partnerships that must be formed in order for the residents of Ontario to simply maintain their standard of living. Now I'd like to call on Bob to make his presentation.
Mr Robert Richardson: Bob Richardson is my name. I'm the manufacturing manager for a company called Armtec, headquartered in Guelph, Ontario. We operate plants coast to coast in this country. About half of those plants are unionized; 50%, of course, are not unionized, so we get a flavour from seeing both sides of it. We want to share some concerns today with you.
As the famed boxer James Corbett once said, "Fight one more round." The person who fights one more round is never defeated. We are here to fight one more round.
As though the current economic conditions, severe competition, increased workers' compensation, transfer of health costs to employers, substantial increases from Ontario Hydro and increased taxation at every level aren't enough, the NDP government is determined to cripple business further with the introduction of radical labour reform, Bill 40. It is called labour reform, and this act is responding to the changing workforce, which includes women, minorities and part-time workers.
The main purpose of this act is to expand unionization in the province of Ontario. Once Bill 40 is enacted, employees in many business sectors can expect to be approached by unions who will promise job security, better wages, improved benefits and better working conditions. Employers are expected to pay for this and at the same time stay competitive.
The Minister of Labour states, "Employee involvement through trade unions can have a strong positive effect on both productivity and job satisfaction and can play a major role in the development of increased work cooperation." Since when did introducing a union improve productivity and work cooperation? The opposite happens as seniority rights and lines of progression destroy flexibility in the workplace.
Jobs, pride, performance and mutual respect between an employee and employer cannot be legislated. The ultimate guarantee of job security and good wages is tied to the economic health of society, not to whether you belong to a union. Political ideology is meaningless if people are unemployed and the economy is staggering under the weight of society's debt.
Investment dollars will not come to Ontario if we are perceived to be an unfriendly place to do business. Employers who are threatened or held ransom by union negotiators may have no choice but to relocate if they wish to stay competitive or secure supply to their customers.
Employees lose individual rights with the introduction of Bill 40, as do employers.
The certification process has been simplified and the power of the labour board expanded, which paves the way for union expansion. Bill 40 allows unions to conduct organizing campaigns at the entrances and exits to workplaces, including shopping malls.
Currently, petitions opposing unions may be presented by employees to the labour board during the certification process. Bill 40 will remove this right. If 55% of employees sign a card, then certification is automatic; the 45% who may not wish to join a union have no choice. Once an employee has signed a card, he cannot change his mind. Employees may regret signing a card if they were influenced by peer pressure or intimidation during a sign-up rally. Under Bill 40, employees will lose their right to withdraw their name.
The current law has no restriction on the right of employers to hire replacement workers during a strike. Bill 40 places severe restrictions on the use of replacement workers. The striking or locked-out employees cannot voluntarily return to work until the union decides to end the work stoppage.
We have attempted to provide constructive and rational input into the public policy process on behalf of Ontario's business community. We have been turned down based on the fact that we are a special interest group. Yes, we are a special interest group: We are concerned about the future of this country, the future of this province and about providing a future for our employees; we are concerned about staying competitive and providing a high level of customer service; we are concerned when we see the government bend over backwards in support of unions while it ignores the reality of today's business climate.
I'm going to share some overheads with you, and I hope you can all see them from where you're sitting.
Labour employment standards is a branch of the Ministry of Labour which establishes legislation governing the minimum standards to be followed by employers for the protection of employees. Each province establishes its own laws governing such areas as vacation with pay, statutory holidays, minimum wage, termination, hours of work, maternity and other leaves, payment of wages and records retention.
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Company policies and union contracts which establish more favourable provisions will prevail over the legislated requirements. Labour standards apply to full-time, part-time and student employees. Employees currently are protected.
Employee rights are impacted with Bill 40. No petitions are allowed after the union files certification application with the labour board. There is automatic certification if 55% sign cards; the other 45%, as I said previously, have no choice.
The union determines if part-time employees shall be placed in combined unit with full-time employees. Part-time employees often have different priorities.
Employees lose their freedom of choice to work during a strike, even if they feel the union is being unreasonable or they cannot afford to strike. Employees must obey a union strike call. The unions are removing, rather than protecting, employee rights, for which the Ministry of Labour standards are intended in this province.
The fact sheet I'm putting in front of you is a negotiation that took place about one month ago with myself and the union. They have asked to be called plant X because we want to respect their future negotiating rights in this province, so they will be unnamed. I hope that's okay with you.
We acquired this plant through a merger back in 1983. This plant is unionized and was unionized at that time. There are seven companies that belong to the same local in this particular location. The contract agreement is for all seven companies.
If the union calls for a strike, then our employees must decide if they will support the strike or wish to continue to work. Contract language and job classifications do not apply to our type of business. We have ignored this in the past, but we must face that in today's market conditions. The reason for that is that they are really a trade union, and we're trying to run a specific manufacturing operation out of this plant.
The machine operator who operates a particular machine in Guelph makes $16.15 per hour, and at plant X it's currently $18.47 an hour. Due to the lower cost of production in Guelph and the deregulated freight rate, we can ship product to plant X economically. If we were making a business decision today in terms of looking after our competitive position in the marketplace, we should probably close that plant down and make the business decision. We don't really want to do that, because it does impact a number of employees. We want to retain a plant in this geographical location, but we must remain competitive. Due to the competitive market conditions and pressures that we face to be a low-cost producer, in order to retain a market share and customer base, we simply can't allow our costs to increase.
Our strategy going into this negotiation meeting was to freeze the contract for a one-year period and review the situation in 1993. We have made a request to negotiate separately on behalf of our employees. This request was granted by the union. Previously, the negotiation took place for all seven companies, as I mentioned above. We are prepared to take a firm stand to keep this plant operating as a viable operation, and that firm stand, as I mentioned, means a complete freeze for the 1992 contract.
Let's look at the union strategy. Remember that we are one of seven companies in this local. If the union agrees to freeze our company, that will impact its ability to negotiate with others. That's why they want to be known as plant X currently. The union has requested a number of changes to the contract. The union may be forced to play hardball with us because of the above conditions.
This is what we were given going into the meetings, and this is really a wish list of the union:
Increase wages by $1.50 per hour for the first year and $1.50 for the second year in all classifications; increase probationary employee starting wage to $9.50, and after completion of 600 hours increase to $10.50; after completion of 1,600 hours from date of hire employee will be classified as production grade 3 at $18.85, moving to grade 2 after another 1,000 hours of production at $19.07, and on completion of 1,000 hours again going from production grade 2 to production grade 1 at $19.54 per hour;
On overtime the request is to be paid at the rate of double time for all overtime, and increase shift premiums for second and third shift;
Increase the vacation pay from 8% to 10%, and add two holidays to the contract, one for the employee's birthday and one for Remembrance Day;
Have a small increase as it pertains to Bill 162, which was an employer contribution to offset this bill. Should this 3 cents per hour be insufficient, the request was that the employers agree to contribute extra moneys as needed.
What happens with Bill 40? The union requests a strike vote prior to negotiation, and in all negotiation meetings I've been involved in, they usually have the strike vote taken care of before they sit at the table with us. If 60% of those who vote are in favour of a strike, then the union has the power to call a strike. The majority, however, may not wish to strike.
The union calls for a strike in support of its future negotiations. Remember, they have seven companies involved in this thing, not just one. Our employees do not have the freedom of choice to support or not to support the union call for a strike. Our plant closes and we supply from Guelph or another plant location. We are not allowed to hire replacement workers. We have options because we operate both union and non-union plants across Canada. We have several locations to ship from; therefore, we can and will protect our marketplace.
However, the owner-operator of a small single location will be forced to negotiate a settlement with the union or close the plant. A small business can rapidly face bankruptcy when this happens. Employees lose their jobs, but the employer may lose his life savings and perhaps investment. The owners cannot win. If they yield to the union demands they will not be competitive; if they don't, the union will call for a strike and shut them down. So what do they do?
Under those conditions I've given you here, I would ask the question: How many of you think that plant is open today? Let's see a show of hands. Under the conditions I gave, all the union requests and us going for a 100% freeze, how many of you think that plant remains open today?
The Chair: Far be it for me to tell you how to do your presentation. You've got 10 minutes left in your half-hour, though, and if you want time for questions and exchanges --
Mr Richardson: Okay. The plant does remain open, because we requested a vote from the employees. The employees voted in favour of working.
The conclusions and recommendations we have for you:
We recommend that a secret ballot vote be enshrined in the certification process so that the employees' true wishes can be determined. The secret ballot could become automatic once 40% of the employees have signed cards. No certification or decertification should occur without a secret ballot vote.
We recommend that employees be allowed freedom of choice to support or not to support the union's call for a strike. We recommend that the employer's last offer be put to a vote and that the majority of the employees must vote in favour of a strike.
We recommend that the rights of the part-time workers be respected. Part-time employees should have the freedom to combine with full-time employees if the majority of part-time workers are in favour.
We recommend that employers be allowed to hire replacement workers during a strike. The use of replacement workers can mean the difference between survival and bankruptcy in a small business.
We recommend that an economic impact analysis be done prior to proceeding with the legislation.
We recommend that the government appoint a tripartite task force consisting of labour, management and government with a mandate to reach consensus on how the Ontario labour law should be revised. If this cannot be achieved, then how can we expect to have cooperation between management and labour in the workplace?
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The Chair: Thank you, sir. Mr Fletcher, three minutes, please.
Mr Derek Fletcher (Guelph): Thank you for your presentation. Quite a few things, and I do have quite a few things: first, when I was negotiating for unions, at no time did I ever go into negotiations, into bargaining, with a strike vote. The strike vote was always called after negotiations had been going on for quite some time, and when I negotiated for Wellington county school board as its chief negotiator, at no time did any of its unions come into negotiations having taken a strike vote. I don't think it's as common as everyone is saying.
The 55% automatic certification has always been there; it's been there for years and years, long before this legislation was even thought of, and I hope you're ready to fight one more round.
The Guelph labour council, as far as I'm concerned, one of the more progressive labour councils and one of the more progressive chambers of commerce, because I remember when I was with the labour council we worked with the chamber on quite a few projects, not always agreeing and not always disagreeing, but the focus groups and the education committee as far as some of the things that were going on.
I remember in 1989, when the Occupational Health and Safety Act was being amended so that workers would have the right to shut down unsafe workplaces, there was a hue and cry from the chamber that this was tipping the balance of power in favour of the unions, that workers would indiscriminately start shutting down workplaces. I'm asking you, to your knowledge, has that ever happened in the city of Guelph, where workplaces have been indiscriminately shut down because of this power?
Mr Green: I hope they wouldn't have to. I assume that the places are safe without having to shut down.
Mr Fletcher: Right, but the workers did not abuse anything.
Mr Green: Is that a fact?
Mr Fletcher: As far as I know, yes, it's never been done.
Mr Green: So you don't know that.
Mr Fletcher: But the perception was from the chamber at that time that this was tilting the balance of power in favour of workers, of unions.
You said that this government is moving along without regard for the business community, and yet I put to you the other side. With the North American free trade agreement moving along the way it is, there are many people who disagree with it but the business community at large agrees with it without looking at and listening to what the small person is saying, what the working people are saying. That government is moving along and not listening. It's a two-edged sword.
Mr Green: Derek, we can get into a discussion on the free trade agreement if you want.
Mr Fletcher: I know we can.
Mr Green: I don't think this is the mandate of this committee.
Mr Fletcher: No, but I'm just showing the similarities between --
Mr Green: The similarities are very distant. The reality with this documentation is that it tries to address an old topic. The world economy as we're looking at it demands -- I'm not saying we shouldn't have a document, but let's not perpetuate something that already is ugly. Let's develop something that is more positive, that involves all of the people in the partnership.
At this point in time throwing up a confrontational wall -- and let's not kid ourselves; there are going to be lots of them -- will not develop the partnerships that are necessary for survival. We're talking about competitive survival here; we're not talking about having fun and getting a couple of pennies an hour for somebody. We're talking about a very, very competitive world economy, and we are becoming more competitive daily.
Simply, the reality is instead of maintaining our standard of living by increasing productivity, cooperation in relationships, we are going to maintain our competitive position by people losing their standard of living. That's a very sad position for us to be in.
Mr Fletcher: And that's the flip side of it.
Mr Hans Daigeler (Nepean): One of the main arguments put forward by the government in introducing this particular bill has been the experience with violence on the picket lines. There is a feeling that this bill will eliminate this, at least for the most part. In the Guelph area, have you had much occasion of violence on the picket lines? Has that been the problem?
Mr Richardson: I would have perhaps a difficult time answering that in the Guelph area. I've been there since 1978 myself, transferred in with the company. I wouldn't say the Guelph area and the business community in Guelph has had what I would term a violent picket line. They've certainly had some long-term strikes that I'm familiar with, but not the type of violent behaviour patterns that you see in some of the stone-throwing or damage to vehicles and this sort of thing. I don't think it's been overly violent.
Derek, you might be able to answer that better. You've been involved.
Mr Fletcher: No, there hasn't.
Mr Daigeler: So according to your experience, that is essentially --
Mr Richardson: I think I would want to answer it in this way. If you're talking violence on the picket line and you're talking about a severe type of violence that is perhaps illegal, then I'm wondering if labour legislation is the way to handle that in itself anyway. Perhaps that's a separate issue. It's more of a police action issue than it is a labour code issue.
Mr Daigeler: I'm mentioning this because the government has certainly used that as the main argument. They feel that this particular legislation will prevent this from happening in the future, but I share with you the questioning, first of all, as to whether that will happen and, second, it's really dealing with a problem that hasn't existed in most parts of Ontario.
Mr Richardson: I guess what we're trying to view is the reality of what that ban on workers means. If it means to small business persons that they are forced to go into bankruptcy -- and I say that in a non-threatening way -- just if that's the way it turns out to be, then of course it has solved the problem on the picket line in terms of violence. It solved the problem in many ways, but it's left a bigger problem in its place, and that's one of unemployed people. I think that's the concern I see in the business community.
Mrs Witmer: Thank you very much for your presentation. I very much appreciate, Mr Richardson, your own business story and the possible impact if Bill 40 were introduced on your business, the changes that there would be.
You might be interested to know that there was a union this morning, the Canadian Paperworkers Union, that agrees with you on some points. They did indicate that the process the government was using to introduce this legislation was flawed -- it did create a war instead of a win-win -- and that the government really wasn't recognizing some of the new realities of the present-day world.
You've talked about the new cost to business and the fact that this bill's not going to guarantee job security. Certainly today we've heard from many people, particularly the automotive parts people, how jobs are being lost and investments are not being made in this province, and we're going to see more job loss. In order to protect jobs and make sure we don't lose any more, what parts of this legislation would you particularly ask this government to make major amendments to?
Mr Richardson: I would say the ones that were referred to in my presentation. I don't think we should take away the employee rights in terms of forming a petition against a certification process. If the rights of the employee, or of the majority of employees, after they think about it, are that they do not wish to belong to a union, I think those rights should be respected.
I think it's very dangerous to have an operation shut down and prevent volunteers or small business people from operating a business when they have no other options to both manufacture and/or distribute their product. I think that's most unfair. Those are some of the key issues.
The Chair: Thank you. I want to tell the Guelph Chamber of Commerce that we thank it for its interest and for its participation here this afternoon. I want to indicate that the visuals you provided are useful, and I especially thank the legislative broadcast, for whom that creates a modest challenge. None the less, they rose to it today, as they have on every other occasion, and that was broadcast along with the rest of your presentation.
Mr Offer: On a quick point of order, Mr Chair: Would it be possible that the visuals could be distributed to the members?
Mr Richardson: I have copies of the complete presentation.
The Chair: Good. They'll form part of the exhibit. Thank you, people, and take care. Have a good, safe trip back home.
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VERNON YORGASON
The Chair: The next participant is Professor Vernon Yorgason, professor of economic affairs at York University in Downsview. Please be seated. Tell us anything more you would like to about yourself but, more important, tell us what you want to tell us about Bill 40 and related matters.
Dr Vernon Yorgason: I'm not used to sitting down when I talk. I guess university professors and bagpipe players tend to like to keep moving for the same reason, basically, that a moving target is more reasonable.
I'm rather on the other side from the gentleman you've just heard, not simply because I am a humanist, I think, but because I've had about 35 jobs. I've been a member of five unions and two staff associations. I have perhaps over a dozen semi-skilled certifications. My experience has been rather different, I would imagine, from the individuals you've just listened to.
That this legislation is something I'm in favour of goes without saying. Managers currently don't have much experience working from the other side. As a result, they tend not to really understand the nature and quality of the work that they do, and they tend not to understand the basic structure of union activity. Typically, rules having to do with seniority tend to stream employees into areas where their declining physical capability as their seniority rises provides a means where they themselves can be more productive.
The last study I heard indicated that unionized shops tended to be on average 31% more productive than those that weren't. In part this is because those workers feel more secure; in part it is because of the substantial improvement in the dispute resolution system that comes with unions.
Managers don't really seem to understand, since they view their own particular contribution to their business as rather larger than lifelike, that in fact it is the workers who get the job done. If you look around you, consider what you observed on your way down to work this morning. All of this has been produced by somebody, not by a manager, by somebody with a hammer, by somebody with a saw, by somebody with very specific skills. Without these people, civilization as we enjoy it today simply would not be here. However beautifully a car is built, it's rather useless if its wheels don't hit the ground.
What I do find interesting about most businessmen is that while they can understand the possibility that people should pay for their product what the product is worth, they seem to view the fact that when they hire people, they don't get what they pay for. If you push down wages, you tend to get a rather poor effort. If you increase workers' risk of losing jobs, you tend to get poorer effort. All of these generally result in lower productivity.
When I first read the discussion paper from the Ministry of Labour, I was of the impression that it was part of a social manifesto. The bill, as I read it, tends to represent something less. Unlike many of your correspondents, I have been unable to show that it is of monumental significance. I hope I'm not disappointing you in this regard. What my studies tend to indicate is that within five years an additional 5% to 7% of the labour force will be unionized, this primarily in the retail sector.
The length and severity of strikes will probably be diminished perhaps by as much as a third. Prices of goods and services will be marginally 1% to 2% higher as a result, but social costs borne by our social fabric will tend to be somewhat less, perhaps by 2% to 3%.
I found it impossible to separate out the influence of this legislation among the myriad of factors that affect employment, but in so far as I could tell, it's not going to have a great deal of effect on the employment level. In fact the probability of its improving employment is as great as its reducing the number of jobs, in large part because unionized labour is more productive. We have quite definitive studies which tend to indicate this.
What concerns me more than anything else is the rather hysterical response that we get from businesses in regard to such legislation. As far as I can tell, its impact is not going to be earth-shaking. What seems to me is that what we face rather than rational thought is ideology.
I consider the situation that business has found itself in over the past 30 years. We have a substantial proportional reduction in income and other taxes paid, considerable setup subsidies, a lax application of environmental laws and regulations, a limited and declining educational and training cost and a vastly inflated role in the halls of power. It's thus been able to shift many of its private costs into the social arena. It now perceives that its privileged position is being eroded. That this should be the case is, to me, undeniable. It's failed to create virtually any new jobs. It's carried out little new investment. Its competitive position relative to the rest of the world has slipped markedly.
My experience as a worker in the factories that I have worked in, and these are fairly recent, up to May of last year for example, I find the principal barrier to increasing productivity the managers, who simply refuse to listen to the veteran, the trained worker, and prefer to listen to the presumably educated manager and engineer. This doesn't strike me as a useful sort of activity.
Secondly, business have over the past three decades come to see themselves as an élite. In part this is because they have substantial formal education. The election of an NDP government shook them to the core. What we've seen are the drawing of class lines in our society more deeply than I've seen them in my memory.
As I look over history, the 1920s were rather an unhappy period; certainly the early part of the 1930s as well, and then of course I was born and the world went to hell. None the less, when I started in a factory over 35 years ago, management listened to me. I was an apprentice tire builder. They listened to me. They took into account my suggestions. They changed the workplace so that I could make myself more productive. They don't listen to me any more.
As a mill operator in Goodyear in Bowmanville, I made a number of suggestions in regard to the machines I was working on. An engineer who walked by me three times a month largely ignored me. My first job as a college graduate was as an engineer. I've worked in this area on and off all my life. I have several advanced degrees.
However, the fact that I was taking 50,000 batches a year off that machine didn't give me any element of expertise. I find it interesting because contracts were lost because they didn't take up my suggestions, and in fact some of those suggestions had to do with the basic safety of the machine.
If you've ever worked on a mill, perhaps you might be interested in it: two whirring drums about three feet in diameter working together, mixed rubber coming down at 400 degrees, and your nose is about two inches from it. You make a mistake and you're a quarter of an inch thick. I don't know anybody who worked on that particular machine for any period of time who wasn't injured as a result. I was injured slightly myself several times.
Because they wouldn't take my suggestions, I quit, not in a fit of pique, but simply because that job was dangerous. I've worked alone a great deal of my life. I've learned to be careful. I've never been seriously injured. A careful workman isn't. But I don't see much in the way, even in large companies, of a commitment to the safety of the worker. It's "get the job done," period. If you get hurt, after you and several other people get hurt, maybe something will be done.
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In part, I think a lot of the problem exists in our society because people seem to associate intelligence with formal education. By my estimate, most of the workers I worked with were somewhat more intelligent than the plant managers. Their decisions were subject to mirth usually. The fact that a person does not have formal education does not affect his intelligence or his capability or his willingness and ability to contribute to the quality of the work that is being done. In fact, in my observation, the principal problem, as I said before, was the manager, not the worker.
This isn't to say that unions don't have their problems. The principal problem that I do see is an expenditure of time and money protecting the jobs of indifferent workers, workers the rank and file really don't appreciate having around because their lack of effort reflects on everybody else.
My principal problem with the legislation as it is set up is that it tends to concentrate more on the relationship between businessmen and unions without considering the activities that carry on within the unions themselves. This is probably where productivity and human rights can be improved and where this legislation, if it is going to have any effect, will live or die.
I don't see many changes in regard to the activities of the Ontario Labour Relations Board. A person who does have problems with his union finds himself rather at a loss when he has to go to the labour relations board. For one, a grievance which may be of some substantive note tends to be sidetracked into a question of procedure. Some of these grievances are of some consequence. Unions may delay and delay violations of collective agreements in regard to these things that don't appear to impinge on anybody's consciousness, even when such delays cause physical injury and death.
I have one grievance with York University that hasn't been resolved and that in fact the union indicated it would not be sending on to arbitration. This grievance is 52 months old. I'm not aware of any element of our legal system that allows such a delay, but the delay is allowed by the labour relations board without penalty. I don't imagine that the substance of the grievance will ever be heard.
However, the embattled employee dealing with his union and the labour relations board finds he has to hire a lawyer. Our labour relations board feels that it must provide employment for indigent litigators, I guess; lawyers need work as well.
I think some very serious changes need to take place in that particular organization for no other reason, and there are perhaps many, than that an intelligent, informed individual should not face laws which are so complex that he cannot represent himself. If they are, it is a violation of the basic elements of democracy. A person should, without prejudice, be able to stand up, adhere to an understandable set of rules and regulations and present his own case. This does not appear to be the case.
Despite the lofty objectives noted by the government's social and economic agenda -- a change of pace -- Ontario's success in the foreseeable future does depend on its current business managers and their ability and willingness to properly utilize their current labour force. I personally can't see much change occurring. Canadian managers, in my experience, are rarely willing to share their authority over the production process with a common worker, no matter how intelligent or able he is, even though the ultimate success of our society may depend on it.
It may be useful to note again that a considerable part of this problem is simple educational snobbery. Again, all too many people seem to think that formal education imbues them with godlike skills. I've taken 120 university courses. People typically take 60 to get a PhD. It took me two years to get a PhD. It took me three years to learn how to run a combine. It took me a year and a half to learn how to run a mill.
Education and training in this province is a very considerable problem. When I look at the increasing educational budget and the diminishing competitive status of Ontario's economy, I am led to the belief that perhaps education should be put back into the workplace from whence it came, that in fact there are some very serious problems with our formal educational system. Please note that my background is science and engineering, so of course I operate from some considerable bias. None the less, I think we are facing some very serious problems.
That business does not operate with the idea that Ontario is important and that its workers are important goes almost without saying. The high incidence of unemployment in our economy is only partially related to recession. It's only partially related to the free trade agreement. It seems to me to be related more to the movement of jobs outside. The fact is, if you push down on the wages of workers, you may well reduce the cost of the product that you produce but you also significantly reduce the capacity of people to buy it. Macroeconomics is unequivocal: What goes around comes around. We find generally that areas of high demand tend to be characterized by workers who are highly trained, highly educated, highly motivated and highly paid.
Anybody who is a student of history would realize that the 1920s was an era of declining real wages. One of the primary theories that explains the Great Depression is one of underconsumption, that in fact the demand for the goods that were being produced simply wasn't there because the wages weren't there. We can demonstrate this empirically, and have quite readily been able to do so since Sidney Greenhalgh's work in 1935.
In conclusion, I find it hard to believe -- another change of pace -- that Canada's lot will improve so long as promotion and advancement depend on who one knows rather than what he can do. It was my experience as a young man that diligence and hard work used to bring promotion and advancement. Now, more often than not, it just results in the expectation of greater diligence and more hard work. This sort of environment is not conducive to higher levels of productivity and a higher level of income for all of us.
In conclusion, I would like to commend those people who put the bill together. I think it's a first step. I do, however, believe that closer cooperation between workers and management will very significantly improve our productivity. It is what is occurring in all the subsidiaries of Goodyear that I visited in the United States. It simply hasn't happened here because Canadians don't cooperate in that particular manner.
I believe it is time that workers and employers, and government as well, realize that we are all in this together, that we're all partners here and that hysterical reactions to the things that will probably not have a great effect are not very useful and in fact have a negative rather than positive connotation. I'm not much of a backer of puerile self-interest, and I believe this is what much of our business community is in fact putting forward.
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Mr Offer: Thank you for your presentation. I was listening intently to your characterization of the issue and though I might take some issue with you as to how it's characterized, because I think what we're hearing in this committee, though there are people coming before the committee adamantly opposed as well as adamantly in favour, there are a great many people who are saying, "We understand all that which is necessary for cooperation and we agree with this, but we have some concerns with the legislation."
It isn't just the business community that has those types of concerns. We're hearing concerns from municipal hydro services, from school boards, from children's aid societies, from municipalities themselves, independent grocers, all with a concern which I don't think would be fair, in my opinion, to characterize as being just purely business hysterics. I think it's people who are very concerned about individuals and about them being able to deal with their own responsibilities.
There is an area in the bill which deals with the way in which matters of grievance can be resolved for employees, and I know you've been involved in that type of area. It talks about expedited hearings. It's a matter which I brought up yesterday. It says that there is a hearing, it shall be called, and when it is called it shall be heard day in and day out until it is resolved. It sounds like that would be very good for the employees, and my question is really from that angle.
I have a concern that when there is no discretion, when there is no flexibility in that procedure, that if there is some occurrence which happens that would make it impossible for an employee to get to the hearing, that far from their rights being enhanced their rights would be significantly reduced. I'm wondering if you could just share with us your thoughts as to the expedited hearing without any possibility of flexibility if somebody can't make it.
Dr Yorgason: My impression of union activity in the plants where I have worked is that the dispute resolution mechanism currently works fairly well. I'm not aware, for example, in Goodyear in Bowmanville, of a dispute that lasted over six months. Given a positive attitude on the part of both employer and worker, these things tend to be resolved in relatively short periods of time. Four years is not reasonable. Some flexibility surely is reasonable.
We are told by the courts that if you can't bring a person with a criminal problem up within 12 to 14 months then you are violating his human rights. We are told as well that if you can't bring a civil action within 20 to 24 months that justice delayed is justice denied. If you do set semifirm deadlines, then something gets done. Everything gets done just before the deadline. None the less, if you don't set deadlines, nothing happens.
How do we define "semifirm"? If there are impelling reasons why both employer and employee cannot meet on a particular day, who is greatly concerned? But how would you like to have to teach students for four years when your integrity had been impugned? If those problems were in fact correct, how would you then go back and repair all the damage you had done? How would you like to go back and work at a dangerous machine when fear itself is often as dangerous as the machine? Yet you have to go back and work there until the grievance is resolved. This gets deadly.
Mrs Witmer: Thank you very much for your presentation. You mentioned that business perhaps was overreacting and we wouldn't suffer some of the job loss and loss of job creation.
I'd like to indicate to you that this morning when the Automotive Parts Manufacturers' Association appeared, it gave us examples of companies that had stopped investment in Ontario, such as Hayes-Dana. They gave us examples of companies that were investing outside Ontario that would normally have invested here, such as Long Manufacturing and Seeburn Metal Products, and they gave us the names of companies that will not make further investments in Ontario due to the negative business climate making it too difficult to run a business competitively. They gave names such as Peerless Cascade, Prince Metal Products and Falcon Tool and Die. I would suggest to you that we will be losing those jobs in the future because of the uncertainty that's been created in the province.
You indicated that there was a need to bring people together in a partnership. But how can that happen when Buzz Hargrove, the new president of the Canadian Auto Workers, was quoted on July 27, 1992, in an issue of Automotive News, as saying he wants "no part of joint operating programs in which union and management work as a team to administer solutions to problems at plants"? You're saying here you were ignored by management, yet today, in 1992, we're hearing the president of the CAW saying he doesn't want people to work together anyway. How can you bring people together when there are these opposing and conflicting views? I think all of us sitting around this table believe there's a need for cooperation and partnership.
The Chair: You've got two questions there. I know the professor wants to answer both of them, the first one and then the second one. Let's give him some time.
Dr Yorgason: In this particular regard, I think you have to distinguish between location of business that might have occurred and that which actually occurred. There are very strict economic rules that do determine the location of business. In large part, they are transportation costs. If a business does not locate here, it is because of the nature of its business and its distance from its market. Scare tactics, might-have-beens, are not particularly relevant. The fact is, these things tend to come out in the wash. I think you will find that many of these companies that suggested they might locate here were just investigating. There was no firm commitment of any sort.
We should note that a number of companies that have located elsewhere are rather unhappy they did, because they located in areas where workers were less skilled and had a much less rigid commitment to work and, as a result, their productivity has seriously been affected.
In regard to the gentleman from the CAW, dinosaurs exist. We see them on television. They're funny. They are, however, still dinosaurs.
What we see in areas where productivity is expanding are cooperative efforts: among the Japanese, who, believe it or not, enjoy a productivity which is still considerably less than ours; and among American plants that tend to be very competitive in regard to competitive bidding within the subsidiaries of various companies. Workers' groups that are responsible for the whole operation of a shift, who show productivity considerably better than some of ours, I think have made pretty much a case for themselves.
The fact is, it's like education in many ways. God gives you a certain set of resources that you have to work with. Wishful thinking won't change those resources; you have to make the best use of the ones you have. If you set up a framework whereby that is ensured, then everybody benefits. If people don't wish to work with each other, you take off their clothes and heave them into a room for a while and let them work out their differences and out they come. If they are required to do so, they will do so.
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Mr Ferguson: Thank you very much, professor, for that sociological response to the bill. I don't think we've had that to date, so it's very insightful.
I just want to pick up on one of your comments. You said that some of the companies that have made a move in fact have been somewhat unhappy or have run into difficulties. I want to share with you that this morning the rubber association appeared before the committee. I was speaking to some of the delegates from that association out in the hall after the committee hearing, and they informed me that they took a plant in Texas and totally gutted the plant, took all the old equipment out of the plant and restocked it with the most advanced tire-building equipment in the world, and then brought the workers back. But what they didn't realize is that the workers they brought back were functionally illiterate and couldn't operate the machinery.
I think that really speaks to the skill and the quality of worker that is needed in order to sustain this value added economy. I'd like you to comment on that. How important do you think it is that we develop and sustain a high-wage, value added economy? That's essentially what you're speaking to in your brief.
Dr Yorgason: Well, a high-wage, high value added economy begets an economic growth and development in its own right.
We did discover, even in the 1930s, that resources moving from one country or one part of a country to another did not tend to result in equalization of resource prices. If you take all the Okies from Oklahoma and send them to California, you would imagine that wages in Oklahoma would go up because there was so much less labour there. What we did find when they got to California is that there is a dynamics that exists in human settlements and among human beings themselves in their economic activity in which it feeds on itself: High wages result in high demand.
In regard to literacy, I'm not at all sure, beyond a basic fundamental level, that it is as important as it is set up to be. A significant portion of our young people simply do not react well to formal environments. In fact, I've been associated with the educational system for most of my life, yet I think the most productive and practical education I got was following my father around. The fact is that many of us learn by doing, not necessarily by reading. It's important in some instances, but it's by no means as important as many people have led you to believe: many university administrators and professors, who appreciate higher wages in their own right.
However, please note that this negative correlation between educational spending and increasing productivity seriously bothers me, because it would appear that it's vastly misdirected. The trouble with universities is that when you make more universities, they just clone themselves. There does not appear to be any large relationship between them and the solution of the problems the society they exist in needs.
The Chair: Professor Yorgason, I want to thank you on behalf of the committee for taking the time to come here and talk to us today. You have answered a number of questions that have been posed frequently since the beginning, at the very least, of these committee hearings, and we're grateful to you for that. You illustrate that there is a large number of people in our communities who are interested in and eager to help government achieve its goals. I express the gratitude of all of the committee for a most valuable presentation.
Dr Yorgason: Thank you very much.
CANADIAN INSTITUTE OF PUBLIC REAL ESTATE COMPANIES
The Chair: The next participant is the Canadian Institute of Public Real Estate Companies. Gentlemen, please seat yourselves in front of a microphone and tell us who you are, what your status is, if any, and whatever else you want to tell us about yourselves, but more important, in your submissions on Bill 40, try to save the last part of the half-hour for questions and exchange.
Mr Ronald Daniel: My name is Ronald Daniel and I'm the executive director of the Canadian Institute of Public Real Estate Companies, which is more often known as CIPREC. With me is Ron Meiers of Cambridge Shopping Centres Ltd. He is the senior vice-president of that company and chief operating officer of the Cambridge shopping centre group. He's also the chairman of CIPREC's industry committee on labour legislation.
We're pleased to have this opportunity to speak directly to the committee. The Canadian Institute of Public Real Estate Companies is the primary voice for the Canadian real estate investment and development industry. It's 35 member firms include most of Canada's large development companies, and it has a total of $60 billion in assets.
CIPREC members own and operate major shopping, office, residential and industrial complexes throughout Ontario and Canada. In 1990, and excluding income taxes, the CIPREC members paid over $658 million in property-related taxes in Ontario. This was made up of $500 million in municipal property taxes, $58 million in lot levies and miscellaneous charges to Ontario municipalities, $55 million in commercial concentration taxes and $45 million in capital taxes to the province of Ontario. So we are significant participants in the commercial life of the province and a major source of funding to all three levels of government in the country.
We draw to the committee's attention, though, that the taxes paid in Ontario -- that is, the property-related taxes I've just identified -- have increased more than 50% in the last three years. That's one of the reasons you read in the press regularly that Toronto is the most expensive city in North America in which to do business. The major reason for that is the large share that property taxes have in the total rental cost of operating space.
For example, the average property tax in Toronto's financial district in 1990 was $7.85 a square foot, in the suburbs $3.71, in New York $7.20, in Atlanta $2.05, in Calgary $2.14 and in Denver $1.06. We have become an extremely costly city and jurisdiction and that pervades large parts of urban Ontario. One of our concerns is whether the impact of the package of proposals in Bill 40 will further increase these costs and make our industry further again less competitive.
We submitted a written submission to the committee and included our most recent annual report in which there's an article on the industry's concerns related to the escalating costs of doing business in urban Canada. It's not just Toronto; it's right across the country.
CIPREC believes that the proposals in Bill 40, if implemented, will increase the cost of doing business in Ontario. From the onset of the current recession in 1989, we advised all levels of government that the real estate development industry, and particularly the commercial segment of the office space and retail space areas, would not be the industry sector that would bring Ontario and Canada out of the recession in the way it did at the end of 1979 and 1982.
The commercial real estate development industry in Canada and Ontario is in a critical condition. We draw to your attention that if we're to have a healthy and sound Ontario and Canadian economy, we must have a healthy commercial real estate sector.
The real estate sector faces its current difficulties as a result of overbuilding in the late 1980s -- the industry's own problem -- the current recession and the rapid increase in property-related taxes. This industry is the underpinning of the Canadian financial system and must return to a profitable position with property values stabilized before further damage is inflicted on the total economy.
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My next remarks are not going to cause much joy among the 70,000 construction workers unemployed in Ontario at the present time. All new construction expenditures in the areas of residential, commercial, industrial, institutional and engineering in Ontario have dropped from over $32 billion in 1990 to an estimated $28.5 billion in 1992, a drop of 12.5%. New commercial building in Ontario, a segment in which the CIPREC members make their investments, has dropped from $6.5 billion in 1990 to an estimated $4.5 billion in 1992, a drop of over 30%.
Together with this drop in new investment, there's been, as you've undoubtedly noticed, a major restructuring of the retail sector and a trend that shows tenants moving from the city core to the suburbs, particularly in Metropolitan Toronto. Vacancy space for office space has climbed as high as 20% in 1992 and 1993, as commercial projects are completed. Most of them have a life of anywhere from two to four years, so that those that were started just before the recession are just now being completed. There will be no new starts until the vacancy level is brought down to more usual and acceptable levels.
The commercial building construction component of the total Ontario construction expenditures will not improve in 1992; it will remain flat. If there is to be any growth to be achieved at all, it must come from institutional and government sectors. As you all know, with the reduced flow of revenues to the government, there is little likelihood of additional major investment in this area.
The CIPREC members share the concerns expressed to you by other representatives of business during these hearings concerning Bill 40. The proposals contained in Bill 40 will have severe negative economic consequences arising from an anticipated reduction in new investment, with a consequent reduction in new jobs, a relocation of businesses to other parts of Canada and the US, causing job losses, and as I referred to in the last few minutes, there is the increased cost of doing business in Ontario and Canada, reducing our competitive edge.
Following the release of the document, Proposed Reform of the Ontario Labour Relations Act, in November 1991, business has endeavoured to have government establish a tripartite consultation forum of business, labour and government, to examine the impact of the proposed amendments on the much-needed new investment and job creation, the profitability and competitiveness of existing industry and business, and the need for the proposed changes to the Ontario existing labour relations policies in relation to the rapidly evolving world economy.
CIPREC members respectfully urge the resources development committee to recommend that Bill 40 be delayed until a full impact study of the proposed changes on investment, job loss and creation and the future competitiveness of Ontario industry and business has been reviewed by the tripartite group.
That's our response in general to Bill 40 and the package of proposals. There are three specific issues that relate directly to the real estate development industry. CIPREC members, as well as other investors in the real estate development industry, are concerned with the efficient and profitable management of the products of their investments, generally space in the retail office and industrial sectors.
Three specific proposals that concern our industry -- I'll just list them and then go back over them -- are allowing security guards to join the union of their choice, access of organized labour to shopping centres and privately owned, publicly used space, and the protection of bargaining rights and collective agreements for cleaners and other service workers employed by a building owner or contractor when their work is transferred from one employer to another.
Dealing with the first one -- security guards being allowed to join the union of their choice -- in all of the premises managed and operated by CIPREC members, the maintenance of a pleasant and hassle-free environment for customers, employees and others is critical to the achievement of the owner's commercial objectives. Shopping centres, multi-use facilities and downtown office retail complexes, particularly those linked by retail walkways, require that users be able to move freely without fear of harassment and intimidation or injury.
Security guards are an essential component of the maintenance of that environment. Security guards in the major facilities are perceived more as customer relations personnel, ensuring that a relaxed environment conducive to shopping and other related retail and entertainment opportunities remains attractive. Permitting security guards to join the union of their choice would allow the option of joining the same union as custodial, cleaning and maintenance staff. A strike by that union would have the effect of leaving a facility without either cleaning or security personnel.
Since Bill 40 also removes the opportunity to bring in replacement staff, the entire facility could be without security for extended periods of time. This would be a completely unacceptable situation in major facilities such as regional shopping centres and downtown complexes, increasing the risk of exposure to injury, harassment and discomfort to the general public. We strongly urge that members of the resources development committee recommend the removal of this proposal from Bill 40.
Access of organized labour to shopping centres and privately owned and publicly used space: In October 1991, CIPREC commissioned a public opinion survey by Environics Research on public access to privately owned, publicly used facilities including shopping centres and office space, but the type of space affected goes far beyond shopping centres and office space. It will include parks and conservation areas, fairs, exhibitions and amusement parks, community recreation facilities, arenas, stadiums and racetracks, public libraries and public art galleries, concert halls, dance and performance centres, theatres and cinemas, pedestrian walkways, common areas or lobbies of transportation terminals and stations, hotels, shopping centres and plazas.
Also, under debate in another forum at this time, there's the possibility that schools, universities, hospitals, privately occupied premises such as shops on streets, office building lobbies and restaurants all would be affected by the recommendation and proposal in Bill 40.
The results of the CIPREC survey on access were made available in the fall of last year to the Premier and the Attorney General. The objective of the survey was to determine the public's attitude and concerns concerning the use of privately owned, publicly used space: Who should control access and to what extent, the reasons for the public visiting shopping centres, and the types of activities that should be allowed there? I have attached, as schedule 1 to the written brief that we have delivered, a full description of the results of the survey.
Here I'll just mention a few. The survey showed that 87% of the respondents view shopping centres as a place to shop, while only 10% considered they provided any other use. Respondents were concerned with questions of safety and crime when choosing a shopping place, when they were deciding whether to shop downtown or in the suburbs or go to a regional mall; 73% indicated that safety was the prime factor in making that decision, and 67% said protection from harassment by individuals or groups was very important.
On the question of what types of activities should be allowed, a large majority said that political gatherings, 77%, and religious gatherings, 79%, should not be allowed. I think they were referring not to the traditional religious groups like the Salvation Army, but more to the fringe religions that are now apparent on the streets. As well, 71% indicated unions organizing workers should not be allowed, nor demonstrations by special interest groups, 75%. I think if we were to do the survey the day of the result of the street incidents on Yonge Street and in urban centres generally the negative response for increased access for these sorts of activities would be higher today.
As stated in the paragraphs related to security guards and unions, the objective of the CIPREC members is to provide an environment in commercial facilities that is free from the risk of injury or crime and that allows invitees and customers to enjoy their shopping and entertainment hassle-free and without unwarranted and unwanted distraction and disturbance. In this manner the owner or the operator of the facility contains an environment conducive to achievement of the original commercial objective.
It is clear from the foregoing that providing organized labour access to privately owned, publicly used places such as shopping centres is not in the public interest. Further, without providing owner-operators with express powers in the legislation for controlling and regulating such activities, it will be difficult to guarantee an environment that is pleasant and presents a low risk of injury or crime while such organizing activities are taking place.
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The committee should recommend that this proposal be removed from Bill 40 until a tripartite group of labour, business and government representatives has fully reviewed the need for such changes.
On the issue of protecting the bargaining rights and collective agreements of cleaners and other service workers employed by a building owner or contractor when their work is transferred from one employer to another, we consider this proposal an intrusion into the management process and an erosion of ownership rights. The proposal effectively limits management's ability to reduce costs through the introduction of new technology systems and policies. The proposal will effectively eliminate competitive bidding and pricing on labour contracts, consequently increasing operating costs and the cost of products and services to the customer.
It again refers to what I started out with in this presentation: our concern, which we're addressing to all three levels of government, the province, the municipalities and the federal government, that real estate taxes and other taxes related to real estate are out of sight and are continuing to grow, causing, we think, major harm to the total economy.
CIPREC requests that the committee remove this proposal concerning competitive bidding from Bill 40, since it represents a change that will contribute to a further increase in costs.
In closing, we urge that the committee insist that a full economic impact study of Bill 40 be carried out, and if necessary, we recommend that you commission your own study. I think the committee has a major opportunity to make a significant contribution to an improvement in the current climate of labour-management relations, which has become further exacerbated on both sides during the discussions on Bill 40. I thank you for the opportunity.
The Vice-Chair: Thank you very much. Questions? Mr Carr, two minutes.
Mr Carr: I appreciate the opportunity to ask you a few questions. I realize many members are facing severe pressures which we read about in the paper. Unfortunately, sometimes in the Report on Business, it's all too front and centre.
My question is regarding mall picketing. I don't think a lot of the public realize what it will mean until they actually go out and face it. Sometimes visuals are far more important than anything. I think back to the last campaign of the Labour Party in England and what was dredged up were old pictures of garbage piling up in the streets. I don't think people are going to realize the implications until they go out to a mall and can't get through because of the picketing.
Your statistics, if I got it right, said 75% of the public don't want unions picketing in malls. Is that what it was?
Mr Daniel: That's right.
Mr Carr: That was done in September 1991?
Mr Daniel: September 1991.
Mr Carr: Before there had been, with this bill, any highlight that this might be coming out.
Mr Daniel: It was done in a period between the swarming incidents and then the street riots earlier this year. We feel very comfortable that what we have is a conservative reaction from the general public. They don't want to be hassled, not only by politicians, religious groups and unions, but by the animal rights movement and all the other interested groups that want to be in there because there are a lot of people there, but the people who are using the place don't want them.
Mr Carr: With the impact studies we've been asking for, the government has continually disregarded what has been put forward from other groups. My personal feeling is that the reason they aren't doing an impact study is that they're afraid to do one because they're afraid of the results. What's your feeling as to why the government won't do any impact studies on this legislation?
Mr Daniel: Frankly, I have no idea. They put their heads down and charged, I guess, and just wanted to get the legislation into the House. But I have no direct information with respect to that.
Mr Ron Meiers: I think there have been examples of labour problems in the country. I recall our own experience in our property, Les Rivières, in Trois Rivières, where we had 300 truckers pull into our parking lot, close up the shopping centre and sing solidarity songs in our mall for approximately six hours. I can tell you that it cleaned out the shopping centre in about 15 minutes and certainly scared most of the residents and consumers who were in the shopping centre.
It's not a case of trying scare tactics here or running hysterics. We've actually lived through these kinds of situations and, believe me, they're not pretty and they're not pleasant and I don't think they really serve the public well. After all, security and safety is the number one concern. In every consumer survey we've ever done, personal safety is the number one issue, and by allowing these kinds of groups and allowing these kinds of activities at the shopping centre, it just invariably leads to the wrong kind of activity happening in the shopping centre. We do not believe that a consuming public wants, needs or requires that kind of hassle when it comes in to do some purchasing in our shopping centre.
Mr Klopp: Thank you for your ideas and thoughts. It strikes me very much as a learning experience.
One comment about the study idea: I understand the ministry did try to get some information on this. Professor Meltz, I believe, from the University of Toronto came to the conclusion that you can't study this particular model because there are too many variables and it wouldn't be accurate. It wasn't, I believe, anybody sticking anybody in the sand. "You can ask people their opinions, but," he says, "I could ask them just the opposite question and get an opposite answer," and that's not scientific enough for studies.
You mentioned earlier in your preamble the tough economic times that we've seen, and there's no doubt. That's what got me involved in politics. As a farmer, I've seen real estate values go extremely high due to an idea of confidence that the land will go to $5,000; buy it at $2,000. As one who was trying to buy, I came into the operation when land was going to $2,000: "Buy it. Keep going." It was a farm my dad started. I think it was worth $5,000 for 150 acres, and the neighbour was asking $300,000 for that same farm the day I went in. Unfortunately, I couldn't buy it because economically it was crazy, not because the real estate person told me it's going to be $5,000 in 20 years. It's only worth what I can afford to pay for it. I wish a lot of other people would have had used a bit more common sense. It ended up falling down in price due to the fact of confidence.
We had a worker in here. She came in the other day and she thought the bill would help to build confidence, because she said that she right now would like to buy a house, but she's worried about her job and she thought these changes to the act, because we already have a legislative process, would give her some confidence and probably she might buy a house, which I think in the real estate industry would help, and what we need is confidence, which would help.
You're in the mall business, and very quickly, we had the president of a clothing company here last night who actually told us -- I don't think he mentioned your particular company. He mentioned some others. We can get Hansard. I don't want to mention names in case I name the wrong ones. He was actually saying that these changes to the act were what US investors were looking for and that they want to come up here.
I believe his son was in a few nights before representing another facet of their company, and he happened to mention that too. He actually said, "Don't put this legislation in place because US firms are looking for this because it'll give them an edge," and then the president of the company came in last night and he mentioned that again. He even went further to say that down in the United States he knows of malls that are going down to the States and offering great deals for US companies to get up here. I just want to know if you're aware of that. Why aren't they doing these same kind of deals for Canadians?
Mr Meiers: First of all, there is a problem in the retail industry. As you may or may not have noticed when you're walking through shopping centres, there's considerable vacancy today. There's been an extremely large number of retailers go out of the industry, and not by choice. Usually, it involved huge losses and loss of confidence with their bankers and those kinds of things. To that end, we are going to the US trying to entice healthy companies into coming to Canada, but at no better deals or rates than we're offering Canadian firms at this particular time.
If there ever was a time to start a retail chain, it's today. There's choice, there's opportunity and there are reduced prices and increased allowances. So it really isn't a case of choice that we're looking south of the border. If we had the retail community in a healthy mode in this particular country, then we'd be filling those spaces with Canadian firms. Those that are coming up are coming up by choice.
We are concerned about the competitive situation. We're not trying to be hysterical about it. We are concerned that this bill will increase the opportunity for US firms to gain more ground in terms of many of our industries and many of our manufacturing jobs that seem to go south because there are relaxed rules there. Today they're enjoying those kinds of things that'll make it even tougher, I would suspect.
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Mr Klopp: No, but he's saying they're looking for these labour rules as soon as they get in here.
The Vice-Chair: Excuse me, Mr Klopp. Could you conclude --
Mr Meiers: I can't see how that could be possible.
The one other issue of interest, I think, that deals with this competitive nature is the fact that in the last three years our operating costs, the ones we can control, have gone up by less than 2%, or beneath inflation. On our five-year projections and for about 10 years back, we have had 7% to 8% increases in our property taxes, and frankly our five-year projections from today are seeing them go up at the same kinds of rates. Those things are very concerning and very worrisome to this industry. We can't control them. They're like death and taxes: You can't control them.
Mr Offer: Thank you for your presentation. I want to address the issue of organizing and access on private property, but I was intrigued with Mr Klopp's question about the US companies coming up as a result of these. I think it would be fair to say that what was put forward was that because of these changes, US firms, which have more capital, can come up and if there is a labour disruption which involves a Canadian company, an Ontario company which has less capital, it will be out of business, and the US companies with more capital will be able to survive; hence this is the great attraction.
I'm not certain that I agree with Mr Klopp in saying this is the way to go. However, the question that I have is, when we take a look at the legislation on access and organizing, it doesn't just apply to malls. I think the press releases say that it is for the malls -- the industrial mall, the retail mall -- but it has a much broader application. We have heard people come before us -- undisputed, by the way -- who say, for instance, that within a department store which licensed particular aspects of the store, either cafeteria or travel agencies or things of this nature, these provisions would allow picketing within the store in front of -- I'll use the example of a cafeteria.
My question to you is this: Is that your understanding? How does that bode for people who would even want to be part of a mall that has a department store, and what protection is there for those stores in a mall that are not involved in this whatsoever, either in picketing or organizing, but might suffer in no small degree because of what's going on in another store within the mall?
Mr Meiers: That is exactly our fear and one of the reasons we would love to meet and work with a legislative committee in trying to put the proper wording and proper thought process into the picketing aspects. We're very concerned that it could create a major hardship. For example, if we had a food store, say, with striking and major confrontations going on, it could just devastate the remaining stores in the shopping centre because a lot of the people enter through those stores, see the activity going on in front of that store, and it would make it very difficult.
We don't disagree that there have to be some rules and some human rights out there for workers and for people involved in unionized labour. That is not the case, that we want to just shut it down. But we also know the very reason people are coming to our commercial establishments is because they feel safe, feel that there's a sense of order, that there's a non-hassle, worry-free atmosphere in a shopping centre.
I certainly would not want my mother or someone close to me out in a shopping centre where there's a great bunch of hassle and shouting and confrontation going on. I can assure you that this would not give her a great comfort level. We don't have to have that kind of situation happening on our commercial property.
I worry just as much for a lot of the public buildings that enjoy similar kinds of -- I go to a museum and I don't expect to be hassled and to see confrontations, or I go to a recreational facility and I take my children. I want free, easy access and I want a safe environment there. I don't believe that's a place to resolve labour differences.
I think the gentleman before us was right on the money when he said there has to more and better communication between all groups involved in the labour equation. Frankly, I think what has to happen is much more dialogue between your group and private enterprise and worker groups -- we're not trying to leave anyone out of this -- to come up with better and more cooperative methods to work it through.
As far as I know, Japan doesn't have a union, and it has a very good working relationship within its organized labour groups. Frankly, I think we should learn a little more from them and have a little less of the confrontational patterns we've really enjoyed in the past, which unfortunately have not seemed to work.
The Vice-Chair: Thank you very much. On behalf of the committee, I'd like to thank the Canadian Institute of Public Real Estate Companies and each of you for presenting those views. Thank you very much for playing an important role in the process.
CAMBRIDGE CHAMBER OF COMMERCE
The Vice-Chair: The next group scheduled is the Cambridge Chamber of Commerce.
First of all, welcome. For the purposes of Hansard, if you could identify yourselves and then proceed with your presentation, you're allocated half an hour. If you could use approximately half of that half-hour for questions and answers from committee members, it will be appreciated.
Mr Hugh Ferguson: Mr Chairman, honourable members, ladies and gentlemen, my name is Hugh Ferguson. I represent the Cambridge Chamber of Commerce. With me today is Mr Gerald Martiniuk, the president of the Cambridge chamber.
I would like to say it's a pleasure to be here to express the views of the 850 members of our chamber. But, ladies and gentlemen, it's not, and I'll tell you why.
Last year, just about this time, I took the opportunity to study the Burkett committee reports, and shortly thereafter, the first draft of proposed amendments to the Labour Relations Act. I needed only to read the report filed by labour to have read the first draft of what was to become Bill 40. Since that time, it has become clear to many of us in the business community that Bill 40 appears to be a done deal, and that the February consultations with the minister, and perhaps even these hearings, are the smoke and mirrors of a hidden agenda.
We are here, none the less, in the desperate hope that some of you folks may be listening. Former presidential hopeful Thomas Harkin said recently of the US job market: "The issue isn't jobs. Hell, slaves had jobs. The issue is long-lasting, secure, high-paying jobs."
What Senator Harkin said seems obvious, but I would like to tell you that it will only come by the joint participation of management and employees to create a socially and economically desirable marketplace for us all to live in. I say to you now that Bill 40 is not joint participation; Bill 40 is the legislating of an entire marketplace for the first time in Ontario history. Bill 40 gives the union movement a monopoly over Ontario's workforce and a stranglehold on Ontario business.
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Where are the checks and balances to protect individual rights over the legislated rights of a union? For example, under the certification process, given the extensive new markets and new powers open to unions, the legislation should mandate an open campaign so that a union seeking representation would (a) file a notice of organizing with the labour board and employer, (b) provide prospective members with copies of the union's constitution and bylaws and their rights therein, (c) provide prospective members with a written commitment of benefits that would accrue and what kind of track record they had in previous settlements, (d) advise each prospective member that, upon joining, a 48-hour cooling-off period is in effect, and (e) ensure that employee hear both sides of the issue.
These suggested provisions are not new or innovative. They are in fact contained in principle in the Consumer Protection Act of this province. I suggest to you that workers of this province have a right to protection against overzealous and unscrupulous people in every marketplace, including union organizers. An informed worker will make an informed decision. We ask you to let them try.
Let us look at the collective bargaining and contract administration sections of the act. The foundation of democracy in this country is the secret ballot. Legislate it for all ratification and strike votes, and mandate a cooling-off period where a strike vote is necessary following a defeated ratification vote. Create a provincial code of picket line conduct to discourage inappropriate behaviour where a strike is necessary. Set out specific penalties for violation of the code for all parties: employers, employees and the representative union. Make the code enforceable in law and have it administered by the courts, or at least some arbitration system similar to that proposed for employees terminated while engaging in lawful labour activity.
I suggest to you that these types of provisions, if enacted, would eliminate much of the violence, intimidation and vandalism so often evident in labour disputes.
Also conspicuous by its absence in the new act is any mention of union accountability. As with most business sectors, the costs of services provided by government should be offset against union revenues in the form of a tax on union dues. Such a system could be twofold.
An annual registration fee per member could be levied to help finance the OLRB and the activities of the Ministry of Labour which directly subsidize the union movement. Further, a user-pay fee structure could be implemented where grievance mediation or a government arbitrator is necessary to settle a dispute. The fee could be paid jointly by both parties.
I suggest that such a system would promote cooperation and compromise on the part of both management and labour, which is one of the stated objectives of Bill 40.
In June of last year in a speech titled Building a Common Sense, Premier Bob Rae had this to say to the Premier's Council on the Economy and Quality of Life: "I am here to tell you that everyone's habits and attitude have to change. Everyone's. We have to go from a low-trust business where we all point fingers and all go home and say, `My God, they are awful.' We have to move from that level of interaction in our society to one of high trust. It is in labour's interest to have businesses that are investing and creating jobs. It is business's interest to have a labour movement that is keenly involved and strongly committed to the health of the whole economy and that believes in it and is given a reason to believe it."
Ladies and gentlemen, Bill 40 is not a vehicle of trust. Bill 40 is not common sense.
This being the third presentation we've made on this issue, we've decided to stick directly to what's not in the act rather than what is in the act, but are prepared to answer questions, wherever they come from.
Mr Ward: I'd like to thank you for coming down today to give the Cambridge Chamber of Commerce's point of view as far as Bill 40 is concerned. When you look at how this proposed legislation has evolved, from the original Burkett commission to the discussion paper to Bill 40 and how changes have been made, I think you have to agree that there have been some changes.
The original Burkett commission and discussion paper suggested that supervisors should be allowed to organize. There was discussion around the access to employee lists and there was discussion around allowing union organizers on to company property for the purpose of organizing. In those three instances the business community, I think it's fair to say, had objections for one reason or another and the government listened. In Bill 40, supervisors are still exempt from being organized. There is no access to employers' property for the purpose of organizing, and there is no access to employee lists except as it is in today's act during the certification process when it's actually at the board. Are those not examples of the government listening, or did I miss something?
Mr Hugh Ferguson: I would have to say that for the business community or at least our members and the work we've done with them, most of those were minor in nature. All of the major issues that were brought forward out of the Burkett report are still entrenched. Most of the things you speak of are fairly minor when you consider the entire act as it presently stands.
Mr Ward: It's odd that you mention that, because when I met with the business communities in and around Brantford and across Ontario for that matter, those are three key concerns that were presented to me. So perhaps the Cambridge Chamber of Commerce had a different point of view. Do you agree that the workplace and workforce has changed since the 1970s?
Mr Hugh Ferguson: Yes.
Mr Ward: So it has changed. I believe there is consensus that there is a need to update the labour act. So it's your suggestion that the initiatives that are presented in Bill 40 should be removed, and if we adopted your suggestions, that's the Cambridge Chamber of Commerce's answer to updating the labour act.
Mr Hugh Ferguson: No, that would not be. I said at the end of my presentation that these are simply some of the issues that we want to concentrate on today: what's missing. I think that what needs to happen with Bill 40 is what's been asked of the government on several different occasions and what it found from several of its own presentations, and so on.
In November 1991 their own professor Meltz indicated in his presentation that -- and I quote: "It is difficult in advance to fully assess the economic impact of the proposed reforms. To assess those implications of the reforms would require a detailed examination of the changes as well as an assessment of the interacting effects." This is their own report.
That hasn't been done. The business community has suggested that these types of things be done. Government is not willing to accept the business presentations that were put forward which indicate loss of jobs, loss of investment, and so on. Yet they continue to disregard a request even of their own departments. The Ontario Ministry of Labour basically said the same thing in November 1991: "We can't assess what's going to happen in the economy." That's it.
Mr Ward: One last question, if I have time. I'm not sure. Is it the view of the Cambridge Chamber of Commerce that in today's economic realities that we're facing there is a role for trade unions to play in today's society and economy? If so, in what role do you foresee trade unions?
Mr Hugh Ferguson: I think there's absolutely a place for the union movement, whether it is in the environment in which we presently operate -- there are many models of labour relations. The North American model, which has consistently been confrontational and will continue to be so with Bill 40, may not be the best model for us to emulate at all. The previous speaker mentioned the Japanese model. There are many models. I don't think that tilting the balance of power one way or another, either towards business or towards labour, is a model we want to emulate.
There's been great talk of the Quebec model when it comes to no workers during a strike. Statistics prove that they have gone well beyond Ontario in a much smaller marketplace. They've lost millions more workdays to strikes than we have in Ontario. So why would we move to a model like that? I think what needs to be done and what's been asked for in many occasions is that business, labour and government sit down and come up with acceptable alternatives to even the legislation we presently have.
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Mr Offer: Thank you for your presentation. I want to deal with that part of your presentation that speaks to the issue of organizing and your suggestion for a secret ballot. That, as you know, has been brought forward to the committee earlier as well as others who have said, "We have some concerns with it." What I would like is if you could share with us what -- it's almost "What would be the difficulties," but it's not the right way to ask the question.
Is not the issue here not whether a union is better than another type of association but rather whether an individual should have the right to freely choose which way he or she wishes to be represented, by union or otherwise, and would a secret ballot, controlled, with full information, provide that type of choice?
Mr Hugh Ferguson: A show of hands is pretty clear. Secret ballot -- I'm looking for the right words. It's so easy to say "democratic." I can say what I want on the outside, but when I get in the box my conscience can do its talking for me. I don't have to be implicated by raising my hand, I don't have to have somebody know what I said. I can do what I feel is in my best interests, whether I have said or not said before.
Mr Offer: I think what you're saying is certain principles that people all understand. They understand these things.
Within the bill there is the purpose clause, and a lot of people point to the purpose clause as the first indication of a tilt in the balance. One aspect of the purpose clause speaks about a worker freely exercising the right to organize by facilitating the right of the employee to choose. That's in one section. Later on in the same bill it says that the board shall not consider evidence that an employee has cancelled, revoked or resigned his or her membership or has otherwise expressed a desire not to be represented by a trade union.
I don't know if it's going to take much time for someone to say that that particular section contravenes the purpose of the very legislation. The purpose speaks about giving the right of an individual to choose, and four or five sections later it says that that same individual doesn't have the right to change his or her mind.
I guess it leads one into the issue as to being informed as to what a union will do for the individual and then for that individual to make a choice. Do you have any concerns with respect to that?
Mr Hugh Ferguson: That's why we call for the open campaign type of system, which says, "We want to organize your workplace," the employer says, "Okay, fine, we've got a notice filed," everybody gets to say their piece and then I get to make my decision based on what I've heard from both sides. There's no "Let's get that 40% or 50% signed and then the rest of them don't matter." It's open. As an employer I can tell the employees, "This is the way it is." As the union, "This is what we'll do for you."
In any contractual situation there are those basics. "Here's what I'm going to do and I'm telling you what I'll do." You make your decision, and in a vote I check my ballot, I fold it up, I put it away, nobody knows. I'll make my decision not based on any kind of confrontation or what have you, based on what I want as a person. Those individual rights must be held superior to the legislated right of any group or organization.
Mrs Witmer: Thank you very much, Mr Ferguson, for your presentation. I particularly appreciate your attempting to recommend to the government some amendments for future consideration. I think that's what the government has asked for, because up until now we've been dealing with a Bill 40 that still contains the same provisions of the Burkett report that was the union-driven agenda. I would hope that by the time the government completes this process we will see a Bill 40 that includes recommendations from all individuals who have taken the time to appear before the committee in the five-week period and have written letters to us.
You might be interested to know that we've had more than 12,000 people want to appear and we could only accommodate a small number.
Ms Murdock: No, 1,200. There's a big difference.
Mr Hugh Ferguson: It would have been nice.
Ms Murdock: Wishful thinking.
Mr Offer: The mail hasn't come in today, though.
Mrs Witmer: It's still coming.
Mr Hugh Ferguson: We'll see what we can do.
Mrs Witmer: That's right. You've concentrated here on the secret ballot vote, and as you probably know I've introduced a private member's bill because I feel very strongly about the need to protect the right of individuals and I feel that this bill, unfortunately, infringes on those rights and gives more power to unions and yet not any more responsibility.
What are some of the other major concerns of the Cambridge Chamber of Commerce from your membership? Obviously they've expressed different concerns to you. Is there anything they would like to see changed?
Mr Hugh Ferguson: Just shortly. We had hoped with a six- or seven-minute presentation to keep you on schedule. An example would be, and some of the research that we've done is, the prohibition on strike replacements. I can tell you that the people who worked for the Montreal Star in the early 1980s weren't particularly pleased with that piece of legislation because the paper never came out of the strike; it folded. There are many types of industry where this piece of legislation, this part of the legislation, could in fact put them out of business. Any kind of lengthy dispute, they're history. Those are jobs gone. They won't be replaced. The Montreal Star was never replaced. Not another newspaper went into Montreal. Several hundred jobs were gone.
When it comes to the first-contract arbitration, how can we ask unions and business to sit down and be reasonable and negotiate when we all know that within 30 days I don't have to do anything? All I have to do is sit there. I can organize and I can tell those people: "Don't worry about it. The longest you're out is that length of time. After that, boys, we got her made, `cause we just take her down to Toronto, you'll get a contract, no sweat." Why bother? Why not just do it tomorrow? Just legislate everybody's wage. Then it's done. Why go out at all?
The purpose clause has nothing to do, really, if you read the bill, with people; it has to do with an organization called a union. If it had to do with people and giving them the right and giving them the choice and giving them the information to make that choice, that's one story. The purpose clause doesn't say or do what I think it was intended to do.
A couple of other areas are the contracting in of service. That effectively removes competition from the marketplace. It says if I decide to hire a different cleaner because the one I've got just became a union and it wants to double my price and I decide to go out and look around the marketplace, why bother? I pretty well have to live with what's there anyway, all those people and so on.
This isn't people-oriented and I think government has an obligation to make all the things it does oriented to the people who put it there, all of the people. I suggest to you that management and companies and the people who run them are also people.
The Vice-Chair: I'd like to thank the Cambridge Chamber of Commerce for appearing before the committee, and particularly both of you for so enthusiastically putting forward your views. The whole committee appreciates the effort of the chamber and of each of you.
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OSHAWA GROUP LTD
The Vice-Chair: The next group is the Oshawa Group Ltd. First of all, welcome. If each of you could find a microphone there or a seat behind a microphone, identify yourselves for the purpose of Hansard and then proceed with your presentation. You're allocated a half an hour, and if you could provide at least 15 minutes of that for questions and answers, it would be very helpful.
Mr David Joffe: Thank you for the opportunity to speak to you this afternoon. My name is David Joffe. I'm the vice-president of industrial relations with the Oshawa Group. With me is Mr Tim Carter. He's the director of public affairs for the company.
The Oshawa Group Ltd is a Canadian company principally engaged in marketing food and pharmaceuticals to retailers and the consuming public in nine provinces.
Mr Tim Carter: I'm sorry to interrupt. Do you have copies of this brief in front of you? I'm wondering, Mr Chairman, if we could have those distributed so people know what they're reading. This will take about 10 minutes to go through, if that's satisfactory. The rest will be for questions and comments.
Mr Joffe: Those two minutes are from your time.
Not to be redundant, the Oshawa Group Ltd is a Canadian company principally engaged in marketing food and pharmaceuticals to retailers and the consuming public in nine provinces. The company is the nation's principal supplier of franchised IGA food markets and other smaller groups of independently owned, affiliated grocery stores. In Ontario, Oshawa operates the Food City, Price Chopper and Dutch Boy supermarket chains as well as Pharma Plus Drugmarts.
The Oshawa Group employs 12,700 people in the province, a third of whom belong to labour unions. This year the company will spend over $1 million for employee training programs. Last year the Oshawa Group contributed $28.8 million in retail sales tax revenues to the consolidated revenue fund in addition to significant amounts in provincial corporate income tax and other levies, including mandatory health benefits and environmental programs.
The Oshawa Group is implementing policies to respond to the workplace of today and tomorrow. The company offers working hours attractive to persons who wish both part-time and seasonal employment. These seasonal employment opportunities and part-time schedules fit the needs of those simultaneously pursuing or intending to follow other endeavours.
Oshawa's training and compensation programs are designed to foster career and income advancement. Our compensation levels exceed those of US competitors as well as those offered by most other retail operations in the province.
A healthy retail sector is essential to the province's economic wellbeing. The retail sector has suffered major widespread damage from the current recession. Thousands of jobs have been lost through the failure of many small and large retail concerns. Just as the retail industry's health is highly sensitive to economic factors, so too is the economy's wellbeing closely tied to the viability of Ontario's retailing sector. The two are inexorably linked, primarily because of retailing's labour-intensiveness and large dependence on consumer spending. Past experience has shown that factors damaging to retailing are also damaging to the economy overall.
Economic spinoffs from retail include job creation in manufacturing, transportation, marketing and a multitude of service sectors, approximately at a two-to-one ratio.
Bill 40 will have a major and profound impact on Ontario's retail sector. In brief, the legislation will impede the industry's ability to return to full economic health in Ontario. It will discourage the investment of capital necessary for the maintenance of existing facilities and employment levels.
Economic renewal is a common goal. Business, labour and government must make economic renewal a top priority and consider the impact that many changes will have on jobs, training, investment and confidence.
Successful working relationships are built on trust, not on legislation. They are achieved by emphasizing objectives which are shared, one of which must be the long-term health of the company. Bill 40 appears to be predicated on the incorrect assumption that employers and employees cannot constructively work together without legislation.
It is fair to say that retailers, labour and government have been impressed by the need to restructure our economy. Oshawa assures its viability in the changing environment by investing in people and technology. In this context, new legislation should reflect the government's sectorial approach to the industrial strategy of development and recognize the separate needs of the various sectors. Retail is different from the manufacturing and resource sectors, and these disparities will continue to be evident in the years ahead.
The combined effect of the individual clauses: Those supporting Bill 40 argue that each proposal exists in some form or another in other jurisdictions. Such comments, however, do not consider the combined influence of the proposed changes. Introduced together, the alterations will have a serious longer-term unfavourable consequence which will hinder the province's economic recovery.
The purpose clause should be modified. The purpose clause of the act should ensure that parties entering the labour relations process be treated on an equal footing, respecting the legitimacy of each side and avoiding a bias in either direction. It should foster a bargaining environment of equality without interfering with the outcome of the deliberations and the process itself.
The amended purpose clause, rather than protecting the objective integrity of the bargaining process, proposes to skew the outcome by directing that decision in favour of one of the parties. It requires a result which improves the terms and conditions of employment as a matter of automatic right without regard for other considerations. This biased directive would interfere with the objectivity of the workings of the board and impose one-sided settlements. Such settlements could well be at the expense of the business's viability and consequently the workers' wellbeing.
A ban on replacement workers is especially harmful to food retailers. Provisions which inhibit the continuance of operations mean that retailers lose revenue, customer loyalty and ultimately the ability to remain viable. This is particularly true for grocers because their customers cannot postpone food purchasing and wait for the resumption of the store's operation.
Experience has proven that in the food business, customers find a replacement store immediately, shifting customer purchase patterns and retail loyalty. The longer a struck store is closed the higher the cost of regaining lost customers after the strike. In food, the point at which it is not economically worthwhile to reopen the store and recapture lost business is reached faster than in other forms of retailing.
As a result, on this issue the proposed legislation is more damaging to food retailing than other business sectors. Without alteration, this provision will ensure the permanent shutdown of food stores more rapidly during strikes, with an accompanying high rate of job loss.
This section should grant any employee at the struck site, non-unionized or unionized or management, the right to work during a strike. The definition of "site" should include all locations covered by that particular collective agreement.
The definition of "bargaining unit" should recognize the structure of the retail sector. Discretionary powers given the labour relations board to consolidate full-time and part-time employees assumes that there are two types of employees with similar interests.
Our experience suggests that part-time employees, who are usually employed on a short-term or casual basis, view their jobs as transitional. Typically, full-time employees are more interested in pursuing long-term careers within retailing. These two employee groups have distinct interests and should be addressed separately, as they currently are.
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The Ontario Labour Relations Board, by virtue of Bill 40, would be given discretionary powers to consolidate two or more bargaining units represented by the same trade union. This would alter the balance of power by allowing unions to organize within smaller units and then bargain on a much broader basis.
Fair and open organizing should be encouraged. Oshawa supports a fair and open organizing process in the workplace. The proposed changes to the present legislation unduly limit employers from responding to organization efforts and, in so doing, restrict their individual rights.
If the Ontario Labour Relations Board determines that an employer has committed an unfair labour practice during a union's organizing effort, the union will be granted automatic certification without adequate representation. This could well happen in situations where an employer is not familiar with the myriad of complex rules on the subject. The thousands of small independent business owners found in retail are particularly vulnerable to this possibility.
Organizing and picketing on third-party property: A Provision to permit any picketing on third-party property will have a damaging effect not only on the intended retailer but on neighbouring stores which are not involved in the dispute.
This proposal is an obvious attempt to secure additional support for picketing workers from the neighbouring stores and from the landlord himself. The change is inappropriate as well as unfair, as it permits demonstrations or other forms of picketing on private property of third parties not involved in the dispute.
Permission to involve third-party property introduces the prospect of reducing a struck retailer's ability to successfully gain tenancy in malls owned by nervous landlords. In addition, this provision can decrease the value of space in shopping centres damaged by strikes. Confidence in business relationships, retailer to landlord or landlord to prospective tenant, are essential in encouraging investment and advancing the total economic growth of the province.
Over the last few years the retail sector has particularly been hard hit by the combined forces of the recession, cross-border shopping, changing demographics and consumer spending patterns. Many retail firms have been lost, taking with them thousands of jobs and millions of dollars in assets. The remaining companies are working hard to respond to a shifting market by investing in new facilities and improving customer purchase values. In this context, Bill 40 represents a serious threat to Ontario retailing.
The process of developing Bill 40 has not provided business with sufficient opportunity to make input into the shape of the legislation. Thoughtful consideration of the long-term impact of the proposed changes and their unintended consequences on the economy is required.
Oshawa and many other retailers are responding to the needs of the changing workplace. Bill 40, in its present form, will not assist with this approach or improve harmonious labour relations. We understand the committee will leave Queen's Park next week and hear opinions from across the province. We sincerely hope its members will consider the unintended consequences of Bill 40 and move to alter the provisions which we and other have cited.
We will be happy to answer any questions.
Mr Offer: Thank you for your presentation. I want to, if I can, zero in on this issue of replacement workers and what it means to an organization such as the Oshawa Group. You've indicated that you're a principal supplier to a number of different grocery chains and that you employ 12,700 people. I'm assuming that within those chains, such as the Food City and what not, that is part of the 12,700 people.
Mr Joffe: It is. That's correct.
Mr Offer: I'm also assuming that some of these stores are not in the big urban areas, but that they're in the many smaller communities throughout the province, of which they may be the only market for the community.
Mr Joffe: Correct. I'll let my associate Mr Carter begin to answer it, and I think I'll finish.
Mr Carter: I think you're right. If you don't have replacement workers and your store shuts down, what kind of consequence is this? It does a number of things to the public and to the company, and I think your question may have been with both, but let me talk about the community.
We supply about 800 independent food stores, who are independent businessmen and women spread throughout the province. We have 100 food stores which we supply that we own and about 150 drugstores. If these stores individually or collectively are shut down, it's a problem for the community. If you have a small community and there's one food store and it's shut down, where do people go? It can present a bunch of problems for those people, particularly if they have just one store in the area and don't have the means to get to another community. We also on a regular basis have buses, for old people, that go to stores. If this store is shut down, what do these people do?
With the drugstores, and we have about 150 of them, there's a special relationship in a lot of these communities between a pharmacist and his community. If the store is shut, what do they do for a prescription if somebody in the family is sick? I don't know whether that was your point, but it's a very valid one.
Mr Offer: That was my concern, because I think you will recognize that throughout these hearings many people have come in with respect to the need for an economic type of statement, impact, whatever, and have made, I think, some important arguments for it. But there's some other type of impact which also hasn't been done, and that's a people impact and that's a community impact.
One of the things I'm concerned about is that, for instance, if there is a grocery in a community which is not in a large urban centre, where the people in that community have no choice, they have to buy their food in one place where they have to go, and they have one pharmacy, or if you're running a bus service and that's the way in which they get their supplies, if those places go on strike, without a replacement worker, what is the impact on the community and the people in the community?
Mr Carter: I think that's a very good point, Mr Offer, and I'd just add one other thing. It's not just to consumers who are short the essentials of drugs and food, but you also have the economic consequences on that small town as well. Quite often they are the major business, if you like, in that town. I think it's a good point.
Mr Joffe: Additionally, if I could just expand on it a bit, particularly with regard to drugstores of which we do have a number in small communities which may well be the only drugstore in that community, you do not have the ability, given the present legislation, to pilot in other personnel to man and run that store. You may have only one pharmacist to draw from. He would not well be able to man that store on the basis of providing the hours of service that are required to the community. Consequently, he'd be forced into a position of being required to shut it down for hours which are normally considered regular service hours.
The same could be true of a small grocery store, with the prohibitions currently appearing in the legislation. Otherwise it might be possible for an operator to bring in family members. He would now be prohibited from doing that type of thing. Consequently, he would be closing. People in those communities would have no options other than to go elsewhere outside the community, and who knows how far.
Mr Offer: I understand what you're saying, but for many people in many small communities, for senior citizens, for a variety of individuals, that isn't an option.
Mr Joffe: That option does not exist.
Mr Carter: That's right. It's particularly a problem in the winter. Transportation is difficult. At this time of year, when crops are coming in, they may come in from the local community. It's a damage to those communities because they bring in their crops and they depend upon that area to sell them.
Mrs Witmer: Thank you for your excellent presentation. I would agree with you that successful working relationships are built on trust and that you can't legislate that type of relationship. Certainly in my past work with boards of education and staff, that's how we built those relationships; it was through trust.
However, you've pointed out here, and certainly other people have pointed this out in the last two weeks, that this bill seems to be trying to respond to the unions, I guess, but in doing so, it doesn't recognize the varying and very different needs of the various sectors. Although there are some things in here that may meet the needs of the manufacturing and resource sectors, it's becoming abundantly clear that the far-reaching impact on the retail sector and the service sector, such as the hospitality and tourist industries, have not been thoroughly examined and looked at. The consequences that we're seeing as a result of this legislation are really becoming very frightening.
I understand that customer loyalty is a very important factor in the retail food sector, and I guess I'm a good example of that; I always shop at the same store week after week and for years and years. Could you tell me what would be the impact on your business if supermarkets had to shut down completely during a strike because of the ban on replacement workers?
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Mr Joffe: If I can, let me relate to you an experience that we went through approximately 15 months ago under the existing labour relations bill, where our retail stores, particularly in the Toronto area, were affected; however, they were not directly on strike. Unfortunately, we did experience a strike at our main distribution centre in Malton and on the Queensway. As a result of that, we encountered a significantly high rate of secondary picketing at retail outlets. With that in and of itself, the inconvenience had a devastating effect at the retail level. It dissuaded customers, many of whom had been customers for years, from continuing their shopping patterns. It interrupted the flow of product; we were able to supply it by alternate means, but certainly not to the extent that we would have otherwise.
With that experience, and again bearing in mind that we were able -- however, with considerable inconvenience -- to do some business at the retail level, it took well over a year and a considerable investment to regain that customer shopping loyalty.
I take that and ask you if you could consider, what would the impact have been had we experienced a strike at retail itself, particularly in the area and considering any marginal operating stores? It could have well required an investment of a magnitude that those stores would not have reopened.
Mr Carter: I'd like to pick up on what Mrs Witmer said at the beginning, which was sector-specific and the broad brush. I think what Mr Joffe said pertains to the food industry and it's very specific. This type of prohibition, if you like, on replacement workers hits food retail very hard, because people don't postpone food purchases. While you like to think that shopping in stores is fun, in the food business it's a repetitive thing you have to do and you do it as quickly and conveniently as you like, and when your ability to do that, knowing where to park and what aisles to go down and everything, is broken up and you go someplace else, it's hard to get people back. So that part, as David said, is a tough one.
What happens, then, is that the costs are very large to get them back. So you hit the break-even point for shutdown in a strike in the food retail business faster than other places, because people can't postpone food. So the economics of this particular clause are very different on our industry than on other ones. I think your point is valid, that it needs to be lined up with the industrial strategy which the province has set, which is very sector-specific. You could make it consistent with what has already been accepted as the industrial strategy if it looked at different sectors, and it's clear that a broad-brush route in this area isn't doing that.
Mrs Witmer: So that would be your recommendation, then, to the government, that it would do that?
Mr Carter: Yes. Stay consistent with the industrial strategy.
Mr Carr: I just wanted to know if you could explain how you would classify your state of relations with your employees right now. The government said this will improve cooperation. How do you see it right now, and do you see any way that this will help improve it?
Mr Joffe: To coin a phrase, if it's not broke, don't fix it. In both employee groups, and by that I mean we have a third of our employees who are unionized -- in the province we have approximately 20 collective agreements; I've been with the company eight years and during that time we've experienced the one interruption, albeit a very dramatic one; only one, thank God -- and there is the non-unionized sector.
Let me speak to our larger chains, principally Oshawa Foods. We have the majority of the stores not organized, and we enjoy good relations, we think, among both the unionized and non-unionized groups. We have training programs in effect, principally covering the non-unionized workforce, but we also cover the unionized group in those training programs in a joint fashion. Additionally, we have full-time employee relations managers in place who handle complaints, questions, concerns in a confidential fashion. We feel that it's a very progressive and forward-reaching program, along with a confidential and private hotline to, again, handle any concerns among either the union or non-union groups.
Mr Klopp: At the beginning, you said you're in nine provinces. What province aren't you in?
Mr Joffe: BC.
Mr Klopp: BC? Really? It's interesting.
With regard to the replacement worker situation, it's my understanding that under section 73.2 replacement workers can be used in such emergencies as seem needed. As to Mr Offer's example about a town where you owned the business and they were unionized and went on strike, under the act, first of all, managers can work automatically -- that's a given -- but also section 73.2 of the act does make provision for emergency. I would think someone starving to death in their house -- I'm sure the board or somebody would think that would be classed as an emergency and you could get people to work at the store.
Mr Joffe: Two points to that, if I could.
Mr Klopp: Sure.
Mr Joffe: First, yes, managers can work, but I don't know for how many hours continuously. In small towns you've got a very small staff you can draw from. Customarily you'd have only one management personnel in the store. A pharmacy is an example. You are looking customarily at long hours and seven-day operation to provide the kind of service the community needs. I don't know that you could put that all on one person; I don't think realistically you can.
Second, I don't know what it would take to get the board to rule what constituted an emergency situation. Right now, as an example, I would look at refuse collection as constituting some sort of emergency, yet it is excluded from the emergency listing under the public employees act. So I presume nothing. If that's the case, then it should be so covered in the legislation specifically.
Mr Klopp: I come from a very small town with a heart. Also, I live in an area where there are a lot of even smaller towns, but they're all quite good: Dashwood etc. The stores are owned by individuals. I know some of the stores are franchised. Do you deal with franchise-type stores?
Mr Joffe: Both franchised and wholly owned independents.
Mr Klopp: I'm not sure -- and I apologize for not knowing whether they even could be unionized -- if your company was unionized employees, would they even be affected? But let's assume for a minute they are. There's one owner and three part-time employees in the one store and four in the other and one owner, in fact husband and wife; it's a family affair. Both of them under this legislation, the way I read it, would work because they both very clearly work every day. Of course, they would tell you they could work many, many hours without any of their part-time staff. I appreciate where maybe you don't come from a smaller-town area. That's no problem; I don't come from a big city either, so I don't know how a big store works.
Mr Joffe: Originally, neither do I, when it comes to that.
Mr Klopp: But I do know that situation. On the other side, you are in Quebec, then, I would gather?
Mr Joffe: Yes, we are.
Mr Klopp: They do have replacement worker laws there.
Mr Joffe: Yes, they do.
Mr Klopp: How has it affected your companies in Quebec, since they have that --
Mr Joffe: Since that legislation's been enacted, we have not had a strike. If we did have a strike, it would have the same impact and effect that we see here. As I said, we have not had any type of interruption in the province of Quebec. But given the experience we had in Ontario with the distribution strike and the chaos it created at retail, even though retail was not directly involved, I don't even want to think about what a strike at retail would do to the business.
Mr Klopp: But you live under that rule there, and it hasn't been --
Mr Joffe: We live under the threat of it, yes.
Mr Klopp: Well, I mean, "threat" --
The Chair: All of that having been said, it's time to say thank you to these people participating in this committee process, the Oshawa Group Ltd and its directors, staff. We thank you very much for your interest in the issue. We appreciate your taking the time to come here and trust you'll be keeping in touch.
The next group is Waterloo Regional Labour Council. There's a little bit of setup necessary, because I understand they're going to do some audiovisuals. In the interim, I might announce that Ms Anderson and Mr Fenson, research officers from the legislative research service, have researched and prepared a memo on the issue raised during the exchange between Mr Fletcher and the Welland Chamber of Commerce.
The Welland Chamber of Commerce had insisted that unions would not have to go back to their members with the employer's final offer as a result of Bill 40, that the members would be at the mercy of the union leaders. Mr Fletcher adamantly refuted that, indicating that this was a totally inaccurate perception of Bill 40, and indeed that there was nothing in Bill 40 to permit that conclusion.
The research was very skilfully and promptly done by Ms Anderson and Mr Fenson. Mr Fletcher might take some solace in the fact that it has indicated that he's entirely correct. There's absolutely nothing in Bill 40 that would permit that conclusion, and indeed nothing in the existing legislation that would permit that conclusion. It's unfortunate that people don't take advantage of the fine research facilities and resources at Queen's Park before they make those sorts of bold statements.
Of course, that memo is available. Members of the committee already have it. Any member of the public who wants to avail himself of it need only write or call the clerk of the resources development committee.
WATERLOO REGIONAL LABOUR COUNCIL
The Chair: Please be seated. Go ahead. Tell us your names and your titles, if any, and lead up into what I understand is going to be a videotape, which we are going to deal with first.
Mr Tom Rooke: I'd like to thank you, Mr Chairman, for allowing us the opportunity to appear before yourself and the committee. My name is Tom Rooke. I'm president of the Waterloo Regional Labour Council. With me is Sandra Ellis, who is an executive board member who wrote the brief on behalf of the labour council and will be reading it to you this afternoon.
We'd like to start off by showing you a short videotape of a scene of a picket line that took place in Cambridge this past spring. After this there are interviews with the young lady who was involved with this picket line. We'll leave this tape with you so that you can view the whole tape at your leisure. If you would, please turn the tape on for us now.
The Chair: You'll note that legislative broadcast service has again done what would seem to be the impossible.
[Video presentation]
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Mr Rooke: At this time I'll turn it over to Sandra Ellis.
Ms Sandra Ellis: As Tom said, we'd like to thank the resources development committee for awarding us standing before it to hear our remarks regarding Bill 40 and to state that we sincerely hope the incident we just viewed on the video will belong to a bygone era.
This government should be congratulated and commended on the legislative changes to the Ontario Labour Relations Act being put forward in Bill 40. These changes will put the province on the road necessary to make the economic structural changes needed to work towards sustainable prosperity over the long term.
The business community is bent on clinging to its theory of scientific management, wherein management has complete control and assumes that workers themselves are incapable of intelligent thought and so are best equipped to do no more than mundane repetitive tasks.
Theories and attitudes need to be changed. However, the campaign which has been undertaken by the business community around these proposed changes makes one realize that this road will not be smooth. Fearmongering benefits no one, including these who stoop to such injurious and immature behaviour.
There are a number of concerns we would like to raise around the proposed and dropped amendments. Our comments are based on the paper produced by the Ministry of Labour, Highlights: Labour Relations Act Reform.
Organizing and certification: The government is proposing that the OLRB be required to begin hearings within 15 days of a complaint around disciplinary action during an organizing campaign and to sit for at least four days each week until complete. While we applaud swifter action in this area, we question whether this amendment requires an expansion of the board in order to ensure sufficient person resources to hear these sorts of complaints. Any additional expenditures attributed to these amendments will not be looked upon favourably by any constituency.
While we could accept the logic around dropping union access to employee lists for organizing purposes, we can find no feasible reason why such lists should not be given to the union after an application for certification has been submitted to the OLRB. We firmly believe that this amendment should have been retained.
We agree with the government that a mandatory secret ballot on certification is not the best indicator of the employees' desires. It requires much more effort on the part of the employees to sign a membership card. This manner has been, and still is, the best method through which the employees make their true desires known.
We are also very happy to see the $1 fee dropped. This in itself has been a source of contention in organizing drives for years. We also agree with retaining the amendment which disallows anti-union petitions. You have brought Ontario into the present with laws in place elsewhere in this country.
We are indeed saddened to see the government bend to business and leave the automatic certification level at 55%. We continue to maintain that the proposed 50% level is consistent with the principle of democratic decision-making.
In the section dealing with information on employers' and employees' rights and obligations, the government is considering a telephone information service. It would be beneficial, if this proposal comes to fruition, to extend that training to those areas and cities where labour councils and/or labour community service agencies have full-time staff.
In the last year, our labour council has had unprecedented numbers of inquiry calls from the public which are in turn referred to yet another phone number. It would serve the public and the government itself much better if it were possible to answer such inquiries and refer them to any other community resource applicable.
Bargaining unit structure: We sincerely thank the government for retaining the proposal which puts both part-time and full-time employees in one bargaining unit where there is majority support for the union. Part-time employees have historically been treated unfairly where they were not part of the unit. Today, as more employers move to greater numbers of part-time employees, much to the detriment of full-time positions we might add, their representation is needed even more.
Workers should not be as expendable as business would like them to be. Loyalty and pride in a company is not achieved by moving away from full-time positions offering security and the possibility of a career at one workplace to a laissez-faire attitude towards part-time employees. This move only serves to increase the distrust, uncooperativeness and confrontational attitudes that have plagued the system for decades.
First-contract negotiations: First-contract arbitration is to be accessible and automatic 30 days after the legal strike or lockout date. This amendment will help in allocating incidents such as the one on the video to the history books. That situation arose, as Tom said, from a long and arduous strike for a first collective agreement at a Thomson-owned newspaper in Cambridge, Ontario. Such cases as these are to be settled by private arbitration. Our question and concern is: Who picks the private arbitrator? Does the person have to have joint approval? What happens if that approval is not reached?
Reducing industrial conflict: In the section dealing with replacement workers, we vehemently disagree with employers having the ability to move work. This is simply another mode of hiring replacement workers. When union members utilize their only ultimate weapon, labour withdrawal, it should not be easy for the employer to carry on by any means. The government should definitely resist this exclusion. Conflicts may in fact become more commonplace as employers attempt to move their work elsewhere. Striking employees will not look favourably on their work being done at another work site. We believe that allowing work to be moved will create chaos in any strike activity.
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There is substantive evidence that the health and safety of the general public has not ever been placed in jeopardy by any strike action, and we disagree with such exemptions as are listed in the essential human services and delivery of services section in the Highlights paper. However, we agree with the proposal that states that non-bargaining unit employees will have the right to refuse to do struck work. These refusals should also take place without fear of reprimand after the strike.
In dealing with the definition of a strike, and taking into consideration the government's objective of reducing conflict, we feel it should be made known that, even if the right to negotiate, the right to refuse to cross a picket line or handle struck work has been dropped, workers still have the right to refuse to cross a picket line if they fear for their own health and safety.
Grievance and arbitration process: The government sees fit to give arbitrators the power to interpret all employment legislation. The government then should also produce an interpretative guidelines booklet. If different arbitrators interpret the same legislation differently, then employers and unions will begin using tactics to stall or speed up the process in order to get their first-choice arbitrator, depending on the issue at hand and former rulings that have been laid down.
Consultation: Every collective agreement is to contain a provision to engage in periodic consultation on workplace issues. Here's a word we already need interpretation for. We are completely positive that the word "periodic" definitely has different meanings to employers and unions.
New service: The new work organization and partnership development service being established sounds very much like the government is getting into the consulting business. There is no indication who will operate this service or how large the workforce will be. We believe a cost-benefit analysis is definitely needed before implementing this sort of service.
Ministerial power re adjustment: The minister himself will be able to exert more power on the parties to discuss adjustment measures around mass layoffs. This can only take place where the minister is aware of mass layoffs. What processes and time lines will be implemented to ensure this awareness and guarantee discussions? The non-mandatory code of best adjustment practices being proposed definitely needs to have input from all parties prior to its publication.
In closing, we'd like to say that we feel these legislative changes take us closer to a more equitable level of awareness and cooperative action in what we hope will be many more workplaces. They do not, however, take us to where we feel we need to be to ensure equal power in the management processes still prevalent in this province. Until labour has the ability to be considered "as having a legitimate and valued role in strategic decisions made in enterprises and in public policy-making" (US Department of Labour, 1991), there will continue to be labour relations problems in Ontario.
We thank you for your attention. We're open for questions.
The Chair: Thank you. I'm sure there are questions, from Mr Carr for starters.
Mr Carr: Thank you very much for your presentation. I want to start with page 1, where you say, "The business community is bent on clinging to its theory of scientific management," talking about complete control and that the workers are incapable of intelligent thought.
Don't you think it's unfair to paint, as you did on this page, all the business community saying that? Don't you think that hurts, first of all your presentation, but the whole idea, when you make a blanket statement that the business community thinks that way? Quite frankly, I don't think anybody on this committee believes the entire business community feels that way. Why was that in there?
Ms Ellis: We speak from personal experience. Having been involved in the labour movement for the last 20 years of my life, I have found no businesses that have an employee workforce which they treat with respect, trust and equality.
Mr Carr: That is sad. If I might ask, just personally, what companies have you been involved with?
Ms Ellis: I have worked at Electrohome Ltd, I've worked at National Cash Register in Waterloo and I spent the last 17 years of my life working for Canada Post.
Mr Carr: That explains it.
Ms Ellis: I rest my case.
Mr Carr: On page 3, you say you don't agree with the secret ballot on certification. Isn't it true that the reason unions don't want that is that they're afraid they won't be able to win the vote for certification?
Mr Rooke: No, I don't think that's the case at all. I think when an individual takes the time to sign a card, he's let everyone know that this is his choice, to become a union member. By forcing him into a secret ballot vote, now you're really challenging the integrity of that individual and whether he knows what he really wants. I think by making the effort and going out and signing the card, he's already made it known that he wants to become a union member. I think that's a choice that should be open to him and that's a decision that should be left to the individual.
Mr Carr: We heard from a lot of the unions accusing businesses of putting pressure on. What about the other side during this period where unions put pressure on somebody to sign a card? Doesn't this, through this process, through secret ballot, make it so that at the end of the day there can be no dispute because in a secret ballot no one will know how you voted? That's the only true democratic way to see the true wishes of individuals, whether it's for unions or against unions. Isn't that the case?
Mr Rooke: I don't feel that's the case at all. The employer has a captive audience. The organizing drives don't have any opportunity to go in to the employer and talk to the employees and give them their side. I've never been involved in a union drive where anybody's been coerced into signing a card.
I've been involved where I've personally negotiated six first collective agreements -- in the process of negotiating two more -- where it has taken almost two years for these groups to be certified. In the one group, two individuals were fired by the corporation. During a union drive, if two of your fellow employees are fired because the company feels that they're union activists, that sends a direct message to the group: "Hey, wait a minute now. If we sign one of these cards, is our job going to be put in jeopardy as well?"
I think it's a harsh reality when an individual makes a choice to become a union member and then loses his job because he made a choice, an adult decision, on the day that he has to go to the hospital and pick up his wife with newborn twins. I think that's really hard on that family. There's a domino effect: Not only is there an effect on the individual, that he's lost his job, but a hardship is put on his family because he made a choice, as an adult, to sign a union card.
Mr Carr: Let's give an example -- you talked about the list -- let's say in a perfect world, if we set it up so that the time frames could be met. The list could be provided, say, as one of the gives and takes. So material could be sent to people who could read it in the leisure of their homes. Let's say the organizers could come in from the outside; a Steelworker could come in and an organizer could sit down with the employees. Under those circumstances, if they could get their message out, would you be in favour of the principle of the secret ballot certification?
Mr Rooke: I still think you're challenging the integrity of an adult who's made a choice by signing the card. Once they've signed the card they've made their choice known and it is fully clear to the individuals that they've made their choice.
Mr Ferguson: It appeared, over the past week, and I suspect this won't change, Mr Chair, there are about three emerging issues that are the main points of contention: number one, of course, being the non-replacement worker clause, the second one being the whole question of the certification process and petitions, and the third one being whether or not there ought to be secret ballots in each and every case and whether there ought to be a provision for that.
I would like know what your opinion is on the question of petitions. It has been suggested to me, and I think it's a pretty good analogy, that it would be generally like running for provincial office, being nominated by 100 individuals, filing your nomination papers and then, after the deadline passes, somebody else comes in with a list of 25 people who want to take their names off your nomination paper. That would automatically rule your nomination invalid and there would be no recourse in order to address that; you know, the election goes on without you. I would like to know what comments you would have on those three particular issues.
The Chair: It could be striking close to home.
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Mr Rooke: First off, on a petition: Once a petition starts, it's usually started by management. It takes a lengthy time; it holds up the certification. They talk about cooperation. What that does is to split the workforce, because then you have the side that's in favour and then you have the "anti" side. So then what happens is that there's a lot of time and money spent by both sides down the board for hearings, and what you've now created is a split in your workforce. For a group that wants to have harmony and work together as soon as these petitions are initiated you've caused the exact opposite.
I've been down in front of the board to a hearing where you had workers pitted against workers, where the management, the people who started the petition, the workers who started the petition who want to have their names withdrawn now from the cards, were sitting on this side of the room and the supporters of the union were sitting over here. So they know full well who they are. Then you have a group of people who don't know what to say to each other and don't know whether or not they should communicate back and forth, because you don't know what's going to come out of the board next.
So really what you've done is you've split a workforce, so there is no longer any harmony in that workplace because of these petitions. As the time goes on, the less harmony there is and the more strife there becomes because of these petitions. It may take 15 months to be certified and what usually happens is that over this 15 months either the union really becomes solid or the support for the union is lost. In most cases the support for the union becomes solid and the demands of those workers increase from what they were. Usually a worker comes and joins and makes the choice to become a union member because of the fact he feels he's not being treated equitably and may not be treated fairly and there may be some favouritism in the workplace.
Ms Ellis: The ideal work situation in this province is to not need unions. That would be an ideal. If everybody was treated equitably, fairly, with trust and respect, then unions would not be needed. Unfortunately, human nature being what it is causes employees to feel like they are not being treated equitably with trust and respect in the workplace, so they seek to organize themselves into one collective voice.
Mr Ferguson: Can we just talk about that for a moment, just the organizing process, because I think there's some mythology around the actual practical application of a union organizing itself. What happens here? The picture that has been painted for the committee is that the Steelworkers meet at their head office and pick a town and they decide to roll in and start knocking on the door of a company and say, "Hi, we're the union and we're here to help you." What is the normal process?
Mr Rooke: What usually happens is that, in our case -- I'm a member of the Canadian Auto Workers, so we have an area office in Waterloo region -- we have a call come in from workers who are disgruntled at their workplace. They usually don't leave their names, but they ask for an organizer's name and we give them the organizer's name who works out of our office and his number. He'll sit down and he'll meet with a group of three or four of these workers and he'll see and listen to their complaints. Then usually a leaflet's done up and one of our cards that you must sign is stapled to that leaflet and he'll go out with a number of other union activists in the area and they'll do a plant gate, inviting all the workers to an open meeting -- and it has the time and the place for this open meeting -- to listen to their concerns.
Then at that point in time an organizing drive will start, cards will start to be signed and once they reach the magic number of 55% they'll apply for certification. But all through the certification process there are all kinds of open meetings where both sides can come and hear the union's side. The anti-union supporters are invited to these meetings as well to voice their concerns of why they don't want to become unionized.
Mr Fletcher: Mr Chair, one quick question. We've been told that what will happen is during bargaining the union will go back and ask for a strike vote before bargaining starts and once the company makes an offer, bang, that's it, they're on strike. Is that the way it works?
Mr Rooke: No, what happens is, in my organization -- again, I'll refer to the Canadian Auto Workers -- all our strike mandates are secret ballot and when we take a strike vote if we don't have 66 2/3% of our members in favour of a strike we won't even pursue it. Even if we reach 100% support for a strike, the national service rep who does the collective bargaining must apply through a strike authorization form to our national president to get authorization to take a strike. The last company offer is brought back to our members and they vote on that, and it's left to the membership.
Interjection: By a secret ballot.
Mr Rooke: By a secret ballot. It's brought back at a membership meeting and it's posted for seven days and it's voted on by the members. At that point in time, if membership turns that final offer down then a strike is called, after we receive authorization from our national office.
The Chair: Mr Offer, three minutes.
Mr Offer: Thank you for your presentation. I have a question around the area of organizing, but it's not anything to do with a secret ballot or what happens during a drive. It has to do with the legislation and in the area of expedited hearings during an organizing drive.
Let me tell you where I'm coming from. In the legislation it says, "If the trade union requests an expedited hearing of the complaint, the board shall begin its inquiry within 15 days," that it "shall hear the complaint on consecutive days from Mondays to Thursdays, except holidays, until the hearing is completed," and that it must "render its decision on the complaint within 48 hours after the hearing is completed." In fairness, I haven't read chapter and verse from the legislation, but I think that's pretty fair.
My concern is on the basis of the employee who is part of the hearing. My concern is that when there is an expedited hearing, without any flexibility, without any discretion given to the board, if, for instance, the employee, for whatever reasons -- it may be having to go to a hospital, to pick up kids, for weather -- can't make it to these hearings, my concern with the framework here is that at the hearing he or she is not there and the hearing is in essence over. I have a concern on the basis of the employee's rights that because it is so definite that they must hear it and it must be this day and it cannot be postponed, there isn't a flexibility which would allow, in many ways, an employee to deal with some of the matters of life. I would like to get your response to that, because I'm going to ask ministry officials if they can provide an assurance that it might not be the case.
Mr Rooke: Once again we're dealing in the worst-case scenario. I figure if it's inclement weather, not only will the employee not be able to be there but I imagine the board won't be able to be there either.
But let's look at it from the other aspect of what we have now where I'm in an organizing drive, I'm one of the key union organizers, I get fired today, 10 months down the road I still haven't been in front of the board, 11 months down the road I've been in front of the board, 13 months down the road I have a settlement and I have my job back and I get redressed. All right? But what's this done to my family for 13 months?
Let's deal with the real world and not look at the worst-case scenario always. I think we have to look at it. I think we're all adults and we're all human beings. If there's inclement weather and the individual can't be there, I'm sure they're going to give him some type of leeway to allow this individual to be there.
Mr Offer: Thank you, and I certainly have no problem with expediting hearings. I don't want you to read that in. That's not my concern. My concern is that in addressing the issue you've said with prolonged hearings, they have gone so far to the other end that there is no flexibility in case of things that happen to everyone who's in this room or is watching. Everybody has had appointments they have not been able to meet for a variety of reasons. My concern is, what happens when you have a hearing cast in stone? I am most concerned about the rights of the individual in meeting that issue, and I think that maybe a flexibility, though not to have the result you've indicated, has to potentially be brought back in to the legislation.
Ms Ellis: Expedited hearings have to be requested. It's not automatic. Therefore, in communication with an employee in a situation such as you're indicating and with the union, it wouldn't be requested.
Mr Offer: I have two further points. You're absolutely right. My concern, and it's probably just the way I'm posing the question, is that the request has been made. The employee now is into this expedited hearing. My concern is, after that request is made, these things come up that may result in the employee's rights unwittingly being denied. That's my concern about that. I certainly do appreciate the point you're making, that there's the very other side of this matter, which is unduly lengthy, prolonged hearings. I understand that, but --
Mr Rooke: I'm sure that the employees --
Mr Offer: Could I have one last point?
Mr Rooke: If I could respond to that, I'm sure that if the employee has unforeseen -- say his mother or father died -- I'm sure that he is being represented by counsel, who will make every effort to get there and represent the employer as best he could, and I'm sure that the hearings officer would say, "If there's a question that's directly dealing with the employee, can you have him here tomorrow?"
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Mr Offer: I have one further question. I have a point -- I have to use my time frame -- and it's with respect to the response by legislative counsel on the Welland Chamber of Commerce and the chamber's statement that unions will not have to go back to their members with their employer's final offer. I'm trying to recall some of the dialogue that took place with Mr Fletcher and the chamber. I think maybe some language, unfortunately, was used.
The Chair: Do you have a question for the Waterloo Regional Labour Council?
Mr Offer: No.
The Chair: In that event, we're going to thank the Waterloo Regional Labour Council for its participation.
Mr Offer: Can I have a point of order?
The Chair: Wait till we thank the Waterloo Regional Labour Council. You can use up First Line Trust's time.
I want to thank the Waterloo Regional Labour Council for its participation here this afternoon. You've provided in some respects a novel presentation that I'm sure has been enlightening and has obviously captured the interest of all the members of the committee. The Waterloo Regional Labour Council has been for a long time at the vanguard of the labour movement in Ontario and you demonstrated that once again today.
Mr Rooke: Thank you for the opportunity.
The Chair: First Line Trust is the next participant. While they're coming forward and settling in, there's coffee at the side and you might just have time to get one because Mr Offer's going to address this issue.
Mr Offer: Briefly, the Welland Chamber of Commerce made a statement that unions will not have to go back to their members with the employer's final offer. Mr Fletcher took issue with that particular statement. I'm a little concerned with some of the language that was used. We asked legislative research to look into this question and it is clear from its response that neither the current statute nor the proposed amendments require unions to hold a vote. It would seem that the statement made by the Welland Chamber of Commerce was in fact correct and that the concern and the statement by Mr Fletcher is not borne out, not only by this legislation but indeed by the previous legislation.
I would hope, as a result of the language that was used, that we would take the opportunity to send to the Welland Chamber of Commerce this response by legislative research service.
The Chair: You can do anything you want with it. Mr Fletcher, do you want to respond to that, on First Line Trust's time?
Mr Fletcher: I'll be as brief as possible. I was going to suggest that this be sent to the Welland Chamber of Commerce myself and also to the Welland and District Labour Council.
The Chair: Okay. It looks like everybody is going to send it to everybody. It remains, however -- and I'm thankful to legislative research -- that Bill 40 does not create the scenario wherein labour union leaders can bypass their membership.
FIRST LINE TRUST
The Chair: First Line Trust, tell us who you are. Please be seated, because the mike won't pick you up if you're standing.
Mr Brendan Calder: I've been trying to keep your attention for three minutes here. I thought I'd use every trick in the book by standing up.
The Chair: You have to sit down or else it won't work. You have to sit down or else the microphone won't pick you up.
First Line Trust is, I'm advised, the only mortgage lender providing a 25-year 9.9% mortgage.
Mr Calder: Ladies and gentlemen, thank you very much for agreeing to listen to me so late in your day. I'll be quick. It's not often that I can play a small part in our democracy. I've never been in this building before.
I have no illusion that my message today will change anything. You seem intent on passing this labour law, whether it's good for our province or not. I am just here to tell you how this law affects our company and how it affects me.
My name is Brendan Calder and I'm the president of First Line Trust. My partner and I started our company seven years ago. First Line Trust is now a leading residential mortgage lender across Canada and is the leader in the mortgage-backed securities business. We have helped over 30,000 Canadians achieve the dream of home ownership by giving them lower-priced mortgages -- lower than the banks -- with better features. But what's more interesting for this forum is that we've created 203 well-paying jobs, 169 of them in Ontario. The average salary is $41,000 per annum. As I read in the newspaper, it doesn't compare to Ontario Hydro, but $41,000 is a pretty decent wage.
Our customers are happy, our staff are happy and our shareholders are happy. My partner and I are among the shareholders. We have invested all of our net worth in this company, which brings me to my second point.
Entrepreneurs and business people like us -- whether you have any interest or not, I just have a sample of one here -- will not invest money in a province where the government stacks the deck in favour of unions and union bosses. We have a choice still. There are no walls around Ontario keeping us here. All of our business is done via electronic means. Telephones, faxes and computers weren't around when unions were invented. It is now possible for Ontario citizens to buy anything using a 1-800 phone number, including our 25-year mortgage that you've heard about. All financial products and services can be delivered this way as well; all of ours are.
As entrepreneurs and business people, with all of our own money at risk, we will be encouraged, if not forced, by this proposed labour legislation to expand our business and create jobs outside the province, in provinces whose governments want people like us and businesses like ours that create jobs. Thank you. That's all I had to say.
Ms Murdock: If you have 203 employees who are earning an average of $41,000 a year and from the sounds of it are quite happy --
Mr Calder: By the surveys they are; we survey them.
Ms Murdock: -- and they're eligible, under the existing legislation that we have here now, to organize, correct? -- I mean there's no exclusion from your particular business, you're not one of the excluded --
Mr Calder: I don't think so.
Ms Murdock: So they are capable of organizing this, as we speak?
Mr Calder: I understand so.
Ms Murdock: And they haven't chosen to do so.
Mr Calder: That's so; that's right.
Ms Murdock: Why do you believe that amending the Labour Relations Act with the amendments of Bill 40 will cause your staff to go that route?
Mr Calder: I'm too busy trying to run a business and I don't have four labour lawyers on my side. Most of what I know is what I read in the newspapers and cursory glances at the legislation and what informed people tell me. My understanding is that its going to be infinitely easier for people to start unions. I am going to be forced to do business with Bob White. He will decide whether I'm going to be unionized or not. This is what I understand.
It doesn't matter how "much easier" it is; the point is, I don't want to have to deal with it. I don't have to. I don't want to have to. I'm glad I was here earlier. I can't believe, and I only realized -- this is how naïve I am -- that it's not even a secret vote.
Ms Murdock: What isn't?
Mr Calder: Whether you're going to have a union or not. I can't believe that. I won't live in that environment. Say they do have a union, I can't go and get someone else to work if this union decides to strike me? That makes sense? Not to me.
Ms Murdock: Obviously, we're coming from different viewpoints of the world. There was a woman in here the other night, an individual. She didn't represent anyone except herself. She was saying that she's a part-time worker by choice initially, and then went into another classification of the job and chose that. It gave her more job security in terms of pension rights and so on.
She did that because part-time workers in Ontario for the most part -- they aren't excluded per se but in reality they are, in that they're not on the job site all that much. Anyway, she ended up that she was in favour of this, mostly because it would give her the opportunity; if she wanted to choose to join a union she could do so, but being unionized would also provide her with some sense of security, benefit packages, that would then allow her to be more of a consumer in the market.
Mr Calder: She can have anything she wants. I will not work in an environment where I have to deal with unions, and so far so good; that's why I'm quite happy with the existing legislation. I'm quite happy because I'm still running a business. We joined a group and I'm quite prepared to go along with --
Ms Murdock: And you're making money under the present system?
Mr Calder: Yes. We're making money and we're doing well and we're servicing customers and we might have some clients here for 25-year mortgages, who knows?
Ms Murdock: Who knows?
Interjection.
Mr Calder: No, it's at 9.9%.
Ms Murdock: Anyway, thank you. That's fine.
1640
Mr Huget: Very briefly, I guess the thing I'm really interested in is what's going to happen to the mortgage rates. You can give me your advice on that through the course of your answer, too.
Mr Calder: I don't make any bets there either. I have no idea.
Mr Huget: I just have two or three very brief questions. Have you ever been the subject of an organizing initiative by your employees?
Mr Calder: No.
Mr Huget: Are you aware of the fact that there is nothing in this legislation that forces your employees to do anything? In fact they can organize now and they can organize after this legislation is amended and will likely be able --
Mr Calder: My understanding is that this legislation will make it easier for them to organize. Is that true?
Mr Huget: The point is --
Mr Calder: Is that true?
Mr Huget: No. It forces no one to do anything.
Mr Calder: Is it easier for them to organize?
Mr Huget: No. I wouldn't say it makes it terribly easier.
Mr Calder: Then I'm misinformed. I understood that it makes it a lot easier.
Mr Huget: I think you have to look at an issue. I believe that unions do not organize workers; employers organize workers.
Mr Calder: I'm a businessman. I'm not pro or against unions. I just choose to decide to run a business where they're not overstacked against me.
Mr Huget: I think your employees could organize before this bill or organize after it and continue to have the right to organize. I just don't see, if you have what is obviously a very highly skilled, well-paid workforce that you claim is extremely happy, how this bill affects you in any way, shape or form. I don't see it.
Mr Calder: I'm sorry. You don't see that?
Mr Huget: No.
Mr Daigeler: Mr Calder, since this is the first time, according to what you said, that you're here, I should explain a little bit about what the committee is all about.
Mr Calder: I meant that.
Mr Daigeler: These members over there represent the government.
Ms Murdock: We're New Democrats.
Mr Daigeler: This side over here is the opposition.
Mr Calder: I was trying to figure out earlier who was on whose side.
Ms Murdock: It's pretty hard to tell sometimes.
Mr Calder: But I also noticed the names are all different. Do they all change all the time?
Mr Daigeler: The first three here --
Mr Calder: They're all different names.
Mr Daigeler: Yes, the first three here are members of the Liberal opposition and then those two members are members of the Tory party. So obviously when you didn't get a straightforward answer from a representative of the government, you know why that was, with regard to whether this legislation makes it easier to organize or not.
Mr Calder: What is the answer to that? Does this legislation make it easier to organize?
Mr Daigeler: According to the opposition, it certainly does. Now, again, the government is arguing or some members of the government are arguing it isn't. It's up to you to decide.
Mr Calder: I've decided it's easier to organize with this new legislation.
Mr Daigeler: Let me say one thing. Certainly from my party, we see a very important role for the work of unions in this province and in this country. Frankly, I was a little bit struck by your very vehement opposition to any kind of effort of unionization. I'm not sure whether you know this, but could you tell me, what is the extent of unionization in the banking sector, in the financial sector generally?
Mr Calder: In the high school and university summers I worked in union organizations. I have been very successful in not being involved with union organizations ever since, and I don't know of any financial service organization that is unionized.
Mr Daigeler: Obviously, from the way you spoke, you would see this as very detrimental to the financial sector.
Mr Calder: A threat, but I'm not going to argue the merits of being unionized or non-unionized; I'm here to tell you, and especially this table, the majority, that if you pass this law, people like me will leave. I don't know if that's good or bad, but I'm just telling you the fact; that's all. I create jobs. This is what I do. That's what I do. I will leave. That's what will happen.
I don't care if there are unions here or not. Because there are no walls here, I will decide to do business somewhere else. That's the only point of my message. I'm not here to argue the merits of unionization -- I've seen all the movies -- or the merits against that or things like that. There are pros and cons. I'm quite prepared to live with compromise.
Mr Daigeler: But do you feel that even in a North American context you will be free from the possible effort of your employees anywhere to unionize?
Mr Calder: Oh, no. I'll just go to the least aggressive place. We're free to do that in this day and age.
Mr Daigeler: Obviously, thankfully so. I should say, though, that certainly from my own perspective, and I think from my party's perspective, even though Mr Offer is the critic, it is not the direction that we are coming from. We see an important role for the work of unions, for people to organize, because they have proven their worth over time.
With regard to this particular legislation, we have very strong views --
Mr Calder: That's the issue at the table here, this legislation.
Mr Daigeler: You, I think, went a little bit beyond that.
Mr Calder: I think I'm practical enough that we're not going to repeal the old act and go the other way. The issue on the table is the existing act and which way we're going to go.
Mr Daigeler: This act certainly makes it easier, as you say, to unionize, and certainly the threat for you to leave would be much stronger under this legislation.
Mr Calder: And there's not just me. That's the point.
The Chair: Did you -- no, Ms Fawcett wanted to too.
Mrs Joan M. Fawcett (Northumberland): Just a brief one?
The Chair: A long one.
Mrs Fawcett: Okay. I thank you for coming today, because I was interested in the fact that really you were learning new things about the legislation even as you sat listening. I think that is disturbing in that I wonder how many more people out there are like you in not being aware fully of the implications of this bill and the ramifications that it will have on people.
Mr Calder: I don't think most people would admit to the same naïveté I have about this bill.
Mrs Fawcett: That's true, but still the fact would remain that they're not as knowledgeable maybe as they should be.
Mr Calder: We've been successful so far in the environment we have today, so I'm quite happy with the law as it is today. The energy I put into this new law -- it is a threatening law to people who create jobs. That's the message.
Mrs Fawcett: Well, you see, our time lines here are very short in that the government really wants this bill passed very quickly. It would seem to me that, if anything, we should be prolonging these hearings and getting as many people as possible. We have some 1,200 people who have made application to appear. Thank goodness you were one of the lucky ones who did get in, but there are a lot of other people out there, I think, who would like to voice their opinions, and we certainly would like to extend the hearings.
Mr Calder: Actually, I should mention that I am a member of the group Project Economic Growth. To my mind they have made proposals to have a more orderly approach to deciding whether this is good or bad for Ontario, as opposed to ramming it through.
The Chair: Mr Carr.
Mr Carr: I must say, Brendan, you didn't need to stand up to get our attention.
Mr Calder: Thank you.
Mr Carr: You've certainly got our attention here today. I'm going to look at a different area, not specifically your own organization and whether it's unionized or not unionized. As a lender, you may be aware of some of the studies that are out that say we could lose 295,000 jobs. The government disputes it.
Mr Calder: I am aware of the Trust Company Association of Canada's stand on this legislation.
Mr Carr: If as a result of that we are to lose any more jobs -- and I'm thinking in terms of being a lender, the economic activity. Of course you're a lender, somebody who is out there lending to people to get mortgages. In the present climate, if we lose any more jobs in Ontario -- and as you know, the people in the trust companies, whether it be Royal or a lot of other ones, are facing severe problems, maybe because you're doing such a good job. If the economic climate gets any worse, what is going to happen to lenders like yourselves, like the Royals, like the banks?
Mr Calder: We'll stop lending. Remember, we finance the companies with our own money, but the money we lend, we lend in a fiduciary manner. We're only going to lend in jurisdictions that are vibrant. We're only going to lend to people who can afford to pay us back. Those people have jobs: no jobs, no ability to pay back.
Mr Carr: Having looked at the financial position of some of the trust companies now, it's fairly scary when you see some of the ones like Royal that were leaders and that are now going down. Again, this is a little bit off topic but it relates to the job losses. As you see it, how precarious is the financial situation in your industry right now of the lenders, of the trust companies? How close are we to facing very serious problems?
Mr Calder: I don't know and I'm not prepared to comment on that. Sorry.
Mr Carr: One last question. With regard to the certification process, you may be aware that right now under the existing legislation, if a union comes in to organize you and anybody in your company says, "I don't want it," and it does something, the penalty for that is automatic certification, regardless of whether one person wants it or 100.
Mr Calder: I read that.
Mr Carr: You're aware of that?
Mr Calder: Does that make it easier to get unionized, or less? I think it makes it easier to get unionized and therefore I'm against it.
Mr Carr: So in terms of your company right now, how do you handle employee relations? I take it you're a fairly flat organization.
Mr Calder: We have three layers in our organization and 209 people, and I know most of them.
Mr Carr: In terms of labour relations and dealing with the employees then, I just sense by your style that it's very hands-on.
Mr Calder: It is.
Mr Carr: So how much contact do you have with these 209 employees on a daily basis?
Mr Calder: I talk to all of them at least once a week live. I use a global voice mail service. They're all on voice mail all across Canada. I talk to them live and they talk to me on a voice mail system. The ones, of course, I'm physically close to I see every day.
Mr Carr: Because, as you may be aware, some of the groups that have appeared in here have painted a lot of business groups as being --
Mr Calder: The lady who sat here before me?
Mr Carr: Yes.
Mr Calder: Those people deserve unions, if they exist, the ones who still think they're running a coal mine with 12-year-olds. I mean, if they are, they deserve unions. I don't know that many that look like that. I just don't know; I haven't met them. Maybe they are. I don't know everything.
Mr Carr: Okay. Thank you very much for your help.
Mr Ward: If Bill 40 was never in place and we had the old act, which is still in existence, and your employees made the decision, for whatever reasons, to organize, you would leave.
Mr Calder: I didn't say that. No, I'm quite happy with the current act.
Mr Ward: Okay, but I thought you said if your employees made the decision to organize, you would leave.
Mr Calder: I did not say that. I said this act threatens me and organization would cause me -- I would not work in a place where it's unionized.
Mr Ward: Okay, so under the existing act, if your employees decided to organize, which they have the right to, you wouldn't leave.
Mr Calder: I don't know.
The Chair: Fair enough.
Mr Ward: Okay.
Mr Calder: Do you understand? I'm not playing a word game with you. First of all, I think people deserve the unions they get, so I doubt that under the existing organization law they would be. If they were to unionize us, I would resist that. Whether I left or not, whether we transferred jobs out of this province, would determine how many times we have picket lines that look like that. I don't want that; nobody wants that. But to paint that as a product of resisting the new act is at least a little too much.
The Chair: Thank you, Mr Calder. In excess of 1,200 people have requested to appear in front of the committee.
Mr Calder: I'm flattered.
The Chair: You should be flattered. As well, you're the first person representing your industry who's appeared here. You've obviously provoked a great deal of thought, hopefully, and certainly response from members of the committee. We thank you and First Line Trust for your attendance and for your interest. We trust you'll be keeping in touch. Take care, sir.
We're going to be in Thunder Bay on Monday. It will not be televised; we regret that. However, this being the process for this week, I want to thank the committee members, who have been very cooperative, and I appreciate that very much.
I want to thank the staff who have been here: Anne Anderson, who's with us right now, and her cohort, Avrum Fenson, both research officers from legislative research service, who do an outstanding job; from the office of the Clerk, Todd Decker, and the co-op student, Dave Augustyn, from Port Robinson Road West in Thorold, as a matter of fact; Clayton Hatfield; Pat Girouard from Hansard, and of course the French-language translation services and the legislative broadcast service, which continue to do a remarkably outstanding job. We are adjourned until Monday in Thunder Bay. Thank you kindly.
The committee adjourned at 1653.